As filed with the Securities and Exchange Commission on May 28, 2015.
Registration Nos. 333-131683
811-21852
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form N-1A
REGISTRATION STATEMENT
UNDER
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THE SECURITIES ACT OF 1933
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x
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Pre-Effective Amendment No.
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¨
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Post-Effective Amendment No. 128
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x
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and/or
REGISTRATION STATEMENT
UNDER
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THE INVESTMENT COMPANY ACT OF 1940
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x
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Amendment No. 136
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x
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(Check Appropriate Box or Boxes)
COLUMBIA FUNDS SERIES TRUST II
(Exact Name of Registrant as Specified in Charter)
225 Franklin
Street, Boston, Massachusetts 02110
(Address of Principal Executive Officers) (Zip Code)
Registrants Telephone Number, Including Area Code: (800) 345-6611
Christopher O. Petersen, Esq.
c/o Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, Massachusetts 02110
(Name and Address of Agent for Service)
Approximate Date of Proposed
Public Offering:
It is proposed that this filing will become effective (check appropriate box)
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Immediately upon filing pursuant to paragraph (b)
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x
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On June 1, 2015 pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)(1)
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On (date) pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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On (date) pursuant to paragraph (a)(2) of rule 485.
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If appropriate, check the following box:
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¨
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This post-effective amendment designates a new effective date for a previously filed post-effective amendment.
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This Post-Effective Amendment relates solely to the Registrants
Columbia Capital Allocation Aggressive
Portfolio, Columbia Capital Allocation Conservative Portfolio, Columbia Capital Allocation Moderate Portfolio, Columbia Income Builder Fund, Columbia Floating Rate Fund (Class Y), Columbia Large Core Quantitative Fund (Class Y), Columbia Large
Growth Quantitative Fund (Class R4 and Class Y) and Columbia Large Value Quantitative Fund (Class R4, Class R5 and Class Y)
series. Information contained in the Registrants Registration Statement relating to any other series of the
Registrant is neither amended nor superseded hereby.
Prospectus
June 1,
2015
Columbia Capital
Allocation Portfolios
Columbia Capital Allocation Conservative Portfolio
Class
A
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Class
B
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Class
C
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Class
K
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Class
R
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Class
R4
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Class
R5
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Class
Y
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Class
Z
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ABDAX
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ABBDX
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RPCCX
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CPVRX
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CBVRX
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CPCYX
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CPAOX
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CPDHX
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CBVZX
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Columbia Capital Allocation
Moderate Conservative Portfolio
Class
A
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Class
B
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Class
C
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Class
K
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Class
R
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Class
R4
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Class
R5
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Class
Y
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Class
Z
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NLGAX
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NLIBX
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NIICX
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CCAKX
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CLIRX
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CHWRX
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CLRRX
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CPDGX
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NIPAX
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Columbia Capital Allocation
Moderate Portfolio
Class
A
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Class
B
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Class
C
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Class
K
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Class
R
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Class
R4
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Class
R5
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Class
Y
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Class
Z
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ABUAX
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AURBX
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AMTCX
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CBRRX
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CBMRX
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CPCZX
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CPAMX
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CPDMX
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CBMZX
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Columbia Capital Allocation
Moderate Aggressive Portfolio
Class
A
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Class
B
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Class
C
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Class
K
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Class
R
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Class
R4
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Class
R5
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Class
T
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Class
Y
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Class
Z
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NBIAX
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NLBBX
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NBICX
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CAMKX
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CLBRX
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CGBRX
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CLHRX
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CGGTX
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CPHNX
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NBGPX
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Columbia Capital Allocation
Aggressive Portfolio
Class
A
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Class
B
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Class
C
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Class
K
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Class
R
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Class
R4
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Class
R5
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Class
Y
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Class
Z
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AXBAX
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AXPBX
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RBGCX
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CAGRX
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CPARX
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CPDAX
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CPANX
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CPDIX
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CPAZX
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As with all mutual funds, the Securities and Exchange Commission (SEC) has
not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Columbia Capital Allocation Portfolios
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3
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12
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21
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30
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39
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48
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48
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48
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52
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56
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61
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64
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65
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66
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66
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66
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71
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79
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81
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84
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85
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85
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86
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90
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92
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98
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99
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102
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102
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103
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106
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A-1
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B-1
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Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Conservative Portfolio
Investment Objective
Columbia Capital Allocation Conservative Portfolio (Conservative
Portfolio or the Fund)
is designed for investors seeking the highest level of total return that is consistent with a conservative level of risk.
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 members of your immediate family invest, or agree to invest in the future, at least $50,000 in certain classes of shares of eligible funds distributed by
Columbia Management Investment Distributors, Inc. (the Distributor). More information about these and other discounts is available from your financial intermediary, and can be found in the
Choosing a Share
Class
section beginning on page 66 of the Fund’s prospectus and in Appendix S to the Statement of Additional Information (SAI) under
Sales Charge Waivers
beginning on page S-1.
Shareholder
Fees (fees paid directly from your investment)
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Class
A
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Class
B
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Class
C
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Classes
K,
R, R4, R5,
Y and Z
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Maximum
sales charge (load) imposed on purchases (as a % of offering price)
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4.75%
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None
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None
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None
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Maximum
deferred sales charge (load) imposed on redemptions (as a % of the lower of the original purchase price or current net asset value)
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1.00%
(a)
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5.00%
(b)
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1.00%
(c)
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None
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Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
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Class
A
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Class
B
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Class
C
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Class
K
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Class
R
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Class
R4
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Class
R5
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Class
Y
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Class
Z
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Management
fees
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0.06%
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0.06%
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0.06%
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0.06%
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0.06%
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0.06%
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0.06%
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0.06%
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0.06%
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Distribution
and/or service (12b-1) fees
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0.25%
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1.00%
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1.00%
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0.00%
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0.50%
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0.00%
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0.00%
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0.00%
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0.00%
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Other
expenses
(d)
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0.22%
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0.22%
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0.22%
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0.40%
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0.22%
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0.22%
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0.15%
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0.10%
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0.22%
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Acquired
fund fees and expenses
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0.51%
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0.51%
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0.51%
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0.51%
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0.51%
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0.51%
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0.51%
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0.51%
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0.51%
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Total
annual Fund operating expenses
(e)
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1.04%
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1.79%
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1.79%
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0.97%
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1.29%
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0.79%
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0.72%
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0.67%
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0.79%
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(a)
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This charge is imposed on
certain investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with
certain limited exceptions.
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(b)
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This charge decreases over
time.
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(c)
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This charge applies to
redemptions within one year after purchase, with certain limited exceptions.
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(d)
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Other expenses for Class A,
Class B, Class C, Class K, Class R, Class R4, Class R5 and Class Z shares have been restated to reflect current fees paid by the Fund.
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(e)
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“Total
annual Fund operating expenses” include acquired fund fees and expenses (expenses the Fund incurs indirectly through its investments in other investment companies) and may be higher than “Total Net Expenses” shown in the
Financial Highlights
section of this prospectus because “Total Net Expenses” do not include acquired fund fees and expenses.
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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:
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you invest $10,000 in the
applicable class of Fund shares for the periods indicated,
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■
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your investment has a 5%
return each year, and
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■
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the
Fund’s total annual operating expenses remain the same as shown in the
Annual Fund Operating Expenses
table above.
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Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Conservative Portfolio
(continued)
Although your actual costs may be higher or
lower, based on the assumptions listed above, your costs would be:
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1
year
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3
years
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5
years
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10
years
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Class
A
(whether or not shares are redeemed)
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$576
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$790
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$1,022
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$1,686
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Class
B
(assuming redemption of all shares at the end of the period)
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$682
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$863
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$1,170
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$1,908
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Class
B
(assuming no redemption of shares)
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$182
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$563
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$
970
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$1,908
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Class
C
(assuming redemption of all shares at the end of the period)
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$282
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$563
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$
970
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$2,105
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Class
C
(assuming no redemption of shares)
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$182
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$563
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$
970
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$2,105
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Class
K
(whether or not shares are redeemed)
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$
99
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$309
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$
536
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$1,190
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Class
R
(whether or not shares are redeemed)
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$131
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$409
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$
708
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$1,556
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Class
R4
(whether or not shares are redeemed)
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$
81
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$252
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$
439
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$
978
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Class
R5
(whether or not shares are redeemed)
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$
74
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$230
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$
401
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$
894
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Class
Y
(whether or not shares are redeemed)
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$
68
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$214
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$
373
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$
835
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Class
Z
(whether or not shares are redeemed)
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$
81
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$252
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$
439
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$
978
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Portfolio Turnover
The Fund and underlying funds pay
transaction costs, such as commissions, when they buy and sell securities (or “turn over” their portfolios). The Fund will indirectly bear the expenses associated with portfolio turnover of the underlying funds. A high portfolio turnover
rate may indicate higher transaction costs. 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 12% of the average value of its portfolio.
Principal Investment Strategies
The Fund is primarily managed as a fund that
invests in other funds (i.e., a “fund-of-funds”) that seeks to achieve its investment objective by investing under normal circumstances in a combination of underlying funds for which Columbia Management Investment Advisers, LLC (the
Investment Manager) or an affiliate serves as investment adviser or principal underwriter (the affiliated underlying funds). The Fund may also invest up to 20% of its net assets in other funds, including third party advised (unaffiliated) funds and
exchange-traded funds (ETFs) (collectively with the affiliated underlying funds, the Underlying Funds), equity securities, fixed income securities (including treasury inflation protected securities (TIPS)) and derivative instruments (the 20%
Sleeve). The Fund’s derivative investments may include forward foreign currency contracts, futures (including currency, equity, fixed income, index and interest rate futures) and options. Derivative positions may be established to seek
incremental earnings, hedge existing positions, increase market or credit exposure, increase investment flexibility (including using the derivative position as a substitute for the purchase or sale of the underlying security, currency or other
instrument) and/or to change the effective duration of the Fund’s portfolio. Collectively, these investments (including through investments in derivatives) provide the Fund with exposure to equity, fixed income, and cash/cash equivalent asset
classes. The Fund may also pursue alternative investment strategies (alternative strategies), including those that seek investment returns uncorrelated to the broad equity and fixed income markets, as well as those providing exposure to other
markets, including but not limited to absolute (positive) return strategies. The Fund can invest up to 90% of its net assets in fixed income securities.
The Fund may invest in Underlying Funds categorized as
“fixed income”, “equity”, “cash/cash equivalents”, and “alternative strategies”, which may represent indirect investments in various sectors, asset classes, strategies and markets. Under normal
circumstances, the Fund emphasizes investments in Underlying Funds categorized as fixed income, which can include those that invest in TIPs, U.S. treasury bonds and notes, mortgage-backed and asset-backed securities, investment grade corporate
bonds, high yield bonds (junk bonds), high yield loans and international bonds (including those of issuers in developed and emerging markets), which may have varying interest rates, terms, duration and credit exposure. The Fund may also invest in
Underlying Funds categorized as equity, which can include those that invest in equity securities representing different investment styles (e.g., growth, value and core/blend), market capitalizations (large-, mid- and small-cap), geographic focus
(domestic and international,
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Conservative Portfolio
(continued)
including emerging markets) and sector focus (e.g., real estate, technology,
infrastructure and natural resources).
The Underlying Funds categorized
as alternative strategies include those that employ a variety of investment strategies, techniques and practices, generally intended to have a low correlation to the performance of the broad equity and fixed income markets over a complete market
cycle including but not limited to absolute (positive) return strategies. Subject to the 20% Sleeve limitation described above, the Fund may also invest directly in equity securities, fixed income securities and derivative instruments, including
forward foreign currency contracts and futures (including currency, equity, fixed income, index and interest rate futures). By investing in a combination of Underlying Funds and other securities described in the 20% Sleeve, the Fund seeks to
minimize the risks typically associated with investing in a traditional mutual fund.
Under normal market circumstances, the Fund may invest,
directly or indirectly, in each of equity, fixed income and cash/cash equivalent asset classes and alternative strategies (each, an asset class category and collectively, the asset class categories) within the following target asset allocation
ranges (includes investments in Underlying Funds and the other securities described in the 20% Sleeve):
Asset
Class Exposures
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Equity
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Fixed
Income
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Cash/Cash
Equivalents
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Alternatives
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Conservative
Portfolio
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0–40%*
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50–90%*
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0–40%*
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0–40%*
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*
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As a percent of Fund net
assets. Ranges include the net notional amounts of a Fund’s direct investments in derivative instruments. Market appreciation or depreciation may cause a Fund to be temporarily outside the ranges identified in the table. The Investment Manager
may modify the target allocation ranges only with the approval of a Fund’s Board of Trustees (the Board).
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The Fund may be most appropriate for investors with a
shorter-term investment horizon.
Principal Risks
An investment in the Fund involves risk, including specific
risks relating to the investment in the Fund based on its investment process and its "fund-of-funds" structure, as well as specific risks related to the underlying funds in which it invests, including among others, those described below. More
information about underlying funds, including their principal risks, is available in their prospectuses.
There is no assurance that the Fund will achieve its investment objective and you may lose money
.
The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV) and share price may go down.
Allocation Risk.
Because the Fund uses an asset allocation strategy in pursuit of its investment objective,
there is a risk that the Fund's allocation among asset classes, investments, managers,
strategies and/or investment styles will cause the Fund's shares to lose value or cause the Fund to underperform other funds with a similar investment objective and/or strategies, or that the investments themselves will not produce the returns
expected.
Alternative Strategies Investment Risk.
An investment in alternative investment strategies (Alternative Strategies), whether through direct investment or through one or more underlying funds, involves risks, which may be significant. Alternative
Strategies may include strategies, instruments or other assets, such as derivatives, that seek investment returns uncorrelated with the broad equity and fixed income/debt markets, as well as those providing exposure to other markets (such as
commodity markets), including but not limited to absolute (positive) return strategies. Alternative Strategies may fail to achieve their desired performance, market or other exposure, or their returns (or lack thereof) may be more correlated with
the broad equity and/or fixed income/debt markets than was anticipated, and the Fund may lose money.
Credit Risk.
The value of
fixed-income securities,
or other instruments or assets, may decline if the issuer thereof defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial
obligations, such as making payments to the Fund when due. Rating agencies assign credit ratings to certain fixed-income securities to indicate their credit risk. Lower quality or unrated securities held by the Fund may present increased credit risk
as compared to higher-rated securities. Non-investment grade fixed-income securities (commonly called “high-yield” or “junk”) may be subject to greater price fluctuations and are more likely to experience a
default
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Conservative Portfolio
(continued)
than investment grade securities and
therefore may expose the Fund to increased credit risk. If the Fund purchases unrated securities, or if the ratings of securities held by the Fund are lowered after purchase, the Fund will depend on analysis of credit risk more heavily than
usual.
Derivatives Risk.
Losses involving derivative instruments may be substantial, because a relatively small movement in the price of an underlying security, instrument, commodity, currency or index may result in a substantial loss for the Fund. In addition to the
potential for increased losses, the use of derivative instruments may lead to increased volatility for the Fund. Derivative investments will typically increase the Fund’s exposure to principal risks to which it is otherwise exposed, and may
expose the Fund to additional risks, including correlation risk, counterparty risk, hedging risk, leverage risk and/or liquidity risk.
Derivatives Risk/Forward Foreign Currency Contracts Risk.
These instruments are a type of derivative contract whereby the Fund may agree to buy or sell a country’s or region’s currency at a specific price on a specific date in the future. These instruments may fall
in value (sometimes dramatically) due to foreign market downswings or foreign currency value fluctuations, subjecting the Fund to foreign currency risk. Investment in these instruments also subjects the Fund to counterparty risk. The Fund’s
strategy of investing in these instruments may not be successful
and the Fund may experience significant losses as a result.
Derivatives Risk/Futures Contracts Risk.
The loss that may be incurred in entering into futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets are highly volatile and the use of futures may increase the
volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract may result in substantial losses for the Fund. Futures
contracts may be illiquid. Furthermore, exchanges may limit fluctuations in futures contract prices during a trading session by imposing a maximum permissible price movement on each futures contract. The Fund may be disadvantaged if it is prohibited
from executing a trade outside the daily permissible price movement. Futures contracts executed on foreign exchanges may not provide the same protection as U.S. exchanges. These transactions involve additional risks, including counterparty risk,
hedging risk and pricing risk.
Derivatives
Risk/Options Risk.
The use of options is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If the Fund
sells a put option, there is a risk that the Fund may be required to buy the underlying asset at a disadvantageous price. If the Fund sells a call option, there is a risk that the Fund may be required to sell the underlying asset at a
disadvantageous price, and if the call option sold is not covered (for example, by owning the underlying asset), the Fund's losses are potentially unlimited. These transactions involve other risks, including counterparty risk and hedging
risk.
Exchange-Traded Fund (ETF) Risk.
ETFs are subject to, among other risks, tracking risk and passive and, in some cases, active investment risk. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar
expenses incurred through ownership of the ETF.
Foreign Currency Risk.
The
performance of the Fund may be materially affected positively or negatively by foreign currency strength or weakness relative to the U.S. dollar, particularly if the Fund invests a significant percentage of its assets in foreign securities or other
assets denominated in currencies other than the U.S. dollar.
Foreign Securities Risk.
Investments in or exposure to foreign securities involve certain risks not associated with investments in or exposure to securities of U.S. companies. Foreign securities subject the Fund to the risks associated with
investing in the particular country of an issuer, including the political, regulatory, economic, social, diplomatic and other conditions or events occurring in the country or region, as well as risks associated with less developed custody and
settlement practices. Foreign securities may be more volatile and less liquid than securities of U.S. companies, and are subject to the risks associated with potential imposition of economic and other sanctions against a particular foreign country,
its nationals or industries or businesses within the country. The performance of the Fund may be negatively impacted by fluctuations in a foreign currency’s strength or weakness relative to the U.S. dollar, particularly
to the extent
the Fund invests a significant percentage of its assets in foreign securities or other assets denominated in currencies other than the U.S. dollar.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Conservative Portfolio
(continued)
Fund-of-Funds Risk.
Determinations regarding asset classes or underlying funds and the Fund’s allocations thereto may not successfully achieve the Fund’s investment objective, in whole or in part. The ability of the Fund to
realize its investment objective will depend, in large part, on the extent to which the underlying funds realize their investment objective. There is no guarantee that the underlying funds will achieve their respective investment objectives. The
Fund is exposed to the same risks as the underlying funds in direct proportion to the allocation of its assets among the underlying funds. Therefore,
to the extent that the Fund invests significantly in a
particular underlying fund, the Fund’s performance would be significantly impacted by the performance of such underlying fund. Generally, by investing in a combination of underlying funds, the Fund has exposure to the risks of many areas of
the market. By concentrating its investments in relatively few underlying funds, the Fund may have more concentrated market exposures, subjecting the Fund to greater risk of loss should those markets decline or fail to rise. The performance of
underlying funds could be adversely affected if other entities that invest in the same underlying funds make relatively large investments or redemptions in such underlying funds. The Fund, and its shareholders, indirectly bear a portion of the
expenses of any funds in which the Fund invests. Because the expenses and costs of each underlying fund are shared by its investors, redemptions by other investors in an underlying fund could result in decreased economies of scale and increased
operating expenses for such fund. The Investment Manager may have potential conflicts of interest in selecting affiliated funds over unaffiliated funds for investment by the Fund, and may also face potential conflicts of interest in selecting
affiliated funds, because the fees the Investment Manager receives from some underlying funds may be higher than the fees paid by other underlying funds.
Growth Securities Risk.
Growth
securities typically trade at a higher multiple of earnings than other types of equity securities. Accordingly, the market values of growth securities may never reach their expected market value and may decline in price. In addition,
growth securities, at times, may not perform as well as value securities or the stock market in general, and may be out of favor with investors for varying periods of time.
Inflation-Protected Securities Risk.
Inflation-protected debt securities tend to react to changes in real interest rates (i.e., nominal interest rates minus the expected impact of inflation). In general, the price of such securities falls when real
interest rates rise, and rises when real interest rates fall. Interest payments on these securities will vary and may be more volatile than interest paid on ordinary bonds. In periods of deflation, the Fund may have no income at all from such
investments.
Interest Rate Risk.
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of
debt securities 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 will generally affect the value of the Fund's shares. In general, the longer the maturity or
duration of a debt security, the greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest
rates may negatively impact the Fund’s performance. Actions by governments and central banking authorities can result in increases
in interest rates. Such actions may negatively affect the value of
fixed-income securities held by the Fund, resulting in a negative impact on the Fund's performance and NAV.
Issuer Risk.
An issuer in
which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may be caused by poor management decisions,
competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or factors.
High-Yield Securities Risk.
Securities rated below investment grade (commonly called “high-yield” or “junk” bonds) and unrated securities of comparable quality expose the Fund to a greater risk of loss of principal and income than a fund that invests
solely or primarily in investment grade securities. In addition, these investments have greater price fluctuations, are less liquid and are more likely to experience a default than higher-rated securities. High-yield securities are considered to be
predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Conservative Portfolio
(continued)
Market Risk.
Market risk refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. An investment in the Fund could lose money over short or long
periods. Although equity securities generally tend to have greater price volatility than debt securities, under certain market conditions, debt securities may have comparable or greater price volatility.
Prepayment and Extension Risk.
Prepayment and extension risk is the risk that a bond or other security or investment might,
in the case of prepayment risk, be called or otherwise converted, prepaid or redeemed before maturity and, in the
case of extension risk, the investment might not be called as expected. In the case of prepayment risk, if the investment is converted, prepaid or redeemed before maturity, the portfolio managers may not be able to invest the proceeds in other
investments providing as high a level of income, resulting in a reduced yield to the Fund. In the case of mortgage- or asset-backed securities, as interest rates decrease or spreads narrow, the likelihood of prepayment increases. Conversely,
extension risk is the risk that an unexpected rise in interest rates will extend the life of a mortgage- or asset-backed security beyond the prepayment time. If the Fund’s investments are locked in at a lower interest rate for a longer period
of time, the portfolio managers may be unable to capitalize on securities with higher interest rates or wider spreads.
Small- and Mid-Cap Company Securities Risk.
Investments in small- and mid-capitalization companies (small- and mid-cap companies) often involve greater risks than investments in larger, more established companies (larger companies) because small- and mid-cap
companies tend to have less predictable earnings and may lack the management experience, financial resources, product diversification and competitive strengths of larger companies. Securities of small- and mid-cap companies may be less liquid and
more volatile than the securities of larger companies.
Value Securities Risk.
Value securities are securities of companies that may have experienced, for example, adverse business, industry or other developments or may be subject to special risks that have caused the securities to be out of favor and, in turn, potentially
undervalued. The market value of a portfolio security may not meet the portfolio manager's perceived value assessment of that security, or may decline in price, even though the portfolio manager(s) believe(s) the securities are already undervalued.
There is also a risk that it may take longer than expected for the value of these investments to rise to the portfolio manager’s perceived value. In addition, value securities, at times, may not perform as well as growth securities or the
stock market in general, and may be out of favor with investors for varying periods of time.
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 bar chart shows how the Fund’s Class A share performance (without sales charges) has varied for each full calendar year shown. If the
sales charges were reflected, returns shown would be lower. The table below the bar chart compares the Fund’s returns (after applicable sales charges shown in the
Shareholder Fees
table in this
prospectus) for the periods shown with a blended index that is intended to provide a measure of the Fund's performance given its investment strategy, as well as one or more other measures of performance for markets in which the Fund may
invest.
The performance of one or more share
classes shown in the table below begins before the indicated inception date for such share class. The returns shown for each such share class include the returns of the Fund’s Class A shares (without applicable sales charges and adjusted to
reflect the higher class-related operating expenses of such classes, where applicable) for periods prior to its inception date. Any share class that does not have available performance would have annual returns substantially similar to those of
Class A shares. Except for differences in annual returns resulting from differences in expenses and sales charges (where applicable), the share classes of the Fund would have substantially similar annual returns because all share classes of the Fund
invest in the same portfolio of securities.
The
after-tax returns shown in the
Average Annual Total Returns
table below are calculated using the highest historical individual U.S. 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
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Conservative Portfolio
(continued)
as 401(k) plans or Individual Retirement Accounts (IRAs). The after-tax
returns are shown only for Class A shares and will vary for other share classes. Returns after taxes on distributions and sale of Fund shares are higher than before-tax returns for certain periods shown because they reflect the tax benefit of
capital losses realized on the redemption of Fund shares.
The Fund’s past performance (before and
after taxes) is no guarantee of how the Fund will perform in the future.
Updated performance information can be obtained by calling toll-free 800.345.6611 or visiting columbiathreadneedle.com/us.
Year
by Year Total Return (%)
as of December 31 Each Year*
|
Best
and Worst Quarterly Returns
During the Period Shown in the Bar Chart
|
|
Best
|
3rd Quarter 2009
|
7.55%
|
Worst
|
4th Quarter 2008
|
-5.93%
|
*
|
Year to Date return as of
March 31, 2015: 1.75%
|
Average Annual Total Returns After
Applicable Sales Charges (for periods ended December 31, 2014)
|
Share
Class
Inception Date
|
1
Year
|
5
Years
|
10
Years
|
Class
A
|
03/04/2004
|
|
|
|
returns
before taxes
|
|
-0.39%
|
4.72%
|
4.13%
|
returns
after taxes on distributions
|
|
-2.45%
|
3.25%
|
2.72%
|
returns
after taxes on distributions and sale of Fund shares
|
|
0.86%
|
3.36%
|
2.85%
|
Class
B
returns before taxes
|
03/04/2004
|
-1.01%
|
4.61%
|
3.85%
|
Class
C
returns before taxes
|
03/04/2004
|
2.88%
|
4.96%
|
3.86%
|
Class
K
returns before taxes
|
03/04/2004
|
4.64%
|
5.82%
|
4.79%
|
Class
R
returns before taxes
|
09/27/2010
|
4.35%
|
5.51%
|
4.42%
|
Class
R4
returns before taxes
|
06/13/2013
|
4.79%
|
5.81%
|
4.67%
|
Class
R5
returns before taxes
|
06/13/2013
|
4.86%
|
5.84%
|
4.69%
|
Class
Y
returns before taxes
|
06/13/2013
|
5.02%
|
5.86%
|
4.70%
|
Class
Z
returns before taxes
|
09/27/2010
|
4.87%
|
5.96%
|
4.75%
|
Blended
Index (consists of 66% Barclays U.S. Aggregate Bond Index, 15% Russell 3000 Index, 10% Citi Three-Month U.S. Treasury Bill Index, 5% MSCI EAFE Index (Net) and 4% Barclays U.S. Corporate High-Yield Index)
(reflects
reinvested dividends net of withholding taxes on the MSCI EAFE Index portion of the Blended Index but reflects no deductions for fees, expenses or other taxes for the other indices portion of the blend)
|
|
5.67%
|
6.03%
|
5.20%
|
Barclays
U.S. Aggregate Bond Index
(reflects no deductions for fees, expenses or taxes)
|
|
5.97%
|
4.45%
|
4.71%
|
Russell
3000 Index
(reflects no deductions for fees, expenses or taxes)
|
|
12.56%
|
15.63%
|
7.94%
|
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Conservative Portfolio
(continued)
Fund Management
Investment Manager:
Columbia
Management Investment Advisers, LLC
Portfolio
Manager
|
|
Title
|
|
Role
with Fund
|
|
Managed
Fund Since
|
Jeffrey
Knight, CFA
|
|
Senior
Portfolio Manager, Managing Director, Global Head of Investment Solutions and Co-Head of Global Asset Allocation
|
|
Co-manager
|
|
2013
|
Anwiti
Bahuguna, Ph.D.
|
|
Senior
Portfolio Manager
|
|
Co-manager
|
|
2010
|
Marie
Schofield, CFA
|
|
Senior
Portfolio Manager and Chief Economist
|
|
Co-manager
|
|
2010
|
Beth
Vanney, CFA
|
|
Portfolio
Manager
|
|
Co-manager
|
|
2011
|
Toby
Nangle
|
|
Portfolio
Manager and Co-Head of Global Asset Allocation
|
|
Co-manager
|
|
2013
|
Purchase and Sale of Fund
Shares
You may purchase or redeem shares of the Fund on
any business day by contacting the Fund in the ways described below:
Online
|
|
Regular
Mail
|
|
Express
Mail
|
|
By
Telephone
|
columbiathreadneedle.com/us
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
30 Dan Road, Suite 8081
Canton, MA 02021-2809
|
|
800.422.3737
|
You may purchase shares
and receive redemption proceeds by electronic funds transfer, by check or by wire. If you maintain your account with a broker-dealer or other financial intermediary, you must contact that financial intermediary to buy, sell or exchange shares of the
Fund through your account with the intermediary.
The
minimum initial investment amounts for the share classes offered by the Fund are shown below:
Minimum Initial Investment
Class
|
Category
of eligible account
|
For
accounts other than
systematic investment
plan accounts
|
For
systematic investment
plan accounts
|
Classes
A, B* & C
|
All
accounts other than IRAs
|
$2,000
|
$100
|
IRAs
|
$1,000
|
$100
|
Classes
K**, R, R4 & Y
|
All
eligible accounts
|
None
|
N/A
|
Class
R5
|
Combined
underlying accounts of eligible registered investment advisers
|
$100,000
|
N/A
|
Omnibus
retirement plans
|
None
|
N/A
|
Class
Z
|
All
eligible accounts
|
$0,
$1,000 or $2,000
depending upon the category
of eligible investor
|
$100
|
*
|
Class B shares are generally
closed to new and existing shareholders.
|
**
|
Class K shares are generally
closed to new investors.
|
There is no
minimum additional investment for any share class.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Conservative Portfolio
(continued)
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-advantaged account, such as a 401(k) plan or an IRA. The use of a
fund-of-funds structure could affect the timing, amount and character of distributions to you and therefore may increase the amount of taxes payable by you. If you are investing through a tax-advantaged account, you may be taxed upon withdrawals
from that 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 Investment Manager), 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.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Conservative Portfolio
Investment Objective
Columbia Capital Allocation Moderate Conservative Portfolio
(Moderate Conservative Portfolio or the Fund)
is designed for investors seeking the highest level of total return that is consistent with a moderate conservative level of risk.
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 members of your immediate family invest, or agree to invest in the future, at least $50,000 in certain classes of shares of eligible funds distributed by
Columbia Management Investment Distributors, Inc. (the Distributor). More information about these and other discounts is available from your financial intermediary, and can be found in the
Choosing a Share
Class
section beginning on page 66 of the Fund’s prospectus and in Appendix S to the Statement of Additional Information (SAI) under
Sales Charge Waivers
beginning on page S-1.
Shareholder
Fees (fees paid directly from your investment)
|
|
Class
A
|
Class
B
|
Class
C
|
Classes
K,
R, R4, R5,
Y and Z
|
Maximum
sales charge (load) imposed on purchases (as a % of offering price)
|
5.75%
|
None
|
None
|
None
|
Maximum
deferred sales charge (load) imposed on redemptions (as a % of the lower of the original purchase price or current net asset value)
|
1.00%
(a)
|
5.00%
(b)
|
1.00%
(c)
|
None
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
Class
A
|
Class
B
|
Class
C
|
Class
K
|
Class
R
|
Class
R4
|
Class
R5
|
Class
Y
|
Class
Z
|
Management
fees
|
0.05%
|
0.05%
|
0.05%
|
0.05%
|
0.05%
|
0.05%
|
0.05%
|
0.05%
|
0.05%
|
Distribution
and/or service (12b-1) fees
|
0.25%
|
1.00%
|
1.00%
|
0.00%
|
0.50%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
Other
expenses
(d)
|
0.20%
|
0.20%
|
0.20%
|
0.38%
|
0.20%
|
0.20%
|
0.13%
|
0.08%
|
0.20%
|
Acquired
fund fees and expenses
|
0.58%
|
0.58%
|
0.58%
|
0.58%
|
0.58%
|
0.58%
|
0.58%
|
0.58%
|
0.58%
|
Total
annual Fund operating expenses
(e)
|
1.08%
|
1.83%
|
1.83%
|
1.01%
|
1.33%
|
0.83%
|
0.76%
|
0.71%
|
0.83%
|
(a)
|
This charge is imposed on
certain investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with
certain limited exceptions.
|
(b)
|
This charge decreases over
time.
|
(c)
|
This charge applies to
redemptions within one year after purchase, with certain limited exceptions.
|
(d)
|
Other expenses for Class A,
Class B, Class C, Class K, Class R, Class R4, Class R5 and Class Z shares have been restated to reflect current fees paid by the Fund.
|
(e)
|
“Total
annual Fund operating expenses” include acquired fund fees and expenses (expenses the Fund incurs indirectly through its investments in other investment companies) and may be higher than “Total Net Expenses” shown in the
Financial Highlights
section of this prospectus because “Total Net Expenses” do not include acquired fund fees and expenses.
|
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 the
applicable class of Fund shares 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
Annual Fund Operating Expenses
table above.
|
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Conservative Portfolio
(continued)
Although your actual costs may be higher or
lower, based on the assumptions listed above, your costs would be:
|
1
year
|
3
years
|
5
years
|
10
years
|
Class
A
(whether or not shares are redeemed)
|
$679
|
$899
|
$1,136
|
$1,816
|
Class
B
(assuming redemption of all shares at the end of the period)
|
$686
|
$876
|
$1,190
|
$1,951
|
Class
B
(assuming no redemption of shares)
|
$186
|
$576
|
$
990
|
$1,951
|
Class
C
(assuming redemption of all shares at the end of the period)
|
$286
|
$576
|
$
990
|
$2,148
|
Class
C
(assuming no redemption of shares)
|
$186
|
$576
|
$
990
|
$2,148
|
Class
K
(whether or not shares are redeemed)
|
$103
|
$322
|
$
558
|
$1,236
|
Class
R
(whether or not shares are redeemed)
|
$135
|
$421
|
$
729
|
$1,601
|
Class
R4
(whether or not shares are redeemed)
|
$
85
|
$265
|
$
460
|
$1,025
|
Class
R5
(whether or not shares are redeemed)
|
$
78
|
$243
|
$
422
|
$
942
|
Class
Y
(whether or not shares are redeemed)
|
$
73
|
$227
|
$
395
|
$
883
|
Class
Z
(whether or not shares are redeemed)
|
$
85
|
$265
|
$
460
|
$1,025
|
Portfolio Turnover
The Fund and underlying funds pay
transaction costs, such as commissions, when they buy and sell securities (or “turn over” their portfolios). The Fund will indirectly bear the expenses associated with portfolio turnover of the underlying funds. A high portfolio turnover
rate may indicate higher transaction costs. 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 14% of the average value of its portfolio.
Principal Investment Strategies
The Fund is primarily managed as a fund that
invests in other funds (i.e., a “fund-of-funds”) that seeks to achieve its investment objective by investing under normal circumstances in a combination of underlying funds for which Columbia Management Investment Advisers, LLC (the
Investment Manager) or an affiliate serves as investment adviser or principal underwriter (the affiliated underlying funds). The Fund may also invest up to 20% of its net assets in other funds, including third party advised (unaffiliated) funds and
exchange-traded funds (ETFs) (collectively with the affiliated underlying funds, the Underlying Funds), equity securities, fixed income securities (including treasury inflation protected securities (TIPS)) and derivative instruments (the 20%
Sleeve). The Fund’s derivative investments may include forward foreign currency contracts, futures (including currency, equity, fixed income, index and interest rate futures) and options. Derivative positions may be established to seek
incremental earnings, hedge existing positions, increase market or credit exposure, increase investment flexibility (including using the derivative position as a substitute for the purchase or sale of the underlying security, currency or other
instrument) and/or to change the effective duration of the Fund’s portfolio. Collectively, these investments (including through investments in derivatives) provide the Fund with exposure to equity, fixed income, and cash/cash equivalent asset
classes. The Fund may also pursue alternative investment strategies (alternative strategies), including those that seek investment returns uncorrelated to the broad equity and fixed income markets, as well as those providing exposure to other
markets, including but not limited to absolute (positive) return strategies.
The Fund may invest in Underlying Funds categorized as
“fixed income”, “equity”, “cash/cash equivalents”, and “alternative strategies”, which may represent indirect investments in various sectors, asset classes, strategies and markets. Under normal
circumstances, the Fund emphasizes investments in Underlying Funds categorized as fixed income, which can include those that invest in TIPs, U.S. treasury bonds and notes, mortgage-backed and asset-backed securities, investment grade corporate
bonds, high yield bonds (junk bonds), high yield loans and international bonds (including those of issuers in developed and emerging markets), which may have varying interest rates, terms, duration and credit exposure. The Fund may also invest in
Underlying Funds categorized as equity, which can include those that invest in equity securities representing different investment styles (e.g., growth, value and core/blend), market capitalizations (large-, mid- and small-cap), geographic focus
(domestic and international, including emerging markets) and sector focus (e.g., real estate, technology, infrastructure and natural resources).
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Conservative Portfolio
(continued)
The Underlying Funds categorized as alternative strategies include those that
employ a variety of investment strategies, techniques and practices, generally intended to have a low correlation to the performance of the broad equity and fixed income markets over a complete market cycle including but not limited to absolute
(positive) return strategies. Subject to the 20% Sleeve limitation described above, the Fund may also invest directly in equity securities, fixed income securities and derivative instruments, including forward foreign currency contracts and futures
(including currency, equity, fixed income, index and interest rate futures). By investing in a combination of Underlying Funds and other securities described in the 20% Sleeve, the Fund seeks to minimize the risks typically associated with investing
in a traditional mutual fund.
Under normal market
circumstances, the Fund may invest, directly or indirectly, in each of equity, fixed income and cash/cash equivalent asset classes and alternative strategies (each, an asset class category and collectively, the asset class categories) within the
following target asset allocation ranges (includes investments in Underlying Funds and the other securities described in the 20% Sleeve):
Asset
Class Exposures
|
|
Equity
|
Fixed
Income
|
Cash/Cash
Equivalents
|
Alternatives
|
Moderate
Conservative Portfolio
|
0–55%*
|
40–85%*
|
0–40%*
|
0–40%*
|
|
|
|
|
|
*
|
As a percent of Fund net
assets. Ranges include the net notional amounts of a Fund’s direct investments in derivative instruments. Market appreciation or depreciation may cause a Fund to be temporarily outside the ranges identified in the table. The Investment Manager
may modify the target allocation ranges only with the approval of a Fund’s Board of Trustees (the Board).
|
The Fund may be most appropriate for investors with a
short-to-intermediate term investment horizon.
Principal
Risks
An investment in the Fund involves risk, including
specific risks relating to the investment in the Fund based on its investment process and its "fund-of-funds" structure, as well as specific risks related to the underlying funds in which it invests, including among others, those described below.
More information about underlying funds, including their principal risks, is available in their prospectuses.
There is no assurance that the Fund will achieve its investment objective and you may lose
money
. The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV) and share price may go down.
Allocation Risk.
Because the Fund uses an asset allocation strategy in pursuit of its investment objective,
there is a risk that the Fund's allocation among asset classes, investments, managers,
strategies and/or investment styles will cause the Fund's shares to lose value or cause the Fund to underperform other funds with a similar investment objective and/or strategies, or that the investments themselves will not produce the returns
expected.
Alternative Strategies Investment Risk.
An investment in alternative investment strategies (Alternative Strategies), whether through direct investment or through one or more underlying funds, involves risks, which may be significant. Alternative
Strategies may include strategies, instruments or other assets, such as derivatives, that seek investment returns uncorrelated with the broad equity and fixed income/debt markets, as well as those providing exposure to other markets (such as
commodity markets), including but not limited to absolute (positive) return strategies. Alternative Strategies may fail to achieve their desired performance, market or other exposure, or their returns (or lack thereof) may be more correlated with
the broad equity and/or fixed income/debt markets than was anticipated, and the Fund may lose money.
Credit Risk.
The value of
fixed-income securities,
or other instruments or assets, may decline if the issuer thereof defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial
obligations, such as making payments to the Fund when due. Rating agencies assign credit ratings to certain fixed-income securities to indicate their credit risk. Lower quality or unrated securities held by the Fund may present increased credit risk
as compared to higher-rated securities. Non-investment grade fixed-income securities (commonly called “high-yield” or “junk”) may be subject to greater price fluctuations and are more likely to experience a
default
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Conservative Portfolio
(continued)
than investment grade securities and
therefore may expose the Fund to increased credit risk. If the Fund purchases unrated securities, or if the ratings of securities held by the Fund are lowered after purchase, the Fund will depend on analysis of credit risk more heavily than
usual.
Derivatives Risk.
Losses involving derivative instruments may be substantial, because a relatively small movement in the price of an underlying security, instrument, commodity, currency or index may result in a substantial loss for the Fund. In addition to the
potential for increased losses, the use of derivative instruments may lead to increased volatility for the Fund. Derivative investments will typically increase the Fund’s exposure to principal risks to which it is otherwise exposed, and may
expose the Fund to additional risks, including correlation risk, counterparty risk, hedging risk, leverage risk and/or liquidity risk.
Derivatives Risk/Forward Foreign Currency Contracts Risk.
These instruments are a type of derivative contract whereby the Fund may agree to buy or sell a country’s or region’s currency at a specific price on a specific date in the future. These instruments may fall
in value (sometimes dramatically) due to foreign market downswings or foreign currency value fluctuations, subjecting the Fund to foreign currency risk. Investment in these instruments also subjects the Fund to counterparty risk. The Fund’s
strategy of investing in these instruments may not be successful
and the Fund may experience significant losses as a result.
Derivatives Risk/Futures Contracts Risk.
The loss that may be incurred in entering into futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets are highly volatile and the use of futures may increase the
volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract may result in substantial losses for the Fund. Futures
contracts may be illiquid. Furthermore, exchanges may limit fluctuations in futures contract prices during a trading session by imposing a maximum permissible price movement on each futures contract. The Fund may be disadvantaged if it is prohibited
from executing a trade outside the daily permissible price movement. Futures contracts executed on foreign exchanges may not provide the same protection as U.S. exchanges. These transactions involve additional risks, including counterparty risk,
hedging risk and pricing risk.
Derivatives
Risk/Options Risk.
The use of options is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If the Fund
sells a put option, there is a risk that the Fund may be required to buy the underlying asset at a disadvantageous price. If the Fund sells a call option, there is a risk that the Fund may be required to sell the underlying asset at a
disadvantageous price, and if the call option sold is not covered (for example, by owning the underlying asset), the Fund's losses are potentially unlimited. These transactions involve other risks, including counterparty risk and hedging
risk.
Exchange-Traded Fund (ETF) Risk.
ETFs are subject to, among other risks, tracking risk and passive and, in some cases, active investment risk. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar
expenses incurred through ownership of the ETF.
Foreign Currency Risk.
The
performance of the Fund may be materially affected positively or negatively by foreign currency strength or weakness relative to the U.S. dollar, particularly if the Fund invests a significant percentage of its assets in foreign securities or other
assets denominated in currencies other than the U.S. dollar.
Foreign Securities Risk.
Investments in or exposure to foreign securities involve certain risks not associated with investments in or exposure to securities of U.S. companies. Foreign securities subject the Fund to the risks associated with
investing in the particular country of an issuer, including the political, regulatory, economic, social, diplomatic and other conditions or events occurring in the country or region, as well as risks associated with less developed custody and
settlement practices. Foreign securities may be more volatile and less liquid than securities of U.S. companies, and are subject to the risks associated with potential imposition of economic and other sanctions against a particular foreign country,
its nationals or industries or businesses within the country. The performance of the Fund may be negatively impacted by fluctuations in a foreign currency’s strength or weakness relative to the U.S. dollar, particularly
to the extent
the Fund invests a significant percentage of its assets in foreign securities or other assets denominated in currencies other than the U.S. dollar.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Conservative Portfolio
(continued)
Fund-of-Funds Risk.
Determinations regarding asset classes or underlying funds and the Fund’s allocations thereto may not successfully achieve the Fund’s investment objective, in whole or in part. The ability of the Fund to
realize its investment objective will depend, in large part, on the extent to which the underlying funds realize their investment objective. There is no guarantee that the underlying funds will achieve their respective investment objectives. The
Fund is exposed to the same risks as the underlying funds in direct proportion to the allocation of its assets among the underlying funds. Therefore,
to the extent that the Fund invests significantly in a
particular underlying fund, the Fund’s performance would be significantly impacted by the performance of such underlying fund. Generally, by investing in a combination of underlying funds, the Fund has exposure to the risks of many areas of
the market. By concentrating its investments in relatively few underlying funds, the Fund may have more concentrated market exposures, subjecting the Fund to greater risk of loss should those markets decline or fail to rise. The performance of
underlying funds could be adversely affected if other entities that invest in the same underlying funds make relatively large investments or redemptions in such underlying funds. The Fund, and its shareholders, indirectly bear a portion of the
expenses of any funds in which the Fund invests. Because the expenses and costs of each underlying fund are shared by its investors, redemptions by other investors in an underlying fund could result in decreased economies of scale and increased
operating expenses for such fund. The Investment Manager may have potential conflicts of interest in selecting affiliated funds over unaffiliated funds for investment by the Fund, and may also face potential conflicts of interest in selecting
affiliated funds, because the fees the Investment Manager receives from some underlying funds may be higher than the fees paid by other underlying funds.
Growth Securities Risk.
Growth
securities typically trade at a higher multiple of earnings than other types of equity securities. Accordingly, the market values of growth securities may never reach their expected market value and may decline in price. In addition,
growth securities, at times, may not perform as well as value securities or the stock market in general, and may be out of favor with investors for varying periods of time.
Inflation-Protected Securities Risk.
Inflation-protected debt securities tend to react to changes in real interest rates (i.e., nominal interest rates minus the expected impact of inflation). In general, the price of such securities falls when real
interest rates rise, and rises when real interest rates fall. Interest payments on these securities will vary and may be more volatile than interest paid on ordinary bonds. In periods of deflation, the Fund may have no income at all from such
investments.
Interest Rate Risk.
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of
debt securities 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 will generally affect the value of the Fund's shares. In general, the longer the maturity or
duration of a debt security, the greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest
rates may negatively impact the Fund’s performance. Actions by governments and central banking authorities can result in increases
in interest rates. Such actions may negatively affect the value of
fixed-income securities held by the Fund, resulting in a negative impact on the Fund's performance and NAV.
Issuer Risk.
An issuer in
which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may be caused by poor management decisions,
competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or factors.
High-Yield Securities Risk.
Securities rated below investment grade (commonly called “high-yield” or “junk” bonds) and unrated securities of comparable quality expose the Fund to a greater risk of loss of principal and income than a fund that invests
solely or primarily in investment grade securities. In addition, these investments have greater price fluctuations, are less liquid and are more likely to experience a default than higher-rated securities. High-yield securities are considered to be
predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Conservative Portfolio
(continued)
Market Risk.
Market risk refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. An investment in the Fund could lose money over short or long
periods. Although equity securities generally tend to have greater price volatility than debt securities, under certain market conditions, debt securities may have comparable or greater price volatility.
Prepayment and Extension Risk.
Prepayment and extension risk is the risk that a bond or other security or investment might,
in the case of prepayment risk, be called or otherwise converted, prepaid or redeemed before maturity and, in the
case of extension risk, the investment might not be called as expected. In the case of prepayment risk, if the investment is converted, prepaid or redeemed before maturity, the portfolio managers may not be able to invest the proceeds in other
investments providing as high a level of income, resulting in a reduced yield to the Fund. In the case of mortgage- or asset-backed securities, as interest rates decrease or spreads narrow, the likelihood of prepayment increases. Conversely,
extension risk is the risk that an unexpected rise in interest rates will extend the life of a mortgage- or asset-backed security beyond the prepayment time. If the Fund’s investments are locked in at a lower interest rate for a longer period
of time, the portfolio managers may be unable to capitalize on securities with higher interest rates or wider spreads.
Small- and Mid-Cap Company Securities Risk.
Investments in small- and mid-capitalization companies (small- and mid-cap companies) often involve greater risks than investments in larger, more established companies (larger companies) because small- and mid-cap
companies tend to have less predictable earnings and may lack the management experience, financial resources, product diversification and competitive strengths of larger companies. Securities of small- and mid-cap companies may be less liquid and
more volatile than the securities of larger companies.
Value Securities Risk.
Value securities are securities of companies that may have experienced, for example, adverse business, industry or other developments or may be subject to special risks that have caused the securities to be out of favor and, in turn, potentially
undervalued. The market value of a portfolio security may not meet the portfolio manager's perceived value assessment of that security, or may decline in price, even though the portfolio manager(s) believe(s) the securities are already undervalued.
There is also a risk that it may take longer than expected for the value of these investments to rise to the portfolio manager’s perceived value. In addition, value securities, at times, may not perform as well as growth securities or the
stock market in general, and may be out of favor with investors for varying periods of time.
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 bar chart shows how the Fund’s Class A share performance (without sales charges) has varied for each full calendar year shown. If the
sales charges were reflected, returns shown would be lower. The table below the bar chart compares the Fund’s returns (after applicable sales charges shown in the
Shareholder Fees
table in this
prospectus) for the periods shown with a blended index that is intended to provide a measure of the Fund's performance given its investment strategy, as well as one or more other measures of performance for markets in which the Fund may
invest.
The performance of one or more share
classes shown in the table below begins before the indicated inception date for such share class. The returns shown for each such share class include the returns of the Fund’s Class A shares (without applicable sales charges and adjusted to
reflect the higher class-related operating expenses of such classes, where applicable) for periods prior to its inception date. Any share class that does not have available performance would have annual returns substantially similar to those of
Class A shares. Except for differences in annual returns resulting from differences in expenses and sales charges (where applicable), the share classes of the Fund would have substantially similar annual returns because all share classes of the Fund
invest in the same portfolio of securities.
The
after-tax returns shown in the
Average Annual Total Returns
table below are calculated using the highest historical individual U.S. 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
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Conservative Portfolio
(continued)
as 401(k) plans or Individual Retirement
Accounts (IRAs). The after-tax returns are shown only for Class A shares and will vary for other share classes. Returns after taxes on distributions and sale of Fund shares are higher than before-tax returns for certain periods shown because they
reflect the tax benefit of capital losses realized on the redemption of Fund shares.
The Fund’s past performance (before and after taxes) is no
guarantee of how the Fund will perform in the future.
Updated performance information can be obtained by calling toll-free 800.345.6611 or visiting columbiathreadneedle.com/us.
Year
by Year Total Return (%)
as of December 31 Each Year*
|
Best
and Worst Quarterly Returns
During the Period Shown in the Bar Chart
|
|
Best
|
2nd Quarter 2009
|
11.32%
|
Worst
|
4th Quarter 2008
|
-9.87%
|
*
|
Year to Date return as of
March 31, 2015: 2.17%
|
Average Annual Total Returns After
Applicable Sales Charges (for periods ended December 31, 2014)
|
Share
Class
Inception Date
|
1
Year
|
5
Years
|
10
Years
|
Class
A
|
10/15/1996
|
|
|
|
returns
before taxes
|
|
-0.85%
|
6.38%
|
5.12%
|
returns
after taxes on distributions
|
|
-3.35%
|
4.87%
|
3.55%
|
returns
after taxes on distributions and sale of Fund shares
|
|
0.99%
|
4.66%
|
3.66%
|
Class
B
returns before taxes
|
08/07/1997
|
-0.34%
|
6.53%
|
4.94%
|
Class
C
returns before taxes
|
10/15/1996
|
3.52%
|
6.85%
|
4.94%
|
Class
K
returns before taxes
|
02/28/2013
|
5.28%
|
7.69%
|
5.76%
|
Class
R
returns before taxes
|
01/23/2006
|
4.93%
|
7.39%
|
5.49%
|
Class
R4
returns before taxes
|
11/08/2012
|
5.40%
|
7.76%
|
5.79%
|
Class
R5
returns before taxes
|
11/08/2012
|
5.59%
|
7.81%
|
5.82%
|
Class
Y
returns before taxes
|
06/13/2013
|
5.71%
|
7.81%
|
5.81%
|
Class
Z
returns before taxes
|
10/15/1996
|
5.43%
|
7.92%
|
5.99%
|
Blended
Index (consists of 55.5% Barclays U.S. Aggregate Bond Index, 26% Russell 3000 Index, 9% MSCI EAFE Index (Net), 5% Citi Three-Month U.S. Treasury Bill Index and 4.5% Barclays U.S. Corporate High-Yield Index)
(reflects reinvested dividends net of withholding taxes on the MSCI EAFE Index portion of the Blended Index but reflects no deductions for fees, expenses or other taxes for the other indices portion of the
blend)
|
|
6.23%
|
7.60%
|
5.82%
|
Barclays
U.S. Aggregate Bond Index
(reflects no deductions for fees, expenses or taxes)
|
|
5.97%
|
4.45%
|
4.71%
|
Russell
3000 Index
(reflects no deductions for fees, expenses or taxes)
|
|
12.56%
|
15.63%
|
7.94%
|
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Conservative Portfolio
(continued)
Fund Management
Investment Manager:
Columbia
Management Investment Advisers, LLC
Portfolio
Manager
|
|
Title
|
|
Role
with Fund
|
|
Managed
Fund Since
|
Jeffrey
Knight, CFA
|
|
Senior
Portfolio Manager, Managing Director, Global Head of Investment Solutions and Co-Head of Global Asset Allocation
|
|
Co-manager
|
|
2013
|
Anwiti
Bahuguna, Ph.D.
|
|
Senior
Portfolio Manager
|
|
Co-manager
|
|
2009
|
Marie
Schofield, CFA
|
|
Senior
Portfolio Manager and Chief Economist
|
|
Co-manager
|
|
2009
|
Beth
Vanney, CFA
|
|
Portfolio
Manager
|
|
Co-manager
|
|
2011
|
Toby
Nangle
|
|
Portfolio
Manager and Co-Head of Global Asset Allocation
|
|
Co-manager
|
|
2013
|
Purchase and Sale of Fund
Shares
You may purchase or redeem shares of the Fund on
any business day by contacting the Fund in the ways described below:
Online
|
|
Regular
Mail
|
|
Express
Mail
|
|
By
Telephone
|
columbiathreadneedle.com/us
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
30 Dan Road, Suite 8081
Canton, MA 02021-2809
|
|
800.422.3737
|
You may purchase shares
and receive redemption proceeds by electronic funds transfer, by check or by wire. If you maintain your account with a broker-dealer or other financial intermediary, you must contact that financial intermediary to buy, sell or exchange shares of the
Fund through your account with the intermediary.
The
minimum initial investment amounts for the share classes offered by the Fund are shown below:
Minimum Initial Investment
Class
|
Category
of eligible account
|
For
accounts other than
systematic investment
plan accounts
|
For
systematic investment
plan accounts
|
Classes
A, B* & C
|
All
accounts other than IRAs
|
$2,000
|
$100
|
IRAs
|
$1,000
|
$100
|
Classes
K**, R, R4 & Y
|
All
eligible accounts
|
None
|
N/A
|
Class
R5
|
Combined
underlying accounts of eligible registered investment advisers
|
$100,000
|
N/A
|
Omnibus
retirement plans
|
None
|
N/A
|
Class
Z
|
All
eligible accounts
|
$0,
$1,000 or $2,000
depending upon the category
of eligible investor
|
$100
|
*
|
Class B shares are generally
closed to new and existing shareholders.
|
**
|
Class K shares are generally
closed to new investors.
|
There is no
minimum additional investment for any share class.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Conservative Portfolio
(continued)
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-advantaged account, such as a 401(k) plan or an IRA. The use of a
fund-of-funds structure could affect the timing, amount and character of distributions to you and therefore may increase the amount of taxes payable by you. If you are investing through a tax-advantaged account, you may be taxed upon withdrawals
from that 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 Investment Manager), 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.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Portfolio
Investment Objective
Columbia Capital Allocation Moderate Portfolio (Moderate
Portfolio or the Fund)
is designed for investors seeking the highest level of total return that is consistent with a moderate level of risk.
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 members of your immediate family invest, or agree to invest in the future, at least $50,000 in certain classes of shares of eligible funds distributed by
Columbia Management Investment Distributors, Inc. (the Distributor). More information about these and other discounts is available from your financial intermediary, and can be found in the
Choosing a Share
Class
section beginning on page 66 of the Fund’s prospectus and in Appendix S to the Statement of Additional Information (SAI) under
Sales Charge Waivers
beginning on page S-1.
Shareholder
Fees (fees paid directly from your investment)
|
|
Class
A
|
Class
B
|
Class
C
|
Classes
K,
R, R4, R5,
Y and Z
|
Maximum
sales charge (load) imposed on purchases (as a % of offering price)
|
5.75%
|
None
|
None
|
None
|
Maximum
deferred sales charge (load) imposed on redemptions (as a % of the lower of the original purchase price or current net asset value)
|
1.00%
(a)
|
5.00%
(b)
|
1.00%
(c)
|
None
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
Class
A
|
Class
B
|
Class
C
|
Class
K
|
Class
R
|
Class
R4
|
Class
R5
|
Class
Y
|
Class
Z
|
Management
fees
|
0.05%
|
0.05%
|
0.05%
|
0.05%
|
0.05%
|
0.05%
|
0.05%
|
0.05%
|
0.05%
|
Distribution
and/or service (12b-1) fees
|
0.25%
|
1.00%
|
1.00%
|
0.00%
|
0.50%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
Other
expenses
(d)
|
0.16%
|
0.16%
|
0.16%
|
0.35%
|
0.16%
|
0.16%
|
0.10%
|
0.05%
|
0.16%
|
Acquired
fund fees and expenses
|
0.64%
|
0.64%
|
0.64%
|
0.64%
|
0.64%
|
0.64%
|
0.64%
|
0.64%
|
0.64%
|
Total
annual Fund operating expenses
(e)
|
1.10%
|
1.85%
|
1.85%
|
1.04%
|
1.35%
|
0.85%
|
0.79%
|
0.74%
|
0.85%
|
(a)
|
This charge is imposed on
certain investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with
certain limited exceptions.
|
(b)
|
This charge decreases over
time.
|
(c)
|
This charge applies to
redemptions within one year after purchase, with certain limited exceptions.
|
(d)
|
Other expenses for Class A,
Class B, Class C, Class K, Class R, Class R4, Class R5 and Class Z shares have been restated to reflect current fees paid by the Fund.
|
(e)
|
“Total
annual Fund operating expenses” include acquired fund fees and expenses (expenses the Fund incurs indirectly through its investments in other investment companies) and may be higher than “Total Net Expenses” shown in the
Financial Highlights
section of this prospectus because “Total Net Expenses” do not include acquired fund fees and expenses.
|
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 the
applicable class of Fund shares 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
Annual Fund Operating Expenses
table above.
|
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Portfolio
(continued)
Although your actual costs may be higher or
lower, based on the assumptions listed above, your costs would be:
|
1
year
|
3
years
|
5
years
|
10
years
|
Class
A
(whether or not shares are redeemed)
|
$681
|
$905
|
$1,146
|
$1,838
|
Class
B
(assuming redemption of all shares at the end of the period)
|
$688
|
$882
|
$1,201
|
$1,973
|
Class
B
(assuming no redemption of shares)
|
$188
|
$582
|
$1,001
|
$1,973
|
Class
C
(assuming redemption of all shares at the end of the period)
|
$288
|
$582
|
$1,001
|
$2,169
|
Class
C
(assuming no redemption of shares)
|
$188
|
$582
|
$1,001
|
$2,169
|
Class
K
(whether or not shares are redeemed)
|
$106
|
$331
|
$
574
|
$1,271
|
Class
R
(whether or not shares are redeemed)
|
$137
|
$428
|
$
739
|
$1,624
|
Class
R4
(whether or not shares are redeemed)
|
$
87
|
$271
|
$
471
|
$1,049
|
Class
R5
(whether or not shares are redeemed)
|
$
81
|
$252
|
$
439
|
$
978
|
Class
Y
(whether or not shares are redeemed)
|
$
76
|
$237
|
$
411
|
$
918
|
Class
Z
(whether or not shares are redeemed)
|
$
87
|
$271
|
$
471
|
$1,049
|
Portfolio Turnover
The Fund and underlying funds pay
transaction costs, such as commissions, when they buy and sell securities (or “turn over” their portfolios). The Fund will indirectly bear the expenses associated with portfolio turnover of the underlying funds. A high portfolio turnover
rate may indicate higher transaction costs. 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 16% of the average value of its portfolio.
Principal Investment Strategies
The Fund is primarily managed as a fund that
invests in other funds (i.e., a “fund-of-funds”) that seeks to achieve its investment objective by investing under normal circumstances in a combination of underlying funds for which Columbia Management Investment Advisers, LLC (the
Investment Manager) or an affiliate serves as investment adviser or principal underwriter (the affiliated underlying funds). The Fund may also invest up to 20% of its net assets in other funds, including third party advised (unaffiliated) funds and
exchange-traded funds (ETFs) (collectively with the affiliated underlying funds, the Underlying Funds), equity securities, fixed income securities (including treasury inflation protected securities (TIPS)) and derivative instruments (the 20%
Sleeve). The Fund’s derivative investments may include forward foreign currency contracts, futures (including currency, equity, fixed income, index and interest rate futures) and options. Derivative positions may be established to seek
incremental earnings, hedge existing positions, increase market or credit exposure, increase investment flexibility (including using the derivative position as a substitute for the purchase or sale of the underlying security, currency or other
instrument) and/or to change the effective duration of the Fund’s portfolio. Collectively, these investments (including through investments in derivatives) provide the Fund with exposure to equity, fixed income, and cash/cash equivalent asset
classes. The Fund may also pursue alternative investment strategies (alternative strategies), including those that seek investment returns uncorrelated to the broad equity and fixed income markets, as well as those providing exposure to other
markets, including but not limited to absolute (positive) return strategies.
The Fund may invest in Underlying Funds categorized as
“fixed income”, “equity”, “cash/cash equivalents”, and “alternative strategies”, which may represent indirect investments in various sectors, asset classes, strategies and markets. Under normal
circumstances, the Fund emphasizes investments in Underlying Funds categorized as fixed income, which can include those that invest in TIPs, U.S. treasury bonds and notes, mortgage-backed and asset-backed securities, investment grade corporate
bonds, high yield bonds (junk bonds), high yield loans and international bonds (including those of issuers in developed and emerging markets), which may have varying interest rates, terms, duration and credit exposure. The Fund may also invest in
Underlying Funds categorized as equity, which can include those that invest in equity securities representing different investment styles (e.g., growth, value and core/blend), market capitalizations (large-, mid- and small-cap), geographic focus
(domestic and international, including emerging markets) and sector focus (e.g., real estate, technology, infrastructure and natural resources).
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Portfolio
(continued)
The Underlying Funds categorized as alternative strategies include those that
employ a variety of investment strategies, techniques and practices, generally intended to have a low correlation to the performance of the broad equity and fixed income markets over a complete market cycle including but not limited to absolute
(positive) return strategies. Subject to the 20% Sleeve limitation described above, the Fund may also invest directly in equity securities, fixed income securities and derivative instruments, including forward foreign currency contracts and futures
(including currency, equity, fixed income, index and interest rate futures). By investing in a combination of Underlying Funds and other securities described in the 20% Sleeve, the Fund seeks to minimize the risks typically associated with investing
in a traditional mutual fund.
Under normal market
circumstances, the Fund may invest, directly or indirectly, in each of equity, fixed income and cash/cash equivalent asset classes and alternative strategies (each, an asset class category and collectively, the asset class categories) within the
following target asset allocation ranges (includes investments in Underlying Funds and the other securities described in the 20% Sleeve):
Asset
Class Exposures
|
|
Equity
|
Fixed
Income
|
Cash/Cash
Equivalents
|
Alternatives
|
Moderate
Portfolio
|
10–70%*
|
30–75%*
|
0–40%*
|
0–40%*
|
|
|
|
|
|
*
|
As a percent of Fund net
assets. Ranges include the net notional amounts of a Fund’s direct investments in derivative instruments. Market appreciation or depreciation may cause a Fund to be temporarily outside the ranges identified in the table. The Investment Manager
may modify the target allocation ranges only with the approval of a Fund’s Board of Trustees (the Board).
|
The Fund may be most appropriate for investors with an
intermediate term investment horizon.
Principal
Risks
An investment in the Fund involves risk, including
specific risks relating to the investment in the Fund based on its investment process and its "fund-of-funds" structure, as well as specific risks related to the underlying funds in which it invests, including among others, those described below.
More information about underlying funds, including their principal risks, is available in their prospectuses.
There is no assurance that the Fund will achieve its investment objective and you may lose
money
. The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV) and share price may go down.
Allocation Risk.
Because the Fund uses an asset allocation strategy in pursuit of its investment objective,
there is a risk that the Fund's allocation among asset classes, investments, managers,
strategies and/or investment styles will cause the Fund's shares to lose value or cause the Fund to underperform other funds with a similar investment objective and/or strategies, or that the investments themselves will not produce the returns
expected.
Alternative Strategies Investment Risk.
An investment in alternative investment strategies (Alternative Strategies), whether through direct investment or through one or more underlying funds, involves risks, which may be significant. Alternative
Strategies may include strategies, instruments or other assets, such as derivatives, that seek investment returns uncorrelated with the broad equity and fixed income/debt markets, as well as those providing exposure to other markets (such as
commodity markets), including but not limited to absolute (positive) return strategies. Alternative Strategies may fail to achieve their desired performance, market or other exposure, or their returns (or lack thereof) may be more correlated with
the broad equity and/or fixed income/debt markets than was anticipated, and the Fund may lose money.
Credit Risk.
The value of
fixed-income securities,
or other instruments or assets, may decline if the issuer thereof defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial
obligations, such as making payments to the Fund when due. Rating agencies assign credit ratings to certain fixed-income securities to indicate their credit risk. Lower quality or unrated securities held by the Fund may present increased credit risk
as compared to higher-rated securities. Non-investment grade fixed-income securities (commonly called “high-yield” or “junk”) may be subject to greater price fluctuations and are more likely to experience a
default
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Portfolio
(continued)
than investment grade securities and
therefore may expose the Fund to increased credit risk. If the Fund purchases unrated securities, or if the ratings of securities held by the Fund are lowered after purchase, the Fund will depend on analysis of credit risk more heavily than
usual.
Derivatives Risk.
Losses involving derivative instruments may be substantial, because a relatively small movement in the price of an underlying security, instrument, commodity, currency or index may result in a substantial loss for the Fund. In addition to the
potential for increased losses, the use of derivative instruments may lead to increased volatility for the Fund. Derivative investments will typically increase the Fund’s exposure to principal risks to which it is otherwise exposed, and may
expose the Fund to additional risks, including correlation risk, counterparty risk, hedging risk, leverage risk and/or liquidity risk.
Derivatives Risk/Forward Foreign Currency Contracts Risk.
These instruments are a type of derivative contract whereby the Fund may agree to buy or sell a country’s or region’s currency at a specific price on a specific date in the future. These instruments may fall
in value (sometimes dramatically) due to foreign market downswings or foreign currency value fluctuations, subjecting the Fund to foreign currency risk. Investment in these instruments also subjects the Fund to counterparty risk. The Fund’s
strategy of investing in these instruments may not be successful
and the Fund may experience significant losses as a result.
Derivatives Risk/Futures Contracts Risk.
The loss that may be incurred in entering into futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets are highly volatile and the use of futures may increase the
volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract may result in substantial losses for the Fund. Futures
contracts may be illiquid. Furthermore, exchanges may limit fluctuations in futures contract prices during a trading session by imposing a maximum permissible price movement on each futures contract. The Fund may be disadvantaged if it is prohibited
from executing a trade outside the daily permissible price movement. Futures contracts executed on foreign exchanges may not provide the same protection as U.S. exchanges. These transactions involve additional risks, including counterparty risk,
hedging risk and pricing risk.
Derivatives
Risk/Options Risk.
The use of options is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If the Fund
sells a put option, there is a risk that the Fund may be required to buy the underlying asset at a disadvantageous price. If the Fund sells a call option, there is a risk that the Fund may be required to sell the underlying asset at a
disadvantageous price, and if the call option sold is not covered (for example, by owning the underlying asset), the Fund's losses are potentially unlimited. These transactions involve other risks, including counterparty risk and hedging
risk.
Exchange-Traded Fund (ETF) Risk.
ETFs are subject to, among other risks, tracking risk and passive and, in some cases, active investment risk. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar
expenses incurred through ownership of the ETF.
Foreign Currency Risk.
The
performance of the Fund may be materially affected positively or negatively by foreign currency strength or weakness relative to the U.S. dollar, particularly if the Fund invests a significant percentage of its assets in foreign securities or other
assets denominated in currencies other than the U.S. dollar.
Foreign Securities Risk.
Investments in or exposure to foreign securities involve certain risks not associated with investments in or exposure to securities of U.S. companies. Foreign securities subject the Fund to the risks associated with
investing in the particular country of an issuer, including the political, regulatory, economic, social, diplomatic and other conditions or events occurring in the country or region, as well as risks associated with less developed custody and
settlement practices. Foreign securities may be more volatile and less liquid than securities of U.S. companies, and are subject to the risks associated with potential imposition of economic and other sanctions against a particular foreign country,
its nationals or industries or businesses within the country. The performance of the Fund may be negatively impacted by fluctuations in a foreign currency’s strength or weakness relative to the U.S. dollar, particularly
to the extent
the Fund invests a significant percentage of its assets in foreign securities or other assets denominated in currencies other than the U.S. dollar.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Portfolio
(continued)
Fund-of-Funds Risk.
Determinations regarding asset classes or underlying funds and the Fund’s allocations thereto may not successfully achieve the Fund’s investment objective, in whole or in part. The ability of the Fund to
realize its investment objective will depend, in large part, on the extent to which the underlying funds realize their investment objective. There is no guarantee that the underlying funds will achieve their respective investment objectives. The
Fund is exposed to the same risks as the underlying funds in direct proportion to the allocation of its assets among the underlying funds. Therefore,
to the extent that the Fund invests significantly in a
particular underlying fund, the Fund’s performance would be significantly impacted by the performance of such underlying fund. Generally, by investing in a combination of underlying funds, the Fund has exposure to the risks of many areas of
the market. By concentrating its investments in relatively few underlying funds, the Fund may have more concentrated market exposures, subjecting the Fund to greater risk of loss should those markets decline or fail to rise. The performance of
underlying funds could be adversely affected if other entities that invest in the same underlying funds make relatively large investments or redemptions in such underlying funds. The Fund, and its shareholders, indirectly bear a portion of the
expenses of any funds in which the Fund invests. Because the expenses and costs of each underlying fund are shared by its investors, redemptions by other investors in an underlying fund could result in decreased economies of scale and increased
operating expenses for such fund. The Investment Manager may have potential conflicts of interest in selecting affiliated funds over unaffiliated funds for investment by the Fund, and may also face potential conflicts of interest in selecting
affiliated funds, because the fees the Investment Manager receives from some underlying funds may be higher than the fees paid by other underlying funds.
Growth Securities Risk.
Growth
securities typically trade at a higher multiple of earnings than other types of equity securities. Accordingly, the market values of growth securities may never reach their expected market value and may decline in price. In addition,
growth securities, at times, may not perform as well as value securities or the stock market in general, and may be out of favor with investors for varying periods of time.
Inflation-Protected Securities Risk.
Inflation-protected debt securities tend to react to changes in real interest rates (i.e., nominal interest rates minus the expected impact of inflation). In general, the price of such securities falls when real
interest rates rise, and rises when real interest rates fall. Interest payments on these securities will vary and may be more volatile than interest paid on ordinary bonds. In periods of deflation, the Fund may have no income at all from such
investments.
Interest Rate Risk.
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of
debt securities 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 will generally affect the value of the Fund's shares. In general, the longer the maturity or
duration of a debt security, the greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest
rates may negatively impact the Fund’s performance. Actions by governments and central banking authorities can result in increases
in interest rates. Such actions may negatively affect the value of
fixed-income securities held by the Fund, resulting in a negative impact on the Fund's performance and NAV.
Issuer Risk.
An issuer in
which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may be caused by poor management decisions,
competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or factors.
High-Yield Securities Risk.
Securities rated below investment grade (commonly called “high-yield” or “junk” bonds) and unrated securities of comparable quality expose the Fund to a greater risk of loss of principal and income than a fund that invests
solely or primarily in investment grade securities. In addition, these investments have greater price fluctuations, are less liquid and are more likely to experience a default than higher-rated securities. High-yield securities are considered to be
predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Portfolio
(continued)
Market Risk.
Market risk refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. An investment in the Fund could lose money over short or long
periods. Although equity securities generally tend to have greater price volatility than debt securities, under certain market conditions, debt securities may have comparable or greater price volatility.
Prepayment and Extension Risk.
Prepayment and extension risk is the risk that a bond or other security or investment might,
in the case of prepayment risk, be called or otherwise converted, prepaid or redeemed before maturity and, in the
case of extension risk, the investment might not be called as expected. In the case of prepayment risk, if the investment is converted, prepaid or redeemed before maturity, the portfolio managers may not be able to invest the proceeds in other
investments providing as high a level of income, resulting in a reduced yield to the Fund. In the case of mortgage- or asset-backed securities, as interest rates decrease or spreads narrow, the likelihood of prepayment increases. Conversely,
extension risk is the risk that an unexpected rise in interest rates will extend the life of a mortgage- or asset-backed security beyond the prepayment time. If the Fund’s investments are locked in at a lower interest rate for a longer period
of time, the portfolio managers may be unable to capitalize on securities with higher interest rates or wider spreads.
Small- and Mid-Cap Company Securities Risk.
Investments in small- and mid-capitalization companies (small- and mid-cap companies) often involve greater risks than investments in larger, more established companies (larger companies) because small- and mid-cap
companies tend to have less predictable earnings and may lack the management experience, financial resources, product diversification and competitive strengths of larger companies. Securities of small- and mid-cap companies may be less liquid and
more volatile than the securities of larger companies.
Value Securities Risk.
Value securities are securities of companies that may have experienced, for example, adverse business, industry or other developments or may be subject to special risks that have caused the securities to be out of favor and, in turn, potentially
undervalued. The market value of a portfolio security may not meet the portfolio manager's perceived value assessment of that security, or may decline in price, even though the portfolio manager(s) believe(s) the securities are already undervalued.
There is also a risk that it may take longer than expected for the value of these investments to rise to the portfolio manager’s perceived value. In addition, value securities, at times, may not perform as well as growth securities or the
stock market in general, and may be out of favor with investors for varying periods of time.
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 bar chart shows how the Fund’s Class A share performance (without sales charges) has varied for each full calendar year shown. If the
sales charges were reflected, returns shown would be lower. The table below the bar chart compares the Fund’s returns (after applicable sales charges shown in the
Shareholder Fees
table in this
prospectus) for the periods shown with a blended index that is intended to provide a measure of the Fund's performance given its investment strategy, as well as one or more other measures of performance for markets in which the Fund may
invest.
The performance of one or more share
classes shown in the table below begins before the indicated inception date for such share class. The returns shown for each such share class include the returns of the Fund’s Class A shares (without applicable sales charges and adjusted to
reflect the higher class-related operating expenses of such classes, where applicable) for periods prior to its inception date. Any share class that does not have available performance would have annual returns substantially similar to those of
Class A shares. Except for differences in annual returns resulting from differences in expenses and sales charges (where applicable), the share classes of the Fund would have substantially similar annual returns because all share classes of the Fund
invest in the same portfolio of securities.
The
after-tax returns shown in the
Average Annual Total Returns
table below are calculated using the highest historical individual U.S. 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
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Portfolio
(continued)
as 401(k) plans or Individual Retirement
Accounts (IRAs). The after-tax returns are shown only for Class A shares and will vary for other share classes. Returns after taxes on distributions and sale of Fund shares are higher than before-tax returns for certain periods shown because they
reflect the tax benefit of capital losses realized on the redemption of Fund shares.
The Fund’s past performance (before and after taxes) is no
guarantee of how the Fund will perform in the future.
Updated performance information can be obtained by calling toll-free 800.345.6611 or visiting columbiathreadneedle.com/us.
Year
by Year Total Return (%)
as of December 31 Each Year*
|
Best
and Worst Quarterly Returns
During the Period Shown in the Bar Chart
|
|
Best
|
2nd Quarter 2009
|
12.51%
|
Worst
|
4th Quarter 2008
|
-12.52%
|
*
|
Year to Date return as of
March 31, 2015: 2.59%
|
Average Annual Total Returns After
Applicable Sales Charges (for periods ended December 31, 2014)
|
Share
Class
Inception Date
|
1
Year
|
5
Years
|
10
Years
|
Class
A
|
03/04/2004
|
|
|
|
returns
before taxes
|
|
-0.75%
|
7.47%
|
5.43%
|
returns
after taxes on distributions
|
|
-3.46%
|
6.05%
|
3.99%
|
returns
after taxes on distributions and sale of Fund shares
|
|
1.35%
|
5.56%
|
3.92%
|
Class
B
returns before taxes
|
03/04/2004
|
-0.28%
|
7.65%
|
5.27%
|
Class
C
returns before taxes
|
03/04/2004
|
3.59%
|
7.95%
|
5.27%
|
Class
K
returns before taxes
|
03/04/2004
|
5.39%
|
8.84%
|
6.24%
|
Class
R
returns before taxes
|
09/27/2010
|
5.04%
|
8.49%
|
5.80%
|
Class
R4
returns before taxes
|
06/13/2013
|
5.55%
|
8.85%
|
6.11%
|
Class
R5
returns before taxes
|
06/13/2013
|
5.70%
|
8.90%
|
6.13%
|
Class
Y
returns before taxes
|
06/13/2013
|
5.66%
|
8.90%
|
6.13%
|
Class
Z
returns before taxes
|
09/27/2010
|
5.55%
|
9.00%
|
6.18%
|
Blended
Index (consists of 42.5% Barclays U.S. Aggregate Bond Index, 37% Russell 3000 Index, 11%, MSCI EAFE Index (Net), 7.5% Barclays U.S. Corporate High-Yield Index, 2% MSCI Emerging Markets Index (Net))
(reflects
reinvested dividends net of withholding taxes on the MSCI EAFE Index and the MSCI Emerging Markets Index portion of the Blended Index but reflects no deductions for fees, expenses or other taxes for the other indices portion of the blend)
|
|
6.75%
|
9.18%
|
6.55%
|
Russell
3000 Index
(reflects no deductions for fees, expenses or taxes)
|
|
12.56%
|
15.63%
|
7.94%
|
Barclays
U.S. Aggregate Bond Index
(reflects no deductions for fees, expenses or taxes)
|
|
5.97%
|
4.45%
|
4.71%
|
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Portfolio
(continued)
Fund Management
Investment Manager:
Columbia
Management Investment Advisers, LLC
Portfolio
Manager
|
|
Title
|
|
Role
with Fund
|
|
Managed
Fund Since
|
Jeffrey
Knight, CFA
|
|
Senior
Portfolio Manager, Managing Director, Global Head of Investment Solutions and Co-Head of Global Asset Allocation
|
|
Co-manager
|
|
2013
|
Anwiti
Bahuguna, Ph.D.
|
|
Senior
Portfolio Manager
|
|
Co-manager
|
|
2010
|
Marie
Schofield, CFA
|
|
Senior
Portfolio Manager and Chief Economist
|
|
Co-manager
|
|
2010
|
Beth
Vanney, CFA
|
|
Portfolio
Manager
|
|
Co-manager
|
|
2011
|
Toby
Nangle
|
|
Portfolio
Manager and Co-Head of Global Asset Allocation
|
|
Co-manager
|
|
2013
|
Purchase and Sale of Fund
Shares
You may purchase or redeem shares of the Fund on
any business day by contacting the Fund in the ways described below:
Online
|
|
Regular
Mail
|
|
Express
Mail
|
|
By
Telephone
|
columbiathreadneedle.com/us
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
30 Dan Road, Suite 8081
Canton, MA 02021-2809
|
|
800.422.3737
|
You may purchase shares
and receive redemption proceeds by electronic funds transfer, by check or by wire. If you maintain your account with a broker-dealer or other financial intermediary, you must contact that financial intermediary to buy, sell or exchange shares of the
Fund through your account with the intermediary.
The
minimum initial investment amounts for the share classes offered by the Fund are shown below:
Minimum Initial Investment
Class
|
Category
of eligible account
|
For
accounts other than
systematic investment
plan accounts
|
For
systematic investment
plan accounts
|
Classes
A, B* & C
|
All
accounts other than IRAs
|
$2,000
|
$100
|
IRAs
|
$1,000
|
$100
|
Classes
K**, R, R4 & Y
|
All
eligible accounts
|
None
|
N/A
|
Class
R5
|
Combined
underlying accounts of eligible registered investment advisers
|
$100,000
|
N/A
|
Omnibus
retirement plans
|
None
|
N/A
|
Class
Z
|
All
eligible accounts
|
$0,
$1,000 or $2,000
depending upon the category
of eligible investor
|
$100
|
*
|
Class B shares are generally
closed to new and existing shareholders.
|
**
|
Class K shares are generally
closed to new investors.
|
There is no
minimum additional investment for any share class.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Portfolio
(continued)
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-advantaged account, such as a 401(k) plan or an IRA. The use of a
fund-of-funds structure could affect the timing, amount and character of distributions to you and therefore may increase the amount of taxes payable by you. If you are investing through a tax-advantaged account, you may be taxed upon withdrawals
from that 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 Investment Manager), 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.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Aggressive Portfolio
Investment Objective
Columbia Capital Allocation Moderate Aggressive Portfolio
(Moderate Aggressive Portfolio or the Fund)
is designed for investors seeking the highest level of total return that is consistent with a moderate aggressive level of risk.
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 members of your immediate family invest, or agree to invest in the future, at least $50,000 in certain classes of shares of eligible funds distributed by
Columbia Management Investment Distributors, Inc. (the Distributor). More information about these and other discounts is available from your financial intermediary, and can be found in the
Choosing a Share
Class
section beginning on page 66 of the Fund’s prospectus and in Appendix S to the Statement of Additional Information (SAI) under
Sales Charge Waivers
beginning on page S-1.
Shareholder
Fees (fees paid directly from your investment)
|
|
Classes
A
and T
|
Class
B
|
Class
C
|
Classes
K,
R, R4, R5,
Y and Z
|
Maximum
sales charge (load) imposed on purchases (as a % of offering price)
|
5.75%
|
None
|
None
|
None
|
Maximum
deferred sales charge (load) imposed on redemptions (as a % of the lower of the original purchase price or current net asset value)
|
1.00%
(a)
|
5.00%
(b)
|
1.00%
(c)
|
None
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
Class
A
|
Class
B
|
Class
C
|
Class
K
|
Class
R
|
Class
R4
|
Class
R5
|
Class
T
|
Class
Y
|
Class
Z
|
Management
fees
|
0.06%
|
0.06%
|
0.06%
|
0.06%
|
0.06%
|
0.06%
|
0.06%
|
0.06%
|
0.06%
|
0.06%
|
Distribution
and/or service (12b-1) fees
|
0.25%
|
1.00%
|
1.00%
|
0.00%
|
0.50%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
Other
expenses
(d)
|
0.21%
|
0.21%
|
0.21%
|
0.35%
|
0.21%
|
0.21%
|
0.10%
|
0.46%
|
0.05%
|
0.21%
|
Acquired
fund fees and expenses
|
0.66%
|
0.66%
|
0.66%
|
0.66%
|
0.66%
|
0.66%
|
0.66%
|
0.66%
|
0.66%
|
0.66%
|
Total
annual Fund operating expenses
(e)
|
1.18%
|
1.93%
|
1.93%
|
1.07%
|
1.43%
|
0.93%
|
0.82%
|
1.18%
|
0.77%
|
0.93%
|
(a)
|
This charge is imposed on
certain investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with
certain limited exceptions.
|
(b)
|
This charge decreases over
time.
|
(c)
|
This charge applies to
redemptions within one year after purchase, with certain limited exceptions.
|
(d)
|
Other expenses for Class A,
Class B, Class C, Class K, Class R, Class R4, Class R5, Class T and Class Z shares have been restated to reflect current fees paid by the Fund.
|
(e)
|
“Total
annual Fund operating expenses” include acquired fund fees and expenses (expenses the Fund incurs indirectly through its investments in other investment companies) and may be higher than “Total Net Expenses” shown in the
Financial Highlights
section of this prospectus because “Total Net Expenses” do not include acquired fund fees and expenses.
|
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Aggressive Portfolio
(continued)
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 the
applicable class of Fund shares 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
Annual Fund Operating Expenses
table above.
|
Although your actual costs may be higher or
lower, based on the assumptions listed above, your costs would be:
|
1
year
|
3
years
|
5
years
|
10
years
|
Class
A
(whether or not shares are redeemed)
|
$688
|
$928
|
$1,187
|
$1,924
|
Class
B
(assuming redemption of all shares at the end of the period)
|
$696
|
$906
|
$1,242
|
$2,059
|
Class
B
(assuming no redemption of shares)
|
$196
|
$606
|
$1,042
|
$2,059
|
Class
C
(assuming redemption of all shares at the end of the period)
|
$296
|
$606
|
$1,042
|
$2,254
|
Class
C
(assuming no redemption of shares)
|
$196
|
$606
|
$1,042
|
$2,254
|
Class
K
(whether or not shares are redeemed)
|
$109
|
$340
|
$
590
|
$1,306
|
Class
R
(whether or not shares are redeemed)
|
$146
|
$452
|
$
782
|
$1,713
|
Class
R4
(whether or not shares are redeemed)
|
$
95
|
$296
|
$
515
|
$1,143
|
Class
R5
(whether or not shares are redeemed)
|
$
84
|
$262
|
$
455
|
$1,014
|
Class
T
(whether or not shares are redeemed)
|
$688
|
$928
|
$1,187
|
$1,924
|
Class
Y
(whether or not shares are redeemed)
|
$
79
|
$246
|
$
428
|
$
954
|
Class
Z
(whether or not shares are redeemed)
|
$
95
|
$296
|
$
515
|
$1,143
|
Portfolio Turnover
The Fund and underlying funds pay
transaction costs, such as commissions, when they buy and sell securities (or “turn over” their portfolios). The Fund will indirectly bear the expenses associated with portfolio turnover of the underlying funds. A high portfolio turnover
rate may indicate higher transaction costs. 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 20% of the average value of its portfolio.
Principal Investment Strategies
The Fund is primarily managed as a fund that
invests in other funds (i.e., a “fund-of-funds”) that seeks to achieve its investment objective by investing under normal circumstances in a combination of underlying funds for which Columbia Management Investment Advisers, LLC (the
Investment Manager) or an affiliate serves as investment adviser or principal underwriter (the affiliated underlying funds). The Fund may also invest up to 20% of its net assets in other funds, including third party advised (unaffiliated) funds and
exchange-traded funds (ETFs) (collectively with the affiliated underlying funds, the Underlying Funds), equity securities, fixed income securities (including treasury inflation protected securities (TIPS)) and derivative instruments (the 20%
Sleeve). The Fund’s derivative investments may include forward foreign currency contracts, futures (including currency, equity, fixed income, index and interest rate futures) and options. Derivative positions may be established to seek
incremental earnings, hedge existing positions, increase market or credit exposure, increase investment flexibility (including using the derivative position as a substitute for the purchase or sale of the underlying security, currency or other
instrument) and/or to change the effective duration of the Fund’s portfolio. Collectively, these investments (including through investments in derivatives) provide the Fund with exposure to equity, fixed income, and cash/cash equivalent asset
classes. The
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Aggressive Portfolio
(continued)
Fund may also pursue alternative investment strategies (alternative
strategies), including those that seek investment returns uncorrelated to the broad equity and fixed income markets, as well as those providing exposure to other markets, including but not limited to absolute (positive) return strategies.
The Fund may invest in Underlying Funds
categorized as “equity”, “fixed income”, “cash/cash equivalents”, and “alternative strategies”, which may represent indirect investments in various sectors, asset classes, strategies and markets. Under
normal circumstances, the Fund emphasizes investments in Underlying Funds categorized as equity, which can include those that invest in equity securities representing different investment styles (e.g., growth, value and core/blend), market
capitalizations (large-, mid- and small-cap), geographic focus (domestic and international, including emerging markets) and sector focus (e.g., real estate, technology, infrastructure and natural resources). The Fund may also invest in Underlying
Funds categorized as fixed income, which can include those investing in TIPs, U.S. treasury bonds and notes, mortgage-backed and asset-backed securities, investment grade corporate bonds, high yield bonds (junk bonds), high yield loans and
international bonds (including those of issuers in developed and emerging markets), which may have varying interest rates, terms, duration and credit exposure. The Underlying Funds categorized as alternative strategies include those that employ a
variety of investment strategies, techniques and practices, generally intended to have a low correlation to the performance of the broad equity and fixed income markets over a complete market cycle including but not limited to absolute (positive)
return strategies. Subject to the 20% Sleeve limitation described above, the Fund may also invest directly in equity securities, fixed income securities and derivative instruments, including forward foreign currency contracts and futures (including
currency, equity, fixed income, index and interest rate futures). By investing in a combination of Underlying Funds and other securities described in the 20% Sleeve, the Fund seeks to minimize the risks typically associated with investing in a
traditional mutual fund.
Under normal market
circumstances, the Fund may invest, directly or indirectly, in each of equity, fixed income and cash/cash equivalent asset classes and alternative strategies (each, an asset class category and collectively, the asset class categories) within the
following target asset allocation ranges (includes investments in Underlying Funds and the other securities described in the 20% Sleeve):
Asset
Class Exposures
|
|
Equity
|
Fixed
Income
|
Cash/Cash
Equivalents
|
Alternatives
|
Moderate
Aggressive Portfolio
|
20–85%*
|
15–60%*
|
0–40%*
|
0–40%*
|
|
|
|
|
|
*
|
As a percent of Fund net
assets. Ranges include the net notional amounts of a Fund’s direct investments in derivative instruments. Market appreciation or depreciation may cause a Fund to be temporarily outside the ranges identified in the table. The Investment Manager
may modify the target allocation ranges only with the approval of a Fund’s Board of Trustees (the Board).
|
The Fund may be most appropriate for investors with an
intermediate-to-long term investment horizon.
Principal
Risks
An investment in the Fund involves risk, including
specific risks relating to the investment in the Fund based on its investment process and its "fund-of-funds" structure, as well as specific risks related to the underlying funds in which it invests, including among others, those described below.
More information about underlying funds, including their principal risks, is available in their prospectuses.
There is no assurance that the Fund will achieve its investment objective and you may lose
money
. The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV) and share price may go down.
Allocation Risk.
Because the Fund uses an asset allocation strategy in pursuit of its investment objective,
there is a risk that the Fund's allocation among asset classes, investments, managers,
strategies and/or investment styles will cause the Fund's shares to lose value or cause the Fund to underperform other funds with a similar investment objective and/or strategies, or that the investments themselves will not produce the returns
expected.
Alternative Strategies Investment Risk.
An investment in alternative investment strategies (Alternative Strategies), whether through direct investment or through one or more underlying funds, involves risks, which may be significant. Alternative
Strategies may include strategies, instruments or other assets, such as derivatives, that seek investment
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Aggressive Portfolio
(continued)
returns uncorrelated with the broad equity
and fixed income/debt markets, as well as those providing exposure to other markets (such as commodity markets), including but not limited to absolute (positive) return strategies. Alternative Strategies may fail to achieve their desired
performance, market or other exposure, or their returns (or lack thereof) may be more correlated with the broad equity and/or fixed income/debt markets than was anticipated, and the Fund may lose money.
Credit Risk.
The value of
fixed-income securities,
or other instruments or assets, may decline if the issuer thereof defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial
obligations, such as making payments to the Fund when due. Rating agencies assign credit ratings to certain fixed-income securities to indicate their credit risk. Lower quality or unrated securities held by the Fund may present increased credit risk
as compared to higher-rated securities. Non-investment grade fixed-income securities (commonly called “high-yield” or “junk”) may be subject to greater price fluctuations and are more likely to experience a default than
investment grade securities and therefore may expose the Fund to increased credit risk. If the Fund purchases unrated securities, or if the ratings of securities held by the Fund are lowered after purchase, the Fund will depend on analysis of credit
risk more heavily than usual.
Derivatives Risk.
Losses involving derivative instruments may be substantial, because a relatively small movement in the price of an underlying security, instrument, commodity, currency or index may result in a substantial loss for the
Fund. In addition to the potential for increased losses, the use of derivative instruments may lead to increased volatility for the Fund. Derivative investments will typically increase the Fund’s exposure to principal risks to which it is
otherwise exposed, and may expose the Fund to additional risks, including correlation risk, counterparty risk, hedging risk, leverage risk and/or liquidity risk.
Derivatives Risk/Forward Foreign Currency Contracts Risk.
These instruments are a type of derivative contract whereby the Fund may agree to buy or sell a country’s or region’s currency at a specific price on a specific date in the future. These instruments may fall
in value (sometimes dramatically) due to foreign market downswings or foreign currency value fluctuations, subjecting the Fund to foreign currency risk. Investment in these instruments also subjects the Fund to counterparty risk. The Fund’s
strategy of investing in these instruments may not be successful
and the Fund may experience significant losses as a result.
Derivatives Risk/Futures Contracts Risk.
The loss that may be incurred in entering into futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets are highly volatile and the use of futures may increase the
volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract may result in substantial losses for the Fund. Futures
contracts may be illiquid. Furthermore, exchanges may limit fluctuations in futures contract prices during a trading session by imposing a maximum permissible price movement on each futures contract. The Fund may be disadvantaged if it is prohibited
from executing a trade outside the daily permissible price movement. Futures contracts executed on foreign exchanges may not provide the same protection as U.S. exchanges. These transactions involve additional risks, including counterparty risk,
hedging risk and pricing risk.
Derivatives
Risk/Options Risk.
The use of options is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If the Fund
sells a put option, there is a risk that the Fund may be required to buy the underlying asset at a disadvantageous price. If the Fund sells a call option, there is a risk that the Fund may be required to sell the underlying asset at a
disadvantageous price, and if the call option sold is not covered (for example, by owning the underlying asset), the Fund's losses are potentially unlimited. These transactions involve other risks, including counterparty risk and hedging
risk.
Exchange-Traded Fund (ETF) Risk.
ETFs are subject to, among other risks, tracking risk and passive and, in some cases, active investment risk. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar
expenses incurred through ownership of the ETF.
Foreign Currency Risk.
The
performance of the Fund may be materially affected positively or negatively by foreign currency strength or weakness relative to the U.S. dollar, particularly if the Fund invests a significant percentage of its assets in foreign securities or other
assets denominated in currencies other than the U.S. dollar.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Aggressive Portfolio
(continued)
Foreign Securities Risk.
Investments in or exposure to foreign securities involve certain risks not associated with investments in or exposure to securities of U.S. companies. Foreign securities subject the Fund to the risks associated with
investing in the particular country of an issuer, including the political, regulatory, economic, social, diplomatic and other conditions or events occurring in the country or region, as well as risks associated with less developed custody and
settlement practices. Foreign securities may be more volatile and less liquid than securities of U.S. companies, and are subject to the risks associated with potential imposition of economic and other sanctions against a particular foreign country,
its nationals or industries or businesses within the country. The performance of the Fund may be negatively impacted by fluctuations in a foreign currency’s strength or weakness relative to the U.S. dollar, particularly
to the extent
the Fund invests a significant percentage of its assets in foreign securities or other assets denominated in currencies other than the U.S. dollar.
Fund-of-Funds Risk.
Determinations regarding asset classes or underlying funds and the Fund’s allocations thereto may not successfully achieve the Fund’s investment objective, in whole or in part. The ability of the Fund to realize its investment objective
will depend, in large part, on the extent to which the underlying funds realize their investment objective. There is no guarantee that the underlying funds will achieve their respective investment objectives. The Fund is exposed to the same risks as
the underlying funds in direct proportion to the allocation of its assets among the underlying funds. Therefore,
to the extent that the Fund invests significantly in a particular underlying fund, the
Fund’s performance would be significantly impacted by the performance of such underlying fund. Generally, by investing in a combination of underlying funds, the Fund has exposure to the risks of many areas of the market. By concentrating its
investments in relatively few underlying funds, the Fund may have more concentrated market exposures, subjecting the Fund to greater risk of loss should those markets decline or fail to rise. The performance of underlying funds could be adversely
affected if other entities that invest in the same underlying funds make relatively large investments or redemptions in such underlying funds. The Fund, and its shareholders, indirectly bear a portion of the expenses of any funds in which the Fund
invests. Because the expenses and costs of each underlying fund are shared by its investors, redemptions by other investors in an underlying fund could result in decreased economies of scale and increased operating expenses for such fund. The
Investment Manager may have potential conflicts of interest in selecting affiliated funds over unaffiliated funds for investment by the Fund, and may also face potential conflicts of interest in selecting affiliated funds, because the fees the
Investment Manager receives from some underlying funds may be higher than the fees paid by other underlying funds.
Growth Securities Risk.
Growth
securities typically trade at a higher multiple of earnings than other types of equity securities. Accordingly, the market values of growth securities may never reach their expected market value and may decline in price. In addition,
growth securities, at times, may not perform as well as value securities or the stock market in general, and may be out of favor with investors for varying periods of time.
Inflation-Protected Securities Risk.
Inflation-protected debt securities tend to react to changes in real interest rates (i.e., nominal interest rates minus the expected impact of inflation). In general, the price of such securities falls when real
interest rates rise, and rises when real interest rates fall. Interest payments on these securities will vary and may be more volatile than interest paid on ordinary bonds. In periods of deflation, the Fund may have no income at all from such
investments.
Interest Rate Risk.
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of
debt securities 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 will generally affect the value of the Fund's shares. In general, the longer the maturity or
duration of a debt security, the greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest
rates may negatively impact the Fund’s performance. Actions by governments and central banking authorities can result in increases
in interest rates. Such actions may negatively affect the value of
fixed-income securities held by the Fund, resulting in a negative impact on the Fund's performance and NAV.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Aggressive Portfolio
(continued)
Issuer Risk.
An issuer in
which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may be caused by poor management decisions,
competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or factors.
High-Yield Securities Risk.
Securities rated below investment grade (commonly called “high-yield” or “junk” bonds) and unrated securities of comparable quality expose the Fund to a greater risk of loss of principal and income than a fund that invests
solely or primarily in investment grade securities. In addition, these investments have greater price fluctuations, are less liquid and are more likely to experience a default than higher-rated securities. High-yield securities are considered to be
predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Market Risk.
Market risk refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. An investment in the Fund could lose money over short or long
periods. Although equity securities generally tend to have greater price volatility than debt securities, under certain market conditions, debt securities may have comparable or greater price volatility.
Prepayment and Extension Risk.
Prepayment and extension risk is the risk that a bond or other security or investment might,
in the case of prepayment risk, be called or otherwise converted, prepaid or redeemed before maturity and, in the
case of extension risk, the investment might not be called as expected. In the case of prepayment risk, if the investment is converted, prepaid or redeemed before maturity, the portfolio managers may not be able to invest the proceeds in other
investments providing as high a level of income, resulting in a reduced yield to the Fund. In the case of mortgage- or asset-backed securities, as interest rates decrease or spreads narrow, the likelihood of prepayment increases. Conversely,
extension risk is the risk that an unexpected rise in interest rates will extend the life of a mortgage- or asset-backed security beyond the prepayment time. If the Fund’s investments are locked in at a lower interest rate for a longer period
of time, the portfolio managers may be unable to capitalize on securities with higher interest rates or wider spreads.
Small- and Mid-Cap Company Securities Risk.
Investments in small- and mid-capitalization companies (small- and mid-cap companies) often involve greater risks than investments in larger, more established companies (larger companies) because small- and mid-cap
companies tend to have less predictable earnings and may lack the management experience, financial resources, product diversification and competitive strengths of larger companies. Securities of small- and mid-cap companies may be less liquid and
more volatile than the securities of larger companies.
Value Securities Risk.
Value securities are securities of companies that may have experienced, for example, adverse business, industry or other developments or may be subject to special risks that have caused the securities to be out of favor and, in turn, potentially
undervalued. The market value of a portfolio security may not meet the portfolio manager's perceived value assessment of that security, or may decline in price, even though the portfolio manager(s) believe(s) the securities are already undervalued.
There is also a risk that it may take longer than expected for the value of these investments to rise to the portfolio manager’s perceived value. In addition, value securities, at times, may not perform as well as growth securities or the
stock market in general, and may be out of favor with investors for varying periods of time.
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 bar chart shows how the Fund’s Class A share performance (without sales charges) has varied for each full calendar year shown. If the
sales charges were reflected, returns shown would be lower. The table below the bar chart compares the Fund’s returns (after applicable sales charges shown in the
Shareholder Fees
table in this
prospectus) for the periods shown with a blended index that is intended to provide a measure of the Fund's performance given its investment strategy, as well as one or more other measures of performance for markets in which the Fund may
invest.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Aggressive Portfolio
(continued)
The performance of one or more share classes shown in the
table below begins before the indicated inception date for such share class. The returns shown for each such share class include the returns of the Fund’s Class A shares (without applicable sales charges and adjusted to reflect the higher
class-related operating expenses of such classes, where applicable) for periods prior to its inception date. Any share class that does not have available performance would have annual returns substantially similar to those of Class A shares. Except
for differences in annual returns resulting from differences in expenses and sales charges (where applicable), the share classes of the Fund would have substantially similar annual returns because all share classes of the Fund invest in the same
portfolio of securities.
The after-tax returns shown in the
Average Annual Total Returns
table below are calculated using the highest historical individual U.S. 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 Individual
Retirement Accounts (IRAs). The after-tax returns are shown only for Class A shares and will vary for other share classes. Returns after taxes on distributions and sale of Fund shares are higher than before-tax returns for certain periods shown
because they reflect the tax benefit of capital losses realized on the redemption of Fund shares.
The Fund’s past performance (before and after taxes) is no
guarantee of how the Fund will perform in the future.
Updated performance information can be obtained by calling toll-free 800.345.6611 or visiting columbiathreadneedle.com/us.
Year
by Year Total Return (%)
as of December 31 Each Year*
|
Best
and Worst Quarterly Returns
During the Period Shown in the Bar Chart
|
|
Best
|
2nd Quarter 2009
|
16.41%
|
Worst
|
4th Quarter 2008
|
-14.57%
|
*
|
Year to Date return as of
March 31, 2015: 2.80%
|
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Aggressive Portfolio
(continued)
Average Annual Total Returns After
Applicable Sales Charges (for periods ended December 31, 2014)
|
Share
Class
Inception Date
|
1
Year
|
5
Years
|
10
Years
|
Class
A
|
10/15/1996
|
|
|
|
returns
before taxes
|
|
-0.60%
|
8.45%
|
6.04%
|
returns
after taxes on distributions
|
|
-3.34%
|
7.26%
|
4.71%
|
returns
after taxes on distributions and sale of Fund shares
|
|
1.57%
|
6.52%
|
4.61%
|
Class
B
returns before taxes
|
08/13/1997
|
0.04%
|
8.65%
|
5.86%
|
Class
C
returns before taxes
|
10/15/1996
|
3.73%
|
8.92%
|
5.86%
|
Class
K
returns before taxes
|
02/28/2013
|
5.67%
|
9.81%
|
6.70%
|
Class
R
returns before taxes
|
01/23/2006
|
5.20%
|
9.48%
|
6.39%
|
Class
R4
returns before taxes
|
11/08/2012
|
5.76%
|
9.89%
|
6.74%
|
Class
R5
returns before taxes
|
11/08/2012
|
5.88%
|
9.93%
|
6.76%
|
Class
T
returns before taxes
|
03/07/2011
|
-0.56%
|
8.42%
|
6.00%
|
Class
Y
returns before taxes
|
06/13/2013
|
5.98%
|
9.92%
|
6.75%
|
Class
Z
returns before taxes
|
10/15/1996
|
5.73%
|
10.01%
|
6.94%
|
Blended
Index (consists of 49% Russell 3000 Index, 28.5% Barclays U.S. Aggregate Bond Index, 12% MSCI EAFE Index (Net), 6.5% Barclays U.S. Corporate High-Yield Index and 4% MSCI Emerging Markets Index (Net))
(reflects
reinvested dividends net of withholding taxes on the MSCI EAFE Index and the MSCI Emerging Markets Index portion of the Blended Index but reflects no deductions for fees, expenses or other taxes for the other indices portion of the blend)
|
|
7.28%
|
10.41%
|
6.96%
|
Russell
3000 Index
(reflects no deductions for fees, expenses or taxes)
|
|
12.56%
|
15.63%
|
7.94%
|
Barclays
U.S. Aggregate Bond Index
(reflects no deductions for fees, expenses or taxes)
|
|
5.97%
|
4.45%
|
4.71%
|
Fund Management
Investment Manager:
Columbia
Management Investment Advisers, LLC
Portfolio
Manager
|
|
Title
|
|
Role
with Fund
|
|
Managed
Fund Since
|
Jeffrey
Knight, CFA
|
|
Senior
Portfolio Manager, Managing Director, Global Head of Investment Solutions and Co-Head of Global Asset Allocation
|
|
Co-manager
|
|
2013
|
Anwiti
Bahuguna, Ph.D.
|
|
Senior
Portfolio Manager
|
|
Co-manager
|
|
2009
|
Marie
Schofield, CFA
|
|
Senior
Portfolio Manager and Chief Economist
|
|
Co-manager
|
|
2009
|
Beth
Vanney, CFA
|
|
Portfolio
Manager
|
|
Co-manager
|
|
2011
|
Toby
Nangle
|
|
Portfolio
Manager and Co-Head of Global Asset Allocation
|
|
Co-manager
|
|
2013
|
Purchase and Sale of Fund
Shares
You may purchase or redeem shares of the Fund on
any business day by contacting the Fund in the ways described below:
Online
|
|
Regular
Mail
|
|
Express
Mail
|
|
By
Telephone
|
columbiathreadneedle.com/us
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
30 Dan Road, Suite 8081
Canton, MA 02021-2809
|
|
800.422.3737
|
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Moderate Aggressive Portfolio
(continued)
You may purchase shares and receive redemption proceeds by
electronic funds transfer, by check or by wire. If you maintain your account with a broker-dealer or other financial intermediary, you must contact that financial intermediary to buy, sell or exchange shares of the Fund through your account with the
intermediary.
The minimum initial investment amounts for
the share classes offered by the Fund are shown below:
Minimum Initial Investment
Class
|
Category
of eligible account
|
For
accounts other than
systematic investment
plan accounts
|
For
systematic investment
plan accounts
|
Classes
A, B*, C
& T**
|
All
accounts other than IRAs
|
$2,000
|
$100
|
IRAs
|
$1,000
|
$100
|
Classes
K**, R, R4 & Y
|
All
eligible accounts
|
None
|
N/A
|
Class
R5
|
Combined
underlying accounts of eligible registered investment advisers
|
$100,000
|
N/A
|
Omnibus
retirement plans
|
None
|
N/A
|
Class
Z
|
All
eligible accounts
|
$0,
$1,000 or $2,000
depending upon the category
of eligible investor
|
$100
|
*
|
Class B shares are generally
closed to new and existing shareholders.
|
**
|
Class T and Class K shares
are generally closed to new investors.
|
There is no minimum additional investment for any share
class.
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-advantaged account, such as a 401(k) plan or an IRA. The use of a
fund-of-funds structure could affect the timing, amount and character of distributions to you and therefore may increase the amount of taxes payable by you. If you are investing through a tax-advantaged account, you may be taxed upon withdrawals
from that 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 Investment Manager), 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.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Aggressive Portfolio
Investment Objective
Columbia Capital Allocation Aggressive Portfolio (Aggressive
Portfolio or the Fund)
is designed for investors seeking the highest level of total return that is consistent with an aggressive level of risk.
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 members of your immediate family invest, or agree to invest in the future, at least $50,000 in certain classes of shares of eligible funds distributed by
Columbia Management Investment Distributors, Inc. (the Distributor). More information about these and other discounts is available from your financial intermediary, and can be found in the
Choosing a Share
Class
section beginning on page 66 of the Fund’s prospectus and in Appendix S to the Statement of Additional Information (SAI) under
Sales Charge Waivers
beginning on page S-1.
Shareholder
Fees (fees paid directly from your investment)
|
|
Class
A
|
Class
B
|
Class
C
|
Classes
K,
R, R4, R5,
Y and Z
|
Maximum
sales charge (load) imposed on purchases (as a % of offering price)
|
5.75%
|
None
|
None
|
None
|
Maximum
deferred sales charge (load) imposed on redemptions (as a % of the lower of the original purchase price or current net asset value)
|
1.00%
(a)
|
5.00%
(b)
|
1.00%
(c)
|
None
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
Class
A
|
Class
B
|
Class
C
|
Class
K
|
Class
R
|
Class
R4
|
Class
R5
|
Class
Y
|
Class
Z
|
Management
fees
|
0.06%
|
0.06%
|
0.06%
|
0.06%
|
0.06%
|
0.06%
|
0.06%
|
0.06%
|
0.06%
|
Distribution
and/or service (12b-1) fees
|
0.25%
|
1.00%
|
1.00%
|
0.00%
|
0.50%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
Other
expenses
(d)
|
0.20%
|
0.20%
|
0.20%
|
0.37%
|
0.20%
|
0.20%
|
0.12%
|
0.07%
|
0.20%
|
Acquired
fund fees and expenses
|
0.69%
|
0.69%
|
0.69%
|
0.69%
|
0.69%
|
0.69%
|
0.69%
|
0.69%
|
0.69%
|
Total
annual Fund operating expenses
(e)
|
1.20%
|
1.95%
|
1.95%
|
1.12%
|
1.45%
|
0.95%
|
0.87%
|
0.82%
|
0.95%
|
(a)
|
This charge is imposed on
certain investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with
certain limited exceptions.
|
(b)
|
This charge decreases over
time.
|
(c)
|
This charge applies to
redemptions within one year after purchase, with certain limited exceptions.
|
(d)
|
Other expenses for Class A,
Class B, Class C, Class K, Class R, Class R4, Class R5 and Class Z shares have been restated to reflect current fees paid by the Fund.
|
(e)
|
“Total
annual Fund operating expenses” include acquired fund fees and expenses (expenses the Fund incurs indirectly through its investments in other investment companies) and may be higher than “Total Net Expenses” shown in the
Financial Highlights
section of this prospectus because “Total Net Expenses” do not include acquired fund fees and expenses.
|
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 the
applicable class of Fund shares 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
Annual Fund Operating Expenses
table above.
|
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Aggressive Portfolio
(continued)
Although your actual costs may be higher or
lower, based on the assumptions listed above, your costs would be:
|
1
year
|
3
years
|
5
years
|
10
years
|
Class
A
(whether or not shares are redeemed)
|
$690
|
$934
|
$1,197
|
$1,946
|
Class
B
(assuming redemption of all shares at the end of the period)
|
$698
|
$912
|
$1,252
|
$2,080
|
Class
B
(assuming no redemption of shares)
|
$198
|
$612
|
$1,052
|
$2,080
|
Class
C
(assuming redemption of all shares at the end of the period)
|
$298
|
$612
|
$1,052
|
$2,275
|
Class
C
(assuming no redemption of shares)
|
$198
|
$612
|
$1,052
|
$2,275
|
Class
K
(whether or not shares are redeemed)
|
$114
|
$356
|
$
617
|
$1,363
|
Class
R
(whether or not shares are redeemed)
|
$148
|
$459
|
$
792
|
$1,735
|
Class
R4
(whether or not shares are redeemed)
|
$
97
|
$303
|
$
525
|
$1,166
|
Class
R5
(whether or not shares are redeemed)
|
$
89
|
$278
|
$
482
|
$1,073
|
Class
Y
(whether or not shares are redeemed)
|
$
84
|
$262
|
$
455
|
$1,014
|
Class
Z
(whether or not shares are redeemed)
|
$
97
|
$303
|
$
525
|
$1,166
|
Portfolio Turnover
The Fund and underlying funds pay
transaction costs, such as commissions, when they buy and sell securities (or “turn over” their portfolios). The Fund will indirectly bear the expenses associated with portfolio turnover of the underlying funds. A high portfolio turnover
rate may indicate higher transaction costs. 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 27% of the average value of its portfolio.
Principal Investment Strategies
The Fund is primarily managed as a fund that
invests in other funds (i.e., a “fund-of-funds”) that seeks to achieve its investment objective by investing under normal circumstances in a combination of underlying funds for which Columbia Management Investment Advisers, LLC (the
Investment Manager) or an affiliate serves as investment adviser or principal underwriter (the affiliated underlying funds). The Fund may also invest up to 20% of its net assets in other funds, including third party advised (unaffiliated) funds and
exchange-traded funds (ETFs) (collectively with the affiliated underlying funds, the Underlying Funds), equity securities, fixed income securities (including treasury inflation protected securities (TIPS)) and derivative instruments (the 20%
Sleeve). The Fund’s derivative investments may include forward foreign currency contracts, futures (including currency, equity, fixed income, index and interest rate futures) and options. Derivative positions may be established to seek
incremental earnings, hedge existing positions, increase market or credit exposure, increase investment flexibility (including using the derivative position as a substitute for the purchase or sale of the underlying security, currency or other
instrument) and/or to change the effective duration of the Fund’s portfolio. Collectively, these investments (including through investments in derivatives) provide the Fund with exposure to equity, fixed income, and cash/cash equivalent asset
classes. The Fund may also pursue alternative investment strategies (alternative strategies), including those that seek investment returns uncorrelated to the broad equity and fixed income markets, as well as those providing exposure to other
markets, including but not limited to absolute (positive) return strategies.
The Fund may invest in Underlying Funds categorized as
“equity”, “fixed income”, “cash/cash equivalents”, and “alternative strategies”, which may represent indirect investments in various sectors, asset classes, strategies and markets. Under normal
circumstances, the Fund emphasizes investments in Underlying Funds categorized as equity, which can include those that invest in equity securities representing different investment styles (e.g., growth, value and core/blend), market capitalizations
(large-, mid- and small-cap), geographic focus (domestic and international, including emerging markets) and sector focus (e.g., real estate, technology, infrastructure and natural resources). The Fund may also invest in Underlying Funds categorized
as fixed income, which can include those investing in TIPs, U.S. treasury bonds and notes, mortgage-backed and asset-backed securities, investment grade corporate bonds, high yield bonds (junk bonds), high yield loans and international bonds
(including those of issuers in developed and emerging markets), which may have varying interest rates, terms, duration and credit exposure. The Underlying Funds
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Aggressive Portfolio
(continued)
categorized as alternative strategies include those that employ a variety of
investment strategies, techniques and practices, generally intended to have a low correlation to the performance of the broad equity and fixed income markets over a complete market cycle including but not limited to absolute (positive) return
strategies. Subject to the 20% Sleeve limitation described above, the Fund may also invest directly in equity securities, fixed income securities and derivative instruments, including forward foreign currency contracts and futures (including
currency, equity, fixed income, index and interest rate futures). By investing in a combination of Underlying Funds and other securities described in the 20% Sleeve, the Fund seeks to minimize the risks typically associated with investing in a
traditional mutual fund.
Under normal market
circumstances, the Fund may invest, directly or indirectly, in each of equity, fixed income and cash/cash equivalent asset classes and alternative strategies (each, an asset class category and collectively, the asset class categories) within the
following target asset allocation ranges (includes investments in Underlying Funds and the other securities described in the 20% Sleeve):
Asset
Class Exposures*
|
|
Equity
|
Fixed
Income
|
Cash/Cash
Equivalents
|
Alternatives
|
Aggressive
Portfolio
|
25–100%*
|
0–50%*
|
0–40%*
|
0–40%*
|
|
|
|
|
|
*
|
As a percent of Fund net
assets. Ranges include the net notional amounts of a Fund’s direct investments in derivative instruments. Market appreciation or depreciation may cause a Fund to be temporarily outside the ranges identified in the table. The Investment Manager
may modify the target allocation ranges only with the approval of a Fund’s Board of Trustees (the Board).
|
The Fund may be most appropriate for investors with a
longer-term investment horizon.
Principal Risks
An investment in the Fund involves risk, including specific
risks relating to the investment in the Fund based on its investment process and its "fund-of-funds" structure, as well as specific risks related to the underlying funds in which it invests, including among others, those described below. More
information about underlying funds, including their principal risks, is available in their prospectuses.
There is no assurance that the Fund will achieve its investment objective and you may lose money
.
The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV) and share price may go down.
Allocation Risk.
Because the Fund uses an asset allocation strategy in pursuit of its investment objective,
there is a risk that the Fund's allocation among asset classes, investments, managers,
strategies and/or investment styles will cause the Fund's shares to lose value or cause the Fund to underperform other funds with a similar investment objective and/or strategies, or that the investments themselves will not produce the returns
expected.
Alternative Strategies Investment Risk.
An investment in alternative investment strategies (Alternative Strategies), whether through direct investment or through one or more underlying funds, involves risks, which may be significant. Alternative
Strategies may include strategies, instruments or other assets, such as derivatives, that seek investment returns uncorrelated with the broad equity and fixed income/debt markets, as well as those providing exposure to other markets (such as
commodity markets), including but not limited to absolute (positive) return strategies. Alternative Strategies may fail to achieve their desired performance, market or other exposure, or their returns (or lack thereof) may be more correlated with
the broad equity and/or fixed income/debt markets than was anticipated, and the Fund may lose money.
Credit Risk.
The value of
fixed-income securities,
or other instruments or assets, may decline if the issuer thereof defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial
obligations, such as making payments to the Fund when due. Rating agencies assign credit ratings to certain fixed-income securities to indicate their credit risk. Lower quality or unrated securities held by the Fund may present increased credit risk
as compared to higher-rated securities. Non-investment grade fixed-income securities (commonly called “high-yield” or “junk”) may be subject to greater price fluctuations and are more likely to experience a
default
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Aggressive Portfolio
(continued)
than investment grade securities and
therefore may expose the Fund to increased credit risk. If the Fund purchases unrated securities, or if the ratings of securities held by the Fund are lowered after purchase, the Fund will depend on analysis of credit risk more heavily than
usual.
Derivatives Risk.
Losses involving derivative instruments may be substantial, because a relatively small movement in the price of an underlying security, instrument, commodity, currency or index may result in a substantial loss for the Fund. In addition to the
potential for increased losses, the use of derivative instruments may lead to increased volatility for the Fund. Derivative investments will typically increase the Fund’s exposure to principal risks to which it is otherwise exposed, and may
expose the Fund to additional risks, including correlation risk, counterparty risk, hedging risk, leverage risk and/or liquidity risk.
Derivatives Risk/Forward Foreign Currency Contracts Risk.
These instruments are a type of derivative contract whereby the Fund may agree to buy or sell a country’s or region’s currency at a specific price on a specific date in the future. These instruments may fall
in value (sometimes dramatically) due to foreign market downswings or foreign currency value fluctuations, subjecting the Fund to foreign currency risk. Investment in these instruments also subjects the Fund to counterparty risk. The Fund’s
strategy of investing in these instruments may not be successful
and the Fund may experience significant losses as a result.
Derivatives Risk/Futures Contracts Risk.
The loss that may be incurred in entering into futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets are highly volatile and the use of futures may increase the
volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract may result in substantial losses for the Fund. Futures
contracts may be illiquid. Furthermore, exchanges may limit fluctuations in futures contract prices during a trading session by imposing a maximum permissible price movement on each futures contract. The Fund may be disadvantaged if it is prohibited
from executing a trade outside the daily permissible price movement. Futures contracts executed on foreign exchanges may not provide the same protection as U.S. exchanges. These transactions involve additional risks, including counterparty risk,
hedging risk and pricing risk.
Derivatives
Risk/Options Risk.
The use of options is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If the Fund
sells a put option, there is a risk that the Fund may be required to buy the underlying asset at a disadvantageous price. If the Fund sells a call option, there is a risk that the Fund may be required to sell the underlying asset at a
disadvantageous price, and if the call option sold is not covered (for example, by owning the underlying asset), the Fund's losses are potentially unlimited. These transactions involve other risks, including counterparty risk and hedging
risk.
Exchange-Traded Fund (ETF) Risk.
ETFs are subject to, among other risks, tracking risk and passive and, in some cases, active investment risk. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar
expenses incurred through ownership of the ETF.
Foreign Currency Risk.
The
performance of the Fund may be materially affected positively or negatively by foreign currency strength or weakness relative to the U.S. dollar, particularly if the Fund invests a significant percentage of its assets in foreign securities or other
assets denominated in currencies other than the U.S. dollar.
Foreign Securities Risk.
Investments in or exposure to foreign securities involve certain risks not associated with investments in or exposure to securities of U.S. companies. Foreign securities subject the Fund to the risks associated with
investing in the particular country of an issuer, including the political, regulatory, economic, social, diplomatic and other conditions or events occurring in the country or region, as well as risks associated with less developed custody and
settlement practices. Foreign securities may be more volatile and less liquid than securities of U.S. companies, and are subject to the risks associated with potential imposition of economic and other sanctions against a particular foreign country,
its nationals or industries or businesses within the country. The performance of the Fund may be negatively impacted by fluctuations in a foreign currency’s strength or weakness relative to the U.S. dollar, particularly
to the extent
the Fund invests a significant percentage of its assets in foreign securities or other assets denominated in currencies other than the U.S. dollar.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Aggressive Portfolio
(continued)
Fund-of-Funds Risk.
Determinations regarding asset classes or underlying funds and the Fund’s allocations thereto may not successfully achieve the Fund’s investment objective, in whole or in part. The ability of the Fund to
realize its investment objective will depend, in large part, on the extent to which the underlying funds realize their investment objective. There is no guarantee that the underlying funds will achieve their respective investment objectives. The
Fund is exposed to the same risks as the underlying funds in direct proportion to the allocation of its assets among the underlying funds. Therefore,
to the extent that the Fund invests significantly in a
particular underlying fund, the Fund’s performance would be significantly impacted by the performance of such underlying fund. Generally, by investing in a combination of underlying funds, the Fund has exposure to the risks of many areas of
the market. By concentrating its investments in relatively few underlying funds, the Fund may have more concentrated market exposures, subjecting the Fund to greater risk of loss should those markets decline or fail to rise. The performance of
underlying funds could be adversely affected if other entities that invest in the same underlying funds make relatively large investments or redemptions in such underlying funds. The Fund, and its shareholders, indirectly bear a portion of the
expenses of any funds in which the Fund invests. Because the expenses and costs of each underlying fund are shared by its investors, redemptions by other investors in an underlying fund could result in decreased economies of scale and increased
operating expenses for such fund. The Investment Manager may have potential conflicts of interest in selecting affiliated funds over unaffiliated funds for investment by the Fund, and may also face potential conflicts of interest in selecting
affiliated funds, because the fees the Investment Manager receives from some underlying funds may be higher than the fees paid by other underlying funds.
Growth Securities Risk.
Growth
securities typically trade at a higher multiple of earnings than other types of equity securities. Accordingly, the market values of growth securities may never reach their expected market value and may decline in price. In addition,
growth securities, at times, may not perform as well as value securities or the stock market in general, and may be out of favor with investors for varying periods of time.
Inflation-Protected Securities Risk.
Inflation-protected debt securities tend to react to changes in real interest rates (i.e., nominal interest rates minus the expected impact of inflation). In general, the price of such securities falls when real
interest rates rise, and rises when real interest rates fall. Interest payments on these securities will vary and may be more volatile than interest paid on ordinary bonds. In periods of deflation, the Fund may have no income at all from such
investments.
Interest Rate Risk.
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of
debt securities 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 will generally affect the value of the Fund's shares. In general, the longer the maturity or
duration of a debt security, the greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest
rates may negatively impact the Fund’s performance. Actions by governments and central banking authorities can result in increases
in interest rates. Such actions may negatively affect the value of
fixed-income securities held by the Fund, resulting in a negative impact on the Fund's performance and NAV.
Issuer Risk.
An issuer in
which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may be caused by poor management decisions,
competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or factors.
High-Yield Securities Risk.
Securities rated below investment grade (commonly called “high-yield” or “junk” bonds) and unrated securities of comparable quality expose the Fund to a greater risk of loss of principal and income than a fund that invests
solely or primarily in investment grade securities. In addition, these investments have greater price fluctuations, are less liquid and are more likely to experience a default than higher-rated securities. High-yield securities are considered to be
predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Aggressive Portfolio
(continued)
Market Risk.
Market risk refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. An investment in the Fund could lose money over short or long
periods. Although equity securities generally tend to have greater price volatility than debt securities, under certain market conditions, debt securities may have comparable or greater price volatility.
Prepayment and Extension Risk.
Prepayment and extension risk is the risk that a bond or other security or investment might,
in the case of prepayment risk, be called or otherwise converted, prepaid or redeemed before maturity and, in the
case of extension risk, the investment might not be called as expected. In the case of prepayment risk, if the investment is converted, prepaid or redeemed before maturity, the portfolio managers may not be able to invest the proceeds in other
investments providing as high a level of income, resulting in a reduced yield to the Fund. In the case of mortgage- or asset-backed securities, as interest rates decrease or spreads narrow, the likelihood of prepayment increases. Conversely,
extension risk is the risk that an unexpected rise in interest rates will extend the life of a mortgage- or asset-backed security beyond the prepayment time. If the Fund’s investments are locked in at a lower interest rate for a longer period
of time, the portfolio managers may be unable to capitalize on securities with higher interest rates or wider spreads.
Small- and Mid-Cap Company Securities Risk.
Investments in small- and mid-capitalization companies (small- and mid-cap companies) often involve greater risks than investments in larger, more established companies (larger companies) because small- and mid-cap
companies tend to have less predictable earnings and may lack the management experience, financial resources, product diversification and competitive strengths of larger companies. Securities of small- and mid-cap companies may be less liquid and
more volatile than the securities of larger companies.
Value Securities Risk.
Value securities are securities of companies that may have experienced, for example, adverse business, industry or other developments or may be subject to special risks that have caused the securities to be out of favor and, in turn, potentially
undervalued. The market value of a portfolio security may not meet the portfolio manager's perceived value assessment of that security, or may decline in price, even though the portfolio manager(s) believe(s) the securities are already undervalued.
There is also a risk that it may take longer than expected for the value of these investments to rise to the portfolio manager’s perceived value. In addition, value securities, at times, may not perform as well as growth securities or the
stock market in general, and may be out of favor with investors for varying periods of time.
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 bar chart shows how the Fund’s Class A share performance (without sales charges) has varied for each full calendar year shown. If the
sales charges were reflected, returns shown would be lower. The table below the bar chart compares the Fund’s returns (after applicable sales charges shown in the
Shareholder Fees
table in this
prospectus) for the periods shown with a blended index that is intended to provide a measure of the Fund's performance given its investment strategy, as well as one or more other measures of performance for markets in which the Fund may
invest.
The performance of one or more share
classes shown in the table below begins before the indicated inception date for such share class. The returns shown for each such share class include the returns of the Fund’s Class A shares (without applicable sales charges and adjusted to
reflect the higher class-related operating expenses of such classes, where applicable) for periods prior to its inception date. Any share class that does not have available performance would have annual returns substantially similar to those of
Class A shares. Except for differences in annual returns resulting from differences in expenses and sales charges (where applicable), the share classes of the Fund would have substantially similar annual returns because all share classes of the Fund
invest in the same portfolio of securities.
The
after-tax returns shown in the
Average Annual Total Returns
table below are calculated using the highest historical individual U.S. 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
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Aggressive Portfolio
(continued)
as 401(k) plans or Individual Retirement
Accounts (IRAs). The after-tax returns are shown only for Class A shares and will vary for other share classes. Returns after taxes on distributions and sale of Fund shares are higher than before-tax returns for certain periods shown because they
reflect the tax benefit of capital losses realized on the redemption of Fund shares.
The Fund’s past performance (before and after taxes) is no
guarantee of how the Fund will perform in the future.
Updated performance information can be obtained by calling toll-free 800.345.6611 or visiting columbiathreadneedle.com/us.
Year
by Year Total Return (%)
as of December 31 Each Year*
|
Best
and Worst Quarterly Returns
During the Period Shown in the Bar Chart
|
|
Best
|
3rd Quarter 2009
|
16.33%
|
Worst
|
4th Quarter 2008
|
-19.00%
|
*
|
Year to Date return as of
March 31, 2015: 2.84%
|
Average Annual Total Returns After
Applicable Sales Charges (for periods ended December 31, 2014)
|
Share
Class
Inception Date
|
1
Year
|
5
Years
|
10
Years
|
Class
A
|
03/04/2004
|
|
|
|
returns
before taxes
|
|
-0.31%
|
9.48%
|
5.73%
|
returns
after taxes on distributions
|
|
-2.66%
|
8.65%
|
4.63%
|
returns
after taxes on distributions and sale of Fund shares
|
|
1.42%
|
7.43%
|
4.37%
|
Class
B
returns before taxes
|
03/04/2004
|
0.16%
|
9.66%
|
5.55%
|
Class
C
returns before taxes
|
03/04/2004
|
4.01%
|
9.96%
|
5.56%
|
Class
K
returns before taxes
|
03/04/2004
|
5.91%
|
10.91%
|
6.55%
|
Class
R
returns before taxes
|
09/27/2010
|
5.42%
|
10.53%
|
6.12%
|
Class
R4
returns before taxes
|
06/13/2013
|
6.07%
|
10.87%
|
6.39%
|
Class
R5
returns before taxes
|
06/13/2013
|
6.11%
|
10.91%
|
6.42%
|
Class
Y
returns before taxes
|
06/13/2013
|
6.17%
|
10.92%
|
6.42%
|
Class
Z
returns before taxes
|
09/27/2010
|
6.01%
|
11.04%
|
6.48%
|
Blended
Index (consists of 60% Russell 3000 Index, 15% Barclays U.S. Aggregate Bond Index, 14% MSCI EAFE Index (Net), 6% MSCI Emerging Markets Index (Net) and 5% Barclays U.S. Corporate High-Yield Index)
(reflects
reinvested dividends net of withholding taxes on the MSCI EAFE Index and the MSCI Emerging Markets Index portion of the Blended Index but reflects no deductions for fees, expenses or other taxes)
|
|
7.64%
|
11.47%
|
7.27%
|
Russell
3000 Index
(reflects no deductions for fees, expenses or taxes)
|
|
12.56%
|
15.63%
|
7.94%
|
Barclays
U.S. Aggregate Bond Index
(reflects no deductions for fees, expenses or taxes)
|
|
5.97%
|
4.45%
|
4.71%
|
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Aggressive Portfolio
(continued)
Fund Management
Investment Manager:
Columbia
Management Investment Advisers, LLC
Portfolio
Manager
|
|
Title
|
|
Role
with Fund
|
|
Managed
Fund Since
|
Jeffrey
Knight, CFA
|
|
Senior
Portfolio Manager, Managing Director, Global Head of Investment Solutions and Co-Head of Global Asset Allocation
|
|
Co-manager
|
|
2013
|
Anwiti
Bahuguna, Ph.D.
|
|
Senior
Portfolio Manager
|
|
Co-manager
|
|
2010
|
Marie
Schofield, CFA
|
|
Senior
Portfolio Manager and Chief Economist
|
|
Co-manager
|
|
2010
|
Beth
Vanney, CFA
|
|
Portfolio
Manager
|
|
Co-manager
|
|
2011
|
Toby
Nangle
|
|
Portfolio
Manager and Co-Head of Global Asset Allocation
|
|
Co-manager
|
|
2013
|
Purchase and Sale of Fund
Shares
You may purchase or redeem shares of the Fund on
any business day by contacting the Fund in the ways described below:
Online
|
|
Regular
Mail
|
|
Express
Mail
|
|
By
Telephone
|
columbiathreadneedle.com/us
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
30 Dan Road, Suite 8081
Canton, MA 02021-2809
|
|
800.422.3737
|
You may purchase shares
and receive redemption proceeds by electronic funds transfer, by check or by wire. If you maintain your account with a broker-dealer or other financial intermediary, you must contact that financial intermediary to buy, sell or exchange shares of the
Fund through your account with the intermediary.
The
minimum initial investment amounts for the share classes offered by the Fund are shown below:
Minimum Initial Investment
Class
|
Category
of eligible account
|
For
accounts other than
systematic investment
plan accounts
|
For
systematic investment
plan accounts
|
Classes
A, B* & C
|
All
accounts other than IRAs
|
$2,000
|
$100
|
IRAs
|
$1,000
|
$100
|
Classes
K**, R, R4 & Y
|
All
eligible accounts
|
None
|
N/A
|
Class
R5
|
Combined
underlying accounts of eligible registered investment advisers
|
$100,000
|
N/A
|
Omnibus
retirement plans
|
None
|
N/A
|
Class
Z
|
All
eligible accounts
|
$0,
$1,000 or $2,000
depending upon the category
of eligible investor
|
$100
|
*
|
Class B shares are generally
closed to new and existing shareholders.
|
**
|
Class K shares are generally
closed to new investors.
|
There is no
minimum additional investment for any share class.
Columbia Capital Allocation Portfolios
Summary of Columbia Capital
Allocation Aggressive Portfolio
(continued)
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-advantaged account, such as a 401(k) plan or an IRA. The use of a
fund-of-funds structure could affect the timing, amount and character of distributions to you and therefore may increase the amount of taxes payable by you. If you are investing through a tax-advantaged account, you may be taxed upon withdrawals
from that 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 Investment Manager), 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.
Columbia Capital Allocation Portfolios
More Information About the
Funds
Investment Objectives
The objective of each Fund is to provide the highest level of
total return that is consistent with an acceptable level of risk. The following highlights each Fund’s objective relative to one another.
Columbia Capital Allocation Conservative Portfolio (Conservative
Portfolio or the Fund)
is designed for investors seeking the highest level of total return that is consistent with a conservative level of risk.
Only shareholders can change
the Fund’s investment objective.
Because any investment involves risk, there is no assurance the Fund’s objective will be achieved.
Columbia Capital Allocation Moderate Conservative Portfolio
(Moderate Conservative Portfolio or the Fund)
is designed for investors seeking the highest level of total return that is consistent with a moderate conservative level of risk.
The Fund’s investment objective is not a fundamental policy and may be changed by the Fund’s Board of Trustees without shareholder approval.
Because any investment
involves risk, there is no assurance the Fund’s objective will be achieved.
Columbia Capital Allocation Moderate Portfolio (Moderate
Portfolio or the Fund)
is designed for investors seeking the highest level of total return that is consistent with a moderate level of risk.
Only shareholders can change the
Fund’s investment objective.
Because any investment involves risk, there is no assurance the Fund’s objective will be achieved.
Columbia Capital Allocation Moderate Aggressive Portfolio
(Moderate Aggressive Portfolio or the Fund)
is designed for investors seeking the highest level of total return that is consistent with a moderate aggressive level of risk.
The Fund’s investment objective is not a fundamental policy and may be changed by the Fund’s Board of Trustees without shareholder approval.
Because any investment involves risk, there is no
assurance the Fund’s objective will be achieved.
Columbia Capital Allocation Aggressive Portfolio (Aggressive
Portfolio or the Fund)
is designed for investors seeking the highest level of total return that is consistent with an aggressive level of risk.
Only shareholders can change
the Fund’s investment objective.
Because any investment involves risk, there is no assurance the Fund’s objective will be achieved.
Conservative Portfolio, Moderate Conservative Portfolio,
Moderate Portfolio, Moderate Aggressive Portfolio and Aggressive Portfolio are singularly and collectively, where the context requires, referred to as either “the Fund,” “each Fund” or “the Funds.” The funds in
which the Funds invest are referred to as “underlying funds” or “acquired funds.”
Principal Investment Strategies
The Funds are intended for investors who
have an objective of achieving a high level of total return consistent with a certain level of risk, as noted above. Each Fund is primarily managed as a fund that invests in other funds (i.e., a “fund-of-funds”) that seeks to achieve its
investment objective by investing under normal circumstances in a combination of underlying funds for which Columbia Management Investment Advisers, LLC (the Investment Manager) or an affiliate serves as investment adviser or principal underwriter
(the affiliated underlying funds). Each Fund may also invest up to 20% of its net assets in other funds, including third party advised (unaffiliated) funds and exchange-traded funds (ETFs) (collectively with the affiliated underlying funds, the
Underlying Funds), equity securities, fixed income securities (including treasury inflation protected securities (TIPS)) and derivative instruments (the 20% Sleeve). Each Fund’s investment in derivative investments may include forward foreign
currency contracts, futures (including currency, equity, fixed income, index and interest rate futures) and options. Derivative positions may be established to seek incremental earnings, hedge existing positions, increase market or credit exposure,
increase investment flexibility (including using the derivative position as a substitute for the purchase or sale of the underlying security, currency or other instrument) and/or to change the effective duration of the Fund’s portfolio.
Collectively, these investments (including through investments in derivatives) provide the Funds with exposure to equity, fixed income, and cash/cash equivalent asset classes. Each Fund may also allocate its assets to Underlying Funds that pursue
alternative investment strategies (alternative strategies), including those that seek investment returns uncorrelated to the broad equity and fixed income markets, as well as those providing exposure to other markets.
Columbia Capital Allocation Portfolios
More Information About the
Funds
(continued)
The Underlying Funds in which each Fund may invest are
categorized as “equity”, “fixed income”, “cash/cash equivalents” and “alternative strategies”, which may represent indirect investments in various sectors, asset classes, strategies and markets. The
Underlying Funds categorized as equity may invest in equity securities representing different investment styles (e.g., growth, value and core/blend), market capitalizations (large-, mid- and small-cap), geographic focus (domestic and international,
including emerging markets), and sector focus (e.g., real estate, technology, infrastructure and natural resources). The Underlying Funds categorized as fixed income may invest in fixed income securities, including TIPs, U.S. treasury bonds and
notes, mortgage-backed and asset-backed securities, investment grade corporate bonds, high yield bonds (junk bonds), high yield loans and international bonds (including those of issuers in developed and emerging markets), which may have varying
interest rates, terms, duration and credit exposure. The Underlying Funds categorized as alternative strategies include those that employ a variety of investment strategies, techniques and practices, generally intended to have a low correlation to
the performance of the broad equity and fixed income markets over a complete market cycle, including but not limited to absolute (positive) return strategies. Subject to the 20% Sleeve limitation described above, the Fund may also invest directly in
equity securities, fixed income securities and derivative instruments, including forward foreign currency contracts and futures (including currency, equity, fixed income, index and interest rate futures). By investing in a combination of Underlying
Funds and the other securities described in the 20% Sleeve, the Funds seek to minimize the risks typically associated with investing in a traditional mutual fund.
Relative to the other Funds offered in this prospectus,
Conservative Portfolio will, under normal market circumstances, invest in a combination of securities that is expected to have the lowest level of overall investment risk relative to the other Funds offered in this prospectus. The Fund may be most
appropriate for investors with a shorter-term investment horizon.
Relative to the Conservative Portfolio, Moderate Conservative
Portfolio will, under normal market circumstances, invest in a combination of securities that is expected to have a higher level of overall investment risk. The Fund may be most appropriate for investors with a short-to-intermediate term investment
horizon.
Relative to the Moderate Conservative
Portfolio, Moderate Portfolio will, under normal market circumstances, invest in a combination of securities that is expected to have a higher level of overall investment risk. The Fund may be most appropriate for investors with an intermediate term
investment horizon.
Relative to the Moderate Portfolio,
Moderate Aggressive Portfolio will, under normal market circumstances, invest in a combination of securities that is expected to have a higher level of overall investment risk. The Fund may be most appropriate for investors with an
intermediate-to-long term investment horizon.
Relative
to the other Funds offered in this prospectus, Aggressive Portfolio will, under normal market circumstances, invest in a combination of securities that is expected to have the highest level of overall investment risk relative to the other Funds
offered in this prospectus. The Fund may be most appropriate for investors with a longer-term investment horizon.
Under normal circumstances, the Funds may invest, directly or
indirectly, in each of equity, fixed income and cash/cash equivalent asset classes and alternative strategies (each, an asset class category and collectively, the asset class categories) within the following target asset allocation ranges (includes
investments in Underlying Funds and the other securities described in the 20% Sleeve):
Asset
Class Exposures*
|
|
Equity
|
Fixed
Income
|
Cash/Cash
Equivalents
|
Alternatives
|
Conservative
Portfolio
|
0–40%
|
50–90%
|
0–40%
|
0–40%
|
Moderate
Conservative Portfolio
|
0–55%
|
40–85%
|
0–40%
|
0–40%
|
Moderate
Portfolio
|
10–70%
|
30–75%
|
0–40%
|
0–40%
|
Moderate
Aggressive Portfolio
|
20–85%
|
15–60%
|
0–40%
|
0–40%
|
Aggressive
Portfolio
|
25–100%
|
0–50%
|
0–40%
|
0–40%
|
|
|
|
|
|
Columbia Capital Allocation Portfolios
More Information About the
Funds
(continued)
*
|
As a percent of Fund net
assets. Ranges include the net notional amounts of a Fund’s direct investments in derivative instruments. Market appreciation or depreciation may cause a Fund to be temporarily outside the ranges identified in the table. The Investment Manager
may modify the target allocation ranges only with the approval of a Fund’s Board of Trustees (the Board).
|
For each Fund, the Investment Manager uses an asset allocation
strategy designed to:
■
|
Determine the allocation of
the Fund’s assets among the asset class categories within the target asset allocation ranges set forth above, based on the Fund’s investment objective, global macro-economic research and historical and projected returns for each asset
class category
|
■
|
Select Underlying Funds to
represent asset class categories and then to determine the portion of the Fund’s assets to be allocated to each such investment, based on the Underlying Funds’ historical and projected returns under their current portfolio managers,
portfolio manager experience and the anticipated investment risks associated with investment in these Underlying Funds
|
■
|
Determine the Fund’s
investments in the 20% Sleeve
|
The
Investment Manager regularly reviews asset class allocations and allocations to Underlying Funds, as well as security selection within the 20% Sleeve. The Investment Manager may reallocate, including on a daily basis, each Fund’s investments
in the Underlying Funds and/or the 20% Sleeve to return the Funds to targeted allocations, or to tactically adjust each Fund’s market or other exposures based on market or other circumstances. Derivatives, in particular, may be used tactically
to increase or decrease a Fund’s exposure to the market or a given market segment, industry, or position.
Underlying Funds
Each Fund has exposure to the risks associated with many areas
of the market through its investments, including through its investments in Underlying Funds. Below is a list of the affiliated underlying funds, by asset class category, available to the Funds for investment (the list does not include unaffiliated
funds or ETFs in which the Funds may invest). Certain Underlying Funds, due to their characteristics, may fit into more than one asset class category, and may be used by the Investment Manager for those purposes. Columbia Management may add new or
remove Underlying Funds without the approval of Fund shareholders.
A description of the affiliated underlying
funds’ investment objectives and principal investment strategies is included in Appendix A. A description of the principal risks associated with investment in these underlying funds is included in Appendix B. The prospectuses and statements of
additional information for the affiliated underlying funds are incorporated by reference into this prospectus and are available free of charge at columbiathreadneedle.com/us or by calling 800.345.6611.
Columbia Capital Allocation Portfolios
More Information About the
Funds
(continued)
Affiliated
Equity Underlying Funds
|
Columbia
Acorn Emerging Markets Fund, Columbia Acorn European Fund, Columbia Acorn
®
Fund, Columbia Acorn International
®
, Columbia
Acorn International Select, Columbia Acorn Select, Columbia Acorn USA
®
, Columbia Asia Pacific ex-Japan Fund, Columbia Contrarian Core Fund, Columbia Diversified Equity Income Fund,
Columbia Dividend Income Fund, Columbia Dividend Opportunity Fund, Columbia Emerging Markets Fund, Columbia European Equity Fund, Columbia Global Dividend Opportunity Fund, Columbia Global Energy and Natural Resources Fund, Columbia Global Equity
Value Fund
(formerly known as Columbia Equity Value Fund)
, Columbia Global Infrastructure Fund, Columbia Greater China Fund, Columbia International Opportunities Fund
(formerly
Columbia Marsico International Opportunities Fund)
, Columbia International Value Fund, Columbia Large Cap Enhanced Core Fund, Columbia Large Cap Growth Fund, Columbia Large Cap Index Fund, Columbia Large Core Quantitative Fund, Columbia Large
Growth Quantitative Fund, Columbia Large Value Quantitative Fund, Columbia Marsico Flexible Capital Fund, Columbia Marsico Focused Equities Fund, Columbia Marsico Growth Fund, Columbia Mid Cap Growth Fund, Columbia Mid Cap Index Fund, Columbia Mid
Cap Value Fund, Columbia Multi-Advisor Small Cap Value Fund, Columbia Overseas Value Fund, Columbia Pacific/Asia Fund, Columbia Real Estate Equity Fund, Columbia Select Global Equity Fund
(formerly known as Columbia
Global Equity Fund)
, Columbia Select International Equity Fund
(formerly known as Columbia Multi-Advisor International Equity Fund)
, Columbia Select Large Cap Equity Fund, Columbia Select Large Cap
Growth Fund, Columbia Select Large-Cap Value Fund, Columbia Select Smaller-Cap Value Fund, Columbia Seligman Communications and Information Fund, Columbia Seligman Global Technology Fund, Columbia Small Cap Core Fund, Columbia Small Cap Growth
Fund I, Columbia Small Cap Index Fund, Columbia Small Cap Value Fund I, Columbia Small Cap Value Fund II, Columbia Small/Mid Cap Value Fund
(formerly known as Columbia Mid Cap Value Opportunity Fund)
and
Columbia Value and Restructuring Fund.
|
Affiliated
Fixed Income Underlying Funds
|
CMG
Ultra Short Term Bond Fund, Columbia Bond Fund, Columbia Convertible Securities Fund, Columbia Corporate Income Fund, Columbia Emerging Markets Bond Fund, Columbia Floating Rate Fund, Columbia Global Bond Fund, Columbia Global Inflation-Linked Bond
Plus Fund, Columbia High Yield Bond Fund, Columbia Income Opportunities Fund, Columbia Inflation Protected Securities Fund, Columbia Intermediate Bond Fund, Columbia Limited Duration Credit Fund, Columbia Short Term Bond Fund, Columbia U.S.
Government Mortgage Fund, Columbia U.S. Treasury Index Fund.
|
Affiliated
Cash/Cash Equivalent Underlying Funds
|
Columbia
Money Market Fund.
|
Affiliated
Alternative Strategy Underlying Funds
|
Columbia
Absolute Return Currency and Income Fund, Columbia Adaptive Alternatives Fund, Columbia Commodity Strategy Fund, Columbia Diversified Absolute Return Fund, Columbia Flexible Capital Income Fund, Columbia Mortgage Opportunities Fund and Columbia
Multi-Asset Income Fund.
|
A
Fund may sell Underlying Funds in order to accommodate redemptions of the Fund’s shares, to change the percentage of its assets invested in certain Underlying Funds in response to economic or market conditions, and to maintain or modify the
proportion of its assets among the various asset classes. The Investment Manager seeks to minimize the impact of the Funds’ purchases and redemptions of shares of the affiliated underlying funds by implementing them over a reasonable
timeframe. In addition, because the Investment Manager earns different fees from the affiliated underlying funds, in determining the allocation of the Funds among these Underlying Funds, the Investment Manager may have an economic conflict of
interest. The Investment Manager will report to the Funds’ Board on the steps it has taken to manage any potential conflicts.
Each Fund may hold a significant amount of cash, money market
instruments or other high quality, short-term investments, including shares of affiliated money market funds, to cover obligations with respect to, or that may result from, the Fund’s derivative transactions. A Fund’s use of certain
derivatives may create leveraged exposure to the equity and debt markets. Leverage occurs when the investments in derivatives create greater economic exposure than the amount invested. This means that the Funds could lose more than originally
invested in the derivative.
Columbia Capital Allocation Portfolios
More Information About the
Funds
(continued)
Principal Risks
An investment in the Fund involves risk, including specific
risks relating to the investment in the Fund based on its investment process and its "fund-of-funds" structure, as well as specific risks related to the underlying funds in which it invests, including among others, those described below. More
information about underlying funds, including their principal risks, is available in their prospectuses.
There is no assurance that the Fund will achieve its investment objective and you may lose money
.
The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV) and share price may go down.
Allocation Risk.
Because the Fund uses an asset allocation strategy in pursuit of its investment objective,
there is a risk that the Fund's allocation among asset classes, investments, managers,
strategies and/or investment styles will cause the Fund's shares to lose value or cause the Fund to underperform other funds with a similar investment objective and/or strategies, or that the investments themselves will not produce the returns
expected.
Alternative Strategies Investment Risk.
An investment in alternative investment strategies (Alternative Strategies), whether through direct investment or through one or more underlying funds, involves risks, which may be significant. Alternative
Strategies may include strategies, instruments or other assets, such as derivatives, that seek investment returns uncorrelated with the broad equity and fixed income/debt markets, as well as those providing exposure to other markets (such as
commodity markets), including but not limited to absolute (positive) return strategies. Alternative Strategies may fail to achieve their desired performance, market or other exposure, or their returns (or lack thereof) may be more correlated with
the broad equity and/or fixed income/debt markets than was anticipated, and the Fund may lose money.
Credit Risk.
The value of
fixed-income securities,
or other instruments or assets, may decline if the issuer thereof defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial
obligations, such as making payments to the Fund when due. Various factors could affect the actual or perceived willingness or ability of the issuer to make timely interest or principal payments, including changes in the financial condition of the
issuer or in general economic conditions. Fixed-income 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 fixed-income 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. Rating agencies
assign credit ratings to certain fixed-income securities to indicate their credit risk. Lower quality or unrated securities held by the Fund may present increased credit risk as compared to higher-rated securities. Non-investment grade fixed-income
securities (commonly called “high-yield” or “junk”) may be subject to greater price fluctuations and are more likely to experience a default than investment grade securities and therefore may expose the Fund to increased
credit risk. If the Fund purchases unrated fixed-income securities, or if the ratings of securities held by the Fund are lowered after purchase, the Fund will depend on analysis of credit risk more heavily than usual.
Derivatives Risk.
Derivatives
are financial instruments whose value depends on, or is derived from, the value of other underlying assets. Losses involving derivative instruments may be substantial, because a relatively small movement in the price of an underlying security,
instrument, commodity, currency or index may result in a substantial loss for the Fund. In addition to the potential for increased losses, the use of derivative instruments may lead to increased volatility for the Fund. Derivative investments will
typically increase the Fund’s exposure to principal risks to which it is otherwise exposed, and may expose the Fund to additional risks. Depending on the type and purpose of the Fund’s derivative investments, these risks may include:
correlation risk (there may be an imperfect correlation between the hedge and the opposite position, which is related to hedging risk), counterparty risk (the counterparty to the instrument may not perform or be able to perform in accordance with
the terms of the instrument), leverage risk (losses from the derivative instrument may be greater than the amount invested in the derivative instrument), hedging risk (the risk that a hedging strategy may not eliminate the risk that it is intended
to offset, and may offset gains), and/or liquidity risk (it may not be possible for the Fund to liquidate the instrument at an advantageous time or price), each of which may result in significant losses for the Fund.
Columbia Capital Allocation Portfolios
More Information About the
Funds
(continued)
Derivatives Risk/Forward Foreign Currency
Contracts Risk.
The use of these derivatives is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. These
instruments are a type of derivative contract, whereby the Fund may agree to buy or sell a country's or region’s currency at a specific price on a specific date in the future. These instruments may fall in value (sometimes dramatically) due to
foreign market downswings or foreign currency value fluctuations, subjecting the Fund to foreign currency risk (the risk that Fund performance may be negatively impacted by foreign currency strength or weakness relative to the U.S.
dollar, particularly if the Fund exposes a significant percentage of its assets to currencies other than the U.S. dollar). Unanticipated changes in the currency markets could result in reduced performance for the Fund
or losses. At or prior to maturity of a forward contract, the Fund may enter into an offsetting contract and may incur a loss to the extent there has been movement in forward contract prices. When the Fund converts its foreign currencies into U.S.
dollars, it may incur currency conversion costs due to the spread between the prices at which it may buy and sell various currencies in the market. Investment in these instruments also subjects the Fund, among other factors, to counterparty risk
(the risk that the counterparty to the instrument will not perform or will be unable to perform in accordance with the terms of the instrument). The Fund’s strategy of investing in these instruments may not be successful and the Fund may
experience significant losses as a result.
Derivatives Risk/Futures Contracts Risk.
The use of futures contracts is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. A futures contract is a sales
contract between a buyer (holding the “long” position) and a seller (holding the “short” position) for an asset with delivery deferred until a future date. The buyer agrees to pay a fixed price at the agreed future date and
the seller agrees to deliver the asset. The seller hopes that the market price on the delivery date is less than the agreed upon price, while the buyer hopes for the contrary. The liquidity of the futures markets depends on participants entering
into offsetting transactions rather than making or taking delivery. To the extent participants decide to make or take delivery, liquidity in the futures market could be reduced. In addition, futures exchanges often impose a maximum permissible price
movement on each futures contract for each trading session. The Fund may be disadvantaged if it is prohibited from executing a trade outside the daily permissible price movement. Moreover, to the extent the Fund engages in futures contracts on
foreign exchanges, such exchanges may not provide the same protection as U.S. exchanges. The loss that the Fund may incur in entering into futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets
are highly volatile and the use of futures may increase the volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract
may result in substantial losses for the Fund. Investments in these instruments involve risks, including counterparty risk (the risk that the counterparty to the instrument may not perform or be able to perform in accordance with the terms of the
instrument), hedging risk (the risk that a hedging strategy may not eliminate the risk that it is intended to offset, and may offset gains) and pricing risk (the risk that the instrument may be difficult to value), each of which may result in
significant losses for the Fund.
Derivatives
Risk/Options Risk.
The use of options is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If the Fund
sells a put option, there is a risk that the Fund may be required to buy the underlying asset at a disadvantageous price. If the Fund sells a call option, there is a risk that the Fund may be required to sell the underlying asset at a
disadvantageous price, and if the call option sold is not covered (for example, by owning the underlying asset), the Fund's losses are potentially unlimited. Options may be traded on a securities exchange or in the over-the-counter market. These
transactions involve other risks, including counterparty risk (the risk that the counterparty to the instrument will not perform or be able to perform in accordance with the terms of the instrument) and hedging risk (the risk that a hedging strategy
may not eliminate the risk that it is intended to offset, and may offset gains), each of which may result in significant losses for the Fund.
Exchange-Traded Fund (ETF) Risk.
An ETF’s share price may not track its specified market index (if any) and may trade below its NAV. Certain ETFs use a “passive” investment strategy and do not take defensive positions in volatile or
declining markets. Other ETFs in which the Fund may invest are actively managed ETFs (i.e.,
they do not track a particular benchmark), which indirectly subjects the Fund to active management risk. An active
secondary market in ETF shares may not develop or be maintained and may be halted or interrupted due to actions by its listing exchange,
Columbia Capital Allocation Portfolios
More Information About the
Funds
(continued)
unusual market conditions or other reasons. There can be no assurance that an
ETF’s shares will continue to be listed on an active exchange. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses incurred through ownership of the ETF. There is a risk that ETFs in
which the Fund invests may terminate due to extraordinary events. For example, any of the service providers to ETFs, such as the trustee or sponsor, may close or otherwise fail to perform their obligations to the ETF, and the ETF may not be able to
find a substitute service provider. Also, certain ETFs may be dependent upon licenses to use various indexes as a basis for determining their compositions and/or otherwise to use certain trade names. If these licenses are terminated, the ETFs may
also terminate. In addition, an ETF may terminate if its net assets fall below a certain amount.
Foreign Currency Risk.
The
performance of the Fund may be materially affected positively or negatively by foreign currency strength or weakness relative to the U.S. dollar, particularly if the Fund invests a significant percentage of its assets in foreign securities or other
assets denominated in currencies other than the U.S. dollar. Currency rates in foreign countries may fluctuate significantly over short or long periods of time for a number of reasons, including changes in interest rates, imposition of currency
controls and economic or political developments in the U.S. or abroad. The Fund may also incur currency conversion costs when converting foreign currencies into U.S. dollars and vice versa.
Foreign Securities Risk.
Investments in or exposure to foreign securities involve certain risks not associated with investments in or exposure to securities of U.S. companies. For example, foreign markets can be extremely volatile. The
performance of the Fund may be negatively impacted by fluctuations in a foreign currency’s strength or weakness relative to the U.S. dollar. Foreign securities may also be less liquid than securities of U.S. companies so that the Fund may, at
times, be unable to sell foreign securities at desirable times or prices. Brokerage commissions, custodial costs 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 on the Fund’s income,
capital gains or proceeds from the disposition of foreign securities, which could reduce the Fund’s return on such securities. Other risks include: possible delays in the settlement of transactions or in the
payment of income; generally less publicly available information about foreign companies; the impact of economic, political, social, diplomatic or other conditions or events; possible seizure, expropriation or nationalization of a company or its
assets or the assets of a particular investor or category of investors; possible imposition of currency exchange controls; accounting, auditing and financial reporting standards that may be less comprehensive and stringent than those applicable to
domestic companies; the imposition of economic and other sanctions against a particular foreign country, its nationals or industries or businesses within the country; and the generally less stringent standard of care to which local agents may be
held in the local markets. In addition, it may be difficult to obtain reliable information about the securities and business operations of certain foreign issuers. Governments or trade groups may compel local agents to hold securities in designated
depositories that are not subject to independent evaluation. The less developed a country’s securities market is, the greater the level of risks. The risks posed by sanctions against a particular foreign country, its nationals or industries or
businesses within the country may be heightened to the extent the Fund invests significantly in the affected country or region or in issuers from the affected country that depend on global markets.
Fund-of-Funds Risk.
Determinations regarding asset classes or underlying funds and the Fund’s allocations thereto may not successfully achieve the Fund’s investment objective, in whole or in part. The selected underlying funds’ performance may be
lower than the performance of the asset class they were selected to represent or may be lower than the performance of alternative underlying funds that could have been selected to represent the asset class. The Fund also is exposed to the same risks
as the underlying funds in direct proportion to the allocation of its assets among the underlying funds. Therefore,
to the extent that the Fund invests significantly in a particular underlying fund, the
Fund’s performance would be significantly impacted by the performance of such underlying fund. Generally, by investing in a combination of underlying funds, the Fund has exposure to the risks of many areas of the market. By concentrating its
investments in relatively few underlying funds, the Fund may have more concentrated market exposures, subjecting the Fund to greater risk of loss should those markets decline or fail to rise. The ability of the Fund to realize its investment
objective will depend, in large part, on the extent to which the underlying funds realize their investment objectives. There is no guarantee that the underlying funds will achieve their respective investment
Columbia Capital Allocation Portfolios
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(continued)
objectives. The performance of underlying funds could be adversely affected
if other entities that invest in the same underlying funds make relatively large investments or redemptions in such underlying funds. The Fund, and its shareholders, indirectly bear a portion of the expenses of any funds in which the Fund invests.
Because the expenses and costs of each underlying fund are shared by its investors, redemptions by other investors in an underlying fund could result in decreased economies of scale and increased operating expenses for such fund. These transactions
might also result in higher brokerage, tax or other costs for an underlying fund. This risk may be particularly important when one investor owns a substantial portion of an underlying fund. The Investment Manager may have potential conflicts of
interest in selecting affiliated funds over unaffiliated funds for investment by the Fund, and may also face potential conflicts of interest in selecting affiliated funds, because the fees the Investment Manager receives from some underlying funds
may be higher than the fees paid by other underlying funds.
Growth Securities Risk.
Growth
securities typically trade at a higher multiple of earnings than other types of equity securities. Accordingly, the market values of growth securities may never reach their expected market value and may decline in price. In addition,
growth securities, at times, may not perform as well as value securities or the stock market in general, and may be out of favor with investors for varying periods of time.
Inflation-Protected Securities Risk.
Inflation-protected debt securities tend to react to changes in real interest rates. Real interest rates can be described as nominal interest rates minus the expected impact of inflation. In general, the price of an
inflation-protected debt security falls when real interest rates rise, and rises when real interest rates fall. Interest payments on inflation-protected debt securities will vary as the principal and/or interest is adjusted for inflation and may be
more volatile than interest paid on ordinary bonds. In periods of deflation, the Fund may have no income at all from such investments. Income earned by a shareholder depends on the amount of principal invested, and that principal will not grow with
inflation unless the shareholder reinvests the portion of Fund distributions that comes from inflation adjustments.
Interest Rate Risk.
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of
debt securities 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 will generally affect the value of the Fund's shares. In general, the longer the maturity or
duration of a debt security, the greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest
rates may negatively impact the Fund’s performance. Actions by governments and central banking authorities can result in increases
in interest rates. Such actions may negatively affect the value of
fixed-income securities held by the Fund, resulting in a negative impact on the Fund's performance and NAV.
Many economies around the world, including the United States,
are experiencing historically low interest rate levels; however, interest rates may soon begin to rise, especially to the extent that economies begin to appear more stable and demonstrate signs of growth. Any interest rate increases could cause the
value of a Fund’s investments in debt securities to decrease. Rising interest rates may prompt redemptions from a Fund, which may force the Fund to sell investments at a time when it is not advantageous to do so, which could result in
losses.
Issuer Risk.
An issuer in which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may
be caused by poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or
factors.
High-Yield Securities Risk.
Securities rated below investment grade (commonly called “high-yield” or “junk” bonds) and unrated securities of comparable quality tend to be more sensitive to credit risk than higher-rated
securities and may experience greater price fluctuations in response to perceived changes in the ability of the issuing entity or obligor to pay interest and principal when due than to changes in interest rates. These investments are generally more
likely to experience a default than higher-rated securities. High-yield securities are considered to be predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal. These securities typically pay a
premium — a higher interest rate or yield — because of the increased risk of loss, including default. High-yield securities may require a greater degree of judgment to establish a price, may be difficult to sell at the time
Columbia Capital Allocation Portfolios
More Information About the
Funds
(continued)
and price the Fund desires, may carry high transaction costs, and also are
generally less liquid than higher-rated securities. The securities ratings provided by third party rating agencies 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. In adverse economic and other circumstances, issuers of lower-rated securities are more likely to have difficulty making principal and interest payments than issuers of higher-rated
securities.
Market Risk.
Market risk refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. Security values may fall or fail to rise because of a variety of
actual or perceived factors affecting an issuer (e.g., an unfavorable earnings report), the industry or sector in which it operates, or the market as a whole, which may reduce the value of an investment in the Fund. Accordingly, an investment in the
Fund could lose money over short or long periods. The market values of the securities the Fund holds 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. Although equity securities generally tend to have greater price volatility than debt securities, under certain market conditions, debt securities may have comparable or greater price volatility. In addition, stock prices may be
sensitive to rising interest rates, as the cost of capital rises and borrowing costs increase.
Prepayment and Extension Risk.
Prepayment risk is the risk that a bond or other security or investment might be called or otherwise converted, prepaid or redeemed before maturity,
and extension risk is the risk that the investment
might not be called as expected.
In
the case of prepayment risk, if the investment is converted, prepaid or redeemed before maturity,
particularly during a time of declining interest rates or spreads, the portfolio managers may not be able to invest the proceeds in other investments providing as high a level of income, resulting in a reduced yield to the Fund. Conversely, in the
case of extension risk, as interest rates rise or spreads widen, the likelihood of prepayment decreases and the maturity of the investment may extend
the life of the investment
beyond the prepayment time. If the Fund's investments are locked in at a lower interest rate for a longer period of time, the portfolio managers may be unable to capitalize on securities with higher interest rates or
wider spreads.
Small- and Mid-Cap Company
Securities Risk.
Securities of small- and mid-capitalization companies (small- and mid-cap companies) can, in certain circumstances, have a higher potential for gains than securities of larger, more established
companies (larger companies) but may also have more risk. For example, small- and mid-cap companies may be more vulnerable to market downturns and adverse business or economic events than larger companies because they may have more limited
financial resources and business operations. Small- and mid-cap companies are also more likely than larger companies to have more limited product lines and operating histories and to depend on smaller management teams. Securities of small- and
mid-cap companies may trade less frequently and in smaller volumes and may be less liquid and fluctuate more sharply in value than securities of larger companies. When the Fund takes significant positions in small- and mid-cap companies with limited
trading volumes, the liquidation of those positions, particularly in a distressed market, could be prolonged and result in losses to the Fund. In addition, some small- and mid-cap companies may not be widely followed by the investment community,
which can lower the demand for their stocks.
Value
Securities Risk.
Value securities are securities of companies that may have experienced, for example, adverse business, industry or other developments or may be subject to special risks that have caused the
securities to be out of favor and, in turn, potentially undervalued. The market value of a portfolio security may not meet the portfolio manager's perceived value assessment of that security, or may decline in price, even though the portfolio
manager(s) believe(s) the securities are already undervalued. There is also a risk that it may take longer than expected for the value of these investments to rise to the portfolio manager’s perceived value. In addition, value securities, at
times, may not perform as well as growth securities or the stock market in general, and may be out of favor with investors for varying periods of time.
Additional Investment Strategies and Policies
This section describes certain investment strategies and
policies that the Fund may utilize in pursuit of its investment objective and some additional factors and risks involved with investing in the Fund.
Columbia Capital Allocation Portfolios
More Information About the
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(continued)
References to “the Fund” throughout the remainder
of the prospectus refer to each Fund singularly or collectively as the context requires.
Investment Guidelines
As a general matter, and except as
specifically described in the discussion of the Fund's principal investment strategies in this prospectus or as otherwise required by the Investment Company Act of 1940, as amended (the 1940 Act), the rules and regulations thereunder and any
applicable exemptive relief, 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 investment in the security or asset.
Holding Other Kinds of Investments
The Fund may hold investments that are not
part of its principal investment strategies. These investments and their risks are described below and/or 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. Information on the Fund’s holdings can be found in the Fund’s shareholder reports or by visiting columbiathreadneedle.com/us.
Transactions in Derivatives
The Fund may enter into derivative
transactions or otherwise have exposure to derivative transactions through underlying investments. 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 the London Interbank Offered Rate (commonly known as LIBOR)) or market indices (such as the Standard & Poor's (S&P) 500
®
Index). The use of derivatives is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities
transactions. 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 directly. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility in
the value of the derivative and/or the Fund’s shares, 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. U.S. federal legislation has been enacted that provides for new clearing, margin, reporting and
registration requirements for participants in the derivatives market. These changes could restrict and/or impose significant costs or other burdens upon the Fund’s participation in derivatives transactions. For more information on the risks of
derivative investments and strategies, see the SAI.
Investing in Affiliated Funds
The Investment Manager or an affiliate serves as investment
adviser to mutual funds using the Columbia brand (Columbia Funds), including those that are structured as “fund-of-funds” (such as the Fund(s) offered in this prospectus), and provides asset-allocation services to (i) shareholders
by investing in shares of other Columbia Funds (collectively referred to in this section as Underlying Funds), and (ii) discretionary managed accounts (collectively referred to as affiliated products) that invest exclusively in Underlying Funds.
These affiliated products, individually or collectively, may own a significant percentage of the outstanding shares of one or more Underlying Funds, and the Investment Manager seeks to balance potential conflicts of interest between the affiliated
products and the Underlying Funds in which they invest. The affiliated products’ investment in the Underlying Funds may have the effect of creating economies of scale, possibly resulting in lower expense ratios for the Underlying Funds,
Columbia Capital Allocation Portfolios
More Information About the
Funds
(continued)
because the affiliated products may own substantial portions of the shares of
Underlying Funds. However, redemption of Underlying Fund shares by one or more affiliated products could cause the expense ratio of an Underlying Fund to increase, as its fixed costs would be spread over a smaller asset base. Because of large
positions of certain affiliated products, the Underlying Funds may experience relatively large inflows and outflows of cash due to affiliated products’ purchases and sales of Underlying Fund shares. Although the Investment Manager or its
affiliate may seek to minimize the impact of these transactions where possible, for example, by structuring them over a reasonable period of time or through other measures, Underlying Funds may experience increased expenses as they buy and sell
portfolio securities to manage the cash flow effect related to these transactions. Further, when the Investment Manager or its affiliate structures transactions over a reasonable period of time in order to manage the potential impact of the buy and
sell decisions for the affiliated products, those affiliated products, including funds-of-funds, may pay more or less (for purchase activity), or receive more or less (for redemption activity), for shares of the Underlying Funds than if the
transactions were executed in one transaction. In addition, substantial redemptions by affiliated products within a short period of time could require the Underlying Fund to liquidate positions more rapidly than would otherwise be desirable, which
may have the effect of reducing or eliminating potential gain or causing it to realize a loss. Substantial redemptions may also adversely affect the ability of the Underlying Fund to implement its investment strategy. The Investment Manager or its
affiliate also has an economic conflict of interest in determining the allocation of affiliated products’ assets among the Underlying Funds, as it earns different fees from the various Underlying Funds.
Investing in Money Market Funds
The Fund may invest cash in, or hold as collateral for certain
investments, shares of registered or unregistered money market funds, including funds advised by the Investment Manager or its affiliates. These funds are not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency. 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.
Investing Defensively
The Fund may from time to time take temporary defensive
investment positions that may be inconsistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, social or other conditions, including, without limitation, investing some or all of
its assets in money market instruments or shares of affiliated or unaffiliated money market funds or holding some or all of its assets in cash or cash equivalents. The Fund may take such defensive investment positions for as long a period as deemed
necessary.
The Fund may not achieve its investment
objective while it is investing defensively. Investing defensively may adversely affect Fund performance. During these times, the portfolio managers may make frequent portfolio holding changes, which could result in increased trading
expenses and taxes, and decreased Fund performance. See also
Investing in Money Market Funds
above for more information.
Other Strategic and Investment Measures
The Fund may also from time to time take temporary portfolio
positions that may or may not be consistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, social or other conditions, including, without limitation, investing in derivatives,
such as futures (e.g., index futures) or options on futures, for various purposes, including among others, investing in particular derivatives to achieve indirect investment exposures to a sector, country or region where the Investment Manager
believes such positioning is appropriate. The Fund may take such portfolio positions for as long a period as deemed necessary. While the Fund is so positioned, derivatives could comprise a substantial portion of the Fund’s investments and the
Fund may not achieve its investment objective. Investing in this manner may adversely affect Fund performance. During these times, the portfolio managers may make frequent portfolio holding changes, which could result in increased trading
expenses and taxes, and decreased Fund performance. For information on the risks of investing in derivatives, see
Transactions in Derivatives
above.
Columbia Capital Allocation Portfolios
More Information About the
Funds
(continued)
Portfolio Holdings Disclosure
The Board has adopted policies and
procedures that govern the timing and circumstances of disclosure to shareholders and third parties of information regarding the securities owned by the Fund. A description of these policies and procedures is included in the SAI. Fund policy
generally permits the disclosure of portfolio holdings information on the Fund's website (columbiathreadneedle.com/us) only after a certain amount of time has passed, as described in the SAI.
Purchases and sales of portfolio securities can take place at
any time, so the portfolio holdings information available on the Fund's website may not always be current.
Mailings to Households
In order to reduce shareholder expenses, the Fund may, if
prior consent has been provided, mail only one copy of the Fund’s prospectus and each annual and semiannual report to those addresses shared by two or more accounts. If you wish to receive separate copies of these documents, call 800.345.6611
or, if your shares are held through a financial intermediary, contact your intermediary directly.
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 shareholders redeeming Fund shares could require the Fund to sell portfolio securities at less than opportune times or to
hold ready reserves of uninvested cash in amounts larger than might otherwise be the case to meet shareholder redemptions. Either situation could adversely impact the Fund’s performance.
Understanding Annual Fund Operating Expenses
The Fund invests in Class I shares of the
underlying funds, which are not subject to distribution fees. Class I shares are available exclusively to Columbia’s fund-of-funds. The Fund’s annual operating expenses, as presented in the
Annual Fund
Operating Expenses
table in the
Fees and Expenses of the Fund
section of this prospectus, generally are based on expenses incurred during the Fund’s most recently completed fiscal year and are
expressed as a percentage (expense ratio) of the Fund’s average net assets during that fiscal year. The expense ratios reflect the Fund’s fee arrangements as of the date of this prospectus and, unless indicated otherwise, are based on
expenses incurred during the Fund’s most recent fiscal year. The Fund’s assets will fluctuate, but no adjustments have been or will be made to the expense ratios to reflect any differences in the Fund’s average net assets between
the most recently completed fiscal year and the date of this prospectus or a later date. In general, the Fund’s expense ratios will increase as its net assets decrease, such that the Fund’s actual expense ratios may be higher than the
expense ratios presented in the
Annual Fund Operating Expenses
table if assets fall. Any commitment by the Investment Manager and/or its affiliates to waive fees and/or cap (reimburse) expenses is expected, in
part, to limit the impact of any increase in the Fund’s operating expense ratios that would otherwise result because of a decrease in the Fund’s assets in the current fiscal year. The Fund’s annual operating expenses are comprised
of (i) investment management fees, (ii) distribution and/or service fees, and (iii) other expenses. Management fees do not vary by class, but distribution and/or service fees and other expenses may vary by class.
Columbia Capital Allocation Portfolios
More Information About the
Funds
(continued)
Other Expenses
“Other expenses” consist of the
fees the Fund pays to its administrator, custodian, transfer agent, auditors, lawyers and trustees, costs relating to compliance and miscellaneous expenses. Generally, these expenses are the same for each share class and are allocated on a pro rata
basis across all share classes. Transfer agent fees and certain shareholder servicing fees, however, are class specific. They differ by share class because the shareholder services provided to each share class may be different. Accordingly, the
differences in “other expenses” among share classes are primarily the result of the different transfer agent and shareholder servicing fees applicable to each share class. For more information on these fees, see
Choosing a Share Class — Selling Agent Compensation.
Fee Waiver/Expense Reimbursement Arrangements
and Impact on Past Performance
The Investment
Manager and certain of its affiliates have voluntarily agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below), so that the Fund’s net operating expenses, after giving effect to fees waived/expenses
reimbursed and any balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the annual rates of:
Columbia
Capital Allocation Conservative Portfolio
|
Class
A
|
0.51%
|
Class
B
|
1.26%
|
Class
C
|
1.26%
|
Class
K
|
0.46%
|
Class
R
|
0.76%
|
Class
R4
|
0.26%
|
Class
R5
|
0.21%
|
Class
Y
|
0.16%
|
Class
Z
|
0.26%
|
Columbia
Capital Allocation Moderate Conservative Portfolio
|
Class
A
|
0.51%
|
Class
B
|
1.26%
|
Class
C
|
1.26%
|
Class
K
|
0.46%
|
Class
R
|
0.76%
|
Class
R4
|
0.26%
|
Class
R5
|
0.21%
|
Class
Y
|
0.16%
|
Class
Z
|
0.26%
|
Columbia
Capital Allocation Moderate Portfolio
|
Class
A
|
0.51%
|
Class
B
|
1.26%
|
Class
C
|
1.26%
|
Class
K
|
0.46%
|
Class
R
|
0.76%
|
Class
R4
|
0.26%
|
Columbia Capital Allocation Portfolios
More Information About the
Funds
(continued)
Columbia
Capital Allocation Moderate Portfolio
|
Class
R5
|
0.21%
|
Class
Y
|
0.16%
|
Class
Z
|
0.26%
|
Columbia
Capital Allocation Moderate Aggressive Portfolio
|
Class
A
|
0.51%
|
Class
B
|
1.26%
|
Class
C
|
1.26%
|
Class
K
|
0.46%
|
Class
R
|
0.76%
|
Class
R4
|
0.26%
|
Class
R5
|
0.21%
|
Class
T
|
0.51%
|
Class
Y
|
0.16%
|
Class
Z
|
0.26%
|
Columbia
Capital Allocation Aggressive Portfolio
|
Class
A
|
0.51%
|
Class
B
|
1.26%
|
Class
C
|
1.26%
|
Class
K
|
0.46%
|
Class
R
|
0.76%
|
Class
R4
|
0.26%
|
Class
R5
|
0.21%
|
Class
Y
|
0.16%
|
Class
Z
|
0.26%
|
Under the arrangement, the
following fees and expenses are excluded from the Fund’s operating expenses when calculating the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: advisory fee, taxes (including foreign transaction taxes),
expenses associated with investment in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program,
dividend expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest and extraordinary expenses. This arrangement may be revised or discontinued at any
time.
Effect of Fee Waivers and/or Expense Reimbursements
on Past Performance.
The Fund’s returns shown in the
Performance Information
section of this prospectus
reflect the effect of any fee waivers and/or reimbursements of Fund expenses by the Investment Manager and/or any of its affiliates and any predecessor firms that were in place during the performance period shown. Without such fee waivers/expense
reimbursements, the Fund’s returns might have been lower.
Primary Service Providers
The Investment Manager, which also serves as the Fund’s
administrator (the Administrator), the Distributor and the Transfer Agent are all affiliates of Ameriprise Financial, Inc. (Ameriprise Financial). They and their affiliates currently provide key services, including investment advisory,
administration, distribution, shareholder servicing and transfer agency services, to the Fund and various other funds, including the Columbia Funds, and are paid for providing these services. These service relationships are described below.
Columbia Capital Allocation Portfolios
More Information About the
Funds
(continued)
The Investment Manager
Columbia Management Investment Advisers, LLC is located at 225
Franklin Street, Boston, MA 02110 and serves as investment adviser to the Columbia Funds. The Investment Manager is a registered investment adviser and a wholly-owned subsidiary of Ameriprise Financial. The Investment Manager’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 traditional mutual funds, exchange-traded funds and closed-end funds,
the Investment Manager acts as an investment adviser for itself, its affiliates, individuals, corporations, retirement plans, private investment companies and financial intermediaries.
The Investment Manager has entered into a personnel-sharing
arrangement with its affiliate, Threadneedle Investments (Threadneedle). Threadneedle, like the Investment Manager, is a wholly-owned subsidiary of Ameriprise Financial and is an SEC-registered investment adviser. Pursuant to this arrangement,
certain employees of Threadneedle serve as “associated persons” of the Investment Manager and, in this capacity, subject to the oversight and supervision of the Investment Manager and consistent with the investment objectives, policies
and limitations set forth in the Funds’ prospectus and SAI, may provide research and related services, and discretionary investment management services (including acting as portfolio managers) to the Funds on behalf of the Investment
Manager.
Subject to oversight by the Board, the
Investment Manager manages the day-to-day operations of the Fund, determining what securities and other investments the Fund should buy or sell and executing portfolio transactions. The Investment Manager may use the research and other capabilities
of its affiliates and third parties in managing the Fund’s investments.
The Securities and Exchange Commission (SEC) has issued an
order that permits the Investment Manager, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for a 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 Investment Manager 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 Investment Manager discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.
At present, the Investment Manager has not engaged any
investment subadviser for the Funds.
The Funds pay the
Investment Manager a fee for its investment advisory services. The fee is calculated as a percentage of the average daily net assets of each Fund and is paid monthly. For the Funds’ most recent fiscal year, aggregate advisory fees paid to the
Investment Manager by each Fund is shown in the following chart.
Annual
Advisory Fee as a % of Average Daily Net Assets
|
Columbia
Capital Allocation Conservative Portfolio
|
0.06%
|
Columbia
Capital Allocation Moderate Conservative Portfolio
|
0.05%
|
Columbia
Capital Allocation Moderate Portfolio
|
0.05%
|
Columbia
Capital Allocation Moderate Aggressive Portfolio
|
0.06%
|
Columbia
Capital Allocation Aggressive Portfolio
|
0.06%
|
The Investment Manager has
implemented a schedule for the Funds’ investment management fees whereby the Funds pay (i) 0.00% on its assets that are invested in Columbia proprietary funds (excluding any proprietary fund that does not pay an investment management fee to
the Investment Manager), (ii) 0.55% on its assets that are invested in securities, other than third party advised mutual funds, and Columbia Funds that do not pay an investment management fee (including exchange-traded funds, derivatives and
individual securities), and (iii) 0.10% on its assets that are invested in non-exchange traded third party advised mutual funds. A discussion regarding the basis for the Board approving the renewal of the Funds' investment management services
agreement with the Investment Manager is available in the Fund’s semiannual report to shareholders for the fiscal period ended July 31, 2014.
Columbia Capital Allocation Portfolios
More Information About the
Funds
(continued)
Portfolio Managers
Information about the portfolio managers primarily responsible
for overseeing the Fund’s investments is shown below. The SAI provides additional information about the portfolio managers, including information relating to compensation, other accounts managed by the portfolio managers and ownership by the
portfolio managers of Fund shares.
Portfolio
Manager
|
|
Title
|
|
Role
with Fund
|
|
Managed
Fund Since
|
|
|
|
|
|
|
For
Conservative Portfolio,
Moderate Portfolio and
Aggressive Portfolio
|
For
Moderate Conservative
Portfolio and Moderate
Aggressive Portfolio
|
Jeffrey
Knight, CFA
|
|
Senior
Portfolio Manager, Global Head of Investment Solutions and Co-Head of Global Asset Allocation
|
|
Co-manager
|
|
2013
|
2013
|
Anwiti
Bahuguna, Ph.D.
|
|
Senior
Portfolio Manager
|
|
Co-manager
|
|
2010
|
2009
|
Marie
Schofield, CFA
|
|
Senior
Portfolio Manager and Chief Economist
|
|
Co-manager
|
|
2010
|
2009
|
Beth
Vanney, CFA
|
|
Portfolio
Manager
|
|
Co-manager
|
|
2011
|
2011
|
Toby
Nangle
|
|
Portfolio
Manager and Co-Head of Global Asset Management
|
|
Co-manager
|
|
2013
|
2013
|
Mr. Knight
joined the Investment Manager in February 2013 as Head of Global Asset Allocation. Prior to joining the Investment Manager, Mr. Knight was at Putnam Investments from 1993 to 2013, most recently as head of global
asset allocation. Mr. Knight began his investment career in 1987 and earned a B.A. from Colgate University and an M.B.A. from Tuck School of Business.
Dr. Bahuguna
joined the
Investment Manager in May 2010 when it acquired the long-term asset management business of Columbia Management Group, where she worked as an investment professional since 2002. Dr. Bahuguna began her investment career in 1998 and earned a B.S. from
St. Stephen’s College, Delhi University and a Ph.D. in economics from Northeastern University.
Ms. Schofield
joined the
Investment Manager in May 2010 when it acquired the long-term asset management business of Columbia Management Group, where she worked as an investment professional since 1990. Ms. Schofield began her investment career in 1975 and earned a B.S. from
the College of Saint Rose.
Ms. Vanney
joined the Investment Manager in May 2010 when it acquired the long-term asset management business of Columbia Management Group, where she worked as an investment professional since 1999. Ms. Vanney began her investment
career in 1990 and earned a B.S. from the University of Minnesota.
Mr. Nangle
joined Threadneedle,
a Participating Affiliate, as Head of Multi-Asset in 2012. Prior to joining Threadneedle, Mr. Nangle worked at Baring Asset Management, initially in the fixed income team and subsequently
as Director of the Multi-Asset Group. Mr. Nangle began his investment career in 1997 and earned a M.A. (Hons) in history, and a MPhil in international relations from Sidney Sussex College, University of Cambridge.
The Administrator
Columbia Management Investment Advisers, LLC 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 related clerical and administrative services. The
Fund pays the Administrator a fee (plus certain out-of-pocket expenses) for the administrative services it provides to the Fund.
Columbia Capital Allocation Portfolios
More Information About the
Funds
(continued)
The Distributor
Shares of the Fund are distributed by Columbia Management
Investment Distributors, Inc., which is located at 225 Franklin Street, Boston, MA 02110. 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
Columbia Management Investment
Services Corp. is a registered transfer agent and wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent is located at 225 Franklin Street, Boston, MA 02110, and its responsibilities include processing purchases, redemptions and
exchanges of Fund shares, calculating and paying distributions, maintaining shareholder records, preparing account statements and providing customer service. The Transfer Agent has engaged DST Systems, Inc., including its affiliate, Boston Financial
Data Services, to provide various shareholder services. In addition, the Transfer Agent enters into agreements with various financial intermediaries through which you may hold Fund shares, pursuant to which the Transfer Agent pays these financial
intermediaries for providing certain shareholder services. The Fund generally pays the Transfer Agent a per account fee, pays a fee based on the assets invested through omnibus accounts and reimburses the Transfer Agent for certain out-of-pocket
expenses.
Other Roles and Relationships of
Ameriprise Financial and its Affiliates — Certain Conflicts of Interest
The Investment Manager, Distributor and Transfer Agent, all
affiliates of Ameriprise Financial, provide various services to the Fund and other Columbia 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 Investment Manager 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 Investment Manager, 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 Investment Manager 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 Investment Manager 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 Investment Manager and other Ameriprise Financial affiliates;
|
■
|
regulatory and other
investment restrictions on investment activities of the Investment Manager 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 Investment Manager, and a Columbia Fund.
|
Columbia Capital Allocation Portfolios
More Information About the
Funds
(continued)
The Investment Manager 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 Management and Other Services — Other Roles and Relationships of Ameriprise
Financial and its Affiliates — Certain Conflicts of Interest
section of the SAI. 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 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. 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 quarterly (10-Q), annual (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 sec.gov.
Columbia Capital Allocation Portfolios
The Funds
The Columbia Funds (referred to as the Funds) generally share
the same policies and procedures for investor services, as described below. Each Fund is a series of Columbia Funds Series Trust (CFST), Columbia Funds Series Trust I (CFST I) or Columbia Funds Series Trust II (CFST II), and certain features of
distribution and/or service plans may differ among these trusts. Columbia Capital Allocation Conservative Portfolio, Columbia Capital Allocation Aggressive Portfolio and Columbia Capital Allocation Moderate Portfolio are series of CFST II, and
Columbia Capital Allocation Moderate Aggressive Portfolio and Columbia Capital Allocation Moderate Conservative Portfolio are series of CFST.
Funds Contact Information
Additional information about the Funds can
be obtained at columbiathreadneedle.com/us,* by calling toll-free 800.345.6611, or by writing (regular mail) to Columbia Management Investment Services Corp., P.O. Box 8081, Boston, MA 02266-8081 or (express mail) Columbia Management Investment
Services Corp., c/o Boston Financial, 30 Dan Road, Suite 8081, Canton, MA 02021-2809.
*
|
The website references in
this prospectus are inactive links and information contained in or otherwise accessible through the referenced websites does not form a part of this prospectus.
|
Selling and/or Servicing Agents
The terms “selling agent” and
“servicing agent” (collectively, selling agents) refer to the financial intermediaries that are authorized to sell shares of the Funds. Selling agents include broker-dealers and financial advisors as well as firms that employ such
broker-dealers and financial advisors, including, for example, brokerage firms, banks, investment advisers, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.
Omnibus Accounts
The term “omnibus account”
refers to a selling agent’s account with the Fund (through the Transfer Agent) that represents the combined holdings of, and transactions in, Fund shares of one or more clients of the selling agent (beneficial shareholders). Omnibus accounts
are held in the name of the selling agents and not in the name of the beneficial shareholders invested in the Fund through omnibus accounts.
Retirement Plans and Omnibus Retirement
Plans
The term “retirement
plan” refers to retirement plans created under sections 401(a), 401(k), 457 and 403(b) of the Internal Revenue Code of 1986, as amended (the Code), non-qualified deferred compensation plans governed by section 409A of the Code and similar
plans, but does not refer to individual retirement plans. The term “omnibus retirement plan” refers to a retirement plan that has a plan-level or omnibus account with the Transfer Agent.
Summary of Share Class Features
Each share class has its own investment eligibility criteria,
cost structure and other features. You may not be eligible for every share class. If you purchase shares of a Fund through a retirement plan or other product or program offered by your selling agent, not all share classes of the Fund may be made
available to you. When deciding which class of shares to buy, you should consider, among other things:
■
|
The amount you plan to
invest.
|
■
|
How long you intend to
remain invested in the Fund.
|
■
|
The expenses for each share
class.
|
■
|
Whether you may be eligible
for a reduction or waiver of sales charges when you buy or sell shares.
|
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
Each investor's personal situation is different and you may
wish to discuss with your selling agent which share classes are available to you and which share class is appropriate for you.
The following summarizes the primary features of Class A,
Class B, Class C, Class I, Class K, Class R, Class R4, Class R5, Class T, Class W, Class Y and Class Z shares.
Not all Funds offer every class of shares. The Fund offers the
class(es) of shares set forth on the cover of this prospectus and may offer other share classes through a separate prospectus. Although certain share classes are generally closed to new or existing investors, information relating to these share
classes is included in the table below because certain qualifying purchase orders are permitted, as described below.
Share Class Features
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
A
|
Eligibility:
Available to the general public for investment
Minimum Initial Investment:
$2,000 for most
investors
|
Taxable
Funds:
5.75% maximum, declining to 0.00% on investments of $1 million or more
Tax-Exempt Funds:
3.00% maximum, declining to 0.00% on
investments of $500,000 or more
(e)
None for Columbia Money Market Fund and certain other
Funds
(e)
|
Taxable
Funds:
CDSC on certain investments of between $1 million and $50 million redeemed within 18 months after purchase charged as follows:
• 1.00% CDSC if redeemed within 12
months after purchase and
• 0.50% CDSC if redeemed more than 12, but less than 18, months after purchase
(e)
Tax-Exempt Funds:
Maximum CDSC of 0.75% on certain investments of $500,000 or more redeemed within 12 months after purchase. The CDSC on shares purchased prior to February
19, 2015 differs
(e)
|
Distribution
and Service
Fees:
up to 0.25%
|
Class
B
|
Eligibility:
Closed to new investors
(f)
Note:
Class
B
shares convert
to Class A shares generally eight years after
purchase
(g)
Minimum Initial Investment:
N/A
|
None
|
5.00%
maximum, gradually declining to 0.00% after six years
(g)
|
Distribution
Fee:
0.75%
Service Fee:
0.25%
|
Class
C
|
Eligibility:
Available to the general public for investment
Minimum Initial Investment:
$2,000 for most investors
Purchase Order Limit for Tax-Exempt Funds:
$499,999
(h)
, none for omnibus retirement plans
Purchase Order Limit for Taxable Funds:
$999,999
(h)
;
none for omnibus
retirement plans
|
None
|
1.00%
on certain investments redeemed within one year of purchase
|
Distribution
Fee:
0.75%
Service Fee:
0.25%
|
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
I
|
Eligibility:
Available only to other Columbia Funds (i.e., fund-of-fund investments)
Minimum Initial Investment:
None
|
None
|
None
|
None
|
Class
K
|
Eligibility:
Closed to new investors; available only to qualified employee benefit plans, trust companies or similar institutions, 501(c)(3) charitable organizations, non-qualified deferred compensation plans whose participants
are included in a qualified employee benefit plan described above, 529 plans, and health savings accounts
(f)
Minimum Initial Investment:
N/A
|
None
|
None
|
Plan
Administration Services Fee:
0.25%
|
Class
R
|
Eligibility:
Available only to eligible retirement plans, health savings accounts and, in the sole discretion of the Distributor, other types of retirement accounts held through platforms maintained by selling agents approved by
the Distributor
Minimum Initial Investment:
None
|
None
|
None
|
Series
of CFST & CFST I:
distribution fee of 0.50%
Series of CFST II:
distribution and service fee of 0.50%, of which the service fee may
be up to 0.25%
|
Class
R4
|
Eligibility:
Available only to (i) omnibus retirement plans, (ii) trust companies or similar institutions, (iii) broker-dealers, banks, trust companies and similar institutions that clear Fund share transactions for their client
or customer investment advisory or similar accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R4 eligibility apart
from selling, servicing or similar agreements, (iv) 501(c)(3) charitable organizations, (v) 529 plans and (vi) health savings accounts
Minimum Initial Investment:
None
|
None
|
None
|
None
|
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
R5
|
Eligibility:
Available only to (i) certain registered investment advisers that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that
have been granted specific written authorization from the Transfer Agent with respect to Class R5 eligibility apart from selling, servicing or similar agreements and (ii) omnibus retirement
plans
(f)
Minimum Initial Investment:
None for omnibus retirement plans; $100,000 for combined underlying
accounts of eligible registered investment advisers
|
None
|
None
|
None
|
Class
T
|
Eligibility:
Generally closed to new investors
(f)
Minimum Initial Investment:
N/A
|
5.75%
maximum, declining to 0.00% on investments of $1 million or more
|
CDSC
on certain investments of between $1 million and $50 million redeemed within 18 months after purchase, charged as follows:
• 1.00% CDSC if redeemed within 12 months after purchase
and
• 0.50% CDSC if redeemed more than 12, but less than 18, months after purchase
|
Service
Fee:
up to 0.50%
|
Class
W
|
Eligibility:
Available only to investors purchasing through certain authorized investment programs managed by investment professionals, including discretionary managed account programs
Minimum Initial Investment:
$500
|
None
|
None
|
Distribution
and Service Fees:
0.25%
|
Class
Y
|
Eligibility:
Available only to retirement plans that
maintain plan-level or omnibus
accounts with the Fund
(f)
Minimum Initial Investment:
None
|
None
|
None
|
None
|
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
Z
|
Eligibility:
Available only to certain eligible investors, which are subject to different minimum investment requirements, ranging from $0 to $2,000; effective March 29, 2013, closed to (i) accounts of selling agents that clear
Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been given specific written notice from the Transfer Agent of the termination of their eligibility for
new purchases of Class Z shares and (ii) omnibus retirement plans, subject to certain exceptions
(f)
Minimum Initial Investment:
See
Eligibility
above
|
None
|
None
|
None
|
(a)
|
For Columbia Money Market
Fund, new investments must be made in Class A, Class I, Class W or Class Z shares, subject to eligibility. Class C and Class R shares of Columbia Money Market Fund are available as a new investment only to investors in the Distributor's proprietary
401(k) products, provided that such investor is eligible to invest in the class and transact directly with the Fund or the Transfer Agent through a third party administrator or third party recordkeeper. Columbia Money Market Fund offers other
classes of shares only to facilitate exchanges with other Funds offering such share classes.
|
(b)
|
The minimum initial
investment requirement is $5,000 for Columbia Floating Rate Fund and Columbia Inflation Protected Securities Fund, and $10,000 for Columbia Absolute Return Currency and Income Fund. See
Buying, Selling and Exchanging
Shares — Buying Shares
for more details on the eligible investors and minimum initial investment requirements. Certain share classes are subject to minimum account balance requirements, as described in
Buying, Selling and Exchanging Shares — Transaction Rules and Policies.
|
(c)
|
Actual front-end sales
charges and CDSCs vary among the Funds. For more information on applicable sales charges, see
Choosing a Share Class — Sales Charges and Commissions
and for information about certain exceptions to these
sales charges, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
|
(d)
|
These are the maximum
applicable distribution and/or service fees. Fee rates and fee components (i.e., the portion of a combined fee that is a distribution or service fee) may vary among Funds. Because these fees are paid out of Fund assets on an ongoing basis, over time
these fees will increase the cost of your investment and may cost you more than paying other types of distribution and/or shareholder service fees. Although Class A shares of certain series of CFST I are subject to a combined distribution and
service fee of up to 0.35%, these Funds currently limit the combined fee to 0.25%. Columbia Money Market Fund pays a distribution and service fee of up to 0.10% on Class A shares, up to 0.75% distribution fee and up to 0.10% service fee on Class B
shares, up to 0.75% distribution fee on Class C shares, and 0.10% distribution and service fees on Class W shares. Columbia AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund pay a service fee of up
to 0.20% on Class A, Class B and Class C shares. Columbia AMT-Free Intermediate Muni Bond Fund pays a distribution fee of up to 0.65% on Class B and Class C shares. For more information on distribution and service fees, see
Choosing a Share Class — Distribution and Service Fees.
|
(e)
|
For Columbia Short Term
Municipal Bond Fund, a CDSC of 0.50% is charged on certain investments of $500,000 or more redeemed within 12 months after purchase. The following Funds are not subject to a front-end sales charge or a CDSC on Class A shares: Columbia Money Market
Fund, Columbia Large Cap Index Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Index Fund, Columbia Small Cap Index Fund and Columbia U.S. Treasury Index Fund. Investments in Class A shares of Tax-Exempt Funds made prior to February
19, 2015 of between $1 million and $50 million are subject to a CDSC of 1.00% if redeemed within 12 months after purchase and 0.50% if redeemed more than 12, but less than 18, months after purchase.
|
(f)
|
These share classes are
closed to new accounts, or closed to previously eligible investors, subject to certain conditions, as summarized below and described in more detail under
Buying, Selling and Exchanging Shares — Buying Shares
— Eligible Investors:
|
•
Class B Shares
. The Funds no longer accept investments from new or existing investors in Class B shares, except through reinvestment of dividend and/or capital gain distributions by existing Class B
shareholders, or a permitted exchange.
•
Class K Shares
. Shareholders who opened and funded a Class K account with a Fund as of the close of business on December 31, 2010 may continue to make additional purchases of such share class, and existing
Class K accounts may continue to allow new investors or participants to be established in their Fund account.
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
•
Class R5 Shares
. Shareholders with Class R5 accounts funded before November 8, 2012 who do not satisfy the current eligibility criteria for Class R5 shares may not establish new Class R5 accounts but may
continue to make additional purchases of Class R5 shares in existing accounts. In addition, investment advisory programs and similar programs that opened a Class R5 account as of May 1, 2010 and continuously hold Class R5 shares in such account
after such date, may generally not only continue to make additional purchases of Class R5 shares but also open new Class R5 accounts for such pre-existing programs and add new shareholders in the program.
•
Class T Shares.
Shareholders
with Class T accounts who received, and have continuously held, Class T shares in connection with the merger of certain Galaxy funds into
certain Funds that were then named Liberty funds may continue to make additional purchases of such share class.
•
Class Y Shares
. Shareholders with Class Y accounts funded before November 8, 2012 who do not satisfy the current eligibility criteria for Class Y shares may not establish new accounts for such share class but
may continue to make additional purchases of Class Y shares in existing accounts.
•
Class Z Shares
. Effective March 29, 2013, selling agents that clear Fund share transactions through designated selling agents and their mutual fund trading platforms that have been given specific written notice
from the Transfer Agent of the termination of their eligibility for new purchases of Class Z shares and omnibus retirement plans are no longer permitted to establish new Class Z accounts, subject to certain exceptions. Omnibus retirement plans that
opened and, subject to exceptions, funded a Class Z account as of close of business on March 28, 2013 and continuously hold Class Z shares in such account after such date, may generally continue to make additional purchases of Class Z shares, open
new Class Z accounts and add new participants. In certain circumstances and in the sole discretion of the Distributor, omnibus retirement plans affiliated with a grandfathered plan may also open new Class Z accounts. Accounts of selling agents
(other than omnibus retirement plans) that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms are not permitted to establish new Class Z accounts or make
additional purchases of Class Z shares (other than through reinvestment of distributions).
(g)
|
Timing of conversion and CDSC
schedules will vary depending on the Fund and the date of your original purchase of Class B shares. For more information on the conversion of Class B shares to Class A shares, see
Choosing a Share Class — Sales
Charges and Commissions.
Class B shares of Columbia Short Term Municipal Bond Fund do not charge a CDSC and do not convert to Class A shares.
|
(h)
|
If you are eligible to invest
in Class A shares without a front-end sales charge, you should discuss your options with your selling agent. For more information, see
Choosing a Share Class – Reductions/Waivers of Sales Charges.
|
Sales Charges and
Commissions
Sales charges, commissions and distribution
and service fees (discussed in a separate sub-section below) compensate selling agents (typically your financial advisor) for selling shares to you and for maintaining and servicing the shares held in your account with them. These charges,
commissions and fees are intended to provide incentives for selling agents to provide such 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 CDSC
and/or over time in the form of increased ongoing fees.
Whether the ultimate cost is higher for one
class over another depends on the amount you invest, how long you hold your shares and whether you are eligible for reduced or waived sales charges. The differential between classes also will vary depending on the actual investment return for any
given investment period. You are responsible for choosing the share class most appropriate for you after taking into account your share class eligibility and the value of accounts that you are eligible to include for the right of accumulation, which
may reduce or eliminate otherwise applicable sales charges. See
Choosing a Share Class
– Reductions/Waivers of Sales Charges
. We encourage you to consult with a
financial advisor who can help you with your investment decisions.
Class A Shares — Front-End Sales Charge
You'll pay a front-end sales charge when you buy Class A
shares (other than shares of Columbia Money Market Fund and certain other Funds), resulting in a smaller dollar amount being invested in a Fund than the purchase price you pay, unless you qualify for a waiver of the sales charge or you buy the
shares through reinvested distributions. For more information, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
The Distributor receives the sales charge and re-allows (or
pays) a portion of the sales charge to the selling agent through which you purchased the shares. The Distributor retains the balance of the sales charge. The Distributor retains the full sales charge you pay when you purchase shares of the Fund
directly from the Fund (through the Transfer Agent, rather than through a selling agent). Sales charges vary depending on the amount of your purchase.
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
Front-End Sales Charge Calculation
The table below presents the front-end
sales charge as a percentage of both the offering price and the net amount invested.
■
|
The net asset value (or NAV)
per share is the price of a share calculated by the Fund every business day.
|
■
|
The
offering price per share is the NAV per share plus any front-end sales charge that applies.
|
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 for the Fund) and the NAV 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 any other accounts eligible for aggregation of which you or your selling agent notifies the Fund) and base the sales charge on the aggregate amount. See
Choosing a Share Class — Reductions/Waivers of Sales Charges
for a discussion of account value aggregation. There is no initial sales charge on reinvested dividend or capital gain distributions.
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 (and any other accounts eligible for aggregation of which you or your selling agent notifies the Fund).
|
Class
A Shares — Front-End Sales Charge — Breakpoint Schedule*
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Equity
Funds,
Columbia Adaptive Alternatives Fund,
Columbia Adaptive Risk Allocation Fund,
Columbia Commodity Strategy Fund,
Columbia Diversified Absolute Return Fund
and Funds-of-Funds (equity)*
|
$
0–$49,999
|
5.75%
|
6.10%
|
5.00%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
3.00%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.15%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Fixed
Income Funds (except those listed below),
Columbia Multi-Asset Income Fund
and Funds-of-Funds (fixed income)*
|
$
0-$49,999
|
4.75%
|
4.99%
|
4.00%
|
$
50,000–$99,999
|
4.25%
|
4.44%
|
3.50%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
3.00%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.15%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Tax-Exempt
Funds (other than Columbia Short Term Municipal Bond Fund)
|
$
0-$99,999
|
3.00%
|
3.09%
|
2.50%
|
$100,000–$249,999
|
2.50%
|
2.56%
|
2.15%
|
$250,000–$499,999
|
1.50
%
|
1.53%
|
1.25%
|
$
500,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
Class
A Shares — Front-End Sales Charge — Breakpoint Schedule*
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Columbia
Absolute Return Currency and Income Fund,
Columbia Floating Rate Fund,
Columbia Inflation Protected Securities Fund,
Columbia Intermediate Bond Fund,
Columbia Limited Duration Credit Fund,
Columbia Mortgage Opportunities
Fund,
Columbia U.S. Government Mortgage Fund and
Columbia U.S. Social Bond Fund
|
$
0-$99,999
|
3.00%
|
3.09%
|
2.50%
|
$100,000–$249,999
|
2.50%
|
2.56%
|
2.15%
|
$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%
|
0.00%
(c)
|
|
|
|
|
|
Columbia
Short Term Bond Fund
|
$
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%
|
0.00%
(c)
|
|
|
|
|
|
Columbia
Short Term Municipal Bond Fund
|
$
0-$99,999
|
0.75%
|
0.76%
|
0.50%
|
$250,000–$499,999
|
0.50%
|
0.50%
|
0.40%
|
$
500,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
*
|
The following Funds are not
subject to a front-end sales charge or CDSC on Class A shares: Columbia Money Market Fund, Columbia Large Cap Index Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Index Fund, Columbia Small Cap Index Fund and Columbia U.S. Treasury
Index Fund.
"Funds-of-Funds (equity)"
includes Columbia Capital Allocation Aggressive Portfolio, Columbia Capital Allocation Moderate Aggressive Portfolio, Columbia Capital Allocation Moderate
Conservative Portfolio, Columbia Capital Allocation Moderate Portfolio and Columbia LifeGoal® Growth Portfolio
. "Funds-of-Funds (fixed income)"
includes Columbia Capital Allocation Conservative Portfolio
and Columbia Income Builder Fund. Columbia Balanced Fund and Columbia Global Opportunities Fund are treated as equity Funds for purposes of the table.
|
(a)
|
Purchase amounts and account
values may be aggregated among all eligible Fund accounts for the purposes of this table. See
Choosing a Share Class — Reductions/Waivers of Sales Charges
for a discussion of account value aggregation.
|
(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. Purchase price includes the sales charge.
|
(c)
|
For information regarding
cumulative commissions paid to your selling agent when you buy Class A shares of a Fund in amounts not subject to initial sales charges, see
Class A Shares — Commissions
below.
|
Class A Shares — CDSC
In some cases, you'll pay a CDSC if you sell Class A shares
that you purchased without an initial sales charge.
Tax-Exempt Funds
■
|
If you purchased Class A
shares of any Tax-Exempt Fund other than Columbia Short Term Municipal Bond Fund on or after February 19, 2015 without an initial sales charge because your accounts aggregated $500,000 or more at the time of purchase, you will incur a CDSC of 0.75%
if you redeem those shares within 12 months after purchase. Subsequent Class A share purchases made on or after February 19, 2015 that bring your aggregate account value to $500,000 or more will also be subject to a CDSC of 0.75% if you redeem them
within 12 months after purchase.
|
■
|
If you purchased Class A
shares of Columbia Short Term Municipal Bond Fund on or after February 19, 2015 without an initial sales charge because your accounts aggregated $500,000 or more at the time of purchase, you
|
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
|
will incur a CDSC of 0.50%
if you redeem those shares within 12 months after purchase. Subsequent Class A share purchases made on or after February 19, 2015 that bring your aggregate account value to $500,000 or more will also be subject to a CDSC of 0.50% if you redeem them
within 12 months after purchase.
|
■
|
If you purchased Class A
shares of any Tax-Exempt Fund prior to February 19, 2015 without an initial sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months
after purchase, which is charged as follows: 1.00% CDSC if shares are redeemed within 12 months after purchase; and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase. Subsequent Class A share purchases made
prior to February 19, 2015 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 18 months after purchase as described in this paragraph.
|
Taxable Funds
■
|
If you purchased Class A
shares of any Taxable Fund without an initial sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months after purchase, which is
charged as follows: 1.00% CDSC if shares are redeemed within 12 months after purchase; and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase. 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 18 months after purchase as described in this paragraph.
|
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. A CDSC is applied to the NAV at the time
of your purchase or sale, whichever is lower, and will not be applied to any shares you receive through reinvested distributions or any amount that represents appreciation in the value of your shares. For purposes of calculating a CDSC, the start of
the holding period is generally the first day of the month in which your purchase was made.
When you place an order to sell shares of a
class that has a CDSC, the Fund will first redeem any shares that aren't subject to a CDSC, followed by those you have held the longest. This means that if a CDSC is imposed, you cannot designate the individual shares being redeemed for U.S. federal
income tax purposes. You should consult your tax advisor about the tax consequences of investing in the Fund. In certain circumstances, the CDSC may not apply. See
Choosing a Share Class — Reductions/Waivers of
Sales Charges
for details.
Class A Shares
— Commissions
The Distributor may pay your selling
agent an up-front commission when you buy Class A shares. The Distributor generally funds the commission through the applicable sales charge paid by you. For more information, see
Class A Shares — Front-End
Sales Charge — Breakpoint Schedule.
The Distributor may also pay your selling
agent a cumulative commission when you buy Class A shares in amounts not subject to initial sales charges, according to the following schedule:
Class
A Shares of Tax-Exempt Funds — Commission Schedule (Paid by the Distributor to Selling Agents)
|
Purchase
Amount
|
Commission
Level*
(as a % of net asset
value per share)
|
$500,000
– $3,999,999
|
0.75%**
|
$4
million – $19,999,999
|
0.50%
|
$20
million or more
|
0.25%
|
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
*
|
The commission level applies
to the applicable asset level so, for example, for a purchase of $5 million, the Distributor would pay a commission of 0.75% on the first $4 million and 0.50% on the remaining $1 million.
|
**
|
The commission level on
purchases of Class A shares of Columbia Short Term Municipal Bond Fund is: 0.50% on purchases of $500,000 to $19,999,999 and 0.25% on purchases of $20 million or more.
|
Class
A Shares of Taxable Funds — Commission Schedule (Paid by the Distributor to Selling Agents)*
|
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%
|
*
|
Not applicable to Funds that
do not assess a front-end sales charge.
|
**
|
The commission level applies
to the applicable asset level so, for example, for a purchase of $5 million, the Distributor would pay a commission of 1.00% on the first $3 million and 0.50% on the remaining $2 million.
|
Class B Shares — Sales Charges
The Funds no longer accept new investments in Class B shares,
except for certain limited transactions as described in more detail under
Buying, Selling and Exchanging Shares — Buying Shares — Eligible Investors — Class B Shares (Closed).
You don't pay a front-end sales charge when you buy Class B
shares, but you may pay a CDSC when you sell Class B shares.
Class B Shares — CDSC
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 and generally declines each year until there is no sales charge, as follows:
Class
B Shares — CDSC Schedule for the Funds (except those listed below)
|
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
|
*
|
Because of rounding in the
calculation, the actual CDSC you pay may be more or less than the CDSC calculated using these percentages.
|
Class
B Shares — CDSC Schedule for Columbia AMT-Free Intermediate Muni Bond Fund, the AMT-Free State-specific Intermediate Muni Bond Funds, Columbia Intermediate Bond Fund and Columbia Short Term Bond Fund
|
Number
of Years
Class B Shares Held
|
Applicable
CDSC*
|
One
|
3.00%
|
Two
|
3.00%
|
Three
|
2.00%
|
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
Class
B Shares — CDSC Schedule for Columbia AMT-Free Intermediate Muni Bond Fund, the AMT-Free State-specific Intermediate Muni Bond Funds, Columbia Intermediate Bond Fund and Columbia Short Term Bond Fund
|
Number
of Years
Class B Shares Held
|
Applicable
CDSC*
|
Four
|
1.00%
|
Five
|
None
|
Six
|
None
|
Seven
|
None
|
Eight
|
None
|
Nine
|
Conversion
to Class A Shares
|
*
|
Because of rounding in the
calculation, the actual CDSC you pay may be more or less than the CDSC calculated using these percentages.
|
Class B shares of Columbia Short Term Municipal Bond Fund are
not subject to a CDSC.
Class B Shares —
Commissions
The Distributor paid an up-front commission
directly to your selling agent when you bought the Class B shares (a portion of this commission may have been paid to your financial advisor).
This up-front commission, which varies across the Funds, was
up to 4.00% of the net asset value per share of Funds with a maximum CDSC of 5.00% and of Class B shares of Columbia Short Term Municipal Bond Fund and up to 2.75% of the net asset value per share of Funds with a maximum CDSC of 3.00%. 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. For more information, see
Choosing a Share Class — Distribution and Service Fees.
Class B Shares — Conversion to Class A Shares
Class B shares of the Funds automatically convert to Class A
shares at different times depending upon the Fund. In general, Class B shares convert to Class A shares after eight years. For details and related information about how the Funds' Class B shares convert to Class A shares, see Appendix S to the SAI.
Class B shares of Columbia Short Term Municipal Bond Fund do not convert to Class A shares.
Class C Shares — Front-End Sales Charge
You don't pay a front-end sales charge when
you buy Class C shares. Although Class C shares do not have a front-end sales charge, over time Class C shares can incur distribution and/or service fees that are equal to or more than the front-end sales charge and distribution and/or service fees
you would pay for Class A shares. Thus, although the full amount of your purchase of Class C shares is invested in a Fund, any positive investment return on this money may be partially or fully offset by the expected higher annual expenses of Class
C shares. If you are eligible to invest in Class A shares without a front-end sales charge, you should discuss your options with your Selling Agent. For more information, see
Choosing a Share Class
– Reductions/Waivers of Sales Charges.
Class C Shares — CDSC
You'll pay a CDSC of 1.00% if you redeem Class C shares within
12 months of buying them unless you qualify for a waiver of the CDSC or the shares you're selling were purchased through reinvested distributions. For more information, see
Choosing a Share Class —
Reductions/Waivers of Sales Charges
. Redemptions of Class C shares are not subject to a CDSC if redeemed after 12 months.
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
Class C Shares — Commissions
Although there is no front-end sales charge when you buy Class
C shares, the Distributor pays an up-front commission directly to your selling agent of up to 1.00% of the NAV per share when you buy Class C shares (a portion of this commission may be paid to your financial advisor). The Distributor seeks to
recover this commission through distribution fees it receives under the Fund's distribution and/or service plan and any applicable CDSC applied when you sell your shares. For more information, see
Choosing a Share
Class — Distribution and Service Fees.
Class
R Shares — Sales Charges and Commissions
You don't
pay a front-end sales charge when you buy Class R shares or a CDSC when you sell Class R shares. The Distributor pays an up-front commission directly to your selling agent when you buy Class R shares (a portion of this commission may be paid to your
financial advisor), according to the following schedule:
Class
R Shares — Commission Schedule (Paid by the Distributor to Selling Agents)
|
Purchase
Amount
|
Commission
Level
(as a % of net asset
value per share)
|
$0
– $49,999,999
|
0.50%
|
$50
million or more
|
0.25%
|
The Distributor seeks to recover
this commission through distribution fees it receives under the Fund's distribution plan. For more information, see
Choosing a Share Class — Distribution and Service Fees.
Class T Shares — Front-End Sales Charge
You'll pay a front-end sales charge when you buy Class T
shares, resulting in a smaller dollar amount being invested in a Fund than the purchase price you pay, unless you qualify for a waiver of the sales charge or you buy the shares through reinvested distributions. For more information, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
The front-end sales charge you'll pay on Class T 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 (and any other accounts eligible for aggregation of which you or your selling agent notifies the Fund).
|
Class
T Shares — Front-End Sales Charge — Breakpoint Schedule
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Equity
Funds
|
$
0–$49,999
|
5.75%
|
6.10%
|
5.00%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
2.75%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.00%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
Class
T Shares — Front-End Sales Charge — Breakpoint Schedule
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Fixed
Income Funds
|
$
0–$49,999
|
4.75%
|
4.99%
|
4.25%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
2.75%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.00%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
(a)
|
Purchase amounts and account
values are aggregated among all eligible 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)
|
For more information
regarding cumulative commissions paid to your selling agent when you buy $1 million or more of Class T shares, see
Class T Shares — Commissions
below.
|
Class T Shares — CDSC
In some cases, you'll pay a CDSC if you sell Class T shares
that you bought without an initial sales charge.
■
|
If you purchased Class T
shares without a front-end sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months after purchase, which is charged as follows: 1.00%
CDSC if shares are redeemed within 12 months after purchase, and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase.
|
■
|
Subsequent Class T 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 the time periods noted above.
|
Class T Shares — Commissions
The Distributor may pay your selling agent an up-front
commission when you buy Class T shares (a portion of this commission may, in turn, be paid to your financial advisor). For more information, see
Class T Shares — Front-End Sales Charge — Breakpoint
Schedule, Amount retained by or paid to selling agents as a % of the offering price.
The Distributor may also pay your selling agent a cumulative
commission when you buy $1 million or more of Class T shares, according to the following schedule:
Class
T Shares
—
Commission Schedule (Paid by the Distributor to Selling Agents)
|
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%
|
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
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 or Class T shares of a Fund. These types of sales charge reductions are also referred to as breakpoint discounts.
First, through the right of accumulation
(ROA), you may combine the value of eligible accounts maintained by you and members of 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 Fund accounts
in the particular class of shares, the Fund will use the current public offering price per share. For purposes of obtaining a breakpoint discount through ROA, you may aggregate your or your immediate family members' ownership of different classes of
shares, except for Class I, Class K, Class R and Class Y shares of the Funds, Class R4 and Class R5 shares of the Funds held in retirement plan accounts and direct purchases of Columbia Money Market Fund shares, which may not be aggregated. Shares
of Columbia Money Market Fund acquired by exchange from other Funds may be combined for ROA purposes.
Second, by making a statement of intent to purchase additional
shares (commonly referred to as a letter of intent (LOI)), you may pay a lower sales charge on all purchases (including existing ROA purchases) of Class A shares or Class T shares made within 13 months after the date of your LOI. Your LOI must state
the aggregate amount of purchases you intend to make in that 13-month period, which must be at least $50,000 (or $100,000 for Funds with breakpoint discounts beginning at $100,000). The required form of LOI may vary by selling agent, so please
contact them directly for more information. Five percent of the purchase commitment amount will be placed in escrow. At the end of the 13-month period, the shares will be released from escrow, provided that you have invested the commitment amount.
If you do not invest the commitment amount by the end of the 13 months, the remaining amount of the unpaid sales charge will be redeemed from the escrowed shares and the remaining balance released from escrow. To calculate the total value of the
purchases you've made under an LOI, the Fund will use the historic cost (i.e., dollars invested) of the shares held in each eligible account. For purposes of making an LOI to purchase additional shares, you may aggregate your ownership of different
classes of shares, except for Class I, Class K, Class R and Class Y shares of the Funds, Class R4 and Class R5 shares of the Funds held in retirement plan accounts and direct purchases of Columbia Money Market Fund shares, which may not be
aggregated. Shares of Columbia Money Market Fund acquired by exchange from other Funds may be combined for LOI purposes.
You must request the reduced sales charge (whether through ROA
or an LOI) when you buy shares. If you do not complete and file an LOI, or do not request the reduced sales charge at the time of purchase, you will not be eligible for the reduced sales charge. To obtain a breakpoint discount, you must notify your
selling agent in writing at the time you buy your shares of each eligible account maintained by you and members of your immediate family, including accounts maintained through different selling agents. You and your selling agent are responsible for
ensuring that you receive discounts for which you are eligible. The Fund is not responsible for a selling agent's failure to apply the eligible discount to your account. You may be asked by your selling agent for account statements or other records
to verify your discount eligibility, including, when applicable, records for accounts opened with a different selling agent and records of accounts established by members of your immediate family.
Your “Immediate Family” and
Account Value Aggregation
For purposes of
obtaining a breakpoint discount for Class A shares or Class T shares the value of your account will be deemed to include the value of all applicable shares in eligible Fund accounts that are held by you and your “immediate family,” which
includes your spouse, domestic partner, parent, step-parent, legal guardian, child under 21, step-child under 21, father-in-law and mother-in-law, provided that you and your immediate family members share the same mailing address. Any Fund accounts
linked together for account value aggregation purposes as of the close of business on September 3, 2010 will be permitted to remain linked together. Group plan accounts are valued at the plan level.
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
Eligible Accounts
The following accounts are eligible for account value
aggregation as described above, provided that they are invested in Class A, Class B, Class C, Class E, Class F, Class T, Class W or Class Z shares of a Fund: individual or joint accounts; Roth and traditional Individual Retirement Accounts (IRAs);
Simplified Employee Pension accounts (SEPs), Savings Investment Match Plans for Employees of Small Employers accounts (SIMPLEs) and Tax Sheltered Custodial Accounts (TSCAs); Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
accounts for which you, your spouse, or your domestic partner is parent or guardian of the minor child; revocable trust accounts for which you or an immediate family member, individually, is the beneficial owner/grantor; accounts held in the name of
your, your spouse’s, or your domestic partner’s sole proprietorship or single owner limited liability company or S corporation; qualified retirement plan assets, provided that you are the sole owner of the business sponsoring the plan,
are the sole participant (other than a spouse) in the plan, and have no intention of adding participants to the plan; and investments in wrap accounts.
The following accounts are
not eligible
for account value aggregation as described above: accounts of pension and retirement plans with multiple participants, such as 401(k) plans (which are combined to reduce the sales charge for the
entire pension or retirement plan and therefore are not used to reduce the sales charge for your individual accounts); investments in 529 plans, donor advised funds, variable annuities, variable insurance products or managed separate accounts;
charitable and irrevocable trust accounts; accounts holding shares of money market funds that used the Columbia brand before May 1, 2010; and accounts invested in Class I, Class K, Class R, Class R4, Class R5 or Class Y shares of a Fund.
Front-End Sales Charge Waivers
The Distributor may waive front-end sales charges on purchases
of Class A and Class T shares of the Funds by certain categories of investors, including Board members, certain employees of selling agents, Fund portfolio managers and certain retirement and employee benefit plans. The Distributor may waive
front-end sales charges on (i) purchases (including exchanges) of Class A shares in accounts of selling agents that have entered into agreements with the Distributor to offer Fund shares to self-directed investment brokerage accounts that may or may
not charge a transaction fee to customers and (ii) exchanges of Class Z shares of a Fund for Class A shares of the Fund. For a more complete description of categories of investors who may purchase Class A and Class T shares of the Funds at NAV,
without payment of any front-end sales charge that would otherwise apply, see Appendix S to the SAI. In addition, certain types of purchases of Class A and Class T shares may be made at NAV. For a description of these eligible transactions, see
Appendix S to the SAI.
CDSC Waivers
You may be able to avoid an otherwise applicable CDSC when you
sell Class A, Class B, Class C or Class T 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 Funds or for other reasons. For example, the CDSC will be waived
on redemptions of shares in the event of the shareholder's death; that result from required minimum distributions taken from retirement accounts when the shareholder reaches age 70½; in connection with the Fund's Small Account Policy (which is
described in
Buying, Selling and Exchanging Shares — Transaction Rules and Policies
); and by certain other investors and in certain other types of transactions. For a more complete description of the
available waivers of the CDSC on redemptions of Class A, Class B, Class C or Class T shares, see Appendix S to the SAI.
Repurchases
Investors can also buy Class A shares without paying a sales
charge if the purchase is made from the proceeds of a redemption of any Class A, Class B, Class C or Class T shares of a Fund (other than Columbia Money Market Fund) within 90 days, up to the amount of the redemption proceeds. Any CDSC paid upon
redemption of your Class A, Class B, Class C or Class T shares of a Fund will not be reimbursed.
To be eligible for the reinstatement privilege, the purchase
must be made into an account for the same owner, but does not need to be into the same Fund from which the shares were sold. The Transfer Agent, Distributor or their agents must receive a written reinstatement request from you or your selling agent
within 90 days after the shares are redeemed and the purchase of Class A shares through this reinstatement privilege will be made at the NAV of
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
such shares next calculated after the request is received in “good
form.” The repurchased shares will be deemed to have the original purchase date for purposes of applying the CDSC (if any) to subsequent redemptions. Systematic withdrawals and purchases are excluded from this policy.
Restrictions and Changes in Terms and Conditions
Restrictions may apply to certain accounts and certain
transactions. The Funds may change or cancel these terms and conditions at any time. Unless you provide your selling agent with information in writing about all of the factors that may count toward a waiver of a sales charge, there can be no
assurance that you will receive all of the waivers for which you may be eligible. You should request that your selling agent provide this information to the Fund when placing your purchase order. Please see Appendix S of the SAI for more information
about the sales charge reductions and waivers.
Distribution and Service Fees
The Board has approved, and the Funds have
adopted, distribution and/or shareholder service plans which set the distribution and/or service fees that are periodically deducted from the Funds’ assets. These fees are calculated daily, may vary by share class and are intended to
compensate the Distributor and/or eligible selling agents for selling Fund shares and directly or indirectly providing services to shareholders. 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/or service fees (as an annual % of average daily net assets) and the combined amount of such fees applicable to each share class:
|
Distribution
Fee
|
Service
Fee
|
Combined
Total
|
Class
A
|
up
to 0.25%
|
up
to 0.25%
|
up
to 0.35%
(a)(b)(c)
|
Class
B
|
0.75%
(d)
|
0.25%
|
1.00%
(b)
|
Class
C
|
0.75%
(c)(e)
|
0.25%
|
1.00%
(b)
|
Class
I
|
None
|
None
|
None
|
Class
K
|
None
|
0.25%
(f)
|
0.25%
(f)
|
Class
R (series of CFST and CFST I)
|
0.50%
|
—
(g)
|
0.50%
|
Class
R (series of CFST II)
|
up
to 0.50%
(c)
|
up
to 0.25%
|
0.50%
(g)
|
Class
R4
|
None
|
None
|
None
|
Class
R5
|
None
|
None
|
None
|
Class
T
|
None
|
0.50%
(h)
|
0.50%
(h)
|
Class
W
|
up
to 0.25%
|
up
to 0.25%
|
0.25%
(c)
|
Class
Y
|
None
|
None
|
None
|
Class
Z
|
None
|
None
|
None
|
(a)
|
The maximum distribution and
service fees of Class A shares varies among the Funds, as shown in the table below:
|
Funds
|
Maximum
Class A
Distribution Fee
|
Maximum
Class A
Service Fee
|
Maximum
Class A
Combined Total
|
Series
of CFST
|
—
|
—
|
0.25%;
these Funds pay a
combined distribution and
service fee
|
Series
of CFST II (other than Columbia
Money Market Fund)
|
up
to 0.25%
|
up
to 0.25%
|
0.25%
|
Columbia
Money Market Fund
|
—
|
—
|
0.10%
|
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
Funds
|
Maximum
Class A
Distribution Fee
|
Maximum
Class A
Service Fee
|
Maximum
Class A
Combined Total
|
Columbia
AMT-Free Oregon Intermediate Muni Bond Fund, Columbia Balanced Fund, Columbia Contrarian Core Fund, Columbia Dividend Income Fund, Columbia Global Technology Growth Fund, Columbia Intermediate Bond Fund, Columbia Large Cap Growth Fund, Columbia Mid
Cap Growth Fund, Columbia Real Estate Equity Fund, Columbia Small Cap Core Fund, Columbia Small Cap Growth Fund I
|
up
to 0.10%
|
up
to 0.25%
|
up
to 0.35%; these Funds may
pay distribution and service fees
up to a maximum of 0.35% of their
average daily net assets
attributable to Class A shares
(comprised of up to 0.10% for
distribution services and up to
0.25%
for shareholder liaison
services) but currently limit such
fees to an aggregate fee of not
more than 0.25% for
Class A shares
|
Columbia
Adaptive Alternatives Fund, Columbia Adaptive Risk Allocation Fund, Columbia AMT-Free Connecticut Intermediate Muni Bond Fund, Columbia AMT-Free Massachusetts Intermediate Muni Bond Fund, Columbia AMT-Free New York Intermediate Muni Bond Fund,
Columbia Bond Fund, Columbia California Tax-Exempt Fund, Columbia Corporate Income Fund, Columbia Diversified Absolute Return Fund, Columbia Diversified Real Return Fund, Columbia Emerging Markets Fund, Columbia Global Dividend Opportunity Fund,
Columbia Global Energy and Natural Resources Fund, Columbia Greater China Fund, Columbia Multi-Asset Income Fund, Columbia New York Tax-Exempt Fund, Columbia Pacific/Asia Fund, Columbia Select Large Cap Growth Fund, Columbia Small Cap Value Fund I,
Columbia Strategic Income Fund, Columbia U.S. Social Bond Fund, Columbia U.S. Treasury Index Fund, Columbia Value and Restructuring Fund
|
—
|
0.25%
|
0.25%
|
Columbia
AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund, Columbia Tax Exempt Fund
|
—
|
0.20%
|
0.20%
|
(b)
|
The service fees for Class A,
Class B and Class C shares of certain Funds vary. Service Fee for Class A, Class B and Class C shares of Columbia AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund — The annual service fee
may equal up to 0.20% of the average daily net asset value of all shares of such Fund class. Distribution Fee for Class B and Class C shares for Columbia AMT-Free Intermediate Muni Bond Fund
—
The annual
distribution fee shall be 0.65% of the average daily net assets of the Fund's Class B and Class C shares. Fee amounts noted apply to Class B shares of the Funds other than Class B shares of Columbia Money Market Fund, which pays distribution fees of
up to 0.75% and service fees of up to 0.10% for a combined total of 0.85%. The Distributor has currently agreed not to be reimbursed by the Fund for 0.10% of the 0.85% fee for Class B shares of Columbia Money Market Fund. The Distributor has
voluntarily agreed to waive the service fee for Class A, Class B and Class C shares of Columbia U.S. Treasury Index Fund so that the service fee does not exceed 0.15% annually. This arrangement may be modified or terminated by the Distributor at any
time.
|
(c)
|
Fee amounts noted apply to
all Funds other than Columbia Money Market Fund, which, for each of Class A and Class W shares, pays distribution and service fees of 0.10%, and for Class C shares pays distribution fees of 0.75%. The Distributor has currently agreed not to be
reimbursed by the Fund for 0.25% of the 0.50% fee for Class R shares of Columbia Money Market Fund. The Distributor has voluntarily agreed to waive the 12b-1 fees it receives from Class A, Class C, Class R and Class W shares of Columbia Money Market
Fund. This arrangement may be modified or terminated by the Distributor at any time. Compensation paid to broker-dealers and other selling agents may be suspended to the extent of the Distributor's waiver of the 12b-1 fees on these specific share
classes of these Funds.
|
(d)
|
The Distributor has
voluntarily agreed to waive a portion of the distribution fee it receives from Class B shares of Columbia Short Term Bond Fund so that the distribution fee does not exceed 0.30% annually. This arrangement may be modified or terminated by the
Distributor at any time.
|
(e)
|
The Distributor has
voluntarily agreed to waive a portion of the distribution fee for Class C shares of the following Funds so that the distribution fee does not exceed the specified percentage annually: 0.45% for Columbia AMT-Free Connecticut Intermediate Muni Bond
Fund, Columbia AMT-Free Massachusetts Intermediate Muni Bond Fund, Columbia AMT-Free New York Intermediate Muni Bond Fund, Columbia AMT-Free Oregon Intermediate Muni Bond Fund, Columbia California Tax-Exempt Fund and Columbia New York Tax-Exempt
Fund; 0.60% for Columbia Corporate Income Fund and Columbia Short Term Bond Fund; 0.65% for Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund; and 0.70% for Columbia U.S. Treasury Index Fund. These arrangements may be modified or
terminated by the Distributor at any time.
|
(f)
|
The shareholder service fees
for Class K shares are not paid pursuant to a 12b-1 plan. Under a plan administration services agreement, the Funds' Class K shares pay for plan administration services. See
Class K Plan Administration Services
Fee
below for more information.
|
(g)
|
Class R shares of series of
CFST and CFST I pay a distribution fee pursuant to a distribution (Rule 12b-1) plan for Class R shares. The Funds do not have a shareholder service plan for Class R shares. Series of CFST II have a distribution and shareholder service plan for Class
R shares, which, prior to the close of business on September 3, 2010, were known as Class R2 shares. For Class R shares of series of CFST II, the maximum fee under the plan reimbursed for distribution expenses is equal on an annual basis to 0.50% of
the average daily net assets of the Fund attributable to Class R shares. Of that amount, up to 0.25% may be reimbursed for shareholder service expenses.
|
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
(h)
|
The shareholder servicing
fees for Class T shares are up to 0.50% of average daily net assets attributable to Class T shares for equity Funds and 0.40% for fixed income Funds. In general, the Funds currently limit such fees to a maximum of 0.25% for equity Funds and 0.15%
for fixed-income Funds. See
Class T Shareholder Service Fees
below for more information.
|
The distribution and/or service fees for Class A, Class B,
Class C, Class R and Class W shares, as applicable, may be subject to the requirements of Rule 12b-1 under the 1940 Act. The Distributor may retain these fees otherwise payable to selling agents if the amounts due are below an amount determined by
the Distributor in its sole discretion.
Series of CFST
II.
For Class A, Class B and Class W shares, the Distributor begins to pay these fees immediately after purchase. For Class C shares, the Distributor pays these fees in advance for the first 12 months. Selling agents
also receive distribution fees up to 0.75% of the average daily net assets of Class C shares sold and held through them, which the Distributor begins to pay 12 months after purchase. For Class B shares and for the first 12 months following the sale
of Class C shares, the Distributor retains the distribution fee of up to 0.75% in order to finance the payment of sales commissions to selling agents and to pay for other distribution related expenses. Selling agents may compensate their financial
advisors with the shareholder service and distribution fees paid to them by the Distributor. The maximum fee for services under the distribution and/or shareholder servicing plan for series of CFST II is the lesser of the amount of reimbursable
expenses and the fee rates in the table above. If a share class of a series of CFST II has no reimbursable distribution or shareholder servicing expenses, it will suspend the payment of any such fee.
Series of CFST and CFST I.
For Class R shares and, with the exception noted in the next sentence, Class A shares, the Distributor begins to pay these fees immediately after purchase. For Class B shares, Class A shares (if purchased as part of a purchase of shares of $1
million or more) and, with the exception noted in the next sentence, Class C shares, the Distributor begins to pay these fees 12 months after purchase (for Class B share, and for the first 12 months following the sale of Class C shares, the
Distributor retains the distribution fee of up to 0.75% in order to finance the payment of sales commissions to selling agents and to pay for other distribution related expenses). For Class C shares, selling agents may opt to decline payment of
sales commission and, instead, may receive these fees immediately after purchase. Selling agents may compensate their financial advisors with the shareholder service and distribution fees paid to them by the Distributor.
If you maintain shares of the Fund directly with the Fund,
without working directly with a financial advisor or other selling agent, distribution and service fees may be retained by the Distributor as payment or reimbursement for incurring certain distribution and shareholder service related expenses.
Over time, these distribution and/or service fees will reduce
the return on your investment and may cost you more than paying other types of sales charges. The Fund will pay these fees to the Distributor and/or to eligible selling agents for as long as the distribution plan and/or shareholder servicing plans
continue in effect, which is expected to be indefinitely. The Fund may reduce or discontinue payments at any time. Your selling agent may also charge you other additional fees for providing services to your account, which may be different from those
described here.
Class K Plan Administration Services
Fee
Class K shares pay an annual plan administration
services fee for the provision of various administrative, recordkeeping, communication and educational services, including services such as implementation and conversion services, account set-up and maintenance, reconciliation and account
recordkeeping and administration to various plan types, including 529 plans, retirement plans and health savings accounts. The fee for Class K shares is equal on an annual basis to 0.25% of average daily net assets attributable to the class.
Class T Shareholder Services Fees
The Funds that offer Class T shares have adopted a shareholder
services plan that permits them to pay for certain services provided to Class T shareholders by their selling agents. Equity Funds may pay shareholder servicing fees up to an aggregate annual rate of 0.50% of the Fund's average daily net assets
attributable to Class T shares (comprised of up to 0.25% for shareholder liaison services and up to 0.25% for administrative support services). Fixed income Funds may pay shareholder servicing fees up to an aggregate annual rate of 0.40% of the
Fund's average daily net assets attributable to Class T shares (comprised of up to 0.20% for shareholder liaison services and up to 0.20% for administrative support services). These fees are currently limited to an aggregate annual rate of
Columbia Capital Allocation Portfolios
Choosing a Share Class
(continued)
not more than 0.25% for equity Funds and not
more than 0.15% for fixed income Funds. With respect to those Funds that declare dividends on a daily basis, the shareholder servicing fee shall be waived by the selling agents to the extent necessary to prevent net investment income from falling
below 0% on a daily basis.
Selling Agent
Compensation
The Distributor, the Investment Manager and
their affiliates make payments, from their own resources, to selling agents, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Funds (Marketing Support Payments). Such payments are generally based
upon one or more of the following factors: average net assets of the Funds sold by the Distributor attributable to that selling agent; gross sales of the Funds distributed by the Distributor attributable to that selling agent; reimbursement of
ticket charges (fees that a selling agent charges its representatives for effecting transactions in Fund shares); or a negotiated lump sum payment. While the financial arrangements may vary for each selling agent, Marketing Support Payments to any
one selling agent are generally between 0.05% and 0.40% on an annual basis for payments based on average net assets of the Fund attributable to the selling agent, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on
gross sales of the Funds attributable to the selling agent. The Distributor, the Investment Manager and their affiliates may make payments in larger amounts or on a basis other than those described above when dealing with certain selling agents,
including certain affiliates of Bank of America Corporation (Bank of America). Such increased payments may enable such selling agents to offset credits that they may provide to customers. The Distributor, the Investment Manager and their affiliates
do not make Marketing Support Payments with respect to Class Y shares; provided, however, that such payments are made to Bank of America with respect to Class Y shares of Columbia Bond Fund, Columbia Global Dividend Opportunity Fund, Columbia Income
Opportunities Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Growth Fund, Columbia Mid Cap Value Fund, Columbia Select International Equity Fund, Columbia Short Term Bond Fund, Columbia Small Cap Growth Fund I and Columbia Small Cap
Value Fund I.
In addition, the Transfer Agent
has certain arrangements in place to compensate selling agents, including other Ameriprise Financial affiliates, that hold Fund shares through omnibus accounts, including omnibus retirement plans, for services that they provide to beneficial
shareholders (Shareholder Services). Shareholder Services may include sub-accounting, sub-transfer agency, participant recordkeeping, shareholder or participant reporting, shareholder or participant transaction processing, maintenance of shareholder
records, preparation of account statements and provision of customer service. Payments for Shareholder Services vary by selling agent but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of
the Fund’s shares.
Generally, each Fund (other than the Columbia
Acorn Funds) pays a percentage of the average aggregate value of shares maintained in omnibus accounts: 0.20% for all share classes other than Class I, K, R5 and Y shares; 0.05% for Class K and R5 shares; and 0% for Class I and Y shares. The amounts
in excess of that reimbursed by the Fund are borne by the Distributor, the Investment Manager and/or their affiliates. The Transfer Agent does not pay selling agents for Shareholder Services and the Fund does not pay the Transfer Agent for any
Shareholder Services provided by selling agents, with respect to Class Y shares.
In addition to the payments described above, the Distributor,
the Investment Manager and their affiliates 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, the
Investment Manager and their affiliates are paid out of their own resources and do not increase the amount paid by you or the Fund. You can find further details in the SAI about the payments made by the Distributor, the Investment Manager and their
affiliates, as well as a list of the selling agents, including Ameriprise Financial affiliates, to which the Distributor and the Investment Manager have agreed to make Marketing Support Payments and pay Shareholder Services fees.
Your selling agent may charge you fees and commissions in
addition to those described in this prospectus. You should consult with your selling agent and review carefully any disclosure your selling agent provides regarding its services and compensation. Depending on the financial arrangement in place at
any particular time, a selling agent and its financial advisors may have a financial incentive for recommending the Fund or a particular share class over others.
Columbia Capital Allocation Portfolios
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 NAV per share for each class of shares of the Fund at the end of each business day.
NAV Calculation
Each of the Fund's share classes calculates
its NAV as follows:
NAV
=
(Value of assets of the share class) – (Liabilities of the share class)
Number of outstanding shares of the class
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 NAV 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.
Equity securities are valued primarily on
the basis of market quotations or valuations reported on stock exchanges and other securities markets around the world. If an equity security is listed on a national exchange, the security is valued at the closing price or, if the closing price is
not readily available, the mean of the closing bid and asked prices. Certain equity securities, debt securities and other assets are valued differently. For instance, bank loans trading in the secondary market are valued primarily on the basis of
indicative bids, fixed-income investments maturing in 60 days or less are valued primarily using the amortized cost method, unless this methodology results in a valuation that does not approximate the market value of these securities, and those
maturing in excess of 60 days are valued primarily using a market-based price obtained from a pricing service, if available. Investments in other open-end funds are valued at their latest NAVs. Both market quotations and indicative bids are obtained
from outside pricing services approved and monitored pursuant to a policy approved by the Fund's Board. For a money market fund, the Fund's investments are generally valued at amortized cost, which approximates market value.
If a market price is not readily available or is deemed not to
reflect market value, the Fund will determine the price of a portfolio security based on a determination of the security's fair value pursuant to a policy approved by the Fund's Board. 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) corporate actions, earnings announcements, litigation or other events
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 foreign security's market price is readily available and reflective of market value and, if not, the fair value of the
security. To the extent the Fund has significant holdings of small cap stocks, high-yield bonds, floating rate loans, or tax-exempt, foreign or other securities that may trade infrequently, fair valuation may be used more frequently than for other
funds.
Columbia Capital Allocation Portfolios
Buying, Selling and
Exchanging Shares
(continued)
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 fund would have priced the security. 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 one or more independent fair valuation pricing services to assist in the fair valuation process for
foreign securities.
Transaction Rules and Policies
The Fund, the Distributor or the Transfer Agent may refuse any
order to buy or exchange shares. If this happens, the Fund will return any money it received, but no interest will be paid on that money.
Order Processing
Orders to buy, sell or exchange Fund shares are processed on
business days. Depending upon the class of shares, orders can be made by mail, by telephone or online. Orders received in “good form” by the Transfer Agent or your selling agent before the end of a business day are priced at the NAV per
share of the Fund's applicable share class on that day. Orders received after the end of a business day will receive the next business day's NAV per share. When a written order to buy, sell or exchange shares is sent to the Transfer Agent, the share
price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the P.O. Box provided for regular mail delivery. 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 NAV per share. The business day that applies to your order is also called the trade date.
“Good Form”
An order is in “good form” if
the Transfer Agent or your selling 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 greater than $100,000 and other transactions, as described below, 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
The Transfer Agent may require a Medallion
Signature Guarantee for your signature in order to process certain transactions. A Medallion Signature Guarantee helps assure that a signature is genuine and not a forgery. A Medallion Signature Guarantee must be provided by an eligible guarantor
institution including, but not limited to, the following: a bank, credit union, savings association, broker or dealer that participates in the Securities Transfer Association Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) or
the New York Stock Exchange Medallion Signature Program (MSP). Notarization by a notary public is not an acceptable signature guarantee. The Transfer Agent reserves the right to reject a signature guarantee and to request additional documentation
for any transaction.
A Medallion Signature Guarantee is
required if: (i) the transaction amount is over $100,000; (ii) you want your check made payable to someone other than the registered account owner(s); (iii) the address of record has changed within the last 30 days; (iv) you want the check mailed to
an address other than the address of record; (v) you want proceeds to be sent according to existing bank account instructions not coded for outgoing Automated Clearing House (ACH) or wire, or to a bank account not on file; (vi) you are the
beneficiary of the account and the account owner is deceased (other documentation may be required); or (vii) you are changing legal ownership of your account.
Columbia Capital Allocation Portfolios
Buying, Selling and
Exchanging Shares
(continued)
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 (e.g., social security number (SSN) or
other taxpayer identification number (TIN)). 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 take other steps as deemed reasonable. The Fund will not be 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 — Class A, Class B, Class C, Class T
and Class Z Share Accounts Below the Minimum Account Balance
The Funds generally will automatically sell your shares if the
value of your Fund account (treating each account of the Fund you own separately from any other account of the Fund you may own) falls below the applicable Minimum Account Balance. The Minimum Account Balance varies among Funds, share classes and
types of accounts, as follows:
Minimum
Account Balance
|
|
|
Minimum
Account
Balance
|
For
all Funds, classes and account types except those listed below
|
$250
(None for accounts with
Systematic Investment Plans)
|
Individual
Retirement Accounts for all Funds and classes except those listed below
|
None
|
Columbia
Absolute Return Currency and Income Fund
|
$5,000
|
Columbia
Floating Rate Fund and Columbia Inflation Protected Securities Fund
|
$2,500
|
Class
I, Class K, Class R, Class R4, Class R5, Class W and Class Y
|
None
|
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 Fund in which you hold shares, or
setting up a Systematic Investment Plan. For more information, contact the Transfer Agent or your selling agent. The Transfer Agent's contact information (toll-free number and mailing addresses) as well as the Funds' website address can be found at
the beginning of the section
Choosing a Share Class
.
The Fund also may sell your Fund shares if your selling agent
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 — Class A, Class B, Class C, Class T
and Class Z Share Accounts Minimum Balance Fee
If the
value of your Fund 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 for any reason, including as a result of market
decline, your account generally will be subject to a $20 annual fee. This fee will be assessed through the automatic sale of Fund 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 Fund account balance, consolidating your Fund accounts through an exchange of shares of another Fund in which you hold shares,
Columbia Capital Allocation Portfolios
Buying, Selling and
Exchanging Shares
(continued)
or setting up a Systematic Investment Plan that invests at least monthly. For
more information, contact the Transfer Agent or your selling agent. The Transfer Agent's contact information (toll-free number and mailing address(es)) as well as the Funds' website address can be found at the beginning of the section
Choosing a Share Class
.
The Funds 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 Small Account Policy (Accounts
Below Minimum Account Balance and Minimum Balance Fee)
The automatic sale of Fund shares of accounts under $250 and
the annual minimum balance fee described above do not apply to shareholders of Class I, Class K, Class R, Class R4, Class R5, Class W and Class Y shares; shareholders holding their shares through broker-dealer networked accounts; wrap fee and
omnibus accounts; accounts with active Systematic Investment Plans; certain qualified retirement plans; and health savings accounts. The automatic sale of Fund shares of accounts under the applicable Minimum Account Balance does not apply to
individual retirement plans.
Small Account Policy —
Broker-Dealer and Wrap Fee Accounts
The Funds may
automatically redeem, at any time, broker-dealer networked accounts and wrap fee accounts that have account balances of $20 or less or have less than one share.
Information Sharing Agreements
As required by Rule 22c-2 under the 1940 Act, the Funds or
certain of their service providers will enter into information sharing agreements with selling agents, including participating life insurance companies and selling agents that sponsor or offer retirement plans through which shares of the Funds are
made available for purchase. Pursuant to Rule 22c-2, selling agents 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.
Excessive Trading Practices Policy of Non-Money Market
Funds
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 purchase 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 sole discretion restrict or reject a purchase or exchange order even if the transaction is
not subject to the specific 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 purchase or exchange transactions communicated directly to the Transfer Agent and to those received by selling agents.
Specific Buying and Exchanging Limitations
— If a Fund detects that an investor has made two “material round trips” in any 28-day period, it will generally reject the investor's future purchase orders, including exchange purchase orders,
involving any 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 sole discretion, reject future buy orders by any person, group or account that appears to
have engaged in any type of excessive trading activity.
Columbia Capital Allocation Portfolios
Buying, Selling and
Exchanging Shares
(continued)
These limits generally do not apply to automated transactions
or transactions by registered investment companies in 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. In addition, the Fund may, in its sole discretion, reinstate trading privileges that have been revoked under the Fund's Excessive Trading Policies and Procedures.
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
or exchange orders through selling agents, and cannot always know of or reasonably detect excessive trading that may be facilitated by selling agents 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 selling agents such as broker-dealers, retirement plans and variable insurance products. These arrangements often permit selling agents to aggregate their clients'
transactions and accounts, and in these circumstances, the identity of the shareholders is often not known to the Fund.
Some selling agents 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.
Columbia Capital Allocation Portfolios
Buying, Selling and
Exchanging Shares
(continued)
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 Fund 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. The risks of excessive trading described above also apply to any underlying funds in which the Fund invests.
Excessive Trading Practices Policy of Columbia Money Market
Fund
A money market fund is designed to offer investors
a liquid cash option that they may buy and sell as often as they wish. Accordingly, the Board has not adopted policies and procedures designed to discourage excessive or short-term trading of Columbia Money Market Fund shares. However, since
frequent purchases and sales of Columbia Money Market Fund shares could in certain instances harm shareholders in various ways, including reducing the returns to long-term shareholders by increasing costs (such as spreads paid to dealers who trade
money market instruments with Columbia Money Market Fund) and disrupting portfolio management strategies, Columbia Money Market Fund reserves the right, but has no obligation, to reject any purchase or exchange transaction at any time. Except as
expressly described in this prospectus (such as minimum purchase amounts), Columbia Money Market Fund has no limits on purchase or exchange transactions. In addition, Columbia Money Market Fund reserves the right to impose or modify restrictions on
purchases, exchanges or trading of Fund shares at any time.
Opening an Account and Placing Orders
We encourage 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 or exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling agent.
As described below, once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.
The Funds are generally available directly and through
broker-dealers, banks and other selling agents or institutions, and through certain qualified and non-qualified plans, wrap fee products or other investment products sponsored by selling agents. You may exchange or sell shares through your selling
agent. If you maintain your account directly with your selling agent, you must contact that agent to process your transaction.
Not all selling agents offer the Funds and certain selling
agents that offer the Funds may not offer all Funds on all investment platforms or programs.
Please consult with your financial advisor to determine the availability of the Funds. If you set up an account at a
selling agent that does not have, and is unable to obtain, a selling agreement with the Distributor, you will not be able to transfer Fund holdings to that account. In that event, you must either maintain your Fund holdings with your current selling
agent, find another selling agent with a selling agreement, or sell your Fund shares, paying any applicable CDSC. Please be aware that transactions in taxable accounts are taxable events and may result in income tax liability.
Selling agents that offer the Funds may charge you additional
fees for the services they provide and they may have different policies that are not described in this prospectus.
Some policy differences may include different minimum investment amounts, exchange privileges, Fund
choices and cutoff times for investments. Additionally, recordkeeping, transaction processing and payments of distributions relating to your account may be performed by the selling agents through which your shares of the Fund are held. Since the
Fund (and its service providers) may not have a record of your account transactions, you should always contact the financial advisor employed by the selling agent through which you purchased or at which you maintain your shares of the Fund to make
changes to your account or to give instructions concerning your account, or to obtain information about your account. The Fund and its service providers, including the Distributor and the Transfer Agent, are not responsible for the failure of these
selling agents to carry out their obligations to its customers.
Columbia Capital Allocation Portfolios
Buying, Selling and
Exchanging Shares
(continued)
The Fund may engage selling agents to receive purchase,
exchange and sell orders on its behalf. Accounts established directly with the Fund will be serviced by the Transfer Agent. The Funds, the Transfer Agent and the Distributor do not provide investment advice.
Accounts Established Directly with the Fund
You or the financial advisor through which
you buy shares may establish an account with the Fund. To do so, complete a Fund account application with your financial advisor or investment professional, and mail the account application to the Transfer Agent. Account applications may be obtained
at columbiathreadneedle.com/us or may be requested by calling 800.345.6611. Make your check payable to the Fund. You will be assessed a $15 fee for any checks rejected by your financial institution due to insufficient funds or other reasons. The
Funds do not accept cash, credit card convenience checks, money orders, traveler's checks, starter checks, third or fourth party checks, or other cash equivalents.
Mail your check and completed application to the Transfer
Agent at its address that can be found at the beginning of the section
Choosing a Share Class.
You may also use these addresses to request an exchange or redemption of Fund shares. When a written order to buy,
sell or exchange shares is sent to the Transfer Agent, the share price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the
P.O. Box provided for regular mail delivery.
You will be
sent a statement confirming your purchase and any subsequent transactions in your account. You will also be sent quarterly and annual statements detailing your transactions in the Fund and the other Funds you own under the same account number.
Duplicate quarterly account statements for the current year and duplicate annual statements for the most recent prior calendar year will be sent to you free of charge. Copies of year-end statements for prior years are available for a fee. Please
contact the Transfer Agent for more information.
Written
Transactions
Once you have an account, you can
communicate written buy, sell or exchange orders to the Transfer Agent at its address that can be found at the beginning of the section
Choosing a Share Class
. When a written order to buy, sell or exchange
shares is sent to the Transfer Agent, the share price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the P.O. Box
provided for regular mail delivery.
Include in your
letter: your name; the name of the Fund(s); your account number; the class of shares to be exchanged or sold; your SSN or other TIN; the dollar amount or number of shares you want to exchange or sell; specific instructions regarding delivery of
redemption proceeds or exchange destination; signature(s) of registered account owner(s); and any special documents the Transfer Agent may require in order to process your order.
Corporate, trust or partnership accounts may need to send
additional documents. Payment will be mailed to the address of record and made payable to the names listed on the account, unless your request specifies differently and is signed by all owners.
Telephone Transactions
For Class A, Class B, Class C, Class R, Class T, Class Y and
Class Z shares, 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 SSN or TIN available when calling.
You can sell Fund shares via the telephone, by electronic
funds transfer or by check to the address of record, up to and including an aggregate of $100,000 of shares per day, per Fund account, if you qualify for telephone orders. Wire redemptions requested via the telephone are subject to a maximum of $3
million of shares per day, per Fund. You can buy up to and including $100,000 of shares per day, per Fund account through your bank account as an Automated Clearing House (ACH) transaction via the telephone if you qualify for telephone orders.
Telephone orders may not be as secure as written orders. The
Fund 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
Columbia Capital Allocation Portfolios
Buying, Selling and
Exchanging Shares
(continued)
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
For Class A, Class B, Class C, Class R, Class T, Class Y and
Class Z shares, once you have an account, you may contact the Transfer Agent 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 and
including an aggregate of $100,000 of shares per day, per Fund account through the internet if you qualify for internet orders.
Wire Transactions
You may buy (or redeem) Class A, Class B (redemptions only),
Class C, Class T, Class W (redemptions only), Class Y and Class Z shares of a Fund by wiring money from (or to) your bank account to (or from) your Fund account by calling the Transfer Agent at 800.422.3737. You must set up this feature prior to
your request unless you are submitting your request in writing with a Medallion Signature Guarantee. The Transfer Agent charges a fee for shares sold by Fedwire. The Transfer Agent may waive the fee for certain accounts. In the case of a redemption,
the receiving bank may charge an additional fee. The minimum amount that can be redeemed by wire is $500. The maximum amount that can be redeemed over the telephone is $3 million per day, per Fund account.
Electronic Funds Transfer
You may buy (or redeem) Class A, Class B (redemptions only),
Class C, Class T, Class Y and Class Z shares of a Fund by electronically transferring money from (or to) your bank account to (or from) 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.
Important:
Payments sent by an
electronic fund transfer, a bank authorization, or check that are not guaranteed may take up to 10 or more days to clear. If you request a redemption before the purchase funds clear, this may cause your redemption request to fail to process if the
requested amount includes unguaranteed funds. If you purchased your shares by check or from your bank account as an ACH transaction, the Fund may hold the redemption proceeds when you sell those shares for a period of time after the trade date of
the purchase.
Buying Shares
Eligible Investors
Class A and Class C Shares
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. As described in
this prospectus, Class A shares but not Class C shares are generally subject to a front-end sales charge, which reduces the dollar amount invested in a Fund. However, Class C shares are generally subject to higher fees than Class A shares, which
will reduce any returns on Class C shares relative to Class A shares. You may be eligible to purchase Class A shares without a front-end sales charge if the value of your Columbia Fund shares held in eligible accounts reaches $1,000,000 (in the case
of a purchase of Class A shares of a Taxable Fund) or $500,000 (in the case of a purchase of Class A shares of a Tax-Exempt Fund). If you are eligible to invest in Class A shares without a front-end sales charge, you should discuss your options with
your selling agent. For more information, see
Choosing a Share Class
– Reductions/Waivers of Sales Charges
. A purchase order for Class C shares of a Taxable or
Tax-Exempt Fund is limited to $999,999 and $499,999, respectively. Your selling agent may impose additional limits on investments in Class C shares.
Columbia Capital Allocation Portfolios
Buying, Selling and
Exchanging Shares
(continued)
For Columbia Money Market Fund, new investments must be made
in Class A, Class I, Class W or Class Z shares, subject to eligibility. Class C and Class R shares of Columbia Money Market Fund are available as a new investment only to investors in the Distributor's proprietary 401(k) products, provided that such
investor is eligible to invest in the class and transacts directly with the Fund or the Transfer Agent through a third party administrator or third party recordkeeper. Columbia Money Market Fund offers other classes of shares only to facilitate
exchanges with other Funds offering these classes of shares.
Class B Shares (Closed)
The Funds no longer accept 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):
■
|
Dividend and/or capital gain
distributions may continue to be reinvested in Class B shares of a Fund.
|
■
|
Shareholders invested in Class
B shares of a Fund may exchange those shares for Class B shares of other Funds offering such shares. Certain exceptions apply, including that not all Funds may permit exchanges.
|
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, any purchase orders (except those submitted by a selling agent through the National Securities Clearing Corporation (NSCC) as described in more detail below) that are orders 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 automatically be invested in Class A shares of the Fund, without regard to the normal minimum initial investment requirement for Class A shares,
but subject to the front-end sales charge that generally applies to Class A shares. See
Choosing a Share Class — Sales Charges and Commissions — Class A Shares — Front-End Sales Charge
for
additional information. Your selling agent may have different policies not described here, including a policy to reject purchase orders for a Fund's Class B shares or to automatically invest the purchase amount in Columbia Money Market Fund. Please
consult your selling agent to understand its policy.
Additional purchase orders for a Fund's Class B shares by an
existing Class B shareholder, submitted by such shareholder's selling agent through the NSCC, will be rejected due to operational limitations of the NSCC. Investors should consult their selling agent if they wish to invest in the Fund by purchasing
a share class of the Fund other than Class B shares.
Dividend and/or capital gain distributions from Class B shares
of a Fund will not be automatically invested in Class B shares of another 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 Fund will be
reinvested in Class B shares of the same Fund that is making the distribution.
Class I Shares
Class I shares are available only to the Funds (i.e.,
fund-of-funds investments).
Class K Shares (Closed)
Class K shares are closed to new investors and new accounts,
subject to certain limited exceptions described below.
Shareholders who opened and funded a Class K account with the
Fund as of the close of business on December 31, 2010 (including accounts once funded that subsequently reached a zero balance) may continue to make additional purchases of Class K shares. Plans may continue to make additional purchases of Fund
shares and add new participants, and new plans sponsored by the same or an affiliated sponsor may invest in the Fund (and add new participants) if an initial plan so sponsored invested in the Fund as of December 31, 2010 (or had approved the Fund as
an investment option as of December 31, 2010 and funded its initial account with the Fund prior to March 31, 2011) and holds Fund shares at the plan level.
Columbia Capital Allocation Portfolios
Buying, Selling and
Exchanging Shares
(continued)
An order to purchase Class K shares received by the Fund or
the Transfer Agent after the close of business on December 31, 2010 (other than as described above) from a new investor or a new account that is not eligible to purchase shares will be refused by the Fund and the Transfer Agent and any money that
the Fund or the Transfer Agent received with the order will be returned to the investor or the selling agent, as appropriate, without interest.
Class K shares are designed for qualified
employee benefit plans, trust companies or similar institutions, charitable organizations that meet the definition in Section 501(c)(3) of the Code, non-qualified deferred compensation plans whose participants are included in a qualified employee
benefit plan described above, state sponsored college savings plans established under Section 529 of the Code, and health savings accounts created pursuant to public law 108-173. Class K shares may be purchased, sold or exchanged only through the
Distributor or an authorized selling agent.
Prior to October 25, 2012, Class K shares were named Class R4
shares.
Class R Shares
Class R shares are available only to eligible health savings
accounts sponsored by third party platforms, including those sponsored by Ameriprise Financial affiliates, eligible retirement plans and, in the sole discretion of the Distributor, other types of retirement accounts held through platforms maintained
by selling agents approved by the Distributor. Eligible retirement plans include any retirement plan other than individual 403(b) plans. Class R shares are generally not available for investment through retail nonretirement accounts, traditional and
Roth IRAs, Coverdell Education Savings Accounts, SEPs, SAR-SEPs, Simple IRAs or 529 tuition programs. Contact the Transfer Agent or your retirement plan or health savings account administrator for more information about investing in Class R
shares.
Class R4 Shares
Class R4 shares are available only to (i) omnibus retirement
plans, (ii) trust companies or similar institutions, (iii) broker-dealers, banks, trust companies and similar institutions that clear Fund share transactions for their client or customer investment advisory or similar accounts through designated
selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R4 eligibility apart from selling, servicing or similar agreements, (iv) 501(c)(3) charitable
organizations, (v) 529 plans and (vi) health savings accounts.
Prior to October 31, 2012, Class R4 shares were named Class R3
shares.
Class R5 Shares
Class R5 shares are available only to (i) certain registered
investment advisers that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with
respect to Class R5 eligibility apart from selling, servicing or similar agreements and (ii) omnibus retirement plans. Prior to November 8, 2012, Class R5 shares were closed to new investors and new accounts, subject to certain exceptions. Existing
shareholders who do not satisfy the new eligibility requirements for investment in Class R5 may not establish new Class R5 accounts but may continue to make additional purchases of Class R5 shares in accounts opened and funded prior to November 8,
2012; provided, however, that investment advisory programs and similar programs that opened a Class R5 account as of May 1, 2010, and continuously hold Class R5 shares in such account after such date, may generally not only continue to make
additional purchases of Class R5 shares but also open new Class R5 accounts for such pre-existing programs and add new shareholders in the program.
Class T Shares
Class T shares are available only to
investors who received (and who have continuously held) Class T shares in connection with the merger of certain Galaxy funds into certain Funds that were then named Liberty funds.
Class W Shares
Class W shares are available only to investors purchasing
through authorized investment programs managed by investment professionals, including discretionary managed account programs. Class W shares may be purchased, sold or exchanged only through the Distributor or an authorized selling agent. Shares
originally purchased in a
Columbia Capital Allocation Portfolios
Buying, Selling and
Exchanging Shares
(continued)
discretionary managed account may continue to be held in Class W outside of a
discretionary managed account, but no additional Class W purchases may be made and no exchanges to Class W shares of another Fund may be made outside of a discretionary managed account.
Class Y Shares
Class Y shares, except as noted below, are
available only to retirement plans that maintain plan-level or omnibus accounts with the Fund (through the Transfer Agent).
Prior to November 8, 2012, Class Y shares were offered only to
certain former shareholders of series of the former Columbia Funds Institutional Trust (together, Former CFIT Shareholders). Former CFIT Shareholders who opened and funded a Class Y account with a Fund as of the close of business on November 7, 2012
may continue to make additional purchases of Class Y shares even if they do not satisfy the current eligibility requirements but may not establish new Class Y shares accounts and will not be eligible to exchange Class Y shares of a Fund into Class Y
shares of other Funds. Former CFIT Shareholders may exchange Class Y shares of a Fund for Class Z shares of the same Fund or Class Z shares of another Fund, subject to applicable minimum investments.
Class Z Shares
Class Z shares are available only to the categories of
eligible investors described below under
Class Z Shares Minimum Initial Investments
.
Selling agents that clear Fund share transactions through designated selling agents and
their mutual fund trading platforms that were given specific written notice from the Transfer Agent of the termination, effective March 29, 2013, of their eligibility for new purchases of Class Z shares and omnibus retirement plans are not permitted
to establish new Class Z accounts, subject to certain exceptions described below.
Omnibus retirement plans that opened and, subject to certain
exceptions, funded a Class Z account with the Fund as of the close of business on March 28, 2013, and have continuously held Class Z shares in such account after such date, may generally continue to make additional purchases of Class Z shares, open
new Class Z accounts and add new participants. In addition, an omnibus retirement plan affiliated with a grandfathered plan may, in the sole discretion of the Distributor, open new Class Z accounts in a Fund if the affiliated plan opened a Class Z
account on or before March 28, 2013. If an omnibus retirement plan invested in Class Z shares changes recordkeepers after March 28, 2013, any new accounts established for that plan may not be established in Class Z shares, but such a plan may
establish new accounts in a different share class for which the plan is eligible. The Distributor may, in its sole discretion, delay the funding requirement described above for omnibus retirement plans to allow an omnibus retirement plan that opened
a Class Z account (the initial Class Z account) with the Fund as of the close of business on March 28, 2013 to make additional purchases of Class Z shares, open new Class Z accounts and add new participants so long as the initial Class Z account was
funded by July 2, 2013.
Accounts of selling agents
(other than omnibus retirement plans, which are discussed above) that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that received specific written notice
from the Transfer Agent of the termination, effective March 29, 2013, of their eligibility for new purchases of Class Z shares will not be permitted to establish new Class Z accounts or make additional purchases of Class Z shares (other than through
reinvestment of distributions). Such accounts may, at their holder’s option, exchange Class Z shares of a Fund, without the payment of a sales charge, for Class A shares of the same Fund.
Additional Eligible Investors
In addition, the Distributor, in its sole discretion, may
accept investments in any share class from investors other than those listed in this prospectus.
Minimum Initial Investments
The table below shows the Fund's minimum initial investment
requirements, which may vary by Fund, class and type of account.
Columbia Capital Allocation Portfolios
Buying, Selling and
Exchanging Shares
(continued)
Minimum
Initial Investments
|
|
Minimum
Initial
Investment
(a)
|
Minimum
Initial Investment
for Accounts
with Systematic
Investment Plans
|
For
all Funds, classes and account types except those listed below
|
$2,000
|
$100
(b)
|
Individual
Retirement Accounts for all Funds and classes except those listed below
|
$1,000
|
$100
(c)
|
Columbia
Absolute Return Currency and Income Fund
|
$10,000
|
$10,000
|
Columbia
Floating Rate Fund and Columbia Inflation Protected Securities Fund
|
$5,000
|
$5,000
|
Class
I, Class K, Class R, Class R4 and Class Y
|
None
|
N/A
|
Class
R5
|
variable
(d)
|
N/A
|
Class
W
|
$500
|
N/A
|
Class
Z
|
variable
(e)
|
$100
|
(a)
|
If your Class A, Class B,
Class C, Class T or Class Z shares account balance falls below the minimum initial investment amount for any reason, including a market decline, you may be asked to increase it to the minimum initial investment amount or establish a monthly
Systematic Investment Plan. If you do not do so, your account will be subject to a $20 annual low balance fee and/or shares may be automatically redeemed and the proceeds mailed to you if the account falls below the minimum account balance. See
Buying, Selling and Exchanging Shares — Transaction Rules and Policies
above.
|
(b)
|
Columbia Money Market Fund
—
$2,000
|
(c)
|
Columbia Money Market Fund
—
$1,000
|
(d)
|
There is no minimum initial
investment in Class R5 shares for omnibus retirement plans. A minimum initial investment of $100,000 applies to aggregate purchases of Class R5 shares of a Fund for combined underlying accounts of any registered investment adviser that clears Fund
share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R5 eligibility
apart from selling, servicing or similar agreements.
|
(e)
|
The minimum initial
investment amount for Class Z shares is $0, $1,000 or $2,000 depending upon the category of eligible investor. See
— Class Z Shares Minimum Initial Investments
below. The minimum initial investment
amount for systematic investment plan accounts is the same as the amount set forth in the first two rows of the table, as applicable.
|
The minimum initial investment requirements may be waived for
accounts that are managed by an investment professional, for accounts held in approved discretionary or non-discretionary wrap programs, or for accounts that are a part of an employer-sponsored retirement plan. The Distributor, in its sole
discretion, may also waive minimum initial investment requirements for other account types.
Minimum investment and related requirements may be modified at
any time, with or without prior notice. If your account is closed and then re-opened with a systematic investment plan, your account must meet the then-current applicable minimum initial investment.
Class Z Shares 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 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.
|
■
|
Any investor participating
in a wrap program sponsored by a selling agent 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:
Columbia Capital Allocation Portfolios
Buying, Selling and
Exchanging Shares
(continued)
■
|
Any individual retirement
plan for which a selling agent 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 employee of Columbia
Management Investment Advisers, LLC, the Distributor or the Transfer Agent and immediate family members of any of the foregoing who share the same address and any persons employed as of April 30, 2010 by Columbia Management Advisors, LLC, Columbia
Management Distributors, Inc., or Columbia Management Services, Inc., the adviser, distributor and transfer agent of series of CFST and CFST I prior to May 1, 2010 (the Previous Service Providers) and immediate family members of any of the foregoing
who share the same address are eligible to make new and subsequent purchases in Class Z shares through an individual retirement account. If you maintain your account with a selling agent, you must contact that selling agent each time you seek to
purchase shares to notify them that you qualify for Class Z shares.
|
The minimum initial investment in Class Z shares for the
following categories of eligible investors is $2,000:
■
|
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 a series of CFST or CFST I distributed by the Distributor.
|
■
|
Any investor participating
in an account offered by a selling agent 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.
|
■
|
Any employee of Columbia
Management Investment Advisers, LLC, the Distributor or the Transfer Agent and immediate family members of any of the foregoing who share the same address and any persons employed as of April 30, 2010 by the Previous Service Providers and any of
their immediate family members who share the same address are eligible to make new and subsequent purchases in Class Z shares through a non-retirement account. If you maintain your account with a selling agent, you must contact that selling agent
each time you seek to purchase shares to notify them that you qualify for Class Z shares.
|
■
|
Certain other investors as
set forth in more detail in the SAI.
|
Systematic Investment Plan
The Systematic Investment Plan allows you to schedule regular
purchases via automatic transfers from your bank account to the Fund on a monthly, quarterly or semiannual basis. Contact the Transfer Agent or your selling agent to set up the plan. Systematic Investment Plans may not be available for all share
classes.
Dividend Diversification
Generally, you may automatically invest distributions made by
another Fund into the same class of shares (and in some cases certain other classes of shares) of a Fund at no additional sales charge. A sales charge may apply when you invest distributions made with respect to shares that were not subject to a
sales charge at the time of your initial purchase. Call the Transfer Agent at 800.345.6611 for details. The ability to invest distributions from one Fund to another Fund may not be available to accounts held at all selling agents.
Columbia Capital Allocation Portfolios
Buying, Selling and
Exchanging Shares
(continued)
Other Purchase Rules You Should Know
■
|
Once the Transfer Agent or
your selling 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
and Class T shares at the public offering price per share because purchases of these share classes are generally subject to a front-end sales charge.
|
■
|
You buy Class B, Class C,
Class I, Class K, Class R, Class R4, Class R5, Class W, Class Y and Class Z shares at net asset value per share because no front-end sales charge applies to purchases of these share classes.
|
■
|
The Distributor and the
Transfer Agent reserve the right to cancel your order if the Fund 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 agents are
responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.
|
■
|
Shares purchased 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. The payment will be sent within seven days after your request is received in “good form.” When you sell shares, the amount you receive may be more or less than the amount you invested.
Your sale price will be the next NAV calculated after your
request is received in “good form,” minus any applicable CDSC.
Systematic Withdrawal Plan
The Systematic Withdrawal Plan allows you to
schedule regular redemptions from your account any business day on a monthly, quarterly or semiannual basis. Currently, Systematic Withdrawal Plans are generally available for Class A, Class B, Class C, Class R4, Class R5, Class T, Class W, Class Y
and Class Z share accounts. Contact the Transfer Agent or your financial advisor to set up the plan. To set up the plan, your account balance must meet the class minimum initial investment amount. 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 Signature Guaranteed.
You can choose to receive your withdrawals via check or direct
deposit into your bank account. The Fund will deduct any applicable CDSC from the withdrawals before sending the balance to you. You can cancel the plan by giving the Fund 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 withdraw your entire investment.
Check Redemption Service (for Columbia Money Market Fund)
Class A and Class Z shares of Columbia Money Market Fund offer
check writing privileges. If you have $2,000 in Columbia Money Market Fund, you may request checks which may be drawn against your account. The amount of any check drawn against your Columbia Money Market Fund must be at least $100. You can elect
this service on your initial application or thereafter. Call 800.345.6611 for the appropriate forms to establish this service. If you own Class A shares that were originally purchased in another Fund at NAV because of the size of the purchase, and
then exchanged into Columbia Money Market Fund, check redemptions may be subject to a CDSC. A $15 charge will be assessed for any stop payment order requested by you or any overdraft in connection with checks written against your Columbia Money
Market Fund account. Note that a Medallion Signature Guarantee may be required if this service is established after the account is opened.
Columbia Capital Allocation Portfolios
Buying, Selling and
Exchanging Shares
(continued)
In-Kind Redemptions
The Fund reserves the right to honor redemption orders with
in-kind distributions of portfolio securities instead of cash. In the event the Fund distributes portfolio securities in-kind, you may incur 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. For U.S. federal income tax purposes redemptions paid in securities are generally treated the same as redemptions paid in cash.
Other Redemption Rules You Should Know
■
|
Once the Transfer Agent or
your selling agent receives your redemption order in “good form,” your shares will be sold at the next calculated NAV 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 that
are held directly with the Funds (through the Transfer Agent), we will normally send the redemption proceeds by mail or electronically transfer them to your bank account within three business days after the Transfer Agent or your selling agent
receives your order in “good form.”
|
■
|
If you sell your shares
through a selling agent, the Funds will normally send the redemption proceeds by Fedwire within three business days after the Transfer Agent or your selling agent receives your order in “good form.”
|
■
|
If you paid for your shares
by check or from your bank account as an ACH transaction, the Funds will hold the redemption proceeds when you sell those shares for a period of time after the trade date of the purchase.
|
■
|
No interest will be paid on
uncashed redemption checks.
|
■
|
The Funds can delay payment
of the redemption proceeds for up to seven days and may suspend redemptions and/or further postpone payment of redemption proceeds when the NYSE is closed or trading thereon is restricted or during emergency or other circumstances, including as
determined by the SEC.
|
■
|
Other restrictions may apply
to retirement accounts. For information about these restrictions, contact your retirement plan administrator.
|
■
|
The Fund reserves the right
to redeem your shares if your account falls below the Fund's minimum initial investment requirement.
|
■
|
Also keep in mind the 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 your Fund to buy shares of
another Fund, in what is called an exchange. You should read the prospectus of, and make sure you understand the investment objective, principal investment strategies, risks, fees and expenses of, the Fund into which you are exchanging.
You may be subject to a sales charge if you exchange from
Columbia Money Market Fund or any other Fund that does not charge a front-end sales charge into a non-money market Fund.
If you hold your Fund shares through certain selling agents, including Ameriprise Financial
Services, Inc., you may have limited exchangeability among the Funds.
Please contact your selling agent for more information.
You can generally make exchanges between like share classes of
any Fund and, subject to eligibility requirements, other share classes of any Fund. Some exceptions apply. Although the Funds allow certain exchanges from one share class to another share class with higher expenses, you should consider the expenses
of each class before making such an exchange.
Systematic
Exchanges
You may buy Class A, Class C, Class T, Class
W, Class Y and/or Class Z shares of a Fund by exchanging each month from another Fund for shares of the same class of the Fund at no additional cost, subject to the following exchange amount minimums: $50 each month for individual retirement
accounts (i.e. tax qualified accounts); and $100 each month for non-retirement accounts. Contact the Transfer Agent or your selling agent to set up the plan. If you set up your plan to exchange more than $100,000 each month, you must obtain a
Medallion Signature Guarantee.
Columbia Capital Allocation Portfolios
Buying, Selling and
Exchanging Shares
(continued)
Exchanges will continue as long as your balance is sufficient
to complete the systematic monthly transfers, subject to the 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 $50 and $100 minimum requirements noted immediately above) by calling the Transfer Agent at 800.345.6611. A sales charge may apply when you exchange shares of a Fund that were
not assessed a sales charge at the time of your initial purchase.
Other Exchange Rules You Should Know
■
|
Exchanges are made at the
NAV next calculated after your exchange order is received in “good form.”
|
■
|
Once the Fund receives your
exchange request, you cannot cancel it after the market closes.
|
■
|
The rules for buying shares
of a Fund generally apply to exchanges into that Fund, including, if your exchange creates a new Fund account, it must satisfy the minimum investment amount, unless a waiver applies.
|
■
|
Shares of the purchased Fund
may not be used on the same day for another exchange or sale.
|
■
|
If you exchange shares from
Class A shares of Columbia Money Market Fund to a non-money market Fund, any further exchanges must be between shares of the same class. For example, if you exchange from Class A shares of Columbia Money Market Fund into Class C shares of a
non-money market Fund, you may not exchange from Class C shares of that non-money market Fund back to Class A shares of Columbia Money Market Fund.
|
■
|
A sales charge may apply when
you exchange shares of a Fund that were not assessed a sales charge at the time of your initial purchase. For example, if your initial investment was in Columbia Money Market Fund and you exchange into a non-money market Fund, your transaction is
subject to a front-end sales charge if you exchange into Class A shares and to a CDSC if you exchange into Class C shares of the Funds.
|
■
|
If your initial investment
was in Class A shares of a non-money market Fund and you exchange shares into Columbia Money Market Fund, you may exchange that amount to another Fund, including dividends earned on that amount, without paying a sales charge.
|
■
|
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 Fund and ends when you sell the shares of the Fund you received from the exchange. The applicable CDSC will be the CDSC of the original Fund.
|
■
|
You may make exchanges only
into a Fund that is legally offered and sold in your state of residence. Contact the Transfer Agent or your selling agent for more information.
|
■
|
You generally may make an
exchange only into a 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.
|
■
|
Changing your investment to
a different Fund will be treated as a sale and purchase, and you will be subject to applicable taxes on the sale and sales charges on the purchase of the new Fund.
|
■
|
Class Z shares of a Fund may
be exchanged for Class A or Class Z shares of another Fund. In certain circumstances, the front-end sales charge applicable to Class A shares may be waived on exchanges of Class Z shares for Class A shares. See
Buying, Selling and Exchanging Shares — Buying Shares — Eligible Investors — Class Z Shares
for details.
|
■
|
You may generally exchange
Class T shares of a Fund for Class A shares of another Fund if the other Fund does not offer Class T shares. Class T shares exchanged into Class A shares cannot be exchanged back into Class T shares.
|
■
|
Class W shares originally
purchased, but no longer held, in a discretionary managed account, may not be exchanged for Class W shares of another Fund.
|
Columbia Capital Allocation Portfolios
Buying, Selling and
Exchanging Shares
(continued)
■
|
Former CFIT Shareholders may
not exchange Class Y shares of a Fund into Class Y shares of another Fund.
|
Same-Fund Exchange Privilege
Certain shareholders of a Fund may be or become eligible to
invest in other classes of shares of the same Fund. Upon a determination of such eligibility, such shareholders may be eligible to exchange their shares for shares of the other share class, if offered. Such exchanges include exchanges of shares of
one class for shares of another share class with higher expenses. Before making such an exchange, you should consider the expenses of each class. Investors should contact their selling agents to learn more about the details of the exchange
privilege.
Note the following rules relating to
same-Fund exchanges:
■
|
No sales charges or other
charges will apply to any such exchange, except that when Class B shares are exchanged, any CDSC applicable to Class B shares will be applied.
|
■
|
Ordinarily, shareholders
will not recognize a gain or loss for U.S. federal income tax purposes upon such an exchange. You should consult your tax advisor about your particular exchanges.
|
Columbia Capital Allocation Portfolios
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 generally unrealized. If the fund sells an investment, it generally will realize a capital gain if it sells that investment for a
higher price than its adjusted cost basis, and will generally realize a capital loss if it sells that investment for a lower price than its adjusted cost basis. Capital gains and losses are either short-term or long-term, depending on whether the
fund holds the securities for one year or less (short-term) or more than one year (long-term).
|
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 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:
For Columbia Capital Allocation Conservative Portfolio,
Columbia Capital Allocation Moderate Conservative Portfolio, Columbia Capital Allocation Moderate Portfolio and Columbia Capital Allocation Moderate Aggressive Portfolio
Declaration
and Distribution Schedule
|
Declarations
|
Quarterly
|
Distributions
|
Quarterly
|
For Columbia Capital Allocation
Aggressive Portfolio
Declaration
and Distribution Schedule
|
Declarations
|
Annually
|
Distributions
|
Annually
|
The Fund may, however, declare or
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 distribution was declared (or, if the Fund declares distributions daily, 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.
Columbia Capital Allocation Portfolios
Distributions and Taxes
(continued)
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 (the selling agent through which you purchased shares may have different policies). You can do this by contacting the Funds at
the addresses and telephone numbers listed at the beginning of the section entitled
Choosing a Share Class
. No sales charges apply to the purchase or sale of such shares.
For accounts held directly with the Fund (through the Transfer
Agent), 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) of net investment income or net realized capital gain, because doing so can cost you money in taxes to the extent 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,” before you invest check the Fund's distribution schedule, which is available at the Funds' website and/or by
calling the Funds' telephone number listed at the beginning of the section entitled
Choosing a Share Class
.
Taxes
You should be aware of the following considerations applicable
to all Funds (unless otherwise noted):
■
|
The Fund intends to qualify
and to be eligible for treatment 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 for treatment as a regulated investment company would result in Fund-level taxation, and consequently, a reduction in income available for distribution to you and in the net asset value of your shares. Even if the Fund
qualifies for treatment as a regulated investment company, the Fund may be subject to federal excise tax on certain undistributed income or gains.
|
■
|
Distributions, if taxable,
generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional Fund shares. Dividends paid in January are deemed paid on December 31 of the prior year if the dividend was declared and payable to
shareholders of record in October, November, or December of such prior year.
|
■
|
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.
For taxable fixed income Funds:
The Fund expects
that distributions will consist primarily of ordinary income.
|
■
|
From time to time, a
distribution from the Fund could constitute a return of capital, which is not taxable to you so long as the amount of the distribution does not exceed your tax basis in your Fund shares. A return of capital reduces your tax basis in your Fund
shares, with any amounts exceeding such basis generally taxable as capital gain.
|
■
|
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 the lower net long-term capital gain rates instead of the higher
ordinary income rates. 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 eligible for treatment as qualified dividend income.
|
■
|
Certain high-income
individuals (as well as estates and trusts) are subject to a 3.8% tax on net investment income. For individuals, the 3.8% tax applies to the lesser of (1) the amount (if any) by which the taxpayer's
|
Columbia Capital Allocation Portfolios
Distributions and Taxes
(continued)
|
modified adjusted gross
income exceeds certain threshold amounts or (2) the taxpayer's “net investment income.”
|
Net investment income
generally includes for this purpose dividends, including any capital gain dividends, paid by the Fund, and net gains recognized on the sale, redemption or exchange of shares of the Fund.
■
|
Certain derivative
instruments when held in the Fund's portfolio subject the Fund to special tax rules, the effect of which may be to, among other things, accelerate income to the Fund, defer Fund losses, cause adjustments in the holding periods of Fund portfolio
securities, or convert capital gains into ordinary income, short-term capital losses into long-term capital losses or long-term capital gains into short-term capital gains. These rules could therefore affect the amount, timing and/or character of
distributions to shareholders.
|
■
|
Certain Funds may purchase
or write options, as described further in the SAI. Generally, a Fund realizes a capital gain or loss on an option when the option expires, or when it is exercised, sold or otherwise terminated. However, if an option is a “section 1256
contract,” which includes most traded options on a broad-based index, and the Fund holds such option at the end of its taxable year, the Fund is deemed to sell such option at fair market value at such time and recognize any gain or loss
thereon, which is generally deemed to be 60% long-term and 40% short-term gain or loss, as described further in the SAI.
|
■
|
If at the end of the taxable
year more than 50% of the value of the Fund's assets consists of securities of foreign corporations, and the Fund makes a special election, you will generally be required to include in your income for U.S. federal income tax purposes your share of
the qualifying foreign income taxes paid by the Fund in respect of its foreign portfolio securities. You may be able to claim a foreign tax credit or deduction in respect of this amount, subject to certain limitations. There is no assurance that the
Fund will make this election for a taxable year, even if it is eligible to do so. The Fund may also be eligible to make this special election, regardless of the overall share of the value of its assets that is invested in the securities of foreign
corporations, if, at the close of each quarter of the Fund’s taxable year, at least 50% of its total assets consist of interests in underlying regulated investment companies.
|
■
|
It is possible that because
most of the Fund's investments are shares of Underlying Funds, and in such a case,
the tax treatment of the Fund's gains, losses, and distributions may differ from the tax treatment that would apply if either
the Fund invested directly in the types of securities held by the Underlying Funds or the Fund shareholders invested directly in the Underlying Funds. As a result, you may receive taxable distributions earlier and recognize higher amounts of capital
gain or ordinary income than you otherwise would.
|
■
|
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 your adjusted tax basis in the shares, which is generally 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; in other circumstances, capital losses may be disallowed under the “wash sale” rules.
|
■
|
The Fund generally is
required to report to shareholders and the Internal Revenue Service (the IRS) upon the sale, exchange or redemption of Fund shares cost basis information with respect to those shares. The Fund uses average cost basis as its default method of
calculating cost basis. Please see columbiathreadneedle.com/us or contact the Fund at 800.345.6611 for more information regarding average cost basis reporting, other available cost basis methods and how to select or change a particular method or to
choose specific shares to sell, redeem or exchange. If you hold Fund shares through a selling agent, you should contact your selling agent to learn about its cost basis reporting default method and the reporting elections available to your account.
|
■
|
The Fund is required by
federal law to withhold tax on any taxable or tax-exempt distributions and redemption 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 TIN or haven't certified to the Fund that withholding doesn't apply; the 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.
|
Columbia Capital Allocation Portfolios
Distributions and Taxes
(continued)
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. Please see the SAI for more detailed tax information. 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.
Columbia Capital Allocation Portfolios
Columbia Capital Allocation Conservative
Portfolio
The financial highlights tables are intended
to help you understand each Fund’s financial performance for the past five fiscal years or, if shorter, the Fund’s period of operations. Certain information reflects financial results for a single Fund share. Per share net investment
income (loss) amounts are calculated based on average shares outstanding during the period. The total returns in the tables represent the rate that an investor would have earned (or lost) on an investment in each Fund assuming all dividends and
distributions had been reinvested.
Total return does not
reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments
and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher. The information for the three most recent fiscal years has been audited by PricewaterhouseCoopers LLP, an independent
registered public accounting firm, whose report, along with the Fund’s financial statements, is included in the annual report, which is available upon request. The information for the prior fiscal years has been derived from the financial
statements audited by the Fund’s former independent registered public accounting firm.
|
Year
Ended January 31,
|
Class
A
|
2015
|
2014
|
2013
|
2012
|
2011
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$10.34
|
$10.63
|
$10.32
|
$10.44
|
$9.77
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.18
|
0.20
|
0.24
|
0.25
|
0.24
|
Net
realized and unrealized gain
|
0.35
|
0.14
|
0.54
|
0.14
|
0.68
|
Total
from investment operations
|
0.53
|
0.34
|
0.78
|
0.39
|
0.92
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.19)
|
(0.27)
|
(0.35)
|
(0.25)
|
(0.25)
|
Net
realized gains
|
(0.58)
|
(0.36)
|
(0.12)
|
(0.26)
|
—
|
Total
distributions to shareholders
|
(0.77)
|
(0.63)
|
(0.47)
|
(0.51)
|
(0.25)
|
Net
asset value, end of period
|
$10.10
|
$10.34
|
$10.63
|
$10.32
|
$10.44
|
Total
return
|
5.24%
|
3.28%
|
7.62%
|
3.90%
|
9.47%
|
Ratios
to average net assets
(a)
|
|
|
|
|
|
Total
gross expenses
|
0.55%
|
0.50%
|
0.48%
|
0.49%
|
0.48%
|
Total
net expenses
(b)
|
0.55%
(c)
|
0.50%
(c)
|
0.48%
(c)
|
0.49%
(c)
|
0.48%
|
Net
investment income
|
1.69%
|
1.91%
|
2.28%
|
2.35%
|
2.32%
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$245,212
|
$263,334
|
$282,382
|
$251,178
|
$217,147
|
Portfolio
turnover
|
12%
|
22%
|
19%
|
88%
|
16%
|
Notes to Financial Highlights
(a)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(b)
|
Total net
expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(c)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Conservative Portfolio, continued)
|
Year
Ended January 31,
|
Class
B
|
2015
|
2014
|
2013
|
2012
|
2011
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$10.31
|
$10.60
|
$10.29
|
$10.40
|
$9.73
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.09
|
0.11
|
0.15
|
0.16
|
0.15
|
Net
realized and unrealized gain
|
0.37
|
0.15
|
0.54
|
0.16
|
0.69
|
Total
from investment operations
|
0.46
|
0.26
|
0.69
|
0.32
|
0.84
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.12)
|
(0.19)
|
(0.26)
|
(0.17)
|
(0.17)
|
Net
realized gains
|
(0.58)
|
(0.36)
|
(0.12)
|
(0.26)
|
—
|
Total
distributions to shareholders
|
(0.70)
|
(0.55)
|
(0.38)
|
(0.43)
|
(0.17)
|
Net
asset value, end of period
|
$10.07
|
$10.31
|
$10.60
|
$10.29
|
$10.40
|
Total
return
|
4.46%
|
2.51%
|
6.79%
|
3.19%
|
8.64%
|
Ratios
to average net assets
(a)
|
|
|
|
|
|
Total
gross expenses
|
1.30%
|
1.25%
|
1.23%
|
1.24%
|
1.23%
|
Total
net expenses
(b)
|
1.30%
(c)
|
1.25%
(c)
|
1.23%
(c)
|
1.24%
(c)
|
1.23%
|
Net
investment income
|
0.90%
|
1.07%
|
1.47%
|
1.56%
|
1.47%
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$7,759
|
$12,454
|
$19,598
|
$24,717
|
$30,599
|
Portfolio
turnover
|
12%
|
22%
|
19%
|
88%
|
16%
|
Notes to Financial Highlights
(a)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(b)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(c)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Conservative Portfolio, continued)
|
Year
Ended January 31,
|
Class
C
|
2015
|
2014
|
2013
|
2012
|
2011
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$10.28
|
$10.58
|
$10.28
|
$10.39
|
$9.73
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.10
|
0.12
|
0.16
|
0.17
|
0.16
|
Net
realized and unrealized gain
|
0.37
|
0.13
|
0.53
|
0.16
|
0.67
|
Total
from investment operations
|
0.47
|
0.25
|
0.69
|
0.33
|
0.83
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.12)
|
(0.19)
|
(0.27)
|
(0.18)
|
(0.17)
|
Net
realized gains
|
(0.58)
|
(0.36)
|
(0.12)
|
(0.26)
|
—
|
Total
distributions to shareholders
|
(0.70)
|
(0.55)
|
(0.39)
|
(0.44)
|
(0.17)
|
Net
asset value, end of period
|
$10.05
|
$10.28
|
$10.58
|
$10.28
|
$10.39
|
Total
return
|
4.57%
|
2.43%
|
6.75%
|
3.28%
|
8.63%
|
Ratios
to average net assets
(a)
|
|
|
|
|
|
Total
gross expenses
|
1.30%
|
1.26%
|
1.23%
|
1.24%
|
1.23%
|
Total
net expenses
(b)
|
1.30%
(c)
|
1.26%
(c)
|
1.23%
(c)
|
1.24%
(c)
|
1.23%
|
Net
investment income
|
0.95%
|
1.18%
|
1.54%
|
1.62%
|
1.60%
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$47,899
|
$47,435
|
$45,368
|
$36,637
|
$26,212
|
Portfolio
turnover
|
12%
|
22%
|
19%
|
88%
|
16%
|
Notes to Financial Highlights
(a)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(b)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(c)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Conservative Portfolio, continued)
|
Year
Ended January 31,
|
Class
K
|
2015
|
2014
|
2013
|
2012
|
2011
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$10.24
|
$10.54
|
$10.25
|
$10.35
|
$9.69
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.18
|
0.23
|
0.24
|
0.25
|
0.24
|
Net
realized and unrealized gain
|
0.37
|
0.12
|
0.53
|
0.16
|
0.67
|
Total
from investment operations
|
0.55
|
0.35
|
0.77
|
0.41
|
0.91
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.20)
|
(0.29)
|
(0.36)
|
(0.25)
|
(0.25)
|
Net
realized gains
|
(0.58)
|
(0.36)
|
(0.12)
|
(0.26)
|
—
|
Total
distributions to shareholders
|
(0.78)
|
(0.65)
|
(0.48)
|
(0.51)
|
(0.25)
|
Net
asset value, end of period
|
$10.01
|
$10.24
|
$10.54
|
$10.25
|
$10.35
|
Total
return
|
5.48%
|
3.35%
|
7.62%
|
4.14%
|
9.49%
|
Ratios
to average net assets
(a)
|
|
|
|
|
|
Total
gross expenses
|
0.47%
|
0.41%
|
0.39%
|
0.41%
|
0.44%
|
Total
net expenses
(b)
|
0.47%
|
0.41%
|
0.39%
|
0.39%
|
0.44%
|
Net
investment income
|
1.79%
|
2.16%
|
2.27%
|
2.43%
|
2.35%
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$96
|
$99
|
$12
|
$79
|
$81
|
Portfolio
turnover
|
12%
|
22%
|
19%
|
88%
|
16%
|
Notes to Financial Highlights
(a)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(b)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Conservative Portfolio, continued)
|
Year
Ended January 31,
|
Class
R
|
2015
|
2014
|
2013
|
2012
|
2011
(a)
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$10.33
|
$10.63
|
$10.32
|
$10.44
|
$10.24
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.15
|
0.20
|
0.25
|
0.22
|
0.10
|
Net
realized and unrealized gain
|
0.37
|
0.11
|
0.50
|
0.15
|
0.21
|
Total
from investment operations
|
0.52
|
0.31
|
0.75
|
0.37
|
0.31
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.17)
|
(0.25)
|
(0.32)
|
(0.23)
|
(0.11)
|
Net
realized gains
|
(0.58)
|
(0.36)
|
(0.12)
|
(0.26)
|
—
|
Total
distributions to shareholders
|
(0.75)
|
(0.61)
|
(0.44)
|
(0.49)
|
(0.11)
|
Net
asset value, end of period
|
$10.10
|
$10.33
|
$10.63
|
$10.32
|
$10.44
|
Total
return
|
5.07%
|
2.94%
|
7.39%
|
3.66%
|
3.03%
|
Ratios
to average net assets
(b)
|
|
|
|
|
|
Total
gross expenses
|
0.80%
|
0.76%
|
0.72%
|
0.75%
|
0.68%
(c)
|
Total
net expenses
(d)
|
0.80%
(e)
|
0.76%
(e)
|
0.72%
|
0.75%
|
0.68%
(c)
|
Net
investment income
|
1.46%
|
1.91%
|
2.36%
|
2.07%
|
2.78%
(c)
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$206
|
$179
|
$114
|
$3
|
$3
|
Portfolio
turnover
|
12%
|
22%
|
19%
|
88%
|
16%
|
Notes to Financial Highlights
(a)
|
Based on operations from
September 27, 2010 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(e)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Conservative Portfolio, continued)
|
Year
Ended January 31,
|
Class
R4
|
2015
|
2014
(a)
|
Per
share data
|
|
|
Net
asset value, beginning of period
|
$10.29
|
$10.53
|
Income
from investment operations:
|
|
|
Net
investment income
|
0.25
|
0.18
|
Net
realized and unrealized gain
|
0.30
|
0.09
|
Total
from investment operations
|
0.55
|
0.27
|
Less
distributions to shareholders:
|
|
|
Net
investment income
|
(0.22)
|
(0.26)
|
Net
realized gains
|
(0.58)
|
(0.25)
|
Total
distributions to shareholders
|
(0.80)
|
(0.51)
|
Net
asset value, end of period
|
$10.04
|
$10.29
|
Total
return
|
5.41%
|
2.56%
|
Ratios
to average net assets
(b)
|
|
|
Total
gross expenses
|
0.31%
|
0.23%
(c)
|
Total
net expenses
(d)
|
0.31%
(e)
|
0.23%
(c)(e)
|
Net
investment income
|
2.44%
|
2.67%
(c)
|
Supplemental
data
|
|
|
Net
assets, end of period (in thousands)
|
$156
|
$2
|
Portfolio
turnover
|
12%
|
22%
|
Notes to Financial Highlights
(a)
|
Based on operations from June
13, 2013 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(e)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Conservative Portfolio, continued)
|
Year
Ended January 31,
|
Class
R5
|
2015
|
2014
(a)
|
Per
share data
|
|
|
Net
asset value, beginning of period
|
$10.29
|
$10.53
|
Income
from investment operations:
|
|
|
Net
investment income
|
0.17
|
0.18
|
Net
realized and unrealized gain
|
0.40
|
0.09
|
Total
from investment operations
|
0.57
|
0.27
|
Less
distributions to shareholders:
|
|
|
Net
investment income
|
(0.23)
|
(0.26)
|
Net
realized gains
|
(0.58)
|
(0.25)
|
Total
distributions to shareholders
|
(0.81)
|
(0.51)
|
Net
asset value, end of period
|
$10.05
|
$10.29
|
Total
return
|
5.60%
|
2.64%
|
Ratios
to average net assets
(b)
|
|
|
Total
gross expenses
|
0.25%
|
0.12%
(c)
|
Total
net expenses
(d)
|
0.25%
|
0.12%
(c)
|
Net
investment income
|
1.80%
|
2.78%
(c)
|
Supplemental
data
|
|
|
Net
assets, end of period (in thousands)
|
$61
|
$2
|
Portfolio
turnover
|
12%
|
22%
|
Notes to Financial Highlights
(a)
|
Based on operations from June
13, 2013 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Conservative Portfolio, continued)
|
Year
Ended January 31,
|
Class
Y
|
2015
|
2014
(a)
|
Per
share data
|
|
|
Net
asset value, beginning of period
|
$10.29
|
$10.53
|
Income
from investment operations:
|
|
|
Net
investment income
|
0.20
|
0.19
|
Net
realized and unrealized gain
|
0.36
|
0.09
|
Total
from investment operations
|
0.56
|
0.28
|
Less
distributions to shareholders:
|
|
|
Net
investment income
|
(0.23)
|
(0.27)
|
Net
realized gains
|
(0.58)
|
(0.25)
|
Total
distributions to shareholders
|
(0.81)
|
(0.52)
|
Net
asset value, end of period
|
$10.04
|
$10.29
|
Total
return
|
5.55%
|
2.68%
|
Ratios
to average net assets
(b)
|
|
|
Total
gross expenses
|
0.17%
|
0.07%
(c)
|
Total
net expenses
(d)
|
0.17%
|
0.07%
(c)
|
Net
investment income
|
2.08%
|
2.83%
(c)
|
Supplemental
data
|
|
|
Net
assets, end of period (in thousands)
|
$2
|
$2
|
Portfolio
turnover
|
12%
|
22%
|
Notes to Financial Highlights
(a)
|
Based on operations from June
13, 2013 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Conservative Portfolio, continued)
|
Year
Ended January 31,
|
Class
Z
|
2015
|
2014
|
2013
|
2012
|
2011
(a)
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$10.33
|
$10.63
|
$10.32
|
$10.44
|
$10.24
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.20
|
0.24
|
0.30
|
0.28
|
0.12
|
Net
realized and unrealized gain
|
0.37
|
0.12
|
0.51
|
0.14
|
0.20
|
Total
from investment operations
|
0.57
|
0.36
|
0.81
|
0.42
|
0.32
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.22)
|
(0.30)
|
(0.38)
|
(0.28)
|
(0.12)
|
Net
realized gains
|
(0.58)
|
(0.36)
|
(0.12)
|
(0.26)
|
—
|
Total
distributions to shareholders
|
(0.80)
|
(0.66)
|
(0.50)
|
(0.54)
|
(0.12)
|
Net
asset value, end of period
|
$10.10
|
$10.33
|
$10.63
|
$10.32
|
$10.44
|
Total
return
|
5.60%
|
3.42%
|
7.91%
|
4.19%
|
3.15%
|
Ratios
to average net assets
(b)
|
|
|
|
|
|
Total
gross expenses
|
0.30%
|
0.26%
|
0.22%
|
0.24%
|
0.26%
(c)
|
Total
net expenses
(d)
|
0.30%
(e)
|
0.26%
(e)
|
0.22%
(e)
|
0.24%
(e)
|
0.21%
(c)
|
Net
investment income
|
1.96%
|
2.26%
|
2.80%
|
2.71%
|
3.28%
(c)
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$3,067
|
$2,719
|
$700
|
$52
|
$20
|
Portfolio
turnover
|
12%
|
22%
|
19%
|
88%
|
16%
|
Notes to Financial Highlights
(a)
|
Based on operations from
September 27, 2010 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(e)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(continued)
Columbia Capital Allocation Moderate Conservative
Portfolio
The financial highlights tables are intended
to help you understand each Fund’s financial performance for the past five fiscal years or, if shorter, the Fund’s period of operations. Certain information reflects financial results for a single Fund share. Per share net investment
income (loss) amounts are calculated based on average shares outstanding during the period. The total returns in the tables represent the rate that an investor would have earned (or lost) on an investment in each Fund assuming all dividends and
distributions had been reinvested.
Total return does not
reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments
and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher. The information for the three most recent fiscal years has been audited by PricewaterhouseCoopers LLP, an independent
registered public accounting firm, whose report, along with the Fund’s financial statements, is included in the annual report, which is available upon request. The information for the prior fiscal years has been derived from the financial
statements audited by the Fund’s former independent registered public accounting firm.
|
Year
Ended January 31,
|
|
Year
Ended March 31,
|
Class
A
|
2015
|
2014
|
2013
|
2012
(a)
|
|
2011
|
2010
|
Per
share data
|
|
|
|
|
|
|
|
Net
asset value, beginning of period
|
$11.37
|
$11.33
|
$10.96
|
$10.89
|
|
$10.04
|
$8.03
|
Income
from investment operations:
|
|
|
|
|
|
|
|
Net
investment income
|
0.19
|
0.25
|
0.25
|
0.21
|
|
0.26
|
0.31
|
Net
realized and unrealized gain
|
0.51
|
0.44
|
0.71
|
0.07
|
|
0.85
|
2.00
|
Total
from investment operations
|
0.70
|
0.69
|
0.96
|
0.28
|
|
1.11
|
2.31
|
Less
distributions to shareholders:
|
|
|
|
|
|
|
|
Net
investment income
|
(0.23)
|
(0.33)
|
(0.32)
|
(0.21)
|
|
(0.26)
|
(0.30)
|
Net
realized gains
|
(0.86)
|
(0.32)
|
(0.27)
|
—
|
|
—
|
—
|
Total
distributions to shareholders
|
(1.09)
|
(0.65)
|
(0.59)
|
(0.21)
|
|
(0.26)
|
(0.30)
|
Net
asset value, end of period
|
$10.98
|
$11.37
|
$11.33
|
$10.96
|
|
$10.89
|
$10.04
|
Total
return
|
6.23%
|
6.18%
|
8.94%
|
2.63%
|
|
11.21%
|
29.06%
|
Ratios
to average net assets
(b)
|
|
|
|
|
|
|
|
Total
gross expenses
|
0.51%
|
0.47%
|
0.70%
|
0.64%
(c)(d)
|
|
0.50%
|
0.50%
|
Total
net expenses
(e)
|
0.51%
(f)
|
0.47%
(f)
|
0.57%
(f)
|
0.57%
(c)(d)(f)
|
|
0.50%
|
0.50%
|
Net
investment income
|
1.70%
|
2.15%
|
2.19%
|
2.37%
(c)
|
|
2.52%
|
3.26%
|
Supplemental
data
|
|
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$545,696
|
$553,593
|
$71,321
|
$68,452
|
|
$63,807
|
$60,848
|
Portfolio
turnover
|
14%
|
30%
|
38%
|
55%
|
|
87%
|
34%
|
Notes to Financial Highlights
(a)
|
For the period from April 1,
2011 to January 31, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to January 31.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Ratios include line of credit
interest expense which is less than 0.01%.
|
(e)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(f)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Conservative Portfolio, continued)
|
Year
Ended January 31,
|
|
Year
Ended March 31,
|
Class
B
|
2015
|
2014
|
2013
|
2012
(a)
|
|
2011
|
2010
|
Per
share data
|
|
|
|
|
|
|
|
Net
asset value, beginning of period
|
$11.31
|
$11.28
|
$10.91
|
$10.85
|
|
$10.00
|
$8.01
|
Income
from investment operations:
|
|
|
|
|
|
|
|
Net
investment income
|
0.10
|
0.15
|
0.15
|
0.14
|
|
0.18
|
0.23
|
Net
realized and unrealized gain
|
0.51
|
0.45
|
0.73
|
0.07
|
|
0.85
|
1.99
|
Total
from investment operations
|
0.61
|
0.60
|
0.88
|
0.21
|
|
1.03
|
2.22
|
Less
distributions to shareholders:
|
|
|
|
|
|
|
|
Net
investment income
|
(0.14)
|
(0.25)
|
(0.24)
|
(0.15)
|
|
(0.18)
|
(0.23)
|
Net
realized gains
|
(0.86)
|
(0.32)
|
(0.27)
|
—
|
|
—
|
—
|
Total
distributions to shareholders
|
(1.00)
|
(0.57)
|
(0.51)
|
(0.15)
|
|
(0.18)
|
(0.23)
|
Net
asset value, end of period
|
$10.92
|
$11.31
|
$11.28
|
$10.91
|
|
$10.85
|
$10.00
|
Total
return
|
5.46%
|
5.32%
|
8.17%
|
1.96%
|
|
10.43%
|
27.94%
|
Ratios
to average net assets
(b)
|
|
|
|
|
|
|
|
Total
gross expenses
|
1.26%
|
1.22%
|
1.44%
|
1.39%
(c)(d)
|
|
1.25%
|
1.25%
|
Total
net expenses
(e)
|
1.26%
(f)
|
1.22%
(f)
|
1.32%
(f)
|
1.31%
(c)(d)(f)
|
|
1.25%
|
1.25%
|
Net
investment income
|
0.88%
|
1.30%
|
1.36%
|
1.58%
(c)
|
|
1.75%
|
2.51%
|
Supplemental
data
|
|
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$17,080
|
$27,184
|
$8,335
|
$14,587
|
|
$26,181
|
$40,508
|
Portfolio
turnover
|
14%
|
30%
|
38%
|
55%
|
|
87%
|
34%
|
Notes to Financial Highlights
(a)
|
For the period from April 1,
2011 to January 31, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to January 31.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Ratios include line of credit
interest expense which is less than 0.01%.
|
(e)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(f)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Conservative Portfolio, continued)
|
Year
Ended January 31,
|
|
Year
Ended March 31,
|
Class
C
|
2015
|
2014
|
2013
|
2012
(a)
|
|
2011
|
2010
|
Per
share data
|
|
|
|
|
|
|
|
Net
asset value, beginning of period
|
$11.23
|
$11.20
|
$10.84
|
$10.78
|
|
$9.94
|
$7.96
|
Income
from investment operations:
|
|
|
|
|
|
|
|
Net
investment income
|
0.11
|
0.16
|
0.16
|
0.14
|
|
0.18
|
0.23
|
Net
realized and unrealized gain
|
0.50
|
0.44
|
0.71
|
0.07
|
|
0.84
|
1.98
|
Total
from investment operations
|
0.61
|
0.60
|
0.87
|
0.21
|
|
1.02
|
2.21
|
Less
distributions to shareholders:
|
|
|
|
|
|
|
|
Net
investment income
|
(0.14)
|
(0.25)
|
(0.24)
|
(0.15)
|
|
(0.18)
|
(0.23)
|
Net
realized gains
|
(0.86)
|
(0.32)
|
(0.27)
|
—
|
|
—
|
—
|
Total
distributions to shareholders
|
(1.00)
|
(0.57)
|
(0.51)
|
(0.15)
|
|
(0.18)
|
(0.23)
|
Net
asset value, end of period
|
$10.84
|
$11.23
|
$11.20
|
$10.84
|
|
$10.78
|
$9.94
|
Total
return
|
5.50%
|
5.35%
|
8.13%
|
1.97%
|
|
10.39%
|
27.99%
|
Ratios
to average net assets
(b)
|
|
|
|
|
|
|
|
Total
gross expenses
|
1.26%
|
1.23%
|
1.45%
|
1.39%
(c)(d)
|
|
1.25%
|
1.25%
|
Total
net expenses
(e)
|
1.26%
(f)
|
1.23%
(f)
|
1.32%
(f)
|
1.32%
(c)(d)(f)
|
|
1.25%
|
1.25%
|
Net
investment income
|
0.96%
|
1.38%
|
1.44%
|
1.61%
(c)
|
|
1.77%
|
2.51%
|
Supplemental
data
|
|
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$90,199
|
$85,756
|
$23,470
|
$24,156
|
|
$23,651
|
$23,321
|
Portfolio
turnover
|
14%
|
30%
|
38%
|
55%
|
|
87%
|
34%
|
Notes to Financial Highlights
(a)
|
For the period from April 1,
2011 to January 31, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to January 31.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Ratios include line of credit
interest expense which is less than 0.01%.
|
(e)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(f)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Conservative Portfolio, continued)
|
Year
Ended January 31,
|
Class
K
|
2015
|
2014
(a)
|
Per
share data
|
|
|
Net
asset value, beginning of period
|
$11.22
|
$11.25
|
Income
from investment operations:
|
|
|
Net
investment income
|
0.18
|
0.32
|
Net
realized and unrealized gain
|
0.52
|
0.32
|
Total
from investment operations
|
0.70
|
0.64
|
Less
distributions to shareholders:
|
|
|
Net
investment income
|
(0.24)
|
(0.35)
|
Net
realized gains
|
(0.86)
|
(0.32)
|
Total
distributions to shareholders
|
(1.10)
|
(0.67)
|
Net
asset value, end of period
|
$10.82
|
$11.22
|
Total
return
|
6.31%
|
5.72%
|
Ratios
to average net assets
(b)
|
|
|
Total
gross expenses
|
0.41%
|
0.38%
(c)
|
Total
net expenses
(d)
|
0.41%
|
0.38%
(c)
|
Net
investment income
|
1.53%
|
3.10%
(c)
|
Supplemental
data
|
|
|
Net
assets, end of period (in thousands)
|
$3
|
$56
|
Portfolio
turnover
|
14%
|
30%
|
Notes to Financial Highlights
(a)
|
Based on operations from
February 28, 2013 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Conservative Portfolio, continued)
|
Year
Ended January 31,
|
|
Year
Ended March 31,
|
Class
R
|
2015
|
2014
|
2013
|
2012
(a)
|
|
2011
|
2010
|
Per
share data
|
|
|
|
|
|
|
|
Net
asset value, beginning of period
|
$11.38
|
$11.34
|
$10.96
|
$10.90
|
|
$10.04
|
$8.04
|
Income
from investment operations:
|
|
|
|
|
|
|
|
Net
investment income
|
0.17
|
0.21
|
0.23
|
0.18
|
|
0.23
|
0.28
|
Net
realized and unrealized gain
|
0.50
|
0.45
|
0.72
|
0.07
|
|
0.86
|
2.00
|
Total
from investment operations
|
0.67
|
0.66
|
0.95
|
0.25
|
|
1.09
|
2.28
|
Less
distributions to shareholders:
|
|
|
|
|
|
|
|
Net
investment income
|
(0.20)
|
(0.30)
|
(0.30)
|
(0.19)
|
|
(0.23)
|
(0.28)
|
Net
realized gains
|
(0.86)
|
(0.32)
|
(0.27)
|
—
|
|
—
|
—
|
Total
distributions to shareholders
|
(1.06)
|
(0.62)
|
(0.57)
|
(0.19)
|
|
(0.23)
|
(0.28)
|
Net
asset value, end of period
|
$10.99
|
$11.38
|
$11.34
|
$10.96
|
|
$10.90
|
$10.04
|
Total
return
|
5.95%
|
5.87%
|
8.76%
|
2.34%
|
|
11.03%
|
28.58%
|
Ratios
to average net assets
(b)
|
|
|
|
|
|
|
|
Total
gross expenses
|
0.76%
|
0.74%
|
0.96%
|
0.89%
(c)(d)
|
|
0.75%
|
0.75%
|
Total
net expenses
(e)
|
0.76%
(f)
|
0.74%
(f)
|
0.81%
(f)
|
0.82%
(c)(d)(f)
|
|
0.75%
|
0.75%
|
Net
investment income
|
1.46%
|
1.85%
|
2.04%
|
2.03%
(c)
|
|
2.28%
|
3.00%
|
Supplemental
data
|
|
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$2,230
|
$2,243
|
$2,148
|
$1,102
|
|
$428
|
$559
|
Portfolio
turnover
|
14%
|
30%
|
38%
|
55%
|
|
87%
|
34%
|
Notes to Financial Highlights
(a)
|
For the period from April 1,
2011 to January 31, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to January 31.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Ratios include line of credit
interest expense which is less than 0.01%.
|
(e)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(f)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Conservative Portfolio, continued)
|
Year
Ended January 31,
|
Class
R4
|
2015
|
2014
|
2013
(a)
|
Per
share data
|
|
|
|
Net
asset value, beginning of period
|
$11.29
|
$11.25
|
$11.30
|
Income
from investment operations:
|
|
|
|
Net
investment income
|
0.24
|
0.27
|
0.09
|
Net
realized and unrealized gain
|
0.48
|
0.46
|
0.26
|
Total
from investment operations
|
0.72
|
0.73
|
0.35
|
Less
distributions to shareholders:
|
|
|
|
Net
investment income
|
(0.26)
|
(0.37)
|
(0.17)
|
Net
realized gains
|
(0.86)
|
(0.32)
|
(0.23)
|
Total
distributions to shareholders
|
(1.12)
|
(0.69)
|
(0.40)
|
Net
asset value, end of period
|
$10.89
|
$11.29
|
$11.25
|
Total
return
|
6.44%
|
6.52%
|
3.11%
|
Ratios
to average net assets
(b)
|
|
|
|
Total
gross expenses
|
0.26%
|
0.19%
|
0.51%
(c)
|
Total
net expenses
(d)
|
0.26%
(e)
|
0.19%
(e)
|
0.37%
(c)
|
Net
investment income
|
2.19%
|
2.36%
|
3.68%
(c)
|
Supplemental
data
|
|
|
|
Net
assets, end of period (in thousands)
|
$966
|
$2
|
$2
|
Portfolio
turnover
|
14%
|
30%
|
38%
|
Notes to Financial Highlights
(a)
|
Based on operations from
November 8, 2012 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(e)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Conservative Portfolio, continued)
|
Year
Ended January 31,
|
Class
R5
|
2015
|
2014
|
2013
(a)
|
Per
share data
|
|
|
|
Net
asset value, beginning of period
|
$11.28
|
$11.25
|
$11.30
|
Income
from investment operations:
|
|
|
|
Net
investment income
|
0.26
|
0.38
|
0.10
|
Net
realized and unrealized gain
|
0.48
|
0.35
|
0.25
|
Total
from investment operations
|
0.74
|
0.73
|
0.35
|
Less
distributions to shareholders:
|
|
|
|
Net
investment income
|
(0.27)
|
(0.38)
|
(0.17)
|
Net
realized gains
|
(0.86)
|
(0.32)
|
(0.23)
|
Total
distributions to shareholders
|
(1.13)
|
(0.70)
|
(0.40)
|
Net
asset value, end of period
|
$10.89
|
$11.28
|
$11.25
|
Total
return
|
6.63%
|
6.53%
|
3.13%
|
Ratios
to average net assets
(b)
|
|
|
|
Total
gross expenses
|
0.18%
|
0.13%
|
0.41%
(c)
|
Total
net expenses
(d)
|
0.18%
|
0.13%
|
0.29%
(c)
|
Net
investment income
|
2.33%
|
3.35%
|
3.77%
(c)
|
Supplemental
data
|
|
|
|
Net
assets, end of period (in thousands)
|
$217
|
$74
|
$2
|
Portfolio
turnover
|
14%
|
30%
|
38%
|
Notes to Financial Highlights
(a)
|
Based on operations from
November 8, 2012 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Conservative Portfolio, continued)
|
Year
Ended January 31,
|
Class
Y
|
2015
|
2014
(a)
|
Per
share data
|
|
|
Net
asset value, beginning of period
|
$11.18
|
$11.32
|
Income
from investment operations:
|
|
|
Net
investment income
|
0.25
|
0.22
|
Net
realized and unrealized gain
|
0.48
|
0.28
|
Total
from investment operations
|
0.73
|
0.50
|
Less
distributions to shareholders:
|
|
|
Net
investment income
|
(0.28)
|
(0.32)
|
Net
realized gains
|
(0.86)
|
(0.32)
|
Total
distributions to shareholders
|
(1.14)
|
(0.64)
|
Net
asset value, end of period
|
$10.77
|
$11.18
|
Total
return
|
6.66%
|
4.51%
|
Ratios
to average net assets
(b)
|
|
|
Total
gross expenses
|
0.09%
|
0.08%
(c)
|
Total
net expenses
(d)
|
0.09%
|
0.08%
(c)
|
Net
investment income
|
2.24%
|
3.02%
(c)
|
Supplemental
data
|
|
|
Net
assets, end of period (in thousands)
|
$4
|
$2
|
Portfolio
turnover
|
14%
|
30%
|
Notes to Financial Highlights
(a)
|
Based on operations from June
13, 2013 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Conservative Portfolio, continued)
|
Year
Ended January 31,
|
|
Year
Ended March 31,
|
Class
Z
|
2015
|
2014
|
2013
|
2012
(a)
|
|
2011
|
2010
|
Per
share data
|
|
|
|
|
|
|
|
Net
asset value, beginning of period
|
$11.25
|
$11.21
|
$10.85
|
$10.78
|
|
$9.94
|
$7.96
|
Income
from investment operations:
|
|
|
|
|
|
|
|
Net
investment income
|
0.22
|
0.28
|
0.27
|
0.23
|
|
0.28
|
0.33
|
Net
realized and unrealized gain
|
0.50
|
0.44
|
0.71
|
0.07
|
|
0.84
|
1.98
|
Total
from investment operations
|
0.72
|
0.72
|
0.98
|
0.30
|
|
1.12
|
2.31
|
Less
distributions to shareholders:
|
|
|
|
|
|
|
|
Net
investment income
|
(0.26)
|
(0.36)
|
(0.35)
|
(0.23)
|
|
(0.28)
|
(0.33)
|
Net
realized gains
|
(0.86)
|
(0.32)
|
(0.27)
|
—
|
|
—
|
—
|
Total
distributions to shareholders
|
(1.12)
|
(0.68)
|
(0.62)
|
(0.23)
|
|
(0.28)
|
(0.33)
|
Net
asset value, end of period
|
$10.85
|
$11.25
|
$11.21
|
$10.85
|
|
$10.78
|
$9.94
|
Total
return
|
6.47%
|
6.49%
|
9.22%
|
2.85%
|
|
11.49%
|
29.25%
|
Ratios
to average net assets
(b)
|
|
|
|
|
|
|
|
Total
gross expenses
|
0.26%
|
0.24%
|
0.45%
|
0.39%
(c)(d)
|
|
0.25%
|
0.25%
|
Total
net expenses
(e)
|
0.26%
(f)
|
0.24%
(f)
|
0.32%
(f)
|
0.32%
(c)(d)(f)
|
|
0.25%
|
0.25%
|
Net
investment income
|
1.97%
|
2.46%
|
2.45%
|
2.61%
(c)
|
|
2.77%
|
3.51%
|
Supplemental
data
|
|
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$26,084
|
$25,287
|
$20,710
|
$21,157
|
|
$21,839
|
$20,406
|
Portfolio
turnover
|
14%
|
30%
|
38%
|
55%
|
|
87%
|
34%
|
Notes to Financial Highlights
(a)
|
For the period from April 1,
2011 to January 31, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to January 31.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Ratios include line of credit
interest expense which is less than 0.01%.
|
(e)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(f)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(continued)
Columbia Capital Allocation Moderate Portfolio
The financial highlights tables are intended
to help you understand each Fund’s financial performance for the past five fiscal years or, if shorter, the Fund’s period of operations. Certain information reflects financial results for a single Fund share. Per share net investment
income (loss) amounts are calculated based on average shares outstanding during the period. The total returns in the tables represent the rate that an investor would have earned (or lost) on an investment in each Fund assuming all dividends and
distributions had been reinvested.
Total return does not
reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments
and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher. The information for the three most recent fiscal years has been audited by PricewaterhouseCoopers LLP, an independent
registered public accounting firm, whose report, along with the Fund’s financial statements, is included in the annual report, which is available upon request. The information for the prior fiscal years has been derived from the financial
statements audited by the Fund’s former independent registered public accounting firm.
|
Year
Ended January 31,
|
Class
A
|
2015
|
2014
|
2013
|
2012
|
2011
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$12.00
|
$11.61
|
$10.75
|
$10.71
|
$9.46
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.18
|
0.20
|
0.22
|
0.23
|
0.23
|
Net
realized and unrealized gain
|
0.63
|
0.86
|
0.93
|
0.06
|
1.29
|
Total
from investment operations
|
0.81
|
1.06
|
1.15
|
0.29
|
1.52
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.24)
|
(0.31)
|
(0.29)
|
(0.25)
|
(0.27)
|
Net
realized gains
|
(1.07)
|
(0.36)
|
—
|
—
|
—
|
Total
distributions to shareholders
|
(1.31)
|
(0.67)
|
(0.29)
|
(0.25)
|
(0.27)
|
Net
asset value, end of period
|
$11.50
|
$12.00
|
$11.61
|
$10.75
|
$10.71
|
Total
return
|
6.77%
|
9.26%
|
10.87%
|
2.84%
|
16.23%
|
Ratios
to average net assets
(a)
|
|
|
|
|
|
Total
gross expenses
|
0.48%
|
0.46%
|
0.46%
|
0.43%
|
0.43%
|
Total
net expenses
(b)
|
0.48%
(c)
|
0.46%
(c)
|
0.46%
(c)
|
0.43%
(c)
|
0.43%
|
Net
investment income
|
1.49%
|
1.64%
|
1.98%
|
2.11%
|
2.32%
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$1,437,972
|
$1,425,904
|
$1,331,311
|
$1,215,462
|
$1,164,732
|
Portfolio
turnover
|
16%
|
23%
|
23%
|
58%
|
9%
|
Notes to Financial Highlights
(a)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(b)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(c)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Portfolio, continued)
|
Year
Ended January 31,
|
Class
B
|
2015
|
2014
|
2013
|
2012
|
2011
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$11.94
|
$11.55
|
$10.70
|
$10.66
|
$9.41
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.08
|
0.10
|
0.13
|
0.14
|
0.15
|
Net
realized and unrealized gain
|
0.64
|
0.87
|
0.93
|
0.07
|
1.29
|
Total
from investment operations
|
0.72
|
0.97
|
1.06
|
0.21
|
1.44
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.15)
|
(0.22)
|
(0.21)
|
(0.17)
|
(0.19)
|
Net
realized gains
|
(1.07)
|
(0.36)
|
—
|
—
|
—
|
Total
distributions to shareholders
|
(1.22)
|
(0.58)
|
(0.21)
|
(0.17)
|
(0.19)
|
Net
asset value, end of period
|
$11.44
|
$11.94
|
$11.55
|
$10.70
|
$10.66
|
Total
return
|
6.00%
|
8.47%
|
9.99%
|
2.03%
|
15.43%
|
Ratios
to average net assets
(a)
|
|
|
|
|
|
Total
gross expenses
|
1.23%
|
1.21%
|
1.20%
|
1.18%
|
1.19%
|
Total
net expenses
(b)
|
1.23%
(c)
|
1.21%
(c)
|
1.20%
(c)
|
1.18%
(c)
|
1.19%
|
Net
investment income
|
0.66%
|
0.81%
|
1.17%
|
1.32%
|
1.47%
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$47,829
|
$71,473
|
$94,225
|
$117,235
|
$153,336
|
Portfolio
turnover
|
16%
|
23%
|
23%
|
58%
|
9%
|
Notes to Financial Highlights
(a)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(b)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(c)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Portfolio, continued)
|
Year
Ended January 31,
|
Class
C
|
2015
|
2014
|
2013
|
2012
|
2011
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$11.92
|
$11.53
|
$10.69
|
$10.65
|
$9.41
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.09
|
0.11
|
0.14
|
0.15
|
0.16
|
Net
realized and unrealized gain
|
0.62
|
0.86
|
0.91
|
0.07
|
1.28
|
Total
from investment operations
|
0.71
|
0.97
|
1.05
|
0.22
|
1.44
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.15)
|
(0.22)
|
(0.21)
|
(0.18)
|
(0.20)
|
Net
realized gains
|
(1.07)
|
(0.36)
|
—
|
—
|
—
|
Total
distributions to shareholders
|
(1.22)
|
(0.58)
|
(0.21)
|
(0.18)
|
(0.20)
|
Net
asset value, end of period
|
$11.41
|
$11.92
|
$11.53
|
$10.69
|
$10.65
|
Total
return
|
5.92%
|
8.51%
|
9.95%
|
2.10%
|
15.40%
|
Ratios
to average net assets
(a)
|
|
|
|
|
|
Total
gross expenses
|
1.23%
|
1.21%
|
1.21%
|
1.18%
|
1.19%
|
Total
net expenses
(b)
|
1.23%
(c)
|
1.21%
(c)
|
1.21%
(c)
|
1.18%
(c)
|
1.19%
|
Net
investment income
|
0.77%
|
0.92%
|
1.25%
|
1.38%
|
1.62%
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$180,143
|
$162,357
|
$132,770
|
$107,827
|
$90,001
|
Portfolio
turnover
|
16%
|
23%
|
23%
|
58%
|
9%
|
Notes to Financial Highlights
(a)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(b)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(c)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Portfolio, continued)
|
Year
Ended January 31,
|
Class
K
|
2015
|
2014
|
2013
|
2012
|
2011
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$11.99
|
$11.60
|
$10.74
|
$10.70
|
$9.45
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.19
|
0.21
|
0.21
|
0.23
|
0.27
|
Net
realized and unrealized gain
|
0.63
|
0.86
|
0.95
|
0.08
|
1.26
|
Total
from investment operations
|
0.82
|
1.07
|
1.16
|
0.31
|
1.53
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.25)
|
(0.32)
|
(0.30)
|
(0.27)
|
(0.28)
|
Net
realized gains
|
(1.07)
|
(0.36)
|
—
|
—
|
—
|
Total
distributions to shareholders
|
(1.32)
|
(0.68)
|
(0.30)
|
(0.27)
|
(0.28)
|
Net
asset value, end of period
|
$11.49
|
$11.99
|
$11.60
|
$10.74
|
$10.70
|
Total
return
|
6.88%
|
9.39%
|
10.94%
|
2.94%
|
16.38%
|
Ratios
to average net assets
(a)
|
|
|
|
|
|
Total
gross expenses
|
0.40%
|
0.36%
|
0.34%
|
0.34%
|
0.33%
|
Total
net expenses
(b)
|
0.40%
|
0.36%
|
0.34%
|
0.34%
|
0.33%
|
Net
investment income
|
1.55%
|
1.77%
|
1.93%
|
2.18%
|
2.66%
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$292
|
$359
|
$298
|
$748
|
$760
|
Portfolio
turnover
|
16%
|
23%
|
23%
|
58%
|
9%
|
Notes to Financial Highlights
(a)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(b)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Portfolio, continued)
|
Year
Ended January 31,
|
Class
R
|
2015
|
2014
|
2013
|
2012
|
2011
(a)
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$11.97
|
$11.58
|
$10.74
|
$10.70
|
$10.10
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.15
|
0.23
|
0.18
|
0.30
|
0.11
|
Net
realized and unrealized gain (loss)
|
0.63
|
0.80
|
0.93
|
(0.02)
|
0.60
|
Total
from investment operations
|
0.78
|
1.03
|
1.11
|
0.28
|
0.71
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.21)
|
(0.28)
|
(0.27)
|
(0.24)
|
(0.11)
|
Net
realized gains
|
(1.07)
|
(0.36)
|
—
|
—
|
—
|
Total
distributions to shareholders
|
(1.28)
|
(0.64)
|
(0.27)
|
(0.24)
|
(0.11)
|
Net
asset value, end of period
|
$11.47
|
$11.97
|
$11.58
|
$10.74
|
$10.70
|
Total
return
|
6.52%
|
9.02%
|
10.46%
|
2.66%
|
7.06%
|
Ratios
to average net assets
(b)
|
|
|
|
|
|
Total
gross expenses
|
0.73%
|
0.72%
|
0.70%
|
0.71%
|
0.67%
(c)
|
Total
net expenses
(d)
|
0.73%
(e)
|
0.72%
(e)
|
0.70%
(e)
|
0.71%
|
0.67%
(c)
|
Net
investment income
|
1.29%
|
1.92%
|
1.67%
|
2.93%
|
3.18%
(c)
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$1,610
|
$1,147
|
$138
|
$60
|
$3
|
Portfolio
turnover
|
16%
|
23%
|
23%
|
58%
|
9%
|
Notes to Financial Highlights
(a)
|
Based on operations from
September 27, 2010 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(e)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Portfolio, continued)
|
Year
Ended January 31,
|
Class
R4
|
2015
|
2014
(a)
|
Per
share data
|
|
|
Net
asset value, beginning of period
|
$11.90
|
$11.82
|
Income
from investment operations:
|
|
|
Net
investment income
|
0.26
|
0.18
|
Net
realized and unrealized gain
|
0.57
|
0.53
|
Total
from investment operations
|
0.83
|
0.71
|
Less
distributions to shareholders:
|
|
|
Net
investment income
|
(0.27)
|
(0.27)
|
Net
realized gains
|
(1.07)
|
(0.36)
|
Total
distributions to shareholders
|
(1.34)
|
(0.63)
|
Net
asset value, end of period
|
$11.39
|
$11.90
|
Total
return
|
7.06%
|
6.11%
|
Ratios
to average net assets
(b)
|
|
|
Total
gross expenses
|
0.23%
|
0.21%
(c)
|
Total
net expenses
(d)
|
0.23%
(e)
|
0.21%
(c)(e)
|
Net
investment income
|
2.22%
|
2.36%
(c)
|
Supplemental
data
|
|
|
Net
assets, end of period (in thousands)
|
$29
|
$3
|
Portfolio
turnover
|
16%
|
23%
|
Notes to Financial Highlights
(a)
|
Based on operations from June
13, 2013 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(e)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Portfolio, continued)
|
Year
Ended January 31,
|
Class
R5
|
2015
|
2014
(a)
|
Per
share data
|
|
|
Net
asset value, beginning of period
|
$11.90
|
$11.82
|
Income
from investment operations:
|
|
|
Net
investment income
|
0.39
|
0.19
|
Net
realized and unrealized gain
|
0.46
|
0.53
|
Total
from investment operations
|
0.85
|
0.72
|
Less
distributions to shareholders:
|
|
|
Net
investment income
|
(0.29)
|
(0.28)
|
Net
realized gains
|
(1.07)
|
(0.36)
|
Total
distributions to shareholders
|
(1.36)
|
(0.64)
|
Net
asset value, end of period
|
$11.39
|
$11.90
|
Total
return
|
7.21%
|
6.21%
|
Ratios
to average net assets
(b)
|
|
|
Total
gross expenses
|
0.16%
|
0.11%
(c)
|
Total
net expenses
(d)
|
0.16%
|
0.11%
(c)
|
Net
investment income
|
3.39%
|
2.51%
(c)
|
Supplemental
data
|
|
|
Net
assets, end of period (in thousands)
|
$78
|
$3
|
Portfolio
turnover
|
16%
|
23%
|
Notes to Financial Highlights
(a)
|
Based on operations from June
13, 2013 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Portfolio, continued)
|
Year
Ended January 31,
|
Class
Y
|
2015
|
2014
(a)
|
Per
share data
|
|
|
Net
asset value, beginning of period
|
$11.90
|
$11.82
|
Income
from investment operations:
|
|
|
Net
investment income
|
0.23
|
0.19
|
Net
realized and unrealized gain
|
0.61
|
0.54
|
Total
from investment operations
|
0.84
|
0.73
|
Less
distributions to shareholders:
|
|
|
Net
investment income
|
(0.29)
|
(0.29)
|
Net
realized gains
|
(1.07)
|
(0.36)
|
Total
distributions to shareholders
|
(1.36)
|
(0.65)
|
Net
asset value, end of period
|
$11.38
|
$11.90
|
Total
return
|
7.16%
|
6.25%
|
Ratios
to average net assets
(b)
|
|
|
Total
gross expenses
|
0.06%
|
0.07%
(c)
|
Total
net expenses
(d)
|
0.06%
|
0.07%
(c)
|
Net
investment income
|
1.92%
|
2.56%
(c)
|
Supplemental
data
|
|
|
Net
assets, end of period (in thousands)
|
$2
|
$3
|
Portfolio
turnover
|
16%
|
23%
|
Notes to Financial Highlights
(a)
|
Based on operations from June
13, 2013 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Portfolio, continued)
|
Year
Ended January 31,
|
Class
Z
|
2015
|
2014
|
2013
|
2012
|
2011
(a)
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$11.99
|
$11.59
|
$10.75
|
$10.71
|
$10.10
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.21
|
0.23
|
0.28
|
0.26
|
0.16
|
Net
realized and unrealized gain
|
0.63
|
0.87
|
0.88
|
0.07
|
0.58
|
Total
from investment operations
|
0.84
|
1.10
|
1.16
|
0.33
|
0.74
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.27)
|
(0.34)
|
(0.32)
|
(0.29)
|
(0.13)
|
Net
realized gains
|
(1.07)
|
(0.36)
|
—
|
—
|
—
|
Total
distributions to shareholders
|
(1.34)
|
(0.70)
|
(0.32)
|
(0.29)
|
(0.13)
|
Net
asset value, end of period
|
$11.49
|
$11.99
|
$11.59
|
$10.75
|
$10.71
|
Total
return
|
7.05%
|
9.65%
|
10.98%
|
3.15%
|
7.31%
|
Ratios
to average net assets
(b)
|
|
|
|
|
|
Total
gross expenses
|
0.23%
|
0.21%
|
0.22%
|
0.19%
|
0.11%
(c)
|
Total
net expenses
(d)
|
0.23%
(e)
|
0.21%
(e)
|
0.22%
(e)
|
0.19%
(e)
|
0.11%
(c)
|
Net
investment income
|
1.77%
|
1.90%
|
2.54%
|
2.49%
|
4.32%
(c)
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$2,989
|
$3,352
|
$2,544
|
$836
|
$7
|
Portfolio
turnover
|
16%
|
23%
|
23%
|
58%
|
9%
|
Notes to Financial Highlights
(a)
|
Based on operations from
September 27, 2010 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(e)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(continued)
Columbia Capital Allocation Moderate Aggressive Portfolio
The financial highlights tables are intended
to help you understand each Fund’s financial performance for the past five fiscal years or, if shorter, the Fund’s period of operations. Certain information reflects financial results for a single Fund share. Per share net investment
income (loss) amounts are calculated based on average shares outstanding during the period. The total returns in the tables represent the rate that an investor would have earned (or lost) on an investment in each Fund assuming all dividends and
distributions had been reinvested.
Total return does not
reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments
and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher. The information for the three most recent fiscal years has been audited by PricewaterhouseCoopers LLP, an independent
registered public accounting firm, whose report, along with the Fund’s financial statements, is included in the annual report, which is available upon request. The information for the prior fiscal years has been derived from the financial
statements audited by the Fund’s former independent registered public accounting firm.
|
Year
Ended January 31,
|
|
Year
Ended March 31,
|
Class
A
|
2015
|
2014
|
2013
|
2012
(a)
|
|
2011
|
2010
|
Per
share data
|
|
|
|
|
|
|
|
Net
asset value, beginning of period
|
$13.01
|
$12.04
|
$11.30
|
$11.61
|
|
$10.23
|
$7.33
|
Income
from investment operations:
|
|
|
|
|
|
|
|
Net
investment income
|
0.16
|
0.18
|
0.18
|
0.15
|
|
0.19
|
0.23
|
Net
realized and unrealized gain (loss)
|
0.76
|
1.21
|
1.07
|
(0.30)
|
|
1.37
|
2.89
|
Total
from investment operations
|
0.92
|
1.39
|
1.25
|
(0.15)
|
|
1.56
|
3.12
|
Less
distributions to shareholders:
|
|
|
|
|
|
|
|
Net
investment income
|
(0.25)
|
(0.25)
|
(0.22)
|
(0.14)
|
|
(0.18)
|
(0.22)
|
Net
realized gains
|
(1.23)
|
(0.17)
|
(0.29)
|
(0.02)
|
|
—
|
—
|
Total
distributions to shareholders
|
(1.48)
|
(0.42)
|
(0.51)
|
(0.16)
|
|
(0.18)
|
(0.22)
|
Proceeds
from regulatory settlements
|
—
|
—
|
—
|
0.00
(b)
|
|
—
|
—
|
Net
asset value, end of period
|
$12.45
|
$13.01
|
$12.04
|
$11.30
|
|
$11.61
|
$10.23
|
Total
return
|
7.03%
|
11.67%
|
11.28%
|
(1.20%)
|
|
15.48%
|
42.94%
|
Ratios
to average net assets
(c)
|
|
|
|
|
|
|
|
Total
gross expenses
|
0.52%
|
0.50%
|
0.53%
|
0.51%
(d)(e)
|
|
0.50%
(e)
|
0.50%
|
Total
net expenses
(f)
|
0.52%
(g)
|
0.50%
(g)
|
0.53%
(g)
|
0.51%
(d)(e)(g)
|
|
0.50%
(e)
|
0.50%
|
Net
investment income
|
1.22%
|
1.38%
|
1.51%
|
1.60%
(d)
|
|
1.75%
|
2.45%
|
Supplemental
data
|
|
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$1,815,185
|
$1,805,239
|
$679,109
|
$665,859
|
|
$291,758
|
$245,327
|
Portfolio
turnover
|
20%
|
22%
|
34%
|
42%
|
|
68%
|
27%
|
Notes to Financial Highlights
(a)
|
For the period from April 1,
2011 to January 31, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to January 31.
|
(c)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(e)
|
Ratios include line of credit
interest expense which is less than 0.01%.
|
(f)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(g)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Aggressive Portfolio, continued)
|
Year
Ended January 31,
|
|
Year
Ended March 31,
|
Class
B
|
2015
|
2014
|
2013
|
2012
(a)
|
|
2011
|
2010
|
Per
share data
|
|
|
|
|
|
|
|
Net
asset value, beginning of period
|
$12.89
|
$11.94
|
$11.21
|
$11.53
|
|
$10.16
|
$7.29
|
Income
from investment operations:
|
|
|
|
|
|
|
|
Net
investment income
|
0.05
|
0.07
|
0.07
|
0.07
|
|
0.10
|
0.16
|
Net
realized and unrealized gain (loss)
|
0.77
|
1.21
|
1.08
|
(0.29)
|
|
1.37
|
2.87
|
Total
from investment operations
|
0.82
|
1.28
|
1.15
|
(0.22)
|
|
1.47
|
3.03
|
Less
distributions to shareholders:
|
|
|
|
|
|
|
|
Net
investment income
|
(0.16)
|
(0.16)
|
(0.13)
|
(0.08)
|
|
(0.10)
|
(0.16)
|
Net
realized gains
|
(1.23)
|
(0.17)
|
(0.29)
|
(0.02)
|
|
—
|
—
|
Total
distributions to shareholders
|
(1.39)
|
(0.33)
|
(0.42)
|
(0.10)
|
|
(0.10)
|
(0.16)
|
Proceeds
from regulatory settlements
|
—
|
—
|
—
|
0.00
(b)
|
|
—
|
—
|
Net
asset value, end of period
|
$12.32
|
$12.89
|
$11.94
|
$11.21
|
|
$11.53
|
$10.16
|
Total
return
|
6.32%
|
10.78%
|
10.45%
|
(1.87%)
|
|
14.63%
|
41.72%
|
Ratios
to average net assets
(c)
|
|
|
|
|
|
|
|
Total
gross expenses
|
1.27%
|
1.25%
|
1.27%
|
1.26%
(d)(e)
|
|
1.25%
(e)
|
1.25%
|
Total
net expenses
(f)
|
1.27%
(g)
|
1.25%
(g)
|
1.27%
(g)
|
1.26%
(d)(e)(g)
|
|
1.25%
(e)
|
1.25%
|
Net
investment income
|
0.37%
|
0.53%
|
0.65%
|
0.75%
(d)
|
|
0.99%
|
1.70%
|
Supplemental
data
|
|
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$61,673
|
$92,956
|
$53,009
|
$85,005
|
|
$133,770
|
$181,026
|
Portfolio
turnover
|
20%
|
22%
|
34%
|
42%
|
|
68%
|
27%
|
Notes to Financial Highlights
(a)
|
For the period from April 1,
2011 to January 31, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to January 31.
|
(c)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(e)
|
Ratios include line of credit
interest expense which is less than 0.01%.
|
(f)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(g)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Aggressive Portfolio, continued)
|
Year
Ended January 31,
|
|
Year
Ended March 31,
|
Class
C
|
2015
|
2014
|
2013
|
2012
(a)
|
|
2011
|
2010
|
Per
share data
|
|
|
|
|
|
|
|
Net
asset value, beginning of period
|
$13.07
|
$12.11
|
$11.36
|
$11.68
|
|
$10.29
|
$7.38
|
Income
from investment operations:
|
|
|
|
|
|
|
|
Net
investment income
|
0.06
|
0.08
|
0.09
|
0.08
|
|
0.11
|
0.16
|
Net
realized and unrealized gain (loss)
|
0.77
|
1.21
|
1.08
|
(0.30)
|
|
1.38
|
2.91
|
Total
from investment operations
|
0.83
|
1.29
|
1.17
|
(0.22)
|
|
1.49
|
3.07
|
Less
distributions to shareholders:
|
|
|
|
|
|
|
|
Net
investment income
|
(0.16)
|
(0.16)
|
(0.13)
|
(0.08)
|
|
(0.10)
|
(0.16)
|
Net
realized gains
|
(1.23)
|
(0.17)
|
(0.29)
|
(0.02)
|
|
—
|
—
|
Total
distributions to shareholders
|
(1.39)
|
(0.33)
|
(0.42)
|
(0.10)
|
|
(0.10)
|
(0.16)
|
Proceeds
from regulatory settlements
|
—
|
—
|
—
|
0.00
(b)
|
|
—
|
—
|
Net
asset value, end of period
|
$12.51
|
$13.07
|
$12.11
|
$11.36
|
|
$11.68
|
$10.29
|
Total
return
|
6.30%
|
10.71%
|
10.49%
|
(1.85%)
|
|
14.64%
|
41.76%
|
Ratios
to average net assets
(c)
|
|
|
|
|
|
|
|
Total
gross expenses
|
1.27%
|
1.25%
|
1.28%
|
1.26%
(d)(e)
|
|
1.25%
(e)
|
1.25%
|
Total
net expenses
(f)
|
1.27%
(g)
|
1.25%
(g)
|
1.28%
(g)
|
1.26%
(d)(e)(g)
|
|
1.25%
(e)
|
1.25%
|
Net
investment income
|
0.49%
|
0.63%
|
0.75%
|
0.81%
(d)
|
|
1.00%
|
1.70%
|
Supplemental
data
|
|
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$213,166
|
$198,837
|
$84,349
|
$86,321
|
|
$91,556
|
$87,496
|
Portfolio
turnover
|
20%
|
22%
|
34%
|
42%
|
|
68%
|
27%
|
Notes to Financial Highlights
(a)
|
For the period from April 1,
2011 to January 31, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to January 31.
|
(c)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(e)
|
Ratios include line of credit
interest expense which is less than 0.01%.
|
(f)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(g)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Aggressive Portfolio, continued)
|
Year
Ended January 31,
|
Class
K
|
2015
|
2014
(a)
|
Per
share data
|
|
|
Net
asset value, beginning of period
|
$12.98
|
$12.07
|
Income
from investment operations:
|
|
|
Net
investment income
|
0.18
|
0.18
|
Net
realized and unrealized gain
|
0.75
|
1.17
|
Total
from investment operations
|
0.93
|
1.35
|
Less
distributions to shareholders:
|
|
|
Net
investment income
|
(0.26)
|
(0.27)
|
Net
realized gains
|
(1.23)
|
(0.17)
|
Total
distributions to shareholders
|
(1.49)
|
(0.44)
|
Net
asset value, end of period
|
$12.42
|
$12.98
|
Total
return
|
7.17%
|
11.31%
|
Ratios
to average net assets
(b)
|
|
|
Total
gross expenses
|
0.41%
|
0.38%
(c)
|
Total
net expenses
(d)
|
0.41%
|
0.38%
(c)
|
Net
investment income
|
1.34%
|
1.57%
(c)
|
Supplemental
data
|
|
|
Net
assets, end of period (in thousands)
|
$98
|
$105
|
Portfolio
turnover
|
20%
|
22%
|
Notes to Financial Highlights
(a)
|
Based on operations from
February 28, 2013 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Aggressive Portfolio, continued)
|
Year
Ended January 31,
|
|
Year
Ended March 31,
|
Class
R
|
2015
|
2014
|
2013
|
2012
(a)
|
|
2011
|
2010
|
Per
share data
|
|
|
|
|
|
|
|
Net
asset value, beginning of period
|
$12.99
|
$12.03
|
$11.29
|
$11.60
|
|
$10.22
|
$7.33
|
Income
from investment operations:
|
|
|
|
|
|
|
|
Net
investment income
|
0.13
|
0.13
|
0.15
|
0.13
|
|
0.16
|
0.20
|
Net
realized and unrealized gain (loss)
|
0.76
|
1.22
|
1.07
|
(0.30)
|
|
1.38
|
2.89
|
Total
from investment operations
|
0.89
|
1.35
|
1.22
|
(0.17)
|
|
1.54
|
3.09
|
Less
distributions to shareholders:
|
|
|
|
|
|
|
|
Net
investment income
|
(0.21)
|
(0.22)
|
(0.19)
|
(0.12)
|
|
(0.16)
|
(0.20)
|
Net
realized gains
|
(1.23)
|
(0.17)
|
(0.29)
|
(0.02)
|
|
—
|
—
|
Total
distributions to shareholders
|
(1.44)
|
(0.39)
|
(0.48)
|
(0.14)
|
|
(0.16)
|
(0.20)
|
Proceeds
from regulatory settlements
|
—
|
—
|
—
|
0.00
(b)
|
|
—
|
—
|
Net
asset value, end of period
|
$12.44
|
$12.99
|
$12.03
|
$11.29
|
|
$11.60
|
$10.22
|
Total
return
|
6.86%
|
11.31%
|
11.01%
|
(1.39%)
|
|
15.21%
|
42.46%
|
Ratios
to average net assets
(c)
|
|
|
|
|
|
|
|
Total
gross expenses
|
0.77%
|
0.75%
|
0.78%
|
0.77%
(d)(e)
|
|
0.75%
(e)
|
0.75%
|
Total
net expenses
(f)
|
0.77%
(g)
|
0.75%
(g)
|
0.78%
(g)
|
0.77%
(d)(e)(g)
|
|
0.75%
(e)
|
0.75%
|
Net
investment income
|
1.01%
|
1.02%
|
1.26%
|
1.40%
(d)
|
|
1.54%
|
2.16%
|
Supplemental
data
|
|
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$4,270
|
$4,347
|
$4,664
|
$3,908
|
|
$1,517
|
$1,740
|
Portfolio
turnover
|
20%
|
22%
|
34%
|
42%
|
|
68%
|
27%
|
Notes to Financial Highlights
(a)
|
For the period from April 1,
2011 to January 31, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to January 31.
|
(c)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(e)
|
Ratios include line of credit
interest expense which is less than 0.01%.
|
(f)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(g)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Aggressive Portfolio, continued)
|
Year
Ended January 31,
|
Class
R4
|
2015
|
2014
|
2013
(a)
|
Per
share data
|
|
|
|
Net
asset value, beginning of period
|
$13.08
|
$12.11
|
$11.71
|
Income
from investment operations:
|
|
|
|
Net
investment income
|
0.53
|
0.18
|
0.11
|
Net
realized and unrealized gain
|
0.44
|
1.25
|
0.65
|
Total
from investment operations
|
0.97
|
1.43
|
0.76
|
Less
distributions to shareholders:
|
|
|
|
Net
investment income
|
(0.28)
|
(0.29)
|
(0.14)
|
Net
realized gains
|
(1.23)
|
(0.17)
|
(0.22)
|
Total
distributions to shareholders
|
(1.51)
|
(0.46)
|
(0.36)
|
Net
asset value, end of period
|
$12.54
|
$13.08
|
$12.11
|
Total
return
|
7.41%
|
11.95%
|
6.60%
|
Ratios
to average net assets
(b)
|
|
|
|
Total
gross expenses
|
0.29%
|
0.22%
|
0.24%
(c)
|
Total
net expenses
(d)
|
0.29%
(e)
|
0.22%
(e)
|
0.24%
(c)
|
Net
investment income
|
4.16%
|
1.39%
|
3.98%
(c)
|
Supplemental
data
|
|
|
|
Net
assets, end of period (in thousands)
|
$1,054
|
$7
|
$3
|
Portfolio
turnover
|
20%
|
22%
|
34%
|
Notes to Financial Highlights
(a)
|
Based on operations from
November 8, 2012 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(e)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Aggressive Portfolio, continued)
|
Year
Ended January 31,
|
Class
R5
|
2015
|
2014
|
2013
(a)
|
Per
share data
|
|
|
|
Net
asset value, beginning of period
|
$13.08
|
$12.11
|
$11.71
|
Income
from investment operations:
|
|
|
|
Net
investment income
|
0.21
|
0.33
|
0.11
|
Net
realized and unrealized gain
|
0.77
|
1.12
|
0.66
|
Total
from investment operations
|
0.98
|
1.45
|
0.77
|
Less
distributions to shareholders:
|
|
|
|
Net
investment income
|
(0.30)
|
(0.31)
|
(0.15)
|
Net
realized gains
|
(1.23)
|
(0.17)
|
(0.22)
|
Total
distributions to shareholders
|
(1.53)
|
(0.48)
|
(0.37)
|
Net
asset value, end of period
|
$12.53
|
$13.08
|
$12.11
|
Total
return
|
7.46%
|
12.07%
|
6.64%
|
Ratios
to average net assets
(b)
|
|
|
|
Total
gross expenses
|
0.16%
|
0.18%
|
0.12%
(c)
|
Total
net expenses
(d)
|
0.16%
|
0.18%
|
0.12%
(c)
|
Net
investment income
|
1.62%
|
2.56%
|
4.10%
(c)
|
Supplemental
data
|
|
|
|
Net
assets, end of period (in thousands)
|
$648
|
$577
|
$3
|
Portfolio
turnover
|
20%
|
22%
|
34%
|
Notes to Financial Highlights
(a)
|
Based on operations from
November 8, 2012 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Aggressive Portfolio, continued)
|
Year
Ended January 31,
|
Year
Ended March 31,
|
Class
T
|
2015
|
2014
|
2013
|
2012
(a)
|
2011
(b)
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$13.00
|
$12.04
|
$11.30
|
$11.61
|
$11.49
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.16
|
0.16
|
0.17
|
0.15
|
0.02
|
Net
realized and unrealized gain (loss)
|
0.76
|
1.22
|
1.07
|
(0.30)
|
0.13
|
Total
from investment operations
|
0.92
|
1.38
|
1.24
|
(0.15)
|
0.15
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.24)
|
(0.25)
|
(0.21)
|
(0.14)
|
(0.03)
|
Net
realized gains
|
(1.23)
|
(0.17)
|
(0.29)
|
(0.02)
|
—
|
Total
distributions to shareholders
|
(1.47)
|
(0.42)
|
(0.50)
|
(0.16)
|
(0.03)
|
Proceeds
from regulatory settlements
|
—
|
—
|
—
|
0.00
(c)
|
—
|
Net
asset value, end of period
|
$12.45
|
$13.00
|
$12.04
|
$11.30
|
$11.61
|
Total
return
|
7.07%
|
11.52%
|
11.23%
|
(1.23%)
|
1.28%
|
Ratios
to average net assets
(d)
|
|
|
|
|
|
Total
gross expenses
|
0.56%
|
0.55%
|
0.58%
|
0.56%
(e)(f)
|
0.55%
(e)
|
Total
net expenses
(g)
|
0.54%
(h)
|
0.55%
(h)
|
0.58%
(h)
|
0.56%
(e)(f)(h)
|
0.55%
(e)
|
Net
investment income
|
1.20%
|
1.24%
|
1.46%
|
1.58%
(e)
|
2.26%
(e)
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$97,408
|
$101,766
|
$100,955
|
$102,913
|
$3
|
Portfolio
turnover
|
20%
|
22%
|
34%
|
42%
|
68%
|
Notes to Financial Highlights
(a)
|
For the period from April 1,
2011 to January 31, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to January 31.
|
(b)
|
Based on operations from
March 7, 2011 (commencement of operations) through the stated period end.
|
(d)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(f)
|
Ratios include line of credit
interest expense which is less than 0.01%.
|
(g)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(h)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Aggressive Portfolio, continued)
|
Year
Ended January 31,
|
Class
Y
|
2015
|
2014
(a)
|
Per
share data
|
|
|
Net
asset value, beginning of period
|
$12.87
|
$12.35
|
Income
from investment operations:
|
|
|
Net
investment income
|
0.21
|
0.18
|
Net
realized and unrealized gain
|
0.76
|
0.78
|
Total
from investment operations
|
0.97
|
0.96
|
Less
distributions to shareholders:
|
|
|
Net
investment income
|
(0.30)
|
(0.27)
|
Net
realized gains
|
(1.23)
|
(0.17)
|
Total
distributions to shareholders
|
(1.53)
|
(0.44)
|
Net
asset value, end of period
|
$12.31
|
$12.87
|
Total
return
|
7.58%
|
7.88%
|
Ratios
to average net assets
(b)
|
|
|
Total
gross expenses
|
0.09%
|
0.07%
(c)
|
Total
net expenses
(d)
|
0.09%
|
0.07%
(c)
|
Net
investment income
|
1.64%
|
2.22%
(c)
|
Supplemental
data
|
|
|
Net
assets, end of period (in thousands)
|
$2
|
$3
|
Portfolio
turnover
|
20%
|
22%
|
Notes to Financial Highlights
(a)
|
Based on operations from June
13, 2013 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Moderate Aggressive Portfolio, continued)
|
Year
Ended January 31,
|
|
Year
Ended March 31,
|
Class
Z
|
2015
|
2014
|
2013
|
2012
(a)
|
|
2011
|
2010
|
Per
share data
|
|
|
|
|
|
|
|
Net
asset value, beginning of period
|
$12.99
|
$12.03
|
$11.29
|
$11.60
|
|
$10.21
|
$7.33
|
Income
from investment operations:
|
|
|
|
|
|
|
|
Net
investment income
|
0.19
|
0.19
|
0.20
|
0.17
|
|
0.21
|
0.25
|
Net
realized and unrealized gain (loss)
|
0.77
|
1.23
|
1.08
|
(0.30)
|
|
1.39
|
2.88
|
Total
from investment operations
|
0.96
|
1.42
|
1.28
|
(0.13)
|
|
1.60
|
3.13
|
Less
distributions to shareholders:
|
|
|
|
|
|
|
|
Net
investment income
|
(0.28)
|
(0.29)
|
(0.25)
|
(0.16)
|
|
(0.21)
|
(0.25)
|
Net
realized gains
|
(1.23)
|
(0.17)
|
(0.29)
|
(0.02)
|
|
—
|
—
|
Total
distributions to shareholders
|
(1.51)
|
(0.46)
|
(0.54)
|
(0.18)
|
|
(0.21)
|
(0.25)
|
Proceeds
from regulatory settlements
|
—
|
—
|
—
|
0.00
(b)
|
|
—
|
—
|
Net
asset value, end of period
|
$12.44
|
$12.99
|
$12.03
|
$11.29
|
|
$11.60
|
$10.21
|
Total
return
|
7.40%
|
11.87%
|
11.57%
|
(1.00%)
|
|
15.89%
|
43.01%
|
Ratios
to average net assets
(c)
|
|
|
|
|
|
|
|
Total
gross expenses
|
0.27%
|
0.25%
|
0.28%
|
0.26%
(d)(e)
|
|
0.25%
(e)
|
0.25%
|
Total
net expenses
(f)
|
0.27%
(g)
|
0.25%
(g)
|
0.28%
(g)
|
0.26%
(d)(e)(g)
|
|
0.25%
(e)
|
0.25%
|
Net
investment income
|
1.47%
|
1.49%
|
1.72%
|
1.86%
(d)
|
|
2.03%
|
2.69%
|
Supplemental
data
|
|
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$128,314
|
$128,234
|
$147,433
|
$146,805
|
|
$56,805
|
$64,967
|
Portfolio
turnover
|
20%
|
22%
|
34%
|
42%
|
|
68%
|
27%
|
Notes to Financial Highlights
(a)
|
For the period from April 1,
2011 to January 31, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to January 31.
|
(c)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(e)
|
Ratios include line of credit
interest expense which is less than 0.01%.
|
(f)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(g)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(continued)
Columbia Capital Allocation Aggressive Portfolio
The financial highlights tables are intended
to help you understand each Fund’s financial performance for the past five fiscal years or, if shorter, the Fund’s period of operations. Certain information reflects financial results for a single Fund share. Per share net investment
income (loss) amounts are calculated based on average shares outstanding during the period. The total returns in the tables represent the rate that an investor would have earned (or lost) on an investment in each Fund assuming all dividends and
distributions had been reinvested.
Total return does not
reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments
and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher. The information for the three most recent fiscal years has been audited by PricewaterhouseCoopers LLP, an independent
registered public accounting firm, whose report, along with the Fund’s financial statements, is included in the annual report, which is available upon request. The information for the prior fiscal years has been derived from the financial
statements audited by the Fund’s former independent registered public accounting firm.
|
Year
Ended January 31,
|
Class
A
|
2015
|
2014
|
2013
|
2012
|
2011
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$12.82
|
$11.41
|
$10.19
|
$10.28
|
$8.62
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.12
|
0.12
|
0.13
|
0.12
|
0.14
|
Net
realized and unrealized gain (loss)
|
0.86
|
1.53
|
1.25
|
(0.07)
|
1.69
|
Total
from investment operations
|
0.98
|
1.65
|
1.38
|
0.05
|
1.83
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.30)
|
(0.24)
|
(0.16)
|
(0.14)
|
(0.17)
|
Net
realized gains
|
(0.96)
|
—
|
—
|
—
|
—
|
Total
distributions to shareholders
|
(1.26)
|
(0.24)
|
(0.16)
|
(0.14)
|
(0.17)
|
Net
asset value, end of period
|
$12.54
|
$12.82
|
$11.41
|
$10.19
|
$10.28
|
Total
return
|
7.50%
|
14.41%
|
13.63%
|
0.60%
|
21.22%
|
Ratios
to average net assets
(a)
|
|
|
|
|
|
Total
gross expenses
|
0.54%
|
0.52%
|
0.52%
|
0.49%
|
0.50%
|
Total
net expenses
(b)
|
0.54%
(c)
|
0.52%
(c)
|
0.51%
(c)
|
0.49%
(c)
|
0.50%
|
Net
investment income
|
0.92%
|
0.98%
|
1.25%
|
1.18%
|
1.48%
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$577,868
|
$554,189
|
$495,722
|
$472,855
|
$489,241
|
Portfolio
turnover
|
27%
|
29%
|
21%
|
83%
|
10%
|
Notes to Financial Highlights
(a)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(b)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(c)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Aggressive Portfolio, continued)
|
Year
Ended January 31,
|
Class
B
|
2015
|
2014
|
2013
|
2012
|
2011
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$12.81
|
$11.41
|
$10.17
|
$10.24
|
$8.57
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.01
|
0.02
|
0.04
|
0.04
|
0.06
|
Net
realized and unrealized gain (loss)
|
0.87
|
1.53
|
1.26
|
(0.07)
|
1.69
|
Total
from investment operations
|
0.88
|
1.55
|
1.30
|
(0.03)
|
1.75
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.20)
|
(0.15)
|
(0.06)
|
(0.04)
|
(0.08)
|
Net
realized gains
|
(0.96)
|
—
|
—
|
—
|
—
|
Total
distributions to shareholders
|
(1.16)
|
(0.15)
|
(0.06)
|
(0.04)
|
(0.08)
|
Net
asset value, end of period
|
$12.53
|
$12.81
|
$11.41
|
$10.17
|
$10.24
|
Total
return
|
6.72%
|
13.54%
|
12.80%
|
(0.22%)
|
20.46%
|
Ratios
to average net assets
(a)
|
|
|
|
|
|
Total
gross expenses
|
1.28%
|
1.27%
|
1.26%
|
1.24%
|
1.26%
|
Total
net expenses
(b)
|
1.28%
(c)
|
1.27%
(c)
|
1.26%
(c)
|
1.24%
(c)
|
1.26%
|
Net
investment income
|
0.04%
|
0.14%
|
0.41%
|
0.38%
|
0.62%
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$22,043
|
$31,473
|
$39,020
|
$49,003
|
$66,323
|
Portfolio
turnover
|
27%
|
29%
|
21%
|
83%
|
10%
|
Notes to Financial Highlights
(a)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(b)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(c)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Aggressive Portfolio, continued)
|
Year
Ended January 31,
|
Class
C
|
2015
|
2014
|
2013
|
2012
|
2011
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$12.62
|
$11.24
|
$10.04
|
$10.14
|
$8.50
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.03
|
0.03
|
0.05
|
0.04
|
0.07
|
Net
realized and unrealized gain (loss)
|
0.83
|
1.50
|
1.24
|
(0.07)
|
1.67
|
Total
from investment operations
|
0.86
|
1.53
|
1.29
|
(0.03)
|
1.74
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.20)
|
(0.15)
|
(0.09)
|
(0.07)
|
(0.10)
|
Net
realized gains
|
(0.96)
|
—
|
—
|
—
|
—
|
Total
distributions to shareholders
|
(1.16)
|
(0.15)
|
(0.09)
|
(0.07)
|
(0.10)
|
Net
asset value, end of period
|
$12.32
|
$12.62
|
$11.24
|
$10.04
|
$10.14
|
Total
return
|
6.66%
|
13.56%
|
12.86%
|
(0.23%)
|
20.45%
|
Ratios
to average net assets
(a)
|
|
|
|
|
|
Total
gross expenses
|
1.29%
|
1.27%
|
1.27%
|
1.24%
|
1.25%
|
Total
net expenses
(b)
|
1.29%
(c)
|
1.27%
(c)
|
1.26%
(c)
|
1.24%
(c)
|
1.25%
|
Net
investment income
|
0.22%
|
0.27%
|
0.52%
|
0.44%
|
0.72%
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$62,488
|
$50,676
|
$38,461
|
$33,266
|
$31,772
|
Portfolio
turnover
|
27%
|
29%
|
21%
|
83%
|
10%
|
Notes to Financial Highlights
(a)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(b)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(c)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Aggressive Portfolio, continued)
|
Year
Ended January 31,
|
Class
K
|
2015
|
2014
|
2013
|
2012
|
2011
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$12.84
|
$11.43
|
$10.20
|
$10.30
|
$8.63
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.10
|
0.14
|
0.15
|
0.13
|
0.15
|
Net
realized and unrealized gain (loss)
|
0.89
|
1.52
|
1.25
|
(0.07)
|
1.70
|
Total
from investment operations
|
0.99
|
1.66
|
1.40
|
0.06
|
1.85
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.31)
|
(0.25)
|
(0.17)
|
(0.16)
|
(0.18)
|
Net
realized gains
|
(0.96)
|
—
|
—
|
—
|
—
|
Total
distributions to shareholders
|
(1.27)
|
(0.25)
|
(0.17)
|
(0.16)
|
(0.18)
|
Net
asset value, end of period
|
$12.56
|
$12.84
|
$11.43
|
$10.20
|
$10.30
|
Total
return
|
7.60%
|
14.52%
|
13.84%
|
0.64%
|
21.46%
|
Ratios
to average net assets
(a)
|
|
|
|
|
|
Total
gross expenses
|
0.43%
|
0.40%
|
0.37%
|
0.35%
|
0.38%
|
Total
net expenses
(b)
|
0.43%
|
0.40%
|
0.37%
|
0.35%
|
0.38%
|
Net
investment income
|
0.72%
|
1.13%
|
1.37%
|
1.30%
|
1.62%
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$68
|
$152
|
$126
|
$451
|
$461
|
Portfolio
turnover
|
27%
|
29%
|
21%
|
83%
|
10%
|
Notes to Financial Highlights
(a)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(b)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Aggressive Portfolio, continued)
|
Year
Ended January 31,
|
Class
R
|
2015
|
2014
|
2013
|
2012
|
2011
(a)
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$12.75
|
$11.35
|
$10.16
|
$10.25
|
$9.42
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.10
|
0.14
|
0.11
|
0.10
|
0.10
|
Net
realized and unrealized gain (loss)
|
0.83
|
1.47
|
1.24
|
(0.07)
|
0.92
|
Total
from investment operations
|
0.93
|
1.61
|
1.35
|
0.03
|
1.02
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.26)
|
(0.21)
|
(0.16)
|
(0.12)
|
(0.19)
|
Net
realized gains
|
(0.96)
|
—
|
—
|
—
|
—
|
Total
distributions to shareholders
|
(1.22)
|
(0.21)
|
(0.16)
|
(0.12)
|
(0.19)
|
Net
asset value, end of period
|
$12.46
|
$12.75
|
$11.35
|
$10.16
|
$10.25
|
Total
return
|
7.19%
|
14.13%
|
13.38%
|
0.33%
|
10.87%
|
Ratios
to average net assets
(b)
|
|
|
|
|
|
Total
gross expenses
|
0.79%
|
0.78%
|
0.79%
|
0.70%
|
0.71%
(c)
|
Total
net expenses
(d)
|
0.79%
(e)
|
0.78%
(e)
|
0.76%
(e)
|
0.70%
|
0.71%
(c)
|
Net
investment income
|
0.72%
|
1.12%
|
1.03%
|
0.98%
|
2.91%
(c)
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$912
|
$644
|
$182
|
$3
|
$3
|
Portfolio
turnover
|
27%
|
29%
|
21%
|
83%
|
10%
|
Notes to Financial Highlights
(a)
|
Based on operations from
September 27, 2010 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(e)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Aggressive Portfolio, continued)
|
Year
Ended January 31,
|
Class
R4
|
2015
|
2014
(a)
|
Per
share data
|
|
|
Net
asset value, beginning of period
|
$12.63
|
$11.82
|
Income
from investment operations:
|
|
|
Net
investment income
|
0.54
|
0.20
|
Net
realized and unrealized gain
|
0.46
|
0.88
|
Total
from investment operations
|
1.00
|
1.08
|
Less
distributions to shareholders:
|
|
|
Net
investment income
|
(0.33)
|
(0.27)
|
Net
realized gains
|
(0.96)
|
—
|
Total
distributions to shareholders
|
(1.29)
|
(0.27)
|
Net
asset value, end of period
|
$12.34
|
$12.63
|
Total
return
|
7.78%
|
9.08%
|
Ratios
to average net assets
(b)
|
|
|
Total
gross expenses
|
0.28%
|
0.29%
(c)
|
Total
net expenses
(d)
|
0.28%
(e)
|
0.29%
(c)(e)
|
Net
investment income
|
4.28%
|
2.54%
(c)
|
Supplemental
data
|
|
|
Net
assets, end of period (in thousands)
|
$497
|
$26
|
Portfolio
turnover
|
27%
|
29%
|
Notes to Financial Highlights
(a)
|
Based on operations from June
13, 2013 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(e)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Aggressive Portfolio, continued)
|
Year
Ended January 31,
|
Class
R5
|
2015
|
2014
(a)
|
Per
share data
|
|
|
Net
asset value, beginning of period
|
$12.63
|
$11.82
|
Income
from investment operations:
|
|
|
Net
investment income
|
0.16
|
0.04
|
Net
realized and unrealized gain
|
0.85
|
1.06
|
Total
from investment operations
|
1.01
|
1.10
|
Less
distributions to shareholders:
|
|
|
Net
investment income
|
(0.35)
|
(0.29)
|
Net
realized gains
|
(0.96)
|
—
|
Total
distributions to shareholders
|
(1.31)
|
(0.29)
|
Net
asset value, end of period
|
$12.33
|
$12.63
|
Total
return
|
7.83%
|
9.27%
|
Ratios
to average net assets
(b)
|
|
|
Total
gross expenses
|
0.18%
|
0.19%
(c)
|
Total
net expenses
(d)
|
0.18%
|
0.19%
(c)
|
Net
investment income
|
1.22%
|
0.47%
(c)
|
Supplemental
data
|
|
|
Net
assets, end of period (in thousands)
|
$381
|
$385
|
Portfolio
turnover
|
27%
|
29%
|
Notes to Financial Highlights
(a)
|
Based on operations from June
13, 2013 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Aggressive Portfolio, continued)
|
Year
Ended January 31,
|
Class
Y
|
2015
|
2014
(a)
|
Per
share data
|
|
|
Net
asset value, beginning of period
|
$12.62
|
$11.82
|
Income
from investment operations:
|
|
|
Net
investment income
|
0.17
|
0.15
|
Net
realized and unrealized gain
|
0.84
|
0.95
|
Total
from investment operations
|
1.01
|
1.10
|
Less
distributions to shareholders:
|
|
|
Net
investment income
|
(0.35)
|
(0.30)
|
Net
realized gains
|
(0.96)
|
—
|
Total
distributions to shareholders
|
(1.31)
|
(0.30)
|
Net
asset value, end of period
|
$12.32
|
$12.62
|
Total
return
|
7.88%
|
9.23%
|
Ratios
to average net assets
(b)
|
|
|
Total
gross expenses
|
0.14%
|
0.06%
(c)
|
Total
net expenses
(d)
|
0.14%
|
0.06%
(c)
|
Net
investment income
|
1.30%
|
1.95%
(c)
|
Supplemental
data
|
|
|
Net
assets, end of period (in thousands)
|
$2
|
$3
|
Portfolio
turnover
|
27%
|
29%
|
Notes to Financial Highlights
(a)
|
Based on operations from June
13, 2013 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
Columbia Capital Allocation Portfolios
Financial Highlights
(Columbia Capital Allocation Aggressive Portfolio, continued)
|
Year
Ended January 31,
|
Class
Z
|
2015
|
2014
|
2013
|
2012
|
2011
(a)
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$12.78
|
$11.36
|
$10.16
|
$10.26
|
$9.42
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.17
|
0.19
|
0.21
|
0.14
|
0.12
|
Net
realized and unrealized gain (loss)
|
0.83
|
1.50
|
1.19
|
(0.07)
|
0.92
|
Total
from investment operations
|
1.00
|
1.69
|
1.40
|
0.07
|
1.04
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.33)
|
(0.27)
|
(0.20)
|
(0.17)
|
(0.20)
|
Net
realized gains
|
(0.96)
|
—
|
—
|
—
|
—
|
Total
distributions to shareholders
|
(1.29)
|
(0.27)
|
(0.20)
|
(0.17)
|
(0.20)
|
Net
asset value, end of period
|
$12.49
|
$12.78
|
$11.36
|
$10.16
|
$10.26
|
Total
return
|
7.70%
|
14.82%
|
13.87%
|
0.83%
|
11.11%
|
Ratios
to average net assets
(b)
|
|
|
|
|
|
Total
gross expenses
|
0.29%
|
0.28%
|
0.28%
|
0.24%
|
0.18%
(c)
|
Total
net expenses
(d)
|
0.29%
(e)
|
0.28%
(e)
|
0.26%
(e)
|
0.24%
(e)
|
0.18%
(c)
|
Net
investment income
|
1.30%
|
1.51%
|
2.00%
|
1.40%
|
3.44%
(c)
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$1,433
|
$951
|
$413
|
$168
|
$3
|
Portfolio
turnover
|
27%
|
29%
|
21%
|
83%
|
10%
|
Notes to Financial Highlights
(a)
|
Based on operations from
September 27, 2010 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(e)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Capital Allocation
Portfolios
Underlying
Funds — Investment Objectives and Strategies
The
following is a brief description of the investment objectives and principal investment strategies of certain of the Underlying Funds (which are referred to as Funds in the descriptions below). The Investment Manager does not necessarily invest Fund
assets in each of the Underlying Funds listed below. The Investment Manager may add new Underlying Funds for investment or change Underlying Funds at any time. In addition, the principal investment strategies of a Fund may change from time to time.
Additional information regarding the Underlying Funds is available in their prospectus and SAI. This prospectus is not an offer for any of the Underlying Funds. For copies of prospectuses of the Underlying Funds, which contains this and other
information, call 800.345.6611 or visit columbiathreadneedle.com/us. Read the prospectus carefully before you invest.
CMG Ultra Short Term Bond Fund
CMG Ultra Short Term Bond Fund (the Fund) seeks a high level
of current income consistent with the maintenance of liquidity and the preservation of capital.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in a diversified portfolio of domestic debt securities of investment grade quality. Debt securities may be issued by governments, companies or special purpose entities
and may include notes, bonds, debentures and commercial paper. Debt securities may also include bank loans, as well as assignments, participations and other interests in bank loans.
The Fund may invest in mortgage- and other asset-backed
securities.
The Fund may purchase or sell securities on
a when-issued, delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction. The Fund may invest in
floating rate debt securities, which have interest rates that adjust or “float” periodically.
The Fund may invest up to 20% of total assets in
dollar-denominated foreign debt securities.
Under normal
circumstances, the Fund’s dollar weighted average effective maturity will be two years or less, and its duration will be one year or less.
Columbia Absolute Return Currency and Income Fund
Columbia Absolute Return Currency and Income Fund (the Fund)
seeks to provide shareholders with positive absolute return.
Under normal market conditions, the Fund invests at least 80%
of its net assets (including the amount of any borrowings for investment purposes) in short-duration debt obligations (or securities that invest in such debt obligations, including an affiliated money market fund) and forward foreign currency
contracts. In pursuit of the Fund’s objective, to provide absolute return, the Fund’s investment manager seeks to generate positive total returns from the income produced by the short-term debt obligations, plus (minus) the gain (loss)
resulting from fluctuations in the values of various foreign currencies relative to the U.S. dollar.
The Fund’s investment in short-duration debt obligations
consists primarily of (i) shares of an affiliated money market fund, and (ii) U.S. dollar denominated non-government, corporate and structured debt securities rated investment grade, or, if unrated, determined to be of comparable quality. A small
portion of the Fund’s portfolio may consist of U.S. government securities. In addition to producing income, these holdings are designated as collateral by the Fund, as necessary, to cover on a net basis obligations with respect to, or that may
result from, the Fund’s investments in forward currency contracts. The Fund targets portfolio duration of up to six months but may extend the portfolio duration up to one year. The Fund gains economic exposure to foreign currencies through its
investment in forward foreign currency contracts comparable to the exposure that it would have had if it had bought or sold the foreign currencies directly. It is expected that the gross notional value of the Fund’s forward foreign currency
contracts will be equivalent to at least 80% of the Fund’s net assets. The Fund expects to utilize leverage, created through investments in cash-settled forwards, as part of its investment strategies. Leverage has the effect of increasing the
Fund’s volatility.
Columbia Capital Allocation
Portfolios
Columbia Management Investment Advisers, LLC
(the Investment Manager) uses a quantitative, proprietary model that applies various fundamental and technical factors, including based on current and historical data, to rank the anticipated value of several developed countries’ currencies
relative to the U.S. dollar, subject to other considerations (including other fundamental, technical, and macroeconomic factors) in the Investment Manager’s discretion that may affect these rankings. The Investment Manager typically enters
into long forward foreign currency contracts for currencies that rank higher in the model, and the Fund will experience profits (losses) to the extent the value of the currency appreciates (depreciates) relative to the U.S. dollar. Conversely, the
Investment Manager typically enters into short forward foreign currency contracts for currencies that rank lower in the model, and the Fund will experience profits (losses) to the extent the value of the currency depreciates (appreciates) relative
to the U.S. dollar.
Columbia Acorn Emerging Markets Fund
SM
Columbia Acorn Emerging Markets Fund
SM
(the Fund) seeks long-term capital appreciation.
Under normal circumstances, the Fund invests at least 80% of
its net assets (plus any borrowing for investment purposes) in companies located in emerging market countries, including frontier market countries. Emerging market countries are those countries whose economies are developing or emerging from
underdevelopment (for example, China, India, Poland and Turkey). Frontier market countries generally have smaller economies and even less developed capital markets than traditional emerging market countries (for example, Vietnam, Colombia, Nigeria
and Kazakhstan). For purposes of the Fund’s policies, the Fund may invest in a company if (i) it is domiciled in, or the principal trading market for its securities is in, an emerging market country, (ii) it derives 50% or more of its economic
value from goods produced, sales made or services performed or has at least 50% of its assets in an emerging market country or countries or (iii) it is a holding company that predominantly holds shares in such companies. The Fund may invest in a
variety of countries, industries and sectors and does not attempt to invest a specific percentage of its assets in any given country, industry or sector.
Under normal circumstances, the Fund invests a majority of its
net assets in the common stock of small- and mid-sized companies with market capitalizations under $5 billion at the time of initial investment. However, if the Fund’s investments in such companies represent less than a majority of its net
assets, the Fund may continue to hold and to make additional investments in an existing company in its portfolio even if that company’s capitalization has grown to exceed $5 billion. Under normal circumstances, the Fund may invest in companies
with market capitalizations above $5 billion at the time of initial investment, provided that immediately after that investment a majority of its net assets would be invested in companies whose market capitalizations were under $5 billion at the
time of initial investment.
Columbia Wanger Asset
Management, LLC, the Fund’s investment adviser (the Investment Manager), believes that stocks of companies with market capitalizations under $5 billion, which generally are not as well known by financial analysts as larger companies, may offer
higher return potential than stocks of larger companies.
The Fund takes advantage of the Investment Manager’s
research and stock-picking capabilities to initially invest in a limited number of companies (generally under 100), offering the potential to provide above-average growth over time.
Columbia Acorn European Fund
SM
Columbia Acorn European Fund
SM
(the Fund) seeks long-term capital appreciation.
Under normal circumstances, the Fund invests at least 80% of
its net assets (plus any borrowing for investment purposes) in European companies. Under normal circumstances, the Fund invests at least 70% of its total assets in companies in Western European countries (for example, the United Kingdom, Germany,
France and Italy), but also may invest up to 30% of its total assets in companies in emerging Central and Eastern European countries (for example, Poland, the Czech Republic, Turkey and Cyprus), including up to 10% of its total assets in companies
in Russia and the Ukraine. For purposes of the Fund’s policies, the Fund may invest in a company if (i) it is domiciled in, or the principal trading market for its securities is in, a European country, (ii) it derives 50% or more of its
economic value from goods produced, sales made or services performed or has at least 50% of its assets in a European country or countries or (iii) it is a holding company that predominantly holds shares in such companies.
Columbia Capital Allocation
Portfolios
The Fund may invest in a variety of
countries, industries and sectors and does not attempt to invest a specific percentage of its assets in any given country, industry or sector.
Under normal circumstances, the Fund invests a majority of its
net assets in the common stock of small- and mid-sized companies with market capitalizations under $5 billion at the time of initial investment. However, if the Fund’s investments in such companies represent less than a majority of its net
assets, the Fund may continue to hold and to make additional investments in an existing company in its portfolio even if that company’s capitalization has grown to exceed $5 billion. Under normal circumstances, the Fund may invest in companies
with market capitalizations above $5 billion at the time of initial investment, provided that immediately after that investment a majority of its net assets would be invested in companies whose market capitalizations were under $5 billion at the
time of initial investment.
Columbia Wanger Asset
Management, LLC, the Fund’s investment adviser (the Investment Manager), believes that stocks of companies with market capitalizations under $5 billion, which generally are not as well known by financial analysts as larger companies, may offer
higher return potential than stocks of larger companies.
The Fund takes advantage of the Investment Manager’s
research and stock-picking capabilities to initially invest in a limited number of companies (generally under 100), offering the potential to provide above-average growth over time.
Columbia Acorn
®
Fund
Columbia Acorn
®
Fund (the Fund) seeks long-term capital appreciation.
Under normal circumstances, the Fund invests a majority of its
net assets in the common stock of small- and mid-sized companies with market capitalizations under $5 billion at the time of initial investment. However, if the Fund’s investments in such companies represent less than a majority of its net
assets, the Fund may continue to hold and to make additional investments in an existing company in its portfolio even if that company’s capitalization has grown to exceed $5 billion. Under normal circumstances, the Fund may invest in companies
with market capitalizations above $5 billion at the time of initial investment, provided that immediately after that investment a majority of its net assets would be invested in companies whose market capitalizations were under $5 billion at the
time of initial investment.
Columbia Wanger Asset
Management, LLC, the Fund’s investment adviser (the Investment Manager), believes that stocks of companies with market capitalizations under $5 billion, which generally are not as well known by financial analysts as larger companies, may offer
higher return potential than stocks of larger companies.
The Fund invests the majority of its assets in U.S. companies,
but also may invest up to 33% of its total assets in foreign companies in developed markets (for example, Japan, Canada and the United Kingdom) and in emerging markets (for example, China, India and Brazil).
Columbia Acorn International
®
Columbia Acorn International
®
(the Fund) seeks long-term capital appreciation.
Under normal circumstances, the Fund invests at least 75% of
its net assets in foreign companies in developed markets (for example, Japan, Canada and the United Kingdom) and in emerging markets (for example, China, India and Brazil).
Under normal circumstances, the Fund invests a majority of its
net assets in the common stock of small- and mid-sized companies with market capitalizations under $5 billion at the time of initial investment. However, if the Fund’s investments in such companies represent less than a majority of its net
assets, the Fund may continue to hold and to make additional investments in an existing company in its portfolio even if that company’s capitalization has grown to exceed $5 billion. Under normal circumstances, the Fund may invest in companies
with market capitalizations above $5 billion at the time of initial investment, provided that immediately after that investment a majority of its net assets would be invested in companies whose market capitalizations were under $5 billion at the
time of initial investment.
Columbia Wanger Asset
Management, LLC, the Fund’s investment adviser (the Investment Manager), believes that stocks of companies with market capitalizations under $5 billion, which generally are not as well known by financial analysts as larger companies, may offer
higher return potential than stocks of larger companies.
Columbia Capital Allocation
Portfolios
Columbia Acorn International Select
SM
Columbia Acorn International Select
SM
(the Fund) seeks long-term capital appreciation.
Under normal circumstances, the Fund invests at least 65% of
its net assets in foreign companies in developed markets (for example, Japan, Canada and the United Kingdom).
The Fund also may invest up to 35% of its total assets in
companies in emerging markets (for example, China, India and Brazil).
The Fund generally invests in at least three countries other
than the United States but may invest up to 25% of its total assets in securities of U.S. issuers.
Under normal circumstances, the Fund invests a majority of its
net assets in the common stock of small- and mid-sized companies with market capitalizations under $25 billion at the time of initial investment. However, if the Fund’s investments in such companies represent less than a majority of its net
assets, the Fund may continue to hold and to make additional investments in an existing company in its portfolio even if that company’s capitalization has grown to exceed $25 billion. Under normal circumstances, the Fund may invest in
companies with market capitalizations above $25 billion at the time of initial investment, provided that immediately after that investment a majority of its net assets would be invested in companies whose market capitalizations were under $25
billion at the time of initial investment.
Columbia
Wanger Asset Management, LLC, the Fund’s investment adviser (the Investment Manager), believes that stocks of companies with market capitalizations under $25 billion, which generally are not as well known by financial analysts as larger
companies, may offer higher return potential than stocks of larger companies. The Fund also may invest in larger-sized companies.
The Fund invests in a limited number of foreign companies
(generally between 40-60), offering the potential to provide above-average growth over time.
Columbia Acorn Select
SM
Columbia Acorn Select
SM
(the Fund) seeks long-term capital appreciation.
Under normal circumstances, the Fund invests a majority of its
net assets in the common stock of companies with market capitalizations under $20 billion at the time of initial investment. However, if the Fund’s investments in such companies represent less than a majority of its net assets, the Fund may
continue to hold and to make additional investments in an existing company in its portfolio even if that company’s capitalization has grown to exceed $20 billion. Under normal circumstances, the Fund may invest in companies with market
capitalizations above $20 billion at the time of initial investment, provided that immediately after that investment a majority of its net assets would be invested in companies whose market capitalizations were under $20 billion at the time of
initial investment.
Columbia Wanger Asset Management,
LLC, the Fund’s investment adviser (the Investment Manager), believes that stocks of companies with market capitalizations under $20 billion, which generally are not as well known by financial analysts as larger companies, may offer higher
return potential than stocks of larger companies. The Fund invests the majority of its assets in U.S. companies, but also may invest up to 33% of its total assets in foreign companies in developed markets (for example, Japan, Canada and the United
Kingdom) and in emerging markets (for example, China, India and Colombia).
The Fund invests in a limited number of companies (generally
between 30-60), offering the potential to provide above-average growth over time.
Columbia Acorn USA
®
Columbia Acorn USA
®
(the Fund) seeks long-term capital appreciation.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount any borrowings for investment purposes) in U.S. companies.
Under normal circumstances, the Fund invests a majority of its
net assets in the common stock of small- and mid-sized companies with market capitalizations under $5 billion at the time of initial investment. However, if the Fund’s investments in such companies represent less than a majority of its net
assets, the Fund may continue to hold and
Columbia Capital Allocation
Portfolios
to make additional investments in an
existing company in its portfolio even if that company’s capitalization has grown to exceed $5 billion. Under normal circumstances, the Fund may invest in companies with market capitalizations above $5 billion at the time of initial
investment, provided that immediately after that investment a majority of its net assets would be invested in companies whose market capitalizations were under $5 billion at the time of initial investment.
Columbia Wanger Asset Management, LLC, the Fund’s
investment adviser (the Investment Manager), believes that stocks of companies with market capitalizations under $5 billion, which generally are not as well known by financial analysts as larger companies, may offer higher return potential than
stocks of larger companies.
Columbia Adaptive Alternatives
Fund
Columbia Adaptive Alternatives Fund (the Fund)
seeks to provide shareholders with absolute (positive) returns over a complete market cycle.
Under normal circumstances, the Fund allocates its net assets
among non-traditional or “alternative” investments and strategies (referred to as Alternative Investment Strategies, as further described below), as well as other strategies, instruments and assets, including derivatives and cash. The
Fund, through such investments, seeks absolute (positive) returns over a complete market cycle. For both stocks and bonds, a complete market cycle can be measured from market peak to peak or from market trough to trough. The Fund’s performance
is anticipated to have a low correlation to the performance of the broad equity and fixed income markets over such cycles.
The Fund’s investment manager, Columbia Management
Investment Advisers, LLC (Columbia Management or the Investment Manager) determines the Fund’s desired exposures to, and allocation strategy across, Alternative Investment Strategies and other available strategies, instruments and
assets.
In seeking its desired exposures, the Fund
anticipates investing substantially in affiliated and unaffiliated open- and closed-end funds, including exchange-traded funds (ETFs) (collectively, the Underlying Funds). Certain of the Underlying Funds may themselves invest in various strategies,
including strategies advised by hedge fund managers through open-end and closed-end funds, hedge funds, funds of hedge funds, funds traded publicly on foreign exchanges, funds that are Undertakings for Collective Investment in Transferable
Securities (UCITS funds), and listed private equity funds and funds of funds. The Fund expects to invest in, among other Underlying Funds, Columbia Inflation Protected Securities Fund and to gain exposure to other Alternative Investment Strategies
by investing in Columbia Intermediary Alternatives Fund (the Intermediary Fund), which will invest substantially all of its assets in Blackstone Alternative Multi-Strategy Fund (the Blackstone Fund), a mutual fund (and registered commodity pool)
managed by Blackstone Alternative Investment Advisors LLC (Blackstone). It is currently expected that the Fund’s exposure to the Blackstone Fund will not exceed 60% of the Fund’s net assets.
As further described below, the Fund also has the flexibility
to invest directly in any securities, instruments or other assets, including derivative instruments, unless otherwise noted below.
The Fund seeks exposure to Alternative Investment Strategies,
which are strategies that seek investment returns largely uncorrelated with the broad equity and fixed income/debt markets. The Fund’s investment in or allocation to such strategies may include, directly or indirectly through Underlying Funds,
exposure to activist, alternative beta, arbitrage, equity and/or credit long/short, event-driven, fundamental, global macro, managed futures, multi-strategy, opportunistic trading, quantitative, and relative value strategies, among others. These
particular Alternative Investment Strategies are described below.
Activist Strategies
seek
exposure to companies that are the subject of a proxy contest or which activist investors are attempting to influence, in the expectation that new management or a change in business strategies will cause the price of the particular company’s
securities to increase.
Alternative Beta Strategies
seek exposure to market-based opportunities through a portfolio constructed of long/short securities positions, derivatives and other instruments in an attempt to isolate and capitalize upon certain market-based
inefficiencies, such as, for example, value and momentum. These alternative beta strategies typically have less correlation to traditional equity and fixed income markets.
Arbitrage Strategies
seek to
identify and exploit pricing inefficiencies in certain securities, markets or countries.
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Portfolios
Equity and/or Credit Long/Short Strategies
involve long positions in equity or fixed income securities that are expected to go up in value and short positions in equity or fixed income securities that are expected to decline in value in an attempt to profit from
the difference in performance of the long positions versus the short positions.
Event-driven Strategies
employ
processes designed to identify opportunities relating to companies undergoing particular corporate transactions or structural transformations (e.g., mergers, acquisitions or reorganizations).
Fundamental Strategies
employ
processes designed to identify attractive opportunities in securities of companies that are undervalued/overvalued or expected to experience high/low levels of growth, including bottom-up analysis of a company’s
financial statements.
Global Macro Strategies
focus
on macroeconomic fundamentals in developing investment theses. Global macroeconomics deals with the performance, structure, behavior, and decision-making of the global economy as a whole, rather than individual markets. Monetary policy shifts,
fiscal policy shifts, gross domestic product growth or inflation all may be considered in developing a market view.
Managed Futures Strategies
seek to profit from movements in the global financial, commodity, and currency markets by investing in futures, options, and forward contracts.
Multi-Strategy Strategies
employ a wide variety of strategies, including some or substantially all of the strategies described above, based upon analysis of macroeconomic variables.
Opportunistic Trading Strategies
employ processes designed to identify short-term or long-term trading opportunities, including analyzing supply/demand imbalances.
Quantitative Strategies
employ
quantitative techniques that seek gains from anticipated price movements, including models based on valuation, events, statistics, economic fundamentals, changes in economic environments, and changes in market sentiment.
Relative Value Strategies
seek
to identify and exploit differences in prices or rates between related financial instruments (e.g., stocks and bonds of the same issuer or issuers in the same or similar industry or sector) in an attempt to profit from the convergence in value
between the related securities.
These Alternative
Investment Strategies, whether implemented directly within the Fund’s portfolio by the Investment Manager or implemented indirectly through investments in Underlying Funds, employ the use of various securities, instruments and other assets,
including derivative instruments. Through its investment in the Alternative Investment Strategies and other available strategies, instruments and assets, the Fund will have investment exposure, directly or indirectly through the Underlying Funds, to
a broad range of markets and asset classes economically tied to U.S. and foreign markets, including, but not limited to, equity securities, fixed income securities, and derivative instruments (both exchange-traded and over-the-counter instruments),
including commodity-linked investments. There is no limit on the amount of exposure the Fund may have to any specific asset class, market sector, or instrument.
The derivative instruments in which the Fund may invest
directly or indirectly through Underlying Funds include futures; forward foreign currency contracts; forward interest rate agreements; structured notes; swaps; options; and warrants and rights. The Fund will not gain investment exposure to the
commodities markets directly, but may do so indirectly through investment in one or more Subsidiaries (as defined below) or Underlying Funds, including but not limited to Columbia Commodity Strategy Fund, a registered commodity pool. The Fund may
invest in derivatives for both hedging and non-hedging purposes, including, for example, seeking to enhance returns or as a substitute for a position in an underlying asset or index. The Fund may invest in derivatives to manage the Fund’s
overall risk exposure.
The Fund may invest directly in
derivatives or indirectly by investing in one or more offshore, wholly-owned subsidiaries (each, a Subsidiary, and, collectively, the Subsidiaries). Generally, Subsidiaries will invest primarily in commodity futures, but they may also invest in
financial futures, option and swap contracts, fixed income securities, pooled investment vehicles, including those that are not registered pursuant to the Investment Company Act of 1940, as amended (the 1940 Act), and other investments intended to
serve as margin or collateral for the Subsidiaries’ derivative positions.
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Portfolios
Unlike the Fund (which is subject to
limitations under federal tax laws), Subsidiaries may invest without limitation in commodity-linked derivatives; however, the Fund, in combination with its Subsidiaries, will comply with the same 1940 Act asset coverage requirements with respect to
the Subsidiaries’ investments in commodity-linked derivatives that are applicable to the Fund’s direct transactions in derivatives.
The Fund may purchase or sell securities on a when-issued,
delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction.
The equity securities in which the Fund may invest directly or
indirectly through Underlying Funds include those of issuers of any market capitalization located throughout the world (including the U.S. and emerging markets) across various investment styles (e.g., growth-, value-oriented styles), which may
include common stocks, preferred stocks, convertible securities, depositary receipts, listed private equity, and real estate investment trusts (REITs) and instruments of similar entities formed under the laws of non-U.S. countries.
The fixed income securities in which the Fund may invest
directly or indirectly through Underlying Funds include debt securities of governments throughout the world (including the U.S. and emerging markets) as well as their agencies and instrumentalities and government-sponsored enterprises, debt
securities of non-governmental issuers (e.g., corporate issuers) throughout the world (including the U.S. and emerging markets), debt securities of any credit rating (including below investment grade debt securities, commonly known as
“high-yield” or “junk” bonds) or debt securities that are unrated, commercial and residential mortgage-backed securities, asset-backed securities (including those backed by consumer assets), floating rate loans, bank loans,
loan assignments and loan participations, bankruptcy or trade claims, exchange-traded notes, cash/cash equivalents, inflation-hedging assets, as well as sovereign and quasi-sovereign debt investments. There is no limitation on the maturities or
duration of the instruments in which the Fund may invest.
The Fund may directly or indirectly purchase securities in
private placements, repurchase agreements, securities or other instruments of distressed companies or issuers undergoing other special situations, including initial public offerings or major corporate events, such as business consolidations or
restructurings.
The Fund may directly or indirectly take
both long and short positions in all of its investments. The Fund as a whole, or any Underlying Fund, may at any time have either a net long exposure or a net short exposure to markets, and neither the Underlying Funds nor the Fund’s portfolio
as a whole will be managed to maintain any fixed net long or net short market exposure.
The Fund expects to have significant investment leverage
(market exposure in excess of the Fund’s assets) as a result of certain of its direct investments (e.g., derivatives) and/or its investments in Underlying Funds, which may themselves use leverage.
The Fund may hold a significant amount of cash, money market
instruments (which may include investments in one or more affiliated or unaffiliated money market funds or similar vehicles), other high-quality, short-term investments, or other liquid assets for investment purposes or to meet its segregation
obligations as a result of its investments in derivatives. In certain market conditions, the Fund may have no market positions (i.e., the Fund may hold only cash and cash equivalents) when the Investment Manager believes it is in the best interests
of the Fund.
The Fund’s investment strategy may
involve the frequent trading of portfolio securities.
The Fund is non-diversified, which means that it can invest a
greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Asia Pacific ex-Japan Fund
Columbia Asia Pacific ex-Japan Fund (the Fund) seeks to
provide shareholders with long-term growth of capital.
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) will be invested in securities of companies located in the Asia Pacific Region, excluding Japan. For these purposes, a company is considered to be
“located” in the Asia Pacific Region if (i) it is organized under the laws of a country in the Asia Pacific Region; (ii) its principal place of business or principal office is in the Asia Pacific Region; or (iii) it derives at least 50%
of its revenues or profits from goods produced or sold, investments made,
Columbia Capital Allocation
Portfolios
services performed, or has at least 50% of
its assets located in the Asia Pacific Region. Countries in the Asia Pacific Region include but are not limited to Australia, China, Hong Kong, India, Indonesia, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand
and Vietnam. Some of these countries may represent developing or emerging markets. The Fund may invest in companies that have market capitalizations of any size. The Fund may from time to time emphasize one or more economic sectors in selecting its
investments, including the financial services sector and the information technology sector.
The Fund will normally have exposure to foreign
currencies.
Columbia Bond Fund
Columbia Bond Fund (the Fund) seeks current income, consistent
with minimal fluctuation of principal.
Under normal
circumstances, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in bonds and other debt securities. The Fund generally invests at least 65% of its assets in debt securities issued by
the U.S. Government and its agencies and instrumentalities, debt securities issued by corporations, and mortgage- and other asset-backed securities that, at the time of purchase, are rated in at least one of the three highest rating categories or
are unrated but determined to be of comparable quality. The Fund may invest up to 25% of its assets in securities that, at the time of purchase, are rated below investment grade or are unrated but determined to be of comparable quality (commonly
referred to as “high yield securities” or “junk bonds”).
The Fund may invest up to 25% of its assets in
dollar-denominated debt securities issued by foreign governments, companies or other entities and up to 20% of its assets in preferred stock. The Fund’s dollar-weighted average maturity and duration will vary over time depending on
expectations for market and economic conditions.
The
Fund may invest in derivatives, such as futures (including interest rate futures) and swap contracts (including credit default swaps and interest rate swaps) for hedging purposes and to manage yield curve, duration and interest rate exposure;
options (including options on listed futures contracts), collateralized debt obligations and inverse floaters for investment purposes; and interest-only (IO) and principal-only (PO) securities for hedging and investment purposes.
The Fund may purchase or sell securities on a when-issued,
delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction. The Fund also may invest in private
placements.
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
Columbia Commodity Strategy Fund
Columbia Commodity Strategy Fund (the Fund) seeks to provide
shareholders with total return.
Under normal
circumstances, the Fund seeks to maintain substantial economic exposure to the performance of the commodities markets. The Fund invests, directly or indirectly, in a portfolio of commodity-linked investments, such as commodity-linked futures,
structured notes and/or swaps, that are designed to provide exposure to the investment return of assets that trade in the commodities markets, without investing directly in physical commodities. A substantial portion of the Fund’s net assets
will also be invested in a portfolio of fixed income securities rated investment-grade or, if unrated, deemed of comparable quality, which will consist primarily of: (i) U.S. Government securities, corporate debt securities, mortgage-backed
securities and/or asset-backed securities; and/or (ii) shares of an affiliated money market fund. In addition to investing in these holdings for their income-producing potential, these holdings will be designated by the Fund, as necessary, to serve
as collateral with respect to the Fund’s commodity-linked investments.
The Fund primarily expects to gain exposure to the commodities
markets by investing up to 25% of its total assets in a wholly-owned subsidiary of the Fund organized as a company under the laws of the Cayman Islands (the Subsidiary). The Subsidiary’s commodity-linked investments are expected to produce
leveraged exposure to the performance of the commodities markets. It is expected that the gross notional value of the Fund’s (including the Subsidiary’s) commodity-linked investments will be equivalent to at least 90% of the Fund’s
net assets. Like the
Columbia Capital Allocation
Portfolios
Fund, the Subsidiary will not invest
directly in physical commodities. The Subsidiary also invests in investment-grade fixed income securities and shares of an affiliated money market fund for investment purposes or to serve as collateral for its commodity-linked investments. The
Fund’s investment in the Subsidiary permits it to gain exposure to the commodities markets in a potentially tax-efficient manner. The Subsidiary has the same investment objective as the Fund and, like the Fund, is managed by Columbia
Management Investment Advisers, LLC (Columbia Management or the Investment Manager) and subadvised by Threadneedle International Limited (Threadneedle).
Derivatives, such as futures, may also be utilized to hedge
existing positions, increase market exposure and/or increase investment flexibility. Actual exposures will vary over time based on factors such as market movements and assessments of market conditions by the Fund’s portfolio managers. The Fund
may engage in derivative transactions on both U.S. and foreign exchanges or in the “over-the-counter” (OTC) market.
In constructing the Fund’s fixed-income portfolio,
Threadneedle seeks to identify a portfolio of investment-grade fixed income securities, generally with a dollar-weighted average portfolio duration of 1 year or less.
Columbia Contrarian Core Fund
Columbia Contrarian Core Fund (the Fund) seeks total return,
consisting of long-term capital appreciation and current income.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in common stocks. In addition, under normal circumstances, the Fund invests at least 80% of its net assets in equity securities of U.S. companies that have large market
capitalizations (generally over $2 billion) that the Fund’s investment manager believes are undervalued and have the potential for long-term growth and current income.
The Fund may also invest up to 20% of its net assets in
foreign securities. The Fund may invest directly in foreign securities or indirectly through depositary receipts.
Columbia Convertible Securities Fund
Columbia Convertible Securities Fund (the Fund) seeks total
return, consisting of capital appreciation and current income.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in convertible securities. The Fund may invest up to 15% of its total assets in Eurodollar convertible securities and up to an additional 20% of its total assets in
foreign securities. Most convertible securities are not investment grade-rated. Convertible securities rated below investment grade may be referred to as “junk bonds.” The Fund also may invest directly in equity securities.
The Fund looks for opportunities to participate in the
potential growth of underlying common stocks, while seeking to earn income that is generally higher than the income those stocks provide. The Fund may sell common stocks short against positions in which the Fund has directly invested in convertible
securities with no more than 10% of its assets. The Fund also may invest in private placements.
Columbia Corporate Income Fund
Columbia Corporate Income Fund (the Fund) seeks total return,
consisting primarily of current income and secondarily of capital appreciation.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in debt securities issued by corporate and other non-governmental issuers, including dollar-denominated debt securities issued by foreign companies. The Fund also
invests at least 60% of total assets in securities that, at the time of purchase, are investment grade securities or in unrated securities determined to be of comparable quality. The Fund may invest up to 25% of its total assets in securities that,
at the time of purchase, are rated below investment grade or are unrated but determined to be of comparable quality (commonly referred to as “high yield securities” or “junk bonds”). Under normal circumstances, the
Fund’s average effective duration will be between three and ten years.
The Fund may invest in derivatives, including interest rate
futures and forward interest rate agreements, for hedging and non-hedging purposes.
Columbia Capital Allocation
Portfolios
The Fund may purchase or sell securities on
a when-issued, delayed delivery or forward commitment basis. The Fund also may invest in private placements.
The Fund may invest in U.S. Government obligations,
asset-backed securities and 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.
Columbia Diversified Absolute Return Fund
Columbia Diversified Absolute Return Fund (the Fund) seeks to
provide shareholders with absolute (positive) returns.
The Fund pursues absolute (positive) returns through a
diversified portfolio reflecting multiple asset classes and various investment and hedging strategies employed across equity, fixed income and other markets, such as commodities markets, while seeking to capitalize on market inefficiencies.
Although the specific strategies the Fund pursues and the
manner in which the Fund pursues such strategies may change from time to time, the Fund is currently expected to combine tactical beta, alternative beta and alpha strategies in seeking the Fund’s investment objective. (In general, beta is a
measure of price volatility resulting from general market movements and alpha is a measure of return resulting from active management.) The Fund’s investment manager, Columbia Management Investment Advisers, LLC (Columbia Management or the
Investment Manager) may use fundamental and quantitative methods to identify and capitalize on short-term mispricings within and across traditional asset classes and markets, such as stocks and bonds. This strategy may be referred to as a tactical
beta strategy in that it seeks opportunities to earn returns from price movements of broad markets. For instance, if the Investment Manager believes the U.S. equity market is undervalued, the Investment Manager may seek to capitalize on this
mispricing by investing in futures on a U.S. equities index. The Investment Manager may also use fundamental and quantitative methods to identify and capitalize on systemic and structural market inefficiencies. This strategy may be referred to as an
alternative beta strategy in that it seeks to generate returns with relatively low correlation to overall market movements by employing a systematic, rules-based approach. For instance, the Fund may take a long position in a broad basket of equities
that the Investment Manager believes are attractively valued and take a short position in a broad basket of equities that the Investment Manager believes are unattractively valued, in order to generate returns from the relative price difference
generally expected in the equity markets over time between undervalued and overvalued equities (i.e., the “value premium”). The Investment Manager will also allocate assets to long, short and other strategies intended to generate returns
that are not dependent on overall market direction. These strategies may be referred to as alpha strategies in that they are intended to have relatively low correlation to market movements and are derived from active management.
The Fund’s investments and strategies are expected to
employ both long and short positions in foreign and domestic equities (including common stock, preferred stock and convertible securities), equity futures, index futures, options, swaps, fixed-income, floating rate and other debt securities
(including U.S. government obligations, sovereign and quasi-sovereign debt obligations, asset-backed securities, exchange traded notes, mortgage-backed securities and fixed income futures), currency forwards and futures and other commodity-related
investments, and other investment companies (including mutual funds, closed-end funds and exchange-traded funds (ETFs)). The Fund may gain investment exposure to these securities and instruments directly or indirectly through investment in one or
more Subsidiaries (as defined below) or affiliated and third party investment companies.
The Fund’s investment strategy may involve the frequent
trading of portfolio securities.
The Fund may invest
without limit in foreign investments (including currencies), which may include investments in emerging markets, and in investments that are rated below investment-grade or, if unrated, deemed to be of comparable quality (commonly referred to as
“high yield securities” or “junk bonds”).
The Fund may invest in derivatives such as futures (including
bond, currency, equity index, interest rate and volatility index futures), forward foreign currency contracts, forward interest rate agreements, options and swap contracts (including credit default swaps, interest rate swaps and total return swaps),
in an effort to produce incremental earnings, to hedge existing positions, to increase market exposure and investment flexibility, and/or to increase credit exposure.
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Portfolios
The Fund may purchase or sell securities on
a when-issued, delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction.
In addition, under normal circumstances, the Fund uses forward
foreign currency contracts in seeking to enhance returns based on fluctuations in the values of various foreign currencies relative to the U.S. dollar (the Currency Overlay Strategy). The Fund gains economic exposure to foreign currencies through
its investment in forward foreign currency contracts comparable to the exposure that it would have had if it had bought or sold the foreign currencies directly.
The Fund may invest directly in derivatives or indirectly by
investing in one or more offshore, wholly-owned subsidiaries (each, a Subsidiary, and, collectively, the Subsidiaries). Generally, Subsidiaries will invest in commodity futures, financial futures, option and swap contracts, fixed income securities,
pooled investment vehicles, including those that are not registered pursuant to the Investment Company Act of 1940, as amended (the 1940 Act), and other investments intended to serve as margin or collateral for the Subsidiaries’ derivative
positions.
The Fund expects to hold a significant amount
of cash, money market instruments (which may include investments in one or more affiliated or unaffiliated money market funds or similar vehicles) or other high-quality, short-term investments to cover obligations with respect to, or that may result
from, the Fund’s investments in forward foreign currency contracts, currency futures contracts, commodity-linked investments or other derivatives.
Columbia Diversified Equity Income Fund
Columbia Diversified Equity Income Fund (the Fund) seeks to
provide shareholders with a high level of current income and, as a secondary objective, steady growth of capital.
The Fund’s assets primarily are invested in equity
securities. Under normal market conditions, the Fund will invest at least 80% of its net assets (including the amount of any borrowings for investment purposes) in dividend-paying common and preferred stocks.
The Fund may invest up to 25% of its net assets in foreign
investments. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector.
Columbia Dividend Income Fund
Columbia Dividend Income Fund (the Fund) seeks total return,
consisting of current income and capital appreciation.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in a diversified portfolio of income-producing (dividend-paying) equity securities, which will consist primarily of common stocks but also may include preferred stocks
and convertible securities. The Fund invests principally in securities of companies believed to be undervalued but also may invest in securities of companies believed to have the potential for long-term growth. The Fund may invest in companies that
have market capitalizations of any size. The Fund may invest up to 20% of its net assets in debt securities, including securities that, at the time of purchase, are rated below investment grade or are unrated but determined to be of comparable
quality (commonly referred to as “high yield securities” or “junk bonds”).
The Fund may also invest up to 20% of its net assets in
foreign securities. The Fund may invest directly in foreign securities or indirectly through depositary receipts.
The investment manager combines fundamental and quantitative
analysis with risk management in identifying investment opportunities and constructing the Fund’s portfolio.
Columbia Dividend Opportunity Fund
Columbia Dividend Opportunity Fund (the Fund) seeks to provide
shareholders with a high level of current income. The Fund’s secondary objective is growth of income and capital.
The Fund’s assets primarily are invested in equity
securities. Under normal market conditions, the Fund will invest at least 80% of its net assets (including the amount of any borrowings for investment purposes) in dividend-paying common and preferred stocks. The selection of dividend-paying stocks
is the primary decision in building the investment portfolio. The Fund may invest in companies that have market capitalizations of any size.
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Portfolios
The Fund may invest up to 25% of its net
assets in foreign investments.
The Fund may invest in
derivatives, such as structured investments (e.g., equity-linked notes), for investment purposes, for risk management (hedging) purposes and to increase investment flexibility.
Columbia Emerging Markets Bond Fund
Columbia Emerging Markets Bond Fund (the Fund) seeks to
provide shareholders with high total return through current income and, secondarily, through capital appreciation.
The Fund invests primarily in fixed income securities of
emerging markets issuers. For these purposes, emerging market countries are generally those either defined by World Bank-defined per capita income brackets or determined to be an emerging market based on the Fund investment team’s qualitative
judgments about a country’s level of economic and institutional development, among other factors. Under normal circumstances, at least 80% of the Fund’s net assets (including the amount of any borrowings for investment purposes) will be
invested in fixed income securities of issuers that are located in emerging markets countries, or that earn 50% or more of their total revenues from goods or services produced in emerging markets countries or from sales made in emerging markets
countries. Fixed income securities may be denominated in either U.S. dollars or the local currency of the issuer. While the Fund may invest 25% or more of its total assets in the securities of foreign governmental and corporate entities located in
the same country, it will not invest 25% or more of its total assets in any single issuer. The Fund can invest in emerging market sovereign debt instruments of any credit quality including those rated investment grade and below investment grade or
considered to be of comparable quality (commonly referred to as “high yield securities” or “junk bonds”). Although the emerging markets sovereign debt universe largely consists of investment grade instruments, a significant
portion of that universe is rated in these lower rating categories. The Fund may invest up to 100% of its assets in debt securities that are rated below investment grade or, if unrated, determined to be of comparable quality.
The Fund may invest in fixed income securities of any maturity
and does not seek to maintain a particular dollar-weighted average maturity.
The Fund may invest significantly in privately placed
securities that have not been registered for sale under the Securities Act of 1933 pursuant to Rule 144A (Rule 144A securities) that are determined to be liquid in accordance with procedures adopted by the Fund’s Board of Trustees.
The Fund is non-diversified, which means that it can invest a
greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Emerging Markets Fund
Columbia Emerging Markets Fund (the Fund) seeks long-term
capital appreciation.
Under normal circumstances, the
Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities (including, but not limited to, common stocks, preferred stocks and securities convertible into common or preferred
stocks) of companies located in emerging market countries. Emerging market countries include those countries whose economies are considered to be developing or emerging from underdevelopment.
The Fund may invest in a variety of countries, industries and
sectors and does not attempt to invest a specific percentage of its assets in any given country, industry or sector. However, the Fund has invested substantially in the financial services sector and information technology and technology-related
sectors and may continue to invest substantially in these or other sectors in the future. The Fund may invest in companies that have market capitalizations of any size.
The Fund may invest in special situations such as companies
involved in initial public offerings, tender offers, mergers and other corporate restructurings, and in companies involved in management changes or companies developing new technologies.
The Fund may invest in securities that the investment manager
believes are undervalued, represent growth opportunities, or both.
Columbia European Equity Fund
Columbia Capital Allocation
Portfolios
Columbia European Equity Fund (the Fund)
seeks to provide shareholders with capital appreciation.
The Fund primarily invests in equity securities of European
companies that are believed to offer growth potential. Under normal market conditions, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities of European companies. These
equity securities generally include common stocks, preferred stocks, securities convertible into U.S. common stocks, U.S. dollar-denominated American Depositary Receipts (ADRs), and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. A
company is considered to be located in Europe if:
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It is organized under the
laws of a European country or has a principal office in a European country;
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It derives at least 50% of
its total revenues from businesses in Europe; or
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Its equity securities are
traded principally on a stock exchange in Europe.
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Although the Fund emphasizes investments in developed
countries, the Fund also may invest in securities of companies located in developing or emerging markets.
The Fund will normally have exposure to foreign
currencies.
Columbia Flexible Capital Income Fund
Columbia Flexible Capital Income Fund (the Fund) seeks to
provide shareholders current income, with long-term capital appreciation.
In pursuing its investment objective, the Fund invests broadly
in debt, equity and/or “hybrid” (convertible) securities. The Fund allocates its investments from one asset class to another based on analysis by the portfolio managers of the opportunities for the Fund to achieve its objective in a
given market. The Fund’s investments in debt securities may include investment grade and non-investment grade bonds, bank loans and U.S. Government securities. The Fund may invest up to 100% of its assets in debt securities that are rated
below investment grade (i.e., high-yield or “junk” securities) or, if unrated, deemed of comparable quality. The Fund also may invest in private placements.
The Fund seeks to invest in undervalued or out-of-favor
securities it believes offer opportunities for current income, with long-term capital appreciation.
The Fund may invest in fixed income securities of any maturity
and does not seek to maintain a particular dollar-weighted average maturity.
The Fund’s equity securities will consist primarily of
large capitalization, dividend paying common stocks or preferred securities, but the Fund may invest in issuers of any size. The Fund may also invest in hybrid securities, including convertible bonds and convertible preferred securities.
The Fund may invest up to 25% of its net assets in foreign
investments, including emerging markets.
Columbia Floating
Rate Fund
Columbia Floating Rate Fund (the Fund) seeks
to provide shareholders with a high level of current income and, as a secondary objective, preservation of capital.
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) will be invested in floating rate loans and other floating rate debt securities. These debt obligations will generally be rated non-investment grade by
recognized rating agencies (similar to “high yield securities” or “junk bonds”) or, if unrated, determined to be of comparable quality.
The Fund may invest up to 25% of its net assets in foreign
investments.
The Fund normally invests in senior secured
floating rate loans.
Senior floating rate loans held by
the Fund will generally have final maturities of nine years or less.
To the extent the Fund invests in derivative instruments, the
Fund may count the value of derivative securities with floating rate loan characteristics towards its 80% policy.
Columbia Capital Allocation
Portfolios
The investment manager may also invest in
other securities, including investment grade fixed income debt obligations, non-investment grade fixed income debt obligations, affiliated money market funds and certain money market instruments. For purposes of the 80% policy, money market holdings
with a remaining maturity of less than 60 days will be deemed floating rate assets.
Columbia Global Bond Fund
Columbia Global Bond Fund (the Fund) seeks to provide
shareholders with high total return through income and growth of capital.
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in debt obligations of issuers located in at least three different countries (which may include the U.S.). Debt obligations include debt securities
and instruments, including money market instruments, either issued or guaranteed as to principal and interest by (i) the U.S. Government, its agencies, authorities or instrumentalities, (ii) non-U.S. governments, their agencies, authorities or
instrumentalities, or (iii) corporate or other non-governmental entities. The Fund may invest in debt securities and instruments across the credit quality spectrum and, at times, may invest significantly in below investment-grade fixed-income
securities (commonly referred to as “high yield securities” or “junk bonds”) in seeking to achieve higher dividends and/or capital appreciation.
The Fund may invest in fixed income securities of any maturity
and does not seek to maintain a particular dollar-weighted average maturity.
Under normal circumstances, the Fund generally invests at
least 40% of its net assets in debt obligations of foreign governments, and companies that (a) maintain their principal place of business or conduct their principal business activities outside the U.S., (b) have their securities traded on non-U.S.
exchanges or (c) have been formed under the laws of non-U.S. countries. This 40% minimum investment amount may be reduced to 30% if market conditions for these investments or specific foreign markets are deemed unfavorable. The Fund considers a
company to conduct its principal business activities outside the U.S. if it derives at least 50% of its revenue from business outside the U.S. or had at least 50% of its assets outside the U.S.
In addition, in pursuing its objective, the Fund, employing
both fundamental and quantitative analyses, may enter into various currency-, interest rate- and credit-related transactions involving derivatives instruments, including futures contracts (such as currency, bond, treasury, index and interest rate
futures) and forward foreign currency contracts (forwards). The use of these derivatives instruments allows the Fund to obtain net long or net negative (short) exposure to selected currencies, interest rates, credit risks and duration risks. The
Fund may use these derivatives as well as “to be announced” (TBA) mortgage-backed securities in an effort to leverage exposures and produce incremental earnings, for hedging purposes, to obtain increased or decreased exposures to various
markets/sectors or to increase investment flexibility. Actual long and short exposures will vary over time based on factors such as market movements, assessments of market conditions, macroeconomic analysis and qualitative valuation analysis.
The investment manager combines fundamental and quantitative
analysis with risk management in identifying investment opportunities and constructing the Fund’s portfolio. The Fund may from time to time emphasize one or more economic sectors in selecting its investments.
The Fund is non-diversified, which means that it can invest a
greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Global Dividend Opportunity Fund
Columbia Global Dividend Opportunity Fund (the Fund) seeks
total return, consisting of current income and capital appreciation.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in income-producing (dividend-paying) equity securities of U.S. and foreign companies. Equity securities include, for example, common stock, preferred stock, convertible
securities and depositary receipts. The Fund invests principally in securities of companies believed to be attractively valued and to have the potential for long-term growth. The Fund may invest in companies that have market capitalizations of any
size. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector.
Columbia Capital Allocation
Portfolios
Under normal circumstances, the Fund will
invest at least 40% of its net assets in foreign securities, including securities of companies in emerging market countries. The Fund may invest directly in foreign securities or indirectly through depositary receipts. This 40% minimum investment
amount may be reduced to 30% if market conditions for these investments or specific foreign markets are deemed unfavorable.
Columbia Global Energy and Natural Resources Fund
Columbia Global Energy and Natural Resources Fund (the Fund)
seeks long-term capital appreciation.
Under normal
circumstances, the Fund invests at least 80% of its net assets (including the amount of borrowings for investment purposes) in equity securities (including, but not limited to, common stocks, preferred stocks and securities convertible into common
or preferred stocks) of U.S. and foreign companies engaged in the energy and natural resources industries. These companies include those engaged in the discovery, development, production or distribution of energy or natural resources and companies
that develop technologies for, and furnish energy and natural resource supplies and services to, these companies. The Fund may invest in companies that have market capitalizations of any size.
The Fund typically invests at least 50% of its assets in crude
oil, petroleum and natural gas companies. The Fund also may invest up to 35% of its assets to gain exposure to precious metals, such as gold, including companies engaged in the production of precious metals.
Under normal circumstances, the Fund generally invests at
least 40% of its net assets in companies that maintain their principal place of business or conduct their principal business activities outside the U.S., companies that have their securities traded on non-U.S. exchanges or that have securities that
trade in the form of depositary receipts or companies that have been formed under the laws of non-U.S. countries, including those of emerging markets. The Fund considers a company to conduct its principal business activities outside the U.S. if it
derives at least 50% of its revenue or profits from business outside the U.S. or has at least 50% of its sales or assets outside the U.S. This 40% minimum investment amount may be reduced to 30% if market conditions for these investments or specific
foreign markets are deemed unfavorable.
The Fund may
invest in derivatives, including options and forward foreign currency contracts, in an effort to enhance returns, to hedge existing positions, to manage the Fund’s overall risk exposure, to increase market exposure, and/or to increase
investment flexibility (including using the derivative as a substitute for a position in an underlying security, currency, asset, or other instrument or reference). Derivatives may be used by the Fund to obtain net long and/or net negative (short)
exposure to a security, currency, asset, or other instrument or reference.
The Fund may invest in securities that the investment manager
believes are undervalued, represent growth opportunities, or both.
The investment manager combines fundamental and quantitative
analysis with risk management in identifying investment opportunities and constructing the Fund’s portfolio.
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.
The Fund is non-diversified, which means that it can invest a
greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Global Equity Value Fund (formerly known as Columbia
Equity Value Fund)
Columbia Global Equity Value Fund
(the Fund) seeks to provide shareholders with growth of capital and income.
Under normal market conditions, the Fund invests at least 80%
of its net assets (including the amount of any borrowings for investment purposes) in equity securities. Equity securities include, for example, common stock, preferred stock, convertible securities and depositary receipts. These securities may
provide income, offer the opportunity for long-term capital appreciation, or both.
Under normal circumstances, the Fund generally invests at
least 40% of its net assets in companies that maintain their principal place of business or conduct their principal business activities outside the U.S., companies that have their securities traded on non-U.S. exchanges or that have securities that
trade in the form of depositary receipts,
Columbia Capital Allocation
Portfolios
companies that have been formed under the
laws of non-U.S. countries, including those of emerging markets, or foreign currencies. The Fund considers a company to conduct its principal business activities outside the U.S. if it derives at least 50% of its revenue or profits from business
outside the U.S. or has at least 50% of its sales or assets outside the U.S. This 40% minimum investment amount may be reduced to 30% if market conditions for these investments or specific foreign markets are deemed unfavorable.
The Fund may invest in derivatives, including forward foreign
currency contracts, for hedging or investment purposes.
The Fund’s investment philosophy is rooted in the belief
that a disciplined, systematic, value-oriented approach to investing primarily in large-cap companies provides investors with an excellent opportunity for long-term growth of capital. The Fund may from time to time emphasize one or more economic
sectors in selecting its investments, including the financial services sector.
Columbia Global Inflation-Linked Bond Plus Fund
Columbia Global Inflation-Linked Bond Plus Fund (the Fund)
seeks to provide shareholders with total return that exceeds the rate of inflation over the long term.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in inflation-linked debt securities. Inflation-linked debt securities are fixed-income securities that are structured to provide protection against inflation. These
securities include bonds and other debt securities whose principal and/or interest payments are adjusted for inflation. The Fund may also invest in other debt instruments, including asset-backed and mortgage-backed securities, which may be of any
maturity and may be issued by developed, developing or emerging markets issuers, including the U.S. Government, non-U.S. governments, quasi-governmental organizations, agencies, instrumentalities, supranational entities and companies. The
Fund’s investments may include money market instruments and shares of an affiliated money market fund. The Fund may make these investments for their income-producing potential and they may also be designated by the Fund, as necessary, to serve
as collateral with respect to the Fund’s investments in derivatives. The Fund generally invests at least 80% of its assets in debt securities rated investment grade by at least one rating agency or, if unrated, determined to be of comparable
quality. The Fund may invest up to 20% of its assets in securities that, at the time of purchase, are rated below investment grade or are unrated but determined to be of comparable quality (commonly referred to as “high yield securities”
or “junk bonds”). The Fund’s dollar-weighted average maturity and duration will vary over time depending on expectations for market and economic conditions.
The Fund may also invest in reverse repurchase agreements and
derivative instruments, including forward foreign currency contracts, futures (including bond futures), options on futures, and swaps (including index swaps, rate swaps, total return swaps, and TIPS asset swaps), in an effort to produce incremental
earnings, to hedge existing positions, to increase market, interest rate or credit exposure, to increase investment flexibility (including by using the derivative as a substitute for the purchase or sale of the underlying security, currency or other
instrument), and/or to change the effective duration of its portfolio. The Fund expects to utilize leverage, created through investments in reverse repurchase agreements and inflation rate swaps, as part of its investment strategies. Leverage has
the effect of increasing the Fund’s volatility.
Under normal circumstances, the Fund invests at least 40% of
its net assets in debt obligations of non-U.S. government, quasigovernmental organizations, agencies, instrumentalities and supranational entities, as well as companies that maintain their principal place of business outside the U.S.; have been
formed under the laws of non-U.S. countries; trade their securities in a market located outside the U.S.; or conduct a substantial amount of business outside the U.S. The Fund considers an issuer to conduct a substantial amount of business outside
the U.S. if it derives at least 50% of its revenue or profits from business outside the U.S. or has at least 50% of its sales or assets outside the U.S. This 40% minimum investment amount may be reduced to 30% if market conditions for these
investments or specific foreign markets are deemed unfavorable. There is no limitation on the maturities of the instruments in which the Fund may invest.
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.
Columbia Capital Allocation
Portfolios
The Fund is non-diversified, which means
that it can invest a greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Global Infrastructure Fund (formerly known as Columbia
Recovery and Infrastructure Fund)
Columbia Global
Infrastructure Fund (the Fund) seeks to provide shareholders with long-term growth of capital.
The Fund invests in infrastructure-related securities that
appear to be undervalued or that may be temporarily out of favor, but that the investment manager believes are entering a period of recovery (i.e., a period in which these infrastructure-related issuers have good prospects for growth or capital
appreciation). Under normal circumstances, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in securities (equity, fixed-income and/or other “hybrid” (convertible)
securities) of infrastructure-related issuers and/or securities intended primarily to finance infrastructure-related activities. Infrastructure-related issuers are defined as U.S. or foreign companies that derive at least 50% of their revenues or
profits from the ownership, development, construction, operation, utilization or financing of infrastructure-related assets, or have at least 50% of the fair market value of their assets invested in infrastructure-related assets. Investments in
infrastructure-related issuers may also include securities issued to finance infrastructure-related assets.
Infrastructure-related assets are the physical structures and
networks which provide necessary services to society. Examples of infrastructure-related assets include transportation assets (e.g., roads, bridges, railroads, airports, seaports, tunnels), utility assets (e.g., electric transmission and
distribution lines, power generation facilities, broadcast and wireless towers, gas and water distribution facilities, cable and satellite networks) and social assets (e.g., hospitals, schools, stadiums, courthouses). The Fund’s investments
include issuers with a direct investment in infrastructure-related companies and in issuers that operate or utilize infrastructure-related assets (e.g., airlines, automakers, and technology companies) or issuers with indirect exposure to
infrastructure-related assets (e.g., suppliers of construction materials). The Fund may also invest in securities that are intended to finance infrastructure-related activities. The Fund may invest up to 20% of its assets in securities of issuers
that are not infrastructure-related, including issuers that the investment manager believes may be undervalued due to their cyclical nature, market conditions, and/or changes in the economy. The Fund’s investments can include high-yield
instruments, which are investments rated below investment grade by a nationally recognized statistical rating organization, or if unrated, determined to be of comparable quality (commonly referred to as “high-yield securities” or
“junk” bonds). The Fund may invest in companies that have market capitalizations of any size.
Under normal circumstances, the Fund invests at least 40% of
its net assets in issuers that maintain their principal place of business or conduct their principal business activities outside the U.S., issuers that have their securities traded on non-U.S. exchanges or issuers that have been formed under the
laws of non-U.S. countries (the 40% Global Investment Policy). The Fund considers an issuer to conduct its principal business activities outside the U.S. if it derives at least 50% of its revenue or profits from business outside the U.S. or has at
least 50% of its sales or assets outside the U.S. From time to time, the Fund may be below this 40% level and, in such circumstances, the Fund will then endeavor to invest its assets to bring the Fund’s net assets above this 40% level,
consistent with the investment manager’s view of market and other conditions and available investment opportunities. Such investments can include securities of emerging market and frontier market issuers. From time to time, the Fund may focus
its investments in certain countries or geographic areas.
In addition to investing in individual stocks, bonds or other
securities, the Fund may invest in publicly-traded units of master limited partnerships, real estate investment trusts (REITs) and other pooled investment vehicles and investment companies.
Columbia Greater China Fund
Columbia Greater China Fund (the Fund) seeks long-term capital
appreciation.
Under normal circumstances, the Fund
invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities of companies whose principal activities are located in the Greater China region. The Greater China region includes Hong
Kong, The People’s Republic of China, Taiwan and certain other
Columbia Capital Allocation
Portfolios
countries. The Fund’s investments
include securities of emerging market issuers. The investment manager determines if a company’s principal activities are located in the Greater China region by considering the company’s country of organization, its primary stock exchange
listing, the source of its revenues, the location of its assets and other factors.
The Fund may invest in companies that have market
capitalizations of any size believed to be undervalued or have the potential for long-term growth. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector and the
information technology sector.
The Fund is
non-diversified, which means that it can invest a greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia High Yield Bond Fund
Columbia High Yield Bond Fund (the Fund) seeks to provide
shareholders with high current income as its primary objective and, as its secondary objective, capital growth.
Under normal market conditions, the Fund invests at least 80%
of its net assets (including the amount of any borrowings for investment purposes) in high-yield debt instruments (commonly referred to as “junk” bonds or securities). These high yield debt instruments include corporate debt securities
as well as floating rate loans rated below investment grade by a nationally recognized statistical rating organization, or if unrated, determined to be of comparable quality.
The Fund may invest up to 25% of its net assets in high yield
debt instruments of foreign issuers.
Corporate debt
securities in which the Fund invests are typically unsecured, with a fixed-rate of interest, and are usually issued by companies or similar entities to provide financing for their operations, or other activities.
The Fund may invest in fixed income securities of any maturity
and does not seek to maintain a particular dollar-weighted average maturity. Because the Fund emphasizes high-yield investments, more emphasis is put on credit risk by the portfolio managers in selecting investments than either maturity or
duration.
The Fund may invest significantly in privately
placed securities that have not been registered for sale under the Securities Act of 1933 pursuant to Rule 144A (Rule 144A securities) that are determined to be liquid in accordance with procedures adopted by the Fund’s Board of
Trustees.
Columbia Income Opportunities Fund
Columbia Income Opportunities Fund (the Fund) seeks to provide
shareholders with a high total return through current income and capital appreciation.
Under normal market conditions, the Fund’s assets are
invested primarily in income-producing debt securities, with an emphasis on the higher rated segment of the high-yield (junk bond) market. These income-producing debt securities include corporate debt securities as well as bank loans. The Fund will
purchase only securities rated B or above, or if unrated, securities determined to be of comparable quality. If a security falls below a B rating after investment by the Fund, the Fund may continue to hold the security.
The Fund may invest up to 25% of its net assets in foreign
investments. The Fund may from time to time emphasize one or more economic sectors in selecting its investments.
Corporate debt securities in which the Fund invests are
typically unsecured, with a fixed-rate of interest, and are usually issued by companies or similar entities to provide financing for their operations, or other activities.
The Fund may invest in fixed income securities of any maturity
and does not seek to maintain a particular dollar-weighted average maturity. Because the Fund emphasizes high-yield investments, more emphasis is put on credit risk by the portfolio manager in selecting investments than either maturity or
duration.
The Fund may invest significantly in privately
placed securities that have not been registered for sale under the Securities Act of 1933 pursuant to Rule 144A (Rule 144A securities) that are determined to be liquid in accordance with procedures adopted by the Fund’s Board of
Trustees.
Columbia Inflation Protected Securities
Fund
Columbia Capital Allocation
Portfolios
Columbia Inflation Protected Securities Fund
(the Fund) seeks to provide shareholders with total return that exceeds the rate of inflation over the long term.
Under normal market conditions, the Fund invests at least 80%
of its net assets (including the amount of any borrowings for investment purposes) in inflation-protected debt securities. These securities include inflation-indexed bonds of varying maturities issued by the U.S. Government and non-U.S. governments,
their agencies or instrumentalities, and U.S. and non-U.S. corporations. The Fund currently intends to focus on inflation-protected debt securities issued by the U.S. Treasury. The Fund invests only in securities rated investment grade at the time
of purchase by a third-party rating agency or, if unrated, deemed to be of comparable quality. Inflation-protected securities are designed to protect the future purchasing power of the money invested in them.
The value of the bond’s principal or the interest income
paid on the bond is adjusted to track changes in an official inflation measure. For example, the U.S. Treasury uses the Consumer Price Index for Urban Consumers (non seasonally adjusted) as the inflation measure. Up to 20% of the Fund’s net
assets may be invested in non-inflation protected debt obligations issued by U.S. and foreign governments, their agencies and instrumentalities, as well as U.S. and foreign corporate debt obligations, mortgage and asset-backed securities and money
market instruments.
The Fund may invest in derivatives,
including futures (including bond futures and interest rate futures), forward currency contracts, credit default swaps, credit default swap indexes, and IOs and POs securities in seeking to manage portfolio duration, yield curve exposure and for
hedging purposes.
The Fund may purchase or sell
securities on a when-issued, delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction.
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.
The Fund is non-diversified, which means that it can invest a
greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Intermediate Bond Fund
Columbia Intermediate Bond Fund (the Fund) seeks total return,
consisting of current income and capital appreciation.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) 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 60% of its net assets in debt securities that, at the time of purchase, are rated in at least one of the three highest bond
rating categories or are unrated securities determined to be of comparable quality. The Fund may invest up to 20% of its net assets in securities that, at the time of purchase, are rated below investment grade or are unrated but determined to be of
comparable quality (commonly referred to as “high yield securities” or “junk bonds”).
While the Fund may invest in securities of any maturity, under
normal circumstances, the Fund’s dollar-weighted average maturity will be between three and ten years.
The Fund may invest in derivatives, such as futures (including
interest rate futures) and swap contracts (including credit default swaps, credit default swap indexes and interest rate swaps) for hedging purposes and to manage yield curve, duration and interest rate exposure; options (including options on listed
futures contracts), collateralized debt obligations and inverse floaters for investment purposes; and interest-only (IO) and principal-only (PO) securities for hedging and investment purposes.
The Fund may purchase or sell securities on a when-issued,
delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction. The Fund also may invest in private
placements.
Columbia Capital Allocation
Portfolios
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.
Columbia International Opportunities Fund (formerly Columbia
Marsico International Opportunities Fund)
Columbia
International Opportunities Fund (the Fund) seeks long-term growth of capital.
Under normal circumstances, the Fund invests at least 65% of
its total assets in equity securities (including common stock, preferred stock, and depositary receipts) of companies located in at least three countries other than the United States, including emerging market countries. The Fund invests in
companies that are believed to have the potential for growth. The Fund typically employs a focused portfolio investing style, which results in fewer holdings than a fund that seeks to achieve its investment objective by investing in a greater number
of issuers.
The Fund may invest in derivatives,
including futures and forward foreign currency contracts, in an effort to enhance returns, to hedge existing positions, to manage the Fund’s currency and overall risk exposure, to increase market or other exposure, and/or to increase
investment flexibility (including using the derivative as a substitute for a position in an underlying security, currency, asset, or other instrument or reference). Derivatives may be used by the Fund to obtain net long and/or net negative (short)
exposure to a security, currency, asset, or other instrument or reference.
The Fund may invest in companies involved in initial public
offerings, tender offers, mergers, other corporate restructurings and other special situations.
Columbia International Value Fund
Columbia International Value Fund (the Fund) seeks long-term
capital appreciation.
Under normal circumstances, the
Fund invests at least 80% of total assets (including the amount of any borrowings for investment purposes) in equity securities of foreign companies that have market capitalizations of more than $1 billion at the time of purchase. The Fund typically
invests in foreign companies in at least three countries, other than the United States, at any one time and may invest in emerging markets. The Fund may invest directly in foreign securities or indirectly through closed-end investment companies and
depositary receipts. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector.
The Fund may invest in currency forwards, futures and options
for both hedging and non-hedging purposes including, for example, to seek to enhance returns or, in certain unusual circumstances, when holding a derivative is deemed preferable to holding the underlying asset. In particular, the Fund may invest in
forward currency contracts to hedge the currency exposure associated with some or all of the Fund’s securities, to shift investment exposure from one currency to another, to shift U.S. dollar exposure to achieve a representative weighted mix
of major currencies in its benchmark, or to adjust an underweight country exposure in its portfolio. The Fund may also invest in equity index futures to manage exposure to the securities market and to maintain equity market exposure while managing
cash flows.
The Fund has the following limits on its
investments, which are applied at the time an investment is made. The Fund:
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normally invests no more
than 5% of its total assets in a single security;
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typically invests up to the
greater of (i) 20% of its total assets in a single country or industry or (ii) 150% of the weighting of a single country or industry in the MSCI Europe, Australasia, Far East (MSCI EAFE) Value Index (limited to less than 25% of its total assets in a
single industry, other than U.S. Government obligations); and
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generally may not invest
more than 20% of its total assets in emerging markets.
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Columbia Capital Allocation
Portfolios
Columbia Large Cap Enhanced Core Fund
Columbia Large Cap Enhanced Core Fund (the Fund) seeks total
return before fees and expenses that exceeds the total return of the Standard & Poor’s (S&P) 500
®
Index.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in common stocks that comprise the S&P 500 Index (the Index), convertible securities that are convertible into stocks included in the Index, and derivatives whose
returns are closely equivalent to the returns of the Index or its components.
The Fund primarily invests in securities included in the Index
but generally holds fewer stocks than the Index and may hold securities that are not in the Index.
Although the Fund’s investment manager attempts to
maintain a portfolio that generally matches the risk characteristics of the Index, it will vary the number and percentages of the Fund’s holdings in attempting to provide higher returns than the Index and to reduce the potential of
underperforming the Index over time. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the information technology sector.
In pursuit of the Fund’s objective, the portfolio
managers use quantitative analysis to evaluate the relative attractiveness of potential investments.
The Fund may invest in derivatives, such as futures contracts,
for investment purposes, for risk management (hedging) purposes and to increase investment flexibility.
Columbia Large Cap Growth Fund
Columbia Large Cap Growth Fund (the Fund) seeks long-term
capital appreciation.
Under normal market conditions,
the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities of large-capitalization companies, primarily common stocks and securities that can be converted into common stocks.
These companies have market capitalizations in the range of companies in the Russell 1000 Growth Index (the Index) at the time of purchase (between $622 million and $651.2 billion as of October 31, 2014). The market capitalization range and
composition of the companies in the Index are subject to change. The Fund invests primarily in common stocks of companies that the investment manager believes have the potential for long-term, above-average earnings growth. The Fund may from time to
time emphasize one or more economic sectors in selecting its investments, including the information technology and technology-related sectors.
The Fund may invest up to 20% of its total assets in foreign
securities. The Fund may invest directly in foreign securities or indirectly through depositary receipts.
Columbia Large Cap Index Fund
Columbia Large Cap Index Fund (the Fund) seeks total return
before fees and expenses that corresponds to the total return of the Standard & Poor’s (S&P) 500
®
Index.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in common stocks that comprise the S&P 500 Index (the Index). The Fund may invest in derivatives, consisting of stock index futures, as substitutes for the
underlying securities in the Index.
Different common
stocks have different weightings in the Index, depending on the amount of stock outstanding and the stock’s current price. In seeking to match the performance of the Index, Columbia Management Investment Advisers, LLC (the Investment Manager)
attempts to allocate the Fund’s assets among common stocks in approximately the same weightings as the Index. This is referred to as a passive or indexing approach to investing. The Fund may buy shares of Ameriprise Financial, Inc., an
affiliate of the Fund’s investment manager, which is currently included in the Index, subject to certain restrictions.
The Fund attempts to achieve at least a 95% correlation
between the performance of the Index and the Fund’s investment results, before fees and expenses.
Columbia Large Core Quantitative Fund
Columbia Capital Allocation
Portfolios
Columbia Large Core Quantitative Fund (the
Fund) seeks to provide shareholders with long-term capital growth.
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in equity securities of companies with market capitalizations greater than $5 billion at the time of purchase or that are within the market
capitalization range of companies in the S&P 500 Index (the Index) at the time of purchase. These equity securities generally include common stocks. The market capitalization range and composition of the companies in the Index are subject to
change.
The Fund may from time to time emphasize one or
more economic sectors in selecting its investments, including the information technology sector.
The Fund may invest in derivatives, such as futures contracts,
for cash equitization and investment flexibility.
In
pursuit of the Fund’s objective, the portfolio managers use quantitative analysis to evaluate the relative attractiveness of potential investments.
Columbia Large Growth Quantitative Fund
Columbia Large Growth Quantitative Fund (the Fund) seeks to
provide shareholders with long-term capital growth.
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in equity securities of companies with market capitalizations greater than $5 billion at the time of purchase or that are within the market
capitalization range of companies in the Russell 1000
®
Growth Index (the Index) at the time of purchase. These equity securities generally include common stocks. The market
capitalization range and composition of the companies in the Index are subject to change.
The Fund primarily invests in securities included in the Index
but generally holds fewer stocks than the Index and may hold securities that are not in the Index. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the consumer discretionary sector and
the information technology sector.
The Fund may invest
in derivatives, such as futures contracts, for cash equitization and investment flexibility.
In pursuit of the Fund’s objective, the portfolio
managers use quantitative analysis to evaluate the relative attractiveness of potential investments.
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.
Columbia Large Value Quantitative Fund
Columbia Large Value Quantitative Fund (the Fund) seeks to
provide shareholders with long-term capital growth.
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in equity securities of companies with market capitalizations greater than $5 billion at the time of purchase or that are within the market
capitalization range of companies in the Russell 1000
®
Value Index (the Index) at the time of purchase. These equity securities generally include common stocks. The market capitalization
range and composition of the companies in the Index are subject to change.
The Fund primarily invests in securities included in the Index
but generally holds fewer stocks than the Index and may hold securities that are not in the Index. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector.
The Fund may invest in derivatives, such as futures contracts,
for cash equitization and investment flexibility.
In
pursuit of the Fund’s objective, the portfolio managers use quantitative analysis to evaluate the relative attractiveness of potential investments.
Columbia Limited Duration Credit Fund
Columbia Limited Duration Credit Fund (the Fund) seeks to
provide shareholders with a level of current income consistent with preservation of capital.
Columbia Capital Allocation
Portfolios
Under normal circumstances, the Fund invests
at least 80% of its net assets (including the amount of any borrowings for investment purposes) in corporate bonds. The Fund will primarily invest in debt securities with short- and intermediate-term maturities generally similar to those included in
the Fund’s benchmark index, the Barclays U.S. 1-5Year Corporate Index (the Index). The Fund may invest up to 15% of its net assets in securities that, at the time of purchase, are rated below investment grade (commonly referred to as
“high yield securities” or “junk bonds”).
The Fund’s duration is managed to help reduce volatility
associated with changes in interest rates. Under normal conditions, the Fund will target duration to be similar to or lower than that of the Index, but will not exceed that of the Index by more than one year. As of October 31, 2014, the duration of
the Index was 2.82 years.
The Fund may invest up to 25%
of its net assets in foreign investments, including emerging markets.
Columbia Marsico Flexible Capital Fund
Columbia Marsico Flexible Capital Fund (the Fund) seeks to
provide shareholders with long-term growth of capital.
Under normal circumstances, the Fund invests in securities or
other investments of issuers of any capitalization. The Fund may also invest up to 40% of its assets in various types of fixed income and variable income securities, including up to 25% in securities rated below investment grade (commonly called
“high yield securities” or “junk bonds”). The Fund typically holds a core position of between 20 and 50 securities or other investments that are believed to have potential for long-term growth. The Fund may from time to time
exceed this range, including when the Fund is accumulating new positions, phasing out and replacing existing positions, or responding to abnormal market conditions; however, the portfolio managers do not currently intend to hold greater than 65
investments.
The core investments of the Fund (i.e., the
primary investments held by the Fund over time) generally may include established companies and securities that are expected to offer long-term growth potential. However, the Fund’s portfolio also may typically include securities of less
mature companies, securities with more aggressive growth characteristics, and securities of companies undergoing significant positive developments, such as, without limitation, the introduction of a new product line, the appointment of a new
management team, or an acquisition.
The Fund may invest
without limit in foreign investments, including investments in emerging markets. The Fund may from time to time emphasize one or more economic sectors in selecting its investments including the consumer discretionary sector.
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.
The Fund may use derivatives, such as options (including
options on currencies, interest rates and swap agreements, which are commonly referred to as swaptions), for investment purposes, for risk management (hedging) purposes, and to increase investment flexibility.
Columbia Marsico Focused Equities Fund
Columbia Marsico Focused Equities Fund (the Fund) seeks
long-term growth of capital.
Under normal circumstances,
the Fund invests at least 80% of its net assets in equity securities. These investments mostly consist of equity securities of large-capitalization companies that have market capitalizations of $5 billion or more at the time of purchase. The Fund
typically holds a core position of between 20 and 35 common stocks that are believed to have potential for long-term growth. The Fund may from time to time exceed this range, including when the Fund is accumulating new positions, phasing out and
replacing existing positions, or responding to abnormal market conditions; however, the portfolio managers do not currently intend to hold greater than 50 common stocks. The Fund may invest up to 25% of its total assets in foreign securities,
including in emerging market securities.
The Fund is
non-diversified, which means that it can invest a greater percentage of its assets in the securities of fewer issuers than can a diversified fund. The Fund may from time to time emphasize one or more economic sectors in selecting its investments,
including the consumer discretionary sector, health care sector, and information technology and technology-related sectors.
Columbia Capital Allocation
Portfolios
The core investments of the Fund (i.e., the
primary investments held by the Fund over time) generally may include established companies and securities that are expected to offer long-term growth potential. However, the Fund’s portfolio also may typically include securities of less
mature companies, securities with more aggressive growth characteristics, and securities of companies undergoing significant positive developments, such as, without limitation, the introduction of a new product line, the appointment of a new
management team, or an acquisition.
Columbia Marsico
Growth Fund
Columbia Marsico Growth Fund (the Fund)
seeks long-term growth of capital.
Under normal
circumstances, the Fund invests primarily in equity securities of large-capitalization companies that have market capitalizations of $5 billion or more at the time of purchase. The Fund typically holds a core position of between 35 and 50 common
stocks that are believed to have potential for long-term growth. The Fund may from time to time exceed this range, including when the Fund is accumulating new positions, phasing out and replacing existing positions, or responding to abnormal market
conditions; however, the portfolio managers do not currently intend to hold greater than 65 common stocks. The Fund may invest up to 25% of its total assets in foreign securities, including in emerging market securities.
The core investments of the Fund (i.e., the primary
investments held by the Fund over time) generally may include established companies and securities that are expected to offer long-term growth potential. However, the Fund’s portfolio also may typically include securities of less mature
companies, securities with more aggressive growth characteristics, and securities of companies undergoing significant positive developments, such as, without limitation, the introduction of a new product line, the appointment of a new management
team, or an acquisition.
The Fund may from time to time
emphasize one or more economic sectors in selecting its investments, including the consumer discretionary sector and the information technology and technology-related sectors.
Columbia Mid Cap Growth Fund
Columbia Mid Cap Growth Fund (the Fund) seeks significant
capital appreciation by investing, under normal market conditions, at least 80% of its net assets (plus any borrowings for investment purposes) in stocks of companies with a market capitalization, at the time of initial purchase, equal to or less
than the largest stock in the Russell Midcap Index.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in equity securities (including, but not limited to, common stocks, preferred stocks and securities convertible into common or preferred stocks) of companies that have
market capitalizations in the range of the companies in the Russell Midcap Index (the Index) at the time of purchase (between $298 million and $35.45 billion as of November 30, 2014). The market capitalization range and composition of the companies
in the Index are subject to change.
The Fund invests
primarily in common stocks of companies believed to have the potential for long-term, above-average earnings growth but may invest in companies for their short, medium or long-term prospects. The Fund may from time to time emphasize one or more
economic sectors in selecting its investments, including the consumer discretionary sector.
The Fund may invest up to 20% of its total assets in foreign
securities. The Fund may invest directly in foreign securities or indirectly through depositary receipts.
The Fund may invest in special situations such as companies
involved in initial public offerings, tender offers, mergers and other corporate restructurings, and in companies involved in management changes or companies developing new technologies.
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.
Columbia Mid Cap Index Fund
Columbia Mid Cap Index Fund (the Fund) seeks total return
before fees and expenses that corresponds to the total return of the Standard & Poor’s (S&P) MidCap 400
®
Index.
Columbia Capital Allocation
Portfolios
Under normal circumstances, the Fund invests
at least 80% of its net assets (including the amount of any borrowings for investment purposes) in common stocks that comprise the S&P MidCap 400 Index (the Index). The Fund may invest in derivatives, consisting of stock index futures, as
substitutes for the underlying securities in the Index.
Different common stocks have different weightings in the
Index, depending on the amount of stock outstanding and the stock’s current price. In seeking to match the performance of the Index, Columbia Management Investment Advisers, LLC (the Investment Manager) attempts to allocate the Fund’s
assets among common stocks in approximately the same weightings as the Index. This is referred to as a passive or indexing approach to investing. As a result of the Fund’s indexing approach to investing, the Fund will typically emphasize
within the portfolio those economic sectors emphasized by the Index, such as the financial services sector.
The Fund attempts to achieve at least a 95% correlation
between the performance of the Index and the Fund’s investment results, before fees and expenses.
Columbia Mid Cap Value Fund
Columbia Mid Cap Value Fund (the Fund) seeks long-term capital
appreciation.
Under normal circumstances, the Fund
invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities of companies that have market capitalizations in the range of the companies in the Russell Midcap Value Index (the Index) at
the time of purchase (between $888 million and $34.2 billion as of May 31, 2014) that the Fund’s investment manager believes are undervalued and have the potential for long-term growth. The market capitalization range and composition of the
companies in the Index are subject to change.
The Fund
may invest up to 20% of its total assets in foreign securities. The Fund normally invests in common stocks and also may invest in real estate investment trusts. The Fund may from time to time emphasize one or more economic sectors in selecting its
investments, including the financial services sector.
Columbia Money Market Fund
Columbia Money Market Fund (the Fund) seeks to provide
shareholders with maximum current income consistent with liquidity and stability of principal.
The Fund’s assets primarily are invested in money market
instruments, such as marketable debt obligations issued by corporations or the U.S. Government or its agencies, bank certificates of deposit, bankers’ acceptances, letters of credit, and commercial paper, including asset-backed commercial
paper. The Fund may invest more than 25% of its total assets in money market instruments issued by U.S. banks, U.S. branches of foreign banks and U.S. Government securities. Additionally, the Fund may invest up to 35% of its total assets in U.S.
dollar-denominated foreign investments.
Because the Fund
seeks to maintain a constant net asset value of $1.00 per share, capital appreciation is not expected to play a role in the Fund’s return. The Fund’s yield generally will vary from day to day.
The Fund restricts its investments to instruments that meet
certain maturity and quality standards required by the Securities and Exchange Commission (SEC) for money market funds. For example, the Fund:
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Invests substantially in
securities rated in the highest short-term rating category, or deemed to be of comparable quality. However, the Fund is permitted to invest up to 3% of its total assets in securities rated in the second highest short-term rating category, or deemed
to be of comparable quality.
|
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Limits its U.S.
dollar-weighted average portfolio maturity to 60 days or less and its U.S. dollar-weighted average life to 120 days or less.
|
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Buys obligations with
remaining maturities of 397 days or less (as maturity is calculated by SEC rules governing the operation of money market funds).
|
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Buys only obligations that
are denominated in U.S. dollars and present minimal credit risk.
|
Columbia Mortgage Opportunities Fund
Columbia Mortgage Opportunities Fund (the Fund) seeks total
return, consisting of long-term capital appreciation and current income.
Columbia Capital Allocation
Portfolios
Under normal circumstances, the Fund will invest at least 80%
of its net assets (including the amount of any borrowings for investment purposes) in mortgage-related assets. Mortgage-related assets include, but are not limited to, long and short positions in mortgage-related securities that are either issued or
guaranteed as to principal and interest by the U.S. Government, its agencies, authorities or instrumentalities, mortgage-related securities issued by non-U.S. governments, and residential and commercial mortgage-backed securities issued by
non-governmental entities, all of which may be represented by derivatives such as forward contracts, options, futures or swap agreements. Mortgage-related securities that either are issued or guaranteed as to principal and interest by the U.S.
Government, its agencies, authorities or instrumentalities include Government National Mortgage Association (GNMA or Ginnie Mae) mortgage-backed bonds, which are backed by the full faith and credit of the U.S. Government; and Federal National
Mortgage Association (FNMA or Fannie Mae) and Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac) mortgage-backed bonds. FNMA and FHLMC are chartered or sponsored by Acts of Congress; however, their securities are neither issued nor
guaranteed by the U.S. Treasury or backed by the full faith and credit of the U.S. Government. The Fund’s investments in mortgage-related securities include investments in stripped mortgage-backed securities such as interest-only (IO),
principal-only (PO) and inverse interest-only (IIO) securities. The Fund seeks to generate positive absolute total returns over full market cycles by investing principally in mortgage-related assets as well as other types of fixed-income securities
and instruments such as asset-backed securities.
The
Fund may invest in fixed income securities of any maturity and does not seek to maintain either a particular dollar-weighted average maturity or a particular duration.
The Fund may invest in derivative instruments, such as futures
(including bond futures) to manage interest rate exposure, forward-settling transactions to produce incremental earnings, swaps (including credit default swaps, interest rate swaps, total return swaps and swaptions) to manage credit and interest
rate exposure, options on futures to hedge existing positions and IO securities to produce incremental earnings. The Fund’s use of derivatives may result in leverage (market exposure in excess of the Fund’s assets). The Fund may hold a
significant amount of cash, money market instruments (which may include investments in one or more affiliated or unaffiliated money market funds or similar vehicles), other high-quality, short-term investments, or other liquid assets to meet its
segregation obligations as a result of its investments in derivatives. The Fund may also engage in short sales.
The Fund may purchase or sell securities on
a when-issued, delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction. The Fund may also engage
in repurchase agreements.
The Fund may invest
in securities that, at the time of purchase, are rated below investment grade or are unrated but determined to be of comparable quality (commonly referred to as “high yield securities” or “junk bonds”).
The Fund may invest significantly in privately placed
securities that have not been registered for sale under the Securities Act of 1933 pursuant to Rule 144A (Rule 144A securities) that are determined to be liquid in accordance with procedures adopted by the Fund’s Board of Trustees.
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.
The Fund is non-diversified, which means that it can invest a
greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Multi-Advisor Small Cap Value Fund
Columbia Multi-Advisor Small Cap Value Fund (the Fund) seeks
to provide shareholders with long-term capital appreciation.
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in small cap companies. For these purposes, small cap companies are those that have a market capitalization, at the time of investment, of up to
$2.5 billion or that fall within the range of the Russell 2000 Value Index (the Index). The Fund may buy and hold stock in a company that is not included in the
Columbia Capital Allocation
Portfolios
Index. The market capitalization range of
the companies included within the Index was $87 million to $7.26 billion as of August 31, 2014. The Fund may invest in any type of securities, including common stocks and depositary receipts. The Fund may from time to time emphasize one or more
economic sectors in selecting its investments.
The Fund
may invest up to 25% of its net assets in foreign investments.
Subject to oversight by the investment manager, multiple
subadvisers provide the day-to-day management of portions of the Fund’s portfolio. Each of the subadvisers employs an active investment strategy that focuses on small cap companies in an attempt to take advantage of what are believed to be
undervalued securities.
Columbia Multi-Asset Income
Fund
Columbia Multi-Asset Income Fund (the Fund) seeks
to provide shareholders with a high level of current income. The Fund’s secondary objective is total return.
Under normal circumstances, the Fund allocates its assets to
multiple asset classes, such as equity, fixed income and cash/cash equivalents, as well as strategies designed to achieve desired investment exposures, including through the use of derivatives and other instruments and assets. The Fund may invest in
the securities, instruments and assets described herein directly, or indirectly through investments in other mutual funds and exchange-traded funds (ETFs) managed by third parties or the investment manager or its affiliates. The Fund seeks to use
asset class selection and diversification as its primary strategy to generate income and total return.
The Fund’s investment manager, Columbia Management
Investment Advisers, LLC (Columbia Management or the Investment Manager) determines the Fund’s desired exposures to, and allocation across, asset classes and strategies. The Fund is not required to allocate its investments among asset classes
in any fixed proportion. The relative proportions of the Fund’s investments allocated to each asset class or strategy may change over time based upon market and economic conditions.
The fixed-income instruments in which the Fund may invest
directly, or indirectly through underlying funds, include debt securities of governments throughout the world (including the U.S. and emerging markets) as well as their agencies and instrumentalities and government-sponsored enterprises, debt
securities of non-governmental issuers (e.g., corporate issuers) throughout the world (including the U.S. and emerging markets), debt securities of any credit rating (including below investment grade debt securities, commonly known as
“high-yield” or “junk” bonds) or debt securities that are unrated, commercial and residential mortgage-backed securities, and bank loans. There is no limitation on the maturities or duration of the instruments in which the
Fund may invest.
The equity securities in which the Fund
may invest directly, or indirectly through underlying funds, include those of issuers of any market capitalization located throughout the world (including the U.S. and emerging markets) across various investment styles (e.g., growth- or
value-oriented styles), which may include common stocks, preferred stocks, convertible securities, master limited partnerships, and real estate investment trusts (REITs) and instruments of similar entities formed under the laws of non-U.S.
countries.
The Fund may invest in derivatives and
complex securities, including structured notes (such as equity-linked notes), for investment purposes.
Columbia Overseas Value Fund
Columbia Overseas Value Fund (the Fund) seeks long-term
capital appreciation.
Under normal circumstances, the
Fund invests at least 80% of total assets (including the amount of any borrowings for investment purposes) in equity securities of foreign companies that have market capitalizations of more than $1 billion at the time of purchase. The Fund typically
invests in foreign companies in at least three countries, other than the United States, at any one time and may invest in emerging markets. The Fund may invest directly in foreign securities or indirectly through closed-end investment companies and
depositary receipts. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector.
The Fund may invest in currency forwards, futures and options
for both hedging and non-hedging purposes including, for example, to seek to enhance returns or, in certain unusual circumstances, when holding a derivative is deemed preferable to holding the underlying asset. In particular, the Fund may invest in
forward currency contracts to hedge the currency exposure associated with some or all of the Fund’s securities, to shift investment exposure from one
Columbia Capital Allocation
Portfolios
currency to another, to shift U.S. dollar
exposure to achieve a representative weighted mix of major currencies in its benchmark, or to adjust an underweight country exposure in its portfolio. The Fund may also invest in equity index futures to manage exposure to the securities market and
to maintain equity market exposure while managing cash flows.
The Fund has the following limits on its investments, which
are applied at the time an investment is made. The Fund:
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normally invests no more
than 5% of its total assets in a single security;
|
■
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typically invests up to the
greater of (i) 20% of its total assets in a single country or industry or (ii) 150% of the weighting of a single country or industry in the MSCI Europe, Australasia, Far East (MSCI EAFE) Value Index (limited to less than 25% of its total assets in a
single industry, other than U.S. Government obligations); and
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generally may not invest
more than 20% of its total assets in emerging markets.
|
Columbia Pacific/Asia Fund
Columbia Pacific/Asia Fund (the Fund) seeks long-term capital
appreciation.
Under normal circumstances, the Fund
invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities (including, but not limited to, common stocks, preferred stocks and securities convertible into common or preferred stocks)
of companies located in Asia and the Pacific Basin, which includes Australia, New Zealand and India, and other countries within this region (the Pacific/Asia region). The Fund may invest in a variety of countries (including emerging markets),
industries and sectors and does not attempt to invest a specific percentage of its assets in any given country, industry or sector. However, the Fund has invested substantially in the financial services sector and may continue to invest
substantially in this or other sectors in the future. The Fund may invest in companies that have market capitalizations of any size.
The Fund may invest in derivatives, such as forward foreign
currency contracts for hedging and investment purposes, including in seeking to achieve or manage desired currency or country exposures, and futures (including index futures) for both hedging and investment purposes, including in seeking to enhance
returns, to increase market exposure and investment flexibility (including using the derivative as a substitute for the purchase or sale of the underlying security(ies), as well as for cash equitization purposes.
The Fund may invest in special situations such as companies
involved in initial public offerings, tender offers, mergers and other corporate restructurings, and in companies involved in management changes or companies developing new technologies.
The Fund may invest in securities believed to be undervalued,
represent growth opportunities, or both.
Columbia Real
Estate Equity Fund
Columbia Real Estate Equity Fund (the
Fund) seeks capital appreciation and above-average income by investing, under normal market conditions, at least 80% of its net assets (plus any borrowings for investment purposes) in the stocks of companies principally engaged in the real estate
industry, including real estate investment trusts (REITs).
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in equity securities of companies principally engaged in the real estate industry, including REITs. A company is considered to be “principally engaged” in
the real estate industry if at least 50% of its gross income or net profits are attributable to the ownership, construction, management or sale of residential, commercial or industrial real estate. The Fund may invest in equity REITs, mortgage REITs
and hybrid REITs.
The Fund is non-diversified, which
means that it can invest a greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Select Global Equity Fund (formerly known as Columbia
Global Equity Fund)
Columbia Select Global Equity Fund
(the Fund) seeks to provide shareholders with long-term capital growth.
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in equity securities, including securities of companies located in developed and emerging countries. These equity securities generally include
common stocks.
Columbia Capital Allocation
Portfolios
The Fund typically employs a focused
portfolio investing style, which results in fewer holdings than a fund that seeks to achieve its investment objective by investing in a greater number of issuers.
Under normal circumstances, the Fund generally invests at
least 40% of its net assets in companies that maintain their principal place of business or conduct their principal business activities outside the U.S., have their securities traded on non-U.S. exchanges or have been formed under the laws of
non-U.S. countries. This 40% minimum investment amount may be reduced to 30% if market conditions for these investments or specific foreign markets are deemed unfavorable. The Fund considers a company to conduct its principal business activities
outside the U.S. if it derives at least 50% of its revenue from business outside the U.S. or had at least 50% of its assets outside the U.S.
Columbia Select International Equity Fund (formerly Columbia
Multi-Advisor International Equity Fund)
Columbia Select
International Equity Fund (the Fund) seeks long-term capital growth.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in equity securities (including common stock, preferred stock, and depositary receipts) of established companies located in at least three countries other than the
United States, including emerging market countries. The Fund invests in companies that are believed to have the potential for growth. The Fund typically employs a focused portfolio investing style, which results in fewer holdings than a fund that
seeks to achieve its investment objective by investing in a greater number of issuers.
The Fund may invest in companies involved in initial public
offerings, tender offers, mergers, other corporate restructurings and other special situations. From time to time, the Fund may focus its investments in certain countries or geographic areas. The Fund may from time to time emphasize one or more
economic sectors in selecting its investments, including the financial services sector.
The Fund may invest in derivatives, including futures
contracts in an effort to enhance returns, to hedge existing positions, to manage the Fund’s overall risk exposure, to increase market or other exposure, and/or to increase investment flexibility (including using the derivative as a substitute
for a position in an underlying security, asset, or other instrument or reference). Derivatives may be used by the Fund to obtain net long and/or net negative (short) exposure to a security, asset, or other instrument or reference.
The Fund’s investment strategy may involve the frequent
trading of portfolio securities.
Columbia Select Large Cap
Equity Fund
Columbia Select Large Cap Equity Fund (the
Fund) seeks long-term capital appreciation.
Under normal
circumstances, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities of companies that have market capitalizations, at the time of purchase, in the range of companies in
the Standard & Poor’s (S&P) 500 Index (the Index). The market capitalization range of the companies included within the Index was $3.1 billion to $564.6 billion as of May 31, 2014. The market capitalization range and composition of the
companies in the Index are subject to change.
The Fund
may invest up to 20% of its total assets in foreign securities. The Fund normally invests in common stocks, preferred stocks and convertible securities such as warrants and rights and may invest in exchange-traded funds. The Fund may from time to
time emphasize one or more economic sectors in selecting its investments, including the information technology sector. Generally, the Fund anticipates holding between 45 and 65 securities in its portfolio; however, the Fund may hold, at any time,
more or fewer securities than noted in this range.
The
Fund may invest in derivatives, including options 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’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.
Columbia Select Large Cap Growth Fund
Columbia Select Large Cap Growth Fund (the Fund) seeks
long-term capital appreciation.
Columbia Capital Allocation
Portfolios
Under normal circumstances, the Fund invests
at least 80% of its net assets (including the amount of any borrowings for investment purposes) in common stocks of U.S. and foreign companies that have market capitalizations, at the time of purchase, in the range of companies in the Russell 1000
Growth Index (the Index). The market capitalization range of the companies included within the Index was $1.63 billion to $560 billion as of June 30, 2014. The market capitalization range and composition of the companies in the Index are subject to
change. The Fund invests primarily in common stocks of companies believed to have the potential for long-term growth. The Fund typically employs a focused portfolio investing style, which results in fewer holdings than a fund that seeks to achieve
its investment objective by investing in a greater number of issuers. The Fund may invest directly in foreign securities or indirectly through depositary receipts. The Fund may from time to time emphasize one or more economic sectors in selecting
its investments, including the consumer discretionary, health care and the information technology and technology-related sectors.
Columbia Select Large-Cap Value Fund
Columbia Select Large-Cap Value Fund (the Fund) seeks to
provide shareholders with long-term capital appreciation.
Under normal circumstances, at least 80% of the Fund’s
net assets (including the amount of any borrowings for investment purposes) are invested in equity securities of large capitalization issuers. These companies have market capitalizations in the range of companies in the Russell 1000
®
Value Index (the Index) at the time of purchase (between $712 million and $427.1 billion as of August 31, 2014). The market capitalization range and composition of the companies in the
Index are subject to change. The Fund’s Board of Trustees may change the parameters by which large market capitalization is defined if it concludes such a change is appropriate.
The Fund invests substantially in securities of U.S. issuers.
The Fund also invests substantially in “value” companies. The Fund considers “value” companies to be those companies believed by the investment manager to be undervalued, either historically, by the market, or as compared
with issuers in the same or similar industry or sector. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector. The Fund may hold a small number of securities,
consistent with its value investment approach. Generally, the Fund anticipates holding between 30 and 40 securities in its portfolio; however, the Fund may hold, at any time, more or fewer securities than noted in this range.
Columbia Select Smaller-Cap Value Fund
Columbia Select Smaller-Cap Value Fund (the Fund) seeks to
provide shareholders with long-term capital appreciation.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in equity securities of smaller capitalization issuers. These companies have market capitalizations in the range of companies in the Russell 2000
®
Value Index (the Index) at the time of purchase (between $87 million and $7.26 billion as of August 31, 2014). The market capitalization range and composition of the companies in the Index
are subject to change. The Fund’s Board of Trustees may change the parameters by which smaller market capitalization is defined if it concludes such a change is appropriate.
The Fund invests substantially in securities of U.S. issuers.
The Fund may invest up to 25% of its net assets in foreign investments. The Fund also invests substantially in “value” companies. The Fund considers “value” companies to be those companies believed by the investment manager
to be undervalued, either historically, by the market, or as compared with issuers in the same or similar industry or sector. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the
industrials sector. The Fund may hold a small number of securities, consistent with its value investment approach. Generally, the Fund anticipates holding between 40 and 50 securities in its portfolio; however, the Fund may hold, at any time, more
or fewer securities than noted in this range.
Columbia
Seligman Communications and Information Fund
Columbia
Seligman Communications and Information Fund (the Fund) seeks to provide shareholders with capital gain.
Under normal market conditions, the Fund will invest at least
80% of its net assets (including the amount of any borrowings for investment purposes) in securities of companies operating in the communications, information and related industries. Accordingly, the Fund invests in companies operating in the
information technology and telecommunications sectors as well as those in the media industry. In addition, as noted above, the Fund may invest
Columbia Capital Allocation
Portfolios
in related industries, which provides the
Fund with broad investment flexibility to invest in any industry and many of the issuers in which the Fund invests are technology and technology-related companies. These technology and technology-related companies may include companies operating in
any industry, including but not limited to software, hardware, health care, medical technology and technology services, such as the internet.
The Fund may invest up to 25% of its net assets in foreign
investments.
The Fund may invest in securities of large
capitalization companies that are well established and can be expected to grow with the market. The Fund may also invest in small-to-medium size capitalization companies that the Fund’s portfolio managers believe provide opportunities to
benefit from the rapidly changing technologies and the expansion of the communications, information and related industries. These securities generally include common stocks.
The Fund is non-diversified, which means that it can invest a
greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Seligman Global Technology Fund
Columbia Seligman Global Technology Fund (the Fund) seeks to
provide shareholders with long-term capital appreciation.
The Fund generally invests at least 80% of its assets
(including the amount of any borrowings for investment purposes) in equity securities of U.S. and non-U.S. companies with business operations in technology and technology-related industries. For these purposes, technology-related companies are those
companies that use technology extensively to improve their business processes and applications. The technology industry comprises information technology and communications, as well as medical, environmental and biotechnology. The Fund may invest in
securities of companies domiciled in any country believed to be appropriate to the Fund’s objective. The Fund generally invests in several countries in different geographic regions.
Under normal circumstances, the Fund generally invests at
least 40% of its net assets in companies that maintain their principal place of business or conduct their principal business activities outside the U.S., have their securities traded on non-U.S. exchanges or have been formed under the laws of
non-U.S. countries. This 40% minimum investment amount may be reduced to 30% if market conditions for these investments or specific foreign markets are deemed unfavorable. The Fund considers a company to conduct its principal business activities
outside the U.S. if it derives at least 50% of its revenue from business outside the U.S. or had at least 50% of its assets outside the U.S. The Fund may, from time to time, take temporary defensive positions that may result in the Fund investing
less than 30% of its net assets in companies outside the U.S. in seeking to minimize extreme volatility caused by adverse market, economic, political or other conditions.
The Fund may invest in companies that have market
capitalizations of any size. Securities of large capitalization companies that are well established in the world technology market can be expected to grow with the market and will frequently be held by the Fund. However, rapidly changing
technologies and expansion of technology and technology-related industries often provide a favorable environment for companies of small-to-medium size capitalization, and the Fund may invest in these companies as well.
The Fund may invest in all types of securities, many of which
will be denominated in currencies other than the U.S. dollar. The Fund normally concentrates its investments in common stocks; however, it may invest in other types of equity securities, including securities convertible into or exchangeable for
common stock, depositary receipts, and rights and warrants to purchase common stock. The Fund also may invest up to 20% of its assets in preferred stock and investment-grade or comparable quality debt securities.
The Fund is non-diversified, which means that it can invest a
greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Short Term Bond Fund
Columbia Short Term Bond Fund (the Fund) seeks current income,
consistent with minimal fluctuation of principal.
Under
normal circumstances, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) 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
Columbia Capital Allocation
Portfolios
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 to be of comparable quality.
The Fund may invest in mortgage- and other asset-backed
securities. The Fund may invest in floating rate debt securities, which have interest rates that adjust or “float” periodically. The Fund also may invest in private placements.
The Fund may invest in derivatives, including treasury
futures, 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, as well as to manage duration, yield curve and/or interest rate exposure.
The Fund may purchase or sell securities on a when-issued,
delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction.
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.
Columbia Small Cap Core Fund
Columbia Small Cap Core Fund (the Fund) seeks long-term
capital appreciation.
Under normal market conditions,
the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in stocks of companies that have market capitalizations, at the time of purchase, in the range of companies in the Russell 2000 Index
(the Index). The market capitalization range of the companies included within the Index was $28 million to $6.84 billion as of November 30, 2014. The market capitalization range and composition of the companies in the Index are subject to change.
The Fund generally invests in common stocks of companies believed to be undervalued. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the industrials sector and the information technology
sector.
The Fund may invest up to 20% of its total
assets in foreign securities. The Fund may invest directly in foreign securities or indirectly through depositary receipts.
Columbia Small Cap Growth Fund I
Columbia Small Cap Growth Fund I (the Fund) seeks capital
appreciation by investing, under normal market conditions, at least 80% of its net assets (plus any borrowings for investment purposes) in stocks of companies with a market capitalization, at the time of initial purchase, equal to or less than the
largest stock in the Standard & Poor’s (S&P) SmallCap 600
®
Index.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in equity securities (including, but not limited to, common stocks, preferred stocks and securities convertible into common or preferred stocks) of companies that have
market capitalizations in the range of the companies in the S&P SmallCap 600® Index (the Index) at the time of purchase (between $160 million and $4.26 billion as of November 30, 2014). The market capitalization range and composition of the
companies in the Index are subject to change.
The Fund
invests primarily in common stocks of companies believed to have the potential for long-term, above-average earnings growth but may invest in companies for their short, medium or long-term prospects. The Fund may from time to time emphasize one or
more economic sectors in selecting its investments, including the consumer discretionary, health care, and information technology sectors.
The Fund may invest up to 20% of its total assets in foreign
securities. The Fund may invest directly in foreign securities or indirectly through depositary receipts.
The Fund may invest in special situations such as companies
involved in initial public offerings, tender offers, mergers and other corporate restructurings, and in companies involved in management changes or companies developing new technologies.
Columbia Capital Allocation
Portfolios
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.
Columbia Small Cap Index Fund
Columbia Small Cap Index Fund (the Fund) seeks total return
before fees and expenses that corresponds to the total return of the Standard & Poor’s (S&P) SmallCap 600
®
Index.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in common stocks that comprise the S&P SmallCap 600 Index (the Index). The Fund may invest in derivatives, consisting of relevant stock index futures, to gain
exposure to the small cap equity market pending direct investments in securities.
Different common stocks have different weightings in the
Index, depending on the amount of stock outstanding and the stock’s current price. In seeking to match the performance of the Index, Columbia Management Investment Advisers, LLC (the Investment Manager) attempts to allocate the Fund’s
assets among common stocks in approximately the same weightings as the Index. This is referred to as a passive or indexing approach to investing. As a result of the Fund’s indexing approach to investing, the Fund will typically emphasize
within the portfolio those economic sectors emphasized by the Index, such as the financial services sector.
The Fund attempts to achieve at least a 95% correlation
between the performance of the Index and the Fund’s investment results, before fees and expenses.
Columbia Small Cap Value Fund I
Columbia Small Cap Value Fund I (the Fund) seeks long-term
capital appreciation.
Under normal circumstances, the
Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities of companies that have market capitalizations in the range of the companies in the Russell 2000 Value Index (the Index)
at the time of purchase (between $113 million and $4.34 billion as of July 31, 2014), that the Fund’s investment manager believes are undervalued. The market capitalization range and composition of the companies in the Index are subject to
change.
The Fund may invest up to 20% of its total
assets in foreign securities. The Fund also may invest up to 20% of its total assets in real estate investment trusts. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial
services sector.
Columbia Small Cap Value Fund II
Columbia Small Cap Value Fund II (the Fund) seeks long-term
capital appreciation.
Under normal circumstances, the
Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities of companies that have market capitalizations in the range of the companies in the Russell 2000 Value Index (the Index)
at the time of purchase (between $15 million and $9.4 billion as of May 31, 2014) that the Fund’s investment manager believes are undervalued and have the potential for long-term growth. The market capitalization range and composition of the
companies in the Index are subject to change.
The Fund
may invest up to 20% of its total assets in foreign securities, including depositary receipts. The Fund normally invests in common stocks and also may invest in real estate investment trusts. The Fund may from time to time emphasize one or more
economic sectors in selecting its investments, including the financial services sector.
The investment manager combines fundamental and quantitative
analysis with risk management in identifying investment opportunities and constructing the Fund’s portfolio.
Columbia Small/Mid Cap Value Fund (formerly known as Columbia
Mid Cap Value Opportunity Fund)
Columbia Small/Mid Cap
Value Fund (the Fund) seeks to provide shareholders with long-term growth of capital.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in equity securities of small- and medium-sized companies. These equity securities generally include common stocks and may also include real estate investment trusts.
Small- and medium-sized
Columbia Capital Allocation
Portfolios
companies are those whose market
capitalizations at the time of purchase fall within the market capitalization range of the Russell 2500 Value Index (the Index) (between $87 million and $11.3 billion as of August 31, 2014). The market capitalization range and composition of the
companies in the Index are subject to change.
The Fund
may invest up to 25% of its net assets in foreign investments. Foreign investments include depositary receipts. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services
sector.
Columbia U.S. Government Mortgage Fund
Columbia U.S. Government Mortgage Fund (the Fund) seeks to
provide shareholders with current income as its primary objective and, as its secondary objective, preservation of capital.
The Fund’s assets primarily are invested in
mortgage-related securities. Under normal market conditions, at least 80% of the Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in mortgage-related securities that either are issued or
guaranteed as to principal and interest by the U.S. Government, its agencies, authorities or instrumentalities. This includes, but is not limited to, Government National Mortgage Association (GNMA or Ginnie Mae) mortgage-backed bonds, which are
backed by the full faith and credit of the U.S. Government; and Federal National Mortgage Association (FNMA or Fannie Mae) and Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac) mortgage-backed bonds. FNMA and FHLMC are chartered or
sponsored by Acts of Congress; however, their securities are neither issued nor guaranteed by the U.S. Treasury.
The Fund’s investments in mortgage-related securities
include investments in stripped mortgage-backed securities such as interest-only (IO) and principal-only (PO) securities.
The Fund may invest in fixed income securities of any maturity
and does not seek to maintain a particular dollar-weighted average maturity.
The Fund may invest significantly in privately placed
securities that have not been registered for sale under the Securities Act of 1933 pursuant to Rule 144A (Rule 144A securities) that are determined to be liquid in accordance with procedures adopted by the Fund’s Board of Trustees.
The Fund may invest in derivatives, including forward
contracts in an effort to produce incremental earnings, to hedge existing positions, to increase market exposure and investment flexibility, and/or to obtain or reduce credit exposure.
The Fund may purchase or sell securities on a when-issued,
delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction.
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.
Columbia U.S. Treasury Index Fund
Columbia U.S. Treasury Index Fund (the Fund) seeks total
return that corresponds to the total return of the Citigroup Bond U.S. Treasury Index, before fees and expenses.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in securities that comprise the Citigroup Bond U.S. Treasury Index (the Index). The Index is an unmanaged index composed of U.S. Treasury notes and bonds with remaining
maturities of at least one year and outstanding principal of at least $5 billion and which are included in the Citigroup Broad Investment-Grade Bond Index. Different securities have different weightings in the Index. Securities in the Index are
weighted by market value; that is, the price per bond or note multiplied by the number of bonds or notes outstanding.
In seeking to match the performance of the Index, before fees
and expenses, the investment manager attempts to allocate the Fund’s assets among securities in the Index. The Fund will not hold all of the securities in the Index.
Columbia Value and Restructuring Fund
Columbia Value and Restructuring Fund (the Fund) seeks
long-term capital appreciation.
Columbia Capital Allocation
Portfolios
Under normal circumstances, the Fund invests
at least 80% of its assets (including the amount of any borrowings for investment purposes) in common stocks of companies that are believed to be undervalued and have the potential for long-term appreciation. The Fund also invests in common stocks
of companies that the Fund’s investment manager believes may benefit from various types of restructuring efforts or industry consolidation. The Fund primarily invests in companies that have larger market capitalizations (generally over $2
billion) but may invest in companies that have market capitalizations of any size.
Although the Fund invests primarily in securities of U.S.
companies, it may invest in foreign securities directly or indirectly through depositary receipts.
The Fund may invest in special situations such as companies
involved in initial public offerings, tender offers, mergers and other corporate restructurings, and in companies involved in management changes or companies developing new technologies.
Columbia Capital Allocation Portfolios
Underlying Funds — Principal
Risks
The ability of each Fund to meet its investment
objective is directly related to its allocation among Underlying Funds and the ability of those Underlying Funds to meet their investment objectives, as well as the investment performance of the Funds’ other investments. The following is
a brief description of certain of the principal risks associated with investment in the Underlying Funds in which the Funds may invest as part of their principal investment strategies. The Funds are subject directly to these risks to the
extent they invest in individual securities and other instruments. Additional information regarding the principal risks associated with investment in the Underlying Funds is available in the applicable Underlying Fund’s prospectus and
Statement of Additional Information. This prospectus is not an offer for any of the Underlying Funds.
The references in each case to the “Fund” within
each of the below risks descriptions in this Appendix B refers to the Underlying Fund(s) that the Funds may invest in.
Active Management Risk.
Certain Funds are actively managed by their portfolio managers. Certain other Funds are managed based primarily on quantitative methods, with the portfolio managers conducting a qualitative review of the quantitative output. In either case, the
Funds could underperform their benchmark indices and/or other funds with a similar investment objective.
Activist Strategies Risk.
The
Fund may purchase securities of a company that is the subject of a proxy contest or which activist investors are attempting to influence, in the expectation that new management or a change in business strategies will cause the price of the
company’s securities to increase. If the proxy contest, or the new management, is not successful, the market price of the company’s securities will typically fall.
Allocation Risk.
Because
the Fund uses an asset allocation strategy in pursuit of its investment objective,
there is a risk that the Fund's allocation among strategies and/or investment styles will cause the Fund's shares to lose
value or cause the Fund to underperform other funds with a similar investment objective and/or strategies, or that the investments themselves will not produce the returns expected.
Alternative Strategies Investment Risk.
An investment in alternative investment strategies (Alternative Strategies), whether through direct investment or through one or more underlying funds, involves risks, which may be significant. Alternative Strategies may
include strategies, instruments or other assets, such as derivatives, that seek investment returns uncorrelated with the broad equity and fixed income/debt markets, as well as those providing exposure to other markets (such as commodity markets),
including but not limited to absolute (positive) return strategies. Alternative Strategies may fail to achieve their desired performance, market or other exposure, or their returns (or lack thereof) may be more correlated with the broad equity
and/or fixed income/debt markets than was anticipated, and the Fund may lose money.
Arbitrage Strategies Risk.
The
Fund may purchase securities at prices only slightly below the anticipated value to be paid or exchanged for such securities in a merger, exchange offer or cash tender offer, and substantially above the prices at which such securities traded
immediately prior to announcement of the transaction. If there is a perception that the proposed transaction will not be consummated or will be delayed, the market price of the security may decline sharply, which would result in a loss to the
Fund.
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. Most asset-backed securities are subject to prepayment
risk (i.e., the risk that the Fund will have to reinvest the money received in securities that have lower yields). Rising or high interest rates tend to extend the duration of asset-backed securities, resulting in valuations that are volatile and
sensitive to changes in interest rates.
Bankruptcy Process Risk.
The Fund may purchase bankruptcy claims. There are a number of significant risks inherent in the bankruptcy process. The effect of a bankruptcy filing on a company may adversely and permanently affect the company by
causing it to lose its market position and key employees and otherwise become incapable of restoring itself as a viable business. Many events in a bankruptcy are the product of contested matters and adversarial proceedings and are beyond the control
of the creditors. The duration of a bankruptcy proceeding is
Columbia Capital Allocation Portfolios
difficult to predict and a creditor’s
return on investment can be adversely affected by delays while the plan of reorganization is being negotiated, approved by the creditors, confirmed by the bankruptcy court, and until it ultimately becomes effective. The administrative costs in
connection with a bankruptcy proceeding are frequently high and are paid out of the debtor’s estate before any return to creditors. Furthermore, bankruptcy law permits the classification of “substantially similar” claims in
determining the classification of claims in a bankruptcy reorganization. Because the standard for classification is vague, there exists the risk that the Fund’s influence with respect to the class of securities it owns can be impaired as a
result of increases in the number and amount of claims in that class or by different classification and treatment of that class. Finally, amounts previously paid to the Fund may be challenged as fraudulent conveyances or preferences as part of a
bankruptcy proceeding.
Changing Distribution
Level Risk.
The amount of the distributions paid by the Fund will vary and generally depends on the amount of interest income 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 income and/or dividends the Fund receives from its investments decline.
Commodity Futures Trading Commission (CFTC) Regulatory Risk.
The Fund does not qualify for an exemption from registration as a “commodity pool” under rules of the Commodity Exchange Act (the CEA). Accordingly, the Fund is a commodity pool under the CEA and the
Investment Manager is registered as a “commodity pool operator” under the CEA. The Fund is subject to dual regulation by the SEC and the CFTC. Compliance with the CFTC’s regulatory requirements could increase Fund expenses,
adversely affecting the Fund’s total return.
Commodity-related Investment Risk.
The value of commodities investments will generally be affected by overall market movements and factors specific to a particular industry or commodity, which may include demand for the commodity, weather, embargoes,
tariffs, and economic health, political, international, regulatory and other developments. Exposure to commodities and commodities markets may subject the value of the Fund’s investments to greater volatility than other types of investments.
Commodities investments may also subject the Fund to counterparty risk and liquidity risk. The Fund may invest in one or more underlying funds that make commodity-related investments through one or more wholly-owned subsidiaries organized outside
the U.S. that are generally not subject to U.S. laws (including securities laws) and their protections.
Commodity-related Tax Risk.
If
the Fund does not appropriately limit its commodity-related investments or if such investments are re-characterized for U.S. federal income tax purposes, the Fund may be unable to qualify as a regulated investment company for one or more years,
which would adversely affect the value of the Fund (and the favorable tax treatment afforded to it as a regulated investment company). In this event, the Fund’s Board may authorize a significant change in investment strategy or the
Fund’s liquidation.
Confidential Information
Access Risk.
Portfolio managers may avoid the receipt of material, non-public information (Confidential Information) about the issuers of floating rate loans (including from the issuer itself) being considered for
acquisition by the Fund, or held in the Fund. A decision not to receive Confidential Information may disadvantage the Fund and could adversely affect the Fund’s performance.
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. The Fund may also be forced to convert a convertible security at an inopportune time, which may decrease the Fund’s return.
Counterparty Risk.
Counterparty risk is the risk that a counterparty to a financial instrument held by the Fund or by a special purpose or structured vehicle invested in by the Fund may become insolvent or otherwise fail to perform its obligations. As a result, the
Fund may obtain no or limited recovery of its investment, and any recovery may be significantly delayed.
Credit Risk.
The value of fixed-income securities,
or other instruments or assets,
may decline if the issuer thereof defaults or otherwise becomes unable or unwilling, or is
perceived to be unable or unwilling, to honor its financial obligations, such as making payments to the Fund
when due. Rating agencies assign credit ratings to certain fixed-income securities to indicate
their credit risk. Lower quality or unrated securities held by the Fund may present increased credit risk as compared to higher-rated securities. Non-investment grade fixed-income securities (commonly called “high-yield” or
“junk”) may be subject to greater price fluctuations and are more likely to experience a default
Columbia Capital Allocation Portfolios
than investment grade securities and
therefore may expose the Fund to increased credit risk. If the Fund purchases unrated securities, or if the ratings of securities held by the Fund are lowered after purchase, the Fund will depend on analysis of credit risk more heavily than
usual.
Depositary Receipts Risk.
Depositary receipts are receipts issued by a bank or trust company reflecting ownership of underlying securities issued by foreign companies. Some foreign securities are traded in the form of American Depositary
Receipts (ADRs). Depositary receipts involve risks similar to the risks associated with investments in foreign securities, including those associated with the particular country, which may be related to the particular political, regulatory,
economic, social and other conditions or events occurring in the country and fluctuations in its currency, as well as market risk tied to the underlying foreign company. In addition, ADR holders may have limited voting rights,
may not have the same rights afforded typical company stockholders in the event of a corporate action such as an acquisition, merger or rights offering and may experience difficulty in receiving company stockholder
communications.
Derivatives Risk.
Losses involving derivative instruments may be substantial, because a relatively small movement in the price of an underlying security, instrument, commodity, currency or index may result in a substantial loss for the
Fund. In addition to the potential for increased losses, the use of derivative instruments may lead to increased volatility for the Fund. Derivative investments will typically increase the Fund’s exposure to principal risks to which it is
otherwise exposed, and may expose the Fund to additional risks, including correlation risk, counterparty risk, hedging risk, leverage risk and/or liquidity risk.
Derivatives Risk/Commodity-Linked Futures Contracts Risk.
The loss that may be incurred by the Fund in entering into futures contracts is potentially unlimited and may exceed the amount of the premium. Futures markets are highly volatile and the use of futures by the Fund may
increase the volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally required in futures trading, a relatively small price movement in a futures contract may result in substantial losses to the Fund.
Futures contracts may be illiquid. The liquidity of the futures market depends on participants entering into offsetting transactions rather than making or taking delivery. To the extent participants decide to make or take delivery, liquidity in the
futures market could be reduced. Furthermore, exchanges may limit fluctuations in futures contract prices during a trading session by imposing a maximum permissible price movement on each futures contract. The Fund may be disadvantaged if it is
prohibited from executing a trade outside the daily permissible price movement. Moreover, to the extent the Fund engages in futures contracts on foreign exchanges, such exchanges may not provide the same protection as U.S. exchanges.
Derivatives Risk/Commodity-Linked Structured Notes
Risk.
Investments in commodity-linked structured notes involve substantial risks, including risk of loss of interest and principal, lack of a liquid secondary market, and risk of greater volatility than investments
in traditional equity and debt markets. These instruments involve additional risks, including counterparty risk and hedging risk.
Derivatives Risk/Commodity-Linked Swaps Risk.
Commodity-linked swaps could result in losses if the underlying asset (e.g., a particular commodity) or reference does not perform as anticipated. The value of swaps, like many other derivatives, may move in unexpected
ways and may result in losses for the Fund. Such transactions can have the potential for unlimited losses. Such risk is heightened in the case of short swap transactions. Swaps can involve greater risks than direct investment in the underlying
asset, because swaps may be leveraged (creating leverage risk) and are subject to counterparty risk, hedging risk, pricing risk and liquidity risk.
Derivatives Risk/Credit Default Swap Indexes Risk.
A credit default swap (CDS) is an agreement between two parties in which one party agrees to make one or more payments to the second party, while the second party assumes the risk of certain defaults, generally a
failure to pay on a referenced debt obligation or the bankruptcy of the obligation’s issuer. As such, a CDS generally enables an investor to buy or sell protection against a credit event. A credit default index (CDX) is an index of CDS. Credit
default swap indexes (CDSX) are swap agreements that are intended to track the performance of a CDX. CDSX allow an investor, such as the Fund, to manage credit risk or to take a position on a basket of debt obligations more efficiently than
transacting in single name CDS. CDSX are subject to the risk that the Fund’s counterparty will default on its obligations. If the counterparty under a CDSX defaults on its obligation to make payments thereunder, the Fund may lose such payments
altogether, or collect only a portion thereof, which collection could involve costs or delays. Also, the Fund’s return from investment in CDSX
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may not match the return of the referenced index. Further, investment in CDSX
could result in losses if the referenced index does not perform as expected. Unexpected changes in the composition of the index may also affect performance of CDSX.
Derivatives Risk/Credit Default Swaps Risk.
A credit default swap enables an investor to buy or sell protection against a credit event, such as an issuer’s failure to make timely payments of interest or principal, bankruptcy or restructuring. A credit
default swap may be embedded within a structured note or other derivative instrument. Swaps can involve greater risks than direct investment in the underlying securities, because swaps, among other factors, may be leveraged (creating leverage risk,
the risk that losses from the derivative instrument may be greater than the amount invested in the derivative instrument) and subject the Fund to counterparty risk, hedging risk, pricing risk and liquidity risk. If the Fund is selling credit
protection, there is a risk that a credit event will occur and that the Fund will have to pay the counterparty. If the Fund is buying credit protection, there is a risk that no credit event will occur and the Fund will receive no benefit for the
premium paid.
Derivatives Risk/Forward Foreign
Currency Contracts Risk.
These instruments are a type of derivative contract whereby the Fund may agree to buy or sell a country’s or region’s currency at a specific price on a specific date in the
future. These instruments may fall in value (sometimes dramatically) due to foreign market downswings or foreign currency value fluctuations, subjecting the Fund to foreign currency risk. Investment in these instruments also subjects the Fund to
counterparty risk. The Fund’s strategy of investing in these instruments may not be successful
and the Fund may experience significant losses as a result.
Derivatives Risk/Forward Interest Rate Agreements Risk.
Under forward interest rate agreements, the buyer locks in an interest rate at a future settlement date. If the interest rate on the settlement date exceeds the lock rate, the buyer pays the seller the difference
between the two rates (based on the notional value of the agreement). If the lock rate exceeds the interest rate on the settlement date, the seller pays the buyer the difference between the two rates (based on the notional value of the agreement).
The Fund may act as a buyer or a seller. These transactions involve risks, including counterparty risk, hedging risk and interest rate risk.
Derivatives Risk/Futures Contracts Risk.
The loss that may be incurred in entering into futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets are highly volatile and the use of futures may increase the
volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract may result in substantial losses for the Fund. Futures
contracts may be illiquid. Furthermore, exchanges may limit fluctuations in futures contract prices during a trading session by imposing a maximum permissible price movement on each futures contract. The Fund may be disadvantaged if it is prohibited
from executing a trade outside the daily permissible price movement. Futures contracts executed on foreign exchanges may not provide the same protection as U.S. exchanges. These transactions involve additional risks, including counterparty risk,
hedging risk and pricing risk.
Derivatives
Risk/Inflation Rate Swaps Risk.
An inflation rate swap is a derivative instrument used to transfer inflation risk from one party to another through an exchange of cash flows. In an inflation rate swap, one party
pays a fixed rate on a notional principal amount, while the other party pays a floating rate linked to an inflation index, such as the Consumer Price Index (CPI). Investments in inflation rate swaps subject the Fund (and, therefore, shareholders) to
risks, including hedging risk (the risk that a hedging strategy may not eliminate the risk that it is intended to offset, and may offset gains), counterparty risk (the risk that the counterparty to the instrument will not perform or be able to
perform in accordance with the terms of the instrument), and inflation risk (the risk that inflation rates may change drastically as a result of unexpected shifts in the global economy), each of which may result in significant losses for the
Fund.
Derivatives Risk/Interest Rate Swaps
Risk.
Interest rate swaps can be based on various measures of interest rates, including the London Interbank Offered Rate (commonly known as LIBOR), swap rates, treasury rates and other foreign interest rates. A
swap agreement can increase or decrease the volatility of the Fund's investments and its NAV. The value of swaps, like many other derivatives, may move in unexpected ways and may result in losses for the Fund. Swaps can involve greater risks than
direct investment in securities, because swaps may be leveraged, and are, among other factors, subject to counterparty risk (the risk that the counterparty to the instrument will not perform or be able to perform in accordance with the terms of the
instrument), hedging and correlation risk (the risk
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that a hedging strategy may not eliminate
the risk that it is intended to offset, and may offset gains, including because of a lack of correlation between the swaps and the portfolio of bonds that the swaps are designed to hedge or replace), pricing risk (swaps may be difficult to value),
liquidity risk (it may not be possible to liquidate a swap position at an advantageous time or price) and interest rate risk (the risk of losses attributable to changes in interest rates), each of which may result in significant losses for the
Fund.
Derivatives Risk/Inverse Floaters Risk.
Inverse floaters (or inverse variable or floating rate securities) are a type of derivative, long-term fixed income obligation with a variable or floating interest rate that moves in the opposite direction of short-term
interest rates. While inverse floaters tend to provide more income than similar term and credit quality fixed-rate bonds, they also exhibit greater volatility in price movement. There is a risk that the current interest rate on variable and floating
rate securities may not accurately reflect current market interest rates or adequately compensate the holder for the current creditworthiness of the issuer. Some variable or floating rate securities are structured with liquidity features and some
may include market-dependent liquidity features that may present greater liquidity risk. Other risks associated with transactions include interest rate risk, credit risk and market risk.
Derivatives Risk/Options Risk.
The use of options is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If the Fund sells a put option, there is a risk that the Fund may be
required to buy the underlying asset at a disadvantageous price. If the Fund sells a call option, there is a risk that the Fund may be required to sell the underlying asset at a disadvantageous price, and if the call option sold is not covered (for
example, by owning the underlying asset), the Fund's losses are potentially unlimited. These transactions involve other risks, including counterparty risk and hedging risk.
Derivatives Risk/Portfolio Swaps and Total
Return Swaps Risk.
The use of portfolio swaps or total return swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities
transactions. Portfolio swaps and equity swaps could result in losses if the underlying asset or reference does not perform as anticipated. The value of swaps, like many other derivatives, may move in unexpected ways and may result in losses for the
Fund. Such transactions can have the potential for unlimited losses. Such risk is heightened in the case of short swap transactions. Swaps can involve greater risks than direct investment in the underlying asset, because swaps, among other factors,
may be leveraged (creating leverage risk) and are subject to counterparty risk, hedging risk, pricing risk and liquidity risk.
Derivatives Risk/Structured Investments Risk.
Structured instruments include debt instruments that are collateralized by the underlying cash flows of a pool of financial assets or receivables.
Structured investments may be
less liquid than other debt securities (or illiquid), and the price of structured investments may be more volatile. In some cases, depending on its terms, a structured investment may provide that the principal and/or interest payments may be
adjusted below zero. Structured investments also may involve significant credit risk and risk of default by the counterparty. The Fund’s use of structured instruments may not work as intended. If structured investments are used to reduce the
duration of the Fund’s portfolio, this may limit the Fund’s return when having a longer duration would be beneficial (for instance, when interest rates decline).
Derivatives Risk/Swaps Risk.
The use of swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. Swaps could result in Fund losses if the
underlying asset or reference does not perform as anticipated. The value of swaps, like many other derivatives, may move in unexpected ways and may result in losses for the Fund. Such transactions can have the potential for unlimited losses. Such
risk is heightened in the case of short swap transactions involving short exposures. Swaps can involve greater risks than direct investment in the underlying asset, because swaps,
among other factors, may be
leveraged (creating leverage risk) and are subject to counterparty risk, hedging risk, pricing risk and liquidity risk.
Derivatives Risk/Total Return Swaps Risk.
In a total return swap transaction, one party agrees to pay the other party an amount equal to the total return of a defined underlying asset (such as an equity security or basket of such securities) or a non-asset
reference (such as an index) during a specified period of time. In return, the other party would make periodic payments based on a fixed or variable interest rate or on the total return from a different underlying asset or non-asset reference. Total
return swaps could result in Fund losses if the underlying asset or
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reference does not perform as anticipated.
Such transactions can have the potential for unlimited losses. Swaps can involve greater risks than direct investment in securities, because swaps, among other factors, may be leveraged (creating leverage risk), and are subject to counterparty risk,
pricing risk and liquidity risk, which may result in significant Fund losses.
Derivatives Risk/Warrants
Risk.
Warrants are securities giving the holder the right, but not the obligation, to buy the stock of an issuer at a given price (generally higher than the value of the stock at the time of issuance) during a
specified period or perpetually. In addition, the value of a warrant does not necessarily change with the value of the underlying securities, and a warrant ceases to have value if it is not exercised prior to its expiration date. Warrants may be
subject to the risk that the securities could lose value, as well being subject to liquidity risk.
Distressed Securities Risk.
The Fund may purchase distressed securities of business enterprises involved in workouts,
liquidations, reorganizations,
bankruptcies and
similar situations. Since there is typically substantial uncertainty concerning the outcome
of transactions involving business enterprises in these situations, there is a high degree of risk of loss,
including loss of the entire investment.
Emerging Market Securities Risk.
Securities issued by foreign governments or companies in emerging market countries, such as
China, Russia and certain countries in Eastern Europe, the Middle East, Asia, Latin
America or Africa, are more likely to have greater exposure to the risks of investing in foreign securities that are described in Foreign Securities Risk. In addition, emerging market countries are more likely to experience instability resulting,
for example, from rapid changes or developments in social, political,
economic or other conditions. Their economies are usually less mature and their securities markets are typically less developed with more
limited trading activity (i.e., lower trading volumes and less liquidity) than more developed countries. Emerging market securities tend to be more volatile than securities in more developed markets. Many emerging market countries are heavily
dependent on international trade and have fewer trading partners, which makes them more sensitive to world commodity prices and economic downturns in other countries, and some have a higher risk of currency devaluations.
Energy and Natural Resources Industry Risk.
The Fund is subject to the risk that the securities of the issuers engaged in the energy and natural resources industries will underperform other industries or the market as a whole. To the extent that the Fund
invests in issuers conducting business in these or similar industries, the Fund is subject to a greater extent to legislative or regulatory changes, adverse market conditions and/or increased competition affecting those industries. The values of
natural resources are affected by numerous factors including, among other factors, events occurring in nature and local and international politics. In addition, rising interest rates and high inflation may affect the demand for certain natural
resources and, therefore, the price of related investments. Prices of precious metals may fluctuate sharply.
Event-Driven Trading Risk.
The Fund may seek to profit from the occurrence of specific corporate or other events. A delay in the timing of these events, or the failure of these events to occur at all, may have a significant negative effect on the
Fund’s performance.
Exchange-Traded
Fund (ETF) Risk.
ETFs are subject to, among other risks, tracking risk and passive and, in some cases, active investment risk. In addition, shareholders bear both their proportionate share of the Fund’s
expenses and similar expenses incurred through ownership of the ETF.
Focused Portfolio Risk.
Because the Fund may invest in a limited number of companies, the Fund as a whole is subject to greater risk of loss if any of those securities decline in price.
Foreign Currency Risk.
The
performance of the Fund may be materially affected positively or negatively by foreign currency strength or weakness relative to the U.S. dollar, particularly if the Fund invests a significant percentage of its assets in foreign securities or other
assets denominated in currencies other than the U.S. dollar.
Foreign Currency-related Tax Risk.
The Internal Revenue Service might issue regulations treating gains from some of the Fund’s foreign currency-denominated positions as not “qualifying income” and there is a remote possibility that such
regulations might be applied retroactively, in which case, the Fund might not qualify as a regulated investment company for one or more years. In the event the Treasury Department issues such regulations, the Fund’s Board may authorize a
significant change in investment strategy or the Fund’s liquidation.
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Foreign Securities Risk.
Investments in or exposure to foreign securities involve certain risks not associated with investments in or exposure to securities of U.S. companies. Foreign securities subject the Fund to the risks associated with
investing in the particular country of an issuer, including the political, regulatory, economic, social, diplomatic and other conditions or events occurring in the country or region, as well as risks associated with less developed custody and
settlement practices. Foreign securities may be more volatile and less liquid than securities of U.S. companies, and are subject to the risks associated with potential imposition of economic and other sanctions against a particular foreign country,
its nationals or industries or businesses within the country. The performance of the Fund may be negatively impacted by fluctuations in a foreign currency’s strength or weakness relative to the U.S. dollar, particularly
to the extent
the Fund invests a significant percentage of its assets in foreign securities or other assets denominated in currencies other than the U.S. dollar.
Forward Commitments on Mortgage-Backed Securities (including
Dollar Rolls) Risk.
When purchasing mortgage-backed securities in the “to be announced” (TBA) market
(MBS TBAs), the seller agrees to deliver mortgage-backed
securities for an agreed upon price on an agreed upon date, but may make no guarantee as to the specific securities to be delivered. In lieu of taking delivery of mortgage-backed securities, the Fund could enter into dollar rolls, which 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). MBS TBAs and dollar rolls are subject to counterparty risk (the risk that the counterparty to
the instrument will not perform or be able to perform in accordance with the terms of the instrument).
Frequent Trading Risk.
The portfolio managers may actively and frequently trade investments in the Fund's portfolio to carry out its investment strategies. Frequent trading of investments increases the possibility that the Fund, as relevant,
will realize taxable capital gains (including short-term capital gains, which are generally taxable to shareholders 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. The trading costs and tax effects associated with portfolio turnover may adversely affect the Fund’s performance.
Frontier Market Risk.
Frontier market countries generally have smaller economies and even less developed capital markets than traditional emerging market countries (which themselves have increased investment risk relative to more
developed market countries) and, as a result, the Fund’s exposure to the risks associated with investing in emerging market countries are magnified when the Fund invests in frontier market countries. Increased risks include: the
potential for extreme price volatility and illiquidity in frontier market countries; government ownership or control of parts of the private sector and of certain companies; trade barriers, exchange controls, managed adjustments in relative currency
values and other protectionist and similar measures imposed or negotiated by the countries with which frontier market countries trade; and the relatively new and unsettled securities laws in many frontier market countries.
Geographic Concentration Risk.
The Fund may be particularly susceptible to economic, political, regulatory or other events or conditions affecting issuers and countries within the specific geographic regions in which the Fund invests. The Fund’s NAV may be more volatile
than the NAV of a more geographically diversified fund.
Geographic Concentration Risk/Asia Pacific Region Risk.
Many of the countries in the Asia Pacific region are considered underdeveloped or developing, including from a political, economic and/or social perspective, and may have relatively unstable governments and economies
based on limited business, industries and/or natural resources or commodities. Events in any one country within the region may impact other countries in the region or the region as a whole. As a result, events in the region will generally have a
greater effect on the Fund than if the Fund were more geographically diversified. This could result in increased volatility in the value of the Fund’s investments and losses for the Fund. Also, securities of some companies in the region can be
less liquid than U.S. or other foreign securities, potentially making it difficult for the Fund to sell such securities at a desirable time and price.
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Geographic Concentration Risk/Europe Risk.
The Fund may be particularly susceptible to economic, political, regulatory or other events or conditions affecting issuers and countries in Europe. Currency devaluations could occur in countries that have not yet
experienced currency devaluation to date, or could continue to occur in countries that have already experienced such devaluations. In addition, the private and public sectors’ debt problems of a single European Union (EU) country can pose
significant economic risks to the EU as a whole. As a result, the Fund’s NAV may be more volatile than the NAV of a more geographically diversified fund. If securities of issuers in Europe fall out of favor, it may cause the Fund to
underperform other funds that do not concentrate in this region of the world.
Greater China Regional Risk.
The Greater China region consists of Hong Kong, The People's Republic of China and Taiwan, among other countries, and the Fund's investments in the region are particularly susceptible to risks in that region.
Adverse events in any one country within the region may impact the other countries in the region or Asia as a whole. As a result, adverse events in the region will generally have a greater effect on the Fund than if the Fund were more geographically
diversified, which could result in greater volatility in the Fund’s NAV and losses. Markets in the Greater China region can experience significant volatility due to social, economic, regulatory and political uncertainties.
Growth Securities Risk.
Growth
securities typically trade at a higher multiple of earnings than other types of equity securities. Accordingly, the market values of growth securities may never reach their expected market value and may decline in price. In addition,
growth securities, at times, may not perform as well as value securities or the stock market in general, and may be out of favor with investors for varying periods of time.
Hedging Transactions Risk.
The Fund may invest in securities and utilize financial instruments for a variety of hedging purposes. Hedging transactions may limit the opportunity for gain if the value of the portfolio position should increase.
There can be no assurance that the Fund will engage in hedging transactions at any given time, even under volatile market conditions, or that any hedging transactions the Fund engages in will be successful. Moreover, it may not be possible for the
Fund to enter into a hedging transaction at a price sufficient to protect its assets. The Fund may not anticipate a particular risk so as to hedge against it.
Highly Leveraged Transactions Risk.
The loans or other securities in which the Fund invests may include highly leveraged transactions whereby the borrower assumes large amounts of debt in order to have the financial resources to attempt to achieve its
business objectives. Loans or securities that are part of highly leveraged transactions involve a greater risk (including default and bankruptcy) than other investments.
High-Yield Securities Risk.
Securities rated below investment grade (commonly called “high-yield” or “junk” bonds) and unrated securities of comparable quality expose the Fund to a greater risk of loss of principal and income than a fund that invests
solely or primarily in investment grade securities. In addition, these investments have greater price fluctuations, are less liquid and are more likely to experience a default than higher-rated securities. High-yield securities are considered to be
predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Impairment of Collateral Risk.
The value of collateral, if any, securing a loan can decline, and may be insufficient to meet the borrower’s obligations or difficult or costly to liquidate. In addition, the Fund’s access to collateral may be limited by bankruptcy or
other insolvency laws. Further, certain floating rate and other loans may not be fully collateralized and may decline in value.
Index Risk.
The
Fund's value will generally decline when the performance of its targeted index declines. In addition, because the Fund may not hold all issues included in its index, it may not always be fully invested. The Fund also bears advisory,
administrative and other expenses and transaction costs in trading securities, which the index does not bear. Accordingly, the Fund's performance will likely fail to match the performance of its targeted index, after taking expenses into account. It
is not possible to invest directly in an index.
Industry Concentration Risk.
Investments that are concentrated in a particular industry will make the Fund’s portfolio value more susceptible to the events or conditions impacting that particular industry. Because the Fund may invest more than
25% of its total assets in money market instruments issued by banks, the value of the Fund may be adversely affected by economic, political or regulatory developments in or that impact the banking industry.
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Inflation-Protected Securities Risk.
Inflation-protected debt securities tend to react to changes in real interest rates (i.e., nominal interest rates minus the expected impact of inflation). In general, the price of such securities falls when real
interest rates rise, and rises when real interest rates fall. Interest payments on these securities will vary and may be more volatile than interest paid on ordinary bonds. In periods of deflation, the Fund may have no income at all from such
investments.
Inflation Risk.
Inflation risk is the uncertainty over the future real value (after inflation) of an investment. Inflation rates may change frequently and drastically as a result of various factors, including unexpected shifts in the
domestic or global economy, and the Fund’s investments may not keep pace with inflation, which may result in losses to Fund investors.
Infrastructure-Related Companies Risk.
Because the Fund concentrates its investments in infrastructure-related securities, the Fund has greater exposure to adverse economic, regulatory, political, legal, and other conditions or events affecting the issuers
of such securities. Additionally, infrastructure-related entities may be subject to regulation by various governmental authorities and may also be affected by governmental regulation of rates charged to customers, service interruption and/or legal
challenges due to environmental, operational or other conditions or events and the imposition of special tariffs and changes in tax laws, regulatory policies and accounting standards.
Interest Rate Risk.
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of debt securities 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 will generally affect the value of the Fund's shares. In general, the longer the maturity or duration of a debt security, the
greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest rates may negatively impact the
Fund’s performance. Actions by governments and central banking authorities can result in increases
in interest rates. Such actions may negatively affect the value of fixed-income securities held by the
Fund, resulting in a negative impact on the Fund's performance and NAV.
Investing in Other Funds Risk.
The Fund’s investment in other funds (affiliated and/or unaffiliated funds, including exchange-traded funds (ETFs)) subjects the Fund to the investment performance (positive or negative) and risks of the underlying funds in direct proportion
to the Fund’s investment therein. In addition, investments in ETFs have unique characteristics, including, but not limited to, the expense structure and additional expenses associated with investing in ETFs. The performance of the underlying
funds could be adversely affected if other investors in the same underlying funds make relatively large investments or redemptions in such underlying funds. The Fund, and its shareholders, indirectly bear a portion of the expenses of any funds in
which the Fund invests. Because the expenses and costs of a fund are shared by its investors, redemptions by other investors in the underlying funds could result in decreased economies of scale and increased operating expenses for such fund. The
Investment Manager may have potential conflicts of interest in selecting affiliated underlying funds for investment by the Fund because the fees paid to it by some underlying funds are higher than the fees paid by other underlying funds, as well as
a potential conflict in selecting affiliated funds over unaffiliated funds. Also, to the extent that the Fund is constrained/restricted from investing (or investing further) in a particular underlying fund for one or more reasons (e.g., underlying
fund capacity constraints or regulatory restrictions) or if the Fund chooses to sell its investment in an underlying fund because of poor investment performance or for other reasons, the Fund may have to invest in another underlying fund(s),
including less desirable funds – from a strategy or investment performance standpoint – which could have a negative impact on Fund performance. In addition, Fund performance could be negatively impacted if an appropriate alternate
underlying fund(s) does not present itself timely or at all.
Investing in Wholly-Owned Subsidiary Risk.
By investing in a Subsidiary, the Fund is indirectly exposed to the risks associated with the Subsidiary’s investments. The Fund’s Principal Risks
may also apply to a
Subsidiary in which the Fund invests (which are described in this prospectus). There can be no assurance that the investment objective of a Subsidiary will be achieved. Changes in the laws of the United States and/or the Cayman Islands, under which
the Fund and any Subsidiary in which it invests, respectively, are organized, could result in the inability of the Fund and/or the Subsidiary to operate as described in this prospectus and the Fund’s SAI and could adversely affect the Fund and
its shareholders.
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Issuer Risk.
An issuer in
which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may be caused by poor management decisions,
competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or factors.
Leverage Risk.
Leverage occurs when the Fund increases its assets available for investment using borrowings, short sales, derivatives, or similar instruments or techniques. If the Fund uses leverage, through purchasing particular
instruments such as derivatives,
the Fund has the risk of capital losses that exceed the net assets of the Fund. Because short sales involve borrowing securities and then selling them, the Fund’s short
sales effectively leverage the Fund’s assets. The Fund's assets that are used as collateral to secure the Fund's obligations to return the securities sold short may decrease in value while the short positions are outstanding, which may force
the Fund to use its other assets to increase the collateral. Leverage can create an interest expense that may lower the Fund's overall returns. Leverage presents the opportunity for increased net income and capital gains, but may also exaggerate the
Fund’s volatility and risk of loss. There can be no guarantee that a leveraging strategy will be successful.
Liquidity Risk.
Liquidity risk
is the risk associated with a lack of marketability of investments which may make it difficult to sell the investments at a desirable time or price. Decreases in the number of financial institutions, including banks and broker-dealers,
willing to make markets (matching up sellers and buyers) in the Fund’s investments or in their capacity or willingness to trade such investments may increase the Fund’s exposure to this risk. As a result,
the Fund, when seeking to sell its portfolio investments, could find that selling is more difficult than anticipated, especially during times of higher market volatility. Market participants attempting to sell the same or similar instrument at the
same time as the Fund could exacerbate the Fund’s exposure to liquidity risk. The Fund may have to accept a lower selling price for the holding, sell other investments that it might otherwise prefer to hold, or forego another, more appealing
investment opportunity. Certain securities that were liquid when purchased by the Fund may later become illiquid, particularly in times of overall economic distress. Changing regulatory, market or other conditions or environments (for example, the
interest rate or credit environments) may also adversely affect the liquidity and the price of the Fund's investments. Certain types of investments, such as structured notes and non-investment grade fixed income securities, as an example, may be
especially subject to liquidity risk. Floating rate loans generally are subject to legal or contractual restrictions on resale, may trade infrequently, and their value may be impaired when the Fund needs to liquidate such loans. Loans or other
assets may trade only in the over-the-counter market rather than on an organized exchange and may be more difficult to purchase or sell at a fair price, which may have a negative impact on the Fund’s performance. Judgement also plays a larger
role in valuing illiquid investments as compared to valuing liquid investments. Price volatility may be higher for illiquid or less liquid investments as a result of, for example, the relatively less frequent pricing of such securities (as compared
to liquid or more liquid investments). Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. Liquidity of the market and other factors can lead to an
increase in Fund redemptions, which may negatively impact Fund performance and NAV, including, for example, if the Fund is forced to sell securities in a down market.
Listed Private Equity Fund Investment Risk.
Private equity funds include financial institutions or vehicles whose principal business is to invest in and lend capital to privately held companies. The Fund is subject to the underlying risks that affect private
equity funds in which it invests, which may include increased liquidity risk, valuation risk, sector risk and credit risk. Limited or incomplete information about the companies in which private equity funds invest, and relatively concentrated
investment portfolios of private equity funds, may expose the Fund to greater volatility and risk of loss. Fund investment in private equity funds subjects Fund shareholders indirectly to the fees and expenses incurred by private equity
funds.
Macro Strategy Risk.
The profitability of any macro program depends primarily on the ability of its manager to predict derivative contract price movements to implement investment ideas regarding macroeconomic trends. Price movements for
commodity interests are influenced by, among other things: changes in interest rates; governmental, agricultural, trade, fiscal, monetary and exchange control programs and policies; weather and climate conditions; natural disasters, such as
hurricanes; changing supply and demand relationships; changes in balances of payments
Columbia Capital Allocation Portfolios
and trade; U.S. and international rates of
inflation and deflation; currency devaluations and revaluations; U.S. and international political and economic events; and changes in philosophies and emotions of market participants. The manager’s trading methods may not take all of these
factors into account.
Market Risk.
Market risk refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. An investment in the Fund could
lose money over short or long periods. Although equity securities generally tend to have greater price volatility than debt securities, under certain market conditions, debt securities may have comparable or greater price volatility.
Master Limited Partnership Risk.
Investments in securities (units) of master limited partnerships involve risks that differ from an investment in common stock. Investors have more limited rights to vote on matters affecting the partnership. Investments
are also subject to certain tax risks and conflicts of interest may exist between common unit holders, subordinated unit holders and the general partner of a master limited partnership.
Mid-Cap Company Securities Risk.
Investments in mid-capitalization companies (mid-cap companies) often involve greater risks than investments in larger, more established companies (larger companies) because mid-cap companies tend to have less
predictable earnings and may lack the management experience, financial resources, product diversification and competitive strengths of larger companies, and may be less liquid than the securities of larger companies.
Model and Technology Risk.
Investment strategies or programs that are fundamentally dependent on proprietary or licensed technology, such as, among other things, hardware, software, model-based strategies, data gathering systems, order execution,
and trade allocation systems, and/or risk management systems may not be successful on an ongoing basis or could contain errors, omissions, imperfections, or malfunctions. Any such errors, imperfections or limitations in a model could affect the
ability of the manager to implement strategies. Despite testing, monitoring and independent safeguards, these errors may result in, among other things, execution and allocation failures and failures to properly gather and organize data – all
of which may have a negative effect on the Fund.
Money Market Fund Investment Risk.
An investment in a money market fund is not a bank deposit and is not insured or guaranteed by any bank, the FDIC or any other government agency. Although money market funds seek to preserve the value of investments at
$1.00 per share, it is possible for the Fund to lose money by investing in money market funds. In addition to the fees and expenses that the Fund directly bears, the Fund indirectly bears the fees and expenses of any money market funds in which it
invests, including affiliated money market funds. The Fund will also be exposed to the investment risks of the money market fund. To the extent the Fund invests in instruments such as derivatives, the Fund may hold investments, which may be
significant, in money market fund shares to cover its obligations resulting from its investments in derivatives. Money market funds and the securities they invest in are subject to comprehensive regulations. The enactment of new legislation or
regulations, as well as changes in interpretation and enforcement of current laws, may affect the manner of operation, performance and/or yield of money market funds.
Money Market Fund Risk.
An
investment in the Fund is not a bank deposit, and is not insured or guaranteed by the Investment Manager, the Investment Manager's parent, the FDIC or any other government agency, and it is possible to lose money by investing in the Fund. The Fund
seeks to maintain a constant net asset value of $1.00 per share, but the net asset values of money market fund shares can fall, and in infrequent cases in the past have fallen, below $1.00 per share, potentially causing shareholders who redeem their
shares at such net asset values to lose money from their original investment. If the net asset value of Fund shares were to fall below $1.00 per share, there is no guarantee that the Investment Manager or its affiliates would protect the Fund or
redeeming shareholders against a loss of principal.
At times of (i) significant redemption activity by
shareholders, including, for example, when a single investor or a few large investors make a significant redemption of Fund shares, (ii) insufficient levels of cash in the Fund's portfolio to satisfy redemption activity, and (iii) disruption in the
normal operation of the markets in which the Fund buys and sells portfolio securities, the Fund could be forced to sell portfolio securities at unfavorable prices in order to generate sufficient cash to pay redeeming shareholders. Sales of portfolio
securities at such times could result in losses to the Fund and cause the net asset value of Fund shares to fall below $1.00 per share. Additionally, in some
Columbia Capital Allocation Portfolios
cases, the default of a single portfolio security could cause the net asset
value of Fund shares to fall below $1.00 per share. In addition, the Fund may suspend redemptions or the payment of redemption proceeds when permitted by applicable regulations.
Mortgage- and Other Asset-Backed
Securities Risk.
The value of any mortgage-backed and other asset-backed securities held by the Fund 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 or other assets; 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. Payment of principal and interest on some mortgage-backed securities (but not the market value of the securities themselves) may be guaranteed by the full faith and credit of a particular
U.S. Government agency, authority, enterprise or instrumentality, and some, but not all, are also insured or guaranteed by the U.S. Government. 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 entail greater risk than obligations guaranteed by the U.S. Government. Mortgage- and other asset-backed securities are subject to
prepayment risk, which is the possibility that the underlying mortgage or other asset 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. Rising or high interest rates tend to extend the duration of mortgage- and other asset-backed securities, making their prices more volatile and more sensitive to changes in interest rates.
Multi-Adviser Risk.
The Fund
has multiple advisory firms that each manage a portion of the Fund’s net assets on a daily basis. Each adviser makes investment decisions independently from the other adviser(s). It is possible that the security selection process of one
adviser will not complement or may conflict or even contradict that of the other adviser(s), including making off-setting trades that have no net effect to the Fund, but which may increase Fund expenses. As a result, the Fund's exposure to a given
security, industry, sector or market capitalization could be smaller or larger than if the Fund were managed by a single adviser, which could adversely affect the Fund's performance.
Multi-Strategy Risk.
The multi-strategy approach employed by the Fund involves special risks, which include the risk that investment decisions, at the Fund or the underlying fund level, may conflict with each other; for example, at any
particular time, one manager may be purchasing shares of an issuer whose shares are being sold by another manager. Consequently, the Fund could indirectly incur transaction costs without accomplishing any net investment result. Also, managers may
use proprietary or licensed investment strategies that are based on considerations and factors that are not fully disclosed to the Fund or other investors.
Non-Diversified Fund Risk.
The Fund is non-diversified, which generally means that it will 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 a more diversified fund.
Opportunistic Investing Risk.
Undervalued securities involve the risk that they may never reach their expected full market value, either because the market fails to recognize the security's intrinsic worth or the expected value was misgauged. Undervalued securities also may
decline in price even though the Investment Manager believes they are already undervalued. Turnaround companies may never improve their fundamentals, may take much longer than expected to improve, or may improve much less than expected. Development
stage companies could fail to develop and deplete their assets, resulting in large percentage losses.
Preferred Stock Risk.
Preferred stock is a type of stock that generally pays dividends at a specified rate and that has preference over common stock in the payment of dividends and the liquidation of assets. Preferred stock does not ordinarily carry voting rights. The
price of a preferred stock is generally determined by earnings, type of products or services, projected growth rates, experience of management, liquidity, and general market conditions of the markets on which the stock trades. The most significant
risks associated with investments in preferred stock include issuer risk, market risk and interest rate risk (
i.e.
, the risk of losses attributable
to changes in interest rates).
Columbia Capital Allocation Portfolios
Prepayment and Extension Risk.
Prepayment and extension risk is the risk that a bond or other security or investment might,
in the case of prepayment risk, be called or otherwise converted, prepaid or redeemed
before maturity and, in the case of extension risk, the investment might not be called as expected. In the case of prepayment risk, if the investment is converted, prepaid or redeemed before maturity, the portfolio managers may not be able to invest
the proceeds in other investments providing as high a level of income, resulting in a reduced yield to the Fund. In the case of mortgage- or asset-backed securities, as interest rates decrease or spreads narrow, the likelihood of prepayment
increases. Conversely, extension risk is the risk that an unexpected rise in interest rates will extend the life of a mortgage- or asset-backed security beyond the prepayment time. If the Fund’s investments are locked in at a lower interest
rate for a longer period of time, the portfolio managers may be unable to capitalize on securities with higher interest rates or wider spreads.
Quantitative Model Risk.
Investments selected using quantitative methods may perform differently from the market as a whole. There can be no assurance that these methodologies will enable the Fund to achieve its objective.
Real Estate-Related Investment Risk.
Investments in real estate investment trusts (REITs) and in securities of other companies (wherever organized) principally engaged in the real estate industry subject the Fund to, among other things, risks similar to
those of direct investments in real estate and the real estate industry in general. These include risks related to general and local economic conditions, possible lack of availability of financing and changes in interest rates or property values.
REITs are entities that either own properties or make construction or mortgage loans, and also may include operating or finance companies. The value of interests in a REIT may be affected by, among other factors, changes in the value of the
underlying properties owned by the REIT, changes in the prospect for earnings and/or cash flow growth of the REIT itself, defaults by borrowers or tenants, market saturation, decreases in market rates for rents, and other economic, political, or
regulatory matters affecting the real estate industry, including REITs. REITs and similar non-U.S. entities depend upon specialized management skills, may have limited financial resources, may have less trading volume in their securities, and may be
subject to more abrupt or erratic price movements than the overall securities markets. REITs are also subject to the risk of failing to qualify for favorable tax treatment under the Internal Revenue Code of 1986, as amended. Some REITs (especially
mortgage REITs) are affected by risks similar to those associated with investments in debt securities including changes in interest rates and the quality of credit extended.
Redemption Risk.
The Fund may
need to sell portfolio securities to meet redemption requests. The Fund could experience a loss when selling portfolio securities to meet redemption requests if there is (i) significant redemption activity by shareholders, including, for example,
when a single investor or few large investors make a significant redemption of Fund shares, (ii) a disruption in the normal operation of the markets in which the Fund buys and sells portfolio securities or (iii) the inability of the Fund to sell
portfolio securities because such securities are illiquid. In such events, the Fund could be forced to sell portfolio securities at unfavorable prices in an effort to generate sufficient cash to pay redeeming shareholders. The Fund may suspend
redemptions or the payment of redemption proceeds when permitted by applicable regulations.
Regulatory Risk — Money Market Funds.
Money market funds and the securities they invest in are subject to comprehensive regulations. The enactment of new legislation or regulations, as well as changes in interpretation and enforcement of current laws, may
affect the manner of operation,
performance and/or yield of money market funds. For example, in July 2014, the SEC adopted amendments to money market regulation designed to address, among other things,
systemic risks associated with money market funds and to enhance transparency for money market fund investors. These rules provide for liquidity fees or redemption gates for non-government money market funds if
portfolio liquidity drops below specified levels and will require institutional prime money market funds to price shares with a floating net asset value. These rule changes may impact the future operations, performance and/or yields of the Columbia
money market funds and other money market funds. Non-governmental money
market funds will be required to restrict beneficial owners to natural persons if they want to maintain a stable net asset value.
Because government money market funds will not be required to float their net asset value or impose liquidity fees or redemption gates, money market funds may decide to change investment strategies to qualify as
government money market funds. Money market funds are required to comply with the liquidity fees, redemption gates and floating net asset value rules by October 2016 and most of the other rules by April 2016.
Columbia Capital Allocation Portfolios
Reinvestment Risk.
Reinvestment risk is the risk that the Fund will not be able to reinvest income or principal at the same return it is currently earning.
Repurchase Agreements Risk.
Repurchase agreements are agreements in which the seller of a security to the Fund agrees to repurchase that security from the Fund 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 Fund's income and the value of your investment in the Fund to decline.
Reverse Repurchase Agreements Risk.
Reverse repurchase agreements are agreements in which a Fund sells a security to a counterparty, such as a bank or broker-dealer, in return for cash and agrees to repurchase that security at a mutually agreed upon price
and time. Reverse repurchase agreements carry the risk that the market value of the security sold by the Fund may decline below the price at which the Fund must repurchase the security. Reverse repurchase agreements also may be viewed as a form of
borrowing, and borrowed assets used for investment creates leverage risk. Leverage can create an interest expense that may lower the Fund's overall returns. Leverage presents the opportunity for increased net income and capital gains, but may also
exaggerate the Fund’s volatility and risk of loss. There can be no guarantee that this strategy will be successful.
Rule 144A Securities Risk.
The
Fund may invest significantly in privately placed “Rule 144A” securities that are determined to be liquid in accordance with procedures adopted by the Fund’s Board. However, an insufficient number of qualified institutional buyers
interested in purchasing Rule 144A securities at a particular time could affect adversely the marketability of such securities and the Fund might be unable to dispose of such securities promptly or at reasonable prices. Accordingly, even if
determined to be liquid, the Fund’s holdings of Rule 144A securities may increase the level of Fund illiquidity if eligible buyers become uninterested in buying them at a particular time. Issuers of Rule 144A securities are required to furnish
information to potential investors upon request. However, the required disclosure is much less extensive than that required of public companies and is not publicly available since it is not filed with the SEC. Further, issuers of Rule 144A
securities can require recipients of the information (such as the Fund) to agree contractually to keep the information confidential, which could also adversely affect the Fund’s ability to dispose of the security.
Sector Risk.
At times, the
Fund may have a significant portion of its assets invested in securities of companies conducting business in a related group of industries within an economic sector. Companies in the same economic sector may be similarly affected by
economic, regulatory, political or market events or conditions, which may make the Fund more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly. Generally,
the more broadly the Fund invests, the more it spreads risk and potentially reduces the risks of loss and volatility.
The Fund may be more susceptible to the particular risks that
may affect companies in the consumer discretionary sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the consumer discretionary sector are subject to certain risks, including fluctuations in the
performance of the overall domestic and international economy, interest rate changes, increased competition and consumer confidence. Performance of such companies may be affected by factors including reduced disposable household income, reduced
consumer spending, changing demographics and consumer tastes.
The Fund may be more susceptible to the particular risks that
may affect companies in the financial services sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the financial services sector are subject to certain risks, including the risk of regulatory change,
decreased liquidity in credit markets and unstable interest rates. Such companies may have concentrated portfolios, such as a high level of loans to real estate developers, which makes them vulnerable to economic conditions that affect that
industry. Performance of such companies may be affected by competitive pressures and exposure to investments or agreements that, under certain circumstances, may lead to losses (e.g., subprime loans). Companies in the financial services sector are
subject to extensive governmental regulation that may limit the amount and types of loans and other financial commitments they can make, and interest rates and fees that they may charge. In addition, profitability of such companies is largely
dependent upon the availability and the cost of capital.
Columbia Capital Allocation Portfolios
The Fund may be more susceptible to the particular risks that
may affect companies in the health care sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the health care sector are subject to certain risks, including restrictions on government reimbursement for
medical expenses, government approval of medical products and services, competitive pricing pressures, and the rising cost of medical products and services (especially for companies dependent upon a relatively limited number of products or
services). Performance of such companies may be affected by factors including, government regulation, obtaining and protecting patents (or the failure to do so), product liability and other similar litigation as well as product obsolescence.
The Fund may be more susceptible to the particular risks that
may affect companies in the industrials sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the industrials sector are subject to certain risks, including changes in supply and demand for their specific
product or service and for industrial sector products in general, including decline in demand for such products due to rapid technological developments and frequent new product introduction. Performance of such companies may be affected by factors
including government regulation, world events and economic conditions and risks for environmental damage and product liability claims.
The Fund may be more susceptible to the particular risks that
may affect companies in the information technology sector, as well as other technology-related sectors (collectively, the technology sectors) than if it were invested in a wider variety of companies in unrelated sectors. Companies in the technology
sectors are subject to certain risks, including the risk that new services, equipment or technologies will not be accepted by consumers and businesses or will become rapidly obsolete. Performance of such companies may be affected by factors
including obtaining and protecting patents (or the failure to do so) and significant competitive pressures, including aggressive pricing of their products or services, new market entrants, competition for market share and short product cycles due to
an accelerated rate of technological developments. Such competitive pressures may lead to limited earnings and/or falling profit margins. As a result, the value of their securities may fall or fail to rise. In addition, many technology sector
companies have limited operating histories and prices of these companies’ securities historically have been more volatile than other securities, especially over the short term.
Select Portfolio Risk.
Because the Fund may invest in a limited number of companies, the Fund as a whole is subject to greater risk of loss if any of its portfolio securities decline in price. In addition, the Fund’s holdings and
weightings will diverge significantly from its primary benchmark’s holdings and weightings and the Fund may therefore experience greater risk and volatility relative to the benchmark. Because the Fund may invest in more than one company
concentrated in a similar industry, sector or geographic region, the Fund may be even more concentrated than the number of companies it may hold would suggest.
Short Positions Risk.
The Fund
may establish short positions which introduce more risk to the Fund than long positions (where the Fund owns the instrument or other asset) because the maximum sustainable loss on an instrument or other asset purchased (held long) is limited to the
amount paid for the instrument or other asset plus the transaction costs, whereas there is no maximum price of the shorted instrument or other asset when purchased in the open market. Therefore, in theory, short positions have unlimited risk. The
Fund’s use of short positions in effect “leverages” the Fund. Leverage potentially exposes the Fund to greater risks of loss due to unanticipated market movements, which may magnify losses and increase the volatility of returns. To
the extent the Fund takes a short position in a derivative instrument or other asset, this involves the risk of a potentially unlimited increase in the value of the underlying instrument or other asset.
Small Company Securities Risk.
Investments in small-capitalization companies (small-cap companies) often involve greater risks than investments in larger, more established companies (larger companies) because small-cap companies tend to have less
predictable earnings and may lack the management experience, financial resources, product diversification and competitive strengths of larger companies,
and securities of small-cap companies may be less
liquid and more volatile than the securities of larger companies.
Columbia Capital Allocation Portfolios
Small- and Mid-Cap Company Securities Risk.
Investments in small- and mid-capitalization companies (small- and mid-cap companies) often involve greater risks than investments in larger, more established companies (larger companies) because small- and mid-cap
companies tend to have less predictable earnings and may lack the management experience, financial resources, product diversification and competitive strengths of larger companies.
Securities of small- and
mid-cap companies may be less liquid and more volatile than the securities of larger companies.
Sovereign Debt Risk.
A
sovereign debtor’s willingness or ability to repay principal and pay interest in a timely manner may be affected by a variety of factors, including its cash flow situation, the extent of its reserves, the availability of sufficient foreign
exchange on the date a payment is due, the relative size of the debt service burden to the economy as a whole, the sovereign debtor’s policy toward international lenders, and the political constraints to which a sovereign debtor may be
subject. Sovereign debt risk is increased for emerging market issuers.
Special Situations Risk.
Securities of companies that are involved in an initial public offering or a major corporate event, such as a business consolidation or restructuring, may be exposed to heightened risk because of the high degree of
uncertainty that can be associated with such events. Securities issued in initial public offerings often are issued by companies that are in the early stages of development, have a history of little or no revenues and may operate at a loss following
the offering. It is possible that there will be no active trading market for the securities after the offering, and that the market price of the securities may be subject to significant and unpredictable fluctuations. Certain “special
situation” investments are investments in securities or other instruments that are determined to be illiquid or lacking a readily ascertainable fair value. Certain special situation investments prevent ownership interests therein from being
withdrawn until the special situation investment, or a portion thereof, is realized or deemed realized, which may negatively impact Fund performance. Investing in special situations may have a magnified effect on the performance of funds with small
amounts of assets.
Stripped
Mortgage-Backed Securities Risk.
Stripped mortgage-backed securities are a type of mortgage-backed security that receive differing proportions of the interest and principal payments from the underlying assets.
Generally, there are two classes of stripped mortgage-backed securities: Interest Only (IO) and Principal Only (PO). IOs entitle the holder to receive distributions consisting of all or a portion of the interest on the underlying pool of mortgage
loans or mortgage-backed securities. POs entitle the holder to receive distributions consisting of all or a portion of the principal of the underlying pool of mortgage loans or mortgage-backed securities. The cash flows and yields on IOs and POs are
extremely sensitive to the rate of principal payments (including prepayments) on the underlying mortgage loans or mortgage-backed securities. A rapid rate of principal payments may adversely affect the yield to maturity of IOs. A slow rate of
principal payments may adversely affect the yield to maturity of POs. If prepayments of principal are greater than anticipated, an investor in IOs may incur substantial losses. If prepayments of principal are slower than anticipated, the yield on a
PO will be affected more severely than would be the case with a traditional mortgage-backed security.
Tax Risk.
The Fund intends to qualify for treatment as a regulated investment company under the Internal Revenue Code of 1986, as amended (the Code). In order to so qualify, the Fund must meet certain requirements regarding the source of its income. Certain
instruments in which the Fund is permitted to invest do not give rise to qualifying income. If the Fund were to fail to limit its income from such investments appropriately, absent a cure the Fund would be unable to qualify for treatment as a
regulated investment company. The tax treatment of certain investments and of the income and gain therefrom under the qualifying income test applicable to regulated investment companies is uncertain. An adverse determination or future guidance by
the Internal Revenue Service (the IRS) regarding such investments or the income and gain from such investments might affect the Fund’s ability to qualify for treatment as a regulated investment company, including on a retroactive
basis.
If the Fund were to fail to qualify as a
regulated investment company, or if it were ineligible to or otherwise could not cure such failure, the Fund would be ineligible for the favorable tax treatment afforded to regulated investment companies for one or more years, which would adversely
affect the value of the Fund. Please refer to “Distributions and Taxes” in this prospectus or to “Taxation” in the SAI for additional information about the U.S. federal income tax treatment of the Fund.
Columbia Capital Allocation Portfolios
Tracking Error Risk.
The Fund
will not track its benchmark index perfectly and the Fund may not outperform the index. The tools that the Investment Manager uses to replicate the index are not perfect and the Fund’s performance may be impacted by the size of the
Fund’s portfolio, the effectiveness of sampling techniques, transaction costs, management fees and expenses, brokerage commissions and fees, the extent and timing of cash flows in and out of the Fund and changes in the index.
Trade Claims Risk.
The Fund may also purchase trade claims against companies, including companies in bankruptcy or reorganization proceedings, which include claims of suppliers for goods delivered and not paid, claims for unpaid services
rendered, claims for contract rejection damages and claims related to litigation. An investment in trade claims is very speculative and carries a high degree of risk. Trade claims may be illiquid instruments that generally do not pay interest and
there can be no guarantee that the debtor will ever be able to satisfy the obligation on the trade claim. Trade claims are typically unsecured and may be subordinated to other unsecured obligations of a debtor, and generally are subject to defenses
of the debtor with respect to the underlying transaction giving rise to the trade claim. The markets in trade claims are not regulated by U.S. federal securities laws or the SEC.
U.S. Government Obligations Risk.
While U.S. Treasury obligations are backed by the “full faith and credit” of the U.S. Government, such securities are nonetheless subject to credit risk (i.e., the risk that the U.S. Government may be, or be
perceived to be, unable or unwilling to honor its financial obligations, such as making payments). 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.
Valuation Risk.
The sales price the Fund (or an underlying fund or other investment vehicle) could receive for any particular investment may differ from the Fund’s (or an underlying fund’s or other investment
vehicle’s) valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair value methodology that produces an estimate of the fair value of the security/instrument, which may
prove to be inaccurate. Investors who purchase or redeem Fund shares on days when the Fund is holding securities or other instruments (or holding shares of underlying funds or other investment vehicles that have fair-valued securities or other
instruments in their portfolios) may receive fewer or more shares or lower or higher redemption proceeds than they would have received if the Fund (or underlying fund or other investment vehicle) had not fair-valued the security or instrument or had
used a different valuation methodology.
Value Securities Risk.
Value securities are securities of companies that may have experienced, for example, adverse business, industry or other developments or may be subject to special risks that have caused the securities to be out of favor and, in turn, potentially
undervalued. The market value of a portfolio security may not meet the portfolio manager's perceived value assessment of that security, or may decline in price, even though the portfolio manager(s) believe(s) the securities are already undervalued.
There is also a risk that it may take longer than expected for the value of these investments to rise to the portfolio manager’s perceived value. In addition, value securities, at times, may not perform as well as growth securities or the
stock market in general, and may be out of favor with investors for varying periods of time.
Additional Information About the Funds
Additional information about each Fund’s investments is available in
the Fund’s annual and semiannual 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.
The SAI also provides additional information about the Fund and its policies. The SAI, which has been filed with the SEC, is legally part of this prospectus (incorporated by reference). To obtain these documents free of charge, to request other
information about the Funds and to make shareholder inquiries, please contact the Funds as follows:
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:
columbiathreadneedle.com/us
Information Provided by the SEC
You can review and copy information about the Funds (including this
prospectus, the SAI and shareholder reports) at the SEC’s Public Reference Room in Washington, D.C. 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 Funds
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, D.C. 20549-1520.
The investment company registration number of each Trust of
which a Fund is a series, is:
Funds
|
Trust
|
Investment
company
registration number
|
Columbia
Capital Allocation Conservative Portfolio,
Columbia Capital Allocation Aggressive Portfolio, and
Columbia Capital Allocation Moderate Portfolio
|
Columbia
Funds Series Trust II
|
811-21852
|
Columbia
Capital Allocation Moderate Aggressive Portfolio, and
Columbia Capital Allocation Moderate Conservative Portfolio
|
Columbia
Funds Series Trust
|
811-09645
|
© 2015 Columbia Management Investment
Distributors, Inc.
225 Franklin Street, Boston, MA 02110
800.345.6611
Prospectus
June 1,
2015
Columbia Income
Builder Fund
Class
|
|
Ticker
Symbol
|
Class
A Shares
|
|
RBBAX
|
Class
B Shares
|
|
RBBBX
|
Class
C Shares
|
|
RBBCX
|
Class
K Shares
|
|
CIPRX
|
Class
R Shares
|
|
CBURX
|
Class
R4 Shares
|
|
CNMRX
|
Class
R5 Shares
|
|
CKKRX
|
Class
W Shares
|
|
CINDX
|
Class
Z Shares
|
|
CBUZX
|
As with all mutual funds, the Securities and Exchange Commission (SEC) has
not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Columbia Income Builder Fund
|
3
|
|
3
|
|
3
|
|
4
|
|
5
|
|
7
|
|
8
|
|
9
|
|
9
|
|
9
|
|
10
|
|
10
|
|
10
|
|
13
|
|
16
|
|
20
|
|
21
|
|
22
|
|
23
|
|
23
|
|
23
|
|
28
|
|
36
|
|
38
|
|
41
|
|
42
|
|
42
|
|
43
|
|
47
|
|
49
|
|
55
|
|
56
|
|
59
|
|
59
|
|
60
|
|
63
|
|
A-1
|
|
B-1
|
Columbia Income Builder Fund
Investment Objective
Columbia Income Builder Fund (the Fund) seeks to provide
shareholders with a high level of current income and growth of capital.
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 members of your immediate family invest, or agree to invest in the future, at least $50,000 in certain classes of shares of eligible funds distributed by
Columbia Management Investment Distributors, Inc. (the Distributor). More information about these and other discounts is available from your financial intermediary, and can be found in the
Choosing a Share
Class
section beginning on page 23 of the Fund’s prospectus and in Appendix S to the Statement of Additional Information (SAI) under
Sales Charge Waivers
beginning on page S-1.
Shareholder
Fees (fees paid directly from your investment)
|
|
Class
A
|
Class
B
|
Class
C
|
Classes
K,
R, R4, R5,
W and Z
|
Maximum
sales charge (load) imposed on purchases (as a % of offering price)
|
4.75%
|
None
|
None
|
None
|
Maximum
deferred sales charge (load) imposed on redemptions (as a % of the lower of the original purchase price or current net asset value)
|
1.00%
(a)
|
5.00%
(b)
|
1.00%
(c)
|
None
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
Class
A
|
Class
B
|
Class
C
|
Class
K
|
Class
R
|
Class
R4
|
Class
R5
|
Class
W
|
Class
Z
|
Management
fees
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
Distribution
and/or service (12b-1) fees
|
0.25%
|
1.00%
|
1.00%
|
0.00%
|
0.50%
|
0.00%
|
0.00%
|
0.25%
|
0.00%
|
Other
expenses
(d)
|
0.16%
|
0.16%
|
0.16%
|
0.35%
|
0.16%
|
0.16%
|
0.10%
|
0.16%
|
0.16%
|
Acquired
fund fees and expenses
|
0.65%
|
0.65%
|
0.65%
|
0.65%
|
0.65%
|
0.65%
|
0.65%
|
0.65%
|
0.65%
|
Total
annual Fund operating expenses
(e)
|
1.06%
|
1.81%
|
1.81%
|
1.00%
|
1.31%
|
0.81%
|
0.75%
|
1.06%
|
0.81%
|
(a)
|
This charge is imposed on
certain investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with
certain limited exceptions.
|
(b)
|
This charge decreases over
time.
|
(c)
|
This charge applies to
redemptions within one year after purchase, with certain limited exceptions.
|
(d)
|
Other expenses for Class A,
Class B, Class C, Class K, Class R, Class R4, Class R5, Class W and Class Z shares have been restated to reflect current fees paid by the Fund.
|
(e)
|
“Total
annual Fund operating expenses” include acquired fund fees and expenses (expenses the Fund incurs indirectly through its investments in other investment companies) and may be higher than “Total Net Expenses” shown in the
Financial Highlights
section of this prospectus because “Total Net Expenses” do not include acquired fund fees and expenses.
|
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 the
applicable class of Fund shares 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
Annual Fund Operating Expenses
table above.
|
Columbia Income Builder Fund
Summary of the Fund
(continued)
Although your actual costs may be higher or
lower, based on the assumptions listed above, your costs would be:
|
1
year
|
3
years
|
5
years
|
10
years
|
Class
A
(whether or not shares are redeemed)
|
$578
|
$796
|
$1,032
|
$1,708
|
Class
B
(assuming redemption of all shares at the end of the period)
|
$684
|
$869
|
$1,180
|
$1,930
|
Class
B
(assuming no redemption of shares)
|
$184
|
$569
|
$
980
|
$1,930
|
Class
C
(assuming redemption of all shares at the end of the period)
|
$284
|
$569
|
$
980
|
$2,127
|
Class
C
(assuming no redemption of shares)
|
$184
|
$569
|
$
980
|
$2,127
|
Class
K
(whether or not shares are redeemed)
|
$102
|
$318
|
$
552
|
$1,225
|
Class
R
(whether or not shares are redeemed)
|
$133
|
$415
|
$
718
|
$1,579
|
Class
R4
(whether or not shares are redeemed)
|
$
83
|
$259
|
$
450
|
$1,002
|
Class
R5
(whether or not shares are redeemed)
|
$
77
|
$240
|
$
417
|
$
930
|
Class
W
(whether or not shares are redeemed)
|
$108
|
$337
|
$
585
|
$1,294
|
Class
Z
(whether or not shares are redeemed)
|
$
83
|
$259
|
$
450
|
$1,002
|
Portfolio Turnover
The Fund and underlying funds pay
transaction costs, such as commissions, when they buy and sell securities (or “turn over” their portfolios). The Fund will indirectly bear the expenses associated with portfolio turnover of the underlying funds. A high portfolio turnover
rate may indicate higher transaction costs. 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 29% of the average value of its portfolio.
Principal Investment Strategies
The Fund is a “fund-of-funds”
and seeks to achieve its objective by investing in a combination of underlying funds representing different asset classes, potentially including an allocation to alternative investment strategies. Under normal market conditions, the Fund intends to
invest in each asset class within the following target asset allocation ranges:
Asset
Class (Target Allocation Range – Under Normal Market Conditions)*
|
Equity
|
0–35%
|
Fixed
Income
|
55–100%
|
Cash
|
0–15%
|
Alternative
Investment Strategy
|
0–20%
|
*
|
Market appreciation or
depreciation may cause the Fund to be temporarily outside the ranges identified in the table. The Investment Manager may modify the target allocation ranges only upon approval of the Fund’s Board of Trustees.
|
Columbia Management Investment Advisers, LLC (the Investment
Manager), will allocate the Fund’s assets within and across different asset classes through investments in underlying funds, potentially including an allocation to alternative investment strategy funds, in an effort to achieve the Fund’s
objective of providing a high level of current income and growth of capital. Typically, asset allocation changes will be made monthly to refine the Fund’s positioning, but may be made more or less frequently depending upon then-current
allocations.
In pursuit of the Fund’s objective,
the Investment Manager chooses investments by:
■
|
Evaluating the Fund’s
total exposure to sectors, industries, issuers and securities relative to the Fund’s indices;
|
■
|
Analyzing factors such as
credit quality, interest rate outlook and price; and
|
■
|
Targeting certain underlying
funds that invest in lower-quality (junk) bonds and foreign investments as attractive opportunities arise.
|
The Investment Manager relies on various qualitative and
quantitative inputs to tactically allocate the Fund’s assets across the different asset classes and investment categories.
Columbia Income Builder Fund
Summary of the Fund
(continued)
Investment Category
Allocation.
Within the equity and fixed income asset classes, the Investment Manager establishes allocations for the Fund, seeking to achieve the Fund’s objective by investing in defined investment categories.
Fixed income investment categories include underlying funds that invest in: treasury inflation protected securities, mortgage- and asset-backed securities, core plus (primarily domestic investment grade bonds), high yield bonds, high yield loans,
international bonds and emerging market bonds. The Investment Manager also may allocate assets to money market (cash) or alternative investment strategies. Equity investment categories include underlying funds that invest in: U.S. large cap, mid cap
and small cap equities (including growth, value and core/blend styles), international equities (including emerging market securities) and real estate securities. The target allocation range constraints set forth in Table 1 are intended to promote
diversification within asset classes, and the Investment Manager takes into account factors such as style, sector, market capitalization, geographic location, credit quality, interest rate outlook, and yield potential. Proposed allocation shifts are
reviewed and approved by the Investment Manager as part of its qualitative review.
Principal Risks
An investment in the Fund involves risk, including specific
risks relating to the investment in the Fund based on its investment process and its "fund-of-funds" structure, as well as specific risks related to the underlying funds in which it invests, including among others, those described below. More
information about underlying funds, including their principal risks, is available in their prospectuses.
There is no assurance that the Fund will achieve its investment objective and you may lose money
.
The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV) and share price may go down.
Allocation Risk.
Because the Fund uses an asset allocation strategy in pursuit of its investment objective,
there is a risk that the Fund's allocation among asset classes, investments, managers,
strategies and/or investment styles will cause the Fund's shares to lose value or cause the Fund to underperform other funds with a similar investment objective and/or strategies, or that the investments themselves will not produce the returns
expected.
Changing Distribution Level
Risk.
The amount of the distributions paid by the Fund will vary and generally depends on the amount of interest income 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 income and/or dividends the Fund receives from its investments decline.
Credit Risk.
The value of fixed-income securities,
or other instruments or assets, may decline if the issuer thereof defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor
its financial obligations, such as making payments to the Fund when due. Rating agencies assign credit ratings to certain fixed-income securities to indicate their credit risk. Lower quality or unrated securities held by the Fund may present
increased credit risk as compared to higher-rated securities. Non-investment grade fixed-income securities (commonly called “high-yield” or “junk”) may be subject to greater price fluctuations and are more likely to
experience a default than investment grade securities and therefore may expose the Fund to increased credit risk. If the Fund purchases unrated securities, or if the ratings of securities held by the Fund are lowered after purchase, the Fund will
depend on analysis of credit risk more heavily than usual.
Emerging Market Securities Risk.
Securities issued by foreign governments or companies in emerging market countries, such as
China, Russia and certain countries in Eastern Europe, the Middle East, Asia, Latin
America or Africa, are more likely to have greater exposure to the risks of investing in foreign securities that are described in Foreign Securities Risk. In addition, emerging market countries are more likely to experience instability resulting,
for example, from rapid changes or developments in social, political,
economic or other conditions. Their economies are usually less mature and their securities markets are typically less developed with more
limited trading activity (i.e., lower trading volumes and less liquidity) than more developed countries. Emerging market securities tend to be more volatile than securities in more developed markets. Many emerging market countries are heavily
dependent on international trade and have fewer trading partners, which makes them more sensitive to world commodity prices and economic downturns in other countries, and some have a higher risk of currency devaluations.
Columbia Income Builder Fund
Summary of the Fund
(continued)
Foreign Securities Risk.
Investments in or exposure to foreign securities involve certain risks not associated with investments in or exposure to securities of U.S. companies. Foreign securities subject the Fund to the risks associated with
investing in the particular country of an issuer, including the political, regulatory, economic, social, diplomatic and other conditions or events occurring in the country or region, as well as risks associated with less developed custody and
settlement practices. Foreign securities may be more volatile and less liquid than securities of U.S. companies, and are subject to the risks associated with potential imposition of economic and other sanctions against a particular foreign country,
its nationals or industries or businesses within the country. The performance of the Fund may be negatively impacted by fluctuations in a foreign currency’s strength or weakness relative to the U.S. dollar, particularly
to the extent
the Fund invests a significant percentage of its assets in foreign securities or other assets denominated in currencies other than the U.S. dollar.
Fund-of-Funds Risk.
Determinations regarding asset classes or underlying funds and the Fund’s allocations thereto may not successfully achieve the Fund’s investment objective, in whole or in part. The ability of the Fund to realize its investment objective
will depend, in large part, on the extent to which the underlying funds realize their investment objective. There is no guarantee that the underlying funds will achieve their respective investment objectives. The Fund is exposed to the same risks as
the underlying funds in direct proportion to the allocation of its assets among the underlying funds. Therefore,
to the extent that the Fund invests significantly in a particular underlying fund, the
Fund’s performance would be significantly impacted by the performance of such underlying fund. Generally, by investing in a combination of underlying funds, the Fund has exposure to the risks of many areas of the market. By concentrating its
investments in relatively few underlying funds, the Fund may have more concentrated market exposures, subjecting the Fund to greater risk of loss should those markets decline or fail to rise. The performance of underlying funds could be adversely
affected if other entities that invest in the same underlying funds make relatively large investments or redemptions in such underlying funds. The Fund, and its shareholders, indirectly bear a portion of the expenses of any funds in which the Fund
invests. Because the expenses and costs of each underlying fund are shared by its investors, redemptions by other investors in an underlying fund could result in decreased economies of scale and increased operating expenses for such fund. The
Investment Manager may have potential conflicts of interest in selecting affiliated funds over unaffiliated funds for investment by the Fund, and may also face potential conflicts of interest in selecting affiliated funds, because the fees the
Investment Manager receives from some underlying funds may be higher than the fees paid by other underlying funds.
High-Yield Securities Risk.
Securities rated below investment grade (commonly called “high-yield” or “junk” bonds) and unrated securities of comparable quality expose the Fund to a greater risk of loss of principal and income than a fund that invests
solely or primarily in investment grade securities. In addition, these investments have greater price fluctuations, are less liquid and are more likely to experience a default than higher-rated securities. High-yield securities are considered to be
predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Interest Rate Risk.
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of
debt securities 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 will generally affect the value of the Fund's shares. In general, the longer the maturity or
duration of a debt security, the greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest
rates may negatively impact the Fund’s performance. Actions by governments and central banking authorities can result in increases
in interest rates. Such actions may negatively affect the value of
fixed-income securities held by the Fund, resulting in a negative impact on the Fund's performance and NAV. Securities with floating coupon rates are typically less sensitive to interest rate changes, but these securities may decline in value if
their coupon rates do not rise as much as,
or keep pace with,
yields on such types of securities. Because rates on certain floating rate loans and other debt
securities reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause fluctuations in the Fund’s NAV.
Columbia Income Builder Fund
Summary of the Fund
(continued)
Issuer Risk.
An issuer in
which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may be caused by poor management decisions,
competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or factors.
Market Risk.
Market risk refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. An investment in the Fund could lose money over short or long
periods. Although equity securities generally tend to have greater price volatility than debt securities, under certain market conditions, debt securities may have comparable or greater price volatility.
Prepayment and Extension Risk.
Prepayment and extension risk is the risk that a bond or other security or investment might,
in the case of prepayment risk, be called or otherwise converted, prepaid or redeemed before maturity and, in the
case of extension risk, the investment might not be called as expected. In the case of prepayment risk, if the investment is converted, prepaid or redeemed before maturity, the portfolio managers may not be able to invest the proceeds in other
investments providing as high a level of income, resulting in a reduced yield to the Fund. In the case of mortgage- or asset-backed securities, as interest rates decrease or spreads narrow, the likelihood of prepayment increases. Conversely,
extension risk is the risk that an unexpected rise in interest rates will extend the life of a mortgage- or asset-backed security beyond the prepayment time. If the Fund’s investments are locked in at a lower interest rate for a longer period
of time, the portfolio managers may be unable to capitalize on securities with higher interest rates or wider spreads.
Reinvestment Risk.
Reinvestment risk is the risk that the Fund will not be able to reinvest income or principal at the same return it is currently earning.
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 bar chart shows how the Fund’s Class A share performance (without sales charges) has varied for each full calendar year shown. If the
sales charges were reflected, returns shown would be lower. The table below the bar chart compares the Fund’s returns (after applicable sales charges shown in the
Shareholder Fees
table in this
prospectus) for the periods shown with a blended index that is intended to provide a measure of the Fund's performance given its investment strategy, as well as one or more other measures of performance for markets in which the Fund may
invest.
The performance of one or more share
classes shown in the table below begins before the indicated inception date for such share class. The returns shown for each such share class include the returns of the Fund’s Class A shares (without applicable sales charges and adjusted to
reflect the higher class-related operating expenses of such classes, where applicable) for periods prior to its inception date. Except for differences in annual returns resulting from differences in expenses and sales charges (where applicable), the
share classes of the Fund would have substantially similar annual returns because all share classes of the Fund invest in the same portfolio of securities.
The after-tax returns shown in the
Average Annual Total Returns
table below are calculated using the highest historical individual U.S. 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 Individual
Retirement Accounts (IRAs). The after-tax returns are shown only for Class A shares and will vary for other share classes. Returns after taxes on distributions and sale of Fund shares are higher than before-tax returns for certain periods shown
because they reflect the tax benefit of capital losses realized on the redemption of Fund shares.
The Fund’s past performance (before and after taxes) is no
guarantee of how the Fund will perform in the future.
Updated performance information can be obtained by calling toll-free 800.345.6611 or visiting columbiathreadneedle.com/us.
Columbia Income Builder Fund
Summary of the Fund
(continued)
Year
by Year Total Return (%)
as of December 31 Each Year*
|
Best
and Worst Quarterly Returns
During the Period Shown in the Bar Chart
|
|
Best
|
3rd Quarter 2009
|
9.74%
|
Worst
|
4th Quarter 2008
|
-8.86%
|
*
|
Year to Date return as of
March 31, 2015: 1.26%
|
Average Annual Total Returns After
Applicable Sales Charges (for periods ended December 31, 2014)
|
Share
Class
Inception Date
|
1
Year
|
5
Years
|
Life
of Fund
|
Class
A
|
02/16/2006
|
|
|
|
returns
before taxes
|
|
-0.16%
|
6.53%
|
5.41%
|
returns
after taxes on distributions
|
|
-1.30%
|
5.26%
|
4.00%
|
returns
after taxes on distributions and sale of Fund shares
|
|
0.17%
|
4.65%
|
3.69%
|
Class
B
returns before taxes
|
02/16/2006
|
-1.01%
|
6.45%
|
5.18%
|
Class
C
returns before taxes
|
02/16/2006
|
3.00%
|
6.77%
|
5.20%
|
Class
K
returns before taxes
|
02/16/2006
|
4.88%
|
7.62%
|
6.20%
|
Class
R
returns before taxes
|
09/27/2010
|
4.52%
|
7.42%
|
5.81%
|
Class
R4
returns before taxes
|
11/08/2012
|
4.98%
|
7.67%
|
6.04%
|
Class
R5
returns before taxes
|
11/08/2012
|
5.04%
|
7.71%
|
6.06%
|
Class
W
returns before taxes
|
06/25/2014
|
4.79%
|
7.57%
|
5.98%
|
Class
Z
returns before taxes
|
09/27/2010
|
5.08%
|
7.82%
|
6.12%
|
Blended
Index (consists of 65% Barclays U.S. Aggregate Bond Index, 25% Russell 3000 Value Index and 10% Citi Three-Month U.S. Treasury Bill Index)
(reflects no deductions for fees, expenses, or taxes)
|
|
7.07%
|
6.83%
|
5.38%
(a)
|
Barclays
U.S. Aggregate Bond Index
(reflects no deductions for fees, expenses or taxes)
|
|
5.97%
|
4.45%
|
5.06%
|
Russell
3000 Value Index
(reflects no deductions for fees, expenses or taxes)
|
|
12.70%
|
15.34%
|
6.83%
|
Citi
Three-Month U.S. Treasury Bill Index
(reflects no deductions for fees, expenses or taxes)
|
|
0.03%
|
0.07%
|
1.24%
(a)
|
(a)
|
As of February 28, 2006.
|
Fund Management
Investment Manager:
Columbia
Management Investment Advisers, LLC
Portfolio
Manager
|
|
Title
|
|
Role
with Fund
|
|
Managed
Fund Since
|
Colin
Lundgren, CFA
|
|
Managing
Director and Head of Fixed Income
|
|
Lead
Manager
|
|
2006
|
Gene
Tannuzzo, CFA
|
|
Senior
Portfolio Manager
|
|
Co-manager
|
|
2010
|
Columbia Income Builder Fund
Summary of the Fund
(continued)
Purchase and Sale of Fund Shares
You may purchase or redeem shares of the Fund on any business
day by contacting the Fund in the ways described below:
Online
|
|
Regular
Mail
|
|
Express
Mail
|
|
By
Telephone
|
columbiathreadneedle.com/us
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
30 Dan Road, Suite 8081
Canton, MA 02021-2809
|
|
800.422.3737
|
You may purchase shares
and receive redemption proceeds by electronic funds transfer, by check or by wire. If you maintain your account with a broker-dealer or other financial intermediary, you must contact that financial intermediary to buy, sell or exchange shares of the
Fund through your account with the intermediary.
The
minimum initial investment amounts for the share classes offered by the Fund are shown below:
Minimum Initial Investment
Class
|
Category
of eligible account
|
For
accounts other than
systematic investment
plan accounts
|
For
systematic investment
plan accounts
|
Classes
A, B* & C
|
All
accounts other than IRAs
|
$2,000
|
$100
|
IRAs
|
$1,000
|
$100
|
Classes
K**, R
& R4
|
All
eligible accounts
|
None
|
N/A
|
Class
R5
|
Combined
underlying accounts of eligible registered investment advisers
|
$100,000
|
N/A
|
Omnibus
retirement plans
|
None
|
N/A
|
Class
W
|
All
eligible accounts
|
$500
|
N/A
|
Class
Z
|
All
eligible accounts
|
$0,
$1,000 or $2,000
depending upon the category
of eligible investor
|
$100
|
*
|
Class B shares are generally
closed to new and existing shareholders.
|
**
|
Class K shares are generally
closed to new investors.
|
There is no
minimum additional investment for any share class.
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-advantaged account, such as a 401(k) plan or an IRA. The use
of a fund-of-funds structure could affect the timing, amount and character of distributions to you and therefore may increase the amount of taxes payable by you. If you are investing through a tax-advantaged account, you may be taxed upon
withdrawals from that 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 Investment Manager), 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.
Columbia Income Builder Fund
More Information About the
Fund
Investment Objective
Columbia Income Builder Fund (the Fund) seeks to provide
shareholders with a high level of current income and growth of capital. Only shareholders can change the Fund’s investment objective. Because any investment involves risk, there is no assurance the Fund’s objective will be
achieved.
Principal Investment Strategies
The Fund is intended for investors who have an objective of
achieving a high level of current income and growth of capital, but prefer to have their investment decisions managed by professional money managers. The Fund is a “fund of funds” that seeks to achieve its objective by investing in a
combination of underlying funds for which Columbia Management Investment Advisers, LLC (Columbia Management or the Investment Manager) or an affiliate acts as Investment Manager or principal underwriter. Columbia Management is the Investment Manager
for the Fund. By investing in several different underlying funds, the Fund seeks to minimize the risks inherent in investing in a single fund.
The Investment Manager will allocate the Fund’s assets
within and across different asset classes through investments in underlying funds, potentially including an allocation to alternative investment strategy funds, in an effort to achieve the Fund’s objective of providing a high level of current
income and growth of capital. Typically, asset allocation changes will be made monthly to refine the Fund’s positioning, but may be made more or less frequently depending upon then-current allocations, subject to constraints that set minimum
or maximum exposure within asset classes, as set forth in Table 1, and between asset classes, as set forth in Table 2.
Investment Category
Allocation.
Within the equity and fixed income asset classes, the Investment Manager establishes allocations for the Fund, seeking to achieve the Fund’s objective by investing in defined investment categories.
Fixed income investment categories include underlying funds that invest in: treasury inflation protected securities, mortgage- and asset-backed securities, core plus (primarily domestic investment grade bonds), high yield bonds, high yield loans,
international bonds and emerging market bonds. The Investment Manager also may allocate assets to money market (cash) or alternative investment strategies. Equity investment categories include underlying funds that invest in: U.S. large cap, mid cap
and small cap equities (including growth, value and core/blend styles), international equities (including emerging market securities) and real estate securities. The target allocation range constraints set forth in Table 1 are intended to promote
diversification within asset classes, and the Investment Manager takes into account factors such as style, sector, market capitalization, geographic location, credit quality, interest rate outlook, and yield potential. Proposed allocation shifts are
reviewed and approved by the Investment Manager as part of its qualitative review.
Table 1. Investment Category Ranges by Fund
Asset
Class
(Target Ranges
set forth in Table 2)
|
Investment
Category
|
Eligible
Underlying Fund*
|
(Target
Allocation
Range—Under
Normal Market
Conditions)**
|
Equity
|
U.S.
Large Cap
|
Columbia
Contrarian Core Fund
|
0-35%
|
|
Columbia
Diversified Equity Income Fund
|
0-35%
|
|
|
Columbia
Dividend Income Fund
|
0-35%
|
|
|
Columbia
Large Cap Enhanced Core Fund
|
0-35%
|
|
|
Columbia
Large Cap Growth Fund
|
0-35%
|
|
|
Columbia
Large Cap Index Fund
|
0-35%
|
|
|
Columbia
Large Core Quantitative Fund
|
0-35%
|
|
|
Columbia
Large Growth Quantitative Fund
|
0-35%
|
|
|
Columbia
Large Value Quantitative Fund
|
0-35%
|
|
|
Columbia
Marsico Focused Equities Fund
|
0-35%
|
|
|
Columbia
Marsico Growth Fund
|
0-35%
|
Columbia Income Builder Fund
More Information About the
Fund
(continued)
Asset
Class
(Target Ranges
set forth in Table 2)
|
Investment
Category
|
Eligible
Underlying Fund*
|
(Target
Allocation
Range—Under
Normal Market
Conditions)**
|
|
|
Columbia
Select Large-Cap Growth Fund
|
0-35%
|
|
|
Columbia
Select Large Cap Equity Fund
|
0-35%
|
|
|
Columbia
Select Large-Cap Value Fund
|
0-35%
|
|
|
Columbia
Seligman Communications and Information Fund
|
0-35%
|
|
|
Columbia
Value and Restructuring Fund
|
0-35%
|
|
U.S.
Mid and Small Cap
|
Columbia
Acorn Fund
|
0-35%
|
|
Columbia
Acorn Select
|
0-35%
|
|
|
Columbia
Acorn USA
|
0-35%
|
|
|
Columbia
Dividend Opportunity Fund
|
0-35%
|
|
|
Columbia
Mid Cap Growth Fund
|
0-35%
|
|
|
Columbia
Mid-Cap Index Fund
|
0-35%
|
|
|
Columbia
Mid-Cap Value Fund
|
0-35%
|
|
|
Columbia
Small/Mid Cap Value Fund
|
0-35%
|
|
U.S.
Small Cap
|
Columbia
Multi-Advisor Small Cap Value Fund
|
0-35%
|
|
|
Columbia
Select Smaller-Cap Value Fund
|
0-35%
|
|
|
Columbia
Small Cap Core Fund
|
0-35%
|
|
|
Columbia
Small Cap Growth Fund I
|
0-35%
|
|
|
Columbia
Small Cap Index Fund
|
0-35%
|
|
|
Columbia
Small Cap Value Fund I
|
0-35%
|
|
|
Columbia
Small Cap Value Fund II
|
0-35%
|
|
Emerging
Market Equities
|
Columbia
Acorn Emerging Markets Fund
|
0-35%
|
|
Columbia
Emerging Markets Fund
|
0-35%
|
|
|
Columbia
Greater China Fund
|
0-35%
|
|
International
Developed Equities
|
Columbia
Acorn International
|
0-35%
|
|
Columbia
Acorn International Select
|
0-35%
|
|
Columbia
Acorn European Fund
|
0-35%
|
|
|
Columbia
Asia Pacific ex-Japan Fund
|
0-35%
|
|
|
Columbia
European Equity Fund
|
0-35%
|
|
|
Columbia
Global Dividend Opportunity Fund
|
0-35%
|
|
|
Columbia
Global Equity Value Fund
|
0-35%
|
|
|
Columbia
Global Infrastructure Fund
|
0-35%
|
|
|
Columbia
International Opportunities Fund
|
0-35%
|
|
|
Columbia
International Value Fund
|
0-35%
|
|
|
Columbia
Overseas Value Fund
|
0-35%
|
|
|
Columbia
Pacific/Asia Fund
|
0-35%
|
|
|
Columbia
Select Global Equity Fund
|
0-35%
|
|
|
Columbia
Select International Equity Fund
|
0-35%
|
|
|
Columbia
Seligman Global Technology Fund
|
0-35%
|
|
Specialty
|
Columbia
Convertible Securities Fund
|
0-35%
|
|
|
Columbia
Flexible Capital Income Fund
|
0-35%
|
|
|
Columbia
Global Energy and Natural Resources Fund
|
0-35%
|
Columbia Income Builder Fund
More Information About the
Fund
(continued)
Asset
Class
(Target Ranges
set forth in Table 2)
|
Investment
Category
|
Eligible
Underlying Fund*
|
(Target
Allocation
Range—Under
Normal Market
Conditions)**
|
|
|
Columbia
Multi-Asset Income Fund
|
0-35%
|
|
|
Columbia
Real Estate Equity Fund
|
0-35%
|
Fixed
Income
|
TIPS/Government
Bonds
|
Columbia
Inflation Protected Securities Fund
|
0–100%
|
|
Columbia
U.S. Treasury Index Fund
|
0–100%
|
|
U.S.
Investment Grade Bonds
|
Columbia
Bond Fund
|
0–100%
|
|
Columbia
Corporate Income Fund
|
0–100%
|
|
|
Columbia
Intermediate Bond Fund
|
0–100%
|
|
|
Columbia
Limited Duration Credit Fund
|
0–100%
|
|
|
Columbia
Short Term Bond Fund
|
0–100%
|
|
|
Columbia
U.S. Government Mortgage Fund
|
0–100%
|
|
U.S.
High Yield Bonds
|
Columbia
High Yield Bond Fund
|
0–100%
|
|
Columbia
Income Opportunities Fund
|
0–100%
|
|
Floating
Rate
|
Columbia
Floating Rate Fund
|
0–100%
|
|
International
Bonds
|
Columbia
Global Bond Fund
|
0–100%
|
|
Columbia
Global Inflation-Linked Bond Plus Fund
|
0–100%
|
|
Emerging
Market Bonds
|
Columbia
Emerging Markets Bond Fund
|
0–100%
|
Cash
|
|
Columbia
Money Market Fund
|
0–15%
|
Alternative
Investment Strategies
|
Columbia
Absolute Return Currency and Income Fund
|
0–20%
|
|
Columbia
Adaptive Alternatives Fund
|
0–20%
|
|
|
Columbia
Commodity Strategy Fund
|
0–20%
|
|
|
Columbia
Diversified Absolute Return Fund
|
0–20%
|
|
|
Columbia
Mortgage Opportunities Fund
|
0-20%
|
*
|
A summary of the principal
investment strategies of each eligible underlying fund is set forth in Appendix A. A description of the principal risks associated with these underlying funds is included in Appendix B. The prospectuses and Statements of Additional Information for
the underlying funds are incorporated by reference into this prospectus and can be obtained by calling toll-free 800.345.6611 or visiting columbiathreadneedle.com/us. Additional information regarding the underlying funds may be found in the
Statement of Additional Information. Additional underlying funds may be added in the future either in addition to, or to replace, current underlying funds in an investment category.
|
**
|
Market appreciation or
depreciation may cause the Fund to be temporarily outside the ranges identified in the table. The Investment Manager may modify the target allocation ranges only upon approval of the Fund’s Board of Trustees.
|
Asset Class Allocation.
In
addition to maintaining investment category ranges within each asset class as set forth in Table 1, the Investment Manager will manage the Fund’s overall asset mix: fixed income, equity, cash, and alternative investments. The target allocation
range constraints set forth in Table 2 are intended to promote diversification between the asset classes, and are incorporated into the broader allocation process discussed above, in an effort to achieve the Fund’s objective of providing a
high level of current income and growth of capital, while maintaining proper diversification consistent with the Fund’s risk profile. Under normal circumstances, the Fund intends to invest in each asset class within the allocation ranges set
forth in Table 2:
Table 2. Asset Class Ranges by
Fund
Asset
Class (Target Allocation Range – Under Normal Market Conditions)*
|
Equity
|
0–35%
|
Fixed
Income
|
55–100%
|
Cash
|
0–15%
|
Alternative
Investment Strategy
|
0–20%
|
*
|
Market appreciation or
depreciation may cause the Fund to be temporarily outside the ranges identified in the table. The Investment Manager may modify the target allocation ranges only upon approval of the Fund’s Board of Trustees.
|
Columbia Income Builder Fund
More Information About the
Fund
(continued)
In pursuit of the Fund’s objective, the Investment
Manager chooses investments by:
■
|
Evaluating the Fund’s
total exposure to sectors, industries, issuers and securities relative to the Fund’s indices;
|
■
|
Analyzing factors such as
credit quality, interest rate outlook and price; and
|
■
|
Targeting certain underlying
funds that invest in lower-quality (junk) bonds and foreign investments as attractive opportunities arise.
|
The Investment Manager relies on various qualitative and
quantitative inputs to tactically allocate the Fund’s assets across the different asset classes and investment categories as described above.
Principal Risks
An investment in the Fund involves risk, including specific
risks relating to the investment in the Fund based on its investment process and its "fund-of-funds" structure, as well as specific risks related to the underlying funds in which it invests, including among others, those described below. More
information about underlying funds, including their principal risks, is available in their prospectuses.
There is no assurance that the Fund will achieve its investment objective and you may lose money
.
The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV) and share price may go down.
Allocation Risk.
Because the Fund uses an asset allocation strategy in pursuit of its investment objective,
there is a risk that the Fund's allocation among asset classes, investments, managers,
strategies and/or investment styles will cause the Fund's shares to lose value or cause the Fund to underperform other funds with a similar investment objective and/or strategies, or that the investments themselves will not produce the returns
expected.
Changing Distribution Level
Risk.
The amount of the distributions paid by the Fund will vary and generally depends on the amount of interest income 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 income and/or dividends the Fund receives from its investments decline.
Credit Risk.
The value of fixed-income securities,
or other instruments or assets, may decline if the issuer thereof defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor
its financial obligations, such as making payments to the Fund when due. Various factors could affect the actual or perceived willingness or ability of the issuer to make timely interest or principal payments, including changes in the financial
condition of the issuer or in general economic conditions. Fixed-income 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 fixed-income 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. Rating
agencies assign credit ratings to certain fixed-income securities to indicate their credit risk. Lower quality or unrated securities held by the Fund may present increased credit risk as compared to higher-rated securities. Non-investment grade
fixed-income securities (commonly called “high-yield” or “junk”) may be subject to greater price fluctuations and are more likely to experience a default than investment grade securities and therefore may expose the Fund to
increased credit risk. If the Fund purchases unrated fixed-income securities, or if the ratings of securities held by the Fund are lowered after purchase, the Fund will depend on analysis of credit risk more heavily than usual.
Emerging Market Securities Risk.
Securities issued by foreign governments or companies in emerging market countries, such as
China, Russia and certain countries in Eastern Europe, the Middle East, Asia, Latin
America or Africa, are more likely to have greater exposure to the risks of investing in foreign securities that are described in
Foreign Securities Risk
. In addition, emerging market countries are more likely to experience instability resulting, for example, from rapid changes or developments in social, political,
economic or
other conditions. Their economies are usually less mature and their securities markets are typically less developed with more limited trading activity (
i.e.
, lower trading volumes and less liquidity) than more developed countries. Emerging market securities tend to be more volatile than securities in more developed markets. Many emerging market countries are heavily
dependent on international trade and have fewer trading partners, which makes them more sensitive to world commodity prices and
Columbia Income Builder Fund
More Information About the
Fund
(continued)
economic downturns in other countries. Some emerging market countries have a
higher risk of currency devaluations, and some of these countries may experience periods of high inflation or rapid changes in inflation rates and may have hostile relations with other countries.
Foreign Securities Risk.
Investments in or exposure to foreign securities involve certain risks not associated with investments in or exposure to securities of U.S. companies. For example, foreign markets can be extremely volatile. The
performance of the Fund may be negatively impacted by fluctuations in a foreign currency’s strength or weakness relative to the U.S. dollar. Foreign securities may also be less liquid than securities of U.S. companies so that the Fund may, at
times, be unable to sell foreign securities at desirable times or prices. Brokerage commissions, custodial costs 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 on the Fund’s income,
capital gains or proceeds from the disposition of foreign securities, which could reduce the Fund’s return on such securities. Other risks include: possible delays in the settlement of transactions or in the
payment of income; generally less publicly available information about foreign companies; the impact of economic, political, social, diplomatic or other conditions or events; possible seizure, expropriation or nationalization of a company or its
assets or the assets of a particular investor or category of investors; possible imposition of currency exchange controls; accounting, auditing and financial reporting standards that may be less comprehensive and stringent than those applicable to
domestic companies; the imposition of economic and other sanctions against a particular foreign country, its nationals or industries or businesses within the country; and the generally less stringent standard of care to which local agents may be
held in the local markets. In addition, it may be difficult to obtain reliable information about the securities and business operations of certain foreign issuers. Governments or trade groups may compel local agents to hold securities in designated
depositories that are not subject to independent evaluation. The less developed a country’s securities market is, the greater the level of risks. The risks posed by sanctions against a particular foreign country, its nationals or industries or
businesses within the country may be heightened to the extent the Fund invests significantly in the affected country or region or in issuers from the affected country that depend on global markets.
Fund-of-Funds Risk.
Determinations regarding asset classes or underlying funds and the Fund’s allocations thereto may not successfully achieve the Fund’s investment objective, in whole or in part. The selected underlying funds’ performance may be
lower than the performance of the asset class they were selected to represent or may be lower than the performance of alternative underlying funds that could have been selected to represent the asset class. The Fund also is exposed to the same risks
as the underlying funds in direct proportion to the allocation of its assets among the underlying funds. Therefore,
to the extent that the Fund invests significantly in a particular underlying fund, the
Fund’s performance would be significantly impacted by the performance of such underlying fund. Generally, by investing in a combination of underlying funds, the Fund has exposure to the risks of many areas of the market. By concentrating its
investments in relatively few underlying funds, the Fund may have more concentrated market exposures, subjecting the Fund to greater risk of loss should those markets decline or fail to rise. The ability of the Fund to realize its investment
objective will depend, in large part, on the extent to which the underlying funds realize their investment objectives. There is no guarantee that the underlying funds will achieve their respective investment objectives. The performance of underlying
funds could be adversely affected if other entities that invest in the same underlying funds make relatively large investments or redemptions in such underlying funds. The Fund, and its shareholders, indirectly bear a portion of the expenses of any
funds in which the Fund invests. Because the expenses and costs of each underlying fund are shared by its investors, redemptions by other investors in an underlying fund could result in decreased economies of scale and increased operating expenses
for such fund. These transactions might also result in higher brokerage, tax or other costs for an underlying fund. This risk may be particularly important when one investor owns a substantial portion of an underlying fund. The Investment Manager
may have potential conflicts of interest in selecting affiliated funds over unaffiliated funds for investment by the Fund, and may also face potential conflicts of interest in selecting affiliated funds, because the fees the Investment Manager
receives from some underlying funds may be higher than the fees paid by other underlying funds.
Columbia Income Builder Fund
More Information About the
Fund
(continued)
High-Yield Securities Risk.
Securities rated below investment grade (commonly called “high-yield” or “junk” bonds) and unrated securities of comparable quality tend to be more sensitive to credit risk than higher-rated securities and may experience
greater price fluctuations in response to perceived changes in the ability of the issuing entity or obligor to pay interest and principal when due than to changes in interest rates. These investments are generally more likely to experience a default
than higher-rated securities. High-yield securities are considered to be predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal. These securities typically pay a premium — a higher interest
rate or yield — because of the increased risk of loss, including default. High-yield securities may require a greater degree of judgment to establish a price, may be difficult to sell at the time and price the Fund desires, may carry high
transaction costs, and also are generally less liquid than higher-rated securities. The securities ratings provided by third party rating agencies 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. In adverse economic and other circumstances, issuers of lower-rated securities are more likely to have difficulty making principal and interest payments
than issuers of higher-rated securities.
Interest Rate Risk.
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of
debt securities 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 will generally affect the value of the Fund's shares. In general, the longer the maturity or
duration of a debt security, the greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest
rates may negatively impact the Fund’s performance. Actions by governments and central banking authorities can result in increases
in interest rates. Such actions may negatively affect the value of
fixed-income securities held by the Fund, resulting in a negative impact on the Fund's performance and NAV. Securities with floating coupon rates are typically less sensitive to interest rate changes, but these securities may decline in value if
their coupon rates do not rise as much as,
or keep pace with,
yields on such types of securities. Because rates on certain floating rate loans and other debt
securities reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause fluctuations in the Fund’s NAV.
Many economies around the world, including the United States,
are experiencing historically low interest rate levels; however, interest rates may soon begin to rise, especially to the extent that economies begin to appear more stable and demonstrate signs of growth. Any interest rate increases could cause the
value of a Fund’s investments in debt securities to decrease. Rising interest rates may prompt redemptions from a Fund, which may force the Fund to sell investments at a time when it is not advantageous to do so, which could result in
losses.
Issuer Risk.
An issuer in which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may
be caused by poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or
factors.
Market Risk.
Market risk refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. Security values may fall or fail to rise because of a variety of
actual or perceived factors affecting an issuer (e.g., an unfavorable earnings report), the industry or sector in which it operates, or the market as a whole, which may reduce the value of an investment in the Fund. Accordingly, an investment in the
Fund could lose money over short or long periods. The market values of the securities the Fund holds 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. Although equity securities generally tend to have greater price volatility than debt securities, under certain market conditions, debt securities may have comparable or greater price volatility. In addition, stock prices may be
sensitive to rising interest rates, as the cost of capital rises and borrowing costs increase.
Prepayment and Extension Risk.
Prepayment risk is the risk that a bond or other security or investment might be called or otherwise converted, prepaid or redeemed before maturity,
and extension risk is the risk that the investment
might not be called as expected.
In
the case of prepayment risk, if the investment is converted, prepaid or redeemed before maturity,
particularly during a time of declining interest rates or spreads, the portfolio managers
Columbia Income Builder Fund
More Information About the
Fund
(continued)
may not be able to invest the proceeds in
other investments providing as high a level of income, resulting in a reduced yield to the Fund. Conversely, in the case of extension risk, as interest rates rise or spreads widen, the likelihood of prepayment decreases and the maturity of the
investment may extend the life of the investment beyond the prepayment time. If the Fund's investments are locked in at a lower interest rate for a longer period of time, the portfolio managers may be unable to capitalize on securities with higher
interest rates or wider spreads.
Reinvestment Risk.
Reinvestment risk is the risk that the Fund will not be able to reinvest income or principal at the same return it is currently earning.
Additional Investment Strategies and Policies
This section describes certain investment strategies and
policies that the Fund may utilize in pursuit of its investment objective and some additional factors and risks involved with investing in the Fund.
Investment Guidelines
As a general matter, and except as
specifically described in the discussion of the Fund's principal investment strategies in this prospectus or as otherwise required by the Investment Company Act of 1940, as amended (the 1940 Act), the rules and regulations thereunder and any
applicable exemptive relief, 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 investment in the security or asset.
Holding Other Kinds of Investments
The Fund may hold investments that are not
part of its principal investment strategies. These investments and their risks are described below and/or 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. Information on the Fund’s holdings can be found in the Fund’s shareholder reports or by visiting columbiathreadneedle.com/us.
Transactions in Derivatives
The Fund may enter into derivative
transactions or otherwise have exposure to derivative transactions through underlying investments. 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 the London Interbank Offered Rate (commonly known as LIBOR)) or market indices (such as the Standard & Poor's (S&P) 500
®
Index). The use of derivatives is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities
transactions. 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 directly. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility in
the value of the derivative and/or the Fund’s shares, 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. U.S. federal legislation has been enacted that provides for new clearing, margin, reporting and
registration requirements for participants in the derivatives market. These changes could restrict and/or impose significant costs or other burdens upon the Fund’s participation in derivatives transactions. For more information on the risks of
derivative investments and strategies, see the SAI.
Columbia Income Builder Fund
More Information About the
Fund
(continued)
Investing in Affiliated Funds
The Investment Manager or an affiliate serves as investment
adviser to mutual funds using the Columbia brand (Columbia Funds), including those that are structured as “fund-of-funds” (such as the Fund(s) offered in this prospectus), and provides asset-allocation services to (i) shareholders
by investing in shares of other Columbia Funds (collectively referred to in this section as Underlying Funds), and (ii) discretionary managed accounts (collectively referred to as affiliated products) that invest exclusively in Underlying Funds.
These affiliated products, individually or collectively, may own a significant percentage of the outstanding shares of one or more Underlying Funds, and the Investment Manager seeks to balance potential conflicts of interest between the affiliated
products and the Underlying Funds in which they invest. The affiliated products’ investment in the Underlying Funds may have the effect of creating economies of scale, possibly resulting in lower expense ratios for the Underlying Funds,
because the affiliated products may own substantial portions of the shares of Underlying Funds. However, redemption of Underlying Fund shares by one or more affiliated products could cause the expense ratio of an Underlying Fund to increase, as its
fixed costs would be spread over a smaller asset base. Because of large positions of certain affiliated products, the Underlying Funds may experience relatively large inflows and outflows of cash due to affiliated products’ purchases and sales
of Underlying Fund shares. Although the Investment Manager or its affiliate may seek to minimize the impact of these transactions where possible, for example, by structuring them over a reasonable period of time or through other measures, Underlying
Funds may experience increased expenses as they buy and sell portfolio securities to manage the cash flow effect related to these transactions. Further, when the Investment Manager or its affiliate structures transactions over a reasonable period of
time in order to manage the potential impact of the buy and sell decisions for the affiliated products, those affiliated products, including funds-of-funds, may pay more or less (for purchase activity), or receive more or less (for redemption
activity), for shares of the Underlying Funds than if the transactions were executed in one transaction. In addition, substantial redemptions by affiliated products within a short period of time could require the Underlying Fund to liquidate
positions more rapidly than would otherwise be desirable, which may have the effect of reducing or eliminating potential gain or causing it to realize a loss. Substantial redemptions may also adversely affect the ability of the Underlying Fund to
implement its investment strategy. The Investment Manager or its affiliate also has an economic conflict of interest in determining the allocation of affiliated products’ assets among the Underlying Funds, as it earns different fees from the
various Underlying Funds.
Investing in Money Market
Funds
The Fund may invest cash in, or hold as collateral
for certain investments, shares of registered or unregistered money market funds, including funds advised by the Investment Manager or its affiliates. These funds are not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or
any other government agency. 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.
Investing Defensively
The Fund may from time to time take temporary defensive
investment positions that may be inconsistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, social or other conditions, including, without limitation, investing some or all of
its assets in money market instruments or shares of affiliated or unaffiliated money market funds or holding some or all of its assets in cash or cash equivalents. The Fund may take such defensive investment positions for as long a period as deemed
necessary.
The Fund may not achieve its investment
objective while it is investing defensively. Investing defensively may adversely affect Fund performance. During these times, the portfolio managers may make frequent portfolio holding changes, which could result in increased trading
expenses and taxes, and decreased Fund performance. See also
Investing in Money Market Funds
above for more information.
Other Strategic and Investment Measures
The Fund may also from time to time take temporary portfolio
positions that may or may not be consistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, social or other conditions, including, without limitation, investing in derivatives,
such as futures (e.g., index futures) or options
Columbia Income Builder Fund
More Information About the
Fund
(continued)
on futures, for various purposes, including among others, investing in
particular derivatives to achieve indirect investment exposures to a sector, country or region where the Investment Manager believes such positioning is appropriate. The Fund may take such portfolio positions for as long a period as deemed
necessary. While the Fund is so positioned, derivatives could comprise a substantial portion of the Fund’s investments and the Fund may not achieve its investment objective. Investing in this manner may adversely affect Fund performance.
During these times, the portfolio managers may make frequent portfolio holding changes, which could result in increased trading expenses and taxes, and decreased Fund performance. For information on the risks of investing in derivatives, see
Transactions in Derivatives
above.
Portfolio Holdings Disclosure
The Board has adopted policies and
procedures that govern the timing and circumstances of disclosure to shareholders and third parties of information regarding the securities owned by the Fund. A description of these policies and procedures is included in the SAI. Fund policy
generally permits the disclosure of portfolio holdings information on the Fund's website (columbiathreadneedle.com/us) only after a certain amount of time has passed, as described in the SAI.
Purchases and sales of portfolio securities can take place at
any time, so the portfolio holdings information available on the Fund's website may not always be current.
Portfolio Holdings Versus the
Benchmarks
The Fund does not limit
its investments to the securities within its benchmark(s), and accordingly the Fund's holdings may diverge significantly from those of its benchmark(s). In addition, the Fund may invest in securities outside any industry and geographic sectors
represented in its benchmark(s). The Fund's weightings in individual securities, and in industry and geographic sectors, may also vary considerably from those of its benchmark(s).
Mailings to Households
In order to reduce shareholder expenses, the Fund may, if
prior consent has been provided, mail only one copy of the Fund’s prospectus and each annual and semiannual report to those addresses shared by two or more accounts. If you wish to receive separate copies of these documents, call 800.345.6611
or, if your shares are held through a financial intermediary, contact your intermediary directly.
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 shareholders redeeming Fund shares could require the Fund to sell portfolio securities at less than opportune times or to
hold ready reserves of uninvested cash in amounts larger than might otherwise be the case to meet shareholder redemptions. Either situation could adversely impact the Fund’s performance.
Understanding Annual Fund Operating Expenses
The Fund invests in Class I shares of the
underlying funds, which are not subject to distribution fees. Class I shares are available exclusively to Columbia’s fund-of-funds. The Fund’s annual operating expenses, as presented in the
Annual Fund
Operating Expenses
table in the
Fees and Expenses of the Fund
section of this prospectus, generally are based on expenses incurred during the Fund’s most recently completed fiscal year and are
expressed as a percentage (expense ratio) of the Fund’s average net assets during that fiscal year. The expense ratios reflect the Fund’s fee arrangements as of the date of this prospectus and, unless indicated otherwise, are based on
expenses incurred during the Fund’s most recent fiscal year. The Fund’s assets will fluctuate, but no adjustments have been or will be made to the expense ratios to reflect any differences in the Fund’s average net assets between
the most recently completed fiscal year and the date of this prospectus or a later date. In general, the Fund’s expense ratios will increase as its net assets decrease, such that the Fund’s actual expense ratios may be higher than the
expense ratios presented in the
Annual Fund Operating Expenses
table if assets fall. Any commitment by the Investment
Columbia Income Builder Fund
More Information About the
Fund
(continued)
Manager and/or its affiliates to waive fees and/or cap (reimburse) expenses
is expected, in part, to limit the impact of any increase in the Fund’s operating expense ratios that would otherwise result because of a decrease in the Fund’s assets in the current fiscal year. The Fund’s annual operating
expenses are comprised of (i) investment management fees, (ii) distribution and/or service fees, and (iii) other expenses. Management fees do not vary by class, but distribution and/or service fees and other expenses may vary by class.
Other Expenses
“Other expenses” consist of the
fees the Fund pays to its administrator, custodian, transfer agent, auditors, lawyers and trustees, costs relating to compliance and miscellaneous expenses. Generally, these expenses are the same for each share class and are allocated on a pro rata
basis across all share classes. Transfer agent fees and certain shareholder servicing fees, however, are class specific. They differ by share class because the shareholder services provided to each share class may be different. Accordingly, the
differences in “other expenses” among share classes are primarily the result of the different transfer agent and shareholder servicing fees applicable to each share class. For more information on these fees, see
Choosing a Share Class — Selling Agent Compensation.
Fee Waiver/Expense Reimbursement Arrangements
and Impact on Past Performance
The Investment
Manager and certain of its affiliates have voluntarily agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below), so that the Fund’s net operating expenses, after giving effect to fees waived/expenses
reimbursed and any balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the annual rates of:
Columbia
Income Builder Fund
|
Class
A
|
0.45%
|
Class
B
|
1.20%
|
Class
C
|
1.20%
|
Class
K
|
0.42%
|
Class
R
|
0.70%
|
Class
R4
|
0.20%
|
Class
R5
|
0.17%
|
Class
W
|
0.45%
|
Class
Z
|
0.20%
|
Under the arrangement, the following fees
and expenses are excluded from the Fund’s operating expenses when calculating the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including foreign transaction taxes), expenses associated with
investment in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program, dividend expenses associated
with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest and extraordinary expenses. This arrangement may be revised or discontinued at any time.
Effect of Fee Waivers and/or Expense Reimbursements on Past
Performance.
The Fund’s returns shown in the
Performance Information
section of this prospectus reflect the
effect of any fee waivers and/or reimbursements of Fund expenses by the Investment Manager and/or any of its affiliates that were in place during the performance period shown. Without such fee waivers/expense reimbursements, the Fund’s returns
might have been lower.
Columbia Income Builder Fund
More Information About the
Fund
(continued)
Primary Service Providers
The Investment Manager, which also serves as the Fund’s
administrator (the Administrator), the Distributor and the Transfer Agent are all affiliates of Ameriprise Financial, Inc. (Ameriprise Financial). They and their affiliates currently provide key services, including investment advisory,
administration, distribution, shareholder servicing and transfer agency services, to the Fund and various other funds, including the Columbia Funds, and are paid for providing these services. These service relationships are described below.
The Investment Manager
Columbia Management Investment Advisers, LLC is located at 225
Franklin Street, Boston, MA 02110 and serves as investment adviser to the Columbia Funds. The Investment Manager is a registered investment adviser and a wholly-owned subsidiary of Ameriprise Financial. The Investment Manager’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 traditional mutual funds, exchange-traded funds and closed-end funds,
the Investment Manager acts as an investment adviser for itself, its affiliates, individuals, corporations, retirement plans, private investment companies and financial intermediaries.
Subject to oversight by the Board, the Investment Manager
manages the day-to-day operations of the Fund, determining what securities and other investments the Fund should buy or sell and executing portfolio transactions. The Investment Manager may use the research and other capabilities of its affiliates
and third parties in managing the Fund’s investments.
The SEC has issued an order that permits the Investment
Manager, 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 Investment Manager 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 Investment Manager does not consider any other relationship it or its affiliates may have with a subadviser, and the Investment Manager discloses to the Board the nature of any material relationships it has with
a subadviser or its affiliates. At present, the Investment Manager has not engaged any investment subadviser for the Fund.
The Fund does not pay the Investment Manager
a direct management fee for managing its assets. Under the Investment Management Services Agreement, however, the Fund pays taxes, brokerage commissions, and nonadvisory expenses. A discussion regarding the basis for the Board approving the renewal
of the Fund's investment management services agreement with the Investment Manager is available in the Fund’s semiannual report to shareholders for the fiscal period ended July 31, 2014.
Portfolio Manager
Information about the portfolio managers primarily responsible
for overseeing the Fund’s investments is shown below. The SAI provides additional information about the portfolio managers, including information relating to compensation, other accounts managed by the portfolio managers and ownership by the
portfolio managers of Fund shares.
Portfolio
Manager
|
|
Title
|
|
Role
with Fund
|
|
Managed
Fund Since
|
Colin
Lundgren, CFA
|
|
Managing
Director and Head of Fixed Income
|
|
Lead
Manager
|
|
2006
|
Gene
Tannuzzo, CFA
|
|
Senior
Portfolio Manager
|
|
Co-manager
|
|
2010
|
Mr. Lundgren
joined the Investment Manager in 1986. Mr. Lundgren began his investment career in 1989 and earned a B.A. from Lake Forest College.
Mr. Tannuzzo
joined the
Investment Manager in 2003. Mr. Tannuzzo began his investment career in 2003 and earned a B.S.B. from University of Minnesota, Carlson School of Management.
Columbia Income Builder Fund
More Information About the
Fund
(continued)
The Administrator
Columbia Management Investment Advisers, LLC 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 related clerical and administrative services. The
Fund pays the Administrator a fee (plus certain out-of-pocket expenses) for the administrative services it provides to the Fund.
The Distributor
Shares of the Fund are distributed by Columbia Management
Investment Distributors, Inc., which is located at 225 Franklin Street, Boston, MA 02110. 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
Columbia Management Investment
Services Corp. is a registered transfer agent and wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent is located at 225 Franklin Street, Boston, MA 02110, and its responsibilities include processing purchases, redemptions and
exchanges of Fund shares, calculating and paying distributions, maintaining shareholder records, preparing account statements and providing customer service. The Transfer Agent has engaged DST Systems, Inc., including its affiliate, Boston Financial
Data Services, to provide various shareholder services. In addition, the Transfer Agent enters into agreements with various financial intermediaries through which you may hold Fund shares, pursuant to which the Transfer Agent pays these financial
intermediaries for providing certain shareholder services. The Fund generally pays the Transfer Agent a per account fee, pays a fee based on the assets invested through omnibus accounts and reimburses the Transfer Agent for certain out-of-pocket
expenses.
Other Roles and Relationships of
Ameriprise Financial and its Affiliates — Certain Conflicts of Interest
The Investment Manager, Distributor and Transfer Agent, all
affiliates of Ameriprise Financial, provide various services to the Fund and other Columbia 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 Investment Manager 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 Investment Manager, 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 Investment Manager 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 Investment Manager 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 Investment Manager and other Ameriprise Financial affiliates;
|
■
|
regulatory and other
investment restrictions on investment activities of the Investment Manager and other Ameriprise Financial affiliates and accounts advised/managed by them;
|
Columbia Income Builder Fund
More Information About the
Fund
(continued)
■
|
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 Investment Manager, and a Columbia Fund.
|
The Investment Manager 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 Management and Other Services — Other Roles and Relationships of Ameriprise
Financial and its Affiliates — Certain Conflicts of Interest
section of the SAI. 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 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. 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 quarterly (10-Q), annual (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 sec.gov.
Columbia Income Builder Fund
The Funds
The Columbia Funds (referred to as the Funds) generally share
the same policies and procedures for investor services, as described below. Each Fund is a series of Columbia Funds Series Trust (CFST), Columbia Funds Series Trust I (CFST I) or Columbia Funds Series Trust II (CFST II), and certain features of
distribution and/or service plans may differ among these trusts. The Fund offered by this prospectus is a series of CFST II. Columbia Funds with names that include the words “Tax-Exempt”, “Municipal”, or “Muni”
(the Tax-Exempt Funds) have certain policies that differ from other Columbia Funds (the Taxable Funds). The Fund offered by this prospectus is a Taxable Fund.
Funds Contact Information
Additional information about the Funds can
be obtained at columbiathreadneedle.com/us,* by calling toll-free 800.345.6611, or by writing (regular mail) to Columbia Management Investment Services Corp., P.O. Box 8081, Boston, MA 02266-8081 or (express mail) Columbia Management Investment
Services Corp., c/o Boston Financial, 30 Dan Road, Suite 8081, Canton, MA 02021-2809.
*
|
The website references in
this prospectus are inactive links and information contained in or otherwise accessible through the referenced websites does not form a part of this prospectus.
|
Selling and/or Servicing Agents
The terms “selling agent” and
“servicing agent” (collectively, selling agents) refer to the financial intermediaries that are authorized to sell shares of the Funds. Selling agents include broker-dealers and financial advisors as well as firms that employ such
broker-dealers and financial advisors, including, for example, brokerage firms, banks, investment advisers, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.
Omnibus Accounts
The term “omnibus account”
refers to a selling agent’s account with the Fund (through the Transfer Agent) that represents the combined holdings of, and transactions in, Fund shares of one or more clients of the selling agent (beneficial shareholders). Omnibus accounts
are held in the name of the selling agents and not in the name of the beneficial shareholders invested in the Fund through omnibus accounts.
Retirement Plans and Omnibus Retirement
Plans
The term “retirement
plan” refers to retirement plans created under sections 401(a), 401(k), 457 and 403(b) of the Internal Revenue Code of 1986, as amended (the Code), non-qualified deferred compensation plans governed by section 409A of the Code and similar
plans, but does not refer to individual retirement plans. The term “omnibus retirement plan” refers to a retirement plan that has a plan-level or omnibus account with the Transfer Agent.
Summary of Share Class Features
Each share class has its own investment eligibility criteria,
cost structure and other features. You may not be eligible for every share class. If you purchase shares of a Fund through a retirement plan or other product or program offered by your selling agent, not all share classes of the Fund may be made
available to you. When deciding which class of shares to buy, you should consider, among other things:
■
|
The amount you plan to
invest.
|
■
|
How long you intend to
remain invested in the Fund.
|
■
|
The expenses for each share
class.
|
■
|
Whether you may be eligible
for a reduction or waiver of sales charges when you buy or sell shares.
|
Each investor's personal situation is different and you may
wish to discuss with your selling agent which share classes are available to you and which share class is appropriate for you.
Columbia Income Builder Fund
Choosing a Share Class
(continued)
The following summarizes the primary features of Class A,
Class B, Class C, Class I, Class K, Class R, Class R4, Class R5, Class T, Class W, Class Y and Class Z shares.
Not all Funds offer every class of shares. The Fund offers the
class(es) of shares set forth on the cover of this prospectus and may offer other share classes through a separate prospectus. Although certain share classes are generally closed to new or existing investors, information relating to these share
classes is included in the table below because certain qualifying purchase orders are permitted, as described below.
Share Class Features
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
A
|
Eligibility:
Available to the general public for investment
Minimum Initial Investment:
$2,000 for most
investors
|
Taxable
Funds:
5.75% maximum, declining to 0.00% on investments of $1 million or more
Tax-Exempt Funds:
3.00% maximum, declining to 0.00% on
investments of $500,000 or more
(e)
None for Columbia Money Market Fund and certain other
Funds
(e)
|
Taxable
Funds:
CDSC on certain investments of between $1 million and $50 million redeemed within 18 months after purchase charged as follows:
• 1.00% CDSC if redeemed within 12
months after purchase and
• 0.50% CDSC if redeemed more than 12, but less than 18, months after purchase
(e)
Tax-Exempt Funds:
Maximum CDSC of 0.75% on certain investments of $500,000 or more redeemed within 12 months after purchase. The CDSC on shares purchased prior to February
19, 2015 differs
(e)
|
Distribution
and Service
Fees:
up to 0.25%
|
Class
B
|
Eligibility:
Closed to new investors
(f)
Note:
Class
B
shares convert
to Class A shares generally eight years after
purchase
(g)
Minimum Initial Investment:
N/A
|
None
|
5.00%
maximum, gradually declining to 0.00% after six years
(g)
|
Distribution
Fee:
0.75%
Service Fee:
0.25%
|
Class
C
|
Eligibility:
Available to the general public for investment
Minimum Initial Investment:
$2,000 for most investors
Purchase Order Limit for Tax-Exempt Funds:
$499,999
(h)
, none for omnibus retirement plans
Purchase Order Limit for Taxable Funds:
$999,999
(h)
;
none for omnibus
retirement plans
|
None
|
1.00%
on certain investments redeemed within one year of purchase
|
Distribution
Fee:
0.75%
Service Fee:
0.25%
|
Columbia Income Builder Fund
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
I
|
Eligibility:
Available only to other Columbia Funds (i.e., fund-of-fund investments)
Minimum Initial Investment:
None
|
None
|
None
|
None
|
Class
K
|
Eligibility:
Closed to new investors; available only to qualified employee benefit plans, trust companies or similar institutions, 501(c)(3) charitable organizations, non-qualified deferred compensation plans whose participants
are included in a qualified employee benefit plan described above, 529 plans, and health savings accounts
(f)
Minimum Initial Investment:
N/A
|
None
|
None
|
Plan
Administration Services Fee:
0.25%
|
Class
R
|
Eligibility:
Available only to eligible retirement plans, health savings accounts and, in the sole discretion of the Distributor, other types of retirement accounts held through platforms maintained by selling agents approved by
the Distributor
Minimum Initial Investment:
None
|
None
|
None
|
Series
of CFST & CFST I:
distribution fee of 0.50%
Series of CFST II:
distribution and service fee of 0.50%, of which the service fee may
be up to 0.25%
|
Class
R4
|
Eligibility:
Available only to (i) omnibus retirement plans, (ii) trust companies or similar institutions, (iii) broker-dealers, banks, trust companies and similar institutions that clear Fund share transactions for their client
or customer investment advisory or similar accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R4 eligibility apart
from selling, servicing or similar agreements, (iv) 501(c)(3) charitable organizations, (v) 529 plans and (vi) health savings accounts
Minimum Initial Investment:
None
|
None
|
None
|
None
|
Columbia Income Builder Fund
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
R5
|
Eligibility:
Available only to (i) certain registered investment advisers that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that
have been granted specific written authorization from the Transfer Agent with respect to Class R5 eligibility apart from selling, servicing or similar agreements and (ii) omnibus retirement
plans
(f)
Minimum Initial Investment:
None for omnibus retirement plans; $100,000 for combined underlying
accounts of eligible registered investment advisers
|
None
|
None
|
None
|
Class
T
|
Eligibility:
Generally closed to new investors
(f)
Minimum Initial Investment:
N/A
|
5.75%
maximum, declining to 0.00% on investments of $1 million or more
|
CDSC
on certain investments of between $1 million and $50 million redeemed within 18 months after purchase, charged as follows:
• 1.00% CDSC if redeemed within 12 months after purchase
and
• 0.50% CDSC if redeemed more than 12, but less than 18, months after purchase
|
Service
Fee:
up to 0.50%
|
Class
W
|
Eligibility:
Available only to investors purchasing through certain authorized investment programs managed by investment professionals, including discretionary managed account programs
Minimum Initial Investment:
$500
|
None
|
None
|
Distribution
and Service Fees:
0.25%
|
Class
Y
|
Eligibility:
Available only to retirement plans that
maintain plan-level or omnibus
accounts with the Fund
(f)
Minimum Initial Investment:
None
|
None
|
None
|
None
|
Columbia Income Builder Fund
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
Z
|
Eligibility:
Available only to certain eligible investors, which are subject to different minimum investment requirements, ranging from $0 to $2,000; effective March 29, 2013, closed to (i) accounts of selling agents that clear
Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been given specific written notice from the Transfer Agent of the termination of their eligibility for
new purchases of Class Z shares and (ii) omnibus retirement plans, subject to certain exceptions
(f)
Minimum Initial Investment:
See
Eligibility
above
|
None
|
None
|
None
|
(a)
|
For Columbia Money Market
Fund, new investments must be made in Class A, Class I, Class W or Class Z shares, subject to eligibility. Class C and Class R shares of Columbia Money Market Fund are available as a new investment only to investors in the Distributor's proprietary
401(k) products, provided that such investor is eligible to invest in the class and transact directly with the Fund or the Transfer Agent through a third party administrator or third party recordkeeper. Columbia Money Market Fund offers other
classes of shares only to facilitate exchanges with other Funds offering such share classes.
|
(b)
|
The minimum initial
investment requirement is $5,000 for Columbia Floating Rate Fund and Columbia Inflation Protected Securities Fund, and $10,000 for Columbia Absolute Return Currency and Income Fund. See
Buying, Selling and Exchanging
Shares — Buying Shares
for more details on the eligible investors and minimum initial investment requirements. Certain share classes are subject to minimum account balance requirements, as described in
Buying, Selling and Exchanging Shares — Transaction Rules and Policies.
|
(c)
|
Actual front-end sales
charges and CDSCs vary among the Funds. For more information on applicable sales charges, see
Choosing a Share Class — Sales Charges and Commissions
and for information about certain exceptions to these
sales charges, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
|
(d)
|
These are the maximum
applicable distribution and/or service fees. Fee rates and fee components (i.e., the portion of a combined fee that is a distribution or service fee) may vary among Funds. Because these fees are paid out of Fund assets on an ongoing basis, over time
these fees will increase the cost of your investment and may cost you more than paying other types of distribution and/or shareholder service fees. Although Class A shares of certain series of CFST I are subject to a combined distribution and
service fee of up to 0.35%, these Funds currently limit the combined fee to 0.25%. Columbia Money Market Fund pays a distribution and service fee of up to 0.10% on Class A shares, up to 0.75% distribution fee and up to 0.10% service fee on Class B
shares, up to 0.75% distribution fee on Class C shares, and 0.10% distribution and service fees on Class W shares. Columbia AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund pay a service fee of up
to 0.20% on Class A, Class B and Class C shares. Columbia AMT-Free Intermediate Muni Bond Fund pays a distribution fee of up to 0.65% on Class B and Class C shares. For more information on distribution and service fees, see
Choosing a Share Class — Distribution and Service Fees.
|
(e)
|
For Columbia Short Term
Municipal Bond Fund, a CDSC of 0.50% is charged on certain investments of $500,000 or more redeemed within 12 months after purchase. The following Funds are not subject to a front-end sales charge or a CDSC on Class A shares: Columbia Money Market
Fund, Columbia Large Cap Index Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Index Fund, Columbia Small Cap Index Fund and Columbia U.S. Treasury Index Fund. Investments in Class A shares of Tax-Exempt Funds made prior to February
19, 2015 of between $1 million and $50 million are subject to a CDSC of 1.00% if redeemed within 12 months after purchase and 0.50% if redeemed more than 12, but less than 18, months after purchase.
|
(f)
|
These share classes are
closed to new accounts, or closed to previously eligible investors, subject to certain conditions, as summarized below and described in more detail under
Buying, Selling and Exchanging Shares — Buying Shares
— Eligible Investors:
|
•
Class B Shares
. The Funds no longer accept investments from new or existing investors in Class B shares, except through reinvestment of dividend and/or capital gain distributions by existing Class B
shareholders, or a permitted exchange.
•
Class K Shares
. Shareholders who opened and funded a Class K account with a Fund as of the close of business on December 31, 2010 may continue to make additional purchases of such share class, and existing
Class K accounts may continue to allow new investors or participants to be established in their Fund account.
Columbia Income Builder Fund
Choosing a Share Class
(continued)
•
Class R5 Shares
. Shareholders with Class R5 accounts funded before November 8, 2012 who do not satisfy the current eligibility criteria for Class R5 shares may not establish new Class R5 accounts but may
continue to make additional purchases of Class R5 shares in existing accounts. In addition, investment advisory programs and similar programs that opened a Class R5 account as of May 1, 2010 and continuously hold Class R5 shares in such account
after such date, may generally not only continue to make additional purchases of Class R5 shares but also open new Class R5 accounts for such pre-existing programs and add new shareholders in the program.
•
Class T Shares.
Shareholders
with Class T accounts who received, and have continuously held, Class T shares in connection with the merger of certain Galaxy funds into
certain Funds that were then named Liberty funds may continue to make additional purchases of such share class.
•
Class Y Shares
. Shareholders with Class Y accounts funded before November 8, 2012 who do not satisfy the current eligibility criteria for Class Y shares may not establish new accounts for such share class but
may continue to make additional purchases of Class Y shares in existing accounts.
•
Class Z Shares
. Effective March 29, 2013, selling agents that clear Fund share transactions through designated selling agents and their mutual fund trading platforms that have been given specific written notice
from the Transfer Agent of the termination of their eligibility for new purchases of Class Z shares and omnibus retirement plans are no longer permitted to establish new Class Z accounts, subject to certain exceptions. Omnibus retirement plans that
opened and, subject to exceptions, funded a Class Z account as of close of business on March 28, 2013 and continuously hold Class Z shares in such account after such date, may generally continue to make additional purchases of Class Z shares, open
new Class Z accounts and add new participants. In certain circumstances and in the sole discretion of the Distributor, omnibus retirement plans affiliated with a grandfathered plan may also open new Class Z accounts. Accounts of selling agents
(other than omnibus retirement plans) that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms are not permitted to establish new Class Z accounts or make
additional purchases of Class Z shares (other than through reinvestment of distributions).
(g)
|
Timing of conversion and CDSC
schedules will vary depending on the Fund and the date of your original purchase of Class B shares. For more information on the conversion of Class B shares to Class A shares, see
Choosing a Share Class — Sales
Charges and Commissions.
Class B shares of Columbia Short Term Municipal Bond Fund do not charge a CDSC and do not convert to Class A shares.
|
(h)
|
If you are eligible to invest
in Class A shares without a front-end sales charge, you should discuss your options with your selling agent. For more information, see
Choosing a Share Class – Reductions/Waivers of Sales Charges.
|
Sales Charges and
Commissions
Sales charges, commissions and distribution
and service fees (discussed in a separate sub-section below) compensate selling agents (typically your financial advisor) for selling shares to you and for maintaining and servicing the shares held in your account with them. These charges,
commissions and fees are intended to provide incentives for selling agents to provide such 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 CDSC
and/or over time in the form of increased ongoing fees.
Whether the ultimate cost is higher for one
class over another depends on the amount you invest, how long you hold your shares and whether you are eligible for reduced or waived sales charges. The differential between classes also will vary depending on the actual investment return for any
given investment period. You are responsible for choosing the share class most appropriate for you after taking into account your share class eligibility and the value of accounts that you are eligible to include for the right of accumulation, which
may reduce or eliminate otherwise applicable sales charges. See
Choosing a Share Class
– Reductions/Waivers of Sales Charges
. We encourage you to consult with a
financial advisor who can help you with your investment decisions.
Class A Shares — Front-End Sales Charge
You'll pay a front-end sales charge when you buy Class A
shares (other than shares of Columbia Money Market Fund and certain other Funds), resulting in a smaller dollar amount being invested in a Fund than the purchase price you pay, unless you qualify for a waiver of the sales charge or you buy the
shares through reinvested distributions. For more information, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
The Distributor receives the sales charge and re-allows (or
pays) a portion of the sales charge to the selling agent through which you purchased the shares. The Distributor retains the balance of the sales charge. The Distributor retains the full sales charge you pay when you purchase shares of the Fund
directly from the Fund (through the Transfer Agent, rather than through a selling agent). Sales charges vary depending on the amount of your purchase.
Columbia Income Builder Fund
Choosing a Share Class
(continued)
Front-End Sales Charge Calculation
The table below presents the front-end
sales charge as a percentage of both the offering price and the net amount invested.
■
|
The net asset value (or NAV)
per share is the price of a share calculated by the Fund every business day.
|
■
|
The
offering price per share is the NAV per share plus any front-end sales charge that applies.
|
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 for the Fund) and the NAV 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 any other accounts eligible for aggregation of which you or your selling agent notifies the Fund) and base the sales charge on the aggregate amount. See
Choosing a Share Class — Reductions/Waivers of Sales Charges
for a discussion of account value aggregation. There is no initial sales charge on reinvested dividend or capital gain distributions.
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 (and any other accounts eligible for aggregation of which you or your selling agent notifies the Fund).
|
Class
A Shares — Front-End Sales Charge — Breakpoint Schedule*
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Equity
Funds,
Columbia Adaptive Alternatives Fund,
Columbia Adaptive Risk Allocation Fund,
Columbia Commodity Strategy Fund,
Columbia Diversified Absolute Return Fund
and Funds-of-Funds (equity)*
|
$
0–$49,999
|
5.75%
|
6.10%
|
5.00%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
3.00%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.15%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Fixed
Income Funds (except those listed below),
Columbia Multi-Asset Income Fund
and Funds-of-Funds (fixed income)*
|
$
0-$49,999
|
4.75%
|
4.99%
|
4.00%
|
$
50,000–$99,999
|
4.25%
|
4.44%
|
3.50%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
3.00%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.15%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Tax-Exempt
Funds (other than Columbia Short Term Municipal Bond Fund)
|
$
0-$99,999
|
3.00%
|
3.09%
|
2.50%
|
$100,000–$249,999
|
2.50%
|
2.56%
|
2.15%
|
$250,000–$499,999
|
1.50
%
|
1.53%
|
1.25%
|
$
500,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Columbia Income Builder Fund
Choosing a Share Class
(continued)
Class
A Shares — Front-End Sales Charge — Breakpoint Schedule*
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Columbia
Absolute Return Currency and Income Fund,
Columbia Floating Rate Fund,
Columbia Inflation Protected Securities Fund,
Columbia Intermediate Bond Fund,
Columbia Limited Duration Credit Fund,
Columbia Mortgage Opportunities
Fund,
Columbia U.S. Government Mortgage Fund and
Columbia U.S. Social Bond Fund
|
$
0-$99,999
|
3.00%
|
3.09%
|
2.50%
|
$100,000–$249,999
|
2.50%
|
2.56%
|
2.15%
|
$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%
|
0.00%
(c)
|
|
|
|
|
|
Columbia
Short Term Bond Fund
|
$
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%
|
0.00%
(c)
|
|
|
|
|
|
Columbia
Short Term Municipal Bond Fund
|
$
0-$99,999
|
0.75%
|
0.76%
|
0.50%
|
$250,000–$499,999
|
0.50%
|
0.50%
|
0.40%
|
$
500,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
*
|
The following Funds are not
subject to a front-end sales charge or CDSC on Class A shares: Columbia Money Market Fund, Columbia Large Cap Index Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Index Fund, Columbia Small Cap Index Fund and Columbia U.S. Treasury
Index Fund.
"Funds-of-Funds (equity)"
includes Columbia Capital Allocation Aggressive Portfolio, Columbia Capital Allocation Moderate Aggressive Portfolio, Columbia Capital Allocation Moderate
Conservative Portfolio, Columbia Capital Allocation Moderate Portfolio and Columbia LifeGoal® Growth Portfolio
. "Funds-of-Funds (fixed income)"
includes Columbia Capital Allocation Conservative Portfolio
and Columbia Income Builder Fund. Columbia Balanced Fund and Columbia Global Opportunities Fund are treated as equity Funds for purposes of the table.
|
(a)
|
Purchase amounts and account
values may be aggregated among all eligible Fund accounts for the purposes of this table. See
Choosing a Share Class — Reductions/Waivers of Sales Charges
for a discussion of account value aggregation.
|
(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. Purchase price includes the sales charge.
|
(c)
|
For information regarding
cumulative commissions paid to your selling agent when you buy Class A shares of a Fund in amounts not subject to initial sales charges, see
Class A Shares — Commissions
below.
|
Class A Shares — CDSC
In some cases, you'll pay a CDSC if you sell Class A shares
that you purchased without an initial sales charge.
Tax-Exempt Funds
■
|
If you purchased Class A
shares of any Tax-Exempt Fund other than Columbia Short Term Municipal Bond Fund on or after February 19, 2015 without an initial sales charge because your accounts aggregated $500,000 or more at the time of purchase, you will incur a CDSC of 0.75%
if you redeem those shares within 12 months after purchase. Subsequent Class A share purchases made on or after February 19, 2015 that bring your aggregate account value to $500,000 or more will also be subject to a CDSC of 0.75% if you redeem them
within 12 months after purchase.
|
■
|
If you purchased Class A
shares of Columbia Short Term Municipal Bond Fund on or after February 19, 2015 without an initial sales charge because your accounts aggregated $500,000 or more at the time of purchase, you
|
Columbia Income Builder Fund
Choosing a Share Class
(continued)
|
will incur a CDSC of 0.50%
if you redeem those shares within 12 months after purchase. Subsequent Class A share purchases made on or after February 19, 2015 that bring your aggregate account value to $500,000 or more will also be subject to a CDSC of 0.50% if you redeem them
within 12 months after purchase.
|
■
|
If you purchased Class A
shares of any Tax-Exempt Fund prior to February 19, 2015 without an initial sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months
after purchase, which is charged as follows: 1.00% CDSC if shares are redeemed within 12 months after purchase; and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase. Subsequent Class A share purchases made
prior to February 19, 2015 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 18 months after purchase as described in this paragraph.
|
Taxable Funds
■
|
If you purchased Class A
shares of any Taxable Fund without an initial sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months after purchase, which is
charged as follows: 1.00% CDSC if shares are redeemed within 12 months after purchase; and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase. 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 18 months after purchase as described in this paragraph.
|
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. A CDSC is applied to the NAV at the time
of your purchase or sale, whichever is lower, and will not be applied to any shares you receive through reinvested distributions or any amount that represents appreciation in the value of your shares. For purposes of calculating a CDSC, the start of
the holding period is generally the first day of the month in which your purchase was made.
When you place an order to sell shares of a
class that has a CDSC, the Fund will first redeem any shares that aren't subject to a CDSC, followed by those you have held the longest. This means that if a CDSC is imposed, you cannot designate the individual shares being redeemed for U.S. federal
income tax purposes. You should consult your tax advisor about the tax consequences of investing in the Fund. In certain circumstances, the CDSC may not apply. See
Choosing a Share Class — Reductions/Waivers of
Sales Charges
for details.
Class A Shares
— Commissions
The Distributor may pay your selling
agent an up-front commission when you buy Class A shares. The Distributor generally funds the commission through the applicable sales charge paid by you. For more information, see
Class A Shares — Front-End
Sales Charge — Breakpoint Schedule.
The Distributor may also pay your selling
agent a cumulative commission when you buy Class A shares in amounts not subject to initial sales charges, according to the following schedule:
Class
A Shares of Tax-Exempt Funds — Commission Schedule (Paid by the Distributor to Selling Agents)
|
Purchase
Amount
|
Commission
Level*
(as a % of net asset
value per share)
|
$500,000
– $3,999,999
|
0.75%**
|
$4
million – $19,999,999
|
0.50%
|
$20
million or more
|
0.25%
|
Columbia Income Builder Fund
Choosing a Share Class
(continued)
*
|
The commission level applies
to the applicable asset level so, for example, for a purchase of $5 million, the Distributor would pay a commission of 0.75% on the first $4 million and 0.50% on the remaining $1 million.
|
**
|
The commission level on
purchases of Class A shares of Columbia Short Term Municipal Bond Fund is: 0.50% on purchases of $500,000 to $19,999,999 and 0.25% on purchases of $20 million or more.
|
Class
A Shares of Taxable Funds — Commission Schedule (Paid by the Distributor to Selling Agents)*
|
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%
|
*
|
Not applicable to Funds that
do not assess a front-end sales charge.
|
**
|
The commission level applies
to the applicable asset level so, for example, for a purchase of $5 million, the Distributor would pay a commission of 1.00% on the first $3 million and 0.50% on the remaining $2 million.
|
Class B Shares — Sales Charges
The Funds no longer accept new investments in Class B shares,
except for certain limited transactions as described in more detail under
Buying, Selling and Exchanging Shares — Buying Shares — Eligible Investors — Class B Shares (Closed).
You don't pay a front-end sales charge when you buy Class B
shares, but you may pay a CDSC when you sell Class B shares.
Class B Shares — CDSC
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 and generally declines each year until there is no sales charge, as follows:
Class
B Shares — CDSC Schedule for the Funds (except those listed below)
|
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
|
*
|
Because of rounding in the
calculation, the actual CDSC you pay may be more or less than the CDSC calculated using these percentages.
|
Class
B Shares — CDSC Schedule for Columbia AMT-Free Intermediate Muni Bond Fund, the AMT-Free State-specific Intermediate Muni Bond Funds, Columbia Intermediate Bond Fund and Columbia Short Term Bond Fund
|
Number
of Years
Class B Shares Held
|
Applicable
CDSC*
|
One
|
3.00%
|
Two
|
3.00%
|
Three
|
2.00%
|
Columbia Income Builder Fund
Choosing a Share Class
(continued)
Class
B Shares — CDSC Schedule for Columbia AMT-Free Intermediate Muni Bond Fund, the AMT-Free State-specific Intermediate Muni Bond Funds, Columbia Intermediate Bond Fund and Columbia Short Term Bond Fund
|
Number
of Years
Class B Shares Held
|
Applicable
CDSC*
|
Four
|
1.00%
|
Five
|
None
|
Six
|
None
|
Seven
|
None
|
Eight
|
None
|
Nine
|
Conversion
to Class A Shares
|
*
|
Because of rounding in the
calculation, the actual CDSC you pay may be more or less than the CDSC calculated using these percentages.
|
Class B shares of Columbia Short Term Municipal Bond Fund are
not subject to a CDSC.
Class B Shares —
Commissions
The Distributor paid an up-front commission
directly to your selling agent when you bought the Class B shares (a portion of this commission may have been paid to your financial advisor).
This up-front commission, which varies across the Funds, was
up to 4.00% of the net asset value per share of Funds with a maximum CDSC of 5.00% and of Class B shares of Columbia Short Term Municipal Bond Fund and up to 2.75% of the net asset value per share of Funds with a maximum CDSC of 3.00%. 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. For more information, see
Choosing a Share Class — Distribution and Service Fees.
Class B Shares — Conversion to Class A Shares
Class B shares of the Funds automatically convert to Class A
shares at different times depending upon the Fund. In general, Class B shares convert to Class A shares after eight years. For details and related information about how the Funds' Class B shares convert to Class A shares, see Appendix S to the SAI.
Class B shares of Columbia Short Term Municipal Bond Fund do not convert to Class A shares.
Class C Shares — Front-End Sales Charge
You don't pay a front-end sales charge when
you buy Class C shares. Although Class C shares do not have a front-end sales charge, over time Class C shares can incur distribution and/or service fees that are equal to or more than the front-end sales charge and distribution and/or service fees
you would pay for Class A shares. Thus, although the full amount of your purchase of Class C shares is invested in a Fund, any positive investment return on this money may be partially or fully offset by the expected higher annual expenses of Class
C shares. If you are eligible to invest in Class A shares without a front-end sales charge, you should discuss your options with your Selling Agent. For more information, see
Choosing a Share Class
– Reductions/Waivers of Sales Charges.
Class C Shares — CDSC
You'll pay a CDSC of 1.00% if you redeem Class C shares within
12 months of buying them unless you qualify for a waiver of the CDSC or the shares you're selling were purchased through reinvested distributions. For more information, see
Choosing a Share Class —
Reductions/Waivers of Sales Charges
. Redemptions of Class C shares are not subject to a CDSC if redeemed after 12 months.
Columbia Income Builder Fund
Choosing a Share Class
(continued)
Class C Shares — Commissions
Although there is no front-end sales charge when you buy Class
C shares, the Distributor pays an up-front commission directly to your selling agent of up to 1.00% of the NAV per share when you buy Class C shares (a portion of this commission may be paid to your financial advisor). The Distributor seeks to
recover this commission through distribution fees it receives under the Fund's distribution and/or service plan and any applicable CDSC applied when you sell your shares. For more information, see
Choosing a Share
Class — Distribution and Service Fees.
Class
R Shares — Sales Charges and Commissions
You don't
pay a front-end sales charge when you buy Class R shares or a CDSC when you sell Class R shares. The Distributor pays an up-front commission directly to your selling agent when you buy Class R shares (a portion of this commission may be paid to your
financial advisor), according to the following schedule:
Class
R Shares — Commission Schedule (Paid by the Distributor to Selling Agents)
|
Purchase
Amount
|
Commission
Level
(as a % of net asset
value per share)
|
$0
– $49,999,999
|
0.50%
|
$50
million or more
|
0.25%
|
The Distributor seeks to recover
this commission through distribution fees it receives under the Fund's distribution plan. For more information, see
Choosing a Share Class — Distribution and Service Fees.
Class T Shares — Front-End Sales Charge
You'll pay a front-end sales charge when you buy Class T
shares, resulting in a smaller dollar amount being invested in a Fund than the purchase price you pay, unless you qualify for a waiver of the sales charge or you buy the shares through reinvested distributions. For more information, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
The front-end sales charge you'll pay on Class T 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 (and any other accounts eligible for aggregation of which you or your selling agent notifies the Fund).
|
Class
T Shares — Front-End Sales Charge — Breakpoint Schedule
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Equity
Funds
|
$
0–$49,999
|
5.75%
|
6.10%
|
5.00%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
2.75%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.00%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Columbia Income Builder Fund
Choosing a Share Class
(continued)
Class
T Shares — Front-End Sales Charge — Breakpoint Schedule
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Fixed
Income Funds
|
$
0–$49,999
|
4.75%
|
4.99%
|
4.25%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
2.75%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.00%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
(a)
|
Purchase amounts and account
values are aggregated among all eligible 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)
|
For more information
regarding cumulative commissions paid to your selling agent when you buy $1 million or more of Class T shares, see
Class T Shares — Commissions
below.
|
Class T Shares — CDSC
In some cases, you'll pay a CDSC if you sell Class T shares
that you bought without an initial sales charge.
■
|
If you purchased Class T
shares without a front-end sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months after purchase, which is charged as follows: 1.00%
CDSC if shares are redeemed within 12 months after purchase, and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase.
|
■
|
Subsequent Class T 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 the time periods noted above.
|
Class T Shares — Commissions
The Distributor may pay your selling agent an up-front
commission when you buy Class T shares (a portion of this commission may, in turn, be paid to your financial advisor). For more information, see
Class T Shares — Front-End Sales Charge — Breakpoint
Schedule, Amount retained by or paid to selling agents as a % of the offering price.
The Distributor may also pay your selling agent a cumulative
commission when you buy $1 million or more of Class T shares, according to the following schedule:
Class
T Shares
—
Commission Schedule (Paid by the Distributor to Selling Agents)
|
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%
|
Columbia Income Builder Fund
Choosing a Share Class
(continued)
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 or Class T shares of a Fund. These types of sales charge reductions are also referred to as breakpoint discounts.
First, through the right of accumulation
(ROA), you may combine the value of eligible accounts maintained by you and members of 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 Fund accounts
in the particular class of shares, the Fund will use the current public offering price per share. For purposes of obtaining a breakpoint discount through ROA, you may aggregate your or your immediate family members' ownership of different classes of
shares, except for Class I, Class K, Class R and Class Y shares of the Funds, Class R4 and Class R5 shares of the Funds held in retirement plan accounts and direct purchases of Columbia Money Market Fund shares, which may not be aggregated. Shares
of Columbia Money Market Fund acquired by exchange from other Funds may be combined for ROA purposes.
Second, by making a statement of intent to purchase additional
shares (commonly referred to as a letter of intent (LOI)), you may pay a lower sales charge on all purchases (including existing ROA purchases) of Class A shares or Class T shares made within 13 months after the date of your LOI. Your LOI must state
the aggregate amount of purchases you intend to make in that 13-month period, which must be at least $50,000 (or $100,000 for Funds with breakpoint discounts beginning at $100,000). The required form of LOI may vary by selling agent, so please
contact them directly for more information. Five percent of the purchase commitment amount will be placed in escrow. At the end of the 13-month period, the shares will be released from escrow, provided that you have invested the commitment amount.
If you do not invest the commitment amount by the end of the 13 months, the remaining amount of the unpaid sales charge will be redeemed from the escrowed shares and the remaining balance released from escrow. To calculate the total value of the
purchases you've made under an LOI, the Fund will use the historic cost (i.e., dollars invested) of the shares held in each eligible account. For purposes of making an LOI to purchase additional shares, you may aggregate your ownership of different
classes of shares, except for Class I, Class K, Class R and Class Y shares of the Funds, Class R4 and Class R5 shares of the Funds held in retirement plan accounts and direct purchases of Columbia Money Market Fund shares, which may not be
aggregated. Shares of Columbia Money Market Fund acquired by exchange from other Funds may be combined for LOI purposes.
You must request the reduced sales charge (whether through ROA
or an LOI) when you buy shares. If you do not complete and file an LOI, or do not request the reduced sales charge at the time of purchase, you will not be eligible for the reduced sales charge. To obtain a breakpoint discount, you must notify your
selling agent in writing at the time you buy your shares of each eligible account maintained by you and members of your immediate family, including accounts maintained through different selling agents. You and your selling agent are responsible for
ensuring that you receive discounts for which you are eligible. The Fund is not responsible for a selling agent's failure to apply the eligible discount to your account. You may be asked by your selling agent for account statements or other records
to verify your discount eligibility, including, when applicable, records for accounts opened with a different selling agent and records of accounts established by members of your immediate family.
Your “Immediate Family” and
Account Value Aggregation
For purposes of
obtaining a breakpoint discount for Class A shares or Class T shares the value of your account will be deemed to include the value of all applicable shares in eligible Fund accounts that are held by you and your “immediate family,” which
includes your spouse, domestic partner, parent, step-parent, legal guardian, child under 21, step-child under 21, father-in-law and mother-in-law, provided that you and your immediate family members share the same mailing address. Any Fund accounts
linked together for account value aggregation purposes as of the close of business on September 3, 2010 will be permitted to remain linked together. Group plan accounts are valued at the plan level.
Columbia Income Builder Fund
Choosing a Share Class
(continued)
Eligible Accounts
The following accounts are eligible for account value
aggregation as described above, provided that they are invested in Class A, Class B, Class C, Class E, Class F, Class T, Class W or Class Z shares of a Fund: individual or joint accounts; Roth and traditional Individual Retirement Accounts (IRAs);
Simplified Employee Pension accounts (SEPs), Savings Investment Match Plans for Employees of Small Employers accounts (SIMPLEs) and Tax Sheltered Custodial Accounts (TSCAs); Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
accounts for which you, your spouse, or your domestic partner is parent or guardian of the minor child; revocable trust accounts for which you or an immediate family member, individually, is the beneficial owner/grantor; accounts held in the name of
your, your spouse’s, or your domestic partner’s sole proprietorship or single owner limited liability company or S corporation; qualified retirement plan assets, provided that you are the sole owner of the business sponsoring the plan,
are the sole participant (other than a spouse) in the plan, and have no intention of adding participants to the plan; and investments in wrap accounts.
The following accounts are
not eligible
for account value aggregation as described above: accounts of pension and retirement plans with multiple participants, such as 401(k) plans (which are combined to reduce the sales charge for the
entire pension or retirement plan and therefore are not used to reduce the sales charge for your individual accounts); investments in 529 plans, donor advised funds, variable annuities, variable insurance products or managed separate accounts;
charitable and irrevocable trust accounts; accounts holding shares of money market funds that used the Columbia brand before May 1, 2010; and accounts invested in Class I, Class K, Class R, Class R4, Class R5 or Class Y shares of a Fund.
Front-End Sales Charge Waivers
The Distributor may waive front-end sales charges on purchases
of Class A and Class T shares of the Funds by certain categories of investors, including Board members, certain employees of selling agents, Fund portfolio managers and certain retirement and employee benefit plans. The Distributor may waive
front-end sales charges on (i) purchases (including exchanges) of Class A shares in accounts of selling agents that have entered into agreements with the Distributor to offer Fund shares to self-directed investment brokerage accounts that may or may
not charge a transaction fee to customers and (ii) exchanges of Class Z shares of a Fund for Class A shares of the Fund. For a more complete description of categories of investors who may purchase Class A and Class T shares of the Funds at NAV,
without payment of any front-end sales charge that would otherwise apply, see Appendix S to the SAI. In addition, certain types of purchases of Class A and Class T shares may be made at NAV. For a description of these eligible transactions, see
Appendix S to the SAI.
CDSC Waivers
You may be able to avoid an otherwise applicable CDSC when you
sell Class A, Class B, Class C or Class T 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 Funds or for other reasons. For example, the CDSC will be waived
on redemptions of shares in the event of the shareholder's death; that result from required minimum distributions taken from retirement accounts when the shareholder reaches age 70½; in connection with the Fund's Small Account Policy (which is
described in
Buying, Selling and Exchanging Shares — Transaction Rules and Policies
); and by certain other investors and in certain other types of transactions. For a more complete description of the
available waivers of the CDSC on redemptions of Class A, Class B, Class C or Class T shares, see Appendix S to the SAI.
Repurchases
Investors can also buy Class A shares without paying a sales
charge if the purchase is made from the proceeds of a redemption of any Class A, Class B, Class C or Class T shares of a Fund (other than Columbia Money Market Fund) within 90 days, up to the amount of the redemption proceeds. Any CDSC paid upon
redemption of your Class A, Class B, Class C or Class T shares of a Fund will not be reimbursed.
To be eligible for the reinstatement privilege, the purchase
must be made into an account for the same owner, but does not need to be into the same Fund from which the shares were sold. The Transfer Agent, Distributor or their agents must receive a written reinstatement request from you or your selling agent
within 90 days after the shares are redeemed and the purchase of Class A shares through this reinstatement privilege will be made at the NAV of
Columbia Income Builder Fund
Choosing a Share Class
(continued)
such shares next calculated after the request is received in “good
form.” The repurchased shares will be deemed to have the original purchase date for purposes of applying the CDSC (if any) to subsequent redemptions. Systematic withdrawals and purchases are excluded from this policy.
Restrictions and Changes in Terms and Conditions
Restrictions may apply to certain accounts and certain
transactions. The Funds may change or cancel these terms and conditions at any time. Unless you provide your selling agent with information in writing about all of the factors that may count toward a waiver of a sales charge, there can be no
assurance that you will receive all of the waivers for which you may be eligible. You should request that your selling agent provide this information to the Fund when placing your purchase order. Please see Appendix S of the SAI for more information
about the sales charge reductions and waivers.
Distribution and Service Fees
The Board has approved, and the Funds have
adopted, distribution and/or shareholder service plans which set the distribution and/or service fees that are periodically deducted from the Funds’ assets. These fees are calculated daily, may vary by share class and are intended to
compensate the Distributor and/or eligible selling agents for selling Fund shares and directly or indirectly providing services to shareholders. 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/or service fees (as an annual % of average daily net assets) and the combined amount of such fees applicable to each share class:
|
Distribution
Fee
|
Service
Fee
|
Combined
Total
|
Class
A
|
up
to 0.25%
|
up
to 0.25%
|
up
to 0.35%
(a)(b)(c)
|
Class
B
|
0.75%
(d)
|
0.25%
|
1.00%
(b)
|
Class
C
|
0.75%
(c)(e)
|
0.25%
|
1.00%
(b)
|
Class
I
|
None
|
None
|
None
|
Class
K
|
None
|
0.25%
(f)
|
0.25%
(f)
|
Class
R (series of CFST and CFST I)
|
0.50%
|
—
(g)
|
0.50%
|
Class
R (series of CFST II)
|
up
to 0.50%
(c)
|
up
to 0.25%
|
0.50%
(g)
|
Class
R4
|
None
|
None
|
None
|
Class
R5
|
None
|
None
|
None
|
Class
T
|
None
|
0.50%
(h)
|
0.50%
(h)
|
Class
W
|
up
to 0.25%
|
up
to 0.25%
|
0.25%
(c)
|
Class
Y
|
None
|
None
|
None
|
Class
Z
|
None
|
None
|
None
|
(a)
|
The maximum distribution and
service fees of Class A shares varies among the Funds, as shown in the table below:
|
Funds
|
Maximum
Class A
Distribution Fee
|
Maximum
Class A
Service Fee
|
Maximum
Class A
Combined Total
|
Series
of CFST
|
—
|
—
|
0.25%;
these Funds pay a
combined distribution and
service fee
|
Series
of CFST II (other than Columbia
Money Market Fund)
|
up
to 0.25%
|
up
to 0.25%
|
0.25%
|
Columbia
Money Market Fund
|
—
|
—
|
0.10%
|
Columbia Income Builder Fund
Choosing a Share Class
(continued)
Funds
|
Maximum
Class A
Distribution Fee
|
Maximum
Class A
Service Fee
|
Maximum
Class A
Combined Total
|
Columbia
AMT-Free Oregon Intermediate Muni Bond Fund, Columbia Balanced Fund, Columbia Contrarian Core Fund, Columbia Dividend Income Fund, Columbia Global Technology Growth Fund, Columbia Intermediate Bond Fund, Columbia Large Cap Growth Fund, Columbia Mid
Cap Growth Fund, Columbia Real Estate Equity Fund, Columbia Small Cap Core Fund, Columbia Small Cap Growth Fund I
|
up
to 0.10%
|
up
to 0.25%
|
up
to 0.35%; these Funds may
pay distribution and service fees
up to a maximum of 0.35% of their
average daily net assets
attributable to Class A shares
(comprised of up to 0.10% for
distribution services and up to
0.25%
for shareholder liaison
services) but currently limit such
fees to an aggregate fee of not
more than 0.25% for
Class A shares
|
Columbia
Adaptive Alternatives Fund, Columbia Adaptive Risk Allocation Fund, Columbia AMT-Free Connecticut Intermediate Muni Bond Fund, Columbia AMT-Free Massachusetts Intermediate Muni Bond Fund, Columbia AMT-Free New York Intermediate Muni Bond Fund,
Columbia Bond Fund, Columbia California Tax-Exempt Fund, Columbia Corporate Income Fund, Columbia Diversified Absolute Return Fund, Columbia Diversified Real Return Fund, Columbia Emerging Markets Fund, Columbia Global Dividend Opportunity Fund,
Columbia Global Energy and Natural Resources Fund, Columbia Greater China Fund, Columbia Multi-Asset Income Fund, Columbia New York Tax-Exempt Fund, Columbia Pacific/Asia Fund, Columbia Select Large Cap Growth Fund, Columbia Small Cap Value Fund I,
Columbia Strategic Income Fund, Columbia U.S. Social Bond Fund, Columbia U.S. Treasury Index Fund, Columbia Value and Restructuring Fund
|
—
|
0.25%
|
0.25%
|
Columbia
AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund, Columbia Tax Exempt Fund
|
—
|
0.20%
|
0.20%
|
(b)
|
The service fees for Class A,
Class B and Class C shares of certain Funds vary. Service Fee for Class A, Class B and Class C shares of Columbia AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund — The annual service fee
may equal up to 0.20% of the average daily net asset value of all shares of such Fund class. Distribution Fee for Class B and Class C shares for Columbia AMT-Free Intermediate Muni Bond Fund
—
The annual
distribution fee shall be 0.65% of the average daily net assets of the Fund's Class B and Class C shares. Fee amounts noted apply to Class B shares of the Funds other than Class B shares of Columbia Money Market Fund, which pays distribution fees of
up to 0.75% and service fees of up to 0.10% for a combined total of 0.85%. The Distributor has currently agreed not to be reimbursed by the Fund for 0.10% of the 0.85% fee for Class B shares of Columbia Money Market Fund. The Distributor has
voluntarily agreed to waive the service fee for Class A, Class B and Class C shares of Columbia U.S. Treasury Index Fund so that the service fee does not exceed 0.15% annually. This arrangement may be modified or terminated by the Distributor at any
time.
|
(c)
|
Fee amounts noted apply to
all Funds other than Columbia Money Market Fund, which, for each of Class A and Class W shares, pays distribution and service fees of 0.10%, and for Class C shares pays distribution fees of 0.75%. The Distributor has currently agreed not to be
reimbursed by the Fund for 0.25% of the 0.50% fee for Class R shares of Columbia Money Market Fund. The Distributor has voluntarily agreed to waive the 12b-1 fees it receives from Class A, Class C, Class R and Class W shares of Columbia Money Market
Fund. This arrangement may be modified or terminated by the Distributor at any time. Compensation paid to broker-dealers and other selling agents may be suspended to the extent of the Distributor's waiver of the 12b-1 fees on these specific share
classes of these Funds.
|
(d)
|
The Distributor has
voluntarily agreed to waive a portion of the distribution fee it receives from Class B shares of Columbia Short Term Bond Fund so that the distribution fee does not exceed 0.30% annually. This arrangement may be modified or terminated by the
Distributor at any time.
|
(e)
|
The Distributor has
voluntarily agreed to waive a portion of the distribution fee for Class C shares of the following Funds so that the distribution fee does not exceed the specified percentage annually: 0.45% for Columbia AMT-Free Connecticut Intermediate Muni Bond
Fund, Columbia AMT-Free Massachusetts Intermediate Muni Bond Fund, Columbia AMT-Free New York Intermediate Muni Bond Fund, Columbia AMT-Free Oregon Intermediate Muni Bond Fund, Columbia California Tax-Exempt Fund and Columbia New York Tax-Exempt
Fund; 0.60% for Columbia Corporate Income Fund and Columbia Short Term Bond Fund; 0.65% for Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund; and 0.70% for Columbia U.S. Treasury Index Fund. These arrangements may be modified or
terminated by the Distributor at any time.
|
(f)
|
The shareholder service fees
for Class K shares are not paid pursuant to a 12b-1 plan. Under a plan administration services agreement, the Funds' Class K shares pay for plan administration services. See
Class K Plan Administration Services
Fee
below for more information.
|
(g)
|
Class R shares of series of
CFST and CFST I pay a distribution fee pursuant to a distribution (Rule 12b-1) plan for Class R shares. The Funds do not have a shareholder service plan for Class R shares. Series of CFST II have a distribution and shareholder service plan for Class
R shares, which, prior to the close of business on September 3, 2010, were known as Class R2 shares. For Class R shares of series of CFST II, the maximum fee under the plan reimbursed for distribution expenses is equal on an annual basis to 0.50% of
the average daily net assets of the Fund attributable to Class R shares. Of that amount, up to 0.25% may be reimbursed for shareholder service expenses.
|
Columbia Income Builder Fund
Choosing a Share Class
(continued)
(h)
|
The shareholder servicing
fees for Class T shares are up to 0.50% of average daily net assets attributable to Class T shares for equity Funds and 0.40% for fixed income Funds. In general, the Funds currently limit such fees to a maximum of 0.25% for equity Funds and 0.15%
for fixed-income Funds. See
Class T Shareholder Service Fees
below for more information.
|
The distribution and/or service fees for Class A, Class B,
Class C, Class R and Class W shares, as applicable, may be subject to the requirements of Rule 12b-1 under the 1940 Act. The Distributor may retain these fees otherwise payable to selling agents if the amounts due are below an amount determined by
the Distributor in its sole discretion.
Series of CFST
II.
For Class A, Class B and Class W shares, the Distributor begins to pay these fees immediately after purchase. For Class C shares, the Distributor pays these fees in advance for the first 12 months. Selling agents
also receive distribution fees up to 0.75% of the average daily net assets of Class C shares sold and held through them, which the Distributor begins to pay 12 months after purchase. For Class B shares and for the first 12 months following the sale
of Class C shares, the Distributor retains the distribution fee of up to 0.75% in order to finance the payment of sales commissions to selling agents and to pay for other distribution related expenses. Selling agents may compensate their financial
advisors with the shareholder service and distribution fees paid to them by the Distributor. The maximum fee for services under the distribution and/or shareholder servicing plan for series of CFST II is the lesser of the amount of reimbursable
expenses and the fee rates in the table above. If a share class of a series of CFST II has no reimbursable distribution or shareholder servicing expenses, it will suspend the payment of any such fee.
Series of CFST and CFST I.
For Class R shares and, with the exception noted in the next sentence, Class A shares, the Distributor begins to pay these fees immediately after purchase. For Class B shares, Class A shares (if purchased as part of a purchase of shares of $1
million or more) and, with the exception noted in the next sentence, Class C shares, the Distributor begins to pay these fees 12 months after purchase (for Class B share, and for the first 12 months following the sale of Class C shares, the
Distributor retains the distribution fee of up to 0.75% in order to finance the payment of sales commissions to selling agents and to pay for other distribution related expenses). For Class C shares, selling agents may opt to decline payment of
sales commission and, instead, may receive these fees immediately after purchase. Selling agents may compensate their financial advisors with the shareholder service and distribution fees paid to them by the Distributor.
If you maintain shares of the Fund directly with the Fund,
without working directly with a financial advisor or other selling agent, distribution and service fees may be retained by the Distributor as payment or reimbursement for incurring certain distribution and shareholder service related expenses.
Over time, these distribution and/or service fees will reduce
the return on your investment and may cost you more than paying other types of sales charges. The Fund will pay these fees to the Distributor and/or to eligible selling agents for as long as the distribution plan and/or shareholder servicing plans
continue in effect, which is expected to be indefinitely. The Fund may reduce or discontinue payments at any time. Your selling agent may also charge you other additional fees for providing services to your account, which may be different from those
described here.
Class K Plan Administration Services
Fee
Class K shares pay an annual plan administration
services fee for the provision of various administrative, recordkeeping, communication and educational services, including services such as implementation and conversion services, account set-up and maintenance, reconciliation and account
recordkeeping and administration to various plan types, including 529 plans, retirement plans and health savings accounts. The fee for Class K shares is equal on an annual basis to 0.25% of average daily net assets attributable to the class.
Class T Shareholder Services Fees
The Funds that offer Class T shares have adopted a shareholder
services plan that permits them to pay for certain services provided to Class T shareholders by their selling agents. Equity Funds may pay shareholder servicing fees up to an aggregate annual rate of 0.50% of the Fund's average daily net assets
attributable to Class T shares (comprised of up to 0.25% for shareholder liaison services and up to 0.25% for administrative support services). Fixed income Funds may pay shareholder servicing fees up to an aggregate annual rate of 0.40% of the
Fund's average daily net assets attributable to Class T shares (comprised of up to 0.20% for shareholder liaison services and up to 0.20% for administrative support services). These fees are currently limited to an aggregate annual rate of
Columbia Income Builder Fund
Choosing a Share Class
(continued)
not more than 0.25% for equity Funds and not
more than 0.15% for fixed income Funds. With respect to those Funds that declare dividends on a daily basis, the shareholder servicing fee shall be waived by the selling agents to the extent necessary to prevent net investment income from falling
below 0% on a daily basis.
Selling Agent
Compensation
The Distributor, the Investment Manager and
their affiliates make payments, from their own resources, to selling agents, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Funds (Marketing Support Payments). Such payments are generally based
upon one or more of the following factors: average net assets of the Funds sold by the Distributor attributable to that selling agent; gross sales of the Funds distributed by the Distributor attributable to that selling agent; reimbursement of
ticket charges (fees that a selling agent charges its representatives for effecting transactions in Fund shares); or a negotiated lump sum payment. While the financial arrangements may vary for each selling agent, Marketing Support Payments to any
one selling agent are generally between 0.05% and 0.40% on an annual basis for payments based on average net assets of the Fund attributable to the selling agent, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on
gross sales of the Funds attributable to the selling agent. The Distributor, the Investment Manager and their affiliates may make payments in larger amounts or on a basis other than those described above when dealing with certain selling agents,
including certain affiliates of Bank of America Corporation (Bank of America). Such increased payments may enable such selling agents to offset credits that they may provide to customers. The Distributor, the Investment Manager and their affiliates
do not make Marketing Support Payments with respect to Class Y shares; provided, however, that such payments are made to Bank of America with respect to Class Y shares of Columbia Bond Fund, Columbia Global Dividend Opportunity Fund, Columbia Income
Opportunities Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Growth Fund, Columbia Mid Cap Value Fund, Columbia Select International Equity Fund, Columbia Short Term Bond Fund, Columbia Small Cap Growth Fund I and Columbia Small Cap
Value Fund I.
In addition, the Transfer Agent
has certain arrangements in place to compensate selling agents, including other Ameriprise Financial affiliates, that hold Fund shares through omnibus accounts, including omnibus retirement plans, for services that they provide to beneficial
shareholders (Shareholder Services). Shareholder Services may include sub-accounting, sub-transfer agency, participant recordkeeping, shareholder or participant reporting, shareholder or participant transaction processing, maintenance of shareholder
records, preparation of account statements and provision of customer service. Payments for Shareholder Services vary by selling agent but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of
the Fund’s shares.
Generally, each Fund (other than the Columbia
Acorn Funds) pays a percentage of the average aggregate value of shares maintained in omnibus accounts: 0.20% for all share classes other than Class I, K, R5 and Y shares; 0.05% for Class K and R5 shares; and 0% for Class I and Y shares. The amounts
in excess of that reimbursed by the Fund are borne by the Distributor, the Investment Manager and/or their affiliates. The Transfer Agent does not pay selling agents for Shareholder Services and the Fund does not pay the Transfer Agent for any
Shareholder Services provided by selling agents, with respect to Class Y shares.
In addition to the payments described above, the Distributor,
the Investment Manager and their affiliates 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, the
Investment Manager and their affiliates are paid out of their own resources and do not increase the amount paid by you or the Fund. You can find further details in the SAI about the payments made by the Distributor, the Investment Manager and their
affiliates, as well as a list of the selling agents, including Ameriprise Financial affiliates, to which the Distributor and the Investment Manager have agreed to make Marketing Support Payments and pay Shareholder Services fees.
Your selling agent may charge you fees and commissions in
addition to those described in this prospectus. You should consult with your selling agent and review carefully any disclosure your selling agent provides regarding its services and compensation. Depending on the financial arrangement in place at
any particular time, a selling agent and its financial advisors may have a financial incentive for recommending the Fund or a particular share class over others.
Columbia Income Builder Fund
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 NAV per share for each class of shares of the Fund at the end of each business day.
NAV Calculation
Each of the Fund's share classes calculates
its NAV as follows:
NAV
=
(Value of assets of the share class) – (Liabilities of the share class)
Number of outstanding shares of the class
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 NAV 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.
Equity securities are valued primarily on
the basis of market quotations or valuations reported on stock exchanges and other securities markets around the world. If an equity security is listed on a national exchange, the security is valued at the closing price or, if the closing price is
not readily available, the mean of the closing bid and asked prices. Certain equity securities, debt securities and other assets are valued differently. For instance, bank loans trading in the secondary market are valued primarily on the basis of
indicative bids, fixed-income investments maturing in 60 days or less are valued primarily using the amortized cost method, unless this methodology results in a valuation that does not approximate the market value of these securities, and those
maturing in excess of 60 days are valued primarily using a market-based price obtained from a pricing service, if available. Investments in other open-end funds are valued at their latest NAVs. Both market quotations and indicative bids are obtained
from outside pricing services approved and monitored pursuant to a policy approved by the Fund's Board. For a money market fund, the Fund's investments are generally valued at amortized cost, which approximates market value.
If a market price is not readily available or is deemed not to
reflect market value, the Fund will determine the price of a portfolio security based on a determination of the security's fair value pursuant to a policy approved by the Fund's Board. 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) corporate actions, earnings announcements, litigation or other events
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 foreign security's market price is readily available and reflective of market value and, if not, the fair value of the
security. To the extent the Fund has significant holdings of small cap stocks, high-yield bonds, floating rate loans, or tax-exempt, foreign or other securities that may trade infrequently, fair valuation may be used more frequently than for other
funds.
Columbia Income Builder Fund
Buying, Selling and
Exchanging Shares
(continued)
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 fund would have priced the security. 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 one or more independent fair valuation pricing services to assist in the fair valuation process for
foreign securities.
Transaction Rules and Policies
The Fund, the Distributor or the Transfer Agent may refuse any
order to buy or exchange shares. If this happens, the Fund will return any money it received, but no interest will be paid on that money.
Order Processing
Orders to buy, sell or exchange Fund shares are processed on
business days. Depending upon the class of shares, orders can be made by mail, by telephone or online. Orders received in “good form” by the Transfer Agent or your selling agent before the end of a business day are priced at the NAV per
share of the Fund's applicable share class on that day. Orders received after the end of a business day will receive the next business day's NAV per share. When a written order to buy, sell or exchange shares is sent to the Transfer Agent, the share
price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the P.O. Box provided for regular mail delivery. 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 NAV per share. The business day that applies to your order is also called the trade date.
“Good Form”
An order is in “good form” if
the Transfer Agent or your selling 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 greater than $100,000 and other transactions, as described below, 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
The Transfer Agent may require a Medallion
Signature Guarantee for your signature in order to process certain transactions. A Medallion Signature Guarantee helps assure that a signature is genuine and not a forgery. A Medallion Signature Guarantee must be provided by an eligible guarantor
institution including, but not limited to, the following: a bank, credit union, savings association, broker or dealer that participates in the Securities Transfer Association Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) or
the New York Stock Exchange Medallion Signature Program (MSP). Notarization by a notary public is not an acceptable signature guarantee. The Transfer Agent reserves the right to reject a signature guarantee and to request additional documentation
for any transaction.
A Medallion Signature Guarantee is
required if: (i) the transaction amount is over $100,000; (ii) you want your check made payable to someone other than the registered account owner(s); (iii) the address of record has changed within the last 30 days; (iv) you want the check mailed to
an address other than the address of record; (v) you want proceeds to be sent according to existing bank account instructions not coded for outgoing Automated Clearing House (ACH) or wire, or to a bank account not on file; (vi) you are the
beneficiary of the account and the account owner is deceased (other documentation may be required); or (vii) you are changing legal ownership of your account.
Columbia Income Builder Fund
Buying, Selling and
Exchanging Shares
(continued)
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 (e.g., social security number (SSN) or
other taxpayer identification number (TIN)). 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 take other steps as deemed reasonable. The Fund will not be 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 — Class A, Class B, Class C, Class T
and Class Z Share Accounts Below the Minimum Account Balance
The Funds generally will automatically sell your shares if the
value of your Fund account (treating each account of the Fund you own separately from any other account of the Fund you may own) falls below the applicable Minimum Account Balance. The Minimum Account Balance varies among Funds, share classes and
types of accounts, as follows:
Minimum
Account Balance
|
|
|
Minimum
Account
Balance
|
For
all Funds, classes and account types except those listed below
|
$250
(None for accounts with
Systematic Investment Plans)
|
Individual
Retirement Accounts for all Funds and classes except those listed below
|
None
|
Columbia
Absolute Return Currency and Income Fund
|
$5,000
|
Columbia
Floating Rate Fund and Columbia Inflation Protected Securities Fund
|
$2,500
|
Class
I, Class K, Class R, Class R4, Class R5, Class W and Class Y
|
None
|
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 Fund in which you hold shares, or
setting up a Systematic Investment Plan. For more information, contact the Transfer Agent or your selling agent. The Transfer Agent's contact information (toll-free number and mailing addresses) as well as the Funds' website address can be found at
the beginning of the section
Choosing a Share Class
.
The Fund also may sell your Fund shares if your selling agent
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 — Class A, Class B, Class C, Class T
and Class Z Share Accounts Minimum Balance Fee
If the
value of your Fund 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 for any reason, including as a result of market
decline, your account generally will be subject to a $20 annual fee. This fee will be assessed through the automatic sale of Fund 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 Fund account balance, consolidating your Fund accounts through an exchange of shares of another Fund in which you hold shares,
Columbia Income Builder Fund
Buying, Selling and
Exchanging Shares
(continued)
or setting up a Systematic Investment Plan that invests at least monthly. For
more information, contact the Transfer Agent or your selling agent. The Transfer Agent's contact information (toll-free number and mailing address(es)) as well as the Funds' website address can be found at the beginning of the section
Choosing a Share Class
.
The Funds 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 Small Account Policy (Accounts
Below Minimum Account Balance and Minimum Balance Fee)
The automatic sale of Fund shares of accounts under $250 and
the annual minimum balance fee described above do not apply to shareholders of Class I, Class K, Class R, Class R4, Class R5, Class W and Class Y shares; shareholders holding their shares through broker-dealer networked accounts; wrap fee and
omnibus accounts; accounts with active Systematic Investment Plans; certain qualified retirement plans; and health savings accounts. The automatic sale of Fund shares of accounts under the applicable Minimum Account Balance does not apply to
individual retirement plans.
Small Account Policy —
Broker-Dealer and Wrap Fee Accounts
The Funds may
automatically redeem, at any time, broker-dealer networked accounts and wrap fee accounts that have account balances of $20 or less or have less than one share.
Information Sharing Agreements
As required by Rule 22c-2 under the 1940 Act, the Funds or
certain of their service providers will enter into information sharing agreements with selling agents, including participating life insurance companies and selling agents that sponsor or offer retirement plans through which shares of the Funds are
made available for purchase. Pursuant to Rule 22c-2, selling agents 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.
Excessive Trading Practices Policy of Non-Money Market
Funds
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 purchase 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 sole discretion restrict or reject a purchase or exchange order even if the transaction is
not subject to the specific 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 purchase or exchange transactions communicated directly to the Transfer Agent and to those received by selling agents.
Specific Buying and Exchanging Limitations
— If a Fund detects that an investor has made two “material round trips” in any 28-day period, it will generally reject the investor's future purchase orders, including exchange purchase orders,
involving any 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 sole discretion, reject future buy orders by any person, group or account that appears to
have engaged in any type of excessive trading activity.
Columbia Income Builder Fund
Buying, Selling and
Exchanging Shares
(continued)
These limits generally do not apply to automated transactions
or transactions by registered investment companies in 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. In addition, the Fund may, in its sole discretion, reinstate trading privileges that have been revoked under the Fund's Excessive Trading Policies and Procedures.
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
or exchange orders through selling agents, and cannot always know of or reasonably detect excessive trading that may be facilitated by selling agents 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 selling agents such as broker-dealers, retirement plans and variable insurance products. These arrangements often permit selling agents to aggregate their clients'
transactions and accounts, and in these circumstances, the identity of the shareholders is often not known to the Fund.
Some selling agents 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.
Columbia Income Builder Fund
Buying, Selling and
Exchanging Shares
(continued)
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 Fund 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. The risks of excessive trading described above also apply to any underlying funds in which the Fund invests.
Excessive Trading Practices Policy of Columbia Money Market
Fund
A money market fund is designed to offer investors
a liquid cash option that they may buy and sell as often as they wish. Accordingly, the Board has not adopted policies and procedures designed to discourage excessive or short-term trading of Columbia Money Market Fund shares. However, since
frequent purchases and sales of Columbia Money Market Fund shares could in certain instances harm shareholders in various ways, including reducing the returns to long-term shareholders by increasing costs (such as spreads paid to dealers who trade
money market instruments with Columbia Money Market Fund) and disrupting portfolio management strategies, Columbia Money Market Fund reserves the right, but has no obligation, to reject any purchase or exchange transaction at any time. Except as
expressly described in this prospectus (such as minimum purchase amounts), Columbia Money Market Fund has no limits on purchase or exchange transactions. In addition, Columbia Money Market Fund reserves the right to impose or modify restrictions on
purchases, exchanges or trading of Fund shares at any time.
Opening an Account and Placing Orders
We encourage 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 or exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling agent.
As described below, once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.
The Funds are generally available directly and through
broker-dealers, banks and other selling agents or institutions, and through certain qualified and non-qualified plans, wrap fee products or other investment products sponsored by selling agents. You may exchange or sell shares through your selling
agent. If you maintain your account directly with your selling agent, you must contact that agent to process your transaction.
Not all selling agents offer the Funds and certain selling
agents that offer the Funds may not offer all Funds on all investment platforms or programs.
Please consult with your financial advisor to determine the availability of the Funds. If you set up an account at a
selling agent that does not have, and is unable to obtain, a selling agreement with the Distributor, you will not be able to transfer Fund holdings to that account. In that event, you must either maintain your Fund holdings with your current selling
agent, find another selling agent with a selling agreement, or sell your Fund shares, paying any applicable CDSC. Please be aware that transactions in taxable accounts are taxable events and may result in income tax liability.
Selling agents that offer the Funds may charge you additional
fees for the services they provide and they may have different policies that are not described in this prospectus.
Some policy differences may include different minimum investment amounts, exchange privileges, Fund
choices and cutoff times for investments. Additionally, recordkeeping, transaction processing and payments of distributions relating to your account may be performed by the selling agents through which your shares of the Fund are held. Since the
Fund (and its service providers) may not have a record of your account transactions, you should always contact the financial advisor employed by the selling agent through which you purchased or at which you maintain your shares of the Fund to make
changes to your account or to give instructions concerning your account, or to obtain information about your account. The Fund and its service providers, including the Distributor and the Transfer Agent, are not responsible for the failure of these
selling agents to carry out their obligations to its customers.
Columbia Income Builder Fund
Buying, Selling and
Exchanging Shares
(continued)
The Fund may engage selling agents to receive purchase,
exchange and sell orders on its behalf. Accounts established directly with the Fund will be serviced by the Transfer Agent. The Funds, the Transfer Agent and the Distributor do not provide investment advice.
Accounts Established Directly with the Fund
You or the financial advisor through which
you buy shares may establish an account with the Fund. To do so, complete a Fund account application with your financial advisor or investment professional, and mail the account application to the Transfer Agent. Account applications may be obtained
at columbiathreadneedle.com/us or may be requested by calling 800.345.6611. Make your check payable to the Fund. You will be assessed a $15 fee for any checks rejected by your financial institution due to insufficient funds or other reasons. The
Funds do not accept cash, credit card convenience checks, money orders, traveler's checks, starter checks, third or fourth party checks, or other cash equivalents.
Mail your check and completed application to the Transfer
Agent at its address that can be found at the beginning of the section
Choosing a Share Class.
You may also use these addresses to request an exchange or redemption of Fund shares. When a written order to buy,
sell or exchange shares is sent to the Transfer Agent, the share price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the
P.O. Box provided for regular mail delivery.
You will be
sent a statement confirming your purchase and any subsequent transactions in your account. You will also be sent quarterly and annual statements detailing your transactions in the Fund and the other Funds you own under the same account number.
Duplicate quarterly account statements for the current year and duplicate annual statements for the most recent prior calendar year will be sent to you free of charge. Copies of year-end statements for prior years are available for a fee. Please
contact the Transfer Agent for more information.
Written
Transactions
Once you have an account, you can
communicate written buy, sell or exchange orders to the Transfer Agent at its address that can be found at the beginning of the section
Choosing a Share Class
. When a written order to buy, sell or exchange
shares is sent to the Transfer Agent, the share price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the P.O. Box
provided for regular mail delivery.
Include in your
letter: your name; the name of the Fund(s); your account number; the class of shares to be exchanged or sold; your SSN or other TIN; the dollar amount or number of shares you want to exchange or sell; specific instructions regarding delivery of
redemption proceeds or exchange destination; signature(s) of registered account owner(s); and any special documents the Transfer Agent may require in order to process your order.
Corporate, trust or partnership accounts may need to send
additional documents. Payment will be mailed to the address of record and made payable to the names listed on the account, unless your request specifies differently and is signed by all owners.
Telephone Transactions
For Class A, Class B, Class C, Class R, Class T, Class Y and
Class Z shares, 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 SSN or TIN available when calling.
You can sell Fund shares via the telephone, by electronic
funds transfer or by check to the address of record, up to and including an aggregate of $100,000 of shares per day, per Fund account, if you qualify for telephone orders. Wire redemptions requested via the telephone are subject to a maximum of $3
million of shares per day, per Fund. You can buy up to and including $100,000 of shares per day, per Fund account through your bank account as an Automated Clearing House (ACH) transaction via the telephone if you qualify for telephone orders.
Telephone orders may not be as secure as written orders. The
Fund 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
Columbia Income Builder Fund
Buying, Selling and
Exchanging Shares
(continued)
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
For Class A, Class B, Class C, Class R, Class T, Class Y and
Class Z shares, once you have an account, you may contact the Transfer Agent 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 and
including an aggregate of $100,000 of shares per day, per Fund account through the internet if you qualify for internet orders.
Wire Transactions
You may buy (or redeem) Class A, Class B (redemptions only),
Class C, Class T, Class W (redemptions only), Class Y and Class Z shares of a Fund by wiring money from (or to) your bank account to (or from) your Fund account by calling the Transfer Agent at 800.422.3737. You must set up this feature prior to
your request unless you are submitting your request in writing with a Medallion Signature Guarantee. The Transfer Agent charges a fee for shares sold by Fedwire. The Transfer Agent may waive the fee for certain accounts. In the case of a redemption,
the receiving bank may charge an additional fee. The minimum amount that can be redeemed by wire is $500. The maximum amount that can be redeemed over the telephone is $3 million per day, per Fund account.
Electronic Funds Transfer
You may buy (or redeem) Class A, Class B (redemptions only),
Class C, Class T, Class Y and Class Z shares of a Fund by electronically transferring money from (or to) your bank account to (or from) 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.
Important:
Payments sent by an
electronic fund transfer, a bank authorization, or check that are not guaranteed may take up to 10 or more days to clear. If you request a redemption before the purchase funds clear, this may cause your redemption request to fail to process if the
requested amount includes unguaranteed funds. If you purchased your shares by check or from your bank account as an ACH transaction, the Fund may hold the redemption proceeds when you sell those shares for a period of time after the trade date of
the purchase.
Buying Shares
Eligible Investors
Class A and Class C Shares
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. As described in
this prospectus, Class A shares but not Class C shares are generally subject to a front-end sales charge, which reduces the dollar amount invested in a Fund. However, Class C shares are generally subject to higher fees than Class A shares, which
will reduce any returns on Class C shares relative to Class A shares. You may be eligible to purchase Class A shares without a front-end sales charge if the value of your Columbia Fund shares held in eligible accounts reaches $1,000,000 (in the case
of a purchase of Class A shares of a Taxable Fund) or $500,000 (in the case of a purchase of Class A shares of a Tax-Exempt Fund). If you are eligible to invest in Class A shares without a front-end sales charge, you should discuss your options with
your selling agent. For more information, see
Choosing a Share Class
– Reductions/Waivers of Sales Charges
. A purchase order for Class C shares of a Taxable or
Tax-Exempt Fund is limited to $999,999 and $499,999, respectively. Your selling agent may impose additional limits on investments in Class C shares.
Columbia Income Builder Fund
Buying, Selling and
Exchanging Shares
(continued)
For Columbia Money Market Fund, new investments must be made
in Class A, Class I, Class W or Class Z shares, subject to eligibility. Class C and Class R shares of Columbia Money Market Fund are available as a new investment only to investors in the Distributor's proprietary 401(k) products, provided that such
investor is eligible to invest in the class and transacts directly with the Fund or the Transfer Agent through a third party administrator or third party recordkeeper. Columbia Money Market Fund offers other classes of shares only to facilitate
exchanges with other Funds offering these classes of shares.
Class B Shares (Closed)
The Funds no longer accept 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):
■
|
Dividend and/or capital gain
distributions may continue to be reinvested in Class B shares of a Fund.
|
■
|
Shareholders invested in Class
B shares of a Fund may exchange those shares for Class B shares of other Funds offering such shares. Certain exceptions apply, including that not all Funds may permit exchanges.
|
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, any purchase orders (except those submitted by a selling agent through the National Securities Clearing Corporation (NSCC) as described in more detail below) that are orders 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 automatically be invested in Class A shares of the Fund, without regard to the normal minimum initial investment requirement for Class A shares,
but subject to the front-end sales charge that generally applies to Class A shares. See
Choosing a Share Class — Sales Charges and Commissions — Class A Shares — Front-End Sales Charge
for
additional information. Your selling agent may have different policies not described here, including a policy to reject purchase orders for a Fund's Class B shares or to automatically invest the purchase amount in Columbia Money Market Fund. Please
consult your selling agent to understand its policy.
Additional purchase orders for a Fund's Class B shares by an
existing Class B shareholder, submitted by such shareholder's selling agent through the NSCC, will be rejected due to operational limitations of the NSCC. Investors should consult their selling agent if they wish to invest in the Fund by purchasing
a share class of the Fund other than Class B shares.
Dividend and/or capital gain distributions from Class B shares
of a Fund will not be automatically invested in Class B shares of another 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 Fund will be
reinvested in Class B shares of the same Fund that is making the distribution.
Class I Shares
Class I shares are available only to the Funds (i.e.,
fund-of-funds investments).
Class K Shares (Closed)
Class K shares are closed to new investors and new accounts,
subject to certain limited exceptions described below.
Shareholders who opened and funded a Class K account with the
Fund as of the close of business on December 31, 2010 (including accounts once funded that subsequently reached a zero balance) may continue to make additional purchases of Class K shares. Plans may continue to make additional purchases of Fund
shares and add new participants, and new plans sponsored by the same or an affiliated sponsor may invest in the Fund (and add new participants) if an initial plan so sponsored invested in the Fund as of December 31, 2010 (or had approved the Fund as
an investment option as of December 31, 2010 and funded its initial account with the Fund prior to March 31, 2011) and holds Fund shares at the plan level.
Columbia Income Builder Fund
Buying, Selling and
Exchanging Shares
(continued)
An order to purchase Class K shares received by the Fund or
the Transfer Agent after the close of business on December 31, 2010 (other than as described above) from a new investor or a new account that is not eligible to purchase shares will be refused by the Fund and the Transfer Agent and any money that
the Fund or the Transfer Agent received with the order will be returned to the investor or the selling agent, as appropriate, without interest.
Class K shares are designed for qualified
employee benefit plans, trust companies or similar institutions, charitable organizations that meet the definition in Section 501(c)(3) of the Code, non-qualified deferred compensation plans whose participants are included in a qualified employee
benefit plan described above, state sponsored college savings plans established under Section 529 of the Code, and health savings accounts created pursuant to public law 108-173. Class K shares may be purchased, sold or exchanged only through the
Distributor or an authorized selling agent.
Prior to October 25, 2012, Class K shares were named Class R4
shares.
Class R Shares
Class R shares are available only to eligible health savings
accounts sponsored by third party platforms, including those sponsored by Ameriprise Financial affiliates, eligible retirement plans and, in the sole discretion of the Distributor, other types of retirement accounts held through platforms maintained
by selling agents approved by the Distributor. Eligible retirement plans include any retirement plan other than individual 403(b) plans. Class R shares are generally not available for investment through retail nonretirement accounts, traditional and
Roth IRAs, Coverdell Education Savings Accounts, SEPs, SAR-SEPs, Simple IRAs or 529 tuition programs. Contact the Transfer Agent or your retirement plan or health savings account administrator for more information about investing in Class R
shares.
Class R4 Shares
Class R4 shares are available only to (i) omnibus retirement
plans, (ii) trust companies or similar institutions, (iii) broker-dealers, banks, trust companies and similar institutions that clear Fund share transactions for their client or customer investment advisory or similar accounts through designated
selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R4 eligibility apart from selling, servicing or similar agreements, (iv) 501(c)(3) charitable
organizations, (v) 529 plans and (vi) health savings accounts.
Prior to October 31, 2012, Class R4 shares were named Class R3
shares.
Class R5 Shares
Class R5 shares are available only to (i) certain registered
investment advisers that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with
respect to Class R5 eligibility apart from selling, servicing or similar agreements and (ii) omnibus retirement plans. Prior to November 8, 2012, Class R5 shares were closed to new investors and new accounts, subject to certain exceptions. Existing
shareholders who do not satisfy the new eligibility requirements for investment in Class R5 may not establish new Class R5 accounts but may continue to make additional purchases of Class R5 shares in accounts opened and funded prior to November 8,
2012; provided, however, that investment advisory programs and similar programs that opened a Class R5 account as of May 1, 2010, and continuously hold Class R5 shares in such account after such date, may generally not only continue to make
additional purchases of Class R5 shares but also open new Class R5 accounts for such pre-existing programs and add new shareholders in the program.
Class T Shares
Class T shares are available only to
investors who received (and who have continuously held) Class T shares in connection with the merger of certain Galaxy funds into certain Funds that were then named Liberty funds.
Class W Shares
Class W shares are available only to investors purchasing
through authorized investment programs managed by investment professionals, including discretionary managed account programs. Class W shares may be purchased, sold or exchanged only through the Distributor or an authorized selling agent. Shares
originally purchased in a
Columbia Income Builder Fund
Buying, Selling and
Exchanging Shares
(continued)
discretionary managed account may continue to be held in Class W outside of a
discretionary managed account, but no additional Class W purchases may be made and no exchanges to Class W shares of another Fund may be made outside of a discretionary managed account.
Class Y Shares
Class Y shares, except as noted below, are
available only to retirement plans that maintain plan-level or omnibus accounts with the Fund (through the Transfer Agent).
Prior to November 8, 2012, Class Y shares were offered only to
certain former shareholders of series of the former Columbia Funds Institutional Trust (together, Former CFIT Shareholders). Former CFIT Shareholders who opened and funded a Class Y account with a Fund as of the close of business on November 7, 2012
may continue to make additional purchases of Class Y shares even if they do not satisfy the current eligibility requirements but may not establish new Class Y shares accounts and will not be eligible to exchange Class Y shares of a Fund into Class Y
shares of other Funds. Former CFIT Shareholders may exchange Class Y shares of a Fund for Class Z shares of the same Fund or Class Z shares of another Fund, subject to applicable minimum investments.
Class Z Shares
Class Z shares are available only to the categories of
eligible investors described below under
Class Z Shares Minimum Initial Investments
.
Selling agents that clear Fund share transactions through designated selling agents and
their mutual fund trading platforms that were given specific written notice from the Transfer Agent of the termination, effective March 29, 2013, of their eligibility for new purchases of Class Z shares and omnibus retirement plans are not permitted
to establish new Class Z accounts, subject to certain exceptions described below.
Omnibus retirement plans that opened and, subject to certain
exceptions, funded a Class Z account with the Fund as of the close of business on March 28, 2013, and have continuously held Class Z shares in such account after such date, may generally continue to make additional purchases of Class Z shares, open
new Class Z accounts and add new participants. In addition, an omnibus retirement plan affiliated with a grandfathered plan may, in the sole discretion of the Distributor, open new Class Z accounts in a Fund if the affiliated plan opened a Class Z
account on or before March 28, 2013. If an omnibus retirement plan invested in Class Z shares changes recordkeepers after March 28, 2013, any new accounts established for that plan may not be established in Class Z shares, but such a plan may
establish new accounts in a different share class for which the plan is eligible. The Distributor may, in its sole discretion, delay the funding requirement described above for omnibus retirement plans to allow an omnibus retirement plan that opened
a Class Z account (the initial Class Z account) with the Fund as of the close of business on March 28, 2013 to make additional purchases of Class Z shares, open new Class Z accounts and add new participants so long as the initial Class Z account was
funded by July 2, 2013.
Accounts of selling agents
(other than omnibus retirement plans, which are discussed above) that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that received specific written notice
from the Transfer Agent of the termination, effective March 29, 2013, of their eligibility for new purchases of Class Z shares will not be permitted to establish new Class Z accounts or make additional purchases of Class Z shares (other than through
reinvestment of distributions). Such accounts may, at their holder’s option, exchange Class Z shares of a Fund, without the payment of a sales charge, for Class A shares of the same Fund.
Additional Eligible Investors
In addition, the Distributor, in its sole discretion, may
accept investments in any share class from investors other than those listed in this prospectus.
Minimum Initial Investments
The table below shows the Fund's minimum initial investment
requirements, which may vary by Fund, class and type of account.
Columbia Income Builder Fund
Buying, Selling and
Exchanging Shares
(continued)
Minimum
Initial Investments
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|
Minimum
Initial
Investment
(a)
|
Minimum
Initial Investment
for Accounts
with Systematic
Investment Plans
|
For
all Funds, classes and account types except those listed below
|
$2,000
|
$100
(b)
|
Individual
Retirement Accounts for all Funds and classes except those listed below
|
$1,000
|
$100
(c)
|
Columbia
Absolute Return Currency and Income Fund
|
$10,000
|
$10,000
|
Columbia
Floating Rate Fund and Columbia Inflation Protected Securities Fund
|
$5,000
|
$5,000
|
Class
I, Class K, Class R, Class R4 and Class Y
|
None
|
N/A
|
Class
R5
|
variable
(d)
|
N/A
|
Class
W
|
$500
|
N/A
|
Class
Z
|
variable
(e)
|
$100
|
(a)
|
If your Class A, Class B,
Class C, Class T or Class Z shares account balance falls below the minimum initial investment amount for any reason, including a market decline, you may be asked to increase it to the minimum initial investment amount or establish a monthly
Systematic Investment Plan. If you do not do so, your account will be subject to a $20 annual low balance fee and/or shares may be automatically redeemed and the proceeds mailed to you if the account falls below the minimum account balance. See
Buying, Selling and Exchanging Shares — Transaction Rules and Policies
above.
|
(b)
|
Columbia Money Market Fund
—
$2,000
|
(c)
|
Columbia Money Market Fund
—
$1,000
|
(d)
|
There is no minimum initial
investment in Class R5 shares for omnibus retirement plans. A minimum initial investment of $100,000 applies to aggregate purchases of Class R5 shares of a Fund for combined underlying accounts of any registered investment adviser that clears Fund
share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R5 eligibility
apart from selling, servicing or similar agreements.
|
(e)
|
The minimum initial
investment amount for Class Z shares is $0, $1,000 or $2,000 depending upon the category of eligible investor. See
— Class Z Shares Minimum Initial Investments
below. The minimum initial investment
amount for systematic investment plan accounts is the same as the amount set forth in the first two rows of the table, as applicable.
|
The minimum initial investment requirements may be waived for
accounts that are managed by an investment professional, for accounts held in approved discretionary or non-discretionary wrap programs, or for accounts that are a part of an employer-sponsored retirement plan. The Distributor, in its sole
discretion, may also waive minimum initial investment requirements for other account types.
Minimum investment and related requirements may be modified at
any time, with or without prior notice. If your account is closed and then re-opened with a systematic investment plan, your account must meet the then-current applicable minimum initial investment.
Class Z Shares Minimum Initial Investments
There is no minimum initial investment in Class Z shares for
the following categories of eligible investors:
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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 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.
|
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Any health savings account
sponsored by a third party platform.
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Any investor participating
in a wrap program sponsored by a selling agent 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:
Columbia Income Builder Fund
Buying, Selling and
Exchanging Shares
(continued)
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Any individual retirement
plan for which a selling agent 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.
|
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Any employee of Columbia
Management Investment Advisers, LLC, the Distributor or the Transfer Agent and immediate family members of any of the foregoing who share the same address and any persons employed as of April 30, 2010 by Columbia Management Advisors, LLC, Columbia
Management Distributors, Inc., or Columbia Management Services, Inc., the adviser, distributor and transfer agent of series of CFST and CFST I prior to May 1, 2010 (the Previous Service Providers) and immediate family members of any of the foregoing
who share the same address are eligible to make new and subsequent purchases in Class Z shares through an individual retirement account. If you maintain your account with a selling agent, you must contact that selling agent each time you seek to
purchase shares to notify them that you qualify for Class Z shares.
|
The minimum initial investment in Class Z shares for the
following categories of eligible investors is $2,000:
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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 a series of CFST or CFST I distributed by the Distributor.
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Any investor participating
in an account offered by a selling agent 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).
|
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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.
|
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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.
|
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Any employee of Columbia
Management Investment Advisers, LLC, the Distributor or the Transfer Agent and immediate family members of any of the foregoing who share the same address and any persons employed as of April 30, 2010 by the Previous Service Providers and any of
their immediate family members who share the same address are eligible to make new and subsequent purchases in Class Z shares through a non-retirement account. If you maintain your account with a selling agent, you must contact that selling agent
each time you seek to purchase shares to notify them that you qualify for Class Z shares.
|
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Certain other investors as
set forth in more detail in the SAI.
|
Systematic Investment Plan
The Systematic Investment Plan allows you to schedule regular
purchases via automatic transfers from your bank account to the Fund on a monthly, quarterly or semiannual basis. Contact the Transfer Agent or your selling agent to set up the plan. Systematic Investment Plans may not be available for all share
classes.
Dividend Diversification
Generally, you may automatically invest distributions made by
another Fund into the same class of shares (and in some cases certain other classes of shares) of a Fund at no additional sales charge. A sales charge may apply when you invest distributions made with respect to shares that were not subject to a
sales charge at the time of your initial purchase. Call the Transfer Agent at 800.345.6611 for details. The ability to invest distributions from one Fund to another Fund may not be available to accounts held at all selling agents.
Columbia Income Builder Fund
Buying, Selling and
Exchanging Shares
(continued)
Other Purchase Rules You Should Know
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Once the Transfer Agent or
your selling 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
and Class T shares at the public offering price per share because purchases of these share classes are generally subject to a front-end sales charge.
|
■
|
You buy Class B, Class C,
Class I, Class K, Class R, Class R4, Class R5, Class W, Class Y and Class Z shares at net asset value per share because no front-end sales charge applies to purchases of these share classes.
|
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The Distributor and the
Transfer Agent reserve the right to cancel your order if the Fund 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 agents are
responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.
|
■
|
Shares purchased 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. The payment will be sent within seven days after your request is received in “good form.” When you sell shares, the amount you receive may be more or less than the amount you invested.
Your sale price will be the next NAV calculated after your
request is received in “good form,” minus any applicable CDSC.
Systematic Withdrawal Plan
The Systematic Withdrawal Plan allows you to
schedule regular redemptions from your account any business day on a monthly, quarterly or semiannual basis. Currently, Systematic Withdrawal Plans are generally available for Class A, Class B, Class C, Class R4, Class R5, Class T, Class W, Class Y
and Class Z share accounts. Contact the Transfer Agent or your financial advisor to set up the plan. To set up the plan, your account balance must meet the class minimum initial investment amount. 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 Signature Guaranteed.
You can choose to receive your withdrawals via check or direct
deposit into your bank account. The Fund will deduct any applicable CDSC from the withdrawals before sending the balance to you. You can cancel the plan by giving the Fund 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 withdraw your entire investment.
Check Redemption Service (for Columbia Money Market Fund)
Class A and Class Z shares of Columbia Money Market Fund offer
check writing privileges. If you have $2,000 in Columbia Money Market Fund, you may request checks which may be drawn against your account. The amount of any check drawn against your Columbia Money Market Fund must be at least $100. You can elect
this service on your initial application or thereafter. Call 800.345.6611 for the appropriate forms to establish this service. If you own Class A shares that were originally purchased in another Fund at NAV because of the size of the purchase, and
then exchanged into Columbia Money Market Fund, check redemptions may be subject to a CDSC. A $15 charge will be assessed for any stop payment order requested by you or any overdraft in connection with checks written against your Columbia Money
Market Fund account. Note that a Medallion Signature Guarantee may be required if this service is established after the account is opened.
Columbia Income Builder Fund
Buying, Selling and
Exchanging Shares
(continued)
In-Kind Redemptions
The Fund reserves the right to honor redemption orders with
in-kind distributions of portfolio securities instead of cash. In the event the Fund distributes portfolio securities in-kind, you may incur 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. For U.S. federal income tax purposes redemptions paid in securities are generally treated the same as redemptions paid in cash.
Other Redemption Rules You Should Know
■
|
Once the Transfer Agent or
your selling agent receives your redemption order in “good form,” your shares will be sold at the next calculated NAV 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 that
are held directly with the Funds (through the Transfer Agent), we will normally send the redemption proceeds by mail or electronically transfer them to your bank account within three business days after the Transfer Agent or your selling agent
receives your order in “good form.”
|
■
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If you sell your shares
through a selling agent, the Funds will normally send the redemption proceeds by Fedwire within three business days after the Transfer Agent or your selling agent receives your order in “good form.”
|
■
|
If you paid for your shares
by check or from your bank account as an ACH transaction, the Funds will hold the redemption proceeds when you sell those shares for a period of time after the trade date of the purchase.
|
■
|
No interest will be paid on
uncashed redemption checks.
|
■
|
The Funds can delay payment
of the redemption proceeds for up to seven days and may suspend redemptions and/or further postpone payment of redemption proceeds when the NYSE is closed or trading thereon is restricted or during emergency or other circumstances, including as
determined by the SEC.
|
■
|
Other restrictions may apply
to retirement accounts. For information about these restrictions, contact your retirement plan administrator.
|
■
|
The Fund reserves the right
to redeem your shares if your account falls below the Fund's minimum initial investment requirement.
|
■
|
Also keep in mind the 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 your Fund to buy shares of
another Fund, in what is called an exchange. You should read the prospectus of, and make sure you understand the investment objective, principal investment strategies, risks, fees and expenses of, the Fund into which you are exchanging.
You may be subject to a sales charge if you exchange from
Columbia Money Market Fund or any other Fund that does not charge a front-end sales charge into a non-money market Fund.
If you hold your Fund shares through certain selling agents, including Ameriprise Financial
Services, Inc., you may have limited exchangeability among the Funds.
Please contact your selling agent for more information.
You can generally make exchanges between like share classes of
any Fund and, subject to eligibility requirements, other share classes of any Fund. Some exceptions apply. Although the Funds allow certain exchanges from one share class to another share class with higher expenses, you should consider the expenses
of each class before making such an exchange.
Systematic
Exchanges
You may buy Class A, Class C, Class T, Class
W, Class Y and/or Class Z shares of a Fund by exchanging each month from another Fund for shares of the same class of the Fund at no additional cost, subject to the following exchange amount minimums: $50 each month for individual retirement
accounts (i.e. tax qualified accounts); and $100 each month for non-retirement accounts. Contact the Transfer Agent or your selling agent to set up the plan. If you set up your plan to exchange more than $100,000 each month, you must obtain a
Medallion Signature Guarantee.
Columbia Income Builder Fund
Buying, Selling and
Exchanging Shares
(continued)
Exchanges will continue as long as your balance is sufficient
to complete the systematic monthly transfers, subject to the 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 $50 and $100 minimum requirements noted immediately above) by calling the Transfer Agent at 800.345.6611. A sales charge may apply when you exchange shares of a Fund that were
not assessed a sales charge at the time of your initial purchase.
Other Exchange Rules You Should Know
■
|
Exchanges are made at the
NAV next calculated after your exchange order is received in “good form.”
|
■
|
Once the Fund receives your
exchange request, you cannot cancel it after the market closes.
|
■
|
The rules for buying shares
of a Fund generally apply to exchanges into that Fund, including, if your exchange creates a new Fund account, it must satisfy the minimum investment amount, unless a waiver applies.
|
■
|
Shares of the purchased Fund
may not be used on the same day for another exchange or sale.
|
■
|
If you exchange shares from
Class A shares of Columbia Money Market Fund to a non-money market Fund, any further exchanges must be between shares of the same class. For example, if you exchange from Class A shares of Columbia Money Market Fund into Class C shares of a
non-money market Fund, you may not exchange from Class C shares of that non-money market Fund back to Class A shares of Columbia Money Market Fund.
|
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|
A sales charge may apply when
you exchange shares of a Fund that were not assessed a sales charge at the time of your initial purchase. For example, if your initial investment was in Columbia Money Market Fund and you exchange into a non-money market Fund, your transaction is
subject to a front-end sales charge if you exchange into Class A shares and to a CDSC if you exchange into Class C shares of the Funds.
|
■
|
If your initial investment
was in Class A shares of a non-money market Fund and you exchange shares into Columbia Money Market Fund, you may exchange that amount to another Fund, including dividends earned on that amount, without paying a sales charge.
|
■
|
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 Fund and ends when you sell the shares of the Fund you received from the exchange. The applicable CDSC will be the CDSC of the original Fund.
|
■
|
You may make exchanges only
into a Fund that is legally offered and sold in your state of residence. Contact the Transfer Agent or your selling agent for more information.
|
■
|
You generally may make an
exchange only into a 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.
|
■
|
Changing your investment to
a different Fund will be treated as a sale and purchase, and you will be subject to applicable taxes on the sale and sales charges on the purchase of the new Fund.
|
■
|
Class Z shares of a Fund may
be exchanged for Class A or Class Z shares of another Fund. In certain circumstances, the front-end sales charge applicable to Class A shares may be waived on exchanges of Class Z shares for Class A shares. See
Buying, Selling and Exchanging Shares — Buying Shares — Eligible Investors — Class Z Shares
for details.
|
■
|
You may generally exchange
Class T shares of a Fund for Class A shares of another Fund if the other Fund does not offer Class T shares. Class T shares exchanged into Class A shares cannot be exchanged back into Class T shares.
|
■
|
Class W shares originally
purchased, but no longer held, in a discretionary managed account, may not be exchanged for Class W shares of another Fund.
|
Columbia Income Builder Fund
Buying, Selling and
Exchanging Shares
(continued)
■
|
Former CFIT Shareholders may
not exchange Class Y shares of a Fund into Class Y shares of another Fund.
|
Same-Fund Exchange Privilege
Certain shareholders of a Fund may be or become eligible to
invest in other classes of shares of the same Fund. Upon a determination of such eligibility, such shareholders may be eligible to exchange their shares for shares of the other share class, if offered. Such exchanges include exchanges of shares of
one class for shares of another share class with higher expenses. Before making such an exchange, you should consider the expenses of each class. Investors should contact their selling agents to learn more about the details of the exchange
privilege.
Note the following rules relating to
same-Fund exchanges:
■
|
No sales charges or other
charges will apply to any such exchange, except that when Class B shares are exchanged, any CDSC applicable to Class B shares will be applied.
|
■
|
Ordinarily, shareholders
will not recognize a gain or loss for U.S. federal income tax purposes upon such an exchange. You should consult your tax advisor about your particular exchanges.
|
Columbia Income Builder Fund
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 generally unrealized. If the fund sells an investment, it generally will realize a capital gain if it sells that investment for a
higher price than its adjusted cost basis, and will generally realize a capital loss if it sells that investment for a lower price than its adjusted cost basis. Capital gains and losses are either short-term or long-term, depending on whether the
fund holds the securities for one year or less (short-term) or more than one year (long-term).
|
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 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
|
Monthly
|
Distributions
|
Monthly
|
The Fund may, however, declare or
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 distribution was declared (or, if the Fund declares distributions daily, 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 (the selling agent through which you purchased shares may have different policies). You can do this by contacting the Funds at
the addresses and telephone numbers listed at the beginning of the section entitled
Choosing a Share Class
. No sales charges apply to the purchase or sale of such shares.
For accounts held directly with the Fund (through the Transfer
Agent), 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.
Columbia Income Builder Fund
Distributions and Taxes
(continued)
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) of net
investment income or net realized capital gain, because doing so can cost you money in taxes to the extent 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,” before you invest check the Fund's distribution schedule, which is available at the Funds' website and/or by calling the Funds' telephone
number listed at the beginning of the section entitled
Choosing a Share Class
.
Taxes
You should be aware of the following considerations applicable
to all Funds (unless otherwise noted):
■
|
The Fund intends to qualify
and to be eligible for treatment 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 for treatment as a regulated investment company would result in Fund-level taxation, and consequently, a reduction in income available for distribution to you and in the net asset value of your shares. Even if the Fund
qualifies for treatment as a regulated investment company, the Fund may be subject to federal excise tax on certain undistributed income or gains.
|
■
|
Distributions, if taxable,
generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional Fund shares. Dividends paid in January are deemed paid on December 31 of the prior year if the dividend was declared and payable to
shareholders of record in October, November, or December of such prior year.
|
■
|
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 expects that distributions will consist primarily of ordinary income.
|
■
|
From time to time, a
distribution from the Fund could constitute a return of capital, which is not taxable to you so long as the amount of the distribution does not exceed your tax basis in your Fund shares. A return of capital reduces your tax basis in your Fund
shares, with any amounts exceeding such basis generally taxable as capital gain.
|
■
|
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 the lower net long-term capital gain rates instead of the higher
ordinary income rates. 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 eligible for treatment as qualified dividend income.
|
■
|
Certain high-income
individuals (as well as estates and trusts) are subject to a 3.8% tax on net investment income. For individuals, the 3.8% tax applies to the lesser of (1) the amount (if any) by which the taxpayer's modified adjusted gross income exceeds certain
threshold amounts or (2) the taxpayer's “net investment income.”
|
Net investment income
generally includes for this purpose dividends, including any capital gain dividends, paid by the Fund, and net gains recognized on the sale, redemption or exchange of shares of the Fund.
■
|
Certain derivative
instruments when held in the Fund's portfolio subject the Fund to special tax rules, the effect of which may be to, among other things, accelerate income to the Fund, defer Fund losses, cause adjustments in the holding periods of Fund portfolio
securities, or convert capital gains into ordinary income, short-term capital losses into long-term capital losses or long-term capital gains into short-term capital gains. These rules could therefore affect the amount, timing and/or character of
distributions to shareholders.
|
Columbia Income Builder Fund
Distributions and Taxes
(continued)
■
|
Certain Funds may purchase
or write options, as described further in the SAI. Generally, a Fund realizes a capital gain or loss on an option when the option expires, or when it is exercised, sold or otherwise terminated. However, if an option is a “section 1256
contract,” which includes most traded options on a broad-based index, and the Fund holds such option at the end of its taxable year, the Fund is deemed to sell such option at fair market value at such time and recognize any gain or loss
thereon, which is generally deemed to be 60% long-term and 40% short-term gain or loss, as described further in the SAI.
|
■
|
If at the end of the taxable
year more than 50% of the value of the Fund's assets consists of securities of foreign corporations, and the Fund makes a special election, you will generally be required to include in your income for U.S. federal income tax purposes your share of
the qualifying foreign income taxes paid by the Fund in respect of its foreign portfolio securities. You may be able to claim a foreign tax credit or deduction in respect of this amount, subject to certain limitations. There is no assurance that the
Fund will make this election for a taxable year, even if it is eligible to do so. The Fund may also be eligible to make this special election, regardless of the overall share of the value of its assets that is invested in the securities of foreign
corporations, if, at the close of each quarter of the Fund’s taxable year, at least 50% of its total assets consist of interests in underlying regulated investment companies.
|
■
|
It is possible that because
most of the Fund's investments are shares of Underlying Funds, and in such a case,
the tax treatment of the Fund's gains, losses, and distributions may differ from the tax treatment that would apply if either
the Fund invested directly in the types of securities held by the Underlying Funds or the Fund shareholders invested directly in the Underlying Funds. As a result, you may receive taxable distributions earlier and recognize higher amounts of capital
gain or ordinary income than you otherwise would.
|
■
|
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 your adjusted tax basis in the shares, which is generally 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; in other circumstances, capital losses may be disallowed under the “wash sale” rules.
|
■
|
The Fund generally is
required to report to shareholders and the Internal Revenue Service (the IRS) upon the sale, exchange or redemption of Fund shares cost basis information with respect to those shares. The Fund uses average cost basis as its default method of
calculating cost basis. Please see columbiathreadneedle.com/us or contact the Fund at 800.345.6611 for more information regarding average cost basis reporting, other available cost basis methods and how to select or change a particular method or to
choose specific shares to sell, redeem or exchange. If you hold Fund shares through a selling agent, you should contact your selling agent to learn about its cost basis reporting default method and the reporting elections available to your account.
|
■
|
The Fund is required by
federal law to withhold tax on any taxable or tax-exempt distributions and redemption 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 TIN or haven't certified to the Fund that withholding doesn't apply; the 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.
|
Columbia Income Builder Fund
Distributions and Taxes
(continued)
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. Please see the SAI for more detailed tax information. 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.
Columbia Income Builder Fund
The financial highlights tables are intended
to help you understand the Fund’s financial performance for the past five fiscal years or, if shorter, the Fund’s period of operations. Certain information reflects financial results for a single Fund share. Per share net investment
income (loss) amounts are calculated based on average shares outstanding during the period. The total returns in the tables represent the rate that an investor would have earned (or lost) on an investment in the Fund assuming all dividends and
distributions had been reinvested. Total return does not reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to
purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher. The information for the three most recent fiscal years has been
audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, whose report, along with the Fund’s financial statements, is included in the annual report, which is available upon request. The information for the prior
fiscal years has been derived from the financial statements audited by the Fund’s former independent registered public accounting firm.
|
Year
Ended January 31,
|
Class
A
|
2015
|
2014
|
2013
|
2012
|
2011
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$11.56
|
$11.48
|
$10.85
|
$10.58
|
$9.76
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.36
|
0.32
|
0.37
|
0.37
|
0.35
|
Net
realized and unrealized gain
|
0.25
|
0.12
|
0.69
|
0.30
|
0.87
|
Total
from investment operations
|
0.61
|
0.44
|
1.06
|
0.67
|
1.22
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.37)
|
(0.36)
|
(0.43)
|
(0.40)
|
(0.40)
|
Net
realized gains
|
(0.03)
|
—
|
—
|
—
|
—
|
Tax
return of capital
|
—
|
—
|
—
|
—
|
(0.00)
(a)
|
Total
distributions to shareholders
|
(0.40)
|
(0.36)
|
(0.43)
|
(0.40)
|
(0.40)
|
Net
asset value, end of period
|
$11.77
|
$11.56
|
$11.48
|
$10.85
|
$10.58
|
Total
return
|
5.29%
|
3.83%
|
9.98%
|
6.48%
|
12.72%
|
Ratios
to average net assets
(b)
|
|
|
|
|
|
Total
gross expenses
|
0.41%
|
0.41%
|
0.42%
|
0.42%
|
0.44%
|
Total
net expenses
(c)
|
0.41%
(d)
|
0.41%
|
0.42%
(d)
|
0.42%
|
0.44%
|
Net
investment income
|
2.99%
|
2.79%
|
3.30%
|
3.50%
|
3.42%
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$1,042,888
|
$972,684
|
$808,070
|
$692,920
|
$199,434
|
Portfolio
turnover
|
29%
|
28%
|
26%
|
31%
|
28%
|
Notes to Financial Highlights
(a)
|
Rounds to zero.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(c)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(d)
|
The
benefits derived from expense reductions had an impact of less than 0.01%.
|
Columbia Income Builder Fund
Financial Highlights
(continued)
|
Year
Ended January 31,
|
Class
B
|
2015
|
2014
|
2013
|
2012
|
2011
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$11.61
|
$11.54
|
$10.90
|
$10.62
|
$9.79
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.26
|
0.22
|
0.28
|
0.29
|
0.27
|
Net
realized and unrealized gain
|
0.27
|
0.12
|
0.71
|
0.30
|
0.88
|
Total
from investment operations
|
0.53
|
0.34
|
0.99
|
0.59
|
1.15
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.28)
|
(0.27)
|
(0.35)
|
(0.31)
|
(0.32)
|
Net
realized gains
|
(0.03)
|
—
|
—
|
—
|
—
|
Tax
return of capital
|
—
|
—
|
—
|
—
|
(0.00)
(a)
|
Total
distributions to shareholders
|
(0.31)
|
(0.27)
|
(0.35)
|
(0.31)
|
(0.32)
|
Net
asset value, end of period
|
$11.83
|
$11.61
|
$11.54
|
$10.90
|
$10.62
|
Total
return
|
4.57%
|
2.96%
|
9.18%
|
5.67%
|
11.91%
|
Ratios
to average net assets
(b)
|
|
|
|
|
|
Total
gross expenses
|
1.16%
|
1.16%
|
1.17%
|
1.17%
|
1.19%
|
Total
net expenses
(c)
|
1.16%
(d)
|
1.16%
|
1.17%
(d)
|
1.17%
|
1.19%
|
Net
investment income
|
2.17%
|
1.92%
|
2.50%
|
2.74%
|
2.61%
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$18,941
|
$27,334
|
$34,248
|
$40,756
|
$18,295
|
Portfolio
turnover
|
29%
|
28%
|
26%
|
31%
|
28%
|
Notes to Financial Highlights
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(c)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(d)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Income Builder Fund
Financial Highlights
(continued)
|
Year
Ended January 31,
|
Class
C
|
2015
|
2014
|
2013
|
2012
|
2011
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$11.60
|
$11.52
|
$10.89
|
$10.61
|
$9.79
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.27
|
0.25
|
0.29
|
0.29
|
0.28
|
Net
realized and unrealized gain
|
0.25
|
0.10
|
0.69
|
0.31
|
0.86
|
Total
from investment operations
|
0.52
|
0.35
|
0.98
|
0.60
|
1.14
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.28)
|
(0.27)
|
(0.35)
|
(0.32)
|
(0.32)
|
Net
realized gains
|
(0.03)
|
—
|
—
|
—
|
—
|
Tax
return of capital
|
—
|
—
|
—
|
—
|
(0.00)
(a)
|
Total
distributions to shareholders
|
(0.31)
|
(0.27)
|
(0.35)
|
(0.32)
|
(0.32)
|
Net
asset value, end of period
|
$11.81
|
$11.60
|
$11.52
|
$10.89
|
$10.61
|
Total
return
|
4.49%
|
3.06%
|
9.14%
|
5.73%
|
11.84%
|
Ratios
to average net assets
(b)
|
|
|
|
|
|
Total
gross expenses
|
1.16%
|
1.16%
|
1.17%
|
1.17%
|
1.20%
|
Total
net expenses
(c)
|
1.16%
(d)
|
1.16%
|
1.17%
(d)
|
1.17%
|
1.20%
|
Net
investment income
|
2.26%
|
2.14%
|
2.61%
|
2.76%
|
2.72%
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$238,901
|
$190,266
|
$102,019
|
$60,381
|
$17,732
|
Portfolio
turnover
|
29%
|
28%
|
26%
|
31%
|
28%
|
Notes to Financial Highlights
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(c)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(d)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Income Builder Fund
Financial Highlights
(continued)
|
Year
Ended January 31,
|
Class
K
|
2015
|
2014
|
2013
|
2012
|
2011
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$11.57
|
$11.50
|
$10.87
|
$10.59
|
$9.77
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.37
|
0.30
|
0.37
|
0.38
|
0.35
|
Net
realized and unrealized gain
|
0.26
|
0.13
|
0.70
|
0.31
|
0.87
|
Total
from investment operations
|
0.63
|
0.43
|
1.07
|
0.69
|
1.22
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.38)
|
(0.36)
|
(0.44)
|
(0.41)
|
(0.40)
|
Net
realized gains
|
(0.03)
|
—
|
—
|
—
|
—
|
Tax
return of capital
|
—
|
—
|
—
|
—
|
(0.00)
(a)
|
Total
distributions to shareholders
|
(0.41)
|
(0.36)
|
(0.44)
|
(0.41)
|
(0.40)
|
Net
asset value, end of period
|
$11.79
|
$11.57
|
$11.50
|
$10.87
|
$10.59
|
Total
return
|
5.45%
|
3.80%
|
10.02%
|
6.64%
|
12.74%
|
Ratios
to average net assets
(b)
|
|
|
|
|
|
Total
gross expenses
|
0.34%
|
0.34%
|
0.37%
|
0.35%
|
0.43%
|
Total
net expenses
(c)
|
0.34%
|
0.34%
|
0.37%
|
0.35%
|
0.42%
|
Net
investment income
|
3.06%
|
2.60%
|
3.34%
|
3.58%
|
3.45%
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$3
|
$40
|
$70
|
$65
|
$11
|
Portfolio
turnover
|
29%
|
28%
|
26%
|
31%
|
28%
|
Notes to Financial Highlights
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(c)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
Columbia Income Builder Fund
Financial Highlights
(continued)
|
Year
Ended January 31,
|
Class
R
|
2015
|
2014
|
2013
|
2012
|
2011
(a)
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$11.62
|
$11.54
|
$10.91
|
$10.63
|
$10.29
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.33
|
0.32
|
0.35
|
0.30
|
0.17
|
Net
realized and unrealized gain
|
0.25
|
0.09
|
0.69
|
0.35
|
0.33
|
Total
from investment operations
|
0.58
|
0.41
|
1.04
|
0.65
|
0.50
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.34)
|
(0.33)
|
(0.41)
|
(0.37)
|
(0.16)
|
Net
realized gains
|
(0.03)
|
—
|
—
|
—
|
—
|
Tax
return of capital
|
—
|
—
|
—
|
—
|
(0.00)
(b)
|
Total
distributions to shareholders
|
(0.37)
|
(0.33)
|
(0.41)
|
(0.37)
|
(0.16)
|
Net
asset value, end of period
|
$11.83
|
$11.62
|
$11.54
|
$10.91
|
$10.63
|
Total
return
|
5.00%
|
3.56%
|
9.68%
|
6.29%
|
4.88%
|
Ratios
to average net assets
(c)
|
|
|
|
|
|
Total
gross expenses
|
0.66%
|
0.66%
|
0.67%
|
0.73%
|
0.63%
(d)
|
Total
net expenses
(e)
|
0.66%
(f)
|
0.66%
|
0.67%
(f)
|
0.66%
|
0.63%
(d)
|
Net
investment income
|
2.75%
|
2.71%
|
3.19%
|
2.90%
|
4.84%
(d)
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$1,172
|
$1,091
|
$715
|
$44
|
$3
|
Portfolio
turnover
|
29%
|
28%
|
26%
|
31%
|
28%
|
Notes to Financial Highlights
(a)
|
Based on operations from
September 27, 2010 (commencement of operations) through the stated period end.
|
(c)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(e)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(f)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Income Builder Fund
Financial Highlights
(continued)
|
Year
Ended January 31,
|
Class
R4
|
2015
|
2014
|
2013
(a)
|
Per
share data
|
|
|
|
Net
asset value, beginning of period
|
$11.59
|
$11.52
|
$11.29
|
Income
from investment operations:
|
|
|
|
Net
investment income
|
0.39
|
0.44
|
0.13
|
Net
realized and unrealized gain
|
0.25
|
0.02
|
0.28
|
Total
from investment operations
|
0.64
|
0.46
|
0.41
|
Less
distributions to shareholders:
|
|
|
|
Net
investment income
|
(0.40)
|
(0.39)
|
(0.18)
|
Net
realized gains
|
(0.03)
|
—
|
—
|
Total
distributions to shareholders
|
(0.43)
|
(0.39)
|
(0.18)
|
Net
asset value, end of period
|
$11.80
|
$11.59
|
$11.52
|
Total
return
|
5.55%
|
4.00%
|
3.61%
|
Ratios
to average net assets
(b)
|
|
|
|
Total
gross expenses
|
0.16%
|
0.16%
|
0.13%
(c)
|
Total
net expenses
(d)
|
0.16%
(e)
|
0.16%
|
0.13%
(c)
|
Net
investment income
|
3.28%
|
3.79%
|
5.21%
(c)
|
Supplemental
data
|
|
|
|
Net
assets, end of period (in thousands)
|
$4,786
|
$2,433
|
$3
|
Portfolio
turnover
|
29%
|
28%
|
26%
|
Notes to Financial Highlights
(a)
|
Based on operations from
November 8, 2012 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(e)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Income Builder Fund
Financial Highlights
(continued)
|
Year
Ended January 31,
|
Class
R5
|
2015
|
2014
|
2013
(a)
|
Per
share data
|
|
|
|
Net
asset value, beginning of period
|
$11.60
|
$11.52
|
$11.29
|
Income
from investment operations:
|
|
|
|
Net
investment income
|
0.40
|
0.42
|
0.14
|
Net
realized and unrealized gain
|
0.25
|
0.05
|
0.27
|
Total
from investment operations
|
0.65
|
0.47
|
0.41
|
Less
distributions to shareholders:
|
|
|
|
Net
investment income
|
(0.41)
|
(0.39)
|
(0.18)
|
Net
realized gains
|
(0.03)
|
—
|
—
|
Total
distributions to shareholders
|
(0.44)
|
(0.39)
|
(0.18)
|
Net
asset value, end of period
|
$11.81
|
$11.60
|
$11.52
|
Total
return
|
5.61%
|
4.14%
|
3.61%
|
Ratios
to average net assets
(b)
|
|
|
|
Total
gross expenses
|
0.10%
|
0.09%
|
0.10%
(c)
|
Total
net expenses
(d)
|
0.10%
|
0.09%
|
0.10%
(c)
|
Net
investment income
|
3.32%
|
3.63%
|
5.23%
(c)
|
Supplemental
data
|
|
|
|
Net
assets, end of period (in thousands)
|
$792
|
$328
|
$3
|
Portfolio
turnover
|
29%
|
28%
|
26%
|
Notes to Financial Highlights
(a)
|
Based on operations from
November 8, 2012 (commencement of operations) through the stated period end.
|
(b)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(d)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
Columbia Income Builder Fund
Financial Highlights
(continued)
Class
W
|
Year
Ended
January 31, 2015
(a)
|
Per
share data
|
|
Net
asset value, beginning of period
|
$12.18
|
Income
from investment operations:
|
|
Net
investment income
|
0.21
|
Net
realized and unrealized loss
|
(0.34)
(b)
|
Total
from investment operations
|
(0.13)
|
Less
distributions to shareholders:
|
|
Net
investment income
|
(0.26)
|
Net
realized gains
|
(0.03)
|
Total
distributions to shareholders
|
(0.29)
|
Net
asset value, end of period
|
$11.76
|
Total
return
|
(1.12%)
|
Ratios
to average net assets
(c)
|
|
Total
gross expenses
|
0.44%
(d)
|
Total
net expenses
(e)
|
0.44%
(d)(f)
|
Net
investment income
|
2.98%
(d)
|
Supplemental
data
|
|
Net
assets, end of period (in thousands)
|
$10
|
Portfolio
turnover
|
29%
|
Notes to Financial Highlights
(a)
|
Based on operations from June
25, 2014 (commencement of operations) through the stated period end.
|
(b)
|
Calculation of the net gain
(loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized gain (loss) presented in the Statement of Operations due to the timing of subscriptions and redemptions of Fund shares in relation to
fluctuations in the market value of the portfolio.
|
(c)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(e)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(f)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Income Builder Fund
Financial Highlights
(continued)
|
Year
Ended January 31,
|
Class
Z
|
2015
|
2014
|
2013
|
2012
|
2011
(a)
|
Per
share data
|
|
|
|
|
|
Net
asset value, beginning of period
|
$11.56
|
$11.49
|
$10.86
|
$10.59
|
$10.29
|
Income
from investment operations:
|
|
|
|
|
|
Net
investment income
|
0.39
|
0.38
|
0.41
|
0.41
|
0.09
|
Net
realized and unrealized gain
|
0.25
|
0.08
|
0.68
|
0.29
|
0.39
|
Total
from investment operations
|
0.64
|
0.46
|
1.09
|
0.70
|
0.48
|
Less
distributions to shareholders:
|
|
|
|
|
|
Net
investment income
|
(0.40)
|
(0.39)
|
(0.46)
|
(0.43)
|
(0.18)
|
Net
realized gains
|
(0.03)
|
—
|
—
|
—
|
—
|
Tax
return of capital
|
—
|
—
|
—
|
—
|
(0.00)
(b)
|
Total
distributions to shareholders
|
(0.43)
|
(0.39)
|
(0.46)
|
(0.43)
|
(0.18)
|
Net
asset value, end of period
|
$11.77
|
$11.56
|
$11.49
|
$10.86
|
$10.59
|
Total
return
|
5.56%
|
4.00%
|
10.25%
|
6.79%
|
4.67%
|
Ratios
to average net assets
(c)
|
|
|
|
|
|
Total
gross expenses
|
0.16%
|
0.16%
|
0.17%
|
0.17%
|
0.47%
(d)
|
Total
net expenses
(e)
|
0.16%
(f)
|
0.16%
|
0.17%
(f)
|
0.17%
|
0.17%
(d)
|
Net
investment income
|
3.26%
|
3.30%
|
3.68%
|
3.87%
|
2.44%
(d)
|
Supplemental
data
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
$52,419
|
$41,893
|
$7,672
|
$1,537
|
$89
|
Portfolio
turnover
|
29%
|
28%
|
26%
|
31%
|
28%
|
Notes to Financial Highlights
(a)
|
Based on operations from
September 27, 2010 (commencement of operations) through the stated period end.
|
(c)
|
In addition to the fees and
expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
(e)
|
Total net expenses include
the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
|
(f)
|
The benefits derived from
expense reductions had an impact of less than 0.01%.
|
Columbia Income Builder Fund
Underlying
Funds — Investment Objectives and Strategies
The
following is a brief description of the investment objectives and principal investment strategies of certain of the Underlying Funds (which are referred to as Funds in the descriptions below). The Investment Manager does not necessarily invest Fund
assets in each of the Underlying Funds listed below. The Investment Manager may add new Underlying Funds for investment or change Underlying Funds at any time. In addition, the principal investment strategies of a Fund may change from time to time.
Additional information regarding the Underlying Funds is available in their prospectus and SAI. This prospectus is not an offer for any of the Underlying Funds. For copies of prospectuses of the Underlying Funds, which contains this and other
information, call 800.345.6611 or visit columbiathreadneedle.com/us. Read the prospectus carefully before you invest.
Columbia Absolute Return Currency and Income Fund
Columbia Absolute Return Currency and Income Fund (the Fund)
seeks to provide shareholders with positive absolute return.
Under normal market conditions, the Fund invests at least 80%
of its net assets (including the amount of any borrowings for investment purposes) in short-duration debt obligations (or securities that invest in such debt obligations, including an affiliated money market fund) and forward foreign currency
contracts. In pursuit of the Fund’s objective, to provide absolute return, the Fund’s investment manager seeks to generate positive total returns from the income produced by the short-term debt obligations, plus (minus) the gain (loss)
resulting from fluctuations in the values of various foreign currencies relative to the U.S. dollar.
The Fund’s investment in short-duration debt obligations
consists primarily of (i) shares of an affiliated money market fund, and (ii) U.S. dollar denominated non-government, corporate and structured debt securities rated investment grade, or, if unrated, determined to be of comparable quality. A small
portion of the Fund’s portfolio may consist of U.S. government securities. In addition to producing income, these holdings are designated as collateral by the Fund, as necessary, to cover on a net basis obligations with respect to, or that may
result from, the Fund’s investments in forward currency contracts. The Fund targets portfolio duration of up to six months but may extend the portfolio duration up to one year. The Fund gains economic exposure to foreign currencies through its
investment in forward foreign currency contracts comparable to the exposure that it would have had if it had bought or sold the foreign currencies directly. It is expected that the gross notional value of the Fund’s forward foreign currency
contracts will be equivalent to at least 80% of the Fund’s net assets. The Fund expects to utilize leverage, created through investments in cash-settled forwards, as part of its investment strategies. Leverage has the effect of increasing the
Fund’s volatility.
Columbia Management Investment
Advisers, LLC (the Investment Manager) uses a quantitative, proprietary model that applies various fundamental and technical factors, including based on current and historical data, to rank the anticipated value of several developed countries’
currencies relative to the U.S. dollar, subject to other considerations (including other fundamental, technical, and macroeconomic factors) in the Investment Manager’s discretion that may affect these rankings. The Investment Manager typically
enters into long forward foreign currency contracts for currencies that rank higher in the model, and the Fund will experience profits (losses) to the extent the value of the currency appreciates (depreciates) relative to the U.S. dollar.
Conversely, the Investment Manager typically enters into short forward foreign currency contracts for currencies that rank lower in the model, and the Fund will experience profits (losses) to the extent the value of the currency depreciates
(appreciates) relative to the U.S. dollar.
Columbia Acorn
Emerging Markets Fund
SM
Columbia Acorn Emerging Markets Fund
SM
(the Fund) seeks long-term capital appreciation.
Under normal circumstances, the Fund invests at least 80% of
its net assets (plus any borrowing for investment purposes) in companies located in emerging market countries, including frontier market countries. Emerging market countries are those countries whose economies are developing or emerging from
underdevelopment (for example, China, India, Poland and Turkey). Frontier market countries generally have smaller economies and even less developed capital markets than traditional emerging market countries (for example, Vietnam, Colombia, Nigeria
and Kazakhstan). For purposes of the Fund’s policies, the Fund may invest in a company if (i) it is domiciled in, or the
Columbia Income Builder Fund
principal trading market for its securities
is in, an emerging market country, (ii) it derives 50% or more of its economic value from goods produced, sales made or services performed or has at least 50% of its assets in an emerging market country or countries or (iii) it is a holding company
that predominantly holds shares in such companies. The Fund may invest in a variety of countries, industries and sectors and does not attempt to invest a specific percentage of its assets in any given country, industry or sector.
Under normal circumstances, the Fund invests a majority of its
net assets in the common stock of small- and mid-sized companies with market capitalizations under $5 billion at the time of initial investment. However, if the Fund’s investments in such companies represent less than a majority of its net
assets, the Fund may continue to hold and to make additional investments in an existing company in its portfolio even if that company’s capitalization has grown to exceed $5 billion. Under normal circumstances, the Fund may invest in companies
with market capitalizations above $5 billion at the time of initial investment, provided that immediately after that investment a majority of its net assets would be invested in companies whose market capitalizations were under $5 billion at the
time of initial investment.
Columbia Wanger Asset
Management, LLC, the Fund’s investment adviser (the Investment Manager), believes that stocks of companies with market capitalizations under $5 billion, which generally are not as well known by financial analysts as larger companies, may offer
higher return potential than stocks of larger companies.
The Fund takes advantage of the Investment Manager’s
research and stock-picking capabilities to initially invest in a limited number of companies (generally under 100), offering the potential to provide above-average growth over time.
Columbia Acorn European Fund
SM
Columbia Acorn European Fund
SM
(the Fund) seeks long-term capital appreciation.
Under normal circumstances, the Fund invests at least 80% of
its net assets (plus any borrowing for investment purposes) in European companies. Under normal circumstances, the Fund invests at least 70% of its total assets in companies in Western European countries (for example, the United Kingdom, Germany,
France and Italy), but also may invest up to 30% of its total assets in companies in emerging Central and Eastern European countries (for example, Poland, the Czech Republic, Turkey and Cyprus), including up to 10% of its total assets in companies
in Russia and the Ukraine. For purposes of the Fund’s policies, the Fund may invest in a company if (i) it is domiciled in, or the principal trading market for its securities is in, a European country, (ii) it derives 50% or more of its
economic value from goods produced, sales made or services performed or has at least 50% of its assets in a European country or countries or (iii) it is a holding company that predominantly holds shares in such companies.
The Fund may invest in a variety of countries, industries and
sectors and does not attempt to invest a specific percentage of its assets in any given country, industry or sector.
Under normal circumstances, the Fund invests a majority of its
net assets in the common stock of small- and mid-sized companies with market capitalizations under $5 billion at the time of initial investment. However, if the Fund’s investments in such companies represent less than a majority of its net
assets, the Fund may continue to hold and to make additional investments in an existing company in its portfolio even if that company’s capitalization has grown to exceed $5 billion. Under normal circumstances, the Fund may invest in companies
with market capitalizations above $5 billion at the time of initial investment, provided that immediately after that investment a majority of its net assets would be invested in companies whose market capitalizations were under $5 billion at the
time of initial investment.
Columbia Wanger Asset
Management, LLC, the Fund’s investment adviser (the Investment Manager), believes that stocks of companies with market capitalizations under $5 billion, which generally are not as well known by financial analysts as larger companies, may offer
higher return potential than stocks of larger companies.
The Fund takes advantage of the Investment Manager’s
research and stock-picking capabilities to initially invest in a limited number of companies (generally under 100), offering the potential to provide above-average growth over time.
Columbia Acorn
®
Fund
Columbia Acorn
®
Fund (the Fund) seeks long-term capital appreciation.
Columbia Income Builder Fund
Under normal circumstances, the Fund invests
a majority of its net assets in the common stock of small- and mid-sized companies with market capitalizations under $5 billion at the time of initial investment. However, if the Fund’s investments in such companies represent less than a
majority of its net assets, the Fund may continue to hold and to make additional investments in an existing company in its portfolio even if that company’s capitalization has grown to exceed $5 billion. Under normal circumstances, the Fund may
invest in companies with market capitalizations above $5 billion at the time of initial investment, provided that immediately after that investment a majority of its net assets would be invested in companies whose market capitalizations were under
$5 billion at the time of initial investment.
Columbia
Wanger Asset Management, LLC, the Fund’s investment adviser (the Investment Manager), believes that stocks of companies with market capitalizations under $5 billion, which generally are not as well known by financial analysts as larger
companies, may offer higher return potential than stocks of larger companies.
The Fund invests the majority of its assets in U.S. companies,
but also may invest up to 33% of its total assets in foreign companies in developed markets (for example, Japan, Canada and the United Kingdom) and in emerging markets (for example, China, India and Brazil).
Columbia Acorn International
®
Columbia Acorn International
®
(the Fund) seeks long-term capital appreciation.
Under normal circumstances, the Fund invests at least 75% of
its net assets in foreign companies in developed markets (for example, Japan, Canada and the United Kingdom) and in emerging markets (for example, China, India and Brazil).
Under normal circumstances, the Fund invests a majority of its
net assets in the common stock of small- and mid-sized companies with market capitalizations under $5 billion at the time of initial investment. However, if the Fund’s investments in such companies represent less than a majority of its net
assets, the Fund may continue to hold and to make additional investments in an existing company in its portfolio even if that company’s capitalization has grown to exceed $5 billion. Under normal circumstances, the Fund may invest in companies
with market capitalizations above $5 billion at the time of initial investment, provided that immediately after that investment a majority of its net assets would be invested in companies whose market capitalizations were under $5 billion at the
time of initial investment.
Columbia Wanger Asset
Management, LLC, the Fund’s investment adviser (the Investment Manager), believes that stocks of companies with market capitalizations under $5 billion, which generally are not as well known by financial analysts as larger companies, may offer
higher return potential than stocks of larger companies.
Columbia Acorn International Select
SM
Columbia Acorn International Select
SM
(the Fund) seeks long-term capital appreciation.
Under normal circumstances, the Fund invests at least 65% of
its net assets in foreign companies in developed markets (for example, Japan, Canada and the United Kingdom).
The Fund also may invest up to 35% of its total assets in
companies in emerging markets (for example, China, India and Brazil).
The Fund generally invests in at least three countries other
than the United States but may invest up to 25% of its total assets in securities of U.S. issuers.
Under normal circumstances, the Fund invests a majority of its
net assets in the common stock of small- and mid-sized companies with market capitalizations under $25 billion at the time of initial investment. However, if the Fund’s investments in such companies represent less than a majority of its net
assets, the Fund may continue to hold and to make additional investments in an existing company in its portfolio even if that company’s capitalization has grown to exceed $25 billion. Under normal circumstances, the Fund may invest in
companies with market capitalizations above $25 billion at the time of initial investment, provided that immediately after that investment a majority of its net assets would be invested in companies whose market capitalizations were under $25
billion at the time of initial investment.
Columbia Income Builder Fund
Columbia Wanger Asset Management, LLC, the
Fund’s investment adviser (the Investment Manager), believes that stocks of companies with market capitalizations under $25 billion, which generally are not as well known by financial analysts as larger companies, may offer higher return
potential than stocks of larger companies. The Fund also may invest in larger-sized companies.
The Fund invests in a limited number of foreign companies
(generally between 40-60), offering the potential to provide above-average growth over time.
Columbia Acorn Select
SM
Columbia Acorn Select
SM
(the Fund) seeks long-term capital appreciation.
Under normal circumstances, the Fund invests a majority of its
net assets in the common stock of companies with market capitalizations under $20 billion at the time of initial investment. However, if the Fund’s investments in such companies represent less than a majority of its net assets, the Fund may
continue to hold and to make additional investments in an existing company in its portfolio even if that company’s capitalization has grown to exceed $20 billion. Under normal circumstances, the Fund may invest in companies with market
capitalizations above $20 billion at the time of initial investment, provided that immediately after that investment a majority of its net assets would be invested in companies whose market capitalizations were under $20 billion at the time of
initial investment.
Columbia Wanger Asset Management,
LLC, the Fund’s investment adviser (the Investment Manager), believes that stocks of companies with market capitalizations under $20 billion, which generally are not as well known by financial analysts as larger companies, may offer higher
return potential than stocks of larger companies. The Fund invests the majority of its assets in U.S. companies, but also may invest up to 33% of its total assets in foreign companies in developed markets (for example, Japan, Canada and the United
Kingdom) and in emerging markets (for example, China, India and Colombia).
The Fund invests in a limited number of companies (generally
between 30-60), offering the potential to provide above-average growth over time.
Columbia Acorn USA
®
Columbia Acorn USA
®
(the Fund) seeks long-term capital appreciation.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount any borrowings for investment purposes) in U.S. companies.
Under normal circumstances, the Fund invests a majority of its
net assets in the common stock of small- and mid-sized companies with market capitalizations under $5 billion at the time of initial investment. However, if the Fund’s investments in such companies represent less than a majority of its net
assets, the Fund may continue to hold and to make additional investments in an existing company in its portfolio even if that company’s capitalization has grown to exceed $5 billion. Under normal circumstances, the Fund may invest in companies
with market capitalizations above $5 billion at the time of initial investment, provided that immediately after that investment a majority of its net assets would be invested in companies whose market capitalizations were under $5 billion at the
time of initial investment.
Columbia Wanger Asset
Management, LLC, the Fund’s investment adviser (the Investment Manager), believes that stocks of companies with market capitalizations under $5 billion, which generally are not as well known by financial analysts as larger companies, may offer
higher return potential than stocks of larger companies.
Columbia Adaptive Alternatives Fund
Columbia Adaptive Alternatives Fund (the Fund) seeks to
provide shareholders with absolute (positive) returns over a complete market cycle.
Under normal circumstances, the Fund allocates its net assets
among non-traditional or “alternative” investments and strategies (referred to as Alternative Investment Strategies, as further described below), as well as other strategies, instruments and assets, including derivatives and cash. The
Fund, through such investments, seeks absolute (positive) returns over a complete market cycle. For both stocks and bonds, a complete market cycle can be measured from market peak to peak or from market trough to trough. The Fund’s performance
is anticipated to have a low correlation to the performance of the broad equity and fixed income markets over such cycles.
Columbia Income Builder Fund
The Fund’s investment manager,
Columbia Management Investment Advisers, LLC (Columbia Management or the Investment Manager) determines the Fund’s desired exposures to, and allocation strategy across, Alternative Investment Strategies and other available strategies,
instruments and assets.
In seeking its desired
exposures, the Fund anticipates investing substantially in affiliated and unaffiliated open- and closed-end funds, including exchange-traded funds (ETFs) (collectively, the Underlying Funds). Certain of the Underlying Funds may themselves invest in
various strategies, including strategies advised by hedge fund managers through open-end and closed-end funds, hedge funds, funds of hedge funds, funds traded publicly on foreign exchanges, funds that are Undertakings for Collective Investment in
Transferable Securities (UCITS funds), and listed private equity funds and funds of funds. The Fund expects to invest in, among other Underlying Funds, Columbia Inflation Protected Securities Fund and to gain exposure to other Alternative Investment
Strategies by investing in Columbia Intermediary Alternatives Fund (the Intermediary Fund), which will invest substantially all of its assets in Blackstone Alternative Multi-Strategy Fund (the Blackstone Fund), a mutual fund (and registered
commodity pool) managed by Blackstone Alternative Investment Advisors LLC (Blackstone). It is currently expected that the Fund’s exposure to the Blackstone Fund will not exceed 60% of the Fund’s net assets.
As further described below, the Fund also has the flexibility
to invest directly in any securities, instruments or other assets, including derivative instruments, unless otherwise noted below.
The Fund seeks exposure to Alternative Investment Strategies,
which are strategies that seek investment returns largely uncorrelated with the broad equity and fixed income/debt markets. The Fund’s investment in or allocation to such strategies may include, directly or indirectly through Underlying Funds,
exposure to activist, alternative beta, arbitrage, equity and/or credit long/short, event-driven, fundamental, global macro, managed futures, multi-strategy, opportunistic trading, quantitative, and relative value strategies, among others. These
particular Alternative Investment Strategies are described below.
Activist Strategies
seek
exposure to companies that are the subject of a proxy contest or which activist investors are attempting to influence, in the expectation that new management or a change in business strategies will cause the price of the particular company’s
securities to increase.
Alternative Beta Strategies
seek exposure to market-based opportunities through a portfolio constructed of long/short securities positions, derivatives and other instruments in an attempt to isolate and capitalize upon certain market-based
inefficiencies, such as, for example, value and momentum. These alternative beta strategies typically have less correlation to traditional equity and fixed income markets.
Arbitrage Strategies
seek to
identify and exploit pricing inefficiencies in certain securities, markets or countries.
Equity and/or Credit Long/Short Strategies
involve long positions in equity or fixed income securities that are expected to go up in value and short positions in equity or fixed income securities that are expected to decline in value in an attempt to profit from
the difference in performance of the long positions versus the short positions.
Event-driven Strategies
employ
processes designed to identify opportunities relating to companies undergoing particular corporate transactions or structural transformations (e.g., mergers, acquisitions or reorganizations).
Fundamental Strategies
employ
processes designed to identify attractive opportunities in securities of companies that are undervalued/overvalued or expected to experience high/low levels of growth, including bottom-up analysis of a company’s
financial statements.
Global Macro Strategies
focus
on macroeconomic fundamentals in developing investment theses. Global macroeconomics deals with the performance, structure, behavior, and decision-making of the global economy as a whole, rather than individual markets. Monetary policy shifts,
fiscal policy shifts, gross domestic product growth or inflation all may be considered in developing a market view.
Managed Futures Strategies
seek to profit from movements in the global financial, commodity, and currency markets by investing in futures, options, and forward contracts.
Multi-Strategy Strategies
employ a wide variety of strategies, including some or substantially all of the strategies described above, based upon analysis of macroeconomic variables.
Columbia Income Builder Fund
Opportunistic Trading Strategies
employ processes designed to identify short-term or long-term trading opportunities, including analyzing supply/demand imbalances.
Quantitative Strategies
employ
quantitative techniques that seek gains from anticipated price movements, including models based on valuation, events, statistics, economic fundamentals, changes in economic environments, and changes in market sentiment.
Relative Value Strategies
seek
to identify and exploit differences in prices or rates between related financial instruments (e.g., stocks and bonds of the same issuer or issuers in the same or similar industry or sector) in an attempt to profit from the convergence in value
between the related securities.
These Alternative
Investment Strategies, whether implemented directly within the Fund’s portfolio by the Investment Manager or implemented indirectly through investments in Underlying Funds, employ the use of various securities, instruments and other assets,
including derivative instruments. Through its investment in the Alternative Investment Strategies and other available strategies, instruments and assets, the Fund will have investment exposure, directly or indirectly through the Underlying Funds, to
a broad range of markets and asset classes economically tied to U.S. and foreign markets, including, but not limited to, equity securities, fixed income securities, and derivative instruments (both exchange-traded and over-the-counter instruments),
including commodity-linked investments. There is no limit on the amount of exposure the Fund may have to any specific asset class, market sector, or instrument.
The derivative instruments in which the Fund may invest
directly or indirectly through Underlying Funds include futures; forward foreign currency contracts; forward interest rate agreements; structured notes; swaps; options; and warrants and rights. The Fund will not gain investment exposure to the
commodities markets directly, but may do so indirectly through investment in one or more Subsidiaries (as defined below) or Underlying Funds, including but not limited to Columbia Commodity Strategy Fund, a registered commodity pool. The Fund may
invest in derivatives for both hedging and non-hedging purposes, including, for example, seeking to enhance returns or as a substitute for a position in an underlying asset or index. The Fund may invest in derivatives to manage the Fund’s
overall risk exposure.
The Fund may invest directly in
derivatives or indirectly by investing in one or more offshore, wholly-owned subsidiaries (each, a Subsidiary, and, collectively, the Subsidiaries). Generally, Subsidiaries will invest primarily in commodity futures, but they may also invest in
financial futures, option and swap contracts, fixed income securities, pooled investment vehicles, including those that are not registered pursuant to the Investment Company Act of 1940, as amended (the 1940 Act), and other investments intended to
serve as margin or collateral for the Subsidiaries’ derivative positions.
Unlike the Fund (which is subject to limitations under federal
tax laws), Subsidiaries may invest without limitation in commodity-linked derivatives; however, the Fund, in combination with its Subsidiaries, will comply with the same 1940 Act asset coverage requirements with respect to the Subsidiaries’
investments in commodity-linked derivatives that are applicable to the Fund’s direct transactions in derivatives.
The Fund may purchase or sell securities on a when-issued,
delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction.
The equity securities in which the Fund may invest directly or
indirectly through Underlying Funds include those of issuers of any market capitalization located throughout the world (including the U.S. and emerging markets) across various investment styles (e.g., growth-, value-oriented styles), which may
include common stocks, preferred stocks, convertible securities, depositary receipts, listed private equity, and real estate investment trusts (REITs) and instruments of similar entities formed under the laws of non-U.S. countries.
The fixed income securities in which the Fund may invest
directly or indirectly through Underlying Funds include debt securities of governments throughout the world (including the U.S. and emerging markets) as well as their agencies and instrumentalities and government-sponsored enterprises, debt
securities of non-governmental issuers (e.g., corporate issuers) throughout the world (including the U.S. and emerging markets), debt securities of any credit rating (including below investment grade debt securities, commonly known as
“high-yield” or “junk” bonds) or debt securities that are unrated, commercial and residential mortgage-backed securities, asset-backed securities
Columbia Income Builder Fund
(including those backed by consumer assets),
floating rate loans, bank loans, loan assignments and loan participations, bankruptcy or trade claims, exchange-traded notes, cash/cash equivalents, inflation-hedging assets, as well as sovereign and quasi-sovereign debt investments. There is no
limitation on the maturities or duration of the instruments in which the Fund may invest.
The Fund may directly or indirectly purchase securities in
private placements, repurchase agreements, securities or other instruments of distressed companies or issuers undergoing other special situations, including initial public offerings or major corporate events, such as business consolidations or
restructurings.
The Fund may directly or indirectly take
both long and short positions in all of its investments. The Fund as a whole, or any Underlying Fund, may at any time have either a net long exposure or a net short exposure to markets, and neither the Underlying Funds nor the Fund’s portfolio
as a whole will be managed to maintain any fixed net long or net short market exposure.
The Fund expects to have significant investment leverage
(market exposure in excess of the Fund’s assets) as a result of certain of its direct investments (e.g., derivatives) and/or its investments in Underlying Funds, which may themselves use leverage.
The Fund may hold a significant amount of cash, money market
instruments (which may include investments in one or more affiliated or unaffiliated money market funds or similar vehicles), other high-quality, short-term investments, or other liquid assets for investment purposes or to meet its segregation
obligations as a result of its investments in derivatives. In certain market conditions, the Fund may have no market positions (i.e., the Fund may hold only cash and cash equivalents) when the Investment Manager believes it is in the best interests
of the Fund.
The Fund’s investment strategy may
involve the frequent trading of portfolio securities.
The Fund is non-diversified, which means that it can invest a
greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Asia Pacific ex-Japan Fund
Columbia Asia Pacific ex-Japan Fund (the Fund) seeks to
provide shareholders with long-term growth of capital.
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) will be invested in securities of companies located in the Asia Pacific Region, excluding Japan. For these purposes, a company is considered to be
“located” in the Asia Pacific Region if (i) it is organized under the laws of a country in the Asia Pacific Region; (ii) its principal place of business or principal office is in the Asia Pacific Region; or (iii) it derives at least 50%
of its revenues or profits from goods produced or sold, investments made, services performed, or has at least 50% of its assets located in the Asia Pacific Region. Countries in the Asia Pacific Region include but are not limited to Australia, China,
Hong Kong, India, Indonesia, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam. Some of these countries may represent developing or emerging markets. The Fund may invest in companies that have market
capitalizations of any size. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector and the information technology sector.
The Fund will normally have exposure to foreign
currencies.
Columbia Bond Fund
Columbia Bond Fund (the Fund) seeks current income, consistent
with minimal fluctuation of principal.
Under normal
circumstances, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in bonds and other debt securities. The Fund generally invests at least 65% of its assets in debt securities issued by
the U.S. Government and its agencies and instrumentalities, debt securities issued by corporations, and mortgage- and other asset-backed securities that, at the time of purchase, are rated in at least one of the three highest rating categories or
are unrated but determined to be of comparable quality. The Fund may invest up to 25% of its assets in securities that, at the time of purchase, are rated below investment grade or are unrated but determined to be of comparable quality (commonly
referred to as “high yield securities” or “junk bonds”).
Columbia Income Builder Fund
The Fund may invest up to 25% of its assets
in dollar-denominated debt securities issued by foreign governments, companies or other entities and up to 20% of its assets in preferred stock. The Fund’s dollar-weighted average maturity and duration will vary over time depending on
expectations for market and economic conditions.
The
Fund may invest in derivatives, such as futures (including interest rate futures) and swap contracts (including credit default swaps and interest rate swaps) for hedging purposes and to manage yield curve, duration and interest rate exposure;
options (including options on listed futures contracts), collateralized debt obligations and inverse floaters for investment purposes; and interest-only (IO) and principal-only (PO) securities for hedging and investment purposes.
The Fund may purchase or sell securities on a when-issued,
delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction. The Fund also may invest in private
placements.
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
Columbia Commodity Strategy Fund
Columbia Commodity Strategy Fund (the Fund) seeks to provide
shareholders with total return.
Under normal
circumstances, the Fund seeks to maintain substantial economic exposure to the performance of the commodities markets. The Fund invests, directly or indirectly, in a portfolio of commodity-linked investments, such as commodity-linked futures,
structured notes and/or swaps, that are designed to provide exposure to the investment return of assets that trade in the commodities markets, without investing directly in physical commodities. A substantial portion of the Fund’s net assets
will also be invested in a portfolio of fixed income securities rated investment-grade or, if unrated, deemed of comparable quality, which will consist primarily of: (i) U.S. Government securities, corporate debt securities, mortgage-backed
securities and/or asset-backed securities; and/or (ii) shares of an affiliated money market fund. In addition to investing in these holdings for their income-producing potential, these holdings will be designated by the Fund, as necessary, to serve
as collateral with respect to the Fund’s commodity-linked investments.
The Fund primarily expects to gain exposure to the commodities
markets by investing up to 25% of its total assets in a wholly-owned subsidiary of the Fund organized as a company under the laws of the Cayman Islands (the Subsidiary). The Subsidiary’s commodity-linked investments are expected to produce
leveraged exposure to the performance of the commodities markets. It is expected that the gross notional value of the Fund’s (including the Subsidiary’s) commodity-linked investments will be equivalent to at least 90% of the Fund’s
net assets. Like the Fund, the Subsidiary will not invest directly in physical commodities. The Subsidiary also invests in investment-grade fixed income securities and shares of an affiliated money market fund for investment purposes or to serve as
collateral for its commodity-linked investments. The Fund’s investment in the Subsidiary permits it to gain exposure to the commodities markets in a potentially tax-efficient manner. The Subsidiary has the same investment objective as the Fund
and, like the Fund, is managed by Columbia Management Investment Advisers, LLC (Columbia Management or the Investment Manager) and subadvised by Threadneedle International Limited (Threadneedle).
Derivatives, such as futures, may also be utilized to hedge
existing positions, increase market exposure and/or increase investment flexibility. Actual exposures will vary over time based on factors such as market movements and assessments of market conditions by the Fund’s portfolio managers. The Fund
may engage in derivative transactions on both U.S. and foreign exchanges or in the “over-the-counter” (OTC) market.
In constructing the Fund’s fixed-income portfolio,
Threadneedle seeks to identify a portfolio of investment-grade fixed income securities, generally with a dollar-weighted average portfolio duration of 1 year or less.
Columbia Contrarian Core Fund
Columbia Contrarian Core Fund (the Fund) seeks total return,
consisting of long-term capital appreciation and current income.
Columbia Income Builder Fund
Under normal circumstances, the Fund invests
at least 80% of its net assets (including the amount of any borrowings for investment purposes) in common stocks. In addition, under normal circumstances, the Fund invests at least 80% of its net assets in equity securities of U.S. companies that
have large market capitalizations (generally over $2 billion) that the Fund’s investment manager believes are undervalued and have the potential for long-term growth and current income.
The Fund may also invest up to 20% of its net assets in
foreign securities. The Fund may invest directly in foreign securities or indirectly through depositary receipts.
Columbia Convertible Securities Fund
Columbia Convertible Securities Fund (the Fund) seeks total
return, consisting of capital appreciation and current income.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in convertible securities. The Fund may invest up to 15% of its total assets in Eurodollar convertible securities and up to an additional 20% of its total assets in
foreign securities. Most convertible securities are not investment grade-rated. Convertible securities rated below investment grade may be referred to as “junk bonds.” The Fund also may invest directly in equity securities.
The Fund looks for opportunities to participate in the
potential growth of underlying common stocks, while seeking to earn income that is generally higher than the income those stocks provide. The Fund may sell common stocks short against positions in which the Fund has directly invested in convertible
securities with no more than 10% of its assets. The Fund also may invest in private placements.
Columbia Corporate Income Fund
Columbia Corporate Income Fund (the Fund) seeks total return,
consisting primarily of current income and secondarily of capital appreciation.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in debt securities issued by corporate and other non-governmental issuers, including dollar-denominated debt securities issued by foreign companies. The Fund also
invests at least 60% of total assets in securities that, at the time of purchase, are investment grade securities or in unrated securities determined to be of comparable quality. The Fund may invest up to 25% of its total assets in securities that,
at the time of purchase, are rated below investment grade or are unrated but determined to be of comparable quality (commonly referred to as “high yield securities” or “junk bonds”). Under normal circumstances, the
Fund’s average effective duration will be between three and ten years.
The Fund may invest in derivatives, including interest rate
futures and forward interest rate agreements, for hedging and non-hedging purposes.
The Fund may purchase or sell securities on a when-issued,
delayed delivery or forward commitment basis. The Fund also may invest in private placements.
The Fund may invest in U.S. Government obligations,
asset-backed securities and 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.
Columbia Diversified Absolute Return Fund
Columbia Diversified Absolute Return Fund (the Fund) seeks to
provide shareholders with absolute (positive) returns.
The Fund pursues absolute (positive) returns through a
diversified portfolio reflecting multiple asset classes and various investment and hedging strategies employed across equity, fixed income and other markets, such as commodities markets, while seeking to capitalize on market inefficiencies.
Although the specific strategies the Fund pursues and the
manner in which the Fund pursues such strategies may change from time to time, the Fund is currently expected to combine tactical beta, alternative beta and alpha strategies in seeking the Fund’s investment objective. (In general, beta is a
measure of price volatility resulting from
Columbia Income Builder Fund
general market movements and alpha is a
measure of return resulting from active management.) The Fund’s investment manager, Columbia Management Investment Advisers, LLC (Columbia Management or the Investment Manager) may use fundamental and quantitative methods to identify and
capitalize on short-term mispricings within and across traditional asset classes and markets, such as stocks and bonds. This strategy may be referred to as a tactical beta strategy in that it seeks opportunities to earn returns from price movements
of broad markets. For instance, if the Investment Manager believes the U.S. equity market is undervalued, the Investment Manager may seek to capitalize on this mispricing by investing in futures on a U.S. equities index. The Investment Manager may
also use fundamental and quantitative methods to identify and capitalize on systemic and structural market inefficiencies. This strategy may be referred to as an alternative beta strategy in that it seeks to generate returns with relatively low
correlation to overall market movements by employing a systematic, rules-based approach. For instance, the Fund may take a long position in a broad basket of equities that the Investment Manager believes are attractively valued and take a short
position in a broad basket of equities that the Investment Manager believes are unattractively valued, in order to generate returns from the relative price difference generally expected in the equity markets over time between undervalued and
overvalued equities (i.e., the “value premium”). The Investment Manager will also allocate assets to long, short and other strategies intended to generate returns that are not dependent on overall market direction. These strategies may
be referred to as alpha strategies in that they are intended to have relatively low correlation to market movements and are derived from active management.
The Fund’s investments and strategies are expected to
employ both long and short positions in foreign and domestic equities (including common stock, preferred stock and convertible securities), equity futures, index futures, options, swaps, fixed-income, floating rate and other debt securities
(including U.S. government obligations, sovereign and quasi-sovereign debt obligations, asset-backed securities, exchange traded notes, mortgage-backed securities and fixed income futures), currency forwards and futures and other commodity-related
investments, and other investment companies (including mutual funds, closed-end funds and exchange-traded funds (ETFs)). The Fund may gain investment exposure to these securities and instruments directly or indirectly through investment in one or
more Subsidiaries (as defined below) or affiliated and third party investment companies.
The Fund’s investment strategy may involve the frequent
trading of portfolio securities.
The Fund may invest
without limit in foreign investments (including currencies), which may include investments in emerging markets, and in investments that are rated below investment-grade or, if unrated, deemed to be of comparable quality (commonly referred to as
“high yield securities” or “junk bonds”).
The Fund may invest in derivatives such as futures (including
bond, currency, equity index, interest rate and volatility index futures), forward foreign currency contracts, forward interest rate agreements, options and swap contracts (including credit default swaps, interest rate swaps and total return swaps),
in an effort to produce incremental earnings, to hedge existing positions, to increase market exposure and investment flexibility, and/or to increase credit exposure.
The Fund may purchase or sell securities on a when-issued,
delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction.
In addition, under normal circumstances, the Fund uses forward
foreign currency contracts in seeking to enhance returns based on fluctuations in the values of various foreign currencies relative to the U.S. dollar (the Currency Overlay Strategy). The Fund gains economic exposure to foreign currencies through
its investment in forward foreign currency contracts comparable to the exposure that it would have had if it had bought or sold the foreign currencies directly.
The Fund may invest directly in derivatives or indirectly by
investing in one or more offshore, wholly-owned subsidiaries (each, a Subsidiary, and, collectively, the Subsidiaries). Generally, Subsidiaries will invest in commodity futures, financial futures, option and swap contracts, fixed income securities,
pooled investment vehicles, including those that are not registered pursuant to the Investment Company Act of 1940, as amended (the 1940 Act), and other investments intended to serve as margin or collateral for the Subsidiaries’ derivative
positions.
Columbia Income Builder Fund
The Fund expects to hold a significant
amount of cash, money market instruments (which may include investments in one or more affiliated or unaffiliated money market funds or similar vehicles) or other high-quality, short-term investments to cover obligations with respect to, or that may
result from, the Fund’s investments in forward foreign currency contracts, currency futures contracts, commodity-linked investments or other derivatives.
Columbia Diversified Equity Income Fund
Columbia Diversified Equity Income Fund (the Fund) seeks to
provide shareholders with a high level of current income and, as a secondary objective, steady growth of capital.
The Fund’s assets primarily are invested in equity
securities. Under normal market conditions, the Fund will invest at least 80% of its net assets (including the amount of any borrowings for investment purposes) in dividend-paying common and preferred stocks.
The Fund may invest up to 25% of its net assets in foreign
investments. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector.
Columbia Dividend Income Fund
Columbia Dividend Income Fund (the Fund) seeks total return,
consisting of current income and capital appreciation.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in a diversified portfolio of income-producing (dividend-paying) equity securities, which will consist primarily of common stocks but also may include preferred stocks
and convertible securities. The Fund invests principally in securities of companies believed to be undervalued but also may invest in securities of companies believed to have the potential for long-term growth. The Fund may invest in companies that
have market capitalizations of any size. The Fund may invest up to 20% of its net assets in debt securities, including securities that, at the time of purchase, are rated below investment grade or are unrated but determined to be of comparable
quality (commonly referred to as “high yield securities” or “junk bonds”).
The Fund may also invest up to 20% of its net assets in
foreign securities. The Fund may invest directly in foreign securities or indirectly through depositary receipts.
The investment manager combines fundamental and quantitative
analysis with risk management in identifying investment opportunities and constructing the Fund’s portfolio.
Columbia Dividend Opportunity Fund
Columbia Dividend Opportunity Fund (the Fund) seeks to provide
shareholders with a high level of current income. The Fund’s secondary objective is growth of income and capital.
The Fund’s assets primarily are invested in equity
securities. Under normal market conditions, the Fund will invest at least 80% of its net assets (including the amount of any borrowings for investment purposes) in dividend-paying common and preferred stocks. The selection of dividend-paying stocks
is the primary decision in building the investment portfolio. The Fund may invest in companies that have market capitalizations of any size.
The Fund may invest up to 25% of its net assets in foreign
investments.
The Fund may invest in derivatives, such as
structured investments (e.g., equity-linked notes), for investment purposes, for risk management (hedging) purposes and to increase investment flexibility.
Columbia Emerging Markets Bond Fund
Columbia Emerging Markets Bond Fund (the Fund) seeks to
provide shareholders with high total return through current income and, secondarily, through capital appreciation.
The Fund invests primarily in fixed income securities of
emerging markets issuers. For these purposes, emerging market countries are generally those either defined by World Bank-defined per capita income brackets or determined to be an emerging market based on the Fund investment team’s qualitative
judgments about a country’s level of economic and institutional development, among other factors. Under normal circumstances, at least 80% of the Fund’s net assets (including the amount of any borrowings for investment purposes) will be
invested in fixed income securities of issuers that are located in emerging markets countries, or that earn 50% or more of their total revenues from goods or services produced in emerging markets countries or from sales made in emerging markets
countries.
Columbia Income Builder Fund
Fixed income securities may be denominated
in either U.S. dollars or the local currency of the issuer. While the Fund may invest 25% or more of its total assets in the securities of foreign governmental and corporate entities located in the same country, it will not invest 25% or more of its
total assets in any single issuer. The Fund can invest in emerging market sovereign debt instruments of any credit quality including those rated investment grade and below investment grade or considered to be of comparable quality (commonly referred
to as “high yield securities” or “junk bonds”). Although the emerging markets sovereign debt universe largely consists of investment grade instruments, a significant portion of that universe is rated in these lower rating
categories. The Fund may invest up to 100% of its assets in debt securities that are rated below investment grade or, if unrated, determined to be of comparable quality.
The Fund may invest in fixed income securities of any maturity
and does not seek to maintain a particular dollar-weighted average maturity.
The Fund may invest significantly in privately placed
securities that have not been registered for sale under the Securities Act of 1933 pursuant to Rule 144A (Rule 144A securities) that are determined to be liquid in accordance with procedures adopted by the Fund’s Board of Trustees.
The Fund is non-diversified, which means that it can invest a
greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Emerging Markets Fund
Columbia Emerging Markets Fund (the Fund) seeks long-term
capital appreciation.
Under normal circumstances, the
Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities (including, but not limited to, common stocks, preferred stocks and securities convertible into common or preferred
stocks) of companies located in emerging market countries. Emerging market countries include those countries whose economies are considered to be developing or emerging from underdevelopment.
The Fund may invest in a variety of countries, industries and
sectors and does not attempt to invest a specific percentage of its assets in any given country, industry or sector. However, the Fund has invested substantially in the financial services sector and information technology and technology-related
sectors and may continue to invest substantially in these or other sectors in the future. The Fund may invest in companies that have market capitalizations of any size.
The Fund may invest in special situations such as companies
involved in initial public offerings, tender offers, mergers and other corporate restructurings, and in companies involved in management changes or companies developing new technologies.
The Fund may invest in securities that the investment manager
believes are undervalued, represent growth opportunities, or both.
Columbia Income Builder Fund
Columbia European Equity Fund
Columbia European Equity Fund (the Fund) seeks to provide
shareholders with capital appreciation.
The Fund
primarily invests in equity securities of European companies that are believed to offer growth potential. Under normal market conditions, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment
purposes) in equity securities of European companies. These equity securities generally include common stocks, preferred stocks, securities convertible into U.S. common stocks, U.S. dollar-denominated American Depositary Receipts (ADRs), and U.S.
dollar-denominated foreign stocks traded on U.S. exchanges. A company is considered to be located in Europe if:
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It is organized under the
laws of a European country or has a principal office in a European country;
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It derives at least 50% of
its total revenues from businesses in Europe; or
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Its equity securities are
traded principally on a stock exchange in Europe.
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Although the Fund emphasizes investments in developed
countries, the Fund also may invest in securities of companies located in developing or emerging markets.
The Fund will normally have exposure to foreign
currencies.
Columbia Flexible Capital Income Fund
Columbia Flexible Capital Income Fund (the Fund) seeks to
provide shareholders current income, with long-term capital appreciation.
In pursuing its investment objective, the Fund invests broadly
in debt, equity and/or “hybrid” (convertible) securities. The Fund allocates its investments from one asset class to another based on analysis by the portfolio managers of the opportunities for the Fund to achieve its objective in a
given market. The Fund’s investments in debt securities may include investment grade and non-investment grade bonds, bank loans and U.S. Government securities. The Fund may invest up to 100% of its assets in debt securities that are rated
below investment grade (i.e., high-yield or “junk” securities) or, if unrated, deemed of comparable quality. The Fund also may invest in private placements.
The Fund seeks to invest in undervalued or out-of-favor
securities it believes offer opportunities for current income, with long-term capital appreciation.
The Fund may invest in fixed income securities of any maturity
and does not seek to maintain a particular dollar-weighted average maturity.
The Fund’s equity securities will consist primarily of
large capitalization, dividend paying common stocks or preferred securities, but the Fund may invest in issuers of any size. The Fund may also invest in hybrid securities, including convertible bonds and convertible preferred securities.
The Fund may invest up to 25% of its net assets in foreign
investments, including emerging markets.
Columbia Floating
Rate Fund
Columbia Floating Rate Fund (the Fund) seeks
to provide shareholders with a high level of current income and, as a secondary objective, preservation of capital.
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) will be invested in floating rate loans and other floating rate debt securities. These debt obligations will generally be rated non-investment grade by
recognized rating agencies (similar to “high yield securities” or “junk bonds”) or, if unrated, determined to be of comparable quality.
The Fund may invest up to 25% of its net assets in foreign
investments.
The Fund normally invests in senior secured
floating rate loans.
Senior floating rate loans held by
the Fund will generally have final maturities of nine years or less.
To the extent the Fund invests in derivative instruments, the
Fund may count the value of derivative securities with floating rate loan characteristics towards its 80% policy.
Columbia Income Builder Fund
The investment manager may also invest in
other securities, including investment grade fixed income debt obligations, non-investment grade fixed income debt obligations, affiliated money market funds and certain money market instruments. For purposes of the 80% policy, money market holdings
with a remaining maturity of less than 60 days will be deemed floating rate assets.
Columbia Global Bond Fund
Columbia Global Bond Fund (the Fund) seeks to provide
shareholders with high total return through income and growth of capital.
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in debt obligations of issuers located in at least three different countries (which may include the U.S.). Debt obligations include debt securities
and instruments, including money market instruments, either issued or guaranteed as to principal and interest by (i) the U.S. Government, its agencies, authorities or instrumentalities, (ii) non-U.S. governments, their agencies, authorities or
instrumentalities, or (iii) corporate or other non-governmental entities. The Fund may invest in debt securities and instruments across the credit quality spectrum and, at times, may invest significantly in below investment-grade fixed-income
securities (commonly referred to as “high yield securities” or “junk bonds”) in seeking to achieve higher dividends and/or capital appreciation.
The Fund may invest in fixed income securities of any maturity
and does not seek to maintain a particular dollar-weighted average maturity.
Under normal circumstances, the Fund generally invests at
least 40% of its net assets in debt obligations of foreign governments, and companies that (a) maintain their principal place of business or conduct their principal business activities outside the U.S., (b) have their securities traded on non-U.S.
exchanges or (c) have been formed under the laws of non-U.S. countries. This 40% minimum investment amount may be reduced to 30% if market conditions for these investments or specific foreign markets are deemed unfavorable. The Fund considers a
company to conduct its principal business activities outside the U.S. if it derives at least 50% of its revenue from business outside the U.S. or had at least 50% of its assets outside the U.S.
In addition, in pursuing its objective, the Fund, employing
both fundamental and quantitative analyses, may enter into various currency-, interest rate- and credit-related transactions involving derivatives instruments, including futures contracts (such as currency, bond, treasury, index and interest rate
futures) and forward foreign currency contracts (forwards). The use of these derivatives instruments allows the Fund to obtain net long or net negative (short) exposure to selected currencies, interest rates, credit risks and duration risks. The
Fund may use these derivatives as well as “to be announced” (TBA) mortgage-backed securities in an effort to leverage exposures and produce incremental earnings, for hedging purposes, to obtain increased or decreased exposures to various
markets/sectors or to increase investment flexibility. Actual long and short exposures will vary over time based on factors such as market movements, assessments of market conditions, macroeconomic analysis and qualitative valuation analysis.
The investment manager combines fundamental and quantitative
analysis with risk management in identifying investment opportunities and constructing the Fund’s portfolio. The Fund may from time to time emphasize one or more economic sectors in selecting its investments.
The Fund is non-diversified, which means that it can invest a
greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Global Dividend Opportunity Fund
Columbia Global Dividend Opportunity Fund (the Fund) seeks
total return, consisting of current income and capital appreciation.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in income-producing (dividend-paying) equity securities of U.S. and foreign companies. Equity securities include, for example, common stock, preferred stock, convertible
securities and depositary receipts. The Fund invests principally in securities of companies believed to be attractively valued and to have the potential for long-term growth. The Fund may invest in companies that have market capitalizations of any
size. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector.
Columbia Income Builder Fund
Under normal circumstances, the Fund will
invest at least 40% of its net assets in foreign securities, including securities of companies in emerging market countries. The Fund may invest directly in foreign securities or indirectly through depositary receipts. This 40% minimum investment
amount may be reduced to 30% if market conditions for these investments or specific foreign markets are deemed unfavorable.
Columbia Global Energy and Natural Resources Fund
Columbia Global Energy and Natural Resources Fund (the Fund)
seeks long-term capital appreciation.
Under normal
circumstances, the Fund invests at least 80% of its net assets (including the amount of borrowings for investment purposes) in equity securities (including, but not limited to, common stocks, preferred stocks and securities convertible into common
or preferred stocks) of U.S. and foreign companies engaged in the energy and natural resources industries. These companies include those engaged in the discovery, development, production or distribution of energy or natural resources and companies
that develop technologies for, and furnish energy and natural resource supplies and services to, these companies. The Fund may invest in companies that have market capitalizations of any size.
The Fund typically invests at least 50% of its assets in crude
oil, petroleum and natural gas companies. The Fund also may invest up to 35% of its assets to gain exposure to precious metals, such as gold, including companies engaged in the production of precious metals.
Under normal circumstances, the Fund generally invests at
least 40% of its net assets in companies that maintain their principal place of business or conduct their principal business activities outside the U.S., companies that have their securities traded on non-U.S. exchanges or that have securities that
trade in the form of depositary receipts or companies that have been formed under the laws of non-U.S. countries, including those of emerging markets. The Fund considers a company to conduct its principal business activities outside the U.S. if it
derives at least 50% of its revenue or profits from business outside the U.S. or has at least 50% of its sales or assets outside the U.S. This 40% minimum investment amount may be reduced to 30% if market conditions for these investments or specific
foreign markets are deemed unfavorable.
The Fund may
invest in derivatives, including options and forward foreign currency contracts, in an effort to enhance returns, to hedge existing positions, to manage the Fund’s overall risk exposure, to increase market exposure, and/or to increase
investment flexibility (including using the derivative as a substitute for a position in an underlying security, currency, asset, or other instrument or reference). Derivatives may be used by the Fund to obtain net long and/or net negative (short)
exposure to a security, currency, asset, or other instrument or reference.
The Fund may invest in securities that the investment manager
believes are undervalued, represent growth opportunities, or both.
The investment manager combines fundamental and quantitative
analysis with risk management in identifying investment opportunities and constructing the Fund’s portfolio.
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.
The Fund is non-diversified, which means that it can invest a
greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Global Equity Value Fund (formerly known as Columbia
Equity Value Fund)
Columbia Global Equity Value Fund
(the Fund) seeks to provide shareholders with growth of capital and income.
Under normal market conditions, the Fund invests at least 80%
of its net assets (including the amount of any borrowings for investment purposes) in equity securities. Equity securities include, for example, common stock, preferred stock, convertible securities and depositary receipts. These securities may
provide income, offer the opportunity for long-term capital appreciation, or both.
Under normal circumstances, the Fund generally invests at
least 40% of its net assets in companies that maintain their principal place of business or conduct their principal business activities outside the U.S., companies that have their securities traded on non-U.S. exchanges or that have securities that
trade in the form of depositary receipts,
Columbia Income Builder Fund
companies that have been formed under the
laws of non-U.S. countries, including those of emerging markets, or foreign currencies. The Fund considers a company to conduct its principal business activities outside the U.S. if it derives at least 50% of its revenue or profits from business
outside the U.S. or has at least 50% of its sales or assets outside the U.S. This 40% minimum investment amount may be reduced to 30% if market conditions for these investments or specific foreign markets are deemed unfavorable.
The Fund may invest in derivatives, including forward foreign
currency contracts, for hedging or investment purposes.
The Fund’s investment philosophy is rooted in the belief
that a disciplined, systematic, value-oriented approach to investing primarily in large-cap companies provides investors with an excellent opportunity for long-term growth of capital. The Fund may from time to time emphasize one or more economic
sectors in selecting its investments, including the financial services sector.
Columbia Global Inflation-Linked Bond Plus Fund
Columbia Global Inflation-Linked Bond Plus Fund (the Fund)
seeks to provide shareholders with total return that exceeds the rate of inflation over the long term.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in inflation-linked debt securities. Inflation-linked debt securities are fixed-income securities that are structured to provide protection against inflation. These
securities include bonds and other debt securities whose principal and/or interest payments are adjusted for inflation. The Fund may also invest in other debt instruments, including asset-backed and mortgage-backed securities, which may be of any
maturity and may be issued by developed, developing or emerging markets issuers, including the U.S. Government, non-U.S. governments, quasi-governmental organizations, agencies, instrumentalities, supranational entities and companies. The
Fund’s investments may include money market instruments and shares of an affiliated money market fund. The Fund may make these investments for their income-producing potential and they may also be designated by the Fund, as necessary, to serve
as collateral with respect to the Fund’s investments in derivatives. The Fund generally invests at least 80% of its assets in debt securities rated investment grade by at least one rating agency or, if unrated, determined to be of comparable
quality. The Fund may invest up to 20% of its assets in securities that, at the time of purchase, are rated below investment grade or are unrated but determined to be of comparable quality (commonly referred to as “high yield securities”
or “junk bonds”). The Fund’s dollar-weighted average maturity and duration will vary over time depending on expectations for market and economic conditions.
The Fund may also invest in reverse repurchase agreements and
derivative instruments, including forward foreign currency contracts, futures (including bond futures), options on futures, and swaps (including index swaps, rate swaps, total return swaps, and TIPS asset swaps), in an effort to produce incremental
earnings, to hedge existing positions, to increase market, interest rate or credit exposure, to increase investment flexibility (including by using the derivative as a substitute for the purchase or sale of the underlying security, currency or other
instrument), and/or to change the effective duration of its portfolio. The Fund expects to utilize leverage, created through investments in reverse repurchase agreements and inflation rate swaps, as part of its investment strategies. Leverage has
the effect of increasing the Fund’s volatility.
Under normal circumstances, the Fund invests at least 40% of
its net assets in debt obligations of non-U.S. government, quasigovernmental organizations, agencies, instrumentalities and supranational entities, as well as companies that maintain their principal place of business outside the U.S.; have been
formed under the laws of non-U.S. countries; trade their securities in a market located outside the U.S.; or conduct a substantial amount of business outside the U.S. The Fund considers an issuer to conduct a substantial amount of business outside
the U.S. if it derives at least 50% of its revenue or profits from business outside the U.S. or has at least 50% of its sales or assets outside the U.S. This 40% minimum investment amount may be reduced to 30% if market conditions for these
investments or specific foreign markets are deemed unfavorable. There is no limitation on the maturities of the instruments in which the Fund may invest.
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.
Columbia Income Builder Fund
The Fund is non-diversified, which means
that it can invest a greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Global Infrastructure Fund (formerly known as Columbia
Recovery and Infrastructure Fund)
Columbia Global
Infrastructure Fund (the Fund) seeks to provide shareholders with long-term growth of capital.
The Fund invests in infrastructure-related securities that
appear to be undervalued or that may be temporarily out of favor, but that the investment manager believes are entering a period of recovery (i.e., a period in which these infrastructure-related issuers have good prospects for growth or capital
appreciation). Under normal circumstances, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in securities (equity, fixed-income and/or other “hybrid” (convertible)
securities) of infrastructure-related issuers and/or securities intended primarily to finance infrastructure-related activities. Infrastructure-related issuers are defined as U.S. or foreign companies that derive at least 50% of their revenues or
profits from the ownership, development, construction, operation, utilization or financing of infrastructure-related assets, or have at least 50% of the fair market value of their assets invested in infrastructure-related assets. Investments in
infrastructure-related issuers may also include securities issued to finance infrastructure-related assets.
Infrastructure-related assets are the physical structures and
networks which provide necessary services to society. Examples of infrastructure-related assets include transportation assets (e.g., roads, bridges, railroads, airports, seaports, tunnels), utility assets (e.g., electric transmission and
distribution lines, power generation facilities, broadcast and wireless towers, gas and water distribution facilities, cable and satellite networks) and social assets (e.g., hospitals, schools, stadiums, courthouses). The Fund’s investments
include issuers with a direct investment in infrastructure-related companies and in issuers that operate or utilize infrastructure-related assets (e.g., airlines, automakers, and technology companies) or issuers with indirect exposure to
infrastructure-related assets (e.g., suppliers of construction materials). The Fund may also invest in securities that are intended to finance infrastructure-related activities. The Fund may invest up to 20% of its assets in securities of issuers
that are not infrastructure-related, including issuers that the investment manager believes may be undervalued due to their cyclical nature, market conditions, and/or changes in the economy. The Fund’s investments can include high-yield
instruments, which are investments rated below investment grade by a nationally recognized statistical rating organization, or if unrated, determined to be of comparable quality (commonly referred to as “high-yield securities” or
“junk” bonds). The Fund may invest in companies that have market capitalizations of any size.
Under normal circumstances, the Fund invests at least 40% of
its net assets in issuers that maintain their principal place of business or conduct their principal business activities outside the U.S., issuers that have their securities traded on non-U.S. exchanges or issuers that have been formed under the
laws of non-U.S. countries (the 40% Global Investment Policy). The Fund considers an issuer to conduct its principal business activities outside the U.S. if it derives at least 50% of its revenue or profits from business outside the U.S. or has at
least 50% of its sales or assets outside the U.S. From time to time, the Fund may be below this 40% level and, in such circumstances, the Fund will then endeavor to invest its assets to bring the Fund’s net assets above this 40% level,
consistent with the investment manager’s view of market and other conditions and available investment opportunities. Such investments can include securities of emerging market and frontier market issuers. From time to time, the Fund may focus
its investments in certain countries or geographic areas.
In addition to investing in individual stocks, bonds or other
securities, the Fund may invest in publicly-traded units of master limited partnerships, real estate investment trusts (REITs) and other pooled investment vehicles and investment companies.
Columbia Greater China Fund
Columbia Greater China Fund (the Fund) seeks long-term capital
appreciation.
Under normal circumstances, the Fund
invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities of companies whose principal activities are located in the Greater China region. The Greater China region includes Hong
Kong, The People’s Republic of China, Taiwan and certain other
Columbia Income Builder Fund
countries. The Fund’s investments
include securities of emerging market issuers. The investment manager determines if a company’s principal activities are located in the Greater China region by considering the company’s country of organization, its primary stock exchange
listing, the source of its revenues, the location of its assets and other factors.
The Fund may invest in companies that have market
capitalizations of any size believed to be undervalued or have the potential for long-term growth. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector and the
information technology sector.
The Fund is
non-diversified, which means that it can invest a greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia High Yield Bond Fund
Columbia High Yield Bond Fund (the Fund) seeks to provide
shareholders with high current income as its primary objective and, as its secondary objective, capital growth.
Under normal market conditions, the Fund invests at least 80%
of its net assets (including the amount of any borrowings for investment purposes) in high-yield debt instruments (commonly referred to as “junk” bonds or securities). These high yield debt instruments include corporate debt securities
as well as floating rate loans rated below investment grade by a nationally recognized statistical rating organization, or if unrated, determined to be of comparable quality.
The Fund may invest up to 25% of its net assets in high yield
debt instruments of foreign issuers.
Corporate debt
securities in which the Fund invests are typically unsecured, with a fixed-rate of interest, and are usually issued by companies or similar entities to provide financing for their operations, or other activities.
The Fund may invest in fixed income securities of any maturity
and does not seek to maintain a particular dollar-weighted average maturity. Because the Fund emphasizes high-yield investments, more emphasis is put on credit risk by the portfolio managers in selecting investments than either maturity or
duration.
The Fund may invest significantly in privately
placed securities that have not been registered for sale under the Securities Act of 1933 pursuant to Rule 144A (Rule 144A securities) that are determined to be liquid in accordance with procedures adopted by the Fund’s Board of
Trustees.
Columbia Income Opportunities Fund
Columbia Income Opportunities Fund (the Fund) seeks to provide
shareholders with a high total return through current income and capital appreciation.
Under normal market conditions, the Fund’s assets are
invested primarily in income-producing debt securities, with an emphasis on the higher rated segment of the high-yield (junk bond) market. These income-producing debt securities include corporate debt securities as well as bank loans. The Fund will
purchase only securities rated B or above, or if unrated, securities determined to be of comparable quality. If a security falls below a B rating after investment by the Fund, the Fund may continue to hold the security.
The Fund may invest up to 25% of its net assets in foreign
investments. The Fund may from time to time emphasize one or more economic sectors in selecting its investments.
Corporate debt securities in which the Fund invests are
typically unsecured, with a fixed-rate of interest, and are usually issued by companies or similar entities to provide financing for their operations, or other activities.
The Fund may invest in fixed income securities of any maturity
and does not seek to maintain a particular dollar-weighted average maturity. Because the Fund emphasizes high-yield investments, more emphasis is put on credit risk by the portfolio manager in selecting investments than either maturity or
duration.
The Fund may invest significantly in privately
placed securities that have not been registered for sale under the Securities Act of 1933 pursuant to Rule 144A (Rule 144A securities) that are determined to be liquid in accordance with procedures adopted by the Fund’s Board of
Trustees.
Columbia Inflation Protected Securities
Fund
Columbia Income Builder Fund
Columbia Inflation Protected Securities Fund
(the Fund) seeks to provide shareholders with total return that exceeds the rate of inflation over the long term.
Under normal market conditions, the Fund invests at least 80%
of its net assets (including the amount of any borrowings for investment purposes) in inflation-protected debt securities. These securities include inflation-indexed bonds of varying maturities issued by the U.S. Government and non-U.S. governments,
their agencies or instrumentalities, and U.S. and non-U.S. corporations. The Fund currently intends to focus on inflation-protected debt securities issued by the U.S. Treasury. The Fund invests only in securities rated investment grade at the time
of purchase by a third-party rating agency or, if unrated, deemed to be of comparable quality. Inflation-protected securities are designed to protect the future purchasing power of the money invested in them.
The value of the bond’s principal or the interest income
paid on the bond is adjusted to track changes in an official inflation measure. For example, the U.S. Treasury uses the Consumer Price Index for Urban Consumers (non seasonally adjusted) as the inflation measure. Up to 20% of the Fund’s net
assets may be invested in non-inflation protected debt obligations issued by U.S. and foreign governments, their agencies and instrumentalities, as well as U.S. and foreign corporate debt obligations, mortgage and asset-backed securities and money
market instruments.
The Fund may invest in derivatives,
including futures (including bond futures and interest rate futures), forward currency contracts, credit default swaps, credit default swap indexes, and IOs and POs securities in seeking to manage portfolio duration, yield curve exposure and for
hedging purposes.
The Fund may purchase or sell
securities on a when-issued, delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction.
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.
The Fund is non-diversified, which means that it can invest a
greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Intermediate Bond Fund
Columbia Intermediate Bond Fund (the Fund) seeks total return,
consisting of current income and capital appreciation.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) 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 60% of its net assets in debt securities that, at the time of purchase, are rated in at least one of the three highest bond
rating categories or are unrated securities determined to be of comparable quality. The Fund may invest up to 20% of its net assets in securities that, at the time of purchase, are rated below investment grade or are unrated but determined to be of
comparable quality (commonly referred to as “high yield securities” or “junk bonds”).
While the Fund may invest in securities of any maturity, under
normal circumstances, the Fund’s dollar-weighted average maturity will be between three and ten years.
The Fund may invest in derivatives, such as futures (including
interest rate futures) and swap contracts (including credit default swaps, credit default swap indexes and interest rate swaps) for hedging purposes and to manage yield curve, duration and interest rate exposure; options (including options on listed
futures contracts), collateralized debt obligations and inverse floaters for investment purposes; and interest-only (IO) and principal-only (PO) securities for hedging and investment purposes.
The Fund may purchase or sell securities on a when-issued,
delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction. The Fund also may invest in private
placements.
Columbia Income Builder Fund
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.
Columbia International Opportunities Fund (formerly Columbia
Marsico International Opportunities Fund)
Columbia
International Opportunities Fund (the Fund) seeks long-term growth of capital.
Under normal circumstances, the Fund invests at least 65% of
its total assets in equity securities (including common stock, preferred stock, and depositary receipts) of companies located in at least three countries other than the United States, including emerging market countries. The Fund invests in
companies that are believed to have the potential for growth. The Fund typically employs a focused portfolio investing style, which results in fewer holdings than a fund that seeks to achieve its investment objective by investing in a greater number
of issuers.
The Fund may invest in derivatives,
including futures and forward foreign currency contracts, in an effort to enhance returns, to hedge existing positions, to manage the Fund’s currency and overall risk exposure, to increase market or other exposure, and/or to increase
investment flexibility (including using the derivative as a substitute for a position in an underlying security, currency, asset, or other instrument or reference). Derivatives may be used by the Fund to obtain net long and/or net negative (short)
exposure to a security, currency, asset, or other instrument or reference.
The Fund may invest in companies involved in initial public
offerings, tender offers, mergers, other corporate restructurings and other special situations.
Columbia International Value Fund
Columbia International Value Fund (the Fund) seeks long-term
capital appreciation.
Under normal circumstances, the
Fund invests at least 80% of total assets (including the amount of any borrowings for investment purposes) in equity securities of foreign companies that have market capitalizations of more than $1 billion at the time of purchase. The Fund typically
invests in foreign companies in at least three countries, other than the United States, at any one time and may invest in emerging markets. The Fund may invest directly in foreign securities or indirectly through closed-end investment companies and
depositary receipts. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector.
The Fund may invest in currency forwards, futures and options
for both hedging and non-hedging purposes including, for example, to seek to enhance returns or, in certain unusual circumstances, when holding a derivative is deemed preferable to holding the underlying asset. In particular, the Fund may invest in
forward currency contracts to hedge the currency exposure associated with some or all of the Fund’s securities, to shift investment exposure from one currency to another, to shift U.S. dollar exposure to achieve a representative weighted mix
of major currencies in its benchmark, or to adjust an underweight country exposure in its portfolio. The Fund may also invest in equity index futures to manage exposure to the securities market and to maintain equity market exposure while managing
cash flows.
The Fund has the following limits on its
investments, which are applied at the time an investment is made. The Fund:
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normally invests no more
than 5% of its total assets in a single security;
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typically invests up to the
greater of (i) 20% of its total assets in a single country or industry or (ii) 150% of the weighting of a single country or industry in the MSCI Europe, Australasia, Far East (MSCI EAFE) Value Index (limited to less than 25% of its total assets in a
single industry, other than U.S. Government obligations); and
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generally may not invest
more than 20% of its total assets in emerging markets.
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Columbia Large Cap Enhanced Core Fund
Columbia Large Cap Enhanced Core Fund (the Fund) seeks total
return before fees and expenses that exceeds the total return of the Standard & Poor’s (S&P) 500
®
Index.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in common stocks that comprise the S&P 500 Index (the Index), convertible securities that are convertible into stocks included in the Index, and derivatives whose
returns are closely equivalent to the returns of the Index or its components.
Columbia Income Builder Fund
The Fund primarily invests in securities
included in the Index but generally holds fewer stocks than the Index and may hold securities that are not in the Index.
Although the Fund’s investment manager attempts to
maintain a portfolio that generally matches the risk characteristics of the Index, it will vary the number and percentages of the Fund’s holdings in attempting to provide higher returns than the Index and to reduce the potential of
underperforming the Index over time. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the information technology sector.
In pursuit of the Fund’s objective, the portfolio
managers use quantitative analysis to evaluate the relative attractiveness of potential investments.
The Fund may invest in derivatives, such as futures contracts,
for investment purposes, for risk management (hedging) purposes and to increase investment flexibility.
Columbia Large Cap Growth Fund
Columbia Large Cap Growth Fund (the Fund) seeks long-term
capital appreciation.
Under normal market conditions,
the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities of large-capitalization companies, primarily common stocks and securities that can be converted into common stocks.
These companies have market capitalizations in the range of companies in the Russell 1000 Growth Index (the Index) at the time of purchase (between $622 million and $651.2 billion as of October 31, 2014). The market capitalization range and
composition of the companies in the Index are subject to change. The Fund invests primarily in common stocks of companies that the investment manager believes have the potential for long-term, above-average earnings growth. The Fund may from time to
time emphasize one or more economic sectors in selecting its investments, including the information technology and technology-related sectors.
The Fund may invest up to 20% of its total assets in foreign
securities. The Fund may invest directly in foreign securities or indirectly through depositary receipts.
Columbia Large Cap Index Fund
Columbia Large Cap Index Fund (the Fund) seeks total return
before fees and expenses that corresponds to the total return of the Standard & Poor’s (S&P) 500
®
Index.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in common stocks that comprise the S&P 500 Index (the Index). The Fund may invest in derivatives, consisting of stock index futures, as substitutes for the
underlying securities in the Index.
Different common
stocks have different weightings in the Index, depending on the amount of stock outstanding and the stock’s current price. In seeking to match the performance of the Index, Columbia Management Investment Advisers, LLC (the Investment Manager)
attempts to allocate the Fund’s assets among common stocks in approximately the same weightings as the Index. This is referred to as a passive or indexing approach to investing. The Fund may buy shares of Ameriprise Financial, Inc., an
affiliate of the Fund’s investment manager, which is currently included in the Index, subject to certain restrictions.
The Fund attempts to achieve at least a 95% correlation
between the performance of the Index and the Fund’s investment results, before fees and expenses.
Columbia Large Core Quantitative Fund
Columbia Large Core Quantitative Fund (the Fund) seeks to
provide shareholders with long-term capital growth.
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in equity securities of companies with market capitalizations greater than $5 billion at the time of purchase or that are within the market
capitalization range of companies in the S&P 500 Index (the Index) at the time of purchase. These equity securities generally include common stocks. The market capitalization range and composition of the companies in the Index are subject to
change.
Columbia Income Builder Fund
The Fund may from time to time emphasize one
or more economic sectors in selecting its investments, including the information technology sector.
The Fund may invest in derivatives, such as futures contracts,
for cash equitization and investment flexibility.
In
pursuit of the Fund’s objective, the portfolio managers use quantitative analysis to evaluate the relative attractiveness of potential investments.
Columbia Large Growth Quantitative Fund
Columbia Large Growth Quantitative Fund (the Fund) seeks to
provide shareholders with long-term capital growth.
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in equity securities of companies with market capitalizations greater than $5 billion at the time of purchase or that are within the market
capitalization range of companies in the Russell 1000
®
Growth Index (the Index) at the time of purchase. These equity securities generally include common stocks. The market
capitalization range and composition of the companies in the Index are subject to change.
The Fund primarily invests in securities included in the Index
but generally holds fewer stocks than the Index and may hold securities that are not in the Index. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the consumer discretionary sector and
the information technology sector.
The Fund may invest
in derivatives, such as futures contracts, for cash equitization and investment flexibility.
In pursuit of the Fund’s objective, the portfolio
managers use quantitative analysis to evaluate the relative attractiveness of potential investments.
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.
Columbia Large Value Quantitative Fund
Columbia Large Value Quantitative Fund (the Fund) seeks to
provide shareholders with long-term capital growth.
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in equity securities of companies with market capitalizations greater than $5 billion at the time of purchase or that are within the market
capitalization range of companies in the Russell 1000
®
Value Index (the Index) at the time of purchase. These equity securities generally include common stocks. The market capitalization
range and composition of the companies in the Index are subject to change.
The Fund primarily invests in securities included in the Index
but generally holds fewer stocks than the Index and may hold securities that are not in the Index. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector.
The Fund may invest in derivatives, such as futures contracts,
for cash equitization and investment flexibility.
In
pursuit of the Fund’s objective, the portfolio managers use quantitative analysis to evaluate the relative attractiveness of potential investments.
Columbia Limited Duration Credit Fund
Columbia Limited Duration Credit Fund (the Fund) seeks to
provide shareholders with a level of current income consistent with preservation of capital.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in corporate bonds. The Fund will primarily invest in debt securities with short- and intermediate-term maturities generally similar to those included in the
Fund’s benchmark index, the Barclays U.S. 1-5Year Corporate Index (the Index). The Fund may invest up to 15% of its net assets in securities that, at the time of purchase, are rated below investment grade (commonly referred to as “high
yield securities” or “junk bonds”).
The Fund’s duration is managed to help reduce volatility
associated with changes in interest rates. Under normal conditions, the Fund will target duration to be similar to or lower than that of the Index, but will not exceed that of the Index by more than one year. As of October 31, 2014, the duration of
the Index was 2.82 years.
Columbia Income Builder Fund
The Fund may invest up to 25% of its net
assets in foreign investments, including emerging markets.
Columbia Marsico Focused Equities Fund
Columbia Marsico Focused Equities Fund (the Fund) seeks
long-term growth of capital.
Under normal circumstances,
the Fund invests at least 80% of its net assets in equity securities. These investments mostly consist of equity securities of large-capitalization companies that have market capitalizations of $5 billion or more at the time of purchase. The Fund
typically holds a core position of between 20 and 35 common stocks that are believed to have potential for long-term growth. The Fund may from time to time exceed this range, including when the Fund is accumulating new positions, phasing out and
replacing existing positions, or responding to abnormal market conditions; however, the portfolio managers do not currently intend to hold greater than 50 common stocks. The Fund may invest up to 25% of its total assets in foreign securities,
including in emerging market securities.
The Fund is
non-diversified, which means that it can invest a greater percentage of its assets in the securities of fewer issuers than can a diversified fund. The Fund may from time to time emphasize one or more economic sectors in selecting its investments,
including the consumer discretionary sector, health care sector, and information technology and technology-related sectors.
The core investments of the Fund (i.e., the primary
investments held by the Fund over time) generally may include established companies and securities that are expected to offer long-term growth potential. However, the Fund’s portfolio also may typically include securities of less mature
companies, securities with more aggressive growth characteristics, and securities of companies undergoing significant positive developments, such as, without limitation, the introduction of a new product line, the appointment of a new management
team, or an acquisition.
Columbia Marsico Growth
Fund
Columbia Marsico Growth Fund (the Fund) seeks
long-term growth of capital.
Under normal circumstances,
the Fund invests primarily in equity securities of large-capitalization companies that have market capitalizations of $5 billion or more at the time of purchase. The Fund typically holds a core position of between 35 and 50 common stocks that are
believed to have potential for long-term growth. The Fund may from time to time exceed this range, including when the Fund is accumulating new positions, phasing out and replacing existing positions, or responding to abnormal market conditions;
however, the portfolio managers do not currently intend to hold greater than 65 common stocks. The Fund may invest up to 25% of its total assets in foreign securities, including in emerging market securities.
The core investments of the Fund (i.e., the primary
investments held by the Fund over time) generally may include established companies and securities that are expected to offer long-term growth potential. However, the Fund’s portfolio also may typically include securities of less mature
companies, securities with more aggressive growth characteristics, and securities of companies undergoing significant positive developments, such as, without limitation, the introduction of a new product line, the appointment of a new management
team, or an acquisition.
The Fund may from time to time
emphasize one or more economic sectors in selecting its investments, including the consumer discretionary sector and the information technology and technology-related sectors.
Columbia Mid Cap Growth Fund
Columbia Mid Cap Growth Fund (the Fund) seeks significant
capital appreciation by investing, under normal market conditions, at least 80% of its net assets (plus any borrowings for investment purposes) in stocks of companies with a market capitalization, at the time of initial purchase, equal to or less
than the largest stock in the Russell Midcap Index.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in equity securities (including, but not limited to, common stocks, preferred stocks and securities convertible into common or preferred stocks) of companies that have
market capitalizations in the range of the companies in the Russell Midcap Index (the Index) at the time of purchase (between $298 million and $35.45 billion as of November 30, 2014). The market capitalization range and composition of the companies
in the Index are subject to change.
Columbia Income Builder Fund
The Fund invests primarily in common stocks
of companies believed to have the potential for long-term, above-average earnings growth but may invest in companies for their short, medium or long-term prospects. The Fund may from time to time emphasize one or more economic sectors in selecting
its investments, including the consumer discretionary sector.
The Fund may invest up to 20% of its total assets in foreign
securities. The Fund may invest directly in foreign securities or indirectly through depositary receipts.
The Fund may invest in special situations such as companies
involved in initial public offerings, tender offers, mergers and other corporate restructurings, and in companies involved in management changes or companies developing new technologies.
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.
Columbia Mid Cap Index Fund
Columbia Mid Cap Index Fund (the Fund) seeks total return
before fees and expenses that corresponds to the total return of the Standard & Poor’s (S&P) MidCap 400
®
Index.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in common stocks that comprise the S&P MidCap 400 Index (the Index). The Fund may invest in derivatives, consisting of stock index futures, as substitutes for the
underlying securities in the Index.
Different common
stocks have different weightings in the Index, depending on the amount of stock outstanding and the stock’s current price. In seeking to match the performance of the Index, Columbia Management Investment Advisers, LLC (the Investment Manager)
attempts to allocate the Fund’s assets among common stocks in approximately the same weightings as the Index. This is referred to as a passive or indexing approach to investing. As a result of the Fund’s indexing approach to investing,
the Fund will typically emphasize within the portfolio those economic sectors emphasized by the Index, such as the financial services sector.
The Fund attempts to achieve at least a 95% correlation
between the performance of the Index and the Fund’s investment results, before fees and expenses.
Columbia Mid Cap Value Fund
Columbia Mid Cap Value Fund (the Fund) seeks long-term capital
appreciation.
Under normal circumstances, the Fund
invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities of companies that have market capitalizations in the range of the companies in the Russell Midcap Value Index (the Index) at
the time of purchase (between $888 million and $34.2 billion as of May 31, 2014) that the Fund’s investment manager believes are undervalued and have the potential for long-term growth. The market capitalization range and composition of the
companies in the Index are subject to change.
The Fund
may invest up to 20% of its total assets in foreign securities. The Fund normally invests in common stocks and also may invest in real estate investment trusts. The Fund may from time to time emphasize one or more economic sectors in selecting its
investments, including the financial services sector.
Columbia Money Market Fund
Columbia Money Market Fund (the Fund) seeks to provide
shareholders with maximum current income consistent with liquidity and stability of principal.
The Fund’s assets primarily are invested in money market
instruments, such as marketable debt obligations issued by corporations or the U.S. Government or its agencies, bank certificates of deposit, bankers’ acceptances, letters of credit, and commercial paper, including asset-backed commercial
paper. The Fund may invest more than 25% of its total assets in money market instruments issued by U.S. banks, U.S. branches of foreign banks and U.S. Government securities. Additionally, the Fund may invest up to 35% of its total assets in U.S.
dollar-denominated foreign investments.
Columbia Income Builder Fund
Because the Fund seeks to maintain a
constant net asset value of $1.00 per share, capital appreciation is not expected to play a role in the Fund’s return. The Fund’s yield generally will vary from day to day.
The Fund restricts its investments to instruments that meet
certain maturity and quality standards required by the Securities and Exchange Commission (SEC) for money market funds. For example, the Fund:
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Invests substantially in
securities rated in the highest short-term rating category, or deemed to be of comparable quality. However, the Fund is permitted to invest up to 3% of its total assets in securities rated in the second highest short-term rating category, or deemed
to be of comparable quality.
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Limits its U.S.
dollar-weighted average portfolio maturity to 60 days or less and its U.S. dollar-weighted average life to 120 days or less.
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Buys obligations with
remaining maturities of 397 days or less (as maturity is calculated by SEC rules governing the operation of money market funds).
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Buys only obligations that
are denominated in U.S. dollars and present minimal credit risk.
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Columbia Mortgage Opportunities Fund
Columbia Mortgage Opportunities Fund (the Fund) seeks total
return, consisting of long-term capital appreciation and current income.
Under normal circumstances, the Fund will invest at least 80%
of its net assets (including the amount of any borrowings for investment purposes) in mortgage-related assets. Mortgage-related assets include, but are not limited to, long and short positions in mortgage-related securities that are either issued or
guaranteed as to principal and interest by the U.S. Government, its agencies, authorities or instrumentalities, mortgage-related securities issued by non-U.S. governments, and residential and commercial mortgage-backed securities issued by
non-governmental entities, all of which may be represented by derivatives such as forward contracts, options, futures or swap agreements. Mortgage-related securities that either are issued or guaranteed as to principal and interest by the U.S.
Government, its agencies, authorities or instrumentalities include Government National Mortgage Association (GNMA or Ginnie Mae) mortgage-backed bonds, which are backed by the full faith and credit of the U.S. Government; and Federal National
Mortgage Association (FNMA or Fannie Mae) and Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac) mortgage-backed bonds. FNMA and FHLMC are chartered or sponsored by Acts of Congress; however, their securities are neither issued nor
guaranteed by the U.S. Treasury or backed by the full faith and credit of the U.S. Government. The Fund’s investments in mortgage-related securities include investments in stripped mortgage-backed securities such as interest-only (IO),
principal-only (PO) and inverse interest-only (IIO) securities. The Fund seeks to generate positive absolute total returns over full market cycles by investing principally in mortgage-related assets as well as other types of fixed-income securities
and instruments such as asset-backed securities.
The
Fund may invest in fixed income securities of any maturity and does not seek to maintain either a particular dollar-weighted average maturity or a particular duration.
The Fund may invest in derivative instruments, such as futures
(including bond futures) to manage interest rate exposure, forward-settling transactions to produce incremental earnings, swaps (including credit default swaps, interest rate swaps, total return swaps and swaptions) to manage credit and interest
rate exposure, options on futures to hedge existing positions and IO securities to produce incremental earnings. The Fund’s use of derivatives may result in leverage (market exposure in excess of the Fund’s assets). The Fund may hold a
significant amount of cash, money market instruments (which may include investments in one or more affiliated or unaffiliated money market funds or similar vehicles), other high-quality, short-term investments, or other liquid assets to meet its
segregation obligations as a result of its investments in derivatives. The Fund may also engage in short sales.
The Fund may purchase or sell securities on
a when-issued, delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction. The Fund may also engage
in repurchase agreements.
The Fund may invest
in securities that, at the time of purchase, are rated below investment grade or are unrated but determined to be of comparable quality (commonly referred to as “high yield securities” or “junk bonds”).
Columbia Income Builder Fund
The Fund may invest significantly in privately placed
securities that have not been registered for sale under the Securities Act of 1933 pursuant to Rule 144A (Rule 144A securities) that are determined to be liquid in accordance with procedures adopted by the Fund’s Board of Trustees.
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.
The Fund is non-diversified, which means that it can invest a
greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Multi-Advisor Small Cap Value Fund
Columbia Multi-Advisor Small Cap Value Fund (the Fund) seeks
to provide shareholders with long-term capital appreciation.
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in small cap companies. For these purposes, small cap companies are those that have a market capitalization, at the time of investment, of up to
$2.5 billion or that fall within the range of the Russell 2000 Value Index (the Index). The Fund may buy and hold stock in a company that is not included in the Index. The market capitalization range of the companies included within the Index was
$87 million to $7.26 billion as of August 31, 2014. The Fund may invest in any type of securities, including common stocks and depositary receipts. The Fund may from time to time emphasize one or more economic sectors in selecting its
investments.
The Fund may invest up to 25% of its net
assets in foreign investments.
Subject to oversight by
the investment manager, multiple subadvisers provide the day-to-day management of portions of the Fund’s portfolio. Each of the subadvisers employs an active investment strategy that focuses on small cap companies in an attempt to take
advantage of what are believed to be undervalued securities.
Columbia Multi-Asset Income Fund
Columbia Multi-Asset Income Fund (the Fund) seeks to provide
shareholders with a high level of current income. The Fund’s secondary objective is total return.
Under normal circumstances, the Fund allocates its assets to
multiple asset classes, such as equity, fixed income and cash/cash equivalents, as well as strategies designed to achieve desired investment exposures, including through the use of derivatives and other instruments and assets. The Fund may invest in
the securities, instruments and assets described herein directly, or indirectly through investments in other mutual funds and exchange-traded funds (ETFs) managed by third parties or the investment manager or its affiliates. The Fund seeks to use
asset class selection and diversification as its primary strategy to generate income and total return.
The Fund’s investment manager, Columbia Management
Investment Advisers, LLC (Columbia Management or the Investment Manager) determines the Fund’s desired exposures to, and allocation across, asset classes and strategies. The Fund is not required to allocate its investments among asset classes
in any fixed proportion. The relative proportions of the Fund’s investments allocated to each asset class or strategy may change over time based upon market and economic conditions.
The fixed-income instruments in which the Fund may invest
directly, or indirectly through underlying funds, include debt securities of governments throughout the world (including the U.S. and emerging markets) as well as their agencies and instrumentalities and government-sponsored enterprises, debt
securities of non-governmental issuers (e.g., corporate issuers) throughout the world (including the U.S. and emerging markets), debt securities of any credit rating (including below investment grade debt securities, commonly known as
“high-yield” or “junk” bonds) or debt securities that are unrated, commercial and residential mortgage-backed securities, and bank loans. There is no limitation on the maturities or duration of the instruments in which the
Fund may invest.
Columbia Income Builder Fund
The equity securities in which the Fund may
invest directly, or indirectly through underlying funds, include those of issuers of any market capitalization located throughout the world (including the U.S. and emerging markets) across various investment styles (e.g., growth- or value-oriented
styles), which may include common stocks, preferred stocks, convertible securities, master limited partnerships, and real estate investment trusts (REITs) and instruments of similar entities formed under the laws of non-U.S. countries.
The Fund may invest in derivatives and complex securities,
including structured notes (such as equity-linked notes), for investment purposes.
Columbia Overseas Value Fund
Columbia Overseas Value Fund (the Fund) seeks long-term
capital appreciation.
Under normal circumstances, the
Fund invests at least 80% of total assets (including the amount of any borrowings for investment purposes) in equity securities of foreign companies that have market capitalizations of more than $1 billion at the time of purchase. The Fund typically
invests in foreign companies in at least three countries, other than the United States, at any one time and may invest in emerging markets. The Fund may invest directly in foreign securities or indirectly through closed-end investment companies and
depositary receipts. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector.
The Fund may invest in currency forwards, futures and options
for both hedging and non-hedging purposes including, for example, to seek to enhance returns or, in certain unusual circumstances, when holding a derivative is deemed preferable to holding the underlying asset. In particular, the Fund may invest in
forward currency contracts to hedge the currency exposure associated with some or all of the Fund’s securities, to shift investment exposure from one currency to another, to shift U.S. dollar exposure to achieve a representative weighted mix
of major currencies in its benchmark, or to adjust an underweight country exposure in its portfolio. The Fund may also invest in equity index futures to manage exposure to the securities market and to maintain equity market exposure while managing
cash flows.
The Fund has the following limits on its
investments, which are applied at the time an investment is made. The Fund:
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normally invests no more
than 5% of its total assets in a single security;
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typically invests up to the
greater of (i) 20% of its total assets in a single country or industry or (ii) 150% of the weighting of a single country or industry in the MSCI Europe, Australasia, Far East (MSCI EAFE) Value Index (limited to less than 25% of its total assets in a
single industry, other than U.S. Government obligations); and
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generally may not invest
more than 20% of its total assets in emerging markets.
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Columbia Pacific/Asia Fund
Columbia Pacific/Asia Fund (the Fund) seeks long-term capital
appreciation.
Under normal circumstances, the Fund
invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities (including, but not limited to, common stocks, preferred stocks and securities convertible into common or preferred stocks)
of companies located in Asia and the Pacific Basin, which includes Australia, New Zealand and India, and other countries within this region (the Pacific/Asia region). The Fund may invest in a variety of countries (including emerging markets),
industries and sectors and does not attempt to invest a specific percentage of its assets in any given country, industry or sector. However, the Fund has invested substantially in the financial services sector and may continue to invest
substantially in this or other sectors in the future. The Fund may invest in companies that have market capitalizations of any size.
The Fund may invest in derivatives, such as forward foreign
currency contracts for hedging and investment purposes, including in seeking to achieve or manage desired currency or country exposures, and futures (including index futures) for both hedging and investment purposes, including in seeking to enhance
returns, to increase market exposure and investment flexibility (including using the derivative as a substitute for the purchase or sale of the underlying security(ies), as well as for cash equitization purposes.
The Fund may invest in special situations such as companies
involved in initial public offerings, tender offers, mergers and other corporate restructurings, and in companies involved in management changes or companies developing new technologies.
Columbia Income Builder Fund
The Fund may invest in securities believed
to be undervalued, represent growth opportunities, or both.
Columbia Real Estate Equity Fund
Columbia Real Estate Equity Fund (the Fund) seeks capital
appreciation and above-average income by investing, under normal market conditions, at least 80% of its net assets (plus any borrowings for investment purposes) in the stocks of companies principally engaged in the real estate industry, including
real estate investment trusts (REITs).
Under normal
circumstances, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities of companies principally engaged in the real estate industry, including REITs. A company is
considered to be “principally engaged” in the real estate industry if at least 50% of its gross income or net profits are attributable to the ownership, construction, management or sale of residential, commercial or industrial real
estate. The Fund may invest in equity REITs, mortgage REITs and hybrid REITs.
The Fund is non-diversified, which means that it can invest a
greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Select Global Equity Fund (formerly known as Columbia
Global Equity Fund)
Columbia Select Global Equity Fund
(the Fund) seeks to provide shareholders with long-term capital growth.
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in equity securities, including securities of companies located in developed and emerging countries. These equity securities generally include
common stocks.
The Fund typically employs a focused
portfolio investing style, which results in fewer holdings than a fund that seeks to achieve its investment objective by investing in a greater number of issuers.
Under normal circumstances, the Fund generally invests at
least 40% of its net assets in companies that maintain their principal place of business or conduct their principal business activities outside the U.S., have their securities traded on non-U.S. exchanges or have been formed under the laws of
non-U.S. countries. This 40% minimum investment amount may be reduced to 30% if market conditions for these investments or specific foreign markets are deemed unfavorable. The Fund considers a company to conduct its principal business activities
outside the U.S. if it derives at least 50% of its revenue from business outside the U.S. or had at least 50% of its assets outside the U.S.
Columbia Select International Equity Fund (formerly Columbia
Multi-Advisor International Equity Fund)
Columbia Select
International Equity Fund (the Fund) seeks long-term capital growth.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in equity securities (including common stock, preferred stock, and depositary receipts) of established companies located in at least three countries other than the
United States, including emerging market countries. The Fund invests in companies that are believed to have the potential for growth. The Fund typically employs a focused portfolio investing style, which results in fewer holdings than a fund that
seeks to achieve its investment objective by investing in a greater number of issuers.
The Fund may invest in companies involved in initial public
offerings, tender offers, mergers, other corporate restructurings and other special situations. From time to time, the Fund may focus its investments in certain countries or geographic areas. The Fund may from time to time emphasize one or more
economic sectors in selecting its investments, including the financial services sector.
The Fund may invest in derivatives, including futures
contracts in an effort to enhance returns, to hedge existing positions, to manage the Fund’s overall risk exposure, to increase market or other exposure, and/or to increase investment flexibility (including using the derivative as a substitute
for a position in an underlying security, asset, or other instrument or reference). Derivatives may be used by the Fund to obtain net long and/or net negative (short) exposure to a security, asset, or other instrument or reference.
The Fund’s investment strategy may involve the frequent
trading of portfolio securities.
Columbia Select Large Cap
Equity Fund
Columbia Select Large Cap Equity Fund (the
Fund) seeks long-term capital appreciation.
Columbia Income Builder Fund
Under normal circumstances, the Fund invests
at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities of companies that have market capitalizations, at the time of purchase, in the range of companies in the Standard & Poor’s
(S&P) 500 Index (the Index). The market capitalization range of the companies included within the Index was $3.1 billion to $564.6 billion as of May 31, 2014. The market capitalization range and composition of the companies in the Index are
subject to change.
The Fund may invest up to 20% of its
total assets in foreign securities. The Fund normally invests in common stocks, preferred stocks and convertible securities such as warrants and rights and may invest in exchange-traded funds. The Fund may from time to time emphasize one or more
economic sectors in selecting its investments, including the information technology sector. Generally, the Fund anticipates holding between 45 and 65 securities in its portfolio; however, the Fund may hold, at any time, more or fewer securities than
noted in this range.
The Fund may invest in derivatives,
including options 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’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.
Columbia Select Large Cap Growth Fund
Columbia Select Large Cap Growth Fund (the Fund) seeks
long-term capital appreciation.
Under normal
circumstances, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in common stocks of U.S. and foreign companies that have market capitalizations, at the time of purchase, in the range of
companies in the Russell 1000 Growth Index (the Index). The market capitalization range of the companies included within the Index was $1.63 billion to $560 billion as of June 30, 2014. The market capitalization range and composition of the
companies in the Index are subject to change. The Fund invests primarily in common stocks of companies believed to have the potential for long-term growth. The Fund typically employs a focused portfolio investing style, which results in fewer
holdings than a fund that seeks to achieve its investment objective by investing in a greater number of issuers. The Fund may invest directly in foreign securities or indirectly through depositary receipts. The Fund may from time to time emphasize
one or more economic sectors in selecting its investments, including the consumer discretionary, health care and the information technology and technology-related sectors.
Columbia Select Large-Cap Value Fund
Columbia Select Large-Cap Value Fund (the Fund) seeks to
provide shareholders with long-term capital appreciation.
Under normal circumstances, at least 80% of the Fund’s
net assets (including the amount of any borrowings for investment purposes) are invested in equity securities of large capitalization issuers. These companies have market capitalizations in the range of companies in the Russell 1000
®
Value Index (the Index) at the time of purchase (between $712 million and $427.1 billion as of August 31, 2014). The market capitalization range and composition of the companies in the
Index are subject to change. The Fund’s Board of Trustees may change the parameters by which large market capitalization is defined if it concludes such a change is appropriate.
The Fund invests substantially in securities of U.S. issuers.
The Fund also invests substantially in “value” companies. The Fund considers “value” companies to be those companies believed by the investment manager to be undervalued, either historically, by the market, or as compared
with issuers in the same or similar industry or sector. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector. The Fund may hold a small number of securities,
consistent with its value investment approach. Generally, the Fund anticipates holding between 30 and 40 securities in its portfolio; however, the Fund may hold, at any time, more or fewer securities than noted in this range.
Columbia Select Smaller-Cap Value Fund
Columbia Select Smaller-Cap Value Fund (the Fund) seeks to
provide shareholders with long-term capital appreciation.
Columbia Income Builder Fund
Under normal circumstances, the Fund invests
at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities of smaller capitalization issuers. These companies have market capitalizations in the range of companies in the Russell 2000
®
Value Index (the Index) at the time of purchase (between $87 million and $7.26 billion as of August 31, 2014). The market capitalization range and composition of the companies in the Index
are subject to change. The Fund’s Board of Trustees may change the parameters by which smaller market capitalization is defined if it concludes such a change is appropriate.
The Fund invests substantially in securities of U.S. issuers.
The Fund may invest up to 25% of its net assets in foreign investments. The Fund also invests substantially in “value” companies. The Fund considers “value” companies to be those companies believed by the investment manager
to be undervalued, either historically, by the market, or as compared with issuers in the same or similar industry or sector. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the
industrials sector. The Fund may hold a small number of securities, consistent with its value investment approach. Generally, the Fund anticipates holding between 40 and 50 securities in its portfolio; however, the Fund may hold, at any time, more
or fewer securities than noted in this range.
Columbia
Seligman Communications and Information Fund
Columbia
Seligman Communications and Information Fund (the Fund) seeks to provide shareholders with capital gain.
Under normal market conditions, the Fund will invest at least
80% of its net assets (including the amount of any borrowings for investment purposes) in securities of companies operating in the communications, information and related industries. Accordingly, the Fund invests in companies operating in the
information technology and telecommunications sectors as well as those in the media industry. In addition, as noted above, the Fund may invest in related industries, which provides the Fund with broad investment flexibility to invest in any industry
and many of the issuers in which the Fund invests are technology and technology-related companies. These technology and technology-related companies may include companies operating in any industry, including but not limited to software, hardware,
health care, medical technology and technology services, such as the internet.
The Fund may invest up to 25% of its net assets in foreign
investments.
The Fund may invest in securities of large
capitalization companies that are well established and can be expected to grow with the market. The Fund may also invest in small-to-medium size capitalization companies that the Fund’s portfolio managers believe provide opportunities to
benefit from the rapidly changing technologies and the expansion of the communications, information and related industries. These securities generally include common stocks.
The Fund is non-diversified, which means that it can invest a
greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Income Builder Fund
Columbia Seligman Global Technology Fund
Columbia Seligman Global Technology Fund (the Fund) seeks to
provide shareholders with long-term capital appreciation.
The Fund generally invests at least 80% of its assets
(including the amount of any borrowings for investment purposes) in equity securities of U.S. and non-U.S. companies with business operations in technology and technology-related industries. For these purposes, technology-related companies are those
companies that use technology extensively to improve their business processes and applications. The technology industry comprises information technology and communications, as well as medical, environmental and biotechnology. The Fund may invest in
securities of companies domiciled in any country believed to be appropriate to the Fund’s objective. The Fund generally invests in several countries in different geographic regions.
Under normal circumstances, the Fund generally invests at
least 40% of its net assets in companies that maintain their principal place of business or conduct their principal business activities outside the U.S., have their securities traded on non-U.S. exchanges or have been formed under the laws of
non-U.S. countries. This 40% minimum investment amount may be reduced to 30% if market conditions for these investments or specific foreign markets are deemed unfavorable. The Fund considers a company to conduct its principal business activities
outside the U.S. if it derives at least 50% of its revenue from business outside the U.S. or had at least 50% of its assets outside the U.S. The Fund may, from time to time, take temporary defensive positions that may result in the Fund investing
less than 30% of its net assets in companies outside the U.S. in seeking to minimize extreme volatility caused by adverse market, economic, political or other conditions.
The Fund may invest in companies that have market
capitalizations of any size. Securities of large capitalization companies that are well established in the world technology market can be expected to grow with the market and will frequently be held by the Fund. However, rapidly changing
technologies and expansion of technology and technology-related industries often provide a favorable environment for companies of small-to-medium size capitalization, and the Fund may invest in these companies as well.
The Fund may invest in all types of securities, many of which
will be denominated in currencies other than the U.S. dollar. The Fund normally concentrates its investments in common stocks; however, it may invest in other types of equity securities, including securities convertible into or exchangeable for
common stock, depositary receipts, and rights and warrants to purchase common stock. The Fund also may invest up to 20% of its assets in preferred stock and investment-grade or comparable quality debt securities.
The Fund is non-diversified, which means that it can invest a
greater percentage of its assets in the securities of fewer issuers than can a diversified fund.
Columbia Short Term Bond Fund
Columbia Short Term Bond Fund (the Fund) seeks current income,
consistent with minimal fluctuation of principal.
Under
normal circumstances, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) 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 to be of comparable quality.
The Fund may invest in mortgage- and other asset-backed
securities. The Fund may invest in floating rate debt securities, which have interest rates that adjust or “float” periodically. The Fund also may invest in private placements.
The Fund may invest in derivatives, including treasury
futures, 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, as well as to manage duration, yield curve and/or interest rate exposure.
Columbia Income Builder Fund
The Fund may purchase or sell securities on
a when-issued, delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction.
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.
Columbia Small Cap Core Fund
Columbia Small Cap Core Fund (the Fund) seeks long-term
capital appreciation.
Under normal market conditions,
the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in stocks of companies that have market capitalizations, at the time of purchase, in the range of companies in the Russell 2000 Index
(the Index). The market capitalization range of the companies included within the Index was $28 million to $6.84 billion as of November 30, 2014. The market capitalization range and composition of the companies in the Index are subject to change.
The Fund generally invests in common stocks of companies believed to be undervalued. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the industrials sector and the information technology
sector.
The Fund may invest up to 20% of its total
assets in foreign securities. The Fund may invest directly in foreign securities or indirectly through depositary receipts.
Columbia Small Cap Growth Fund I
Columbia Small Cap Growth Fund I (the Fund) seeks capital
appreciation by investing, under normal market conditions, at least 80% of its net assets (plus any borrowings for investment purposes) in stocks of companies with a market capitalization, at the time of initial purchase, equal to or less than the
largest stock in the Standard & Poor’s (S&P) SmallCap 600
®
Index.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in equity securities (including, but not limited to, common stocks, preferred stocks and securities convertible into common or preferred stocks) of companies that have
market capitalizations in the range of the companies in the S&P SmallCap 600® Index (the Index) at the time of purchase (between $160 million and $4.26 billion as of November 30, 2014). The market capitalization range and composition of the
companies in the Index are subject to change.
The Fund
invests primarily in common stocks of companies believed to have the potential for long-term, above-average earnings growth but may invest in companies for their short, medium or long-term prospects. The Fund may from time to time emphasize one or
more economic sectors in selecting its investments, including the consumer discretionary, health care, and information technology sectors.
The Fund may invest up to 20% of its total assets in foreign
securities. The Fund may invest directly in foreign securities or indirectly through depositary receipts.
The Fund may invest in special situations such as companies
involved in initial public offerings, tender offers, mergers and other corporate restructurings, and in companies involved in management changes or companies developing new technologies.
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.
Columbia Small Cap Index Fund
Columbia Small Cap Index Fund (the Fund) seeks total return
before fees and expenses that corresponds to the total return of the Standard & Poor’s (S&P) SmallCap 600
®
Index.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in common stocks that comprise the S&P SmallCap 600 Index (the Index). The Fund may invest in derivatives, consisting of relevant stock index futures, to gain
exposure to the small cap equity market pending direct investments in securities.
Columbia Income Builder Fund
Different common stocks have different
weightings in the Index, depending on the amount of stock outstanding and the stock’s current price. In seeking to match the performance of the Index, Columbia Management Investment Advisers, LLC (the Investment Manager) attempts to allocate
the Fund’s assets among common stocks in approximately the same weightings as the Index. This is referred to as a passive or indexing approach to investing. As a result of the Fund’s indexing approach to investing, the Fund will
typically emphasize within the portfolio those economic sectors emphasized by the Index, such as the financial services sector.
The Fund attempts to achieve at least a 95% correlation
between the performance of the Index and the Fund’s investment results, before fees and expenses.
Columbia Small Cap Value Fund I
Columbia Small Cap Value Fund I (the Fund) seeks long-term
capital appreciation.
Under normal circumstances, the
Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities of companies that have market capitalizations in the range of the companies in the Russell 2000 Value Index (the Index)
at the time of purchase (between $113 million and $4.34 billion as of July 31, 2014), that the Fund’s investment manager believes are undervalued. The market capitalization range and composition of the companies in the Index are subject to
change.
The Fund may invest up to 20% of its total
assets in foreign securities. The Fund also may invest up to 20% of its total assets in real estate investment trusts. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial
services sector.
Columbia Small Cap Value Fund II
Columbia Small Cap Value Fund II (the Fund) seeks long-term
capital appreciation.
Under normal circumstances, the
Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities of companies that have market capitalizations in the range of the companies in the Russell 2000 Value Index (the Index)
at the time of purchase (between $15 million and $9.4 billion as of May 31, 2014) that the Fund’s investment manager believes are undervalued and have the potential for long-term growth. The market capitalization range and composition of the
companies in the Index are subject to change.
The Fund
may invest up to 20% of its total assets in foreign securities, including depositary receipts. The Fund normally invests in common stocks and also may invest in real estate investment trusts. The Fund may from time to time emphasize one or more
economic sectors in selecting its investments, including the financial services sector.
The investment manager combines fundamental and quantitative
analysis with risk management in identifying investment opportunities and constructing the Fund’s portfolio.
Columbia Small/Mid Cap Value Fund (formerly known as Columbia
Mid Cap Value Opportunity Fund)
Columbia Small/Mid Cap
Value Fund (the Fund) seeks to provide shareholders with long-term growth of capital.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in equity securities of small- and medium-sized companies. These equity securities generally include common stocks and may also include real estate investment trusts.
Small- and medium-sized companies are those whose market capitalizations at the time of purchase fall within the market capitalization range of the Russell 2500 Value Index (the Index) (between $87 million and $11.3 billion as of August 31, 2014).
The market capitalization range and composition of the companies in the Index are subject to change.
The Fund may invest up to 25% of its net assets in foreign
investments. Foreign investments include depositary receipts. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector.
Columbia U.S. Government Mortgage Fund
Columbia U.S. Government Mortgage Fund (the Fund) seeks to
provide shareholders with current income as its primary objective and, as its secondary objective, preservation of capital.
Columbia Income Builder Fund
The Fund’s assets primarily are
invested in mortgage-related securities. Under normal market conditions, at least 80% of the Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in mortgage-related securities that either are issued
or guaranteed as to principal and interest by the U.S. Government, its agencies, authorities or instrumentalities. This includes, but is not limited to, Government National Mortgage Association (GNMA or Ginnie Mae) mortgage-backed bonds, which are
backed by the full faith and credit of the U.S. Government; and Federal National Mortgage Association (FNMA or Fannie Mae) and Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac) mortgage-backed bonds. FNMA and FHLMC are chartered or
sponsored by Acts of Congress; however, their securities are neither issued nor guaranteed by the U.S. Treasury.
The Fund’s investments in mortgage-related securities
include investments in stripped mortgage-backed securities such as interest-only (IO) and principal-only (PO) securities.
The Fund may invest in fixed income securities of any maturity
and does not seek to maintain a particular dollar-weighted average maturity.
The Fund may invest significantly in privately placed
securities that have not been registered for sale under the Securities Act of 1933 pursuant to Rule 144A (Rule 144A securities) that are determined to be liquid in accordance with procedures adopted by the Fund’s Board of Trustees.
The Fund may invest in derivatives, including forward
contracts in an effort to produce incremental earnings, to hedge existing positions, to increase market exposure and investment flexibility, and/or to obtain or reduce credit exposure.
The Fund may purchase or sell securities on a when-issued,
delayed delivery or forward commitment basis. Such securities may include mortgage-backed securities acquired or sold in the “to be announced” (TBA) market and those in a dollar roll transaction.
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.
Columbia U.S. Treasury Index Fund
Columbia U.S. Treasury Index Fund (the Fund) seeks total
return that corresponds to the total return of the Citigroup Bond U.S. Treasury Index, before fees and expenses.
Under normal circumstances, the Fund invests at least 80% of
its net assets (including the amount of any borrowings for investment purposes) in securities that comprise the Citigroup Bond U.S. Treasury Index (the Index). The Index is an unmanaged index composed of U.S. Treasury notes and bonds with remaining
maturities of at least one year and outstanding principal of at least $5 billion and which are included in the Citigroup Broad Investment-Grade Bond Index. Different securities have different weightings in the Index. Securities in the Index are
weighted by market value; that is, the price per bond or note multiplied by the number of bonds or notes outstanding.
In seeking to match the performance of the Index, before fees
and expenses, the investment manager attempts to allocate the Fund’s assets among securities in the Index. The Fund will not hold all of the securities in the Index.
Columbia Value and Restructuring Fund
Columbia Value and Restructuring Fund (the Fund) seeks
long-term capital appreciation.
Under normal
circumstances, the Fund invests at least 80% of its assets (including the amount of any borrowings for investment purposes) in common stocks of companies that are believed to be undervalued and have the potential for long-term appreciation. The Fund
also invests in common stocks of companies that the Fund’s investment manager believes may benefit from various types of restructuring efforts or industry consolidation. The Fund primarily invests in companies that have larger market
capitalizations (generally over $2 billion) but may invest in companies that have market capitalizations of any size.
Although the Fund invests primarily in securities of U.S.
companies, it may invest in foreign securities directly or indirectly through depositary receipts.
Columbia Income Builder Fund
The Fund may invest in special situations
such as companies involved in initial public offerings, tender offers, mergers and other corporate restructurings, and in companies involved in management changes or companies developing new technologies.
Columbia Income Builder Fund
Underlying Funds — Principal
Risks
The ability of each Fund to meet its investment
objective is directly related to its allocation among Underlying Funds and the ability of those Underlying Funds to meet their investment objectives, as well as the investment performance of the Funds’ other investments. The following is
a brief description of certain of the principal risks associated with investment in the Underlying Funds in which the Funds may invest as part of their principal investment strategies. The Funds are subject directly to these risks to the
extent they invest in individual securities and other instruments. Additional information regarding the principal risks associated with investment in the Underlying Funds is available in the applicable Underlying Fund’s prospectus and
Statement of Additional Information. This prospectus is not an offer for any of the Underlying Funds.
The references in each case to the “Fund” within
each of the below risks descriptions in this Appendix B refers to the Underlying Fund(s) that the Funds may invest in.
Active Management Risk.
Certain Funds are actively managed by their portfolio managers. Certain other Funds are managed based primarily on quantitative methods, with the portfolio managers conducting a qualitative review of the quantitative output. In either case, the
Funds could underperform their benchmark indices and/or other funds with a similar investment objective.
Activist Strategies Risk.
The
Fund may purchase securities of a company that is the subject of a proxy contest or which activist investors are attempting to influence, in the expectation that new management or a change in business strategies will cause the price of the
company’s securities to increase. If the proxy contest, or the new management, is not successful, the market price of the company’s securities will typically fall.
Allocation Risk.
Because
the Fund uses an asset allocation strategy in pursuit of its investment objective,
there is a risk that the Fund's allocation among asset classes, investments, managers, strategies and/or investment styles
will cause the Fund's shares to lose value or cause the Fund to underperform other funds with a similar investment objective and/or strategies, or that the investments themselves will not produce the returns expected.
Alternative Strategies Investment Risk.
An investment in alternative investment strategies (Alternative Strategies), whether through direct investment or through one or more underlying funds, involves risks, which may be significant. Alternative
Strategies may include strategies, instruments or other assets, such as derivatives, that seek investment returns uncorrelated with the broad equity and fixed income/debt markets, as well as those providing exposure to other markets (such as
commodity markets), including but not limited to absolute (positive) return strategies. Alternative Strategies may fail to achieve their desired performance, market or other exposure, or their returns (or lack thereof) may be more correlated with
the broad equity and/or fixed income/debt markets than was anticipated, and the Fund may lose money.
To the extent that an underlying fund is charged a performance
(or incentive) fee (which would indirectly be borne by the Fund’s shareholders), such fees may create incentives for the underlying fund’s manager to make investments that are riskier or more speculative than in the absence of these
fees. Because these fees are often based on both realized as well as unrealized appreciation, the fee may be greater than if it were based only on realized gains. In addition, underlying fund managers may receive compensation for relative
performance of the underlying fund even if the underlying fund’s overall returns are negative.
Arbitrage Strategies Risk.
The
Fund may purchase securities at prices only slightly below the anticipated value to be paid or exchanged for such securities in a merger, exchange offer or cash tender offer, and substantially above the prices at which such securities traded
immediately prior to announcement of the transaction. If there is a perception that the proposed transaction will not be consummated or will be delayed, the market price of the security may decline sharply, which would result in a loss to the
Fund.
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. Most asset-backed
Columbia Income Builder Fund
securities are subject to prepayment risk (i.e., the risk that the Fund will
have to reinvest the money received in securities that have lower yields). Rising or high interest rates tend to extend the duration of asset-backed securities, resulting in valuations that are volatile and sensitive to changes in interest
rates.
Bankruptcy Process Risk.
The Fund may purchase bankruptcy claims. There are a number of significant risks inherent in the bankruptcy process. The effect of a bankruptcy filing on a company may adversely and permanently affect the company by
causing it to lose its market position and key employees and otherwise become incapable of restoring itself as a viable business. Many events in a bankruptcy are the product of contested matters and adversarial proceedings and are beyond the control
of the creditors. The duration of a bankruptcy proceeding is difficult to predict and a creditor’s return on investment can be adversely affected by delays while the plan of reorganization is being negotiated, approved by the creditors,
confirmed by the bankruptcy court, and until it ultimately becomes effective. The administrative costs in connection with a bankruptcy proceeding are frequently high and are paid out of the debtor’s estate before any return to creditors.
Furthermore, bankruptcy law permits the classification of “substantially similar” claims in determining the classification of claims in a bankruptcy reorganization. Because the standard for classification is vague, there exists the risk
that the Fund’s influence with respect to the class of securities it owns can be impaired as a result of increases in the number and amount of claims in that class or by different classification and treatment of that class. Finally, amounts
previously paid to the Fund may be challenged as fraudulent conveyances or preferences as part of a bankruptcy proceeding.
Changing Distribution Level Risk.
The amount of the distributions paid by the Fund will vary and generally depends on the amount of interest income 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 income and/or dividends the Fund receives from its investments decline.
Commodity Futures Trading Commission (CFTC) Regulatory Risk.
The Fund does not qualify for an exemption from registration as a “commodity pool” under rules of the Commodity Exchange Act (the CEA). Accordingly, the Fund is a commodity pool under the CEA and the
Investment Manager is registered as a “commodity pool operator” under the CEA. The Fund is subject to dual regulation by the SEC and the CFTC. Compliance with the CFTC’s regulatory requirements could increase Fund expenses,
adversely affecting the Fund’s total return.
Commodity-related Investment Risk.
The value of commodities investments will generally be affected by overall market movements and factors specific to a particular industry or commodity, which may include demand for the commodity, weather, embargoes,
tariffs, and economic health, political, international, regulatory and other developments. Exposure to commodities and commodities markets may subject the value of the Fund’s investments to greater volatility than other types of investments.
Commodities investments may also subject the Fund to counterparty risk and liquidity risk. The Fund may make commodity-related investments through one or more wholly-owned subsidiaries organized outside the U.S. that are generally not subject to
U.S. laws (including securities laws) and their protections.
Commodity-related Tax Risk.
If
the Fund does not appropriately limit its commodity-related investments or if such investments are re-characterized for U.S. federal income tax purposes, the Fund may be unable to qualify as a regulated investment company for one or more years,
which would adversely affect the value of the Fund (and the favorable tax treatment afforded to it as a regulated investment company). In this event, the Fund’s Board may authorize a significant change in investment strategy or the
Fund’s liquidation.
Confidential Information
Access Risk.
Portfolio managers may avoid the receipt of material, non-public information (Confidential Information) about the issuers of floating rate loans (including from the issuer itself) being considered for
acquisition by the Fund, or held in the Fund. A decision not to receive Confidential Information may disadvantage the Fund and could adversely affect the Fund’s performance.
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. The Fund may also be forced to convert a convertible security at an inopportune time, which may decrease the Fund’s return.
Columbia Income Builder Fund
Counterparty Risk.
Counterparty risk is the risk that a counterparty to a financial instrument held by the Fund or by a special purpose or structured vehicle invested in by the Fund may become insolvent or otherwise fail to perform its obligations. As a result, the
Fund may obtain no or limited recovery of its investment, and any recovery may be significantly delayed.
Credit Risk.
The value of fixed-income securities,
or other instruments or assets,
may decline if the issuer thereof defaults or otherwise becomes unable or unwilling, or is
perceived to be unable or unwilling, to honor its financial obligations, such as making payments to the Fund
when due. Rating agencies assign credit ratings to certain fixed-income securities to indicate
their credit risk. Lower quality or unrated securities held by the Fund may present increased credit risk as compared to higher-rated securities. Non-investment grade fixed-income securities (commonly called “high-yield” or
“junk”) may be subject to greater price fluctuations and are more likely to experience a default than investment grade securities and therefore may expose the Fund to increased credit risk. If the Fund purchases unrated securities, or if
the
ratings of securities held by the Fund are lowered after purchase,
the Fund will depend on analysis of credit risk more heavily than usual.
Depositary Receipts Risk.
Depositary receipts are receipts issued by a bank or trust company reflecting ownership of underlying securities issued by foreign companies. Some foreign securities are traded in the form of American Depositary Receipts (ADRs). Depositary receipts
involve risks similar to the risks associated with investments in foreign securities, including those associated with the particular country, which may be related to the particular political, regulatory, economic, social and other conditions or
events occurring in the country and fluctuations in its currency, as well as market risk tied to the underlying foreign company. In addition, ADR holders may have limited voting rights,
may not have the same
rights afforded typical company stockholders in the event of a corporate action such as an acquisition, merger or rights offering and may experience difficulty in receiving company stockholder communications.
Derivatives Risk.
Losses
involving derivative instruments may be substantial, because a relatively small movement in the price of an underlying security, instrument, commodity, currency or index may result in a substantial loss for the Fund. In addition to the potential for
increased losses, the use of derivative instruments may lead to increased volatility for the Fund. Derivative investments will typically increase the Fund’s exposure to principal risks to which it is otherwise exposed, and may expose the Fund
to additional risks, including correlation risk, counterparty risk, hedging risk, leverage risk and/or liquidity risk.
Derivatives Risk/Commodity-Linked Futures Contracts Risk.
The loss that may be incurred by the Fund in entering into futures contracts is potentially unlimited and may exceed the amount of the premium. Futures markets are highly volatile and the use of futures by the Fund may
increase the volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally required in futures trading, a relatively small price movement in a futures contract may result in substantial losses to the Fund.
Futures contracts may be illiquid. The liquidity of the futures market depends on participants entering into offsetting transactions rather than making or taking delivery. To the extent participants decide to make or take delivery, liquidity in the
futures market could be reduced. Furthermore, exchanges may limit fluctuations in futures contract prices during a trading session by imposing a maximum permissible price movement on each futures contract. The Fund may be disadvantaged if it is
prohibited from executing a trade outside the daily permissible price movement. Moreover, to the extent the Fund engages in futures contracts on foreign exchanges, such exchanges may not provide the same protection as U.S. exchanges.
Derivatives Risk/Commodity-Linked Structured Notes
Risk.
Investments in commodity-linked structured notes involve substantial risks, including risk of loss of interest and principal, lack of a liquid secondary market, and risk of greater volatility than investments
in traditional equity and debt markets. These instruments involve additional risks, including counterparty risk and hedging risk.
Derivatives Risk/Commodity-Linked Swaps Risk.
Commodity-linked swaps could result in losses if the underlying asset (e.g., a particular commodity) or reference does not perform as anticipated. The value of swaps, like many other derivatives, may move in unexpected
ways and may result in losses for the Fund. Such transactions can have the potential for unlimited losses. Such risk is heightened in the case of short swap transactions. Swaps can involve greater risks than direct investment in the underlying
asset, because swaps may be leveraged (creating leverage risk) and are subject to counterparty risk, hedging risk, pricing risk and liquidity risk.
Columbia Income Builder Fund
Derivatives Risk/Credit Default Swap Indexes Risk.
A credit default swap (CDS) is an agreement between two parties in which one party agrees to make one or more payments to the second party, while the second party assumes the risk of certain defaults, generally a
failure to pay on a referenced debt obligation or the bankruptcy of the obligation’s issuer. As such, a CDS generally enables an investor to buy or sell protection against a credit event. A credit default index (CDX) is an index of CDS. Credit
default swap indexes (CDSX) are swap agreements that are intended to track the performance of a CDX. CDSX allow an investor, such as the Fund, to manage credit risk or to take a position on a basket of debt obligations more efficiently than
transacting in single name CDS. CDSX are subject to the risk that the Fund’s counterparty will default on its obligations. If the counterparty under a CDSX defaults on its obligation to make payments thereunder, the Fund may lose such payments
altogether, or collect only a portion thereof, which collection could involve costs or delays. Also, the Fund’s return from investment in CDSX may not match the return of the referenced index. Further, investment in CDSX could result in losses
if the referenced index does not perform as expected. Unexpected changes in the composition of the index may also affect performance of CDSX.
Derivatives Risk/Credit Default Swaps Risk.
A credit default swap enables an investor to buy or sell protection against a credit event, such as an issuer’s failure to make timely payments of interest or principal, bankruptcy or restructuring. A credit
default swap may be embedded within a structured note or other derivative instrument. Swaps can involve greater risks than direct investment in the underlying securities, because swaps,
among other factors,
may be leveraged (creating leverage risk, the risk that losses from the derivative instrument may be greater than the amount invested in the derivative instrument) and subject the Fund to counterparty risk, hedging risk, pricing risk and liquidity
risk. If the Fund is selling credit protection, there is a risk that a credit event will occur and that the Fund will have to pay the counterparty. If the Fund is buying credit protection, there is a risk that no credit event will occur and the Fund
will receive no benefit for the premium paid.
Derivatives Risk/Forward Foreign Currency Contracts Risk.
These instruments are a type of derivative contract whereby the Fund may agree to buy or sell a country’s or region’s currency at a specific price on a specific date in the future. These instruments may fall
in value (sometimes dramatically) due to foreign market downswings or foreign currency value fluctuations, subjecting the Fund to foreign currency risk. Investment in these instruments also subjects the Fund to counterparty risk. The Fund’s
strategy of investing in these instruments may not be successful
and the Fund may experience significant losses as a result.
Derivatives Risk/Forward Interest Rate Agreements Risk.
Under forward interest rate agreements, the buyer locks in an interest rate at a future settlement date. If the interest rate on the settlement date exceeds the lock rate, the buyer pays the seller the difference
between the two rates (based on the notional value of the agreement). If the lock rate exceeds the interest rate on the settlement date, the seller pays the buyer the difference between the two rates (based on the notional value of the agreement).
The Fund may act as a buyer or a seller. These transactions involve risks, including counterparty risk, hedging risk and interest rate risk.
Derivatives Risk/Futures Contracts Risk.
The loss that may be incurred in entering into futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets are highly volatile and the use of futures may increase the
volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract may result in substantial losses for the Fund. Futures
contracts may be illiquid. Furthermore, exchanges may limit fluctuations in futures contract prices during a trading session by imposing a maximum permissible price movement on each futures contract. The Fund may be disadvantaged if it is prohibited
from executing a trade outside the daily permissible price movement. Futures contracts executed on foreign exchanges may not provide the same protection as U.S. exchanges. These transactions involve additional risks, including counterparty risk,
hedging risk and pricing risk.
Derivatives
Risk/Inflation Rate Swaps Risk.
An inflation rate swap is a derivative instrument used to transfer inflation risk from one party to another through an exchange of cash flows. In an inflation rate swap, one party
pays a fixed rate on a notional principal amount, while the other party pays a floating rate linked to an inflation index, such as the Consumer Price Index (CPI). Investments in inflation rate swaps subject the Fund (and, therefore, shareholders) to
risks, including hedging risk (the risk that a hedging strategy may not eliminate the risk that it is intended to offset, and may offset gains), counterparty risk (the risk that the counterparty to the instrument will not
Columbia Income Builder Fund
perform or be able to perform in accordance
with the terms of the instrument), and inflation risk (the risk that inflation rates may change drastically as a result of unexpected shifts in the global economy), each of which may result in significant losses for the Fund.
Derivatives Risk/Interest Rate Swaps Risk.
Interest rate swaps can be based on various measures of interest rates, including the London Interbank Offered Rate (commonly known as LIBOR), swap rates, treasury rates and other foreign interest rates. A swap
agreement can increase or decrease the volatility of the Fund's investments and its NAV. The value of swaps, like many other derivatives, may move in unexpected ways and may result in losses for the Fund. Swaps can involve greater risks than direct
investment in securities, because swaps may be leveraged, and are, among other factors, subject to counterparty risk (the risk that the counterparty to the instrument will not perform or be able to perform in accordance with the terms of the
instrument), hedging and correlation risk (the risk that a hedging strategy may not eliminate the risk that it is intended to offset, and may offset gains, including because of a lack of correlation between the swaps and the portfolio of bonds that
the swaps are designed to hedge or replace), pricing risk (swaps may be difficult to value), liquidity risk (it may not be possible to liquidate a swap position at an advantageous time or price) and interest rate risk (the risk of losses
attributable to changes in interest rates), each of which may result in significant losses for the Fund.
Derivatives Risk/Inverse Floaters Risk.
Inverse floaters (or inverse variable or floating rate securities) are a type of derivative, long-term fixed income obligation with a variable or floating interest rate that moves in the opposite direction of short-term
interest rates. While inverse floaters tend to provide more income than similar term and credit quality fixed-rate bonds, they also exhibit greater volatility in price movement. There is a risk that the current interest rate on variable and floating
rate securities may not accurately reflect current market interest rates or adequately compensate the holder for the current creditworthiness of the issuer. Some variable or floating rate securities are structured with liquidity features and some
may include market-dependent liquidity features that may present greater liquidity risk. Other risks associated with transactions include interest rate risk, credit risk and market risk.
Derivatives Risk/Options Risk.
The use of options is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If the Fund sells a put option, there is a risk that the Fund may be
required to buy the underlying asset at a disadvantageous price. If the Fund sells a call option, there is a risk that the Fund may be required to sell the underlying asset at a disadvantageous price, and if the call option sold is not covered (for
example, by owning the underlying asset), the Fund's losses are potentially unlimited. These transactions involve other risks, including counterparty risk and hedging risk.
Derivatives Risk/Portfolio Swaps and Total
Return Swaps Risk.
The use of portfolio swaps or total return swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities
transactions. Portfolio swaps and equity swaps could result in losses if the underlying asset or reference does not perform as anticipated. The value of swaps, like many other derivatives, may move in unexpected ways and may result in losses for the
Fund. Such transactions can have the potential for unlimited losses. Such risk is heightened in the case of short swap transactions. Swaps can involve greater risks than direct investment in the underlying asset, because swaps, among other factors,
may be leveraged (creating leverage risk) and are subject to counterparty risk, hedging risk, pricing risk and liquidity risk.
Derivatives Risk/Structured Investments Risk.
Structured instruments include debt instruments that are collateralized by the underlying cash flows of a pool of financial assets or receivables.
Structured investments may be
less liquid than other debt securities (or illiquid), and the price of structured investments may be more volatile. In some cases, depending on its terms, a structured investment may provide that the principal and/or interest payments may be
adjusted below zero. Structured investments also may involve significant credit risk and risk of default by the counterparty. The Fund’s use of structured instruments may not work as intended. If structured investments are used to reduce the
duration of the Fund’s portfolio, this may limit the Fund’s return when having a longer duration would be beneficial (for instance, when interest rates decline).
Derivatives Risk/Swaps Risk.
The use of swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. Swaps could result in Fund losses if the
underlying asset or reference does not perform as anticipated. The value of swaps, like many other
Columbia Income Builder Fund
derivatives, may move in unexpected ways and
may result in losses for the Fund. Such transactions can have the potential for unlimited losses. Such risk is heightened in the case of short swap transactions involving short exposures. Swaps can involve greater risks than direct investment in the
underlying asset, because swaps, among other factors, may be leveraged (creating leverage risk) and are subject to counterparty risk, hedging risk, pricing risk and liquidity risk.
Derivatives Risk/Total Return Swaps Risk.
In a total return swap transaction, one party agrees to pay the other party an amount equal to the total return of a defined underlying asset (such as an equity security or basket of such securities) or a non-asset
reference (such as an index) during a specified period of time. In return, the other party would make periodic payments based on a fixed or variable interest rate or on the total return from a different underlying asset or non-asset reference. Total
return swaps could result in Fund losses if the underlying asset or reference does not perform as anticipated. Such transactions can have the potential for unlimited losses. Swaps can involve greater risks than direct investment in securities,
because swaps,
among other factors, may be leveraged (creating leverage risk), and are subject to counterparty risk, pricing risk and liquidity risk, which may result in significant Fund losses.
Derivatives Risk/Warrants
Risk.
Warrants are securities giving the holder the right,
but not the obligation, to buy the stock of an issuer at a given price
(generally higher than the value of the stock at the time of issuance)
during a specified period or perpetually. In addition,
the value of a warrant does not
necessarily
change with the value of the underlying securities, and a warrant ceases to have value if it is not exercised prior to its expiration date. Warrants may be subject to the risk that the securities
could lose value,
as well being subject to
liquidity risk.
Distressed Securities Risk.
The Fund may purchase distressed securities of business enterprises involved in workouts, liquidations, reorganizations, bankruptcies and similar situations. Since there is typically substantial uncertainty concerning the outcome of transactions
involving business enterprises in these situations, there is a high degree of risk of loss, including loss of the entire investment.
Emerging Market Securities Risk.
Securities issued by foreign governments or companies in emerging market countries, such as
China, Russia and certain countries in Eastern Europe, the Middle East, Asia, Latin
America or Africa, are more likely to have greater exposure to the risks of investing in foreign securities that are described in Foreign Securities Risk. In addition, emerging market countries are more likely to experience instability resulting,
for example, from rapid changes or developments in social, political,
economic or other conditions. Their economies are usually less mature and their securities markets are typically less developed with more
limited trading activity (i.e., lower trading volumes and less liquidity) than more developed countries. Emerging market securities tend to be more volatile than securities in more developed markets. Many emerging market countries are heavily
dependent on international trade and have fewer trading partners, which makes them more sensitive to world commodity prices and economic downturns in other countries, and some have a higher risk of currency devaluations.
Energy and Natural Resources Industry Risk.
The Fund is subject to the risk that the securities of the issuers engaged in the energy and natural resources industries will underperform other industries or the market as a whole. To the extent that the Fund
invests in issuers conducting business in these or similar industries, the Fund is subject to a greater extent to legislative or regulatory changes, adverse market conditions and/or increased competition affecting those industries. The values of
natural resources are affected by numerous factors including, among other factors, events occurring in nature and local and international politics. In addition, rising interest rates and high inflation may affect the demand for certain natural
resources and, therefore, the price of related investments. Prices of precious metals may fluctuate sharply.
Event-Driven Trading Risk.
The Fund may seek to profit from the occurrence of specific corporate or other events. A delay in the timing of these events, or the failure of these events to occur at all, may have a significant negative effect on the
Fund’s performance.
Exchange-Traded
Fund (ETF) Risk.
ETFs are subject to, among other risks, tracking risk and passive and, in some cases, active investment risk. In addition, shareholders bear both their proportionate share of the Fund’s
expenses and similar expenses incurred through ownership of the ETF.
Focused Portfolio Risk.
Because the Fund may invest in a limited number of companies, the Fund as a whole is subject to greater risk of loss if any of those securities decline in price.
Columbia Income Builder Fund
Foreign Currency Risk.
The
performance of the Fund may be materially affected positively or negatively by foreign currency strength or weakness relative to the U.S. dollar, particularly if the Fund invests a significant percentage of its assets in foreign securities or other
assets denominated in currencies other than the U.S. dollar.
Foreign Currency-related Tax Risk.
The Internal Revenue Service might issue regulations treating gains from some of the Fund’s foreign currency-denominated positions as not “qualifying income” and there is a remote possibility that such
regulations might be applied retroactively, in which case, the Fund might not qualify as a regulated investment company for one or more years. In the event the Treasury Department issues such regulations, the Fund’s Board may authorize a
significant change in investment strategy or the Fund’s liquidation.
Foreign Securities Risk.
Investments in or exposure to foreign securities involve certain risks not associated with investments in or exposure to securities of U.S. companies. Foreign securities subject the Fund to the risks associated with
investing in the particular country of an issuer, including the political, regulatory, economic, social, diplomatic and other conditions or events occurring in the country or region, as well as risks associated with less developed custody and
settlement practices. Foreign securities may be more volatile and less liquid than securities of U.S. companies, and are subject to the risks associated with potential imposition of economic and other sanctions against a particular foreign country,
its nationals or industries or businesses within the country. The performance of the Fund may be negatively impacted by fluctuations in a foreign currency’s strength or weakness relative to the U.S. dollar, particularly
to the extent
the Fund invests a significant percentage of its assets in foreign securities or other assets denominated in currencies other than the U.S. dollar.
Forward Commitments on Mortgage-Backed Securities (including
Dollar Rolls) Risk.
When purchasing mortgage-backed securities in the “to be announced” (TBA) market
(MBS TBAs), the seller agrees to deliver mortgage-backed
securities for an agreed upon price on an agreed upon date, but may make no guarantee as to the specific securities to be delivered. In lieu of taking delivery of mortgage-backed securities, the Fund could enter into dollar rolls, which 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). MBS TBAs and dollar rolls are subject to counterparty risk (the risk that the counterparty to
the instrument will not perform or be able to perform in accordance with the terms of the instrument).
Frequent Trading Risk.
The portfolio managers may actively and frequently trade investments in the Fund's portfolio to carry out its investment strategies. Frequent trading of investments increases the possibility that the Fund, as relevant,
will realize taxable capital gains (including short-term capital gains, which are generally taxable to shareholders 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. The trading costs and tax effects associated with portfolio turnover may adversely affect the Fund’s performance.
Frontier Market Risk.
Frontier market countries generally have smaller economies and even less developed capital markets than traditional emerging market countries (which themselves have increased investment risk relative to more
developed market countries) and, as a result, the Fund’s exposure to the risks associated with investing in emerging market countries are magnified when the Fund invests in frontier market countries. Increased risks include: the
potential for extreme price volatility and illiquidity in frontier market countries; government ownership or control of parts of the private sector and of certain companies; trade barriers, exchange controls, managed adjustments in relative currency
values and other protectionist and similar measures imposed or negotiated by the countries with which frontier market countries trade; and the relatively new and unsettled securities laws in many frontier market countries.
Geographic Concentration Risk.
The Fund may be particularly susceptible to economic, political, regulatory or other events or conditions affecting issuers and countries within the specific geographic regions in which the Fund invests. The Fund’s NAV may be more volatile
than the NAV of a more geographically diversified fund.
Columbia Income Builder Fund
Geographic Concentration Risk/Asia Pacific
Region Risk.
Many of the countries in the Asia Pacific region are considered underdeveloped or developing, including from a political, economic and/or social perspective, and may have relatively unstable governments
and economies based on limited business, industries and/or natural resources or commodities. Events in any one country within the region may impact other countries in the region or the region as a whole. As a result, events in the region will
generally have a greater effect on the Fund than if the Fund were more geographically diversified. This could result in increased volatility in the value of the Fund’s investments and losses for the Fund. Also, securities of some companies in
the region can be less liquid than U.S. or other foreign securities, potentially making it difficult for the Fund to sell such securities at a desirable time and price.
Geographic Concentration Risk/Europe Risk.
The Fund may be particularly susceptible to economic, political, regulatory or other events or conditions affecting issuers and countries in Europe. Currency devaluations could occur in countries that have not yet
experienced currency devaluation to date, or could continue to occur in countries that have already experienced such devaluations. In addition, the private and public sectors’ debt problems of a single European Union (EU) country can pose
significant economic risks to the EU as a whole. As a result, the Fund’s NAV may be more volatile than the NAV of a more geographically diversified fund. If securities of issuers in Europe fall out of favor, it may cause the Fund to
underperform other funds that do not concentrate in this region of the world.
Greater China Regional Risk.
The Greater China region consists of Hong Kong, The People's Republic of China and Taiwan, among other countries, and the Fund's investments in the region are particularly susceptible to risks in that region.
Adverse events in any one country within the region may impact the other countries in the region or Asia as a whole. As a result, adverse events in the region will generally have a greater effect on the Fund than if the Fund were more geographically
diversified, which could result in greater volatility in the Fund’s NAV and losses. Markets in the Greater China region can experience significant volatility due to social, economic, regulatory and political uncertainties.
Growth Securities Risk.
Growth
securities typically trade at a higher multiple of earnings than other types of equity securities. Accordingly, the market values of growth securities may never reach their expected market value and may decline in price. In addition,
growth securities, at times, may not perform as well as value securities or the stock market in general, and may be out of favor with investors for varying periods of time.
Hedging Transactions Risk.
The Fund may invest in securities and utilize financial instruments for a variety of hedging purposes. Hedging transactions may limit the opportunity for gain if the value of the portfolio position should increase.
There can be no assurance that the Fund will engage in hedging transactions at any given time, even under volatile market conditions, or that any hedging transactions the Fund engages in will be successful. Moreover, it may not be possible for the
Fund to enter into a hedging transaction at a price sufficient to protect its assets. The Fund may not anticipate a particular risk so as to hedge against it.
Highly Leveraged Transactions Risk.
The loans or other securities in which the Fund invests may include highly leveraged transactions whereby the borrower assumes large amounts of debt in order to have the financial resources to attempt to achieve its
business objectives. Loans or securities that are part of highly leveraged transactions involve a greater risk (including default and bankruptcy) than other investments.
High-Yield Securities Risk.
Securities rated below investment grade (commonly called “high-yield” or “junk” bonds) and unrated securities of comparable quality expose the Fund to a greater risk of loss of principal and income than a fund that invests
solely or primarily in investment grade securities. In addition, these investments have greater price fluctuations, are less liquid and are more likely to experience a default than higher-rated securities. High-yield securities are considered to be
predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Impairment of Collateral Risk.
The value of collateral, if any, securing a loan can decline, and may be insufficient to meet the borrower’s obligations or difficult or costly to liquidate. In addition, the Fund’s access to collateral may be limited by bankruptcy or
other insolvency laws. Further, certain floating rate and other loans may not be fully collateralized and may decline in value.
Columbia Income Builder Fund
Index Risk.
The
Fund's value will generally decline when the performance of its targeted index declines. In addition, because the Fund may not hold all issues included in its index, it may not always be fully invested. The Fund also bears advisory,
administrative and other expenses and transaction costs in trading securities, which the index does not bear. Accordingly, the Fund's performance will likely fail to match the performance of its targeted index, after taking expenses into account. It
is not possible to invest directly in an index.
Industry Concentration Risk.
Investments that are concentrated in a particular industry will make the Fund’s portfolio value more susceptible to the events or conditions impacting that particular industry. Because the Fund may invest more than
25% of its total assets in money market instruments issued by banks, the value of the Fund may be adversely affected by economic, political or regulatory developments in or that impact the banking industry.
Inflation-Protected Securities Risk.
Inflation-protected debt securities tend to react to changes in real interest rates (i.e., nominal interest rates minus the expected impact of inflation). In general, the price of such securities falls when real
interest rates rise, and rises when real interest rates fall. Interest payments on these securities will vary and may be more volatile than interest paid on ordinary bonds. In periods of deflation, the Fund may have no income at all from such
investments.
Inflation Risk.
Inflation risk is the uncertainty over the future real value (after inflation) of an investment. Inflation rates may change frequently and drastically as a result of various factors, including unexpected shifts in the
domestic or global economy, and the Fund’s investments may not keep pace with inflation, which may result in losses to Fund investors.
Infrastructure-Related Companies Risk.
Because the Fund concentrates its investments in infrastructure-related securities, the Fund has greater exposure to adverse economic, regulatory, political, legal, and other conditions or events affecting the issuers
of such securities. Additionally, infrastructure-related entities may be subject to regulation by various governmental authorities and may also be affected by governmental regulation of rates charged to customers, service interruption and/or legal
challenges due to environmental, operational or other conditions or events and the imposition of special tariffs and changes in tax laws, regulatory policies and accounting standards.
Interest Rate Risk.
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of
debt securities 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 will generally affect the value of the Fund's shares. In general, the longer the maturity or
duration of a debt security, the greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest
rates may negatively impact the Fund’s performance. Actions by governments and central banking authorities can result in increases
in interest rates. Such actions may negatively affect the value of
fixed-income securities held by the Fund, resulting in a negative impact on the Fund's performance and NAV. Securities with floating coupon rates are typically less sensitive to interest rate changes, but these securities may decline in value if
their coupon rates do not rise as much as,
or keep pace with,
yields on such types of securities. Because rates on certain floating rate loans and other debt
securities reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause fluctuations in the Fund’s NAV.
Investing in Other Funds Risk.
The Fund’s investment in other funds (affiliated and/or unaffiliated funds, including exchange-traded funds (ETFs)) subjects the Fund to the investment performance (positive or negative) and risks of the underlying funds in direct proportion
to the Fund’s investment therein. In addition, investments in ETFs have unique characteristics, including, but not limited to, the expense structure and additional expenses associated with investing in ETFs. The performance of the underlying
funds could be adversely affected if other investors in the same underlying funds make relatively large investments or redemptions in such underlying funds. The Fund, and its shareholders, indirectly bear a portion of the expenses of any funds in
which the Fund invests. Because the expenses and costs of a fund are shared by its investors, redemptions by other investors in the underlying funds could result in decreased economies of scale and increased operating expenses for such fund. The
Investment Manager may have potential conflicts of interest in selecting affiliated underlying funds for investment by the Fund because the fees paid to it by some underlying funds are higher than the fees paid by other underlying funds, as well as
a potential conflict in selecting affiliated funds over unaffiliated funds. Also, to the extent that the Fund is
Columbia Income Builder Fund
constrained/restricted from investing (or
investing further) in a particular underlying fund for one or more reasons (e.g., underlying fund capacity constraints or regulatory restrictions) or if the Fund chooses to sell its investment in an underlying fund because of poor investment
performance or for other reasons, the Fund may have to invest in another underlying fund(s), including less desirable funds – from a strategy or investment performance standpoint – which could have a negative impact on Fund performance.
In addition, Fund performance could be negatively impacted if an appropriate alternate underlying fund(s) does not present itself timely or at all.
Investing in Wholly-Owned Subsidiary Risk.
By investing in a Subsidiary, the Fund is indirectly exposed to the risks associated with the Subsidiary’s investments. The Fund’s Principal Risks
may also apply to a
Subsidiary in which the Fund invests (which are described in this prospectus). There can be no assurance that the investment objective of a Subsidiary will be achieved. Changes in the laws of the United States and/or the Cayman Islands, under which
the Fund and any Subsidiary in which it invests, respectively, are organized, could result in the inability of the Fund and/or the Subsidiary to operate as described in this prospectus and the Fund’s SAI and could adversely affect the Fund and
its shareholders.
Issuer Risk.
An issuer in which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may
be caused by poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or
factors.
Leverage Risk.
Leverage occurs when the Fund increases its assets available for investment using borrowings, short sales, derivatives, or similar instruments or techniques. If the Fund uses leverage, through purchasing particular
instruments such as derivatives,
the Fund has the risk of capital losses that exceed the net assets of the Fund. Because short sales involve borrowing securities and then selling them, the Fund’s short
sales effectively leverage the Fund’s assets. The Fund's assets that are used as collateral to secure the Fund's obligations to return the securities sold short may decrease in value while the short positions are outstanding, which may force
the Fund to use its other assets to increase the collateral. Leverage can create an interest expense that may lower the Fund's overall returns. Leverage presents the opportunity for increased net income and capital gains, but may also exaggerate the
Fund’s volatility and risk of loss. There can be no guarantee that a leveraging strategy will be successful.
Liquidity Risk.
Liquidity risk
is the risk associated with a lack of marketability of investments which may make it difficult to sell the investments at a desirable time or price. Decreases in the number of financial institutions, including banks and broker-dealers,
willing to make markets (matching up sellers and buyers) in the Fund’s investments or in their capacity or willingness to trade such investments may increase the Fund’s exposure to this risk. As a result,
the Fund, when seeking to sell its portfolio investments, could find that selling is more difficult than anticipated, especially during times of higher market volatility. Market participants attempting to sell the same or similar instrument at the
same time as the Fund could exacerbate the Fund’s exposure to liquidity risk. The Fund may have to accept a lower selling price for the holding, sell other investments that it might otherwise prefer to hold, or forego another, more appealing
investment opportunity. Certain securities that were liquid when purchased by the Fund may later become illiquid, particularly in times of overall economic distress. Changing regulatory, market or other conditions or environments (for example, the
interest rate or credit environments) may also adversely affect the liquidity and the price of the Fund's investments. Certain types of investments, such as structured notes and non-investment grade fixed income securities, as an example, may be
especially subject to liquidity risk. Floating rate loans generally are subject to legal or contractual restrictions on resale, may trade infrequently, and their value may be impaired when the Fund needs to liquidate such loans. Loans or other
assets may trade only in the over-the-counter market rather than on an organized exchange and may be more difficult to purchase or sell at a fair price, which may have a negative impact on the Fund’s performance. Judgement also plays a larger
role in valuing illiquid investments as compared to valuing liquid investments. Price volatility may be higher for illiquid or less liquid investments as a result of, for example, the relatively less frequent pricing of such securities (as compared
to liquid or more liquid investments). Generally, the less liquid the market at the time the Fund sells a portfolio investment,
Columbia Income Builder Fund
the greater the risk of loss or decline of
value to the Fund. Liquidity of the market and other factors can lead to an increase in Fund redemptions, which may negatively impact Fund performance and NAV, including, for example, if the Fund is forced to sell securities in a down market.
Listed Private Equity Fund Investment Risk.
Private equity funds include financial institutions or vehicles whose principal business is to invest in and lend capital to privately held companies. The Fund is subject to the underlying risks that affect private
equity funds in which it invests, which may include increased liquidity risk, valuation risk, sector risk and credit risk. Limited or incomplete information about the companies in which private equity funds invest, and relatively concentrated
investment portfolios of private equity funds, may expose the Fund to greater volatility and risk of loss. Fund investment in private equity funds subjects Fund shareholders indirectly to the fees and expenses incurred by private equity
funds.
Macro Strategy Risk.
The profitability of any macro program depends primarily on the ability of its manager to predict derivative contract price movements to implement investment ideas regarding macroeconomic trends. Price movements for
commodity interests are influenced by, among other things: changes in interest rates; governmental, agricultural, trade, fiscal, monetary and exchange control programs and policies; weather and climate conditions; natural disasters, such as
hurricanes; changing supply and demand relationships; changes in balances of payments and trade; U.S. and international rates of inflation and deflation; currency devaluations and revaluations; U.S. and international political and economic events;
and changes in philosophies and emotions of market participants. The manager’s trading methods may not take all of these factors into account.
Market Risk.
Market risk
refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. An investment in the Fund could lose money over short or long periods.
Although equity securities generally tend to have greater price volatility than debt securities, under certain market conditions, debt securities may have comparable or greater price volatility.
Master Limited Partnership Risk.
Investments in securities (units) of master limited partnerships involve risks that differ from an investment in common stock. Investors have more limited rights to vote on matters affecting the partnership. Investments
are also subject to certain tax risks and conflicts of interest may exist between common unit holders, subordinated unit holders and the general partner of a master limited partnership.
Mid-Cap Company Securities Risk.
Investments in mid-capitalization companies (mid-cap companies) often involve greater risks than investments in larger, more established companies (larger companies) because mid-cap companies tend to have less
predictable earnings and may lack the management experience, financial resources, product diversification and competitive strengths of larger companies, and may be less liquid than the securities of larger companies.
Model and Technology Risk.
Investment strategies or programs that are fundamentally dependent on proprietary or licensed technology, such as, among other things, hardware, software, model-based strategies, data gathering systems, order execution,
and trade allocation systems, and/or risk management systems may not be successful on an ongoing basis or could contain errors, omissions, imperfections, or malfunctions. Any such errors, imperfections or limitations in a model could affect the
ability of the manager to implement strategies. Despite testing, monitoring and independent safeguards, these errors may result in, among other things, execution and allocation failures and failures to properly gather and organize data – all
of which may have a negative effect on the Fund.
Money Market Fund Investment Risk.
An investment in a money market fund is not a bank deposit and is not insured or guaranteed by any bank, the FDIC or any other government agency. Although money market funds seek to preserve the value of investments at
$1.00 per share, it is possible for the Fund to lose money by investing in money market funds. In addition to the fees and expenses that the Fund directly bears, the Fund indirectly bears the fees and expenses of any money market funds in which it
invests, including affiliated money market funds. The Fund will also be exposed to the investment risks of the money market fund. To the extent the Fund invests in instruments such as derivatives, the Fund may hold investments, which may be
significant, in money market fund shares to cover its obligations resulting from its investments in derivatives. Money market funds and the securities they invest in are subject to comprehensive regulations. The enactment of new legislation or
regulations, as well as changes in interpretation and enforcement of current laws, may affect the manner of operation, performance and/or yield of money market funds.
Columbia Income Builder Fund
Money Market Fund Risk.
An
investment in the Fund is not a bank deposit, and is not insured or guaranteed by the Investment Manager, the Investment Manager's parent, the FDIC or any other government agency, and it is possible to lose money by investing in the Fund. The Fund
seeks to maintain a constant net asset value of $1.00 per share, but the net asset values of money market fund shares can fall, and in infrequent cases in the past have fallen, below $1.00 per share, potentially causing shareholders who redeem their
shares at such net asset values to lose money from their original investment. If the net asset value of Fund shares were to fall below $1.00 per share, there is no guarantee that the Investment Manager or its affiliates would protect the Fund or
redeeming shareholders against a loss of principal.
At times of (i) significant redemption activity by
shareholders, including, for example, when a single investor or a few large investors make a significant redemption of Fund shares, (ii) insufficient levels of cash in the Fund's portfolio to satisfy redemption activity, and (iii) disruption in the
normal operation of the markets in which the Fund buys and sells portfolio securities, the Fund could be forced to sell portfolio securities at unfavorable prices in order to generate sufficient cash to pay redeeming shareholders. Sales of portfolio
securities at such times could result in losses to the Fund and cause the net asset value of Fund shares to fall below $1.00 per share. Additionally, in some cases, the default of a single portfolio security could cause the net asset value of Fund
shares to fall below $1.00 per share. In addition, the Fund may suspend redemptions or the payment of redemption proceeds when permitted by applicable regulations.
Mortgage- and Other Asset-Backed
Securities Risk.
The value of any mortgage-backed and other asset-backed securities held by the Fund 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 or other assets; 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. Payment of principal and interest on some mortgage-backed securities (but not the market value of the securities themselves) may be guaranteed by the full faith and credit of a particular
U.S. Government agency, authority, enterprise or instrumentality, and some, but not all, are also insured or guaranteed by the U.S. Government. 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 entail greater risk than obligations guaranteed by the U.S. Government. Mortgage- and other asset-backed securities are subject to
prepayment risk, which is the possibility that the underlying mortgage or other asset 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. Rising or high interest rates tend to extend the duration of mortgage- and other asset-backed securities, making their prices more volatile and more sensitive to changes in interest rates.
Multi-Adviser Risk.
The Fund
has multiple advisory firms that each manage a portion of the Fund’s net assets on a daily basis. Each adviser makes investment decisions independently from the other adviser(s). It is possible that the security selection process of one
adviser will not complement or may conflict or even contradict that of the other adviser(s), including making off-setting trades that have no net effect to the Fund, but which may increase Fund expenses. As a result, the Fund's exposure to a given
security, industry, sector or market capitalization could be smaller or larger than if the Fund were managed by a single adviser, which could adversely affect the Fund's performance.
Multi-Strategy Risk.
The multi-strategy approach employed by the Fund involves special risks, which include the risk that investment decisions, at the Fund or the underlying fund level, may conflict with each other; for example, at any
particular time, one manager may be purchasing shares of an issuer whose shares are being sold by another manager. Consequently, the Fund could indirectly incur transaction costs without accomplishing any net investment result. Also, managers may
use proprietary or licensed investment strategies that are based on considerations and factors that are not fully disclosed to the Fund or other investors.
Non-Diversified Fund Risk.
The Fund is non-diversified, which generally means that it will 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 a more diversified fund.
Columbia Income Builder Fund
Opportunistic Investing Risk.
Undervalued securities involve the risk that they may never reach their expected full market value, either because the market fails to recognize the security's intrinsic worth or the expected value was misgauged. Undervalued securities also may
decline in price even though the Investment Manager believes they are already undervalued. Turnaround companies may never improve their fundamentals, may take much longer than expected to improve, or may improve much less than expected. Development
stage companies could fail to develop and deplete their assets, resulting in large percentage losses.
Preferred Stock Risk.
Preferred stock is a type of stock that generally pays dividends at a specified rate and that has preference over common stock in the payment of dividends and the liquidation of assets. Preferred stock does not ordinarily carry voting rights. The
price of a preferred stock is generally determined by earnings, type of products or services, projected growth rates, experience of management, liquidity, and general market conditions of the markets on which the stock trades. The most significant
risks associated with investments in preferred stock include issuer risk, market risk and interest rate risk (
i.e.
, the risk of losses attributable
to changes in interest rates).
Prepayment and Extension Risk.
Prepayment and extension risk is the risk that a bond or other security or investment might,
in the case of prepayment risk, be called or otherwise converted, prepaid or redeemed
before maturity and, in the case of extension risk, the investment might not be called as expected. In the case of prepayment risk, if the investment is converted, prepaid or redeemed before maturity, the portfolio managers may not be able to invest
the proceeds in other investments providing as high a level of income, resulting in a reduced yield to the Fund. In the case of mortgage- or asset-backed securities, as interest rates decrease or spreads narrow, the likelihood of prepayment
increases. Conversely, extension risk is the risk that an unexpected rise in interest rates will extend the life of a mortgage- or asset-backed security beyond the prepayment time. If the Fund’s investments are locked in at a lower interest
rate for a longer period of time, the portfolio managers may be unable to capitalize on securities with higher interest rates or wider spreads.
Quantitative Model Risk.
Investments selected using quantitative methods may perform differently from the market as a whole. There can be no assurance that these methodologies will enable the Fund to achieve its objective.
Real Estate-Related Investment Risk.
Investments in real estate investment trusts (REITs) and in securities of other companies (wherever organized) principally engaged in the real estate industry subject the Fund to, among other things, risks similar to
those of direct investments in real estate and the real estate industry in general. These include risks related to general and local economic conditions, possible lack of availability of financing and changes in interest rates or property values.
REITs are entities that either own properties or make construction or mortgage loans, and also may include operating or finance companies. The value of interests in a REIT may be affected by, among other factors, changes in the value of the
underlying properties owned by the REIT, changes in the prospect for earnings and/or cash flow growth of the REIT itself, defaults by borrowers or tenants, market saturation, decreases in market rates for rents, and other economic, political, or
regulatory matters affecting the real estate industry, including REITs. REITs and similar non-U.S. entities depend upon specialized management skills, may have limited financial resources, may have less trading volume in their securities, and may be
subject to more abrupt or erratic price movements than the overall securities markets. REITs are also subject to the risk of failing to qualify for favorable tax treatment under the Internal Revenue Code of 1986, as amended. Some REITs (especially
mortgage REITs) are affected by risks similar to those associated with investments in debt securities including changes in interest rates and the quality of credit extended.
Redemption Risk.
The Fund may
need to sell portfolio securities to meet redemption requests. The Fund could experience a loss when selling portfolio securities to meet redemption requests if there is (i) significant redemption activity by shareholders, including, for example,
when a single investor or few large investors make a significant redemption of Fund shares, (ii) a disruption in the normal operation of the markets in which the Fund buys and sells portfolio securities or (iii) the inability of the Fund to sell
portfolio securities because such securities are illiquid. In such events, the Fund could be forced to sell portfolio securities at unfavorable prices in an effort to generate sufficient cash to pay redeeming shareholders. The Fund may suspend
redemptions or the payment of redemption proceeds when permitted by applicable regulations.
Columbia Income Builder Fund
Regulatory Risk — Money Market Funds.
Money market funds and the securities they invest in are subject to comprehensive regulations. The enactment of new legislation or regulations, as well as changes in interpretation and enforcement of current laws, may
affect the manner of operation,
performance and/or yield of money market funds. For example, in July 2014, the SEC adopted amendments to money market regulation designed to address, among other things,
systemic risks associated with money market funds and to enhance transparency for money market fund investors. These rules provide for liquidity fees or redemption gates for non-government money market funds if
portfolio liquidity drops below specified levels and will require institutional prime money market funds to price shares with a floating net asset value. These rule changes may impact the future operations, performance and/or yields of the Columbia
money market funds and other money market funds. Non-governmental money
market funds will be required to restrict beneficial owners to natural persons if they want to maintain a stable net asset value.
Because government money market funds will not be required to float their net asset value or impose liquidity fees or redemption gates, money market funds may decide to change investment strategies to qualify as
government money market funds. Money market funds are required to comply with the liquidity fees, redemption gates and floating net asset value rules by October 2016 and most of the other rules by April 2016.
Reinvestment Risk.
Reinvestment risk is the risk that the Fund will not be able to reinvest income or principal at the same return it is currently earning.
Repurchase Agreements Risk.
Repurchase agreements are agreements in which the seller of a security to the Fund agrees to repurchase that security from the Fund 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 Fund's income and the value of your investment in the Fund to decline.
Reverse Repurchase Agreements Risk.
Reverse repurchase agreements are agreements in which a Fund sells a security to a counterparty, such as a bank or broker-dealer, in return for cash and agrees to repurchase that security at a mutually agreed upon price
and time. Reverse repurchase agreements carry the risk that the market value of the security sold by the Fund may decline below the price at which the Fund must repurchase the security. Reverse repurchase agreements also may be viewed as a form of
borrowing, and borrowed assets used for investment creates leverage risk. Leverage can create an interest expense that may lower the Fund's overall returns. Leverage presents the opportunity for increased net income and capital gains, but may also
exaggerate the Fund’s volatility and risk of loss. There can be no guarantee that this strategy will be successful.
Rule 144A Securities Risk.
The
Fund may invest significantly in privately placed “Rule 144A” securities that are determined to be liquid in accordance with procedures adopted by the Fund’s Board. However, an insufficient number of qualified institutional buyers
interested in purchasing Rule 144A securities at a particular time could affect adversely the marketability of such securities and the Fund might be unable to dispose of such securities promptly or at reasonable prices. Accordingly, even if
determined to be liquid, the Fund’s holdings of Rule 144A securities may increase the level of Fund illiquidity if eligible buyers become uninterested in buying them at a particular time. Issuers of Rule 144A securities are required to furnish
information to potential investors upon request. However, the required disclosure is much less extensive than that required of public companies and is not publicly available since it is not filed with the SEC. Further, issuers of Rule 144A
securities can require recipients of the information (such as the Fund) to agree contractually to keep the information confidential, which could also adversely affect the Fund’s ability to dispose of the security.
Sector Risk.
At times, the
Fund may have a significant portion of its assets invested in securities of companies conducting business in a related group of industries within an economic sector. Companies in the same economic sector may be similarly affected by
economic, regulatory, political or market events or conditions, which may make the Fund more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly. Generally,
the more broadly the Fund invests, the more it spreads risk and potentially reduces the risks of loss and volatility.
The Fund may be more susceptible to the particular risks that
may affect companies in the consumer discretionary sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the consumer discretionary sector are subject to certain risks, including fluctuations in the
performance of the overall domestic and
Columbia Income Builder Fund
international economy, interest rate changes, increased competition and
consumer confidence. Performance of such companies may be affected by factors including reduced disposable household income, reduced consumer spending, changing demographics and consumer tastes.
The Fund may be more susceptible to the particular risks that
may affect companies in the financial services sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the financial services sector are subject to certain risks, including the risk of regulatory change,
decreased liquidity in credit markets and unstable interest rates. Such companies may have concentrated portfolios, such as a high level of loans to real estate developers, which makes them vulnerable to economic conditions that affect that
industry. Performance of such companies may be affected by competitive pressures and exposure to investments or agreements that, under certain circumstances, may lead to losses (e.g., subprime loans). Companies in the financial services sector are
subject to extensive governmental regulation that may limit the amount and types of loans and other financial commitments they can make, and interest rates and fees that they may charge. In addition, profitability of such companies is largely
dependent upon the availability and the cost of capital.
The Fund may be more susceptible to the particular risks that
may affect companies in the health care sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the health care sector are subject to certain risks, including restrictions on government reimbursement for
medical expenses, government approval of medical products and services, competitive pricing pressures, and the rising cost of medical products and services (especially for companies dependent upon a relatively limited number of products or
services). Performance of such companies may be affected by factors including, government regulation, obtaining and protecting patents (or the failure to do so), product liability and other similar litigation as well as product obsolescence.
The Fund may be more susceptible to the particular risks that
may affect companies in the industrials sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the industrials sector are subject to certain risks, including changes in supply and demand for their specific
product or service and for industrial sector products in general, including decline in demand for such products due to rapid technological developments and frequent new product introduction. Performance of such companies may be affected by factors
including government regulation, world events and economic conditions and risks for environmental damage and product liability claims.
The Fund may be more susceptible to the particular risks that
may affect companies in the information technology sector, as well as other technology-related sectors (collectively, the technology sectors) than if it were invested in a wider variety of companies in unrelated sectors. Companies in the technology
sectors are subject to certain risks, including the risk that new services, equipment or technologies will not be accepted by consumers and businesses or will become rapidly obsolete. Performance of such companies may be affected by factors
including obtaining and protecting patents (or the failure to do so) and significant competitive pressures, including aggressive pricing of their products or services, new market entrants, competition for market share and short product cycles due to
an accelerated rate of technological developments. Such competitive pressures may lead to limited earnings and/or falling profit margins. As a result, the value of their securities may fall or fail to rise. In addition, many technology sector
companies have limited operating histories and prices of these companies’ securities historically have been more volatile than other securities, especially over the short term.
Select Portfolio Risk.
Because
the Fund may invest in a limited number of companies, the Fund as a whole is subject to greater risk of loss if any of its portfolio securities decline in price. In addition, the Fund’s holdings and weightings will diverge significantly from
its primary benchmark’s holdings and weightings and the Fund may therefore experience greater risk and volatility relative to the benchmark. Because the Fund may invest in more than one company concentrated in a similar industry, sector or
geographic region, the Fund may be even more concentrated than the number of companies it may hold would suggest.
Short Positions Risk.
The Fund
may establish short positions which introduce more risk to the Fund than long positions (where the Fund owns the instrument or other asset) because the maximum sustainable loss on an instrument or other asset purchased (held long) is limited to the
amount paid for the instrument or other asset plus the transaction costs, whereas there is no maximum price of the shorted instrument or other asset when purchased in the open market. Therefore, in theory, short positions have unlimited risk. The
Fund’s use of short positions in effect “leverages” the Fund. Leverage potentially exposes the Fund to greater risks of loss due to unanticipated
Columbia Income Builder Fund
market movements, which may magnify losses and increase the volatility of
returns. To the extent the Fund takes a short position in a derivative instrument or other asset, this involves the risk of a potentially unlimited increase in the value of the underlying instrument or other asset.
Small Company Securities Risk.
Investments in small-capitalization companies (small-cap companies) often involve greater risks than investments in larger, more established companies (larger companies) because small-cap companies tend to have less predictable earnings and may lack
the management experience, financial resources, product diversification and competitive strengths of larger companies, and securities of small-cap companies may be less liquid and more volatile than the securities of larger companies.
Small- and Mid-Cap Company Securities Risk.
Investments in small- and mid-capitalization companies (small- and mid-cap companies) often involve greater risks than investments in larger, more established companies (larger companies) because small- and mid-cap
companies tend to have less predictable earnings and may lack the management experience, financial resources, product diversification and competitive strengths of larger companies. Securities of small- and mid-cap companies may be less liquid and
more volatile than the securities of larger companies.
Sovereign Debt Risk.
A
sovereign debtor’s willingness or ability to repay principal and pay interest in a timely manner may be affected by a variety of factors, including its cash flow situation, the extent of its reserves, the availability of sufficient foreign
exchange on the date a payment is due, the relative size of the debt service burden to the economy as a whole, the sovereign debtor’s policy toward international lenders, and the political constraints to which a sovereign debtor may be
subject. Sovereign debt risk is increased for emerging market issuers.
Special Situations Risk.
Securities of companies that are involved in an initial public offering or a major corporate event, such as a business consolidation or restructuring, may be exposed to heightened risk because of the high degree of
uncertainty that can be associated with such events. Securities issued in initial public offerings often are issued by companies that are in the early stages of development, have a history of little or no revenues and may operate at a loss following
the offering. It is possible that there will be no active trading market for the securities after the offering, and that the market price of the securities may be subject to significant and unpredictable fluctuations. Certain “special
situation” investments are investments in securities or other instruments that are determined to be illiquid or lacking a readily ascertainable fair value. Certain special situation investments prevent ownership interests therein from being
withdrawn until the special situation investment, or a portion thereof, is realized or deemed realized, which may negatively impact Fund performance. Investing in special situations may have a magnified effect on the performance of funds with small
amounts of assets.
Stripped
Mortgage-Backed Securities Risk.
Stripped mortgage-backed securities are a type of mortgage-backed security that receive differing proportions of the interest and principal payments from the underlying assets.
Generally, there are two classes of stripped mortgage-backed securities: Interest Only (IO) and Principal Only (PO). IOs entitle the holder to receive distributions consisting of all or a portion of the interest on the underlying pool of mortgage
loans or mortgage-backed securities. POs entitle the holder to receive distributions consisting of all or a portion of the principal of the underlying pool of mortgage loans or mortgage-backed securities. The cash flows and yields on IOs and POs are
extremely sensitive to the rate of principal payments (including prepayments) on the underlying mortgage loans or mortgage-backed securities. A rapid rate of principal payments may adversely affect the yield to maturity of IOs. A slow rate of
principal payments may adversely affect the yield to maturity of POs. If prepayments of principal are greater than anticipated, an investor in IOs may incur substantial losses. If prepayments of principal are slower than anticipated, the yield on a
PO will be affected more severely than would be the case with a traditional mortgage-backed security.
Tax Risk.
The Fund intends to qualify for treatment as a regulated investment company under the Internal Revenue Code of 1986, as amended (the Code). In order to so qualify, the Fund must meet certain requirements regarding the source of its income. Certain
instruments in which the Fund is permitted to invest do not give rise to qualifying income. If the Fund were to fail to limit its income from such investments appropriately, absent a cure the Fund would be unable to qualify for treatment as a
regulated investment company. The tax treatment of certain investments and of the income and gain therefrom under the qualifying income test applicable to regulated investment companies is
Columbia Income Builder Fund
uncertain. An adverse determination or
future guidance by the Internal Revenue Service (the IRS) regarding such investments or the income and gain from such investments might affect the Fund’s ability to qualify for treatment as a regulated investment company, including on a
retroactive basis.
If the Fund were to fail to qualify
as a regulated investment company, or if it were ineligible to or otherwise could not cure such failure, the Fund would be ineligible for the favorable tax treatment afforded to regulated investment companies for one or more years, which would
adversely affect the value of the Fund. Please refer to “Distributions and Taxes” in this prospectus or to “Taxation” in the SAI for additional information about the U.S. federal income tax treatment of the Fund.
Tracking Error Risk.
The Fund will not track its benchmark index perfectly and the Fund may not outperform the index. The tools that the Investment Manager uses to replicate the index are not perfect and the Fund’s performance may be impacted by the size of the
Fund’s portfolio, the effectiveness of sampling techniques, transaction costs, management fees and expenses, brokerage commissions and fees, the extent and timing of cash flows in and out of the Fund and changes in the index.
Trade Claims Risk.
The Fund may also purchase trade claims against companies, including companies in bankruptcy or reorganization proceedings, which include claims of suppliers for goods delivered and not paid, claims for unpaid services
rendered, claims for contract rejection damages and claims related to litigation. An investment in trade claims is very speculative and carries a high degree of risk. Trade claims may be illiquid instruments that generally do not pay interest and
there can be no guarantee that the debtor will ever be able to satisfy the obligation on the trade claim. Trade claims are typically unsecured and may be subordinated to other unsecured obligations of a debtor, and generally are subject to defenses
of the debtor with respect to the underlying transaction giving rise to the trade claim. The markets in trade claims are not regulated by U.S. federal securities laws or the SEC.
U.S. Government Obligations Risk.
While U.S. Treasury obligations are backed by the “full faith and credit” of the U.S. Government, such securities are nonetheless subject to credit risk (i.e., the risk that the U.S. Government may be, or be
perceived to be, unable or unwilling to honor its financial obligations, such as making payments). 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.
Valuation Risk.
The sales price the Fund (or an underlying fund or other investment vehicle) could receive for any particular investment may differ from the Fund’s (or an underlying fund’s or other investment
vehicle’s) valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair value methodology that produces an estimate of the fair value of the security/instrument, which may
prove to be inaccurate. Investors who purchase or redeem Fund shares on days when the Fund is holding securities or other instruments (or holding shares of underlying funds or other investment vehicles that have fair-valued securities or other
instruments in their portfolios) may receive fewer or more shares or lower or higher redemption proceeds than they would have received if the Fund (or underlying fund or other investment vehicle) had not fair-valued the security or instrument or had
used a different valuation methodology.
Value Securities Risk.
Value securities are securities of companies that may have experienced, for example, adverse business, industry or other developments or may be subject to special risks that have caused the securities to be out of favor and, in turn, potentially
undervalued. The market value of a portfolio security may not meet the portfolio manager's perceived value assessment of that security, or may decline in price, even though the portfolio manager(s) believe(s) the securities are already undervalued.
There is also a risk that it may take longer than expected for the value of these investments to rise to the portfolio manager’s perceived value. In addition, value securities, at times, may not perform as well as growth securities or the
stock market in general, and may be out of favor with investors for varying periods of time.
Additional Information About the Fund
Additional information about the Fund’s investments is available in
the Fund’s annual and semiannual 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.
The SAI also provides additional information about the Fund and its policies. The SAI, which has been filed with the SEC, is legally part of this prospectus (incorporated by reference). To obtain these documents free of charge, to request other
information about the Fund and to make shareholder inquiries, please contact the Fund as follows:
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:
columbiathreadneedle.com/us
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, D.C. 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, D.C. 20549-1520.
The investment company registration number of Columbia Funds
Series Trust II, of which the Fund is a series, is 811-21852.
© 2015 Columbia Management Investment
Distributors, Inc.
225 Franklin Street, Boston, MA 02110
800.345.6611
Prospectus
June 1,
2015
Columbia
Floating Rate Fund
Class
|
|
Ticker
Symbol
|
Class
Y Shares
|
|
CFRYX
|
As with all mutual funds, the Securities and Exchange Commission (SEC) has
not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Columbia Floating Rate Fund
|
3
|
|
3
|
|
3
|
|
3
|
|
4
|
|
6
|
|
7
|
|
8
|
|
8
|
|
8
|
|
9
|
|
9
|
|
9
|
|
10
|
|
13
|
|
17
|
|
19
|
|
20
|
|
21
|
|
21
|
|
21
|
|
26
|
|
34
|
|
36
|
|
39
|
|
40
|
|
40
|
|
41
|
|
46
|
|
48
|
|
54
|
|
55
|
|
57
|
|
57
|
|
58
|
Columbia Floating Rate Fund
Investment
Objective
Columbia Floating Rate Fund (the Fund) seeks
to provide shareholders with a high level of current income and, as a secondary objective, preservation of capital.
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
|
Maximum
sales charge (load) imposed on purchases
|
|
None
|
Maximum
deferred sales charge (load) imposed on redemptions
|
|
None
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
Class
Y
|
Management
fees
|
0.57%
|
Distribution
and/or service (12b-1) fees
|
0.00%
|
Other
expenses
(a)
|
0.12%
|
Acquired
fund fees and expenses
|
0.01%
|
Total
annual Fund operating expenses
|
0.70%
|
(a)
|
Other expenses are based on
estimated amounts for the Fund’s current fiscal year.
|
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 the
applicable class of Fund shares 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
Annual Fund Operating Expenses
table above.
|
Although your actual costs may be higher or
lower, based on the assumptions listed above, your costs would be:
|
1
year
|
3
years
|
5
years
|
10
years
|
Class
Y
(whether or not shares are redeemed)
|
$72
|
$224
|
$390
|
$871
|
Portfolio Turnover
The Fund may pay 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 57% of the average value of its portfolio.
Principal Investment Strategies
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) will be invested in floating rate loans and other floating rate debt securities. These debt obligations will generally be rated non-investment grade by
recognized rating agencies (similar to “high yield securities” or “junk bonds”) or, if unrated, determined to be of comparable quality.
Columbia Floating Rate Fund
Summary of the Fund
(continued)
The Fund may invest up to 25% of its net assets in foreign
investments.
The Fund normally invests in senior secured
floating rate loans.
Senior floating rate loans held by
the Fund will generally have final maturities of nine years or less.
To the extent the Fund invests in derivative instruments, the
Fund may count the value of derivative securities with floating rate loan characteristics towards its 80% policy.
The investment manager may also invest in other securities,
including investment grade fixed income debt obligations, non-investment grade fixed income debt obligations, affiliated money market funds and certain money market instruments. For purposes of the 80% policy, money market holdings with a remaining
maturity of less than 60 days will be deemed floating rate assets.
Principal Risks
An investment in the Fund involves risk, including those
described below.
There is no assurance that the Fund will achieve its investment objective and you may lose money
. The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV)
and share price may go down.
Active Management Risk.
Due to its active management, the Fund could underperform its benchmark index and/or other funds with similar investment objectives.
Changing Distribution Level Risk.
The amount of the distributions paid by the Fund will vary and generally depends on the amount of interest income 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 income and/or dividends the Fund receives from its investments decline.
Confidential Information Access Risk.
Portfolio managers may avoid the receipt of material, non-public information (Confidential Information) about the issuers of floating rate loans (including from the issuer itself) being considered for acquisition by the
Fund, or held in the Fund. A decision not to receive Confidential Information may disadvantage the Fund and could adversely affect the Fund’s performance.
Counterparty Risk.
Counterparty risk is the risk that a counterparty to a financial instrument held by the Fund or by a special purpose or structured vehicle invested in by the Fund may become insolvent or otherwise fail to perform its obligations. As a result, the
Fund may obtain no or limited recovery of its investment, and any recovery may be significantly delayed.
Credit Risk.
The value of
loans or fixed-income securities, or other instruments or assets, may decline if the borrower or the issuer thereof defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial obligations,
such as making payments to the Fund when due. Rating agencies assign credit ratings to certain loans and fixed-income securities to indicate their credit risk. Lower quality or unrated securities held by the Fund may present increased credit risk as
compared to higher-rated securities. Non-investment grade loans or fixed-income securities (commonly called “high-yield” or “junk”) may be subject to greater price fluctuations and are more likely to experience a default than
investment grade loans or securities and therefore may expose the Fund to increased credit risk. If the Fund purchases unrated loans or securities, or if the ratings of loans or securities held by the Fund are lowered after purchase, the Fund will
depend on analysis of credit risk more heavily than usual. If the issuer of a loan declares bankruptcy or is declared bankrupt, there may be a delay before the Fund can act on the collateral securing the loan, which may adversely affect the Fund.
Further, there is a risk that a court could take action with respect to a loan that is adverse to the holders of the loan. Such actions may include invalidating the loan, the lien on the collateral, the priority status of the loan, or ordering the
refund of interest previously paid by the borrower. Any such actions by a court could adversely affect the Fund’s performance. A default or expected default of a loan could also make it difficult for the Fund to sell the loan at a price
approximating the value previously placed on it. In order to enforce its rights in the event of a default, bankruptcy or similar situation, the Fund may be required to retain legal or similar counsel. This may increase the Fund’s operating
expenses and adversely affect its NAV. Loans that have a lower priority for repayment in an issuer’s capital structure may involve a higher degree of overall risk than more senior loans of the same borrower.
Columbia Floating Rate Fund
Summary of the Fund
(continued)
Foreign Securities Risk.
Investments in or exposure to foreign securities involve certain risks not associated with investments in or exposure to securities of U.S. companies. Foreign securities subject the Fund to the risks associated with investing in the particular
country of an issuer, including the political, regulatory, economic, social, diplomatic and other conditions or events occurring in the country or region, as well as risks associated with less developed custody and settlement practices. Foreign
securities may be more volatile and less liquid than securities of U.S. companies, and are subject to the risks associated with potential imposition of economic and other sanctions against a particular foreign country, its nationals or industries or
businesses within the country. The performance of the Fund may be negatively impacted by fluctuations in a foreign currency’s strength or weakness relative to the U.S. dollar, particularly to the extent the Fund invests a significant
percentage of its assets in foreign securities or other assets denominated in currencies other than the U.S. dollar.
High-Yield Securities Risk.
Securities rated below investment grade (commonly called “high-yield” or “junk” bonds) and unrated securities of comparable quality expose the Fund to a greater risk of loss of principal and income than a fund that invests
solely or primarily in investment grade securities. In addition, these investments have greater price fluctuations, are less liquid and are more likely to experience a default than higher-rated securities. High-yield securities are considered to be
predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Highly Leveraged Transactions Risk.
The loans or other securities in which the Fund invests may include highly leveraged transactions whereby the borrower assumes large amounts of debt in order to have the financial resources to attempt to achieve its
business objectives. Loans or securities that are part of highly leveraged transactions involve a greater risk (including default and bankruptcy) than other investments.
Impairment of Collateral Risk.
The value of collateral, if any, securing a loan can decline, and may be insufficient to meet the borrower’s obligations or difficult or costly to liquidate. In addition, the Fund’s access to collateral may be limited by bankruptcy or
other insolvency laws. Further, certain floating rate and other loans may not be fully collateralized and may decline in value.
Interest Rate Risk.
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of debt securities 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 will generally affect the value of the Fund's shares. In general, the longer the maturity or duration of a debt security, the
greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest rates may negatively impact the
Fund’s performance. Actions by governments and central banking authorities can result in increases in interest rates. Such actions may negatively affect the value of fixed-income securities held by the Fund, resulting in a negative impact on
the Fund's performance and NAV. Securities with floating coupon rates are typically less sensitive to interest rate changes, but these securities may decline in value if their coupon rates do not rise as much as, or keep pace with, yields on
such types of securities. Because rates on certain floating rate loans and other debt securities reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause fluctuations in
the Fund’s NAV.
Issuer Risk.
An issuer in which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may
be caused by poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or
factors.
Liquidity Risk.
Liquidity risk is the risk associated with a lack of marketability of investments which may make it difficult to sell the investments at a desirable time or price. Decreases in the number of financial institutions,
including banks and broker-dealers, willing to make markets (matching up sellers and buyers) in the Fund’s investments or in their capacity or willingness to trade such investments may increase the Fund’s exposure to this risk. As a
result, the Fund, when seeking to sell its portfolio investments, could find that selling is more difficult than anticipated, especially during times of higher market volatility. Market participants attempting to sell the same or similar instrument
at the same time as the Fund could exacerbate the Fund’s exposure to liquidity risk. The Fund may
Columbia Floating Rate Fund
Summary of the Fund
(continued)
have to accept a lower selling price for the holding, sell other investments
that it might otherwise prefer to hold, or forego another, more appealing investment opportunity. Certain securities that were liquid when purchased by the Fund may later become illiquid, particularly in times of overall economic distress. Changing
regulatory, market or other conditions or environments (for example, the interest rate or credit environments) may also adversely affect the liquidity and the price of the Fund's investments. Certain types of investments, such as structured notes
and non-investment grade fixed income securities, as an example, may be especially subject to liquidity risk. Floating rate loans generally are subject to legal or contractual restrictions on resale, may trade infrequently, and their value may be
impaired when the Fund needs to liquidate such loans. Loans or other assets may trade only in the over-the-counter market rather than on an organized exchange and may be more difficult to purchase or sell at a fair price, which may have a negative
impact on the Fund’s performance. Judgement also plays a larger role in valuing illiquid investments as compared to valuing liquid investments. Price volatility may be higher for illiquid or less liquid investments as a result of, for example,
the relatively less frequent pricing of such securities (as compared to liquid or more liquid investments). Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to
the Fund. Liquidity of the market and other factors can lead to an increase in Fund redemptions, which may negatively impact Fund performance and NAV, including, for example, if the Fund is forced to sell securities in a down market.
Market Risk.
Market risk
refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. Under certain market conditions, debt securities may have greater price
volatility than equity securities. An investment in the Fund could lose money over short or long periods.
Money Market Fund Investment Risk.
An investment in a money market fund is not a bank deposit and is not insured or guaranteed by any bank, the FDIC or any other government agency. Although money market funds seek to preserve the value of investments at
$1.00 per share, it is possible for the Fund to lose money by investing in money market funds. In addition to the fees and expenses that the Fund directly bears, the Fund indirectly bears the fees and expenses of any money market funds in which it
invests, including affiliated money market funds. The Fund will also be exposed to the investment risks of the money market fund. To the extent the Fund invests in instruments such as derivatives, the Fund may hold investments, which may be
significant, in money market fund shares to cover its obligations resulting from its investments in derivatives. Money market funds and the securities they invest in are subject to comprehensive regulations. The enactment of new legislation or
regulations, as well as changes in interpretation and enforcement of current laws, may affect the manner of operation, performance and/or yield of money market funds.
Prepayment and Extension Risk.
Prepayment and extension risk is the risk that a loan, bond or other security or investment might, in the case of prepayment risk, be called or otherwise converted, prepaid or redeemed before maturity and, in the case of extension risk, the
investment might not be called as expected. In the case of prepayment risk, if the investment is converted, prepaid or redeemed before maturity, the portfolio managers may not be able to invest the proceeds in other investments providing as high a
level of income, resulting in a reduced yield to the Fund. In the case of mortgage- or asset-backed securities, as interest rates decrease or spreads narrow, the likelihood of prepayment increases. Conversely, extension risk is the risk that an
unexpected rise in interest rates will extend the life of a mortgage- or asset-backed security beyond the prepayment time. If the Fund’s investments are locked in at a lower interest rate for a longer period of time, the portfolio managers may
be unable to capitalize on securities with higher interest rates or wider spreads.
Reinvestment Risk.
Reinvestment risk is the risk that the Fund will not be able to reinvest income or principal at the same return it is currently earning.
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 bar chart shows how the Fund’s Class A share performance (without sales charges) has varied for each full calendar year shown. If the sales charges were
reflected, returns shown would be lower. Class A shares are offered in a separate prospectus. The table below the bar chart compares the Fund’s returns (after applicable sales charges) for the periods shown with a broad measure of market
performance.
Columbia Floating Rate Fund
Summary of the Fund
(continued)
Class Y shares of the Fund did not commence operations prior
to the date of this prospectus and, therefore, performance is not yet available. Any share class that does not have available performance would have annual returns substantially similar to those of Class A shares. Except for differences in annual
returns resulting from differences in expenses and sales charges (where applicable), the share classes of the Fund would have substantially similar annual returns because all share classes of the Fund invest in the same portfolio of
securities.
The after-tax returns shown in the
Average Annual Total Returns
table below are calculated using the highest historical individual U.S. 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 Individual
Retirement Accounts (IRAs). The after-tax returns are shown only for Class A shares and will vary for other share classes. Returns after taxes on distributions and sale of Fund shares are higher than before-tax returns for certain periods shown
because they reflect the tax benefit of capital losses realized on the redemption of Fund shares.
The Fund’s past performance (before and after taxes) is no
guarantee of how the Fund will perform in the future.
Updated performance information can be obtained by calling toll-free 800.345.6611 or visiting columbiathreadneedle.com/us.
Year
by Year Total Return (%)
as of December 31 Each Year*
|
Best
and Worst Quarterly Returns
During the Period Shown in the Bar Chart
|
|
Best
|
2nd Quarter 2009
|
16.99%
|
Worst
|
4th Quarter 2008
|
-24.18%
|
*
|
Year to Date return as of
March 31, 2015: 2.07%
|
Average Annual Total Returns After Applicable Sales
Charges (for periods ended December 31, 2014)
|
Share
Class
Inception Date
|
1
Year
|
5
Years
|
Life
of Fund
|
Class
A
|
02/16/2006
|
|
|
|
returns
before taxes
|
|
-2.09%
|
5.08%
|
3.58%
|
returns
after taxes on distributions
|
|
-3.66%
|
3.41%
|
1.70%
|
returns
after taxes on distributions and sale of Fund shares
|
|
-1.18%
|
3.26%
|
1.99%
|
Credit
Suisse Leveraged Loan Index
(reflects no deductions for fees, expenses or taxes)
|
|
2.06%
|
5.83%
|
4.52%**
|
**
|
Credit Suisse Leveraged Loan
Index Life return is as of 2/28/06.
|
Fund Management
Investment Manager:
Columbia
Management Investment Advisers, LLC
Portfolio
Manager
|
|
Title
|
|
Role
with Fund
|
|
Managed
Fund Since
|
Lynn
Hopton
|
|
Vice
President and Senior Portfolio Manager, Co-Head of Leveraged Debt Group
|
|
Co-manager
|
|
2006
|
Columbia Floating Rate Fund
Summary of the Fund
(continued)
Portfolio
Manager
|
|
Title
|
|
Role
with Fund
|
|
Managed
Fund Since
|
Yvonne
Stevens
|
|
Vice
President and Senior Portfolio Manager, Co-Head of Leveraged Debt Group
|
|
Co-manager
|
|
2006
|
Steven
Staver
|
|
Senior
Portfolio Manager
|
|
Co-manager
|
|
2008
|
Ronald
Launsbach, CFA
|
|
Portfolio
Manager
|
|
Co-manager
|
|
2012
|
Purchase and Sale of Fund
Shares
You may purchase or redeem shares of the Fund on
any business day by contacting the Fund in the ways described below:
Online
|
|
Regular
Mail
|
|
Express
Mail
|
|
By
Telephone
|
columbiathreadneedle.com/us
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
30 Dan Road, Suite 8081
Canton, MA 02021-2809
|
|
800.422.3737
|
You may purchase shares and receive
redemption proceeds by electronic funds transfer, by check or by wire. If you maintain your account with a broker-dealer or other financial intermediary, you must contact that financial intermediary to buy, sell or exchange shares of the Fund
through your account with the intermediary.
The minimum
initial investment amounts for the share class offered by the Fund are shown below:
Minimum Initial Investment
Class
|
Category
of eligible account
|
For
accounts other than
systematic investment
plan accounts
|
For
systematic investment
plan accounts
|
Class
Y
|
All
eligible accounts
|
None
|
N/A
|
There is no minimum additional investment for any share
class.
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, qualified dividend income or capital gains, unless you are investing through a tax-advantaged account, such as a 401(k) plan or an
IRA. If you are investing through a tax-advantaged account, you may be taxed upon withdrawals from that 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 Investment Manager), 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.
Columbia Floating Rate Fund
More Information About the
Fund
Investment Objective
Columbia Floating Rate Fund (the Fund) seeks to provide
shareholders with a high level of current income and, as a secondary objective, preservation of capital. Only shareholders can change the Fund’s investment objective. Because any investment involves risk, there is no assurance the Fund’s
objective will be achieved.
Principal Investment
Strategies
Under normal market conditions, at least 80%
of the Fund’s net assets (including the amount of any borrowings for investment purposes) will be invested in floating rate loans and other floating rate debt securities. These debt obligations will generally be rated non-investment grade by
recognized rating agencies (similar to “high yield securities” or “junk bonds”) or, if unrated, determined to be of comparable quality.
The Fund may invest up to 25% of its net assets in foreign
investments.
Floating rate loans are debt obligations of
companies and other similar entities that have interest rates that adjust or “float” periodically (normally on a daily, monthly, quarterly or semiannual basis by reference to a base lending rate (such as London Interbank Offered Rate
(commonly known as LIBOR) plus a premium). Floating rate loans are typically structured and administered by a financial institution that acts as the agent of the lenders participating in the floating rate loan. The Fund may acquire loans directly
through the agent or from another holder of the loan by assignment. They are generally valued on a daily basis by independent pricing services.
The Fund normally invests in senior secured floating rate
loans. Senior secured floating rate loans ordinarily are secured by specific collateral or assets of the borrower so that holders of the loans will have a claim on those assets senior to the claim of certain other parties in the event of default or
bankruptcy by the borrower. These loans usually are senior in rank to other securities issued by the borrower (such as common stock or other debt instruments). The proceeds of the loan primarily are used by the borrower to finance leveraged
buy-outs, recapitalizations, dividends to sponsors, mergers and acquisitions, and, to a lesser extent, to finance internal growth or for other corporate purposes.
Senior floating rate loans held by the Fund will generally
have final maturities of nine years or less.
In pursuit
of the Fund’s objective, Columbia Management Investment Advisers, LLC (the Investment Manager) identifies loans for potential investment by conducting extensive credit analysis which typically includes an analysis of the collateral value
supporting such loan, the liquidity profile of the borrower, an analysis of the borrower’s capital structure, a competitive analysis of the borrower and its industry, an evaluation of the management team’s capabilities, a review of the
legal documentation supporting such loan, including an analysis of the covenants and the rights and remedies of the lender, and the Fund’s relative concentration by industry. Additionally, the Investment Manager considers its interest rate
outlook, the interest rate (and floating rate formula) to be paid on the investment, the portfolio’s exposure to a particular sector, and the relative value of the loan within the sector, among other factors. Once a loan is in the portfolio,
it is continually monitored. Generally, a decision to hold or sell a loan is made based on the Investment Manager’s analysis of the relative value of other opportunities for investment, the borrower’s risk profile, and expected recovery
values versus the current market value of the holding.
To the extent the Fund invests in derivative instruments, the
Fund may count the value of derivative securities with floating rate loan characteristics towards its 80% policy.
The investment manager may also invest in other securities,
including investment grade fixed income debt obligations, non-investment grade fixed income debt obligations, affiliated money market funds and certain money market instruments. For purposes of the 80% policy, money market holdings with a remaining
maturity of less than 60 days will be deemed floating rate assets.
The Fund’s investment policy with respect to 80% of its
net assets may be changed by the Board of Trustees without shareholder approval as long as shareholders are given 60 days advance written notice of the change.
Columbia Floating Rate Fund
More Information About the
Fund
(continued)
Principal Risks
An investment in the Fund involves risk, including those
described below.
There is no assurance that the Fund will achieve its investment objective and you may lose money
. The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV)
and share price may go down.
Active Management Risk.
The Fund is actively managed and its performance therefore will reflect, in part, the ability of the portfolio managers to make investment decisions that will achieve the Fund’s investment objective. Due to its
active management, the Fund could underperform its benchmark index and/or other funds with similar investment objectives and/or strategies.
Changing Distribution Level Risk.
The amount of the distributions paid by the Fund will vary and generally depends on the amount of interest income 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 income and/or dividends the Fund receives from its investments decline.
Confidential Information Access Risk.
In many instances, issuers of floating rate loans offer to furnish material, non-public information (Confidential Information) to prospective purchasers or holders of the issuer’s floating rate loans to help
potential investors assess the value of the loan. Portfolio managers may avoid the receipt of Confidential Information about the issuers of floating rate loans being considered for acquisition by the Fund, or held in the Fund. A decision not to
receive Confidential Information from these issuers may disadvantage the Fund as compared to other floating rate loan investors, and may adversely affect the price the Fund pays for the loans it purchases, or the price at which the Fund sells the
loans. Further, in situations when holders of floating rate loans are asked, for example, to grant consents, waivers or amendments, the ability to assess the desirability of such consents, waivers or amendments may be compromised. For these and
other reasons, it is possible that the decision not to receive Confidential Information could adversely affect the Fund’s performance.
Counterparty Risk.
The risk
exists that a counterparty to a financial instrument held by the Fund or by a special purpose or structured vehicle in which the Fund invests may become insolvent or otherwise fail to perform its obligations due to financial difficulties, including
making payments to the Fund. The Fund may obtain no or limited recovery in a bankruptcy or other organizational proceedings, and any recovery may be significantly delayed. Transactions that the Fund enters into may involve counterparties in the
financial services sector and, as a result, events affecting the financial services sector may cause the Fund’s share value to fluctuate.
Credit Risk.
The value of
loans or fixed-income securities, or other instruments or assets, may decline if the borrower or the issuer thereof defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial obligations,
such as making payments to the Fund when due. Various factors could affect the actual or perceived willingness or ability of the borrower or the issuer to make timely interest or principal payments, including changes in the financial condition of
the borrower or the issuer or in general economic conditions. Fixed-income 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 fixed-income 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. Rating
agencies assign credit ratings to certain loans and fixed-income securities to indicate their credit risk. Lower quality or unrated securities held by the Fund may present increased credit risk as compared to higher-rated securities. Non-investment
grade loans or fixed-income securities (commonly called “high-yield” or “junk”) may be subject to greater price fluctuations and are more likely to experience a default than investment grade loans or securities and therefore
may expose the Fund to increased credit risk. If the Fund purchases unrated loans or fixed-income securities, or if the ratings of securities held by the Fund are lowered after purchase, the Fund will depend on analysis of credit risk more heavily
than usual. If the issuer of a loan declares bankruptcy or is declared bankrupt, there may be a delay before the Fund can act on the collateral securing the loan, which may adversely affect the Fund. Further, there is a risk that a court could take
action with respect to a loan that is adverse to the holders of the loan. Such actions may include invalidating the loan, the lien on the collateral, the priority status of the loan, or ordering the refund of interest previously paid by the
borrower. Any such actions by a court could adversely affect the Fund’s performance. A default or expected default of a loan could also make it difficult for the Fund to sell the loan at a price approximating the value previously placed
on
Columbia Floating Rate Fund
More Information About the
Fund
(continued)
it. In order to enforce its rights in the event of a default, bankruptcy or
similar situation, the Fund may be required to retain legal or similar counsel. This may increase the Fund’s operating expenses and adversely affect its NAV. Loans that have a lower priority for repayment in an issuer’s capital structure
may involve a higher degree of overall risk than more senior loans of the same borrower.
Foreign Securities Risk.
Investments in or exposure to foreign securities involve certain risks not associated with investments in or exposure to securities of U.S. companies. For example, foreign markets can be extremely volatile. The performance of the Fund may be
negatively impacted by fluctuations in a foreign currency’s strength or weakness relative to the U.S. dollar. Foreign securities may also be less liquid than securities of U.S. companies so that the Fund may, at times, be unable to sell
foreign securities at desirable times or prices. Brokerage commissions, custodial costs 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 on the Fund’s income, capital gains or proceeds from the disposition of foreign
securities, which could reduce the Fund’s return on such securities. Other risks include: possible delays in the settlement of transactions or in the payment of income; generally less publicly available information about foreign companies; the
impact of economic, political, social, diplomatic or other conditions or events; possible seizure, expropriation or nationalization of a company or its assets or the assets of a particular investor or category of investors; possible imposition of
currency exchange controls; accounting, auditing and financial reporting standards that may be less comprehensive and stringent than those applicable to domestic companies; the imposition of economic and other sanctions against a particular foreign
country, its nationals or industries or businesses within the country; and the generally less stringent standard of care to which local agents may be held in the local markets. In addition, it may be difficult to obtain reliable information about
the securities and business operations of certain foreign issuers. Governments or trade groups may compel local agents to hold securities in designated depositories that are not subject to independent evaluation. The less developed a country’s
securities market is, the greater the level of risks. The risks posed by sanctions against a particular foreign country, its nationals or industries or businesses within the country may be heightened to the extent the Fund invests significantly in
the affected country or region or in issuers from the affected country that depend on global markets.
High-Yield Securities Risk.
Securities rated below investment grade (commonly called “high-yield” or “junk” bonds) and unrated securities of comparable quality tend to be more sensitive to credit risk than higher-rated securities and may experience
greater price fluctuations in response to perceived changes in the ability of the issuing entity or obligor to pay interest and principal when due than to changes in interest rates. These investments are generally more likely to experience a default
than higher-rated securities. High-yield securities are considered to be predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal. These securities typically pay a premium — a higher interest
rate or yield — because of the increased risk of loss, including default. High-yield securities may require a greater degree of judgment to establish a price, may be difficult to sell at the time and price the Fund desires, may carry high
transaction costs, and also are generally less liquid than higher-rated securities. The securities ratings provided by third party rating agencies 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. In adverse economic and other circumstances, issuers of lower-rated securities are more likely to have difficulty making principal and interest payments
than issuers of higher-rated securities.
Highly
Leveraged Transactions Risk.
The loans or other securities in which the Fund invests may consist of transactions involving refinancings, recapitalizations, mergers and acquisitions and other financings for general
corporate purposes. The Fund’s investments also may include senior obligations of a borrower issued in connection with a restructuring pursuant to Chapter 11 of the U.S. Bankruptcy Code (commonly known as “debtor-in-possession”
financings), provided that such senior obligations are determined by the Fund’s portfolio managers to be a suitable investment for the Fund. In such highly leveraged transactions, the borrower assumes large amounts of debt in order to have the
financial resources to attempt to achieve its business objectives. Such business objectives may include but are not limited to: management’s taking over control of a company (leveraged buy-out); reorganizing the assets and liabilities of a
company (leveraged recapitalization); or acquiring another company. Loans or securities that are part of highly leveraged transactions involve a greater risk (including default and bankruptcy) than other investments.
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Impairment of Collateral Risk.
The value of collateral, if any, securing a loan can decline, and may be insufficient to meet the borrower’s obligations or difficult or costly to liquidate. In addition, the Fund’s access to collateral may be limited by bankruptcy or
other insolvency laws. Further, certain floating rate and other loans may not be fully collateralized and may decline in value.
Interest Rate Risk.
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of debt securities 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 will generally affect the value of the Fund's shares. In general, the longer the maturity or duration of a debt security, the
greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest rates may negatively impact the
Fund’s performance. Actions by governments and central banking authorities can result in increases in interest rates. Such actions may negatively affect the value of fixed-income securities held by the Fund, resulting in a negative impact on
the Fund's performance and NAV. Securities with floating coupon rates are typically less sensitive to interest rate changes, but these securities may decline in value if their coupon rates do not rise as much as, or keep pace with, yields on
such types of securities. Because rates on certain floating rate loans and other debt securities reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause fluctuations in
the Fund’s NAV.
Many economies around the
world, including the United States, are experiencing historically low interest rate levels; however, interest rates may soon begin to rise, especially to the extent that economies begin to appear more stable and demonstrate signs of growth. Any
interest rate increases could cause the value of a Fund’s investments in debt securities to decrease. Rising interest rates may prompt redemptions from a Fund, which may force the Fund to sell investments at a time when it is not advantageous
to do so, which could result in losses.
Issuer Risk.
An issuer in which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may
be caused by poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or
factors.
Liquidity Risk.
Liquidity risk is the risk associated with a lack of marketability of investments which may make it difficult to sell the investment at a desirable time or price. Decreases in the number of financial institutions,
including banks and broker-dealers, willing to make markets (matching up sellers and buyers) in the Fund’s investments or in their capacity or willingness to trade such investments may increase the Fund’s exposure to this risk. The debt
market has experienced considerable growth, and financial institutions making markets in instruments purchased and sold by the Fund (e.g., bond dealers) have experienced increased regulation over their businesses, and the impact of that growth and
regulation on the ability and willingness of financial institutions to engage in trading or “making a market” in such instruments remains unsettled. As a result, the Fund, when seeking to sell its portfolio investments, could find that
selling is more difficult than anticipated, especially during times of higher market volatility. Market participants attempting to sell the same or similar instrument at the same time as the Fund could exacerbate the Fund’s exposure to
liquidity risk. The Fund may have to accept a lower selling price for the holding, sell other investments that it might otherwise prefer to hold, or forego another, more appealing investment opportunity. Certain securities that were liquid when
purchased by the Fund may later become illiquid, particularly in times of overall economic distress. Changing regulatory, market or other conditions or environments (for example, the interest rate or credit environments) may also adversely affect
the liquidity and the price of the Fund's investments. Certain types of investments, such as structured notes and non-investment grade fixed income securities, as an example, may be especially subject to liquidity risk. Floating rate loans also may
trade infrequently on the secondary market. The value of the loan to the Fund may be impaired in the event that the Fund needs to liquidate such loans. The inability to purchase or sell floating rate loans and other debt securities at a fair price
may have a negative impact on the Fund’s performance. Securities or other assets in which the Fund invests may be traded in the over-the-counter market rather than on an organized exchange and therefore may be more difficult to purchase or
sell at a fair price. Judgment also plays a larger role in valuing illiquid investments as compared to valuing liquid investments. Price volatility may be higher for illiquid or less liquid investments as a result of, for example, the relatively
less
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frequent pricing of such securities (as compared to liquid or more liquid
investments). Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. Liquidity of the market and other factors can lead to an increase in Fund
redemptions, which may negatively impact Fund performance and NAV, including, for example, if the Fund is forced to sell securities in a down market.
Market Risk.
Market risk
refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. Security values may fall or fail to rise because of a variety of actual or
perceived factors affecting an issuer (e.g., an unfavorable earnings report), the industry or sector in which it operates, or the market as a whole, which may reduce the value of an investment in the Fund. Under certain market conditions, debt
securities may have greater price volatility than equity securities. Accordingly, an investment in the Fund could lose money over short or long periods. The market values of the securities the Fund holds 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.
Money Market Fund Investment Risk.
An investment in a money market fund is not a bank deposit and is not insured or guaranteed by any bank, the FDIC or any other government agency. Although money market funds seek to preserve the value of investments at
$1.00 per share, it is possible for the Fund to lose money by investing in money market funds. In addition to the fees and expenses that the Fund directly bears, the Fund indirectly bears the fees and expenses of any money market funds in which it
invests, including affiliated money market funds. To the extent these fees and expenses, along with the fees and expenses of any other funds in which the Fund may invest, are expected to equal or exceed 0.01% of the Fund’s average daily net
assets, they will be reflected in the Annual Fund Operating Expenses set forth in the table under “Fees and Expenses of the Fund.” By investing in a money market fund, the Fund will be exposed to the investment risks of the money market
fund in direct proportion to such investment. The money market fund may not achieve its investment objective. The Fund, through its investment in the money market fund, may not achieve its investment objective. To the extent the Fund invests in
instruments such as derivatives, the Fund may hold investments, which may be significant, in money market fund shares to cover its obligations resulting from the Fund’s investments in derivatives. Money market funds and the securities they
invest in are subject to comprehensive regulations. The enactment of new legislation or regulations, as well as changes in interpretation and enforcement of current laws, may affect the manner of operation, performance and/or yield of money market
funds.
Prepayment and Extension Risk.
Prepayment risk is the risk that a loan, bond or other security or investment might be called or otherwise converted, prepaid or redeemed before maturity, and extension risk is the risk that the investment might not be
called as expected. In the case of prepayment risk, if the investment is converted, prepaid or redeemed before maturity, particularly during a time of declining interest rates or spreads, the portfolio managers may not be able to invest the proceeds
in other investments providing as high a level of income, resulting in a reduced yield to the Fund. Conversely, in the case of extension risk, as interest rates rise or spreads widen, the likelihood of prepayment decreases and the maturity of the
investment may extend the life of the investment beyond the prepayment time. If the Fund's investments are locked in at a lower interest rate for a longer period of time, the portfolio managers may be unable to capitalize on securities with higher
interest rates or wider spreads.
Reinvestment Risk.
Reinvestment risk is the risk that the Fund will not be able to reinvest income or principal at the same return it is currently earning.
Additional Investment Strategies and Policies
This section describes certain investment strategies and
policies that the Fund may utilize in pursuit of its investment objective and some additional factors and risks involved with investing in the Fund.
Investment Guidelines
As a general matter, and except as specifically described in
the discussion of the Fund's principal investment strategies in this prospectus or as otherwise required by the Investment Company Act of 1940, as amended (the 1940 Act), the rules and regulations thereunder and any applicable exemptive relief,
whenever an investment policy
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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 investment in the security or asset.
Holding Other Kinds of Investments
The Fund may hold investments that are not part of its
principal investment strategies. These investments and their risks are described below and/or 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.
Information on the Fund’s holdings can be found in the Fund’s shareholder reports or by visiting columbiathreadneedle.com/us.
Transactions in Derivatives
The Fund may enter into derivative transactions or otherwise
have exposure to derivative transactions through underlying investments. 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 the London Interbank Offered Rate (commonly known as LIBOR)) or market indices (such as the Standard & Poor's (S&P)
500
®
Index). The use of derivatives is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities
transactions. 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 directly. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility in
the value of the derivative and/or the Fund’s shares, 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. U.S. federal legislation has been enacted that provides for new clearing, margin, reporting and
registration requirements for participants in the derivatives market. These changes could restrict and/or impose significant costs or other burdens upon the Fund’s participation in derivatives transactions. For more information on the risks of
derivative investments and strategies, see the SAI.
Investing in Affiliated Funds
The Investment Manager or an affiliate serves as investment
adviser to mutual funds using the Columbia brand (Columbia Funds), including those that are structured as “fund-of-funds”, and provides asset-allocation services to (i) shareholders by investing in shares of other Columbia
Funds, which may include the Fund (collectively referred to in this section as Underlying Funds), and (ii) discretionary managed accounts (collectively referred to as affiliated products) that invest exclusively in Underlying Funds. These
affiliated products, individually or collectively, may own a significant percentage of the outstanding shares of one or more Underlying Funds, and the Investment Manager seeks to balance potential conflicts of interest between the affiliated
products and the Underlying Funds in which they invest. The affiliated products’ investment in the Underlying Funds may have the effect of creating economies of scale, possibly resulting in lower expense ratios for the Underlying Funds,
because the affiliated products may own substantial portions of the shares of Underlying Funds. However, redemption of Underlying Fund shares by one or more affiliated products could cause the expense ratio of an Underlying Fund to increase, as its
fixed costs would be spread over a smaller asset base. Because of large positions of certain affiliated products, the Underlying Funds may experience relatively large inflows and outflows of cash due to affiliated products’ purchases and sales
of Underlying Fund shares. Although the Investment Manager or its affiliate may seek to minimize the impact of these transactions where possible, for example, by structuring them over a reasonable period of time or through other measures, Underlying
Funds may experience increased expenses as they buy and sell portfolio securities to manage the cash
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flow effect related to these transactions. Further, when the Investment
Manager or its affiliate structures transactions over a reasonable period of time in order to manage the potential impact of the buy and sell decisions for the affiliated products, those affiliated products, including funds-of-funds, may pay more or
less (for purchase activity), or receive more or less (for redemption activity), for shares of the Underlying Funds than if the transactions were executed in one transaction. In addition, substantial redemptions by affiliated products within a short
period of time could require the Underlying Fund to liquidate positions more rapidly than would otherwise be desirable, which may have the effect of reducing or eliminating potential gain or causing it to realize a loss. Substantial redemptions may
also adversely affect the ability of the Underlying Fund to implement its investment strategy. The Investment Manager or its affiliate also has an economic conflict of interest in determining the allocation of affiliated products’ assets among
the Underlying Funds, as it earns different fees from the various Underlying Funds.
Investing in Money Market Funds
The Fund may invest cash in, or hold as collateral for certain
investments, shares of registered or unregistered money market funds, including funds advised by the Investment Manager or its affiliates. These funds are not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency. 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.
Lending of Portfolio Securities
The Fund may lend portfolio securities to 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 currently does not participate in the securities
lending program but the Board of Trustees (the Board) may determine to renew participation in the future. For more information on lending of portfolio securities and the risks involved, see the Fund’s SAI and its annual and semiannual reports
to shareholders.
Investing Defensively
The Fund may from time to time take temporary defensive
investment positions that may be inconsistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, social or other conditions, including, without limitation, investing some or all of
its assets in money market instruments or shares of affiliated or unaffiliated money market funds or holding some or all of its assets in cash or cash equivalents. The Fund may take such defensive investment positions for as long a period as deemed
necessary.
The Fund may not achieve its investment
objective while it is investing defensively. Investing defensively may adversely affect Fund performance. During these times, the portfolio managers may make frequent portfolio holding changes, which could result in increased trading
expenses and taxes, and decreased Fund performance. See also
Investing in Money Market Funds
above for more information.
Other Strategic and Investment Measures
The Fund may also from time to time take temporary portfolio
positions that may or may not be consistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, social or other conditions, including, without limitation, investing in derivatives,
such as futures (e.g., index futures) or options on futures, for various purposes, including among others, investing in particular derivatives to achieve indirect investment exposures to a sector, country or region where the Investment Manager
believes such positioning is appropriate. The Fund may take such portfolio positions for as long a period as deemed necessary. While the Fund is so positioned, derivatives could comprise a substantial portion of the Fund’s investments and the
Fund may not achieve its investment objective. Investing in this manner may adversely affect Fund performance. During these times, the portfolio managers may make frequent portfolio holding changes, which could result in increased trading
expenses and taxes, and decreased Fund performance. For information on the risks of investing in derivatives, see
Transactions in Derivatives
above.
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Portfolio Holdings Disclosure
The Board has adopted policies and procedures that govern the
timing and circumstances of disclosure to shareholders and third parties of information regarding the securities owned by the Fund. A description of these policies and procedures is included in the SAI. Fund policy generally permits the disclosure
of portfolio holdings information on the Fund's website (columbiathreadneedle.com/us) only after a certain amount of time has passed, as described in the SAI.
Purchases and sales of portfolio securities can take place at
any time, so the portfolio holdings information available on the Fund's website may not always be current.
Portfolio Holdings Versus the
Benchmarks
The Fund does not limit
its investments to the securities within its benchmark(s), and accordingly the Fund's holdings may diverge significantly from those of its benchmark(s). In addition, the Fund may invest in securities outside any industry and geographic sectors
represented in its benchmark(s). The Fund's weightings in individual securities, and in industry and geographic sectors, may also vary considerably from those of its benchmark(s).
Mailings to Households
In order to reduce shareholder expenses, the Fund may, if
prior consent has been provided, mail only one copy of the Fund’s prospectus and each annual and semiannual report to those addresses shared by two or more accounts. If you wish to receive separate copies of these documents, call 800.345.6611
or, if your shares are held through a financial intermediary, contact your intermediary directly.
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 shareholders redeeming Fund shares could require the Fund to sell portfolio securities at less than opportune times or to
hold ready reserves of uninvested cash in amounts larger than might otherwise be the case to meet shareholder redemptions. Either situation could adversely impact the Fund’s performance.
Understanding Annual Fund Operating Expenses
The Fund’s annual operating expenses, as presented in
the
Annual Fund Operating Expenses
table in the
Fees and Expenses of the Fund
section of this prospectus, generally are based on expenses incurred during the
Fund’s most recently completed fiscal year and are expressed as a percentage (expense ratio) of the Fund’s average net assets during that fiscal year. The expense ratio for Class Y shares is based on estimated amounts for the
Fund’s current fiscal year. The expense ratio reflects the Fund’s fee arrangements as of the date of this prospectus and, unless indicated otherwise, is based on expenses incurred during the Fund’s most recent fiscal year. The
Fund’s assets will fluctuate, but no adjustments have been or will be made to the expense ratio to reflect any differences in the Fund’s average net assets between the most recently completed fiscal year and the date of this prospectus
or a later date. In general, the Fund’s expense ratio will increase as its net assets decrease, such that the Fund’s actual expense ratio may be higher than the expense ratio presented in the
Annual Fund
Operating Expenses
table if assets fall. Any commitment by the Investment Manager and/or its affiliates to waive fees and/or cap (reimburse) expenses is expected, in part, to limit the impact of any increase in the Fund’s operating
expense ratio that would otherwise result because of a decrease in the Fund’s assets in the current fiscal year. The Fund’s annual operating expenses are comprised of (i) investment management fees, (ii) distribution and/or service fees,
and (iii) other expenses. Management fees do not vary by class, but distribution and/or service fees and other expenses may vary by class.
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Other Expenses
“Other expenses” consist of the
fees the Fund pays to its administrator, custodian, transfer agent, auditors, lawyers and trustees, costs relating to compliance and miscellaneous expenses. Generally, these expenses are the same for each share class and are allocated on a pro rata
basis across all share classes. Transfer agent fees and certain shareholder servicing fees, however, are class specific. They differ by share class because the shareholder services provided to each share class may be different. Accordingly, the
differences in “other expenses” among share classes are primarily the result of the different transfer agent and shareholder servicing fees applicable to each share class. For more information on these fees, see
Choosing a Share Class — Selling Agent Compensation.
Fee Waiver/Expense Reimbursement Arrangements and Impact on
Past Performance
The Investment Manager and certain of
its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) through November 30, 2015, unless sooner terminated at the sole discretion of the Fund's Board, so that the
Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the annual rate of:
Columbia
Floating Rate Fund
|
Class
Y
|
0.71%
|
Under the agreement, the following
fees and expenses are excluded from the Fund’s operating expenses when calculating the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including foreign transaction taxes), expenses associated
with investment in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program, dividend expenses
associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest, extraordinary expenses and any other expenses the exclusion of which is specifically approved by the
Board. This agreement may be modified or amended only with approval from all parties.
In addition, the Fund’s expense ratio is subject to a
voluntary expense reimbursement arrangement pursuant to which fees will be waived and/or expenses reimbursed (excluding certain fees and expenses immediately described above), so that the Fund’s net operating expenses, after giving effect to
fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the annual rate of 0.70% for Class Y. This arrangement may be revised or discontinued at any time.
Effect of Fee Waivers and/or Expense Reimbursements on Past
Performance.
The Fund’s returns shown in the
Performance Information
section of this prospectus reflect the
effect of any fee waivers and/or reimbursements of Fund expenses by the Investment Manager and/or any of its affiliates that were in place during the performance period shown. Without such fee waivers/expense reimbursements, the Fund’s returns
might have been lower.
Primary Service
Providers
The Investment Manager, which also serves as
the Fund’s administrator (the Administrator), the Distributor and the Transfer Agent are all affiliates of Ameriprise Financial, Inc. (Ameriprise Financial). They and their affiliates currently provide key services, including investment
advisory, administration, distribution, shareholder servicing and transfer agency services, to the Fund and various other funds, including the Columbia Funds, and are paid for providing these services. These service relationships are described
below.
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The Investment Manager
Columbia Management Investment Advisers, LLC is located at 225
Franklin Street, Boston, MA 02110 and serves as investment adviser to the Columbia Funds. The Investment Manager is a registered investment adviser and a wholly-owned subsidiary of Ameriprise Financial. The Investment Manager’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 traditional mutual funds, exchange-traded funds and closed-end funds,
the Investment Manager acts as an investment adviser for itself, its affiliates, individuals, corporations, retirement plans, private investment companies and financial intermediaries.
Subject to oversight by the Board, the Investment Manager
manages the day-to-day operations of the Fund, determining what securities and other investments the Fund should buy or sell and executing portfolio transactions. The Investment Manager may use the research and other capabilities of its affiliates
and third parties in managing the Fund’s investments.
The SEC has issued an order that permits the Investment
Manager, 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 Investment Manager 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 Investment Manager does not consider any other relationship it or its affiliates may have with a subadviser, and the Investment Manager discloses to the Board the nature of any material relationships it has with
a subadviser or its affiliates. At present, the Investment Manager has not engaged any investment subadviser for the Fund.
The Fund pays the Investment Manager 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 the Investment Manager by the Fund amounted to
0.57% of average daily net assets of the Fund. A discussion regarding the basis for the Board approving the renewal of the Fund's investment management services agreement with the Investment Manager is available in the Fund’s annual report to
shareholders for the fiscal year ended July 31, 2014.
Portfolio Managers
Information about the portfolio managers primarily responsible
for overseeing the Fund’s investments is shown below. The SAI provides additional information about the portfolio managers, including information relating to compensation, other accounts managed by the portfolio managers and ownership by the
portfolio managers of Fund shares.
Portfolio
Manager
|
|
Title
|
|
Role
with Fund
|
|
Managed
Fund Since
|
Lynn
Hopton
|
|
Vice
President and Senior Portfolio Manager, Co-Head of Leveraged Debt Group
|
|
Co-manager
|
|
2006
|
Yvonne
Stevens
|
|
Vice
President and Senior Portfolio Manager, Co-Head of Leveraged Debt Group
|
|
Co-manager
|
|
2006
|
Steven
Staver
|
|
Senior
Portfolio Manager
|
|
Co-manager
|
|
2008
|
Ronald
Launsbach, CFA
|
|
Portfolio
Manager
|
|
Co-manager
|
|
2012
|
Ms. Hopton
joined the Investment Manager in 2000. Ms. Hopton began her investment career in 1986 and earned a B.A. from Northwestern University and an M.B.A. from J.L. Kellogg Graduate School of Management at Northwestern
University.
Ms. Stevens
joined the Investment Manager in 2000. Ms. Stevens began her investment career in 1986 and earned a B.A. from Wellesley College and an M.B.A. from Wharton School at the University of Pennsylvania.
Mr. Staver
joined the
Investment Manager in 2000. Mr. Staver began his investment career in 1993 and earned a M.B.A. from the University of Southern California Marshall School of Business.
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Mr. Launsbach
joined the
Investment Manager in 2001. Mr. Launsbach began his investment career in 1994 and earned a M.B.A. from Marshall School of Business at the University of Southern California.
The Administrator
Columbia Management Investment Advisers, LLC 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 related clerical and administrative services. The
Fund pays the Administrator a fee (plus certain out-of-pocket expenses) for the administrative services it provides to the Fund.
The Distributor
Shares of the Fund are distributed by Columbia Management
Investment Distributors, Inc., which is located at 225 Franklin Street, Boston, MA 02110. 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
Columbia Management Investment Services Corp. is a registered
transfer agent and wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent is located at 225 Franklin Street, Boston, MA 02110, and its responsibilities include processing purchases, redemptions and exchanges of Fund shares, calculating
and paying distributions, maintaining shareholder records, preparing account statements and providing customer service. The Transfer Agent has engaged DST Systems, Inc., including its affiliate, Boston Financial Data Services, to provide various
shareholder services. In addition, the Transfer Agent enters into agreements with various financial intermediaries through which you may hold Fund shares, pursuant to which the Transfer Agent pays these financial intermediaries for providing certain
shareholder services. The Fund generally pays the Transfer Agent a per account fee, pays a fee based on the assets invested through omnibus accounts and reimburses the Transfer Agent for certain out-of-pocket expenses.
Other Roles and Relationships of Ameriprise Financial and its
Affiliates — Certain Conflicts of Interest
The
Investment Manager, Distributor and Transfer Agent, all affiliates of Ameriprise Financial, provide various services to the Fund and other Columbia 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 Investment Manager 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 Investment Manager, 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 Investment Manager 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 Investment Manager 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 Investment Manager and other Ameriprise Financial affiliates;
|
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■
|
regulatory and other
investment restrictions on investment activities of the Investment Manager 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 Investment Manager, and a Columbia Fund.
|
The Investment Manager 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 Management and Other Services — Other Roles and Relationships of Ameriprise Financial and its Affiliates —
Certain Conflicts of Interest
section of the SAI. 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 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. 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 quarterly (10-Q), annual (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 sec.gov.
Columbia Floating Rate Fund
The
Funds
The Columbia Funds (referred to as the Funds)
generally share the same policies and procedures for investor services, as described below. Each Fund is a series of Columbia Funds Series Trust (CFST), Columbia Funds Series Trust I (CFST I) or Columbia Funds Series Trust II (CFST II), and certain
features of distribution and/or service plans may differ among these trusts. The Fund offered by this prospectus is a series of CFST II. Columbia Funds with names that include the words “Tax-Exempt”, “Municipal”, or
“Muni” (the Tax-Exempt Funds) have certain policies that differ from other Columbia Funds (the Taxable Funds). The Fund offered by this prospectus is a Taxable Fund.
Funds Contact Information
Additional information about the Funds can be obtained at
columbiathreadneedle.com/us,* by calling toll-free 800.345.6611, or by writing (regular mail) to Columbia Management Investment Services Corp., P.O. Box 8081, Boston, MA 02266-8081 or (express mail) Columbia Management Investment Services Corp., c/o
Boston Financial, 30 Dan Road, Suite 8081, Canton, MA 02021-2809.
*
|
The website references in this
prospectus are inactive links and information contained in or otherwise accessible through the referenced websites does not form a part of this prospectus.
|
Selling and/or Servicing Agents
The terms “selling agent” and
“servicing agent” (collectively, selling agents) refer to the financial intermediaries that are authorized to sell shares of the Funds. Selling agents include broker-dealers and financial advisors as well as firms that employ such
broker-dealers and financial advisors, including, for example, brokerage firms, banks, investment advisers, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.
Omnibus Accounts
The term “omnibus account”
refers to a selling agent’s account with the Fund (through the Transfer Agent) that represents the combined holdings of, and transactions in, Fund shares of one or more clients of the selling agent (beneficial shareholders). Omnibus accounts
are held in the name of the selling agents and not in the name of the beneficial shareholders invested in the Fund through omnibus accounts.
Retirement Plans and Omnibus Retirement
Plans
The term “retirement
plan” refers to retirement plans created under sections 401(a), 401(k), 457 and 403(b) of the Internal Revenue Code of 1986, as amended (the Code), non-qualified deferred compensation plans governed by section 409A of the Code and similar
plans, but does not refer to individual retirement plans. The term “omnibus retirement plan” refers to a retirement plan that has a plan-level or omnibus account with the Transfer Agent.
Summary of Share Class Features
Each share class has its own investment eligibility criteria,
cost structure and other features. You may not be eligible for every share class. If you purchase shares of a Fund through a retirement plan or other product or program offered by your selling agent, not all share classes of the Fund may be made
available to you. When deciding which class of shares to buy, you should consider, among other things:
■
|
The amount you plan to
invest.
|
■
|
How long you intend to
remain invested in the Fund.
|
■
|
The expenses for each share
class.
|
■
|
Whether you may be eligible
for a reduction or waiver of sales charges when you buy or sell shares.
|
Each investor's personal situation is different and you may
wish to discuss with your selling agent which share classes are available to you and which share class is appropriate for you.
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
The following summarizes the primary features of Class A,
Class B, Class C, Class I, Class K, Class R, Class R4, Class R5, Class T, Class W, Class Y and Class Z shares.
Not all Funds offer every class of shares. The Fund offers the
class(es) of shares set forth on the cover of this prospectus and may offer other share classes through a separate prospectus. Although certain share classes are generally closed to new or existing investors, information relating to these share
classes is included in the table below because certain qualifying purchase orders are permitted, as described below.
Share Class Features
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
A
|
Eligibility:
Available to the general public for investment
Minimum Initial Investment:
$2,000 for most investors
|
Taxable
Funds:
5.75% maximum, declining to 0.00% on investments of $1 million or more
Tax-Exempt Funds:
3.00% maximum, declining to 0.00% on
investments of $500,000 or more
(e)
None for Columbia Money Market Fund and certain other
Funds
(e)
|
Taxable
Funds:
CDSC on certain investments of between $1 million and $50 million redeemed within 18 months after purchase charged as follows:
• 1.00% CDSC if redeemed within 12
months after purchase and
• 0.50% CDSC if redeemed more than 12, but less than 18, months after purchase
(e)
Tax-Exempt Funds:
Maximum CDSC of 0.75% on certain investments of $500,000 or more redeemed within 12 months after purchase. The CDSC on shares purchased prior to February
19, 2015 differs
(e)
|
Distribution
and Service
Fees:
up to 0.25%
|
Class
B
|
Eligibility:
Closed to new investors
(f)
Note:
Class B shares convert to Class A shares
generally eight years after purchase
(g)
Minimum Initial Investment:
N/A
|
None
|
5.00%
maximum, gradually declining to 0.00% after six years
(g)
|
Distribution
Fee:
0.75%
Service Fee:
0.25%
|
Class
C
|
Eligibility:
Available to the general public for investment
Minimum Initial Investment:
$2,000 for most investors
Purchase Order Limit for Tax-Exempt Funds:
$499,999
(h)
, none for omnibus retirement plans
Purchase Order Limit for Taxable Funds:
$999,999
(h)
; none for omnibus retirement plans
|
None
|
1.00%
on certain investments redeemed within one year of purchase
|
Distribution
Fee:
0.75%
Service Fee:
0.25%
|
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
I
|
Eligibility:
Available only to other Columbia Funds (i.e., fund-of-fund investments)
Minimum Initial Investment:
None
|
None
|
None
|
None
|
Class
K
|
Eligibility:
Closed to new investors; available only to qualified employee benefit plans, trust companies or similar institutions, 501(c)(3) charitable organizations, non-qualified deferred compensation plans whose participants
are included in a qualified employee benefit plan described above, 529 plans, and health savings accounts
(f)
Minimum Initial Investment:
N/A
|
None
|
None
|
Plan
Administration Services Fee:
0.25%
|
Class
R
|
Eligibility:
Available only to eligible retirement plans, health savings accounts and, in the sole discretion of the Distributor, other types of retirement accounts held through platforms maintained by selling agents approved by
the Distributor
Minimum Initial Investment:
None
|
None
|
None
|
Series
of CFST & CFST I:
distribution fee of 0.50%
Series of CFST II:
distribution and service fee of 0.50%, of which the service fee may
be up to 0.25%
|
Class
R4
|
Eligibility:
Available only to (i) omnibus retirement plans, (ii) trust companies or similar institutions, (iii) broker-dealers, banks, trust companies and similar institutions that clear Fund share transactions for their client
or customer investment advisory or similar accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R4 eligibility apart
from selling, servicing or similar agreements, (iv) 501(c)(3) charitable organizations, (v) 529 plans and (vi) health savings accounts
Minimum Initial Investment:
None
|
None
|
None
|
None
|
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
R5
|
Eligibility:
Available only to (i) certain registered investment advisers that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that
have been granted specific written authorization from the Transfer Agent with respect to Class R5 eligibility apart from selling, servicing or similar agreements and (ii) omnibus retirement
plans
(f)
Minimum Initial Investment:
None for omnibus retirement plans; $100,000 for combined underlying
accounts of eligible registered investment advisers
|
None
|
None
|
None
|
Class
T
|
Eligibility:
Generally closed to new investors
(f)
Minimum Initial Investment:
N/A
|
5.75%
maximum, declining to 0.00% on investments of $1 million or more
|
CDSC
on certain investments of between $1 million and $50 million redeemed within 18 months after purchase, charged as follows:
• 1.00% CDSC if redeemed within 12 months after purchase
and
• 0.50% CDSC if redeemed more than 12, but less than 18, months after purchase
|
Service
Fee:
up to 0.50%
|
Class
W
|
Eligibility:
Available only to investors purchasing through certain authorized investment programs managed by investment professionals, including discretionary managed account programs
Minimum Initial Investment:
$500
|
None
|
None
|
Distribution
and Service Fees:
0.25%
|
Class
Y
|
Eligibility:
Available only to retirement plans that maintain plan-level or omnibus accounts with the Fund
(f)
Minimum
Initial Investment:
None
|
None
|
None
|
None
|
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
Z
|
Eligibility:
Available only to certain eligible investors, which are subject to different minimum investment requirements, ranging from $0 to $2,000; effective March 29, 2013, closed to (i) accounts of selling agents that clear
Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been given specific written notice from the Transfer Agent of the termination of their eligibility for
new purchases of Class Z shares and (ii) omnibus retirement plans, subject to certain exceptions
(f)
Minimum Initial Investment:
See
Eligibility
above
|
None
|
None
|
None
|
(a)
|
For Columbia Money Market Fund,
new investments must be made in Class A, Class I, Class W or Class Z shares, subject to eligibility. Class C and Class R shares of Columbia Money Market Fund are available as a new investment only to investors in the Distributor's proprietary 401(k)
products, provided that such investor is eligible to invest in the class and transact directly with the Fund or the Transfer Agent through a third party administrator or third party recordkeeper. Columbia Money Market Fund offers other classes of
shares only to facilitate exchanges with other Funds offering such share classes.
|
(b)
|
The minimum initial investment
requirement is $5,000 for Columbia Floating Rate Fund and Columbia Inflation Protected Securities Fund, and $10,000 for Columbia Absolute Return Currency and Income Fund. See
Buying, Selling and Exchanging Shares
— Buying Shares
for more details on the eligible investors and minimum initial investment requirements. Certain share classes are subject to minimum account balance requirements, as described in
Buying,
Selling and Exchanging Shares — Transaction Rules and Policies.
|
(c)
|
Actual front-end sales charges
and CDSCs vary among the Funds. For more information on applicable sales charges, see
Choosing a Share Class — Sales Charges and Commissions
and for information about certain exceptions to these sales
charges, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
|
(d)
|
These are the maximum
applicable distribution and/or service fees. Fee rates and fee components (i.e., the portion of a combined fee that is a distribution or service fee) may vary among Funds. Because these fees are paid out of Fund assets on an ongoing basis, over time
these fees will increase the cost of your investment and may cost you more than paying other types of distribution and/or shareholder service fees. Although Class A shares of certain series of CFST I are subject to a combined distribution and
service fee of up to 0.35%, these Funds currently limit the combined fee to 0.25%. Columbia Money Market Fund pays a distribution and service fee of up to 0.10% on Class A shares, up to 0.75% distribution fee and up to 0.10% service fee on Class B
shares, up to 0.75% distribution fee on Class C shares, and 0.10% distribution and service fees on Class W shares. Columbia AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund pay a service fee of up
to 0.20% on Class A, Class B and Class C shares. Columbia AMT-Free Intermediate Muni Bond Fund pays a distribution fee of up to 0.65% on Class B and Class C shares. For more information on distribution and service fees, see
Choosing a Share Class — Distribution and Service Fees.
|
(e)
|
For Columbia Short Term
Municipal Bond Fund, a CDSC of 0.50% is charged on certain investments of $500,000 or more redeemed within 12 months after purchase. The following Funds are not subject to a front-end sales charge or a CDSC on Class A shares: Columbia Money Market
Fund, Columbia Large Cap Index Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Index Fund, Columbia Small Cap Index Fund and Columbia U.S. Treasury Index Fund. Investments in Class A shares of Tax-Exempt Funds made prior to February
19, 2015 of between $1 million and $50 million are subject to a CDSC of 1.00% if redeemed within 12 months after purchase and 0.50% if redeemed more than 12, but less than 18, months after purchase.
|
(f)
|
These share classes are closed
to new accounts, or closed to previously eligible investors, subject to certain conditions, as summarized below and described in more detail under
Buying, Selling and Exchanging Shares — Buying Shares —
Eligible Investors:
|
•
Class B Shares
. The Funds no longer accept investments from new or existing investors in Class B shares, except through reinvestment of dividend and/or capital gain distributions by existing Class B shareholders,
or a permitted exchange.
•
Class K Shares
. Shareholders who opened and funded a Class K account with a Fund as of the close of business on December 31, 2010 may continue to make additional purchases of such share class, and existing Class K
accounts may continue to allow new investors or participants to be established in their Fund account.
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
•
Class R5 Shares
. Shareholders with Class R5 accounts funded before November 8, 2012 who do not satisfy the current eligibility criteria for Class R5 shares may not establish new Class R5 accounts but may continue
to make additional purchases of Class R5 shares in existing accounts. In addition, investment advisory programs and similar programs that opened a Class R5 account as of May 1, 2010 and continuously hold Class R5 shares in such account after such
date, may generally not only continue to make additional purchases of Class R5 shares but also open new Class R5 accounts for such pre-existing programs and add new shareholders in the program.
•
Class T Shares.
Shareholders
with Class T accounts who received, and have continuously held, Class T shares in connection with the merger of certain Galaxy funds into certain
Funds that were then named Liberty funds may continue to make additional purchases of such share class.
•
Class Y Shares
. Shareholders with Class Y accounts funded before November 8, 2012 who do not satisfy the current eligibility criteria for Class Y shares may not establish new accounts for such share class but may
continue to make additional purchases of Class Y shares in existing accounts.
•
Class Z Shares
. Effective March 29, 2013, selling agents that clear Fund share transactions through designated selling agents and their mutual fund trading platforms that have been given specific written notice
from the Transfer Agent of the termination of their eligibility for new purchases of Class Z shares and omnibus retirement plans are no longer permitted to establish new Class Z accounts, subject to certain exceptions. Omnibus retirement plans that
opened and, subject to exceptions, funded a Class Z account as of close of business on March 28, 2013 and continuously hold Class Z shares in such account after such date, may generally continue to make additional purchases of Class Z shares, open
new Class Z accounts and add new participants. In certain circumstances and in the sole discretion of the Distributor, omnibus retirement plans affiliated with a grandfathered plan may also open new Class Z accounts. Accounts of selling agents
(other than omnibus retirement plans) that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms are not permitted to establish new Class Z accounts or make
additional purchases of Class Z shares (other than through reinvestment of distributions).
(g)
|
Timing of conversion and CDSC
schedules will vary depending on the Fund and the date of your original purchase of Class B shares. For more information on the conversion of Class B shares to Class A shares, see
Choosing a Share Class — Sales
Charges and Commissions.
Class B shares of Columbia Short Term Municipal Bond Fund do not charge a CDSC and do not convert to Class A shares.
|
(h)
|
If you are eligible to invest
in Class A shares without a front-end sales charge, you should discuss your options with your selling agent. For more information, see
Choosing a Share Class – Reductions/Waivers of Sales Charges.
|
Sales Charges and Commissions
Sales charges, commissions and distribution and service fees
(discussed in a separate sub-section below) compensate selling agents (typically your financial advisor) for selling shares to you and for maintaining and servicing the shares held in your account with them. These charges, commissions and fees are
intended to provide incentives for selling agents to provide such 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 CDSC
and/or over time in the form of increased ongoing fees.
Whether the ultimate cost is higher for one class over another
depends on the amount you invest, how long you hold your shares and whether you are eligible for reduced or waived sales charges. The differential between classes also will vary depending on the actual investment return for any given investment
period. You are responsible for choosing the share class most appropriate for you after taking into account your share class eligibility and the value of accounts that you are eligible to include for the right of accumulation, which may reduce
or eliminate otherwise applicable sales charges. See
Choosing a Share Class – Reductions/Waivers of Sales Charges
. We encourage you to consult with a financial advisor who can help you with your
investment decisions.
Class A Shares — Front-End
Sales Charge
You'll pay a front-end sales charge when
you buy Class A shares (other than shares of Columbia Money Market Fund and certain other Funds), resulting in a smaller dollar amount being invested in a Fund than the purchase price you pay, unless you qualify for a waiver of the sales charge
or you buy the shares through reinvested distributions. For more information, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
The Distributor receives the sales charge and re-allows (or
pays) a portion of the sales charge to the selling agent through which you purchased the shares. The Distributor retains the balance of the sales charge. The Distributor retains the full sales charge you pay when you purchase shares of the Fund
directly from the Fund (through the Transfer Agent, rather than through a selling agent). Sales charges vary depending on the amount of your purchase.
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
Front-End Sales Charge Calculation
The table below presents the front-end
sales charge as a percentage of both the offering price and the net amount invested.
■
|
The net asset value (or NAV)
per share is the price of a share calculated by the Fund every business day.
|
■
|
The
offering price per share is the NAV per share plus any front-end sales charge that applies.
|
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 for the Fund) and the NAV 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 any other accounts eligible for aggregation of which you or your selling agent notifies the Fund) and base the sales charge on the aggregate amount. See
Choosing a Share Class — Reductions/Waivers of Sales Charges
for a discussion of account value aggregation. There is no initial sales charge on reinvested dividend or capital gain distributions.
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 (and any other accounts eligible for aggregation of which you or your selling agent notifies the Fund).
|
Class
A Shares — Front-End Sales Charge — Breakpoint Schedule*
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Equity
Funds,
Columbia Adaptive Alternatives Fund,
Columbia Adaptive Risk Allocation Fund,
Columbia Commodity Strategy Fund,
Columbia Diversified Absolute Return Fund
and Funds-of-Funds (equity)*
|
$
0–$49,999
|
5.75%
|
6.10%
|
5.00%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
3.00%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.15%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Fixed
Income Funds (except those listed below),
Columbia Multi-Asset Income Fund
and Funds-of-Funds (fixed income)*
|
$
0-$49,999
|
4.75%
|
4.99%
|
4.00%
|
$
50,000–$99,999
|
4.25%
|
4.44%
|
3.50%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
3.00%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.15%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Tax-Exempt
Funds (other than Columbia Short Term Municipal Bond Fund)
|
$
0-$99,999
|
3.00%
|
3.09%
|
2.50%
|
$100,000–$249,999
|
2.50%
|
2.56%
|
2.15%
|
$250,000–$499,999
|
1.50
%
|
1.53%
|
1.25%
|
$
500,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
Class
A Shares — Front-End Sales Charge — Breakpoint Schedule*
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Columbia
Absolute Return Currency and Income Fund,
Columbia Floating Rate Fund,
Columbia Inflation Protected Securities Fund,
Columbia Intermediate Bond Fund,
Columbia Limited Duration Credit Fund,
Columbia Mortgage Opportunities
Fund,
Columbia U.S. Government Mortgage Fund and
Columbia U.S. Social Bond Fund
|
$
0-$99,999
|
3.00%
|
3.09%
|
2.50%
|
$100,000–$249,999
|
2.50%
|
2.56%
|
2.15%
|
$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%
|
0.00%
(c)
|
|
|
|
|
|
Columbia
Short Term Bond Fund
|
$
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%
|
0.00%
(c)
|
|
|
|
|
|
Columbia
Short Term Municipal Bond Fund
|
$
0-$99,999
|
0.75%
|
0.76%
|
0.50%
|
$250,000–$499,999
|
0.50%
|
0.50%
|
0.40%
|
$
500,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
*
|
The following Funds are not
subject to a front-end sales charge or CDSC on Class A shares: Columbia Money Market Fund, Columbia Large Cap Index Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Index Fund, Columbia Small Cap Index Fund and Columbia U.S. Treasury
Index Fund.
"Funds-of-Funds (equity)"
includes Columbia Capital Allocation Aggressive Portfolio, Columbia Capital Allocation Moderate Aggressive Portfolio, Columbia Capital Allocation Moderate
Conservative Portfolio, Columbia Capital Allocation Moderate Portfolio and Columbia LifeGoal® Growth Portfolio
. "Funds-of-Funds (fixed income)"
includes Columbia Capital Allocation Conservative Portfolio
and Columbia Income Builder Fund. Columbia Balanced Fund and Columbia Global Opportunities Fund are treated as equity Funds for purposes of the table.
|
(a)
|
Purchase amounts and account
values may be aggregated among all eligible Fund accounts for the purposes of this table. See
Choosing a Share Class — Reductions/Waivers of Sales Charges
for a discussion of account value aggregation.
|
(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. Purchase price includes the sales charge.
|
(c)
|
For information regarding
cumulative commissions paid to your selling agent when you buy Class A shares of a Fund in amounts not subject to initial sales charges, see
Class A Shares — Commissions
below.
|
Class A Shares — CDSC
In some cases, you'll pay a CDSC if you sell Class A shares
that you purchased without an initial sales charge.
Tax-Exempt Funds
■
|
If you purchased Class A
shares of any Tax-Exempt Fund other than Columbia Short Term Municipal Bond Fund on or after February 19, 2015 without an initial sales charge because your accounts aggregated $500,000 or more at the time of purchase, you will incur a CDSC of 0.75%
if you redeem those shares within 12 months after purchase. Subsequent Class A share purchases made on or after February 19, 2015 that bring your aggregate account value to $500,000 or more will also be subject to a CDSC of 0.75% if you redeem them
within 12 months after purchase.
|
■
|
If you purchased Class A
shares of Columbia Short Term Municipal Bond Fund on or after February 19, 2015 without an initial sales charge because your accounts aggregated $500,000 or more at the time of purchase, you
|
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
|
will incur a CDSC of 0.50%
if you redeem those shares within 12 months after purchase. Subsequent Class A share purchases made on or after February 19, 2015 that bring your aggregate account value to $500,000 or more will also be subject to a CDSC of 0.50% if you redeem them
within 12 months after purchase.
|
■
|
If you purchased Class A
shares of any Tax-Exempt Fund prior to February 19, 2015 without an initial sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months
after purchase, which is charged as follows: 1.00% CDSC if shares are redeemed within 12 months after purchase; and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase. Subsequent Class A share purchases made
prior to February 19, 2015 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 18 months after purchase as described in this paragraph.
|
Taxable Funds
■
|
If you purchased Class A
shares of any Taxable Fund without an initial sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months after purchase, which is
charged as follows: 1.00% CDSC if shares are redeemed within 12 months after purchase; and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase. 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 18 months after purchase as described in this paragraph.
|
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. A CDSC is applied to the NAV at the time
of your purchase or sale, whichever is lower, and will not be applied to any shares you receive through reinvested distributions or any amount that represents appreciation in the value of your shares. For purposes of calculating a CDSC, the start of
the holding period is generally the first day of the month in which your purchase was made.
When you place an order to sell shares of a
class that has a CDSC, the Fund will first redeem any shares that aren't subject to a CDSC, followed by those you have held the longest. This means that if a CDSC is imposed, you cannot designate the individual shares being redeemed for U.S. federal
income tax purposes. You should consult your tax advisor about the tax consequences of investing in the Fund. In certain circumstances, the CDSC may not apply. See
Choosing a Share Class — Reductions/Waivers of
Sales Charges
for details.
Class A Shares
— Commissions
The Distributor may pay your selling
agent an up-front commission when you buy Class A shares. The Distributor generally funds the commission through the applicable sales charge paid by you. For more information, see
Class A Shares — Front-End
Sales Charge — Breakpoint Schedule.
The
Distributor may also pay your selling agent a cumulative commission when you buy Class A shares in amounts not subject to initial sales charges, according to the following schedule:
Class
A Shares of Tax-Exempt Funds — Commission Schedule (Paid by the Distributor to Selling Agents)
|
Purchase
Amount
|
Commission
Level*
(as a % of net asset
value per share)
|
$500,000
– $3,999,999
|
0.75%**
|
$4
million – $19,999,999
|
0.50%
|
$20
million or more
|
0.25%
|
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
*
|
The commission level applies to
the applicable asset level so, for example, for a purchase of $5 million, the Distributor would pay a commission of 0.75% on the first $4 million and 0.50% on the remaining $1 million.
|
**
|
The commission level on
purchases of Class A shares of Columbia Short Term Municipal Bond Fund is: 0.50% on purchases of $500,000 to $19,999,999 and 0.25% on purchases of $20 million or more.
|
Class
A Shares of Taxable Funds — Commission Schedule (Paid by the Distributor to Selling Agents)*
|
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%
|
*
|
Not applicable to Funds that do
not assess a front-end sales charge.
|
**
|
The commission level applies to
the applicable asset level so, for example, for a purchase of $5 million, the Distributor would pay a commission of 1.00% on the first $3 million and 0.50% on the remaining $2 million.
|
Class B Shares — Sales Charges
The Funds no longer accept new investments in Class B shares,
except for certain limited transactions as described in more detail under
Buying, Selling and Exchanging Shares — Buying Shares — Eligible Investors — Class B Shares (Closed).
You don't pay a front-end sales charge when you buy Class B
shares, but you may pay a CDSC when you sell Class B shares.
Class B Shares — CDSC
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 and generally declines each year until there is no sales charge, as follows:
Class
B Shares — CDSC Schedule for the Funds (except those listed below)
|
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
|
*
|
Because of rounding in the
calculation, the actual CDSC you pay may be more or less than the CDSC calculated using these percentages.
|
Class
B Shares — CDSC Schedule for Columbia AMT-Free Intermediate Muni Bond Fund, the AMT-Free State-specific Intermediate Muni Bond Funds, Columbia Intermediate Bond Fund and Columbia Short Term Bond Fund
|
Number
of Years
Class B Shares Held
|
Applicable
CDSC*
|
One
|
3.00%
|
Two
|
3.00%
|
Three
|
2.00%
|
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
Class
B Shares — CDSC Schedule for Columbia AMT-Free Intermediate Muni Bond Fund, the AMT-Free State-specific Intermediate Muni Bond Funds, Columbia Intermediate Bond Fund and Columbia Short Term Bond Fund
|
Number
of Years
Class B Shares Held
|
Applicable
CDSC*
|
Four
|
1.00%
|
Five
|
None
|
Six
|
None
|
Seven
|
None
|
Eight
|
None
|
Nine
|
Conversion
to Class A Shares
|
*
|
Because of rounding in the
calculation, the actual CDSC you pay may be more or less than the CDSC calculated using these percentages.
|
Class B shares of Columbia Short Term Municipal Bond Fund are
not subject to a CDSC.
Class B Shares —
Commissions
The Distributor paid an up-front commission
directly to your selling agent when you bought the Class B shares (a portion of this commission may have been paid to your financial advisor).
This up-front commission, which varies across the Funds, was
up to 4.00% of the net asset value per share of Funds with a maximum CDSC of 5.00% and of Class B shares of Columbia Short Term Municipal Bond Fund and up to 2.75% of the net asset value per share of Funds with a maximum CDSC of 3.00%. 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. For more information, see
Choosing a Share Class — Distribution and Service Fees.
Class B Shares — Conversion to Class A Shares
Class B shares of the Funds automatically convert to Class A
shares at different times depending upon the Fund. In general, Class B shares convert to Class A shares after eight years. For details and related information about how the Funds' Class B shares convert to Class A shares, see Appendix S to the SAI.
Class B shares of Columbia Short Term Municipal Bond Fund do not convert to Class A shares.
Class C Shares — Front-End Sales Charge
You don't pay a front-end sales charge when you buy Class C
shares. Although Class C shares do not have a front-end sales charge, over time Class C shares can incur distribution and/or service fees that are equal to or more than the front-end sales charge and distribution and/or service fees you would pay
for Class A shares. Thus, although the full amount of your purchase of Class C shares is invested in a Fund, any positive investment return on this money may be partially or fully offset by the expected higher annual expenses of Class C shares. If
you are eligible to invest in Class A shares without a front-end sales charge, you should discuss your options with your Selling Agent. For more information, see
Choosing a Share Class – Reductions/Waivers of
Sales Charges.
Class C Shares — CDSC
You'll pay a CDSC of 1.00% if you redeem Class C shares within
12 months of buying them unless you qualify for a waiver of the CDSC or the shares you're selling were purchased through reinvested distributions. For more information, see
Choosing a Share Class —
Reductions/Waivers of Sales Charges
. Redemptions of Class C shares are not subject to a CDSC if redeemed after 12 months.
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
Class C Shares — Commissions
Although there is no front-end sales charge when you buy Class
C shares, the Distributor pays an up-front commission directly to your selling agent of up to 1.00% of the NAV per share when you buy Class C shares (a portion of this commission may be paid to your financial advisor). The Distributor seeks to
recover this commission through distribution fees it receives under the Fund's distribution and/or service plan and any applicable CDSC applied when you sell your shares. For more information, see
Choosing a Share
Class — Distribution and Service Fees.
Class
R Shares — Sales Charges and Commissions
You don't
pay a front-end sales charge when you buy Class R shares or a CDSC when you sell Class R shares. The Distributor pays an up-front commission directly to your selling agent when you buy Class R shares (a portion of this commission may be paid to your
financial advisor), according to the following schedule:
Class
R Shares — Commission Schedule (Paid by the Distributor to Selling Agents)
|
Purchase
Amount
|
Commission
Level
(as a % of net asset
value per share)
|
$0
– $49,999,999
|
0.50%
|
$50
million or more
|
0.25%
|
The Distributor seeks to recover
this commission through distribution fees it receives under the Fund's distribution plan. For more information, see
Choosing a Share Class — Distribution and Service Fees.
Class T Shares — Front-End Sales Charge
You'll pay a front-end sales charge when you buy Class T
shares, resulting in a smaller dollar amount being invested in a Fund than the purchase price you pay, unless you qualify for a waiver of the sales charge or you buy the shares through reinvested distributions. For more information, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
The front-end sales charge you'll pay on Class T 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 (and any other accounts eligible for aggregation of which you or your selling agent notifies the Fund).
|
Class
T Shares — Front-End Sales Charge — Breakpoint Schedule
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Equity
Funds
|
$
0–$49,999
|
5.75%
|
6.10%
|
5.00%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
2.75%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.00%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
Class
T Shares — Front-End Sales Charge — Breakpoint Schedule
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Fixed
Income Funds
|
$
0–$49,999
|
4.75%
|
4.99%
|
4.25%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
2.75%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.00%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
(a)
|
Purchase amounts and account
values are aggregated among all eligible 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)
|
For more information regarding
cumulative commissions paid to your selling agent when you buy $1 million or more of Class T shares, see
Class T Shares — Commissions
below.
|
Class T Shares — CDSC
In some cases, you'll pay a CDSC if you sell Class T shares
that you bought without an initial sales charge.
■
|
If you purchased Class T
shares without a front-end sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months after purchase, which is charged as follows: 1.00%
CDSC if shares are redeemed within 12 months after purchase, and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase.
|
■
|
Subsequent Class T 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 the time periods noted above.
|
Class T Shares — Commissions
The Distributor may pay your selling agent an up-front
commission when you buy Class T shares (a portion of this commission may, in turn, be paid to your financial advisor). For more information, see
Class T Shares — Front-End Sales Charge — Breakpoint
Schedule, Amount retained by or paid to selling agents as a % of the offering price.
The Distributor may also pay your selling agent a cumulative
commission when you buy $1 million or more of Class T shares, according to the following schedule:
Class
T Shares
—
Commission Schedule (Paid by the Distributor to Selling Agents)
|
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%
|
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
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 or Class T shares of a Fund. These types of sales charge reductions are also referred to as breakpoint discounts.
First, through the right of accumulation (ROA), you may
combine the value of eligible accounts maintained by you and members of 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 Fund accounts in the
particular class of shares, the Fund will use the current public offering price per share. For purposes of obtaining a breakpoint discount through ROA, you may aggregate your or your immediate family members' ownership of different classes of
shares, except for Class I, Class K, Class R and Class Y shares of the Funds, Class R4 and Class R5 shares of the Funds held in retirement plan accounts and direct purchases of Columbia Money Market Fund shares, which may not be aggregated. Shares
of Columbia Money Market Fund acquired by exchange from other Funds may be combined for ROA purposes.
Second, by making a statement of intent to purchase additional
shares (commonly referred to as a letter of intent (LOI)), you may pay a lower sales charge on all purchases (including existing ROA purchases) of Class A shares or Class T shares made within 13 months after the date of your LOI. Your LOI must state
the aggregate amount of purchases you intend to make in that 13-month period, which must be at least $50,000 (or $100,000 for Funds with breakpoint discounts beginning at $100,000). The required form of LOI may vary by selling agent, so please
contact them directly for more information. Five percent of the purchase commitment amount will be placed in escrow. At the end of the 13-month period, the shares will be released from escrow, provided that you have invested the commitment amount.
If you do not invest the commitment amount by the end of the 13 months, the remaining amount of the unpaid sales charge will be redeemed from the escrowed shares and the remaining balance released from escrow. To calculate the total value of the
purchases you've made under an LOI, the Fund will use the historic cost (i.e., dollars invested) of the shares held in each eligible account. For purposes of making an LOI to purchase additional shares, you may aggregate your ownership of different
classes of shares, except for Class I, Class K, Class R and Class Y shares of the Funds, Class R4 and Class R5 shares of the Funds held in retirement plan accounts and direct purchases of Columbia Money Market Fund shares, which may not be
aggregated. Shares of Columbia Money Market Fund acquired by exchange from other Funds may be combined for LOI purposes.
You must request the reduced sales charge (whether through ROA
or an LOI) when you buy shares. If you do not complete and file an LOI, or do not request the reduced sales charge at the time of purchase, you will not be eligible for the reduced sales charge. To obtain a breakpoint discount, you must notify your
selling agent in writing at the time you buy your shares of each eligible account maintained by you and members of your immediate family, including accounts maintained through different selling agents. You and your selling agent are responsible for
ensuring that you receive discounts for which you are eligible. The Fund is not responsible for a selling agent's failure to apply the eligible discount to your account. You may be asked by your selling agent for account statements or other records
to verify your discount eligibility, including, when applicable, records for accounts opened with a different selling agent and records of accounts established by members of your immediate family.
Your “Immediate Family” and
Account Value Aggregation
For
purposes of obtaining a breakpoint discount for Class A shares or Class T shares the value of your account will be deemed to include the value of all applicable shares in eligible Fund accounts that are held by you and your “immediate
family,” which includes your spouse, domestic partner, parent, step-parent, legal guardian, child under 21, step-child under 21, father-in-law and mother-in-law, provided that you and your immediate family members share the same mailing
address. Any Fund accounts linked together for account value aggregation purposes as of the close of business on September 3, 2010 will be permitted to remain linked together. Group plan accounts are valued at the plan level.
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
Eligible Accounts
The following accounts are eligible for account value
aggregation as described above, provided that they are invested in Class A, Class B, Class C, Class E, Class F, Class T, Class W or Class Z shares of a Fund: individual or joint accounts; Roth and traditional Individual Retirement Accounts (IRAs);
Simplified Employee Pension accounts (SEPs), Savings Investment Match Plans for Employees of Small Employers accounts (SIMPLEs) and Tax Sheltered Custodial Accounts (TSCAs); Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
accounts for which you, your spouse, or your domestic partner is parent or guardian of the minor child; revocable trust accounts for which you or an immediate family member, individually, is the beneficial owner/grantor; accounts held in the name of
your, your spouse’s, or your domestic partner’s sole proprietorship or single owner limited liability company or S corporation; qualified retirement plan assets, provided that you are the sole owner of the business sponsoring the plan,
are the sole participant (other than a spouse) in the plan, and have no intention of adding participants to the plan; and investments in wrap accounts.
The following accounts are
not eligible
for account value aggregation as described above: accounts of pension and retirement plans with multiple participants, such as 401(k) plans (which are combined to reduce the sales charge for the
entire pension or retirement plan and therefore are not used to reduce the sales charge for your individual accounts); investments in 529 plans, donor advised funds, variable annuities, variable insurance products or managed separate accounts;
charitable and irrevocable trust accounts; accounts holding shares of money market funds that used the Columbia brand before May 1, 2010; and accounts invested in Class I, Class K, Class R, Class R4, Class R5 or Class Y shares of a Fund.
Front-End Sales Charge Waivers
The Distributor may waive front-end sales charges on purchases
of Class A and Class T shares of the Funds by certain categories of investors, including Board members, certain employees of selling agents, Fund portfolio managers and certain retirement and employee benefit plans. The Distributor may waive
front-end sales charges on (i) purchases (including exchanges) of Class A shares in accounts of selling agents that have entered into agreements with the Distributor to offer Fund shares to self-directed investment brokerage accounts that may or may
not charge a transaction fee to customers and (ii) exchanges of Class Z shares of a Fund for Class A shares of the Fund. For a more complete description of categories of investors who may purchase Class A and Class T shares of the Funds at NAV,
without payment of any front-end sales charge that would otherwise apply, see Appendix S to the SAI. In addition, certain types of purchases of Class A and Class T shares may be made at NAV. For a description of these eligible transactions, see
Appendix S to the SAI.
CDSC Waivers
You may be able to avoid an otherwise applicable CDSC when you
sell Class A, Class B, Class C or Class T 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 Funds or for other reasons. For example, the CDSC will be waived
on redemptions of shares in the event of the shareholder's death; that result from required minimum distributions taken from retirement accounts when the shareholder reaches age 70½; in connection with the Fund's Small Account Policy (which is
described in
Buying, Selling and Exchanging Shares — Transaction Rules and Policies
); and by certain other investors and in certain other types of transactions. For a more complete description of the
available waivers of the CDSC on redemptions of Class A, Class B, Class C or Class T shares, see Appendix S to the SAI.
Repurchases
Investors can also buy Class A shares without paying a sales
charge if the purchase is made from the proceeds of a redemption of any Class A, Class B, Class C or Class T shares of a Fund (other than Columbia Money Market Fund) within 90 days, up to the amount of the redemption proceeds. Any CDSC paid upon
redemption of your Class A, Class B, Class C or Class T shares of a Fund will not be reimbursed.
To be eligible for the reinstatement privilege, the purchase
must be made into an account for the same owner, but does not need to be into the same Fund from which the shares were sold. The Transfer Agent, Distributor or their agents must receive a written reinstatement request from you or your selling agent
within 90 days after the shares are redeemed and the purchase of Class A shares through this reinstatement privilege will be made at the NAV of
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
such shares next calculated after the request is received in “good
form.” The repurchased shares will be deemed to have the original purchase date for purposes of applying the CDSC (if any) to subsequent redemptions. Systematic withdrawals and purchases are excluded from this policy.
Restrictions and Changes in Terms and Conditions
Restrictions may apply to certain accounts and certain
transactions. The Funds may change or cancel these terms and conditions at any time. Unless you provide your selling agent with information in writing about all of the factors that may count toward a waiver of a sales charge, there can be no
assurance that you will receive all of the waivers for which you may be eligible. You should request that your selling agent provide this information to the Fund when placing your purchase order. Please see Appendix S of the SAI for more information
about the sales charge reductions and waivers.
Distribution and Service Fees
The Board has approved, and the Funds have adopted,
distribution and/or shareholder service plans which set the distribution and/or service fees that are periodically deducted from the Funds’ assets. These fees are calculated daily, may vary by share class and are intended to compensate the
Distributor and/or eligible selling agents for selling Fund shares and directly or indirectly providing services to shareholders. 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/or service fees (as an annual % of average daily net assets) and the combined amount of such fees applicable to each share class:
|
Distribution
Fee
|
Service
Fee
|
Combined
Total
|
Class
A
|
up
to 0.25%
|
up
to 0.25%
|
up
to 0.35%
(a)(b)(c)
|
Class
B
|
0.75%
(d)
|
0.25%
|
1.00%
(b)
|
Class
C
|
0.75%
(c)(e)
|
0.25%
|
1.00%
(b)
|
Class
I
|
None
|
None
|
None
|
Class
K
|
None
|
0.25%
(f)
|
0.25%
(f)
|
Class
R (series of CFST and CFST I)
|
0.50%
|
—
(g)
|
0.50%
|
Class
R (series of CFST II)
|
up
to 0.50%
(c)
|
up
to 0.25%
|
0.50%
(g)
|
Class
R4
|
None
|
None
|
None
|
Class
R5
|
None
|
None
|
None
|
Class
T
|
None
|
0.50%
(h)
|
0.50%
(h)
|
Class
W
|
up
to 0.25%
|
up
to 0.25%
|
0.25%
(c)
|
Class
Y
|
None
|
None
|
None
|
Class
Z
|
None
|
None
|
None
|
(a)
|
The maximum distribution and
service fees of Class A shares varies among the Funds, as shown in the table below:
|
Funds
|
Maximum
Class A
Distribution Fee
|
Maximum
Class A
Service Fee
|
Maximum
Class A
Combined Total
|
Series
of CFST
|
—
|
—
|
0.25%;
these Funds pay a
combined distribution and
service fee
|
Series
of CFST II (other than Columbia
Money Market Fund)
|
up
to 0.25%
|
up
to 0.25%
|
0.25%
|
Columbia
Money Market Fund
|
—
|
—
|
0.10%
|
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
Funds
|
Maximum
Class A
Distribution Fee
|
Maximum
Class A
Service Fee
|
Maximum
Class A
Combined Total
|
Columbia
AMT-Free Oregon Intermediate Muni Bond Fund, Columbia Balanced Fund, Columbia Contrarian Core Fund, Columbia Dividend Income Fund, Columbia Global Technology Growth Fund, Columbia Intermediate Bond Fund, Columbia Large Cap Growth Fund, Columbia Mid
Cap Growth Fund, Columbia Real Estate Equity Fund, Columbia Small Cap Core Fund, Columbia Small Cap Growth Fund I
|
up
to 0.10%
|
up
to 0.25%
|
up
to 0.35%; these Funds may
pay distribution and service fees
up to a maximum of 0.35% of their
average daily net assets
attributable to Class A shares
(comprised of up to 0.10% for
distribution services and up to
0.25%
for shareholder liaison
services) but currently limit such
fees to an aggregate fee of not
more than 0.25% for
Class A shares
|
Columbia
Adaptive Alternatives Fund, Columbia Adaptive Risk Allocation Fund, Columbia AMT-Free Connecticut Intermediate Muni Bond Fund, Columbia AMT-Free Massachusetts Intermediate Muni Bond Fund, Columbia AMT-Free New York Intermediate Muni Bond Fund,
Columbia Bond Fund, Columbia California Tax-Exempt Fund, Columbia Corporate Income Fund, Columbia Diversified Absolute Return Fund, Columbia Diversified Real Return Fund, Columbia Emerging Markets Fund, Columbia Global Dividend Opportunity Fund,
Columbia Global Energy and Natural Resources Fund, Columbia Greater China Fund, Columbia Multi-Asset Income Fund, Columbia New York Tax-Exempt Fund, Columbia Pacific/Asia Fund, Columbia Select Large Cap Growth Fund, Columbia Small Cap Value Fund I,
Columbia Strategic Income Fund, Columbia U.S. Social Bond Fund, Columbia U.S. Treasury Index Fund, Columbia Value and Restructuring Fund
|
—
|
0.25%
|
0.25%
|
Columbia
AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund, Columbia Tax Exempt Fund
|
—
|
0.20%
|
0.20%
|
(b)
|
The service fees for Class A,
Class B and Class C shares of certain Funds vary. Service Fee for Class A, Class B and Class C shares of Columbia AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund — The annual service fee
may equal up to 0.20% of the average daily net asset value of all shares of such Fund class. Distribution Fee for Class B and Class C shares for Columbia AMT-Free Intermediate Muni Bond Fund
—
The annual
distribution fee shall be 0.65% of the average daily net assets of the Fund's Class B and Class C shares. Fee amounts noted apply to Class B shares of the Funds other than Class B shares of Columbia Money Market Fund, which pays distribution fees of
up to 0.75% and service fees of up to 0.10% for a combined total of 0.85%. The Distributor has currently agreed not to be reimbursed by the Fund for 0.10% of the 0.85% fee for Class B shares of Columbia Money Market Fund. The Distributor has
voluntarily agreed to waive the service fee for Class A, Class B and Class C shares of Columbia U.S. Treasury Index Fund so that the service fee does not exceed 0.15% annually. This arrangement may be modified or terminated by the Distributor at any
time.
|
(c)
|
Fee amounts noted apply to all
Funds other than Columbia Money Market Fund, which, for each of Class A and Class W shares, pays distribution and service fees of 0.10%, and for Class C shares pays distribution fees of 0.75%. The Distributor has currently agreed not to be
reimbursed by the Fund for 0.25% of the 0.50% fee for Class R shares of Columbia Money Market Fund. The Distributor has voluntarily agreed to waive the 12b-1 fees it receives from Class A, Class C, Class R and Class W shares of Columbia Money Market
Fund. This arrangement may be modified or terminated by the Distributor at any time. Compensation paid to broker-dealers and other selling agents may be suspended to the extent of the Distributor's waiver of the 12b-1 fees on these specific share
classes of these Funds.
|
(d)
|
The Distributor has voluntarily
agreed to waive a portion of the distribution fee it receives from Class B shares of Columbia Short Term Bond Fund so that the distribution fee does not exceed 0.30% annually. This arrangement may be modified or terminated by the Distributor at any
time.
|
(e)
|
The Distributor has voluntarily
agreed to waive a portion of the distribution fee for Class C shares of the following Funds so that the distribution fee does not exceed the specified percentage annually: 0.45% for Columbia AMT-Free Connecticut Intermediate Muni Bond Fund, Columbia
AMT-Free Massachusetts Intermediate Muni Bond Fund, Columbia AMT-Free New York Intermediate Muni Bond Fund, Columbia AMT-Free Oregon Intermediate Muni Bond Fund, Columbia California Tax-Exempt Fund and Columbia New York Tax-Exempt Fund; 0.60% for
Columbia Corporate Income Fund and Columbia Short Term Bond Fund; 0.65% for Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund; and 0.70% for Columbia U.S. Treasury Index Fund. These arrangements may be modified or terminated by the
Distributor at any time.
|
(f)
|
The shareholder service fees
for Class K shares are not paid pursuant to a 12b-1 plan. Under a plan administration services agreement, the Funds' Class K shares pay for plan administration services. See
Class K Plan Administration Services
Fee
below for more information.
|
(g)
|
Class R shares of series of
CFST and CFST I pay a distribution fee pursuant to a distribution (Rule 12b-1) plan for Class R shares. The Funds do not have a shareholder service plan for Class R shares. Series of CFST II have a distribution and shareholder service plan for Class
R shares, which, prior to the close of business on September 3, 2010, were known as Class R2 shares. For Class R shares of series of CFST II, the maximum fee under the plan reimbursed for distribution expenses is equal on an annual basis to 0.50% of
the average daily net assets of the Fund attributable to Class R shares. Of that amount, up to 0.25% may be reimbursed for shareholder service expenses.
|
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
(h)
|
The shareholder servicing fees
for Class T shares are up to 0.50% of average daily net assets attributable to Class T shares for equity Funds and 0.40% for fixed income Funds. In general, the Funds currently limit such fees to a maximum of 0.25% for equity Funds and 0.15% for
fixed-income Funds. See
Class T Shareholder Service Fees
below for more information.
|
The distribution and/or service fees for Class A, Class B,
Class C, Class R and Class W shares, as applicable, may be subject to the requirements of Rule 12b-1 under the 1940 Act. The Distributor may retain these fees otherwise payable to selling agents if the amounts due are below an amount determined by
the Distributor in its sole discretion.
Series of CFST
II.
For Class A, Class B and Class W shares, the Distributor begins to pay these fees immediately after purchase. For Class C shares, the Distributor pays these fees in advance for the first 12 months. Selling agents
also receive distribution fees up to 0.75% of the average daily net assets of Class C shares sold and held through them, which the Distributor begins to pay 12 months after purchase. For Class B shares and for the first 12 months following the sale
of Class C shares, the Distributor retains the distribution fee of up to 0.75% in order to finance the payment of sales commissions to selling agents and to pay for other distribution related expenses. Selling agents may compensate their financial
advisors with the shareholder service and distribution fees paid to them by the Distributor. The maximum fee for services under the distribution and/or shareholder servicing plan for series of CFST II is the lesser of the amount of reimbursable
expenses and the fee rates in the table above. If a share class of a series of CFST II has no reimbursable distribution or shareholder servicing expenses, it will suspend the payment of any such fee.
Series of CFST and CFST I.
For Class R shares and, with the exception noted in the next sentence, Class A shares, the Distributor begins to pay these fees immediately after purchase. For Class B shares, Class A shares (if purchased as part of a purchase of shares of $1
million or more) and, with the exception noted in the next sentence, Class C shares, the Distributor begins to pay these fees 12 months after purchase (for Class B share, and for the first 12 months following the sale of Class C shares, the
Distributor retains the distribution fee of up to 0.75% in order to finance the payment of sales commissions to selling agents and to pay for other distribution related expenses). For Class C shares, selling agents may opt to decline payment of
sales commission and, instead, may receive these fees immediately after purchase. Selling agents may compensate their financial advisors with the shareholder service and distribution fees paid to them by the Distributor.
If you maintain shares of the Fund directly with the Fund,
without working directly with a financial advisor or other selling agent, distribution and service fees may be retained by the Distributor as payment or reimbursement for incurring certain distribution and shareholder service related expenses.
Over time, these distribution and/or service fees will reduce
the return on your investment and may cost you more than paying other types of sales charges. The Fund will pay these fees to the Distributor and/or to eligible selling agents for as long as the distribution plan and/or shareholder servicing plans
continue in effect, which is expected to be indefinitely. The Fund may reduce or discontinue payments at any time. Your selling agent may also charge you other additional fees for providing services to your account, which may be different from those
described here.
Class K Plan Administration Services
Fee
Class K shares pay an annual plan administration
services fee for the provision of various administrative, recordkeeping, communication and educational services, including services such as implementation and conversion services, account set-up and maintenance, reconciliation and account
recordkeeping and administration to various plan types, including 529 plans, retirement plans and health savings accounts. The fee for Class K shares is equal on an annual basis to 0.25% of average daily net assets attributable to the class.
Class T Shareholder Services Fees
The Funds that offer Class T shares have adopted a shareholder
services plan that permits them to pay for certain services provided to Class T shareholders by their selling agents. Equity Funds may pay shareholder servicing fees up to an aggregate annual rate of 0.50% of the Fund's average daily net assets
attributable to Class T shares (comprised of up to 0.25% for shareholder liaison services and up to 0.25% for administrative support services). Fixed income Funds may pay shareholder servicing fees up to an aggregate annual rate of 0.40% of the
Fund's average daily net assets attributable to Class T shares (comprised of up to 0.20% for shareholder liaison services and up to 0.20% for administrative support services). These fees are currently limited to an aggregate annual rate of
Columbia Floating Rate Fund
Choosing a Share Class
(continued)
not more than 0.25% for equity Funds and not more than 0.15% for fixed income
Funds. With respect to those Funds that declare dividends on a daily basis, the shareholder servicing fee shall be waived by the selling agents to the extent necessary to prevent net investment income from falling below 0% on a daily basis.
Selling Agent Compensation
The Distributor, the Investment Manager and their affiliates
make payments, from their own resources, to selling agents, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Funds (Marketing Support Payments). Such payments are generally based upon one or more
of the following factors: average net assets of the Funds sold by the Distributor attributable to that selling agent; gross sales of the Funds distributed by the Distributor attributable to that selling agent; reimbursement of ticket charges (fees
that a selling agent charges its representatives for effecting transactions in Fund shares); or a negotiated lump sum payment. While the financial arrangements may vary for each selling agent, Marketing Support Payments to any one selling agent are
generally between 0.05% and 0.40% on an annual basis for payments based on average net assets of the Fund attributable to the selling agent, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the
Funds attributable to the selling agent. The Distributor, the Investment Manager and their affiliates may make payments in larger amounts or on a basis other than those described above when dealing with certain selling agents, including certain
affiliates of Bank of America Corporation (Bank of America). Such increased payments may enable such selling agents to offset credits that they may provide to customers. The Distributor, the Investment Manager and their affiliates do not make
Marketing Support Payments with respect to Class Y shares; provided, however, that such payments are made to Bank of America with respect to Class Y shares of Columbia Bond Fund, Columbia Global Dividend Opportunity Fund, Columbia Income
Opportunities Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Growth Fund, Columbia Mid Cap Value Fund, Columbia Select International Equity Fund, Columbia Short Term Bond Fund, Columbia Small Cap Growth Fund I and Columbia Small Cap
Value Fund I.
In addition, the Transfer Agent has
certain arrangements in place to compensate selling agents, including other Ameriprise Financial affiliates, that hold Fund shares through omnibus accounts, including omnibus retirement plans, for services that they provide to beneficial
shareholders (Shareholder Services). Shareholder Services may include sub-accounting, sub-transfer agency, participant recordkeeping, shareholder or participant reporting, shareholder or participant transaction processing, maintenance of shareholder
records, preparation of account statements and provision of customer service. Payments for Shareholder Services vary by selling agent but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of
the Fund’s shares.
Generally, each Fund (other than the Columbia
Acorn Funds) pays a percentage of the average aggregate value of shares maintained in omnibus accounts: 0.20% for all share classes other than Class I, K, R5 and Y shares; 0.05% for Class K and R5 shares; and 0% for Class I and Y shares. The amounts
in excess of that reimbursed by the Fund are borne by the Distributor, the Investment Manager and/or their affiliates. The Transfer Agent does not pay selling agents for Shareholder Services and the Fund does not pay the Transfer Agent for any
Shareholder Services provided by selling agents, with respect to Class Y shares.
In addition to the payments described above, the Distributor,
the Investment Manager and their affiliates 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, the
Investment Manager and their affiliates are paid out of their own resources and do not increase the amount paid by you or the Fund. You can find further details in the SAI about the payments made by the Distributor, the Investment Manager and their
affiliates, as well as a list of the selling agents, including Ameriprise Financial affiliates, to which the Distributor and the Investment Manager have agreed to make Marketing Support Payments and pay Shareholder Services fees.
Your selling agent may charge you fees and commissions in
addition to those described in this prospectus. You should consult with your selling agent and review carefully any disclosure your selling agent provides regarding its services and compensation. Depending on the financial arrangement in place at
any particular time, a selling agent and its financial advisors may have a financial incentive for recommending the Fund or a particular share class over others.
Columbia Floating Rate Fund
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 NAV per share for each class of shares of the Fund at the end of each business day.
NAV Calculation
Each of the Fund's share classes calculates
its NAV as follows:
NAV
=
(Value of assets of the share class) – (Liabilities of the share class)
Number of outstanding shares of the class
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 NAV 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.
Equity
securities are valued primarily on the basis of market quotations or valuations reported on stock exchanges and other securities markets around the world. If an equity security is listed on a national exchange, the security is valued at the closing
price or, if the closing price is not readily available, the mean of the closing bid and asked prices. Certain equity securities, debt securities and other assets are valued differently. For instance, bank loans trading in the secondary market are
valued primarily on the basis of indicative bids, fixed-income investments maturing in 60 days or less are valued primarily using the amortized cost method, unless this methodology results in a valuation that does not approximate the market value of
these securities, and those maturing in excess of 60 days are valued primarily using a market-based price obtained from a pricing service, if available. Investments in other open-end funds are valued at their latest NAVs. Both market quotations and
indicative bids are obtained from outside pricing services approved and monitored pursuant to a policy approved by the Fund's Board. For a money market fund, the Fund's investments are generally valued at amortized cost, which approximates market
value.
If a market price is not readily available or is
deemed not to reflect market value, the Fund will determine the price of a portfolio security based on a determination of the security's fair value pursuant to a policy approved by the Fund's Board. 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) corporate actions, earnings announcements, litigation or
other events 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 foreign security's market price is readily available and reflective of market value and, if not, the fair value of
the security. To the extent the Fund has significant holdings of small cap stocks, high-yield bonds, floating rate loans, or tax-exempt, foreign or other securities that may trade infrequently, fair valuation may be used more frequently than for
other funds.
Columbia Floating Rate Fund
Buying, Selling and
Exchanging Shares
(continued)
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 fund would have priced the security. 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 one or more independent fair valuation pricing services to assist in the fair valuation process for
foreign securities.
Transaction Rules and Policies
The Fund, the Distributor or the Transfer Agent may refuse any
order to buy or exchange shares. If this happens, the Fund will return any money it received, but no interest will be paid on that money.
Order Processing
Orders to buy, sell or exchange Fund shares are processed on
business days. Depending upon the class of shares, orders can be made by mail, by telephone or online. Orders received in “good form” by the Transfer Agent or your selling agent before the end of a business day are priced at the NAV per
share of the Fund's applicable share class on that day. Orders received after the end of a business day will receive the next business day's NAV per share. When a written order to buy, sell or exchange shares is sent to the Transfer Agent, the share
price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the P.O. Box provided for regular mail delivery. 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 NAV per share. The business day that applies to your order is also called the trade date.
“Good Form”
An order is in “good form” if the Transfer Agent
or your selling 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 greater than $100,000 and other transactions, as described below, 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
The Transfer Agent may require a Medallion Signature Guarantee
for your signature in order to process certain transactions. A Medallion Signature Guarantee helps assure that a signature is genuine and not a forgery. A Medallion Signature Guarantee must be provided by an eligible guarantor institution including,
but not limited to, the following: a bank, credit union, savings association, broker or dealer that participates in the Securities Transfer Association Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) or the New York Stock
Exchange Medallion Signature Program (MSP). Notarization by a notary public is not an acceptable signature guarantee. The Transfer Agent reserves the right to reject a signature guarantee and to request additional documentation for any
transaction.
A Medallion Signature Guarantee is required
if: (i) the transaction amount is over $100,000; (ii) you want your check made payable to someone other than the registered account owner(s); (iii) the address of record has changed within the last 30 days; (iv) you want the check mailed to an
address other than the address of record; (v) you want proceeds to be sent according to existing bank account instructions not coded for outgoing Automated Clearing House (ACH) or wire, or to a bank account not on file; (vi) you are the beneficiary
of the account and the account owner is deceased (other documentation may be required); or (vii) you are changing legal ownership of your account.
Columbia Floating Rate Fund
Buying, Selling and
Exchanging Shares
(continued)
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 (e.g., social security number (SSN) or
other taxpayer identification number (TIN)). 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 take other steps as deemed reasonable. The Fund will not be 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 — Class A, Class B, Class C, Class T
and Class Z Share Accounts Below the Minimum Account Balance
The Funds generally will automatically sell your shares if the
value of your Fund account (treating each account of the Fund you own separately from any other account of the Fund you may own) falls below the applicable Minimum Account Balance. The Minimum Account Balance varies among Funds, share classes and
types of accounts, as follows:
Minimum
Account Balance
|
|
|
Minimum
Account
Balance
|
For
all Funds, classes and account types except those listed below
|
$250
(None for accounts with
Systematic Investment Plans)
|
Individual
Retirement Accounts for all Funds and classes except those listed below
|
None
|
Columbia
Absolute Return Currency and Income Fund
|
$5,000
|
Columbia
Floating Rate Fund and Columbia Inflation Protected Securities Fund
|
$2,500
|
Class
I, Class K, Class R, Class R4, Class R5, Class W and Class Y
|
None
|
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 Fund in which you hold shares, or
setting up a Systematic Investment Plan. For more information, contact the Transfer Agent or your selling agent. The Transfer Agent's contact information (toll-free number and mailing addresses) as well as the Funds' website address can be found at
the beginning of the section
Choosing a Share Class
.
The Fund also may sell your Fund shares if your selling agent
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 — Class A, Class B, Class C, Class T
and Class Z Share Accounts Minimum Balance Fee
If the
value of your Fund 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 for any reason, including as a result of market
decline, your account generally will be subject to a $20 annual fee. This fee will be assessed through the automatic sale of Fund 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 Fund account balance, consolidating your Fund accounts through an exchange of shares of another Fund in which you hold shares,
Columbia Floating Rate Fund
Buying, Selling and
Exchanging Shares
(continued)
or setting up a Systematic Investment Plan that invests at least monthly. For
more information, contact the Transfer Agent or your selling agent. The Transfer Agent's contact information (toll-free number and mailing address(es)) as well as the Funds' website address can be found at the beginning of the section
Choosing a Share Class
.
The Funds 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 Small Account Policy (Accounts
Below Minimum Account Balance and Minimum Balance Fee)
The automatic sale of Fund shares of accounts under $250 and
the annual minimum balance fee described above do not apply to shareholders of Class I, Class K, Class R, Class R4, Class R5, Class W and Class Y shares; shareholders holding their shares through broker-dealer networked accounts; wrap fee and
omnibus accounts; accounts with active Systematic Investment Plans; certain qualified retirement plans; and health savings accounts. The automatic sale of Fund shares of accounts under the applicable Minimum Account Balance does not apply to
individual retirement plans.
Small Account Policy —
Broker-Dealer and Wrap Fee Accounts
The Funds may
automatically redeem, at any time, broker-dealer networked accounts and wrap fee accounts that have account balances of $20 or less or have less than one share.
Information Sharing Agreements
As required by Rule 22c-2 under the 1940 Act, the Funds or
certain of their service providers will enter into information sharing agreements with selling agents, including participating life insurance companies and selling agents that sponsor or offer retirement plans through which shares of the Funds are
made available for purchase. Pursuant to Rule 22c-2, selling agents 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.
Excessive Trading Practices Policy of Non-Money Market
Funds
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 purchase 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 sole discretion restrict or reject a purchase or exchange order even if the transaction is
not subject to the specific 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 purchase or exchange transactions communicated directly to the Transfer Agent and to those received by selling agents.
Specific Buying and Exchanging Limitations
— If a Fund detects that an investor has made two “material round trips” in any 28-day period, it will generally reject the investor's future purchase orders, including exchange purchase orders,
involving any 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 sole discretion, reject future buy orders by any person, group or account that appears to
have engaged in any type of excessive trading activity.
Columbia Floating Rate Fund
Buying, Selling and
Exchanging Shares
(continued)
These limits generally do not apply to automated transactions
or transactions by registered investment companies in 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. In addition, the Fund may, in its sole discretion, reinstate trading privileges that have been revoked under the Fund's Excessive Trading Policies and Procedures.
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 or exchange orders through selling agents, and cannot always know of or reasonably detect excessive trading that may be facilitated by selling agents 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 selling agents such as broker-dealers, retirement plans and variable insurance products. These arrangements often permit selling
agents to aggregate their clients' transactions and accounts, and in these circumstances, the identity of the shareholders is often not known to the Fund.
Some selling agents 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.
Columbia Floating Rate Fund
Buying, Selling and
Exchanging Shares
(continued)
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 Fund 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.
Excessive
Trading Practices Policy of Columbia Money Market Fund
A
money market fund is designed to offer investors a liquid cash option that they may buy and sell as often as they wish. Accordingly, the Board has not adopted policies and procedures designed to discourage excessive or short-term trading of Columbia
Money Market Fund shares. However, since frequent purchases and sales of Columbia Money Market Fund shares could in certain instances harm shareholders in various ways, including reducing the returns to long-term shareholders by increasing costs
(such as spreads paid to dealers who trade money market instruments with Columbia Money Market Fund) and disrupting portfolio management strategies, Columbia Money Market Fund reserves the right, but has no obligation, to reject any purchase or
exchange transaction at any time. Except as expressly described in this prospectus (such as minimum purchase amounts), Columbia Money Market Fund has no limits on purchase or exchange transactions. In addition, Columbia Money Market Fund reserves
the right to impose or modify restrictions on purchases, exchanges or trading of Fund shares at any time.
Columbia Floating Rate Fund
Buying, Selling and
Exchanging Shares
(continued)
Opening an Account and Placing Orders
We encourage 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 or exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling agent.
As described below, once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.
The Funds are generally available directly and through
broker-dealers, banks and other selling agents or institutions, and through certain qualified and non-qualified plans, wrap fee products or other investment products sponsored by selling agents. You may exchange or sell shares through your selling
agent. If you maintain your account directly with your selling agent, you must contact that agent to process your transaction.
Not all selling agents offer the Funds and certain selling
agents that offer the Funds may not offer all Funds on all investment platforms or programs.
Please consult with your financial advisor to determine the availability of the Funds. If you set up an account at a
selling agent that does not have, and is unable to obtain, a selling agreement with the Distributor, you will not be able to transfer Fund holdings to that account. In that event, you must either maintain your Fund holdings with your current selling
agent, find another selling agent with a selling agreement, or sell your Fund shares, paying any applicable CDSC. Please be aware that transactions in taxable accounts are taxable events and may result in income tax liability.
Selling agents that offer the Funds may charge you additional
fees for the services they provide and they may have different policies that are not described in this prospectus.
Some policy differences may include different minimum investment amounts, exchange privileges, Fund
choices and cutoff times for investments. Additionally, recordkeeping, transaction processing and payments of distributions relating to your account may be performed by the selling agents through which your shares of the Fund are held. Since the
Fund (and its service providers) may not have a record of your account transactions, you should always contact the financial advisor employed by the selling agent through which you purchased or at which you maintain your shares of the Fund to make
changes to your account or to give instructions concerning your account, or to obtain information about your account. The Fund and its service providers, including the Distributor and the Transfer Agent, are not responsible for the failure of these
selling agents to carry out their obligations to its customers.
The Fund may engage selling agents to receive purchase,
exchange and sell orders on its behalf. Accounts established directly with the Fund will be serviced by the Transfer Agent. The Funds, the Transfer Agent and the Distributor do not provide investment advice.
Accounts Established Directly with the Fund
You or the financial advisor through which you buy shares may
establish an account with the Fund. To do so, complete a Fund account application with your financial advisor or investment professional, and mail the account application to the Transfer Agent. Account applications may be obtained at
columbiathreadneedle.com/us or may be requested by calling 800.345.6611. Make your check payable to the Fund. You will be assessed a $15 fee for any checks rejected by your financial institution due to insufficient funds or other reasons. The Funds
do not accept cash, credit card convenience checks, money orders, traveler's checks, starter checks, third or fourth party checks, or other cash equivalents.
Mail your check and completed application to the Transfer
Agent at its address that can be found at the beginning of the section
Choosing a Share Class.
You may also use these addresses to request an exchange or redemption of Fund shares. When a written order to buy,
sell or exchange shares is sent to the Transfer Agent, the share price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the
P.O. Box provided for regular mail delivery.
You will be
sent a statement confirming your purchase and any subsequent transactions in your account. You will also be sent quarterly and annual statements detailing your transactions in the Fund and the other Funds you own under the same account number.
Duplicate quarterly account statements for the current year and duplicate annual statements for the most recent prior calendar year will be sent to you free of charge. Copies of year-end statements for prior years are available for a fee. Please
contact the Transfer Agent for more information.
Columbia Floating Rate Fund
Buying, Selling and
Exchanging Shares
(continued)
Written Transactions
Once you have an account, you can communicate written buy,
sell or exchange orders to the Transfer Agent at its address that can be found at the beginning of the section
Choosing a Share Class
. When a written order to buy, sell or exchange shares is sent to the
Transfer Agent, the share price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the P.O. Box provided for regular mail
delivery.
Include in your letter: your name; the name of
the Fund(s); your account number; the class of shares to be exchanged or sold; your SSN or other TIN; the dollar amount or number of shares you want to exchange or sell; specific instructions regarding delivery of redemption proceeds or exchange
destination; signature(s) of registered account owner(s); and any special documents the Transfer Agent may require in order to process your order.
Corporate, trust or partnership accounts may need to send
additional documents. Payment will be mailed to the address of record and made payable to the names listed on the account, unless your request specifies differently and is signed by all owners.
Telephone Transactions
For Class A, Class B, Class C, Class R, Class T, Class Y and
Class Z shares, 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 SSN or TIN available when calling.
You can sell Fund shares via the telephone, by electronic
funds transfer or by check to the address of record, up to and including an aggregate of $100,000 of shares per day, per Fund account, if you qualify for telephone orders. Wire redemptions requested via the telephone are subject to a maximum of $3
million of shares per day, per Fund. You can buy up to and including $100,000 of shares per day, per Fund account through your bank account as an Automated Clearing House (ACH) transaction via the telephone if you qualify for telephone orders.
Telephone orders may not be as secure as written orders. The
Fund 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
For Class A, Class B, Class C, Class R, Class T, Class Y and
Class Z shares, once you have an account, you may contact the Transfer Agent 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 and
including an aggregate of $100,000 of shares per day, per Fund account through the internet if you qualify for internet orders.
Wire Transactions
You may buy (or redeem) Class A, Class B (redemptions only),
Class C, Class T, Class W (redemptions only), Class Y and Class Z shares of a Fund by wiring money from (or to) your bank account to (or from) your Fund account by calling the Transfer Agent at 800.422.3737. You must set up this feature prior to
your request unless you are submitting your request in writing with a Medallion Signature Guarantee. The Transfer Agent charges a fee for shares sold by Fedwire. The Transfer Agent may waive the fee for certain accounts. In the case of a redemption,
the receiving bank may charge an additional fee. The minimum amount that can be redeemed by wire is $500. The maximum amount that can be redeemed over the telephone is $3 million per day, per Fund account.
Columbia Floating Rate Fund
Buying, Selling and
Exchanging Shares
(continued)
Electronic Funds Transfer
You may buy (or redeem) Class A, Class B (redemptions only),
Class C, Class T, Class Y and Class Z shares of a Fund by electronically transferring money from (or to) your bank account to (or from) 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.
Important:
Payments sent by an
electronic fund transfer, a bank authorization, or check that are not guaranteed may take up to 10 or more days to clear. If you request a redemption before the purchase funds clear, this may cause your redemption request to fail to process if the
requested amount includes unguaranteed funds. If you purchased your shares by check or from your bank account as an ACH transaction, the Fund may hold the redemption proceeds when you sell those shares for a period of time after the trade date of
the purchase.
Buying Shares
Eligible Investors
Class A and Class C Shares
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. As described in this prospectus,
Class A shares but not Class C shares are generally subject to a front-end sales charge, which reduces the dollar amount invested in a Fund. However, Class C shares are generally subject to higher fees than Class A shares, which will reduce any
returns on Class C shares relative to Class A shares. You may be eligible to purchase Class A shares without a front-end sales charge if the value of your Columbia Fund shares held in eligible accounts reaches $1,000,000 (in the case of a purchase
of Class A shares of a Taxable Fund) or $500,000 (in the case of a purchase of Class A shares of a Tax-Exempt Fund). If you are eligible to invest in Class A shares without a front-end sales charge, you should discuss your options with your selling
agent. For more information, see
Choosing a Share Class – Reductions/Waivers of Sales Charges
. A purchase order for Class C shares of a Taxable or Tax-Exempt Fund is limited to $999,999 and $499,999,
respectively. Your selling agent may impose additional limits on investments in Class C shares.
For Columbia Money Market Fund, new investments must be made
in Class A, Class I, Class W or Class Z shares, subject to eligibility. Class C and Class R shares of Columbia Money Market Fund are available as a new investment only to investors in the Distributor's proprietary 401(k) products, provided that such
investor is eligible to invest in the class and transacts directly with the Fund or the Transfer Agent through a third party administrator or third party recordkeeper. Columbia Money Market Fund offers other classes of shares only to facilitate
exchanges with other Funds offering these classes of shares.
Class B Shares (Closed)
The Funds no longer accept 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):
■
|
Dividend and/or capital gain
distributions may continue to be reinvested in Class B shares of a Fund.
|
■
|
Shareholders invested in Class
B shares of a Fund may exchange those shares for Class B shares of other Funds offering such shares. Certain exceptions apply, including that not all Funds may permit exchanges.
|
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, any purchase orders (except those submitted by a selling agent through the National Securities Clearing Corporation (NSCC) as described in more detail below) that are orders for additional Class B shares of the Fund received from existing
investors in Class B shares, including orders
Columbia Floating Rate Fund
Buying, Selling and
Exchanging Shares
(continued)
made through an active systematic investment plan, will automatically be
invested in Class A shares of the Fund, without regard to the normal minimum initial investment requirement for Class A shares, but subject to the front-end sales charge that generally applies to Class A shares. See
Choosing a Share Class — Sales Charges and Commissions — Class A Shares — Front-End Sales Charge
for additional information. Your selling agent may have different policies not described here,
including a policy to reject purchase orders for a Fund's Class B shares or to automatically invest the purchase amount in Columbia Money Market Fund. Please consult your selling agent to understand its policy.
Additional purchase orders for a Fund's Class B shares by an
existing Class B shareholder, submitted by such shareholder's selling agent through the NSCC, will be rejected due to operational limitations of the NSCC. Investors should consult their selling agent if they wish to invest in the Fund by purchasing
a share class of the Fund other than Class B shares.
Dividend and/or capital gain distributions from Class B shares
of a Fund will not be automatically invested in Class B shares of another 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 Fund will be
reinvested in Class B shares of the same Fund that is making the distribution.
Class I Shares
Class I shares are available only to the Funds (i.e.,
fund-of-funds investments).
Class K Shares (Closed)
Class K shares are closed to new investors and new accounts,
subject to certain limited exceptions described below.
Shareholders who opened and funded a Class K account with the
Fund as of the close of business on December 31, 2010 (including accounts once funded that subsequently reached a zero balance) may continue to make additional purchases of Class K shares. Plans may continue to make additional purchases of Fund
shares and add new participants, and new plans sponsored by the same or an affiliated sponsor may invest in the Fund (and add new participants) if an initial plan so sponsored invested in the Fund as of December 31, 2010 (or had approved the Fund as
an investment option as of December 31, 2010 and funded its initial account with the Fund prior to March 31, 2011) and holds Fund shares at the plan level.
An order to purchase Class K shares received by the Fund or
the Transfer Agent after the close of business on December 31, 2010 (other than as described above) from a new investor or a new account that is not eligible to purchase shares will be refused by the Fund and the Transfer Agent and any money that
the Fund or the Transfer Agent received with the order will be returned to the investor or the selling agent, as appropriate, without interest.
Class K shares are designed for qualified employee benefit
plans, trust companies or similar institutions, charitable organizations that meet the definition in Section 501(c)(3) of the Code, non-qualified deferred compensation plans whose participants are included in a qualified employee benefit plan
described above, state sponsored college savings plans established under Section 529 of the Code, and health savings accounts created pursuant to public law 108-173. Class K shares may be purchased, sold or exchanged only through the Distributor or
an authorized selling agent.
Prior to October 25, 2012,
Class K shares were named Class R4 shares.
Class R
Shares
Class R shares are available only to eligible
health savings accounts sponsored by third party platforms, including those sponsored by Ameriprise Financial affiliates, eligible retirement plans and, in the sole discretion of the Distributor, other types of retirement accounts held through
platforms maintained by selling agents approved by the Distributor. Eligible retirement plans include any retirement plan other than individual 403(b) plans. Class R shares are generally not available for investment through retail nonretirement
accounts, traditional and Roth IRAs, Coverdell Education Savings Accounts, SEPs, SAR-SEPs, Simple IRAs or 529 tuition programs. Contact the Transfer Agent or your retirement plan or health savings account administrator for more information about
investing in Class R shares.
Columbia Floating Rate Fund
Buying, Selling and
Exchanging Shares
(continued)
Class R4 Shares
Class R4 shares are available only to (i) omnibus retirement
plans, (ii) trust companies or similar institutions, (iii) broker-dealers, banks, trust companies and similar institutions that clear Fund share transactions for their client or customer investment advisory or similar accounts through designated
selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R4 eligibility apart from selling, servicing or similar agreements, (iv) 501(c)(3) charitable
organizations, (v) 529 plans and (vi) health savings accounts.
Prior to October 31, 2012, Class R4 shares were named Class R3
shares.
Class R5 Shares
Class R5 shares are available only to (i) certain registered
investment advisers that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with
respect to Class R5 eligibility apart from selling, servicing or similar agreements and (ii) omnibus retirement plans. Prior to November 8, 2012, Class R5 shares were closed to new investors and new accounts, subject to certain exceptions. Existing
shareholders who do not satisfy the new eligibility requirements for investment in Class R5 may not establish new Class R5 accounts but may continue to make additional purchases of Class R5 shares in accounts opened and funded prior to November 8,
2012; provided, however, that investment advisory programs and similar programs that opened a Class R5 account as of May 1, 2010, and continuously hold Class R5 shares in such account after such date, may generally not only continue to make
additional purchases of Class R5 shares but also open new Class R5 accounts for such pre-existing programs and add new shareholders in the program.
Class T Shares
Class T shares are available only to investors who received
(and who have continuously held) Class T shares in connection with the merger of certain Galaxy funds into certain Funds that were then named Liberty funds.
Class W Shares
Class W shares are available only to investors purchasing
through authorized investment programs managed by investment professionals, including discretionary managed account programs. Class W shares may be purchased, sold or exchanged only through the Distributor or an authorized selling agent. Shares
originally purchased in a discretionary managed account may continue to be held in Class W outside of a discretionary managed account, but no additional Class W purchases may be made and no exchanges to Class W shares of another Fund may be made
outside of a discretionary managed account.
Class Y
Shares
Class Y shares, except as noted below, are
available only to retirement plans that maintain plan-level or omnibus accounts with the Fund (through the Transfer Agent).
Prior to November 8, 2012, Class Y shares were offered only to
certain former shareholders of series of the former Columbia Funds Institutional Trust (together, Former CFIT Shareholders). Former CFIT Shareholders who opened and funded a Class Y account with a Fund as of the close of business on November 7, 2012
may continue to make additional purchases of Class Y shares even if they do not satisfy the current eligibility requirements but may not establish new Class Y shares accounts and will not be eligible to exchange Class Y shares of a Fund into Class Y
shares of other Funds. Former CFIT Shareholders may exchange Class Y shares of a Fund for Class Z shares of the same Fund or Class Z shares of another Fund, subject to applicable minimum investments.
Columbia Floating Rate Fund
Buying, Selling and
Exchanging Shares
(continued)
Class Z Shares
Class Z shares are available only to the categories of
eligible investors described below under
Class Z Shares Minimum Initial Investments
.
Selling agents that clear Fund share transactions through designated selling agents and
their mutual fund trading platforms that were given specific written notice from the Transfer Agent of the termination, effective March 29, 2013, of their eligibility for new purchases of Class Z shares and omnibus retirement plans are not permitted
to establish new Class Z accounts, subject to certain exceptions described below.
Omnibus retirement plans that opened and, subject to certain
exceptions, funded a Class Z account with the Fund as of the close of business on March 28, 2013, and have continuously held Class Z shares in such account after such date, may generally continue to make additional purchases of Class Z shares, open
new Class Z accounts and add new participants. In addition, an omnibus retirement plan affiliated with a grandfathered plan may, in the sole discretion of the Distributor, open new Class Z accounts in a Fund if the affiliated plan opened a Class Z
account on or before March 28, 2013. If an omnibus retirement plan invested in Class Z shares changes recordkeepers after March 28, 2013, any new accounts established for that plan may not be established in Class Z shares, but such a plan may
establish new accounts in a different share class for which the plan is eligible. The Distributor may, in its sole discretion, delay the funding requirement described above for omnibus retirement plans to allow an omnibus retirement plan that opened
a Class Z account (the initial Class Z account) with the Fund as of the close of business on March 28, 2013 to make additional purchases of Class Z shares, open new Class Z accounts and add new participants so long as the initial Class Z account was
funded by July 2, 2013.
Accounts of selling agents
(other than omnibus retirement plans, which are discussed above) that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that received specific written notice
from the Transfer Agent of the termination, effective March 29, 2013, of their eligibility for new purchases of Class Z shares will not be permitted to establish new Class Z accounts or make additional purchases of Class Z shares (other than through
reinvestment of distributions). Such accounts may, at their holder’s option, exchange Class Z shares of a Fund, without the payment of a sales charge, for Class A shares of the same Fund.
Additional Eligible Investors
In addition, the Distributor, in its sole discretion, may
accept investments in any share class from investors other than those listed in this prospectus.
Minimum Initial Investments
The table below shows the Fund's minimum initial investment
requirements, which may vary by Fund, class and type of account.
Minimum
Initial Investments
|
|
Minimum
Initial
Investment
(a)
|
Minimum
Initial Investment
for Accounts
with Systematic
Investment Plans
|
For
all Funds, classes and account types except those listed below
|
$2,000
|
$100
(b)
|
Individual
Retirement Accounts for all Funds and classes except those listed below
|
$1,000
|
$100
(c)
|
Columbia
Absolute Return Currency and Income Fund
|
$10,000
|
$10,000
|
Columbia
Floating Rate Fund and Columbia Inflation Protected Securities Fund
|
$5,000
|
$5,000
|
Class
I, Class K, Class R, Class R4 and Class Y
|
None
|
N/A
|
Class
R5
|
variable
(d)
|
N/A
|
Class
W
|
$500
|
N/A
|
Class
Z
|
variable
(e)
|
$100
|
Columbia Floating Rate Fund
Buying, Selling and
Exchanging Shares
(continued)
(a)
|
If your Class A, Class B, Class
C, Class T or Class Z shares account balance falls below the minimum initial investment amount for any reason, including a market decline, you may be asked to increase it to the minimum initial investment amount or establish a monthly Systematic
Investment Plan. If you do not do so, your account will be subject to a $20 annual low balance fee and/or shares may be automatically redeemed and the proceeds mailed to you if the account falls below the minimum account balance. See
Buying, Selling and Exchanging Shares — Transaction Rules and Policies
above.
|
(b)
|
Columbia Money Market Fund
—
$2,000
|
(c)
|
Columbia Money Market Fund
—
$1,000
|
(d)
|
There is no minimum initial
investment in Class R5 shares for omnibus retirement plans. A minimum initial investment of $100,000 applies to aggregate purchases of Class R5 shares of a Fund for combined underlying accounts of any registered investment adviser that clears Fund
share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R5 eligibility
apart from selling, servicing or similar agreements.
|
(e)
|
The minimum initial investment
amount for Class Z shares is $0, $1,000 or $2,000 depending upon the category of eligible investor. See
—
Class Z Shares Minimum Initial Investments
below. The
minimum initial investment amount for systematic investment plan accounts is the same as the amount set forth in the first two rows of the table, as applicable.
|
The minimum initial investment requirements may be waived for
accounts that are managed by an investment professional, for accounts held in approved discretionary or non-discretionary wrap programs, or for accounts that are a part of an employer-sponsored retirement plan. The Distributor, in its sole
discretion, may also waive minimum initial investment requirements for other account types.
Minimum investment and related requirements may be modified at
any time, with or without prior notice. If your account is closed and then re-opened with a systematic investment plan, your account must meet the then-current applicable minimum initial investment.
Class Z Shares 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 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.
|
■
|
Any investor participating
in a wrap program sponsored by a selling agent 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 for which a selling agent 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 employee of Columbia
Management Investment Advisers, LLC, the Distributor or the Transfer Agent and immediate family members of any of the foregoing who share the same address and any persons employed as of April 30, 2010 by Columbia Management Advisors, LLC, Columbia
Management Distributors, Inc., or Columbia Management Services, Inc., the adviser, distributor and transfer agent of series of CFST and CFST I prior to May 1, 2010 (the Previous Service Providers) and immediate family members of any of the foregoing
who share the same address are eligible to make new and subsequent purchases in Class Z shares through an individual retirement account. If you maintain your account with a selling agent, you must contact that selling agent each time you seek to
purchase shares to notify them that you qualify for Class Z shares.
|
The minimum initial investment in Class Z shares for the
following categories of eligible investors is $2,000:
■
|
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
|
Columbia Floating Rate Fund
Buying, Selling and
Exchanging Shares
(continued)
|
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 a series of CFST or CFST I distributed by the Distributor.
|
■
|
Any investor participating
in an account offered by a selling agent 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.
|
■
|
Any employee of Columbia
Management Investment Advisers, LLC, the Distributor or the Transfer Agent and immediate family members of any of the foregoing who share the same address and any persons employed as of April 30, 2010 by the Previous Service Providers and any of
their immediate family members who share the same address are eligible to make new and subsequent purchases in Class Z shares through a non-retirement account. If you maintain your account with a selling agent, you must contact that selling agent
each time you seek to purchase shares to notify them that you qualify for Class Z shares.
|
■
|
Certain other investors as
set forth in more detail in the SAI.
|
Systematic Investment Plan
The Systematic Investment Plan allows you to schedule regular
purchases via automatic transfers from your bank account to the Fund on a monthly, quarterly or semiannual basis. Contact the Transfer Agent or your selling agent to set up the plan. Systematic Investment Plans may not be available for all share
classes.
Dividend Diversification
Generally, you may automatically invest distributions made by
another Fund into the same class of shares (and in some cases certain other classes of shares) of a Fund at no additional sales charge. A sales charge may apply when you invest distributions made with respect to shares that were not subject to a
sales charge at the time of your initial purchase. Call the Transfer Agent at 800.345.6611 for details. The ability to invest distributions from one Fund to another Fund may not be available to accounts held at all selling agents.
Other Purchase Rules You Should Know
■
|
Once the Transfer Agent or
your selling 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
and Class T shares at the public offering price per share because purchases of these share classes are generally subject to a front-end sales charge.
|
■
|
You buy Class B, Class C,
Class I, Class K, Class R, Class R4, Class R5, Class W, Class Y and Class Z shares at net asset value per share because no front-end sales charge applies to purchases of these share classes.
|
■
|
The Distributor and the
Transfer Agent reserve the right to cancel your order if the Fund 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 agents are
responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.
|
■
|
Shares purchased are
recorded on the books of the Fund. The Fund doesn't issue certificates.
|
Columbia Floating Rate Fund
Buying, Selling and
Exchanging Shares
(continued)
Selling Shares
When you sell your shares, the Fund is effectively buying them
back from you. This is called a redemption. The payment will be sent within seven days after your request is received in “good form.” When you sell shares, the amount you receive may be more or less than the amount you invested.
Your sale price will be the next NAV calculated after your
request is received in “good form,” minus any applicable CDSC.
Systematic Withdrawal Plan
The Systematic Withdrawal Plan allows you to schedule regular
redemptions from your account any business day on a monthly, quarterly or semiannual basis. Currently, Systematic Withdrawal Plans are generally available for Class A, Class B, Class C, Class R4, Class R5, Class T, Class W, Class Y and Class Z share
accounts. Contact the Transfer Agent or your financial advisor to set up the plan. To set up the plan, your account balance must meet the class minimum initial investment amount. 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 Signature Guaranteed.
You can choose to receive your withdrawals via check or direct
deposit into your bank account. The Fund will deduct any applicable CDSC from the withdrawals before sending the balance to you. You can cancel the plan by giving the Fund 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 withdraw your entire investment.
Check Redemption Service (for Columbia Money Market Fund)
Class A and Class Z shares of Columbia Money Market Fund offer
check writing privileges. If you have $2,000 in Columbia Money Market Fund, you may request checks which may be drawn against your account. The amount of any check drawn against your Columbia Money Market Fund must be at least $100. You can elect
this service on your initial application or thereafter. Call 800.345.6611 for the appropriate forms to establish this service. If you own Class A shares that were originally purchased in another Fund at NAV because of the size of the purchase, and
then exchanged into Columbia Money Market Fund, check redemptions may be subject to a CDSC. A $15 charge will be assessed for any stop payment order requested by you or any overdraft in connection with checks written against your Columbia Money
Market Fund account. Note that a Medallion Signature Guarantee may be required if this service is established after the account is opened.
In-Kind Redemptions
The Fund reserves the right to honor redemption orders with
in-kind distributions of portfolio securities instead of cash. In the event the Fund distributes portfolio securities in-kind, you may incur 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. For U.S. federal income tax purposes redemptions paid in securities are generally treated the same as redemptions paid in cash.
Other Redemption Rules You Should Know
■
|
Once the Transfer Agent or
your selling agent receives your redemption order in “good form,” your shares will be sold at the next calculated NAV 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 that
are held directly with the Funds (through the Transfer Agent), we will normally send the redemption proceeds by mail or electronically transfer them to your bank account within three business days after the Transfer Agent or your selling agent
receives your order in “good form.”
|
■
|
If you sell your shares
through a selling agent, the Funds will normally send the redemption proceeds by Fedwire within three business days after the Transfer Agent or your selling agent receives your order in “good form.”
|
■
|
If you paid for your shares
by check or from your bank account as an ACH transaction, the Funds will hold the redemption proceeds when you sell those shares for a period of time after the trade date of the purchase.
|
Columbia Floating Rate Fund
Buying, Selling and
Exchanging Shares
(continued)
■
|
No interest will be paid on
uncashed redemption checks.
|
■
|
The Funds can delay payment
of the redemption proceeds for up to seven days and may suspend redemptions and/or further postpone payment of redemption proceeds when the NYSE is closed or trading thereon is restricted or during emergency or other circumstances, including as
determined by the SEC.
|
■
|
Other restrictions may apply
to retirement accounts. For information about these restrictions, contact your retirement plan administrator.
|
■
|
The Fund reserves the right
to redeem your shares if your account falls below the Fund's minimum initial investment requirement.
|
■
|
Also keep in mind the 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 your Fund to buy shares of
another Fund, in what is called an exchange. You should read the prospectus of, and make sure you understand the investment objective, principal investment strategies, risks, fees and expenses of, the Fund into which you are exchanging.
You may be subject to a sales charge if you exchange from
Columbia Money Market Fund or any other Fund that does not charge a front-end sales charge into a non-money market Fund.
If you hold your Fund shares through certain selling agents, including Ameriprise Financial
Services, Inc., you may have limited exchangeability among the Funds.
Please contact your selling agent for more information.
You can generally make exchanges between like share classes of
any Fund and, subject to eligibility requirements, other share classes of any Fund. Some exceptions apply. Although the Funds allow certain exchanges from one share class to another share class with higher expenses, you should consider the expenses
of each class before making such an exchange.
Systematic
Exchanges
You may buy Class A, Class C, Class T, Class
W, Class Y and/or Class Z shares of a Fund by exchanging each month from another Fund for shares of the same class of the Fund at no additional cost, subject to the following exchange amount minimums: $50 each month for individual retirement
accounts (i.e. tax qualified accounts); and $100 each month for non-retirement accounts. Contact the Transfer Agent or your selling agent to set up the plan. If you set up your plan to exchange more than $100,000 each month, you must obtain a
Medallion Signature Guarantee.
Exchanges will continue
as long as your balance is sufficient to complete the systematic monthly transfers, subject to the 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 $50 and $100 minimum requirements noted immediately above) by calling the Transfer Agent at 800.345.6611. A sales charge may apply when
you exchange shares of a Fund that were not assessed a sales charge at the time of your initial purchase.
Other Exchange Rules You Should Know
■
|
Exchanges are made at the
NAV next calculated after your exchange order is received in “good form.”
|
■
|
Once the Fund receives your
exchange request, you cannot cancel it after the market closes.
|
■
|
The rules for buying shares
of a Fund generally apply to exchanges into that Fund, including, if your exchange creates a new Fund account, it must satisfy the minimum investment amount, unless a waiver applies.
|
■
|
Shares of the purchased Fund
may not be used on the same day for another exchange or sale.
|
■
|
If you exchange shares from
Class A shares of Columbia Money Market Fund to a non-money market Fund, any further exchanges must be between shares of the same class. For example, if you exchange from Class A shares of Columbia Money Market Fund into Class C shares of a
non-money market Fund, you may not exchange from Class C shares of that non-money market Fund back to Class A shares of Columbia Money Market Fund.
|
Columbia Floating Rate Fund
Buying, Selling and
Exchanging Shares
(continued)
■
|
A sales charge may apply when
you exchange shares of a Fund that were not assessed a sales charge at the time of your initial purchase. For example, if your initial investment was in Columbia Money Market Fund and you exchange into a non-money market Fund, your transaction is
subject to a front-end sales charge if you exchange into Class A shares and to a CDSC if you exchange into Class C shares of the Funds.
|
■
|
If your initial investment
was in Class A shares of a non-money market Fund and you exchange shares into Columbia Money Market Fund, you may exchange that amount to another Fund, including dividends earned on that amount, without paying a sales charge.
|
■
|
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 Fund and ends when you sell the shares of the Fund you received from the exchange. The applicable CDSC will be the CDSC of the original Fund.
|
■
|
You may make exchanges only
into a Fund that is legally offered and sold in your state of residence. Contact the Transfer Agent or your selling agent for more information.
|
■
|
You generally may make an
exchange only into a 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.
|
■
|
Changing your investment to
a different Fund will be treated as a sale and purchase, and you will be subject to applicable taxes on the sale and sales charges on the purchase of the new Fund.
|
■
|
Class Z shares of a Fund may
be exchanged for Class A or Class Z shares of another Fund. In certain circumstances, the front-end sales charge applicable to Class A shares may be waived on exchanges of Class Z shares for Class A shares. See
Buying, Selling and Exchanging Shares — Buying Shares — Eligible Investors — Class Z Shares
for details.
|
■
|
You may generally exchange
Class T shares of a Fund for Class A shares of another Fund if the other Fund does not offer Class T shares. Class T shares exchanged into Class A shares cannot be exchanged back into Class T shares.
|
■
|
Class W shares originally
purchased, but no longer held, in a discretionary managed account, may not be exchanged for Class W shares of another Fund.
|
■
|
Former CFIT Shareholders may
not exchange Class Y shares of a Fund into Class Y shares of another Fund.
|
Same-Fund Exchange Privilege
Certain shareholders of a Fund may be or become eligible to
invest in other classes of shares of the same Fund. Upon a determination of such eligibility, such shareholders may be eligible to exchange their shares for shares of the other share class, if offered. Such exchanges include exchanges of shares of
one class for shares of another share class with higher expenses. Before making such an exchange, you should consider the expenses of each class. Investors should contact their selling agents to learn more about the details of the exchange
privilege.
Note the following rules relating to
same-Fund exchanges:
■
|
No sales charges or other
charges will apply to any such exchange, except that when Class B shares are exchanged, any CDSC applicable to Class B shares will be applied.
|
■
|
Ordinarily, shareholders
will not recognize a gain or loss for U.S. federal income tax purposes upon such an exchange. You should consult your tax advisor about your particular exchanges.
|
Columbia Floating Rate Fund
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 generally unrealized. If the fund sells an investment, it generally will realize a capital gain if it sells that investment for a
higher price than its adjusted cost basis, and will generally realize a capital loss if it sells that investment for a lower price than its adjusted cost basis. Capital gains and losses are either short-term or long-term, depending on whether the
fund holds the securities for one year or less (short-term) or more than one year (long-term).
|
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 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, declare or
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 distribution was declared (or, if the Fund declares distributions daily, 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 (the selling agent through which you purchased shares may have different policies). You can do this by contacting the Funds at
the addresses and telephone numbers listed at the beginning of the section entitled
Choosing a Share Class
. No sales charges apply to the purchase or sale of such shares.
For accounts held directly with the Fund (through the Transfer
Agent), 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.
Columbia Floating Rate Fund
Distributions and Taxes
(continued)
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) of net
investment income or net realized capital gain, because doing so can cost you money in taxes to the extent 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,” before you invest check the Fund's distribution schedule, which is available at the Funds' website and/or by calling the Funds' telephone
number listed at the beginning of the section entitled
Choosing a Share Class
.
Taxes
You should be aware of the following considerations applicable
to all Funds (unless otherwise noted):
■
|
The Fund intends to qualify
and to be eligible for treatment 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 for treatment as a regulated investment company would result in Fund-level taxation, and consequently, a reduction in income available for distribution to you and in the net asset value of your shares. Even if the Fund
qualifies for treatment as a regulated investment company, the Fund may be subject to federal excise tax on certain undistributed income or gains.
|
■
|
Distributions, if taxable,
generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional Fund shares. Dividends paid in January are deemed paid on December 31 of the prior year if the dividend was declared and payable to
shareholders of record in October, November, or December of such prior year.
|
■
|
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.
For taxable fixed income Funds:
The Fund expects
that distributions will consist primarily of ordinary income.
|
■
|
From time to time, a
distribution from the Fund could constitute a return of capital, which is not taxable to you so long as the amount of the distribution does not exceed your tax basis in your Fund shares. A return of capital reduces your tax basis in your Fund
shares, with any amounts exceeding such basis generally taxable as capital gain.
|
■
|
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 the lower net long-term capital gain rates instead of the higher
ordinary income rates. 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 eligible for treatment as qualified dividend income.
|
■
|
Certain high-income
individuals (as well as estates and trusts) are subject to a 3.8% tax on net investment income. For individuals, the 3.8% tax applies to the lesser of (1) the amount (if any) by which the taxpayer's modified adjusted gross income exceeds certain
threshold amounts or (2) the taxpayer's “net investment income.”
|
|
Net investment income
generally includes for this purpose dividends, including any capital gain dividends, paid by the Fund, and net gains recognized on the sale, redemption or exchange of shares of the Fund.
|
■
|
Certain derivative
instruments when held in the Fund's portfolio subject the Fund to special tax rules, the effect of which may be to, among other things, accelerate income to the Fund, defer Fund losses, cause adjustments in the holding periods of Fund portfolio
securities, or convert capital gains into ordinary income, short-term capital losses into long-term capital losses or long-term capital gains into short-term capital gains. These rules could therefore affect the amount, timing and/or character of
distributions to shareholders.
|
Columbia Floating Rate Fund
Distributions and Taxes
(continued)
■
|
Certain Funds may purchase
or write options, as described further in the SAI. Generally, a Fund realizes a capital gain or loss on an option when the option expires, or when it is exercised, sold or otherwise terminated. However, if an option is a “section 1256
contract,” which includes most traded options on a broad-based index, and the Fund holds such option at the end of its taxable year, the Fund is deemed to sell such option at fair market value at such time and recognize any gain or loss
thereon, which is generally deemed to be 60% long-term and 40% short-term gain or loss, as described further in the SAI.
|
■
|
If at the end of the taxable
year more than 50% of the value of the Fund's assets consists of securities of foreign corporations, and the Fund makes a special election, you will generally be required to include in your income for U.S. federal income tax purposes your share of
the qualifying foreign income taxes paid by the Fund in respect of its foreign portfolio securities. You may be able to claim a foreign tax credit or deduction in respect of this amount, subject to certain limitations. There is no assurance that the
Fund will make this election for a taxable year, even if it is eligible to do so.
|
■
|
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 your adjusted tax basis in the shares, which is generally 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; in other circumstances, capital losses may be disallowed under the “wash sale” rules.
|
■
|
The Fund generally is
required to report to shareholders and the Internal Revenue Service (the IRS) upon the sale, exchange or redemption of Fund shares cost basis information with respect to those shares. The Fund uses average cost basis as its default method of
calculating cost basis. Please see columbiathreadneedle.com/us or contact the Fund at 800.345.6611 for more information regarding average cost basis reporting, other available cost basis methods and how to select or change a particular method or to
choose specific shares to sell, redeem or exchange. If you hold Fund shares through a selling agent, you should contact your selling agent to learn about its cost basis reporting default method and the reporting elections available to your account.
|
■
|
The Fund is required by
federal law to withhold tax on any taxable or tax-exempt distributions and redemption 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 TIN or haven't certified to the Fund that withholding doesn't apply; the 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.
|
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. Please see the SAI for more detailed tax information. 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.
Additional Information About the Fund
Additional information about the Fund’s investments is available in
the Fund’s annual and semiannual 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.
The SAI also provides additional information about the Fund and its policies. The SAI, which has been filed with the SEC, is legally part of this prospectus (incorporated by reference). To obtain these documents free of charge, to request other
information about the Fund and to make shareholder inquiries, please contact the Fund as follows:
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:
columbiathreadneedle.com/us
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, D.C. 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, D.C. 20549-1520.
The investment company registration number of Columbia Funds
Series Trust II, of which the Fund is a series, is 811-21852.
© 2015 Columbia Management Investment Distributors,
Inc.
225 Franklin Street, Boston, MA 02110
800.345.6611
Prospectus
June 1,
2015
Columbia Large
Core Quantitative Fund
Class
|
|
Ticker
Symbol
|
Class
Y Shares
|
|
CCQYX
|
As with all mutual funds, the Securities and Exchange Commission (SEC) has
not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Columbia Large Core Quantitative Fund
|
3
|
|
3
|
|
3
|
|
3
|
|
4
|
|
5
|
|
6
|
|
6
|
|
6
|
|
7
|
|
8
|
|
8
|
|
8
|
|
8
|
|
10
|
|
14
|
|
15
|
|
16
|
|
17
|
|
17
|
|
17
|
|
22
|
|
30
|
|
32
|
|
35
|
|
36
|
|
36
|
|
37
|
|
41
|
|
43
|
|
49
|
|
50
|
|
53
|
|
53
|
|
54
|
Columbia Large Core Quantitative Fund
Investment
Objective
Columbia Large Core Quantitative Fund (the
Fund) seeks to provide shareholders with long-term capital growth.
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
|
Maximum
sales charge (load) imposed on purchases
|
|
None
|
Maximum
deferred sales charge (load) imposed on redemptions
|
|
None
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
Class
Y
|
Management
fees
|
0.58%
|
Distribution
and/or service (12b-1) fees
|
0.00%
|
Other
expenses
(a)
|
0.08%
|
Total
annual Fund operating expenses
|
0.66%
|
(a)
|
Other expenses are based on
estimated amounts for the Fund’s current fiscal year.
|
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 the
applicable class of Fund shares 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
Annual Fund Operating Expenses
table above.
|
Although your actual costs may be higher or
lower, based on the assumptions listed above, your costs would be:
|
1
year
|
3
years
|
5
years
|
10
years
|
Class
Y
(whether or not shares are redeemed)
|
$67
|
$211
|
$368
|
$822
|
Portfolio Turnover
The Fund may pay 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 73% of the average value of its portfolio.
Principal Investment Strategies
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in equity securities of companies with market capitalizations greater than $5 billion at the time of purchase or that are within the market
capitalization range of companies in the S&P 500 Index (the Index) at the time of purchase. These equity securities generally include common stocks. The market capitalization range and composition of the companies in the Index are subject to
change.
Columbia Large Core Quantitative Fund
Summary of the Fund
(continued)
The Fund may from time to time emphasize one or more economic
sectors in selecting its investments, including the information technology sector.
The Fund may invest in derivatives, such as futures contracts,
for cash equitization and investment flexibility.
In
pursuit of the Fund’s objective, the portfolio managers use quantitative analysis to evaluate the relative attractiveness of potential investments.
Principal Risks
An investment in the Fund involves risk, including those
described below.
There is no assurance that the Fund will achieve its investment objective and you may lose money
. The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV)
and share price may go down.
Active Management Risk.
Although the Fund is managed based primarily on quantitative methods, a qualitative review of the quantitative output is conducted by the portfolio managers. Therefore, the Fund’s performance will reflect, in
part, the ability of the portfolio managers to make active, qualitative decisions, including allocation decisions that seek to achieve the Fund’s investment objective.
Derivatives Risk.
Losses
involving derivative instruments may be substantial, because a relatively small movement in the price of an underlying security, instrument, commodity, currency or index may result in a substantial loss for the Fund. In addition to the potential for
increased losses, the use of derivative instruments may lead to increased volatility for the Fund. Derivative investments will typically increase the Fund’s exposure to principal risks to which it is otherwise exposed, and may expose the Fund
to additional risks, including correlation risk, counterparty risk, hedging risk, leverage risk and/or liquidity risk.
Derivatives Risk/Futures Contracts Risk.
The loss that may be incurred in entering into futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets are highly volatile and the use of futures may increase the
volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract may result in substantial losses for the Fund. Futures
contracts may be illiquid. Furthermore, exchanges may limit fluctuations in futures contract prices during a trading session by imposing a maximum permissible price movement on each futures contract. The Fund may be disadvantaged if it is prohibited
from executing a trade outside the daily permissible price movement. Futures contracts executed on foreign exchanges may not provide the same protection as U.S. exchanges. These transactions involve additional risks, including counterparty risk,
hedging risk and pricing risk.
Issuer Risk.
An issuer in which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may
be caused by poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or
factors.
Market Risk.
Market risk refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. An investment in the Fund could
lose money over short or long periods. Although equity securities generally tend to have greater price volatility than debt securities, under certain market conditions, debt securities may have comparable or greater price volatility.
Quantitative Model Risk.
Investments selected using quantitative methods may perform differently from the market as a whole. There can be no assurance that these methodologies will enable the Fund to achieve its objective.
Sector Risk.
At times, the
Fund may have a significant portion of its assets invested in securities of companies conducting business in a related group of industries within an economic sector, including the information technology sector. Companies in the same
economic sector may be similarly affected by economic, regulatory, political or market events or conditions, which may make the Fund more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly.
Generally, the more broadly the Fund invests, the more it spreads risk and potentially reduces the risks of loss and volatility.
Columbia Large Core Quantitative Fund
Summary of the Fund
(continued)
The Fund may be more susceptible to the particular risks that
may affect companies in the information technology sector, as well as other technology-related sectors (collectively, the technology sectors) than if it were invested in a wider variety of companies in unrelated sectors. Companies in the technology
sectors are subject to certain risks, including the risk that new services, equipment or technologies will not be accepted by consumers and businesses or will become rapidly obsolete. Performance of such companies may be affected by factors
including obtaining and protecting patents (or the failure to do so) and significant competitive pressures, including aggressive pricing of their products or services, new market entrants, competition for market share and short product cycles due to
an accelerated rate of technological developments. Such competitive pressures may lead to limited earnings and/or falling profit margins. As a result, the value of their securities may fall or fail to rise. In addition, many technology sector
companies have limited operating histories and prices of these companies’ securities historically have been more volatile than other securities, especially over the short term.
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 bar chart shows how the Fund’s Class A share performance (without sales charges) has varied for each full calendar year shown. If the sales charges were
reflected, returns shown would be lower. Class A shares are offered in a separate prospectus. The table below the bar chart compares the Fund’s returns (after applicable sales charges) for the periods shown with a broad measure of market
performance.
Class Y shares of the Fund did not commence
operations prior to the date of this prospectus and, therefore, performance is not yet available. Any share class that does not have available performance would have annual returns substantially similar to those of Class A shares. Except for
differences in annual returns resulting from differences in expenses and sales charges (where applicable), the share classes of the Fund would have substantially similar annual returns because all share classes of the Fund invest in the same
portfolio of securities.
The after-tax returns shown in
the
Average Annual Total Returns
table below are calculated using the highest historical individual U.S. 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
Individual Retirement Accounts (IRAs). The after-tax returns are shown only for Class A shares and will vary for other share classes.
The Fund’s past performance (before and after taxes) is no
guarantee of how the Fund will perform in the future.
Updated performance information can be obtained by calling toll-free 800.345.6611 or visiting columbiathreadneedle.com/us.
Year
by Year Total Return (%)
as of December 31 Each Year*
|
Best
and Worst Quarterly Returns
During the Period Shown in the Bar Chart
|
|
Best
|
3rd Quarter 2009
|
15.99%
|
Worst
|
4th Quarter 2008
|
-22.19%
|
*
|
Year to Date return as of
March 31, 2015: 1.87%
|
Columbia Large Core Quantitative Fund
Summary of the Fund
(continued)
Average Annual Total Returns After Applicable Sales
Charges (for periods ended December 31, 2014)
|
Share
Class
Inception Date
|
1
Year
|
5
Years
|
10
Years
|
Class
A
|
04/24/2003
|
|
|
|
returns
before taxes
|
|
8.33%
|
15.21%
|
7.00%
|
returns
after taxes on distributions
|
|
8.07%
|
14.97%
|
6.14%
|
returns
after taxes on distributions and sale of Fund shares
|
|
4.94%
|
12.28%
|
5.34%
|
S&P
500 Index
(reflects no deductions for fees, expenses or taxes)
|
|
13.69%
|
15.45%
|
7.67%
|
Fund Management
Investment Manager:
Columbia
Management Investment Advisers, LLC
Portfolio
Manager
|
|
Title
|
|
Role
with Fund
|
|
Managed
Fund Since
|
Brian
Condon, CFA
|
|
Senior
Portfolio Manager and Head of Quantitative Strategies
|
|
Co-manager
|
|
2010
|
Peter
Albanese
|
|
Senior
Portfolio Manager
|
|
Co-manager
|
|
August
2014
|
Purchase and Sale of Fund
Shares
You may purchase or redeem shares of the Fund on
any business day by contacting the Fund in the ways described below:
Online
|
|
Regular
Mail
|
|
Express
Mail
|
|
By
Telephone
|
columbiathreadneedle.com/us
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
30 Dan Road, Suite 8081
Canton, MA 02021-2809
|
|
800.422.3737
|
You may purchase shares and receive
redemption proceeds by electronic funds transfer, by check or by wire. If you maintain your account with a broker-dealer or other financial intermediary, you must contact that financial intermediary to buy, sell or exchange shares of the Fund
through your account with the intermediary.
The minimum
initial investment amounts for the share class offered by the Fund are shown below:
Minimum Initial Investment
Class
|
Category
of eligible account
|
For
accounts other than
systematic investment
plan accounts
|
For
systematic investment
plan accounts
|
Class
Y
|
All
eligible accounts
|
None
|
N/A
|
There is no minimum additional investment for any share
class.
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, qualified dividend income or capital gains, unless you are investing through a tax-advantaged account, such as a 401(k) plan or an
IRA. If you are investing through a tax-advantaged account, you may be taxed upon withdrawals from that account.
Columbia Large Core Quantitative Fund
Summary of the Fund
(continued)
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 Investment Manager), 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.
Columbia Large Core Quantitative Fund
More Information About the
Fund
Investment Objective
Columbia Large Core Quantitative Fund (the Fund) seeks to
provide shareholders with long-term capital growth. Only shareholders can change the Fund’s investment objective. Because any investment involves risk, there is no assurance the Fund’s objective will be achieved.
Principal Investment Strategies
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in equity securities of companies with market capitalizations greater than $5 billion at the time of purchase or that are within the market
capitalization range of companies in the S&P 500 Index (the Index) at the time of purchase. These equity securities generally include common stocks. The market capitalization range and composition of the companies in the Index are subject to
change. As such, the size of the companies in which the Fund invests may change. As long as an investment continues to meet the Fund’s other investment criteria, the Fund may choose to continue to hold a stock even if the company’s
market capitalization grows beyond the market capitalization of the largest company within the Index or falls below the market capitalization of the smallest company within the Index.
The Fund may from time to time emphasize one or more economic
sectors in selecting its investments, including the information technology sector.
The Fund may invest in derivatives, such as futures contracts,
for cash equitization and investment flexibility.
In
pursuit of the Fund’s objective, the portfolio managers use quantitative analysis to evaluate the relative attractiveness of potential investments.
Columbia Management Investment Advisers, LLC (the Investment
Manager) considers a variety of factors in identifying investment opportunities and constructing the Fund’s portfolio which may include, among others, the following:
■
|
Valuation factors, such as
earnings and cash flow relative to market values;
|
■
|
Catalyst factors, such as
relative stock price performance, business momentum, and short interest measures; and
|
■
|
Quality factors, such as
quality of earnings and financial strength.
|
The Investment Manager may sell a security when it believes
other stocks in the Index or other investments are more attractive, if the security is believed to be overvalued relative to other potential investments, when the company no longer meets the Investment Manager’s performance expectation, when
the security is removed from the Index, or for other reasons.
The Fund’s investment policy with respect to 80% of its
net assets may be changed by the Board of Trustees without shareholder approval as long as shareholders are given 60 days advance written notice of the change.
Principal Risks
An investment in the Fund involves risk, including those
described below.
There is no assurance that the Fund will achieve its investment objective and you may lose money
. The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV)
and share price may go down.
Active Management Risk.
Although the Fund is managed based primarily on quantitative methods, a qualitative review of the quantitative output is conducted by the portfolio managers. Therefore, the Fund’s performance will reflect, in
part, the ability of the portfolio managers to make active, qualitative decisions, including allocation decisions that seek to achieve the Fund’s investment objective.
Derivatives Risk.
Derivatives
are financial instruments whose value depends on, or is derived from, the value of other underlying assets. Losses involving derivative instruments may be substantial, because a relatively small movement in the price of an underlying security,
instrument, commodity, currency or index may result in a substantial loss for the Fund. In addition to the potential for increased losses, the use of derivative instruments may lead to increased
Columbia Large Core Quantitative Fund
More Information About the
Fund
(continued)
volatility for the Fund. Derivative investments will typically increase the
Fund’s exposure to principal risks to which it is otherwise exposed, and may expose the Fund to additional risks. Depending on the type and purpose of the Fund’s derivative investments, these risks may include: correlation risk (there
may be an imperfect correlation between the hedge and the opposite position, which is related to hedging risk), counterparty risk (the counterparty to the instrument may not perform or be able to perform in accordance with the terms of the
instrument), leverage risk (losses from the derivative instrument may be greater than the amount invested in the derivative instrument), hedging risk (the risk that a hedging strategy may not eliminate the risk that it is intended to offset, and may
offset gains), and/or liquidity risk (it may not be possible for the Fund to liquidate the instrument at an advantageous time or price), each of which may result in significant losses for the Fund.
Derivatives Risk/Futures Contracts Risk.
The use of futures contracts is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. A futures contract is a sales
contract between a buyer (holding the “long” position) and a seller (holding the “short” position) for an asset with delivery deferred until a future date. The buyer agrees to pay a fixed price at the agreed future date and
the seller agrees to deliver the asset. The seller hopes that the market price on the delivery date is less than the agreed upon price, while the buyer hopes for the contrary. The liquidity of the futures markets depends on participants entering
into offsetting transactions rather than making or taking delivery. To the extent participants decide to make or take delivery, liquidity in the futures market could be reduced. In addition, futures exchanges often impose a maximum permissible price
movement on each futures contract for each trading session. The Fund may be disadvantaged if it is prohibited from executing a trade outside the daily permissible price movement. Moreover, to the extent the Fund engages in futures contracts on
foreign exchanges, such exchanges may not provide the same protection as U.S. exchanges. The loss that the Fund may incur in entering into futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets
are highly volatile and the use of futures may increase the volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract
may result in substantial losses for the Fund. Investments in these instruments involve risks, including counterparty risk (the risk that the counterparty to the instrument may not perform or be able to perform in accordance with the terms of the
instrument), hedging risk (the risk that a hedging strategy may not eliminate the risk that it is intended to offset, and may offset gains) and pricing risk (the risk that the instrument may be difficult to value), each of which may result in
significant losses for the Fund.
Issuer Risk.
An issuer in which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may
be caused by poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or
factors.
Market Risk.
Market risk refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. Security values may fall or fail
to rise because of a variety of actual or perceived factors affecting an issuer (e.g., an unfavorable earnings report), the industry or sector in which it operates, or the market as a whole, which may reduce the value of an investment in the Fund.
Accordingly, an investment in the Fund could lose money over short or long periods. The market values of the securities the Fund holds 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. Although equity securities generally tend to have greater price volatility than debt securities, under certain market conditions, debt securities may have comparable or greater price volatility. In
addition, stock prices may be sensitive to rising interest rates, as the cost of capital rises and borrowing costs increase.
Quantitative Model Risk.
The
Fund may use quantitative methods to select investments. Securities or other investments selected using quantitative methods may perform differently from the market as a whole or from their expected performance for many reasons, including factors
used in building the quantitative analytical framework, the weights placed on each factor, and changing sources of market returns, among others. Any errors or imperfections in the Fund portfolio manager’s quantitative analyses or models, or in
the data on which they are based, could adversely affect the portfolio manager’s effective use of such analyses or models, which in turn could adversely
Columbia Large Core Quantitative Fund
More Information About the
Fund
(continued)
affect the Fund’s performance. It is not possible or practicable for a
manager to factor all relevant, available data into quantitative model forecasts and/or trading decisions. Quantitative managers will use their discretion to determine what data to gather with respect to an investment strategy and what data the
models will take into account to produce forecasts that may have an impact on ultimate trading decisions. Shareholders should be aware that there is no guarantee that a quantitative manager will use any specific data or type of data in making
trading decisions on behalf of the Fund, nor is there any guarantee that the data actually utilized in generating forecasts or making trading decisions on behalf of the Fund will be the most accurate data available or free from errors. There can be
no assurance that these methodologies will enable the Fund to achieve its objective.
Sector Risk.
At times, the
Fund may have a significant portion of its assets invested in securities of companies conducting business in a related group of industries within an economic sector, including the information technology sector. Companies in the same
economic sector may be similarly affected by economic, regulatory, political or market events or conditions, which may make the Fund more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly.
Generally, the more broadly the Fund invests, the more it spreads risk and potentially reduces the risks of loss and volatility.
The Fund may be more susceptible to the particular risks that
may affect companies in the information technology sector, as well as other technology-related sectors (collectively, the technology sectors) than if it were invested in a wider variety of companies in unrelated sectors. Companies in the technology
sectors are subject to certain risks, including the risk that new services, equipment or technologies will not be accepted by consumers and businesses or will become rapidly obsolete. Performance of such companies may be affected by factors
including obtaining and protecting patents (or the failure to do so) and significant competitive pressures, including aggressive pricing of their products or services, new market entrants, competition for market share and short product cycles due to
an accelerated rate of technological developments. Such competitive pressures may lead to limited earnings and/or falling profit margins. As a result, the value of their securities may fall or fail to rise. In addition, many technology sector
companies have limited operating histories and prices of these companies’ securities historically have been more volatile than other securities, especially over the short term.
Additional Investment Strategies and Policies
This section describes certain investment strategies and
policies that the Fund may utilize in pursuit of its investment objective and some additional factors and risks involved with investing in the Fund.
Investment Guidelines
As a general matter, and except as specifically described in
the discussion of the Fund's principal investment strategies in this prospectus or as otherwise required by the Investment Company Act of 1940, as amended (the 1940 Act), the rules and regulations thereunder and any applicable exemptive relief,
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 investment in the security or asset.
Holding Other Kinds of Investments
The Fund may hold investments that are not part of its
principal investment strategies. These investments and their risks are described below and/or 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.
Information on the Fund’s holdings can be found in the Fund’s shareholder reports or by visiting columbiathreadneedle.com/us.
Transactions in Derivatives
The Fund may enter into derivative transactions or otherwise
have exposure to derivative transactions through underlying investments. 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 the London Interbank Offered Rate (commonly known as LIBOR)) or market indices (such as the Standard & Poor's (S&P)
500
®
Index). The use of derivatives is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities
transactions.
Columbia Large Core Quantitative Fund
More Information About the
Fund
(continued)
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 directly. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility in the value of the derivative and/or the Fund’s shares, 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. U.S. federal legislation has been enacted that provides for new clearing, margin, reporting and registration requirements for participants in the derivatives market. These changes could
restrict and/or impose significant costs or other burdens upon the Fund’s participation in derivatives transactions. For more information on the risks of derivative investments and strategies, see the SAI.
Investing in Affiliated Funds
The Investment Manager or an affiliate serves as investment
adviser to mutual funds using the Columbia brand (Columbia Funds), including those that are structured as “fund-of-funds”, and provides asset-allocation services to (i) shareholders by investing in shares of other Columbia
Funds, which may include the Fund (collectively referred to in this section as Underlying Funds), and (ii) discretionary managed accounts (collectively referred to as affiliated products) that invest exclusively in Underlying Funds. These
affiliated products, individually or collectively, may own a significant percentage of the outstanding shares of one or more Underlying Funds, and the Investment Manager seeks to balance potential conflicts of interest between the affiliated
products and the Underlying Funds in which they invest. The affiliated products’ investment in the Underlying Funds may have the effect of creating economies of scale, possibly resulting in lower expense ratios for the Underlying Funds,
because the affiliated products may own substantial portions of the shares of Underlying Funds. However, redemption of Underlying Fund shares by one or more affiliated products could cause the expense ratio of an Underlying Fund to increase, as its
fixed costs would be spread over a smaller asset base. Because of large positions of certain affiliated products, the Underlying Funds may experience relatively large inflows and outflows of cash due to affiliated products’ purchases and sales
of Underlying Fund shares. Although the Investment Manager or its affiliate may seek to minimize the impact of these transactions where possible, for example, by structuring them over a reasonable period of time or through other measures, Underlying
Funds may experience increased expenses as they buy and sell portfolio securities to manage the cash flow effect related to these transactions. Further, when the Investment Manager or its affiliate structures transactions over a reasonable period of
time in order to manage the potential impact of the buy and sell decisions for the affiliated products, those affiliated products, including funds-of-funds, may pay more or less (for purchase activity), or receive more or less (for redemption
activity), for shares of the Underlying Funds than if the transactions were executed in one transaction. In addition, substantial redemptions by affiliated products within a short period of time could require the Underlying Fund to liquidate
positions more rapidly than would otherwise be desirable, which may have the effect of reducing or eliminating potential gain or causing it to realize a loss. Substantial redemptions may also adversely affect the ability of the Underlying Fund to
implement its investment strategy. The Investment Manager or its affiliate also has an economic conflict of interest in determining the allocation of affiliated products’ assets among the Underlying Funds, as it earns different fees from the
various Underlying Funds.
Investing in Money Market
Funds
The Fund may invest cash in, or hold as collateral
for certain investments, shares of registered or unregistered money market funds, including funds advised by the Investment Manager or its affiliates. These funds are not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or
any other government agency. 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.
Columbia Large Core Quantitative Fund
More Information About the
Fund
(continued)
Lending of Portfolio Securities
The Fund may lend portfolio securities to 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 currently does not participate in the securities
lending program but the Board of Trustees (the Board) may determine to renew participation in the future. For more information on lending of portfolio securities and the risks involved, see the Fund’s SAI and its annual and semiannual reports
to shareholders.
Investing Defensively
The Fund may from time to time take temporary defensive
investment positions that may be inconsistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, social or other conditions, including, without limitation, investing some or all of
its assets in money market instruments or shares of affiliated or unaffiliated money market funds or holding some or all of its assets in cash or cash equivalents. The Fund may take such defensive investment positions for as long a period as deemed
necessary.
The Fund may not achieve its investment
objective while it is investing defensively. Investing defensively may adversely affect Fund performance. During these times, the portfolio managers may make frequent portfolio holding changes, which could result in increased trading
expenses and taxes, and decreased Fund performance. See also
Investing in Money Market Funds
above for more information.
Other Strategic and Investment Measures
The Fund may also from time to time take temporary portfolio
positions that may or may not be consistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, social or other conditions, including, without limitation, investing in derivatives,
such as futures (e.g., index futures) or options on futures, for various purposes, including among others, investing in particular derivatives to achieve indirect investment exposures to a sector, country or region where the Investment Manager
believes such positioning is appropriate. The Fund may take such portfolio positions for as long a period as deemed necessary. While the Fund is so positioned, derivatives could comprise a substantial portion of the Fund’s investments and the
Fund may not achieve its investment objective. Investing in this manner may adversely affect Fund performance. During these times, the portfolio managers may make frequent portfolio holding changes, which could result in increased trading
expenses and taxes, and decreased Fund performance. For information on the risks of investing in derivatives, see
Transactions in Derivatives
above.
Portfolio Holdings Disclosure
The Board has adopted policies and procedures that govern the
timing and circumstances of disclosure to shareholders and third parties of information regarding the securities owned by the Fund. A description of these policies and procedures is included in the SAI. Fund policy generally permits the disclosure
of portfolio holdings information on the Fund's website (columbiathreadneedle.com/us) only after a certain amount of time has passed, as described in the SAI.
Purchases and sales of portfolio securities can take place at
any time, so the portfolio holdings information available on the Fund's website may not always be current.
Portfolio Holdings Versus the
Benchmarks
The Fund does not limit
its investments to the securities within its benchmark(s), and accordingly the Fund's holdings may diverge significantly from those of its benchmark(s). In addition, the Fund may invest in securities outside any industry and geographic sectors
represented in its benchmark(s). The Fund's weightings in individual securities, and in industry and geographic sectors, may also vary considerably from those of its benchmark(s).
Columbia Large Core Quantitative Fund
More Information About the
Fund
(continued)
Mailings to Households
In order to reduce shareholder expenses, the Fund may, if
prior consent has been provided, mail only one copy of the Fund’s prospectus and each annual and semiannual report to those addresses shared by two or more accounts. If you wish to receive separate copies of these documents, call 800.345.6611
or, if your shares are held through a financial intermediary, contact your intermediary directly.
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 shareholders redeeming Fund shares could require the Fund to sell portfolio securities at less than opportune times or to
hold ready reserves of uninvested cash in amounts larger than might otherwise be the case to meet shareholder redemptions. Either situation could adversely impact the Fund’s performance.
Understanding Annual Fund Operating Expenses
The Fund’s annual operating expenses, as presented in
the
Annual Fund Operating Expenses
table in the
Fees and Expenses of the Fund
section of this prospectus, generally are based on expenses incurred during the
Fund’s most recently completed fiscal year and are expressed as a percentage (expense ratio) of the Fund’s average net assets during that fiscal year. The expense ratio for Class Y shares is based on estimated amounts for the
Fund’s current fiscal year. The expense ratio reflects the Fund’s fee arrangements as of the date of this prospectus and, unless indicated otherwise, is based on expenses incurred during the Fund’s most recent fiscal year. The
Fund’s assets will fluctuate, but no adjustments have been or will be made to the expense ratio to reflect any differences in the Fund’s average net assets between the most recently completed fiscal year and the date of this prospectus
or a later date. In general, the Fund’s expense ratio will increase as its net assets decrease, such that the Fund’s actual expense ratio may be higher than the expense ratio presented in the
Annual Fund
Operating Expenses
table if assets fall. Any commitment by the Investment Manager and/or its affiliates to waive fees and/or cap (reimburse) expenses is expected, in part, to limit the impact of any increase in the Fund’s operating
expense ratio that would otherwise result because of a decrease in the Fund’s assets in the current fiscal year. The Fund’s annual operating expenses are comprised of (i) investment management fees, (ii) distribution and/or service fees,
and (iii) other expenses. Management fees do not vary by class, but distribution and/or service fees and other expenses may vary by class.
Other Expenses
“Other expenses” consist of the
fees the Fund pays to its administrator, custodian, transfer agent, auditors, lawyers and trustees, costs relating to compliance and miscellaneous expenses. Generally, these expenses are the same for each share class and are allocated on a pro rata
basis across all share classes. Transfer agent fees and certain shareholder servicing fees, however, are class specific. They differ by share class because the shareholder services provided to each share class may be different. Accordingly, the
differences in “other expenses” among share classes are primarily the result of the different transfer agent and shareholder servicing fees applicable to each share class. For more information on these fees, see
Choosing a Share Class — Selling Agent Compensation.
Fee Waiver/Expense Reimbursement Arrangements and Impact on
Past Performance
The Investment Manager and certain of
its affiliates have voluntarily agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below), so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any
balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the annual rate of:
Columbia
Large Core Quantitative Fund
|
Class
Y
|
0.80%
|
Columbia Large Core Quantitative Fund
More Information About the
Fund
(continued)
Under the arrangement, the following fees and expenses are
excluded from the Fund’s operating expenses when calculating the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including foreign transaction taxes), expenses associated with investment in
affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program, dividend expenses associated with securities
sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest and extraordinary expenses. This arrangement may be revised or discontinued at any time.
Effect of Fee Waivers and/or Expense Reimbursements on Past
Performance.
The Fund’s returns shown in the
Performance Information
section of this prospectus reflect the
effect of any fee waivers and/or reimbursements of Fund expenses by the Investment Manager and/or any of its affiliates that were in place during the performance period shown. Without such fee waivers/expense reimbursements, the Fund’s returns
might have been lower.
Primary Service
Providers
The Investment Manager, which also serves as
the Fund’s administrator (the Administrator), the Distributor and the Transfer Agent are all affiliates of Ameriprise Financial, Inc. (Ameriprise Financial). They and their affiliates currently provide key services, including investment
advisory, administration, distribution, shareholder servicing and transfer agency services, to the Fund and various other funds, including the Columbia Funds, and are paid for providing these services. These service relationships are described
below.
The Investment Manager
Columbia Management Investment Advisers, LLC is located at 225
Franklin Street, Boston, MA 02110 and serves as investment adviser to the Columbia Funds. The Investment Manager is a registered investment adviser and a wholly-owned subsidiary of Ameriprise Financial. The Investment Manager’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 traditional mutual funds, exchange-traded funds and closed-end funds,
the Investment Manager acts as an investment adviser for itself, its affiliates, individuals, corporations, retirement plans, private investment companies and financial intermediaries.
Subject to oversight by the Board, the Investment Manager
manages the day-to-day operations of the Fund, determining what securities and other investments the Fund should buy or sell and executing portfolio transactions. The Investment Manager may use the research and other capabilities of its affiliates
and third parties in managing the Fund’s investments.
The SEC has issued an order that permits the Investment
Manager, 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 Investment Manager 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 Investment Manager does not consider any other relationship it or its affiliates may have with a subadviser, and the Investment Manager discloses to the Board the nature of any material relationships it has with
a subadviser or its affiliates. At present, the Investment Manager has not engaged any investment subadviser for the Fund.
The Fund pays the Investment Manager 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 the Investment Manager by the Fund amounted to
0.58% of average daily net assets of the Fund. A discussion regarding the basis for the Board approving the renewal of the Fund's investment management services agreement with the Investment Manager is available in the Fund’s annual report to
shareholders for the fiscal year ended July 31, 2014.
Columbia Large Core Quantitative Fund
More Information About the
Fund
(continued)
Portfolio Managers
Information about the portfolio managers primarily responsible
for overseeing the Fund’s investments is shown below. The SAI provides additional information about the portfolio managers, including information relating to compensation, other accounts managed by the portfolio managers and ownership by the
portfolio managers of Fund shares.
Portfolio
Manager
|
|
Title
|
|
Role
with Fund
|
|
Managed
Fund Since
|
Brian
Condon, CFA
|
|
Senior
Portfolio Manager and Head of Quantitative Strategies
|
|
Co-manager
|
|
2010
|
Peter
Albanese
|
|
Senior
Portfolio Manager
|
|
Co-manager
|
|
August
2014
|
Mr. Condon
joined the Investment Manager in May 2010 when it acquired the long-term asset management business of Columbia Management Group, where he was a portfolio manager since 1999. Mr. Condon began his investment career in
1993 and earned a B.A. from Bryant University and an M.S. in finance from Bentley University.
Mr. Albanese
joined the
Investment Manager in August 2014. Prior to joining the Investment Manager, Mr. Albanese was a Managing Director and Senior Portfolio Manager at Robeco Investment Management. Mr. Albanese began his investment career in 1991 and earned a B.S. from
Stony Brook University and an M.B.A. from the Stern School of Business at New York University.
The Administrator
Columbia Management Investment Advisers, LLC 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 related clerical and administrative services. The
Fund pays the Administrator a fee (plus certain out-of-pocket expenses) for the administrative services it provides to the Fund.
The Distributor
Shares of the Fund are distributed by Columbia Management
Investment Distributors, Inc., which is located at 225 Franklin Street, Boston, MA 02110. 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
Columbia Management Investment Services Corp. is a registered
transfer agent and wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent is located at 225 Franklin Street, Boston, MA 02110, and its responsibilities include processing purchases, redemptions and exchanges of Fund shares, calculating
and paying distributions, maintaining shareholder records, preparing account statements and providing customer service. The Transfer Agent has engaged DST Systems, Inc., including its affiliate, Boston Financial Data Services, to provide various
shareholder services. In addition, the Transfer Agent enters into agreements with various financial intermediaries through which you may hold Fund shares, pursuant to which the Transfer Agent pays these financial intermediaries for providing certain
shareholder services. The Fund generally pays the Transfer Agent a per account fee, pays a fee based on the assets invested through omnibus accounts and reimburses the Transfer Agent for certain out-of-pocket expenses.
Other Roles and Relationships of Ameriprise Financial and its
Affiliates — Certain Conflicts of Interest
The
Investment Manager, Distributor and Transfer Agent, all affiliates of Ameriprise Financial, provide various services to the Fund and other Columbia 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.
Columbia Large Core Quantitative Fund
More Information About the
Fund
(continued)
The Investment Manager 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 Investment Manager, 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 Investment Manager 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 Investment Manager 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 Investment Manager and other Ameriprise Financial affiliates;
|
■
|
regulatory and other
investment restrictions on investment activities of the Investment Manager 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 Investment Manager, and a Columbia Fund.
|
The Investment Manager 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 Management and Other Services — Other Roles and Relationships of Ameriprise Financial and its Affiliates —
Certain Conflicts of Interest
section of the SAI. 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 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. 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 quarterly (10-Q), annual (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 sec.gov.
Columbia Large Core Quantitative Fund
The
Funds
The Columbia Funds (referred to as the Funds)
generally share the same policies and procedures for investor services, as described below. Each Fund is a series of Columbia Funds Series Trust (CFST), Columbia Funds Series Trust I (CFST I) or Columbia Funds Series Trust II (CFST II), and certain
features of distribution and/or service plans may differ among these trusts. The Fund offered by this prospectus is a series of CFST II. Columbia Funds with names that include the words “Tax-Exempt”, “Municipal”, or
“Muni” (the Tax-Exempt Funds) have certain policies that differ from other Columbia Funds (the Taxable Funds). The Fund offered by this prospectus is a Taxable Fund.
Funds Contact Information
Additional information about the Funds can be obtained at
columbiathreadneedle.com/us,* by calling toll-free 800.345.6611, or by writing (regular mail) to Columbia Management Investment Services Corp., P.O. Box 8081, Boston, MA 02266-8081 or (express mail) Columbia Management Investment Services Corp., c/o
Boston Financial, 30 Dan Road, Suite 8081, Canton, MA 02021-2809.
*
|
The website references in this
prospectus are inactive links and information contained in or otherwise accessible through the referenced websites does not form a part of this prospectus.
|
Selling and/or Servicing Agents
The terms “selling agent” and
“servicing agent” (collectively, selling agents) refer to the financial intermediaries that are authorized to sell shares of the Funds. Selling agents include broker-dealers and financial advisors as well as firms that employ such
broker-dealers and financial advisors, including, for example, brokerage firms, banks, investment advisers, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.
Omnibus Accounts
The term “omnibus account”
refers to a selling agent’s account with the Fund (through the Transfer Agent) that represents the combined holdings of, and transactions in, Fund shares of one or more clients of the selling agent (beneficial shareholders). Omnibus accounts
are held in the name of the selling agents and not in the name of the beneficial shareholders invested in the Fund through omnibus accounts.
Retirement Plans and Omnibus Retirement
Plans
The term “retirement
plan” refers to retirement plans created under sections 401(a), 401(k), 457 and 403(b) of the Internal Revenue Code of 1986, as amended (the Code), non-qualified deferred compensation plans governed by section 409A of the Code and similar
plans, but does not refer to individual retirement plans. The term “omnibus retirement plan” refers to a retirement plan that has a plan-level or omnibus account with the Transfer Agent.
Summary of Share Class Features
Each share class has its own investment eligibility criteria,
cost structure and other features. You may not be eligible for every share class. If you purchase shares of a Fund through a retirement plan or other product or program offered by your selling agent, not all share classes of the Fund may be made
available to you. When deciding which class of shares to buy, you should consider, among other things:
■
|
The amount you plan to
invest.
|
■
|
How long you intend to
remain invested in the Fund.
|
■
|
The expenses for each share
class.
|
■
|
Whether you may be eligible
for a reduction or waiver of sales charges when you buy or sell shares.
|
Each investor's personal situation is different and you may
wish to discuss with your selling agent which share classes are available to you and which share class is appropriate for you.
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
The following summarizes the primary features of Class A,
Class B, Class C, Class I, Class K, Class R, Class R4, Class R5, Class T, Class W, Class Y and Class Z shares.
Not all Funds offer every class of shares. The Fund offers the
class(es) of shares set forth on the cover of this prospectus and may offer other share classes through a separate prospectus. Although certain share classes are generally closed to new or existing investors, information relating to these share
classes is included in the table below because certain qualifying purchase orders are permitted, as described below.
Share Class Features
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
A
|
Eligibility:
Available to the general public for investment
Minimum Initial Investment:
$2,000 for most investors
|
Taxable
Funds:
5.75% maximum, declining to 0.00% on investments of $1 million or more
Tax-Exempt Funds:
3.00% maximum, declining to 0.00% on
investments of $500,000 or more
(e)
None for Columbia Money Market Fund and certain other
Funds
(e)
|
Taxable
Funds:
CDSC on certain investments of between $1 million and $50 million redeemed within 18 months after purchase charged as follows:
• 1.00% CDSC if redeemed within 12
months after purchase and
• 0.50% CDSC if redeemed more than 12, but less than 18, months after purchase
(e)
Tax-Exempt Funds:
Maximum CDSC of 0.75% on certain investments of $500,000 or more redeemed within 12 months after purchase. The CDSC on shares purchased prior to February
19, 2015 differs
(e)
|
Distribution
and Service
Fees:
up to 0.25%
|
Class
B
|
Eligibility:
Closed to new investors
(f)
Note:
Class B shares convert to Class A shares
generally eight years after purchase
(g)
Minimum Initial Investment:
N/A
|
None
|
5.00%
maximum, gradually declining to 0.00% after six years
(g)
|
Distribution
Fee:
0.75%
Service Fee:
0.25%
|
Class
C
|
Eligibility:
Available to the general public for investment
Minimum Initial Investment:
$2,000 for most investors
Purchase Order Limit for Tax-Exempt Funds:
$499,999
(h)
, none for omnibus retirement plans
Purchase Order Limit for Taxable Funds:
$999,999
(h)
; none for omnibus retirement plans
|
None
|
1.00%
on certain investments redeemed within one year of purchase
|
Distribution
Fee:
0.75%
Service Fee:
0.25%
|
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
I
|
Eligibility:
Available only to other Columbia Funds (i.e., fund-of-fund investments)
Minimum Initial Investment:
None
|
None
|
None
|
None
|
Class
K
|
Eligibility:
Closed to new investors; available only to qualified employee benefit plans, trust companies or similar institutions, 501(c)(3) charitable organizations, non-qualified deferred compensation plans whose participants
are included in a qualified employee benefit plan described above, 529 plans, and health savings accounts
(f)
Minimum Initial Investment:
N/A
|
None
|
None
|
Plan
Administration Services Fee:
0.25%
|
Class
R
|
Eligibility:
Available only to eligible retirement plans, health savings accounts and, in the sole discretion of the Distributor, other types of retirement accounts held through platforms maintained by selling agents approved by
the Distributor
Minimum Initial Investment:
None
|
None
|
None
|
Series
of CFST & CFST I:
distribution fee of 0.50%
Series of CFST II:
distribution and service fee of 0.50%, of which the service fee may
be up to 0.25%
|
Class
R4
|
Eligibility:
Available only to (i) omnibus retirement plans, (ii) trust companies or similar institutions, (iii) broker-dealers, banks, trust companies and similar institutions that clear Fund share transactions for their client
or customer investment advisory or similar accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R4 eligibility apart
from selling, servicing or similar agreements, (iv) 501(c)(3) charitable organizations, (v) 529 plans and (vi) health savings accounts
Minimum Initial Investment:
None
|
None
|
None
|
None
|
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
R5
|
Eligibility:
Available only to (i) certain registered investment advisers that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that
have been granted specific written authorization from the Transfer Agent with respect to Class R5 eligibility apart from selling, servicing or similar agreements and (ii) omnibus retirement
plans
(f)
Minimum Initial Investment:
None for omnibus retirement plans; $100,000 for combined underlying
accounts of eligible registered investment advisers
|
None
|
None
|
None
|
Class
T
|
Eligibility:
Generally closed to new investors
(f)
Minimum Initial Investment:
N/A
|
5.75%
maximum, declining to 0.00% on investments of $1 million or more
|
CDSC
on certain investments of between $1 million and $50 million redeemed within 18 months after purchase, charged as follows:
• 1.00% CDSC if redeemed within 12 months after purchase
and
• 0.50% CDSC if redeemed more than 12, but less than 18, months after purchase
|
Service
Fee:
up to 0.50%
|
Class
W
|
Eligibility:
Available only to investors purchasing through certain authorized investment programs managed by investment professionals, including discretionary managed account programs
Minimum Initial Investment:
$500
|
None
|
None
|
Distribution
and Service Fees:
0.25%
|
Class
Y
|
Eligibility:
Available only to retirement plans that maintain plan-level or omnibus accounts with the Fund
(f)
Minimum
Initial Investment:
None
|
None
|
None
|
None
|
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
Z
|
Eligibility:
Available only to certain eligible investors, which are subject to different minimum investment requirements, ranging from $0 to $2,000; effective March 29, 2013, closed to (i) accounts of selling agents that clear
Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been given specific written notice from the Transfer Agent of the termination of their eligibility for
new purchases of Class Z shares and (ii) omnibus retirement plans, subject to certain exceptions
(f)
Minimum Initial Investment:
See
Eligibility
above
|
None
|
None
|
None
|
(a)
|
For Columbia Money Market Fund,
new investments must be made in Class A, Class I, Class W or Class Z shares, subject to eligibility. Class C and Class R shares of Columbia Money Market Fund are available as a new investment only to investors in the Distributor's proprietary 401(k)
products, provided that such investor is eligible to invest in the class and transact directly with the Fund or the Transfer Agent through a third party administrator or third party recordkeeper. Columbia Money Market Fund offers other classes of
shares only to facilitate exchanges with other Funds offering such share classes.
|
(b)
|
The minimum initial investment
requirement is $5,000 for Columbia Floating Rate Fund and Columbia Inflation Protected Securities Fund, and $10,000 for Columbia Absolute Return Currency and Income Fund. See
Buying, Selling and Exchanging Shares
— Buying Shares
for more details on the eligible investors and minimum initial investment requirements. Certain share classes are subject to minimum account balance requirements, as described in
Buying,
Selling and Exchanging Shares — Transaction Rules and Policies.
|
(c)
|
Actual front-end sales charges
and CDSCs vary among the Funds. For more information on applicable sales charges, see
Choosing a Share Class — Sales Charges and Commissions
and for information about certain exceptions to these sales
charges, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
|
(d)
|
These are the maximum
applicable distribution and/or service fees. Fee rates and fee components (i.e., the portion of a combined fee that is a distribution or service fee) may vary among Funds. Because these fees are paid out of Fund assets on an ongoing basis, over time
these fees will increase the cost of your investment and may cost you more than paying other types of distribution and/or shareholder service fees. Although Class A shares of certain series of CFST I are subject to a combined distribution and
service fee of up to 0.35%, these Funds currently limit the combined fee to 0.25%. Columbia Money Market Fund pays a distribution and service fee of up to 0.10% on Class A shares, up to 0.75% distribution fee and up to 0.10% service fee on Class B
shares, up to 0.75% distribution fee on Class C shares, and 0.10% distribution and service fees on Class W shares. Columbia AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund pay a service fee of up
to 0.20% on Class A, Class B and Class C shares. Columbia AMT-Free Intermediate Muni Bond Fund pays a distribution fee of up to 0.65% on Class B and Class C shares. For more information on distribution and service fees, see
Choosing a Share Class — Distribution and Service Fees.
|
(e)
|
For Columbia Short Term
Municipal Bond Fund, a CDSC of 0.50% is charged on certain investments of $500,000 or more redeemed within 12 months after purchase. The following Funds are not subject to a front-end sales charge or a CDSC on Class A shares: Columbia Money Market
Fund, Columbia Large Cap Index Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Index Fund, Columbia Small Cap Index Fund and Columbia U.S. Treasury Index Fund. Investments in Class A shares of Tax-Exempt Funds made prior to February
19, 2015 of between $1 million and $50 million are subject to a CDSC of 1.00% if redeemed within 12 months after purchase and 0.50% if redeemed more than 12, but less than 18, months after purchase.
|
(f)
|
These share classes are closed
to new accounts, or closed to previously eligible investors, subject to certain conditions, as summarized below and described in more detail under
Buying, Selling and Exchanging Shares — Buying Shares —
Eligible Investors:
|
•
Class B Shares
. The Funds no longer accept investments from new or existing investors in Class B shares, except through reinvestment of dividend and/or capital gain distributions by existing Class B shareholders,
or a permitted exchange.
•
Class K Shares
. Shareholders who opened and funded a Class K account with a Fund as of the close of business on December 31, 2010 may continue to make additional purchases of such share class, and existing Class K
accounts may continue to allow new investors or participants to be established in their Fund account.
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
•
Class R5 Shares
. Shareholders with Class R5 accounts funded before November 8, 2012 who do not satisfy the current eligibility criteria for Class R5 shares may not establish new Class R5 accounts but may continue
to make additional purchases of Class R5 shares in existing accounts. In addition, investment advisory programs and similar programs that opened a Class R5 account as of May 1, 2010 and continuously hold Class R5 shares in such account after such
date, may generally not only continue to make additional purchases of Class R5 shares but also open new Class R5 accounts for such pre-existing programs and add new shareholders in the program.
•
Class T Shares.
Shareholders
with Class T accounts who received, and have continuously held, Class T shares in connection with the merger of certain Galaxy funds into certain
Funds that were then named Liberty funds may continue to make additional purchases of such share class.
•
Class Y Shares
. Shareholders with Class Y accounts funded before November 8, 2012 who do not satisfy the current eligibility criteria for Class Y shares may not establish new accounts for such share class but may
continue to make additional purchases of Class Y shares in existing accounts.
•
Class Z Shares
. Effective March 29, 2013, selling agents that clear Fund share transactions through designated selling agents and their mutual fund trading platforms that have been given specific written notice
from the Transfer Agent of the termination of their eligibility for new purchases of Class Z shares and omnibus retirement plans are no longer permitted to establish new Class Z accounts, subject to certain exceptions. Omnibus retirement plans that
opened and, subject to exceptions, funded a Class Z account as of close of business on March 28, 2013 and continuously hold Class Z shares in such account after such date, may generally continue to make additional purchases of Class Z shares, open
new Class Z accounts and add new participants. In certain circumstances and in the sole discretion of the Distributor, omnibus retirement plans affiliated with a grandfathered plan may also open new Class Z accounts. Accounts of selling agents
(other than omnibus retirement plans) that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms are not permitted to establish new Class Z accounts or make
additional purchases of Class Z shares (other than through reinvestment of distributions).
(g)
|
Timing of conversion and CDSC
schedules will vary depending on the Fund and the date of your original purchase of Class B shares. For more information on the conversion of Class B shares to Class A shares, see
Choosing a Share Class — Sales
Charges and Commissions.
Class B shares of Columbia Short Term Municipal Bond Fund do not charge a CDSC and do not convert to Class A shares.
|
(h)
|
If you are eligible to invest
in Class A shares without a front-end sales charge, you should discuss your options with your selling agent. For more information, see
Choosing a Share Class – Reductions/Waivers of Sales Charges.
|
Sales Charges and Commissions
Sales charges, commissions and distribution and service fees
(discussed in a separate sub-section below) compensate selling agents (typically your financial advisor) for selling shares to you and for maintaining and servicing the shares held in your account with them. These charges, commissions and fees are
intended to provide incentives for selling agents to provide such 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 CDSC
and/or over time in the form of increased ongoing fees.
Whether the ultimate cost is higher for one class over another
depends on the amount you invest, how long you hold your shares and whether you are eligible for reduced or waived sales charges. The differential between classes also will vary depending on the actual investment return for any given investment
period. You are responsible for choosing the share class most appropriate for you after taking into account your share class eligibility and the value of accounts that you are eligible to include for the right of accumulation, which may reduce
or eliminate otherwise applicable sales charges. See
Choosing a Share Class – Reductions/Waivers of Sales Charges
. We encourage you to consult with a financial advisor who can help you with your
investment decisions.
Class A Shares — Front-End
Sales Charge
You'll pay a front-end sales charge when
you buy Class A shares (other than shares of Columbia Money Market Fund and certain other Funds), resulting in a smaller dollar amount being invested in a Fund than the purchase price you pay, unless you qualify for a waiver of the sales charge
or you buy the shares through reinvested distributions. For more information, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
The Distributor receives the sales charge and re-allows (or
pays) a portion of the sales charge to the selling agent through which you purchased the shares. The Distributor retains the balance of the sales charge. The Distributor retains the full sales charge you pay when you purchase shares of the Fund
directly from the Fund (through the Transfer Agent, rather than through a selling agent). Sales charges vary depending on the amount of your purchase.
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
Front-End Sales Charge Calculation
The table below presents the front-end
sales charge as a percentage of both the offering price and the net amount invested.
■
|
The net asset value (or NAV)
per share is the price of a share calculated by the Fund every business day.
|
■
|
The
offering price per share is the NAV per share plus any front-end sales charge that applies.
|
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 for the Fund) and the NAV 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 any other accounts eligible for aggregation of which you or your selling agent notifies the Fund) and base the sales charge on the aggregate amount. See
Choosing a Share Class — Reductions/Waivers of Sales Charges
for a discussion of account value aggregation. There is no initial sales charge on reinvested dividend or capital gain distributions.
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 (and any other accounts eligible for aggregation of which you or your selling agent notifies the Fund).
|
Class
A Shares — Front-End Sales Charge — Breakpoint Schedule*
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Equity
Funds,
Columbia Adaptive Alternatives Fund,
Columbia Adaptive Risk Allocation Fund,
Columbia Commodity Strategy Fund,
Columbia Diversified Absolute Return Fund
and Funds-of-Funds (equity)*
|
$
0–$49,999
|
5.75%
|
6.10%
|
5.00%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
3.00%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.15%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Fixed
Income Funds (except those listed below),
Columbia Multi-Asset Income Fund
and Funds-of-Funds (fixed income)*
|
$
0-$49,999
|
4.75%
|
4.99%
|
4.00%
|
$
50,000–$99,999
|
4.25%
|
4.44%
|
3.50%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
3.00%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.15%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Tax-Exempt
Funds (other than Columbia Short Term Municipal Bond Fund)
|
$
0-$99,999
|
3.00%
|
3.09%
|
2.50%
|
$100,000–$249,999
|
2.50%
|
2.56%
|
2.15%
|
$250,000–$499,999
|
1.50
%
|
1.53%
|
1.25%
|
$
500,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
Class
A Shares — Front-End Sales Charge — Breakpoint Schedule*
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Columbia
Absolute Return Currency and Income Fund,
Columbia Floating Rate Fund,
Columbia Inflation Protected Securities Fund,
Columbia Intermediate Bond Fund,
Columbia Limited Duration Credit Fund,
Columbia Mortgage Opportunities
Fund,
Columbia U.S. Government Mortgage Fund and
Columbia U.S. Social Bond Fund
|
$
0-$99,999
|
3.00%
|
3.09%
|
2.50%
|
$100,000–$249,999
|
2.50%
|
2.56%
|
2.15%
|
$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%
|
0.00%
(c)
|
|
|
|
|
|
Columbia
Short Term Bond Fund
|
$
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%
|
0.00%
(c)
|
|
|
|
|
|
Columbia
Short Term Municipal Bond Fund
|
$
0-$99,999
|
0.75%
|
0.76%
|
0.50%
|
$250,000–$499,999
|
0.50%
|
0.50%
|
0.40%
|
$
500,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
*
|
The following Funds are not
subject to a front-end sales charge or CDSC on Class A shares: Columbia Money Market Fund, Columbia Large Cap Index Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Index Fund, Columbia Small Cap Index Fund and Columbia U.S. Treasury
Index Fund.
"Funds-of-Funds (equity)"
includes Columbia Capital Allocation Aggressive Portfolio, Columbia Capital Allocation Moderate Aggressive Portfolio, Columbia Capital Allocation Moderate
Conservative Portfolio, Columbia Capital Allocation Moderate Portfolio and Columbia LifeGoal® Growth Portfolio
. "Funds-of-Funds (fixed income)"
includes Columbia Capital Allocation Conservative Portfolio
and Columbia Income Builder Fund. Columbia Balanced Fund and Columbia Global Opportunities Fund are treated as equity Funds for purposes of the table.
|
(a)
|
Purchase amounts and account
values may be aggregated among all eligible Fund accounts for the purposes of this table. See
Choosing a Share Class — Reductions/Waivers of Sales Charges
for a discussion of account value aggregation.
|
(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. Purchase price includes the sales charge.
|
(c)
|
For information regarding
cumulative commissions paid to your selling agent when you buy Class A shares of a Fund in amounts not subject to initial sales charges, see
Class A Shares — Commissions
below.
|
Class A Shares — CDSC
In some cases, you'll pay a CDSC if you sell Class A shares
that you purchased without an initial sales charge.
Tax-Exempt Funds
■
|
If you purchased Class A
shares of any Tax-Exempt Fund other than Columbia Short Term Municipal Bond Fund on or after February 19, 2015 without an initial sales charge because your accounts aggregated $500,000 or more at the time of purchase, you will incur a CDSC of 0.75%
if you redeem those shares within 12 months after purchase. Subsequent Class A share purchases made on or after February 19, 2015 that bring your aggregate account value to $500,000 or more will also be subject to a CDSC of 0.75% if you redeem them
within 12 months after purchase.
|
■
|
If you purchased Class A
shares of Columbia Short Term Municipal Bond Fund on or after February 19, 2015 without an initial sales charge because your accounts aggregated $500,000 or more at the time of purchase, you
|
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
|
will incur a CDSC of 0.50%
if you redeem those shares within 12 months after purchase. Subsequent Class A share purchases made on or after February 19, 2015 that bring your aggregate account value to $500,000 or more will also be subject to a CDSC of 0.50% if you redeem them
within 12 months after purchase.
|
■
|
If you purchased Class A
shares of any Tax-Exempt Fund prior to February 19, 2015 without an initial sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months
after purchase, which is charged as follows: 1.00% CDSC if shares are redeemed within 12 months after purchase; and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase. Subsequent Class A share purchases made
prior to February 19, 2015 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 18 months after purchase as described in this paragraph.
|
Taxable Funds
■
|
If you purchased Class A
shares of any Taxable Fund without an initial sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months after purchase, which is
charged as follows: 1.00% CDSC if shares are redeemed within 12 months after purchase; and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase. 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 18 months after purchase as described in this paragraph.
|
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. A CDSC is applied to the NAV at the time
of your purchase or sale, whichever is lower, and will not be applied to any shares you receive through reinvested distributions or any amount that represents appreciation in the value of your shares. For purposes of calculating a CDSC, the start of
the holding period is generally the first day of the month in which your purchase was made.
When you place an order to sell shares of a
class that has a CDSC, the Fund will first redeem any shares that aren't subject to a CDSC, followed by those you have held the longest. This means that if a CDSC is imposed, you cannot designate the individual shares being redeemed for U.S. federal
income tax purposes. You should consult your tax advisor about the tax consequences of investing in the Fund. In certain circumstances, the CDSC may not apply. See
Choosing a Share Class — Reductions/Waivers of
Sales Charges
for details.
Class A Shares
— Commissions
The Distributor may pay your selling
agent an up-front commission when you buy Class A shares. The Distributor generally funds the commission through the applicable sales charge paid by you. For more information, see
Class A Shares — Front-End
Sales Charge — Breakpoint Schedule.
The
Distributor may also pay your selling agent a cumulative commission when you buy Class A shares in amounts not subject to initial sales charges, according to the following schedule:
Class
A Shares of Tax-Exempt Funds — Commission Schedule (Paid by the Distributor to Selling Agents)
|
Purchase
Amount
|
Commission
Level*
(as a % of net asset
value per share)
|
$500,000
– $3,999,999
|
0.75%**
|
$4
million – $19,999,999
|
0.50%
|
$20
million or more
|
0.25%
|
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
*
|
The commission level applies to
the applicable asset level so, for example, for a purchase of $5 million, the Distributor would pay a commission of 0.75% on the first $4 million and 0.50% on the remaining $1 million.
|
**
|
The commission level on
purchases of Class A shares of Columbia Short Term Municipal Bond Fund is: 0.50% on purchases of $500,000 to $19,999,999 and 0.25% on purchases of $20 million or more.
|
Class
A Shares of Taxable Funds — Commission Schedule (Paid by the Distributor to Selling Agents)*
|
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%
|
*
|
Not applicable to Funds that do
not assess a front-end sales charge.
|
**
|
The commission level applies to
the applicable asset level so, for example, for a purchase of $5 million, the Distributor would pay a commission of 1.00% on the first $3 million and 0.50% on the remaining $2 million.
|
Class B Shares — Sales Charges
The Funds no longer accept new investments in Class B shares,
except for certain limited transactions as described in more detail under
Buying, Selling and Exchanging Shares — Buying Shares — Eligible Investors — Class B Shares (Closed).
You don't pay a front-end sales charge when you buy Class B
shares, but you may pay a CDSC when you sell Class B shares.
Class B Shares — CDSC
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 and generally declines each year until there is no sales charge, as follows:
Class
B Shares — CDSC Schedule for the Funds (except those listed below)
|
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
|
*
|
Because of rounding in the
calculation, the actual CDSC you pay may be more or less than the CDSC calculated using these percentages.
|
Class
B Shares — CDSC Schedule for Columbia AMT-Free Intermediate Muni Bond Fund, the AMT-Free State-specific Intermediate Muni Bond Funds, Columbia Intermediate Bond Fund and Columbia Short Term Bond Fund
|
Number
of Years
Class B Shares Held
|
Applicable
CDSC*
|
One
|
3.00%
|
Two
|
3.00%
|
Three
|
2.00%
|
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
Class
B Shares — CDSC Schedule for Columbia AMT-Free Intermediate Muni Bond Fund, the AMT-Free State-specific Intermediate Muni Bond Funds, Columbia Intermediate Bond Fund and Columbia Short Term Bond Fund
|
Number
of Years
Class B Shares Held
|
Applicable
CDSC*
|
Four
|
1.00%
|
Five
|
None
|
Six
|
None
|
Seven
|
None
|
Eight
|
None
|
Nine
|
Conversion
to Class A Shares
|
*
|
Because of rounding in the
calculation, the actual CDSC you pay may be more or less than the CDSC calculated using these percentages.
|
Class B shares of Columbia Short Term Municipal Bond Fund are
not subject to a CDSC.
Class B Shares —
Commissions
The Distributor paid an up-front commission
directly to your selling agent when you bought the Class B shares (a portion of this commission may have been paid to your financial advisor).
This up-front commission, which varies across the Funds, was
up to 4.00% of the net asset value per share of Funds with a maximum CDSC of 5.00% and of Class B shares of Columbia Short Term Municipal Bond Fund and up to 2.75% of the net asset value per share of Funds with a maximum CDSC of 3.00%. 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. For more information, see
Choosing a Share Class — Distribution and Service Fees.
Class B Shares — Conversion to Class A Shares
Class B shares of the Funds automatically convert to Class A
shares at different times depending upon the Fund. In general, Class B shares convert to Class A shares after eight years. For details and related information about how the Funds' Class B shares convert to Class A shares, see Appendix S to the SAI.
Class B shares of Columbia Short Term Municipal Bond Fund do not convert to Class A shares.
Class C Shares — Front-End Sales Charge
You don't pay a front-end sales charge when you buy Class C
shares. Although Class C shares do not have a front-end sales charge, over time Class C shares can incur distribution and/or service fees that are equal to or more than the front-end sales charge and distribution and/or service fees you would pay
for Class A shares. Thus, although the full amount of your purchase of Class C shares is invested in a Fund, any positive investment return on this money may be partially or fully offset by the expected higher annual expenses of Class C shares. If
you are eligible to invest in Class A shares without a front-end sales charge, you should discuss your options with your Selling Agent. For more information, see
Choosing a Share Class – Reductions/Waivers of
Sales Charges.
Class C Shares — CDSC
You'll pay a CDSC of 1.00% if you redeem Class C shares within
12 months of buying them unless you qualify for a waiver of the CDSC or the shares you're selling were purchased through reinvested distributions. For more information, see
Choosing a Share Class —
Reductions/Waivers of Sales Charges
. Redemptions of Class C shares are not subject to a CDSC if redeemed after 12 months.
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
Class C Shares — Commissions
Although there is no front-end sales charge when you buy Class
C shares, the Distributor pays an up-front commission directly to your selling agent of up to 1.00% of the NAV per share when you buy Class C shares (a portion of this commission may be paid to your financial advisor). The Distributor seeks to
recover this commission through distribution fees it receives under the Fund's distribution and/or service plan and any applicable CDSC applied when you sell your shares. For more information, see
Choosing a Share
Class — Distribution and Service Fees.
Class
R Shares — Sales Charges and Commissions
You don't
pay a front-end sales charge when you buy Class R shares or a CDSC when you sell Class R shares. The Distributor pays an up-front commission directly to your selling agent when you buy Class R shares (a portion of this commission may be paid to your
financial advisor), according to the following schedule:
Class
R Shares — Commission Schedule (Paid by the Distributor to Selling Agents)
|
Purchase
Amount
|
Commission
Level
(as a % of net asset
value per share)
|
$0
– $49,999,999
|
0.50%
|
$50
million or more
|
0.25%
|
The Distributor seeks to recover
this commission through distribution fees it receives under the Fund's distribution plan. For more information, see
Choosing a Share Class — Distribution and Service Fees.
Class T Shares — Front-End Sales Charge
You'll pay a front-end sales charge when you buy Class T
shares, resulting in a smaller dollar amount being invested in a Fund than the purchase price you pay, unless you qualify for a waiver of the sales charge or you buy the shares through reinvested distributions. For more information, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
The front-end sales charge you'll pay on Class T 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 (and any other accounts eligible for aggregation of which you or your selling agent notifies the Fund).
|
Class
T Shares — Front-End Sales Charge — Breakpoint Schedule
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Equity
Funds
|
$
0–$49,999
|
5.75%
|
6.10%
|
5.00%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
2.75%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.00%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
Class
T Shares — Front-End Sales Charge — Breakpoint Schedule
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Fixed
Income Funds
|
$
0–$49,999
|
4.75%
|
4.99%
|
4.25%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
2.75%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.00%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
(a)
|
Purchase amounts and account
values are aggregated among all eligible 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)
|
For more information regarding
cumulative commissions paid to your selling agent when you buy $1 million or more of Class T shares, see
Class T Shares — Commissions
below.
|
Class T Shares — CDSC
In some cases, you'll pay a CDSC if you sell Class T shares
that you bought without an initial sales charge.
■
|
If you purchased Class T
shares without a front-end sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months after purchase, which is charged as follows: 1.00%
CDSC if shares are redeemed within 12 months after purchase, and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase.
|
■
|
Subsequent Class T 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 the time periods noted above.
|
Class T Shares — Commissions
The Distributor may pay your selling agent an up-front
commission when you buy Class T shares (a portion of this commission may, in turn, be paid to your financial advisor). For more information, see
Class T Shares — Front-End Sales Charge — Breakpoint
Schedule, Amount retained by or paid to selling agents as a % of the offering price.
The Distributor may also pay your selling agent a cumulative
commission when you buy $1 million or more of Class T shares, according to the following schedule:
Class
T Shares
—
Commission Schedule (Paid by the Distributor to Selling Agents)
|
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%
|
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
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 or Class T shares of a Fund. These types of sales charge reductions are also referred to as breakpoint discounts.
First, through the right of accumulation (ROA), you may
combine the value of eligible accounts maintained by you and members of 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 Fund accounts in the
particular class of shares, the Fund will use the current public offering price per share. For purposes of obtaining a breakpoint discount through ROA, you may aggregate your or your immediate family members' ownership of different classes of
shares, except for Class I, Class K, Class R and Class Y shares of the Funds, Class R4 and Class R5 shares of the Funds held in retirement plan accounts and direct purchases of Columbia Money Market Fund shares, which may not be aggregated. Shares
of Columbia Money Market Fund acquired by exchange from other Funds may be combined for ROA purposes.
Second, by making a statement of intent to purchase additional
shares (commonly referred to as a letter of intent (LOI)), you may pay a lower sales charge on all purchases (including existing ROA purchases) of Class A shares or Class T shares made within 13 months after the date of your LOI. Your LOI must state
the aggregate amount of purchases you intend to make in that 13-month period, which must be at least $50,000 (or $100,000 for Funds with breakpoint discounts beginning at $100,000). The required form of LOI may vary by selling agent, so please
contact them directly for more information. Five percent of the purchase commitment amount will be placed in escrow. At the end of the 13-month period, the shares will be released from escrow, provided that you have invested the commitment amount.
If you do not invest the commitment amount by the end of the 13 months, the remaining amount of the unpaid sales charge will be redeemed from the escrowed shares and the remaining balance released from escrow. To calculate the total value of the
purchases you've made under an LOI, the Fund will use the historic cost (i.e., dollars invested) of the shares held in each eligible account. For purposes of making an LOI to purchase additional shares, you may aggregate your ownership of different
classes of shares, except for Class I, Class K, Class R and Class Y shares of the Funds, Class R4 and Class R5 shares of the Funds held in retirement plan accounts and direct purchases of Columbia Money Market Fund shares, which may not be
aggregated. Shares of Columbia Money Market Fund acquired by exchange from other Funds may be combined for LOI purposes.
You must request the reduced sales charge (whether through ROA
or an LOI) when you buy shares. If you do not complete and file an LOI, or do not request the reduced sales charge at the time of purchase, you will not be eligible for the reduced sales charge. To obtain a breakpoint discount, you must notify your
selling agent in writing at the time you buy your shares of each eligible account maintained by you and members of your immediate family, including accounts maintained through different selling agents. You and your selling agent are responsible for
ensuring that you receive discounts for which you are eligible. The Fund is not responsible for a selling agent's failure to apply the eligible discount to your account. You may be asked by your selling agent for account statements or other records
to verify your discount eligibility, including, when applicable, records for accounts opened with a different selling agent and records of accounts established by members of your immediate family.
Your “Immediate Family” and
Account Value Aggregation
For
purposes of obtaining a breakpoint discount for Class A shares or Class T shares the value of your account will be deemed to include the value of all applicable shares in eligible Fund accounts that are held by you and your “immediate
family,” which includes your spouse, domestic partner, parent, step-parent, legal guardian, child under 21, step-child under 21, father-in-law and mother-in-law, provided that you and your immediate family members share the same mailing
address. Any Fund accounts linked together for account value aggregation purposes as of the close of business on September 3, 2010 will be permitted to remain linked together. Group plan accounts are valued at the plan level.
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
Eligible Accounts
The following accounts are eligible for account value
aggregation as described above, provided that they are invested in Class A, Class B, Class C, Class E, Class F, Class T, Class W or Class Z shares of a Fund: individual or joint accounts; Roth and traditional Individual Retirement Accounts (IRAs);
Simplified Employee Pension accounts (SEPs), Savings Investment Match Plans for Employees of Small Employers accounts (SIMPLEs) and Tax Sheltered Custodial Accounts (TSCAs); Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
accounts for which you, your spouse, or your domestic partner is parent or guardian of the minor child; revocable trust accounts for which you or an immediate family member, individually, is the beneficial owner/grantor; accounts held in the name of
your, your spouse’s, or your domestic partner’s sole proprietorship or single owner limited liability company or S corporation; qualified retirement plan assets, provided that you are the sole owner of the business sponsoring the plan,
are the sole participant (other than a spouse) in the plan, and have no intention of adding participants to the plan; and investments in wrap accounts.
The following accounts are
not eligible
for account value aggregation as described above: accounts of pension and retirement plans with multiple participants, such as 401(k) plans (which are combined to reduce the sales charge for the
entire pension or retirement plan and therefore are not used to reduce the sales charge for your individual accounts); investments in 529 plans, donor advised funds, variable annuities, variable insurance products or managed separate accounts;
charitable and irrevocable trust accounts; accounts holding shares of money market funds that used the Columbia brand before May 1, 2010; and accounts invested in Class I, Class K, Class R, Class R4, Class R5 or Class Y shares of a Fund.
Front-End Sales Charge Waivers
The Distributor may waive front-end sales charges on purchases
of Class A and Class T shares of the Funds by certain categories of investors, including Board members, certain employees of selling agents, Fund portfolio managers and certain retirement and employee benefit plans. The Distributor may waive
front-end sales charges on (i) purchases (including exchanges) of Class A shares in accounts of selling agents that have entered into agreements with the Distributor to offer Fund shares to self-directed investment brokerage accounts that may or may
not charge a transaction fee to customers and (ii) exchanges of Class Z shares of a Fund for Class A shares of the Fund. For a more complete description of categories of investors who may purchase Class A and Class T shares of the Funds at NAV,
without payment of any front-end sales charge that would otherwise apply, see Appendix S to the SAI. In addition, certain types of purchases of Class A and Class T shares may be made at NAV. For a description of these eligible transactions, see
Appendix S to the SAI.
CDSC Waivers
You may be able to avoid an otherwise applicable CDSC when you
sell Class A, Class B, Class C or Class T 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 Funds or for other reasons. For example, the CDSC will be waived
on redemptions of shares in the event of the shareholder's death; that result from required minimum distributions taken from retirement accounts when the shareholder reaches age 70½; in connection with the Fund's Small Account Policy (which is
described in
Buying, Selling and Exchanging Shares — Transaction Rules and Policies
); and by certain other investors and in certain other types of transactions. For a more complete description of the
available waivers of the CDSC on redemptions of Class A, Class B, Class C or Class T shares, see Appendix S to the SAI.
Repurchases
Investors can also buy Class A shares without paying a sales
charge if the purchase is made from the proceeds of a redemption of any Class A, Class B, Class C or Class T shares of a Fund (other than Columbia Money Market Fund) within 90 days, up to the amount of the redemption proceeds. Any CDSC paid upon
redemption of your Class A, Class B, Class C or Class T shares of a Fund will not be reimbursed.
To be eligible for the reinstatement privilege, the purchase
must be made into an account for the same owner, but does not need to be into the same Fund from which the shares were sold. The Transfer Agent, Distributor or their agents must receive a written reinstatement request from you or your selling agent
within 90 days after the shares are redeemed and the purchase of Class A shares through this reinstatement privilege will be made at the NAV of
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
such shares next calculated after the request is received in “good
form.” The repurchased shares will be deemed to have the original purchase date for purposes of applying the CDSC (if any) to subsequent redemptions. Systematic withdrawals and purchases are excluded from this policy.
Restrictions and Changes in Terms and Conditions
Restrictions may apply to certain accounts and certain
transactions. The Funds may change or cancel these terms and conditions at any time. Unless you provide your selling agent with information in writing about all of the factors that may count toward a waiver of a sales charge, there can be no
assurance that you will receive all of the waivers for which you may be eligible. You should request that your selling agent provide this information to the Fund when placing your purchase order. Please see Appendix S of the SAI for more information
about the sales charge reductions and waivers.
Distribution and Service Fees
The Board has approved, and the Funds have adopted,
distribution and/or shareholder service plans which set the distribution and/or service fees that are periodically deducted from the Funds’ assets. These fees are calculated daily, may vary by share class and are intended to compensate the
Distributor and/or eligible selling agents for selling Fund shares and directly or indirectly providing services to shareholders. 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/or service fees (as an annual % of average daily net assets) and the combined amount of such fees applicable to each share class:
|
Distribution
Fee
|
Service
Fee
|
Combined
Total
|
Class
A
|
up
to 0.25%
|
up
to 0.25%
|
up
to 0.35%
(a)(b)(c)
|
Class
B
|
0.75%
(d)
|
0.25%
|
1.00%
(b)
|
Class
C
|
0.75%
(c)(e)
|
0.25%
|
1.00%
(b)
|
Class
I
|
None
|
None
|
None
|
Class
K
|
None
|
0.25%
(f)
|
0.25%
(f)
|
Class
R (series of CFST and CFST I)
|
0.50%
|
—
(g)
|
0.50%
|
Class
R (series of CFST II)
|
up
to 0.50%
(c)
|
up
to 0.25%
|
0.50%
(g)
|
Class
R4
|
None
|
None
|
None
|
Class
R5
|
None
|
None
|
None
|
Class
T
|
None
|
0.50%
(h)
|
0.50%
(h)
|
Class
W
|
up
to 0.25%
|
up
to 0.25%
|
0.25%
(c)
|
Class
Y
|
None
|
None
|
None
|
Class
Z
|
None
|
None
|
None
|
(a)
|
The maximum distribution and
service fees of Class A shares varies among the Funds, as shown in the table below:
|
Funds
|
Maximum
Class A
Distribution Fee
|
Maximum
Class A
Service Fee
|
Maximum
Class A
Combined Total
|
Series
of CFST
|
—
|
—
|
0.25%;
these Funds pay a
combined distribution and
service fee
|
Series
of CFST II (other than Columbia
Money Market Fund)
|
up
to 0.25%
|
up
to 0.25%
|
0.25%
|
Columbia
Money Market Fund
|
—
|
—
|
0.10%
|
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
Funds
|
Maximum
Class A
Distribution Fee
|
Maximum
Class A
Service Fee
|
Maximum
Class A
Combined Total
|
Columbia
AMT-Free Oregon Intermediate Muni Bond Fund, Columbia Balanced Fund, Columbia Contrarian Core Fund, Columbia Dividend Income Fund, Columbia Global Technology Growth Fund, Columbia Intermediate Bond Fund, Columbia Large Cap Growth Fund, Columbia Mid
Cap Growth Fund, Columbia Real Estate Equity Fund, Columbia Small Cap Core Fund, Columbia Small Cap Growth Fund I
|
up
to 0.10%
|
up
to 0.25%
|
up
to 0.35%; these Funds may
pay distribution and service fees
up to a maximum of 0.35% of their
average daily net assets
attributable to Class A shares
(comprised of up to 0.10% for
distribution services and up to
0.25%
for shareholder liaison
services) but currently limit such
fees to an aggregate fee of not
more than 0.25% for
Class A shares
|
Columbia
Adaptive Alternatives Fund, Columbia Adaptive Risk Allocation Fund, Columbia AMT-Free Connecticut Intermediate Muni Bond Fund, Columbia AMT-Free Massachusetts Intermediate Muni Bond Fund, Columbia AMT-Free New York Intermediate Muni Bond Fund,
Columbia Bond Fund, Columbia California Tax-Exempt Fund, Columbia Corporate Income Fund, Columbia Diversified Absolute Return Fund, Columbia Diversified Real Return Fund, Columbia Emerging Markets Fund, Columbia Global Dividend Opportunity Fund,
Columbia Global Energy and Natural Resources Fund, Columbia Greater China Fund, Columbia Multi-Asset Income Fund, Columbia New York Tax-Exempt Fund, Columbia Pacific/Asia Fund, Columbia Select Large Cap Growth Fund, Columbia Small Cap Value Fund I,
Columbia Strategic Income Fund, Columbia U.S. Social Bond Fund, Columbia U.S. Treasury Index Fund, Columbia Value and Restructuring Fund
|
—
|
0.25%
|
0.25%
|
Columbia
AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund, Columbia Tax Exempt Fund
|
—
|
0.20%
|
0.20%
|
(b)
|
The service fees for Class A,
Class B and Class C shares of certain Funds vary. Service Fee for Class A, Class B and Class C shares of Columbia AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund — The annual service fee
may equal up to 0.20% of the average daily net asset value of all shares of such Fund class. Distribution Fee for Class B and Class C shares for Columbia AMT-Free Intermediate Muni Bond Fund
—
The annual
distribution fee shall be 0.65% of the average daily net assets of the Fund's Class B and Class C shares. Fee amounts noted apply to Class B shares of the Funds other than Class B shares of Columbia Money Market Fund, which pays distribution fees of
up to 0.75% and service fees of up to 0.10% for a combined total of 0.85%. The Distributor has currently agreed not to be reimbursed by the Fund for 0.10% of the 0.85% fee for Class B shares of Columbia Money Market Fund. The Distributor has
voluntarily agreed to waive the service fee for Class A, Class B and Class C shares of Columbia U.S. Treasury Index Fund so that the service fee does not exceed 0.15% annually. This arrangement may be modified or terminated by the Distributor at any
time.
|
(c)
|
Fee amounts noted apply to all
Funds other than Columbia Money Market Fund, which, for each of Class A and Class W shares, pays distribution and service fees of 0.10%, and for Class C shares pays distribution fees of 0.75%. The Distributor has currently agreed not to be
reimbursed by the Fund for 0.25% of the 0.50% fee for Class R shares of Columbia Money Market Fund. The Distributor has voluntarily agreed to waive the 12b-1 fees it receives from Class A, Class C, Class R and Class W shares of Columbia Money Market
Fund. This arrangement may be modified or terminated by the Distributor at any time. Compensation paid to broker-dealers and other selling agents may be suspended to the extent of the Distributor's waiver of the 12b-1 fees on these specific share
classes of these Funds.
|
(d)
|
The Distributor has voluntarily
agreed to waive a portion of the distribution fee it receives from Class B shares of Columbia Short Term Bond Fund so that the distribution fee does not exceed 0.30% annually. This arrangement may be modified or terminated by the Distributor at any
time.
|
(e)
|
The Distributor has voluntarily
agreed to waive a portion of the distribution fee for Class C shares of the following Funds so that the distribution fee does not exceed the specified percentage annually: 0.45% for Columbia AMT-Free Connecticut Intermediate Muni Bond Fund, Columbia
AMT-Free Massachusetts Intermediate Muni Bond Fund, Columbia AMT-Free New York Intermediate Muni Bond Fund, Columbia AMT-Free Oregon Intermediate Muni Bond Fund, Columbia California Tax-Exempt Fund and Columbia New York Tax-Exempt Fund; 0.60% for
Columbia Corporate Income Fund and Columbia Short Term Bond Fund; 0.65% for Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund; and 0.70% for Columbia U.S. Treasury Index Fund. These arrangements may be modified or terminated by the
Distributor at any time.
|
(f)
|
The shareholder service fees
for Class K shares are not paid pursuant to a 12b-1 plan. Under a plan administration services agreement, the Funds' Class K shares pay for plan administration services. See
Class K Plan Administration Services
Fee
below for more information.
|
(g)
|
Class R shares of series of
CFST and CFST I pay a distribution fee pursuant to a distribution (Rule 12b-1) plan for Class R shares. The Funds do not have a shareholder service plan for Class R shares. Series of CFST II have a distribution and shareholder service plan for Class
R shares, which, prior to the close of business on September 3, 2010, were known as Class R2 shares. For Class R shares of series of CFST II, the maximum fee under the plan reimbursed for distribution expenses is equal on an annual basis to 0.50% of
the average daily net assets of the Fund attributable to Class R shares. Of that amount, up to 0.25% may be reimbursed for shareholder service expenses.
|
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
(h)
|
The shareholder servicing fees
for Class T shares are up to 0.50% of average daily net assets attributable to Class T shares for equity Funds and 0.40% for fixed income Funds. In general, the Funds currently limit such fees to a maximum of 0.25% for equity Funds and 0.15% for
fixed-income Funds. See
Class T Shareholder Service Fees
below for more information.
|
The distribution and/or service fees for Class A, Class B,
Class C, Class R and Class W shares, as applicable, may be subject to the requirements of Rule 12b-1 under the 1940 Act. The Distributor may retain these fees otherwise payable to selling agents if the amounts due are below an amount determined by
the Distributor in its sole discretion.
Series of CFST
II.
For Class A, Class B and Class W shares, the Distributor begins to pay these fees immediately after purchase. For Class C shares, the Distributor pays these fees in advance for the first 12 months. Selling agents
also receive distribution fees up to 0.75% of the average daily net assets of Class C shares sold and held through them, which the Distributor begins to pay 12 months after purchase. For Class B shares and for the first 12 months following the sale
of Class C shares, the Distributor retains the distribution fee of up to 0.75% in order to finance the payment of sales commissions to selling agents and to pay for other distribution related expenses. Selling agents may compensate their financial
advisors with the shareholder service and distribution fees paid to them by the Distributor. The maximum fee for services under the distribution and/or shareholder servicing plan for series of CFST II is the lesser of the amount of reimbursable
expenses and the fee rates in the table above. If a share class of a series of CFST II has no reimbursable distribution or shareholder servicing expenses, it will suspend the payment of any such fee.
Series of CFST and CFST I.
For Class R shares and, with the exception noted in the next sentence, Class A shares, the Distributor begins to pay these fees immediately after purchase. For Class B shares, Class A shares (if purchased as part of a purchase of shares of $1
million or more) and, with the exception noted in the next sentence, Class C shares, the Distributor begins to pay these fees 12 months after purchase (for Class B share, and for the first 12 months following the sale of Class C shares, the
Distributor retains the distribution fee of up to 0.75% in order to finance the payment of sales commissions to selling agents and to pay for other distribution related expenses). For Class C shares, selling agents may opt to decline payment of
sales commission and, instead, may receive these fees immediately after purchase. Selling agents may compensate their financial advisors with the shareholder service and distribution fees paid to them by the Distributor.
If you maintain shares of the Fund directly with the Fund,
without working directly with a financial advisor or other selling agent, distribution and service fees may be retained by the Distributor as payment or reimbursement for incurring certain distribution and shareholder service related expenses.
Over time, these distribution and/or service fees will reduce
the return on your investment and may cost you more than paying other types of sales charges. The Fund will pay these fees to the Distributor and/or to eligible selling agents for as long as the distribution plan and/or shareholder servicing plans
continue in effect, which is expected to be indefinitely. The Fund may reduce or discontinue payments at any time. Your selling agent may also charge you other additional fees for providing services to your account, which may be different from those
described here.
Class K Plan Administration Services
Fee
Class K shares pay an annual plan administration
services fee for the provision of various administrative, recordkeeping, communication and educational services, including services such as implementation and conversion services, account set-up and maintenance, reconciliation and account
recordkeeping and administration to various plan types, including 529 plans, retirement plans and health savings accounts. The fee for Class K shares is equal on an annual basis to 0.25% of average daily net assets attributable to the class.
Class T Shareholder Services Fees
The Funds that offer Class T shares have adopted a shareholder
services plan that permits them to pay for certain services provided to Class T shareholders by their selling agents. Equity Funds may pay shareholder servicing fees up to an aggregate annual rate of 0.50% of the Fund's average daily net assets
attributable to Class T shares (comprised of up to 0.25% for shareholder liaison services and up to 0.25% for administrative support services). Fixed income Funds may pay shareholder servicing fees up to an aggregate annual rate of 0.40% of the
Fund's average daily net assets attributable to Class T shares (comprised of up to 0.20% for shareholder liaison services and up to 0.20% for administrative support services). These fees are currently limited to an aggregate annual rate of
Columbia Large Core Quantitative Fund
Choosing a Share Class
(continued)
not more than 0.25% for equity Funds and not more than 0.15% for fixed income
Funds. With respect to those Funds that declare dividends on a daily basis, the shareholder servicing fee shall be waived by the selling agents to the extent necessary to prevent net investment income from falling below 0% on a daily basis.
Selling Agent Compensation
The Distributor, the Investment Manager and their affiliates
make payments, from their own resources, to selling agents, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Funds (Marketing Support Payments). Such payments are generally based upon one or more
of the following factors: average net assets of the Funds sold by the Distributor attributable to that selling agent; gross sales of the Funds distributed by the Distributor attributable to that selling agent; reimbursement of ticket charges (fees
that a selling agent charges its representatives for effecting transactions in Fund shares); or a negotiated lump sum payment. While the financial arrangements may vary for each selling agent, Marketing Support Payments to any one selling agent are
generally between 0.05% and 0.40% on an annual basis for payments based on average net assets of the Fund attributable to the selling agent, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the
Funds attributable to the selling agent. The Distributor, the Investment Manager and their affiliates may make payments in larger amounts or on a basis other than those described above when dealing with certain selling agents, including certain
affiliates of Bank of America Corporation (Bank of America). Such increased payments may enable such selling agents to offset credits that they may provide to customers. The Distributor, the Investment Manager and their affiliates do not make
Marketing Support Payments with respect to Class Y shares; provided, however, that such payments are made to Bank of America with respect to Class Y shares of Columbia Bond Fund, Columbia Global Dividend Opportunity Fund, Columbia Income
Opportunities Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Growth Fund, Columbia Mid Cap Value Fund, Columbia Select International Equity Fund, Columbia Short Term Bond Fund, Columbia Small Cap Growth Fund I and Columbia Small Cap
Value Fund I.
In addition, the Transfer Agent has
certain arrangements in place to compensate selling agents, including other Ameriprise Financial affiliates, that hold Fund shares through omnibus accounts, including omnibus retirement plans, for services that they provide to beneficial
shareholders (Shareholder Services). Shareholder Services may include sub-accounting, sub-transfer agency, participant recordkeeping, shareholder or participant reporting, shareholder or participant transaction processing, maintenance of shareholder
records, preparation of account statements and provision of customer service. Payments for Shareholder Services vary by selling agent but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of
the Fund’s shares.
Generally, each Fund (other than the Columbia
Acorn Funds) pays a percentage of the average aggregate value of shares maintained in omnibus accounts: 0.20% for all share classes other than Class I, K, R5 and Y shares; 0.05% for Class K and R5 shares; and 0% for Class I and Y shares. The amounts
in excess of that reimbursed by the Fund are borne by the Distributor, the Investment Manager and/or their affiliates. The Transfer Agent does not pay selling agents for Shareholder Services and the Fund does not pay the Transfer Agent for any
Shareholder Services provided by selling agents, with respect to Class Y shares.
In addition to the payments described above, the Distributor,
the Investment Manager and their affiliates 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, the
Investment Manager and their affiliates are paid out of their own resources and do not increase the amount paid by you or the Fund. You can find further details in the SAI about the payments made by the Distributor, the Investment Manager and their
affiliates, as well as a list of the selling agents, including Ameriprise Financial affiliates, to which the Distributor and the Investment Manager have agreed to make Marketing Support Payments and pay Shareholder Services fees.
Your selling agent may charge you fees and commissions in
addition to those described in this prospectus. You should consult with your selling agent and review carefully any disclosure your selling agent provides regarding its services and compensation. Depending on the financial arrangement in place at
any particular time, a selling agent and its financial advisors may have a financial incentive for recommending the Fund or a particular share class over others.
Columbia Large Core Quantitative Fund
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 NAV per share for each class of shares of the Fund at the end of each business day.
NAV Calculation
Each of the Fund's share classes calculates
its NAV as follows:
NAV
=
(Value of assets of the share class) – (Liabilities of the share class)
Number of outstanding shares of the class
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 NAV 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.
Equity
securities are valued primarily on the basis of market quotations or valuations reported on stock exchanges and other securities markets around the world. If an equity security is listed on a national exchange, the security is valued at the closing
price or, if the closing price is not readily available, the mean of the closing bid and asked prices. Certain equity securities, debt securities and other assets are valued differently. For instance, bank loans trading in the secondary market are
valued primarily on the basis of indicative bids, fixed-income investments maturing in 60 days or less are valued primarily using the amortized cost method, unless this methodology results in a valuation that does not approximate the market value of
these securities, and those maturing in excess of 60 days are valued primarily using a market-based price obtained from a pricing service, if available. Investments in other open-end funds are valued at their latest NAVs. Both market quotations and
indicative bids are obtained from outside pricing services approved and monitored pursuant to a policy approved by the Fund's Board. For a money market fund, the Fund's investments are generally valued at amortized cost, which approximates market
value.
If a market price is not readily available or is
deemed not to reflect market value, the Fund will determine the price of a portfolio security based on a determination of the security's fair value pursuant to a policy approved by the Fund's Board. 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) corporate actions, earnings announcements, litigation or
other events 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 foreign security's market price is readily available and reflective of market value and, if not, the fair value of
the security. To the extent the Fund has significant holdings of small cap stocks, high-yield bonds, floating rate loans, or tax-exempt, foreign or other securities that may trade infrequently, fair valuation may be used more frequently than for
other funds.
Columbia Large Core Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
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 fund would have priced the security. 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 one or more independent fair valuation pricing services to assist in the fair valuation process for
foreign securities.
Transaction Rules and Policies
The Fund, the Distributor or the Transfer Agent may refuse any
order to buy or exchange shares. If this happens, the Fund will return any money it received, but no interest will be paid on that money.
Order Processing
Orders to buy, sell or exchange Fund shares are processed on
business days. Depending upon the class of shares, orders can be made by mail, by telephone or online. Orders received in “good form” by the Transfer Agent or your selling agent before the end of a business day are priced at the NAV per
share of the Fund's applicable share class on that day. Orders received after the end of a business day will receive the next business day's NAV per share. When a written order to buy, sell or exchange shares is sent to the Transfer Agent, the share
price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the P.O. Box provided for regular mail delivery. 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 NAV per share. The business day that applies to your order is also called the trade date.
“Good Form”
An order is in “good form” if the Transfer Agent
or your selling 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 greater than $100,000 and other transactions, as described below, 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
The Transfer Agent may require a Medallion Signature Guarantee
for your signature in order to process certain transactions. A Medallion Signature Guarantee helps assure that a signature is genuine and not a forgery. A Medallion Signature Guarantee must be provided by an eligible guarantor institution including,
but not limited to, the following: a bank, credit union, savings association, broker or dealer that participates in the Securities Transfer Association Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) or the New York Stock
Exchange Medallion Signature Program (MSP). Notarization by a notary public is not an acceptable signature guarantee. The Transfer Agent reserves the right to reject a signature guarantee and to request additional documentation for any
transaction.
A Medallion Signature Guarantee is required
if: (i) the transaction amount is over $100,000; (ii) you want your check made payable to someone other than the registered account owner(s); (iii) the address of record has changed within the last 30 days; (iv) you want the check mailed to an
address other than the address of record; (v) you want proceeds to be sent according to existing bank account instructions not coded for outgoing Automated Clearing House (ACH) or wire, or to a bank account not on file; (vi) you are the beneficiary
of the account and the account owner is deceased (other documentation may be required); or (vii) you are changing legal ownership of your account.
Columbia Large Core Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
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 (e.g., social security number (SSN) or
other taxpayer identification number (TIN)). 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 take other steps as deemed reasonable. The Fund will not be 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 — Class A, Class B, Class C, Class T
and Class Z Share Accounts Below the Minimum Account Balance
The Funds generally will automatically sell your shares if the
value of your Fund account (treating each account of the Fund you own separately from any other account of the Fund you may own) falls below the applicable Minimum Account Balance. The Minimum Account Balance varies among Funds, share classes and
types of accounts, as follows:
Minimum
Account Balance
|
|
|
Minimum
Account
Balance
|
For
all Funds, classes and account types except those listed below
|
$250
(None for accounts with
Systematic Investment Plans)
|
Individual
Retirement Accounts for all Funds and classes except those listed below
|
None
|
Columbia
Absolute Return Currency and Income Fund
|
$5,000
|
Columbia
Floating Rate Fund and Columbia Inflation Protected Securities Fund
|
$2,500
|
Class
I, Class K, Class R, Class R4, Class R5, Class W and Class Y
|
None
|
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 Fund in which you hold shares, or
setting up a Systematic Investment Plan. For more information, contact the Transfer Agent or your selling agent. The Transfer Agent's contact information (toll-free number and mailing addresses) as well as the Funds' website address can be found at
the beginning of the section
Choosing a Share Class
.
The Fund also may sell your Fund shares if your selling agent
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 — Class A, Class B, Class C, Class T
and Class Z Share Accounts Minimum Balance Fee
If the
value of your Fund 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 for any reason, including as a result of market
decline, your account generally will be subject to a $20 annual fee. This fee will be assessed through the automatic sale of Fund 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 Fund account balance, consolidating your Fund accounts through an exchange of shares of another Fund in which you hold shares,
Columbia Large Core Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
or setting up a Systematic Investment Plan that invests at least monthly. For
more information, contact the Transfer Agent or your selling agent. The Transfer Agent's contact information (toll-free number and mailing address(es)) as well as the Funds' website address can be found at the beginning of the section
Choosing a Share Class
.
The Funds 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 Small Account Policy (Accounts
Below Minimum Account Balance and Minimum Balance Fee)
The automatic sale of Fund shares of accounts under $250 and
the annual minimum balance fee described above do not apply to shareholders of Class I, Class K, Class R, Class R4, Class R5, Class W and Class Y shares; shareholders holding their shares through broker-dealer networked accounts; wrap fee and
omnibus accounts; accounts with active Systematic Investment Plans; certain qualified retirement plans; and health savings accounts. The automatic sale of Fund shares of accounts under the applicable Minimum Account Balance does not apply to
individual retirement plans.
Small Account Policy —
Broker-Dealer and Wrap Fee Accounts
The Funds may
automatically redeem, at any time, broker-dealer networked accounts and wrap fee accounts that have account balances of $20 or less or have less than one share.
Information Sharing Agreements
As required by Rule 22c-2 under the 1940 Act, the Funds or
certain of their service providers will enter into information sharing agreements with selling agents, including participating life insurance companies and selling agents that sponsor or offer retirement plans through which shares of the Funds are
made available for purchase. Pursuant to Rule 22c-2, selling agents 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.
Excessive Trading Practices Policy of Non-Money Market
Funds
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 purchase 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 sole discretion restrict or reject a purchase or exchange order even if the transaction is
not subject to the specific 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 purchase or exchange transactions communicated directly to the Transfer Agent and to those received by selling agents.
Specific Buying and Exchanging Limitations
— If a Fund detects that an investor has made two “material round trips” in any 28-day period, it will generally reject the investor's future purchase orders, including exchange purchase orders,
involving any 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 sole discretion, reject future buy orders by any person, group or account that appears to
have engaged in any type of excessive trading activity.
Columbia Large Core Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
These limits generally do not apply to automated transactions
or transactions by registered investment companies in 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. In addition, the Fund may, in its sole discretion, reinstate trading privileges that have been revoked under the Fund's Excessive Trading Policies and Procedures.
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 or exchange orders through selling agents, and cannot always know of or reasonably detect excessive trading that may be facilitated by selling agents 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 selling agents such as broker-dealers, retirement plans and variable insurance products. These arrangements often permit selling
agents to aggregate their clients' transactions and accounts, and in these circumstances, the identity of the shareholders is often not known to the Fund.
Some selling agents 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.
Columbia Large Core Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
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 Fund 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.
Excessive
Trading Practices Policy of Columbia Money Market Fund
A
money market fund is designed to offer investors a liquid cash option that they may buy and sell as often as they wish. Accordingly, the Board has not adopted policies and procedures designed to discourage excessive or short-term trading of Columbia
Money Market Fund shares. However, since frequent purchases and sales of Columbia Money Market Fund shares could in certain instances harm shareholders in various ways, including reducing the returns to long-term shareholders by increasing costs
(such as spreads paid to dealers who trade money market instruments with Columbia Money Market Fund) and disrupting portfolio management strategies, Columbia Money Market Fund reserves the right, but has no obligation, to reject any purchase or
exchange transaction at any time. Except as expressly described in this prospectus (such as minimum purchase amounts), Columbia Money Market Fund has no limits on purchase or exchange transactions. In addition, Columbia Money Market Fund reserves
the right to impose or modify restrictions on purchases, exchanges or trading of Fund shares at any time.
Opening an Account and Placing Orders
We encourage 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 or exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling agent.
As described below, once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.
The Funds are generally available directly and through
broker-dealers, banks and other selling agents or institutions, and through certain qualified and non-qualified plans, wrap fee products or other investment products sponsored by selling agents. You may exchange or sell shares through your selling
agent. If you maintain your account directly with your selling agent, you must contact that agent to process your transaction.
Not all selling agents offer the Funds and certain selling
agents that offer the Funds may not offer all Funds on all investment platforms or programs.
Please consult with your financial advisor to determine the availability of the Funds. If you set up an account at a
selling agent that does not have, and is unable to obtain, a selling agreement with the Distributor, you will not be able to transfer Fund holdings to that account. In that event, you must either maintain your Fund holdings with your current selling
agent, find another selling agent with a selling agreement, or sell your Fund shares, paying any applicable CDSC. Please be aware that transactions in taxable accounts are taxable events and may result in income tax liability.
Selling agents that offer the Funds may charge you additional
fees for the services they provide and they may have different policies that are not described in this prospectus.
Some policy differences may include different minimum investment amounts, exchange privileges, Fund
choices and cutoff times for investments. Additionally, recordkeeping, transaction processing and payments of distributions relating to your account may be performed by the selling agents through which your shares of the Fund are held. Since the
Fund (and its service providers) may not have a record of your account transactions, you should always contact the financial advisor employed by the selling agent through which you purchased or at which you maintain your shares of the Fund to make
changes to your account or to give instructions concerning your account, or to obtain information about your account. The Fund and its service providers, including the Distributor and the Transfer Agent, are not responsible for the failure of these
selling agents to carry out their obligations to its customers.
The Fund may engage selling agents to receive purchase,
exchange and sell orders on its behalf. Accounts established directly with the Fund will be serviced by the Transfer Agent. The Funds, the Transfer Agent and the Distributor do not provide investment advice.
Columbia Large Core Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Accounts Established Directly with the Fund
You or the financial advisor through which you buy shares may
establish an account with the Fund. To do so, complete a Fund account application with your financial advisor or investment professional, and mail the account application to the Transfer Agent. Account applications may be obtained at
columbiathreadneedle.com/us or may be requested by calling 800.345.6611. Make your check payable to the Fund. You will be assessed a $15 fee for any checks rejected by your financial institution due to insufficient funds or other reasons. The Funds
do not accept cash, credit card convenience checks, money orders, traveler's checks, starter checks, third or fourth party checks, or other cash equivalents.
Mail your check and completed application to the Transfer
Agent at its address that can be found at the beginning of the section
Choosing a Share Class.
You may also use these addresses to request an exchange or redemption of Fund shares. When a written order to buy,
sell or exchange shares is sent to the Transfer Agent, the share price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the
P.O. Box provided for regular mail delivery.
You will be
sent a statement confirming your purchase and any subsequent transactions in your account. You will also be sent quarterly and annual statements detailing your transactions in the Fund and the other Funds you own under the same account number.
Duplicate quarterly account statements for the current year and duplicate annual statements for the most recent prior calendar year will be sent to you free of charge. Copies of year-end statements for prior years are available for a fee. Please
contact the Transfer Agent for more information.
Written
Transactions
Once you have an account, you can
communicate written buy, sell or exchange orders to the Transfer Agent at its address that can be found at the beginning of the section
Choosing a Share Class
. When a written order to buy, sell or exchange
shares is sent to the Transfer Agent, the share price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the P.O. Box
provided for regular mail delivery.
Include in your
letter: your name; the name of the Fund(s); your account number; the class of shares to be exchanged or sold; your SSN or other TIN; the dollar amount or number of shares you want to exchange or sell; specific instructions regarding delivery of
redemption proceeds or exchange destination; signature(s) of registered account owner(s); and any special documents the Transfer Agent may require in order to process your order.
Corporate, trust or partnership accounts may need to send
additional documents. Payment will be mailed to the address of record and made payable to the names listed on the account, unless your request specifies differently and is signed by all owners.
Telephone Transactions
For Class A, Class B, Class C, Class R, Class T, Class Y and
Class Z shares, 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 SSN or TIN available when calling.
You can sell Fund shares via the telephone, by electronic
funds transfer or by check to the address of record, up to and including an aggregate of $100,000 of shares per day, per Fund account, if you qualify for telephone orders. Wire redemptions requested via the telephone are subject to a maximum of $3
million of shares per day, per Fund. You can buy up to and including $100,000 of shares per day, per Fund account through your bank account as an Automated Clearing House (ACH) transaction via the telephone if you qualify for telephone orders.
Telephone orders may not be as secure as written orders. The
Fund 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.
Columbia Large Core Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Online Transactions
For Class A, Class B, Class C, Class R, Class T, Class Y and
Class Z shares, once you have an account, you may contact the Transfer Agent 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 and
including an aggregate of $100,000 of shares per day, per Fund account through the internet if you qualify for internet orders.
Wire Transactions
You may buy (or redeem) Class A, Class B (redemptions only),
Class C, Class T, Class W (redemptions only), Class Y and Class Z shares of a Fund by wiring money from (or to) your bank account to (or from) your Fund account by calling the Transfer Agent at 800.422.3737. You must set up this feature prior to
your request unless you are submitting your request in writing with a Medallion Signature Guarantee. The Transfer Agent charges a fee for shares sold by Fedwire. The Transfer Agent may waive the fee for certain accounts. In the case of a redemption,
the receiving bank may charge an additional fee. The minimum amount that can be redeemed by wire is $500. The maximum amount that can be redeemed over the telephone is $3 million per day, per Fund account.
Electronic Funds Transfer
You may buy (or redeem) Class A, Class B (redemptions only),
Class C, Class T, Class Y and Class Z shares of a Fund by electronically transferring money from (or to) your bank account to (or from) 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.
Important:
Payments sent by an
electronic fund transfer, a bank authorization, or check that are not guaranteed may take up to 10 or more days to clear. If you request a redemption before the purchase funds clear, this may cause your redemption request to fail to process if the
requested amount includes unguaranteed funds. If you purchased your shares by check or from your bank account as an ACH transaction, the Fund may hold the redemption proceeds when you sell those shares for a period of time after the trade date of
the purchase.
Buying Shares
Eligible Investors
Class A and Class C Shares
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. As described in this prospectus,
Class A shares but not Class C shares are generally subject to a front-end sales charge, which reduces the dollar amount invested in a Fund. However, Class C shares are generally subject to higher fees than Class A shares, which will reduce any
returns on Class C shares relative to Class A shares. You may be eligible to purchase Class A shares without a front-end sales charge if the value of your Columbia Fund shares held in eligible accounts reaches $1,000,000 (in the case of a purchase
of Class A shares of a Taxable Fund) or $500,000 (in the case of a purchase of Class A shares of a Tax-Exempt Fund). If you are eligible to invest in Class A shares without a front-end sales charge, you should discuss your options with your selling
agent. For more information, see
Choosing a Share Class – Reductions/Waivers of Sales Charges
. A purchase order for Class C shares of a Taxable or Tax-Exempt Fund is limited to $999,999 and $499,999,
respectively. Your selling agent may impose additional limits on investments in Class C shares.
For Columbia Money Market Fund, new investments must be made
in Class A, Class I, Class W or Class Z shares, subject to eligibility. Class C and Class R shares of Columbia Money Market Fund are available as a new investment only to investors in the Distributor's proprietary 401(k) products, provided that such
investor is eligible to invest in
Columbia Large Core Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
the class and transacts directly with the Fund or the Transfer Agent through
a third party administrator or third party recordkeeper. Columbia Money Market Fund offers other classes of shares only to facilitate exchanges with other Funds offering these classes of shares.
Class B Shares (Closed)
The Funds no longer accept 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):
■
|
Dividend and/or capital gain
distributions may continue to be reinvested in Class B shares of a Fund.
|
■
|
Shareholders invested in Class
B shares of a Fund may exchange those shares for Class B shares of other Funds offering such shares. Certain exceptions apply, including that not all Funds may permit exchanges.
|
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, any purchase orders (except those submitted by a selling agent through the National Securities Clearing Corporation (NSCC) as described in more detail below) that are orders 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 automatically be invested in Class A shares of the Fund, without regard to the normal minimum initial investment requirement for Class A shares,
but subject to the front-end sales charge that generally applies to Class A shares. See
Choosing a Share Class — Sales Charges and Commissions — Class A Shares — Front-End Sales Charge
for
additional information. Your selling agent may have different policies not described here, including a policy to reject purchase orders for a Fund's Class B shares or to automatically invest the purchase amount in Columbia Money Market Fund. Please
consult your selling agent to understand its policy.
Additional purchase orders for a Fund's Class B shares by an
existing Class B shareholder, submitted by such shareholder's selling agent through the NSCC, will be rejected due to operational limitations of the NSCC. Investors should consult their selling agent if they wish to invest in the Fund by purchasing
a share class of the Fund other than Class B shares.
Dividend and/or capital gain distributions from Class B shares
of a Fund will not be automatically invested in Class B shares of another 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 Fund will be
reinvested in Class B shares of the same Fund that is making the distribution.
Class I Shares
Class I shares are available only to the Funds (i.e.,
fund-of-funds investments).
Class K Shares (Closed)
Class K shares are closed to new investors and new accounts,
subject to certain limited exceptions described below.
Shareholders who opened and funded a Class K account with the
Fund as of the close of business on December 31, 2010 (including accounts once funded that subsequently reached a zero balance) may continue to make additional purchases of Class K shares. Plans may continue to make additional purchases of Fund
shares and add new participants, and new plans sponsored by the same or an affiliated sponsor may invest in the Fund (and add new participants) if an initial plan so sponsored invested in the Fund as of December 31, 2010 (or had approved the Fund as
an investment option as of December 31, 2010 and funded its initial account with the Fund prior to March 31, 2011) and holds Fund shares at the plan level.
Columbia Large Core Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
An order to purchase Class K shares received by the Fund or
the Transfer Agent after the close of business on December 31, 2010 (other than as described above) from a new investor or a new account that is not eligible to purchase shares will be refused by the Fund and the Transfer Agent and any money that
the Fund or the Transfer Agent received with the order will be returned to the investor or the selling agent, as appropriate, without interest.
Class K shares are designed for qualified employee benefit
plans, trust companies or similar institutions, charitable organizations that meet the definition in Section 501(c)(3) of the Code, non-qualified deferred compensation plans whose participants are included in a qualified employee benefit plan
described above, state sponsored college savings plans established under Section 529 of the Code, and health savings accounts created pursuant to public law 108-173. Class K shares may be purchased, sold or exchanged only through the Distributor or
an authorized selling agent.
Prior to October 25, 2012,
Class K shares were named Class R4 shares.
Class R
Shares
Class R shares are available only to eligible
health savings accounts sponsored by third party platforms, including those sponsored by Ameriprise Financial affiliates, eligible retirement plans and, in the sole discretion of the Distributor, other types of retirement accounts held through
platforms maintained by selling agents approved by the Distributor. Eligible retirement plans include any retirement plan other than individual 403(b) plans. Class R shares are generally not available for investment through retail nonretirement
accounts, traditional and Roth IRAs, Coverdell Education Savings Accounts, SEPs, SAR-SEPs, Simple IRAs or 529 tuition programs. Contact the Transfer Agent or your retirement plan or health savings account administrator for more information about
investing in Class R shares.
Class R4 Shares
Class R4 shares are available only to (i) omnibus retirement
plans, (ii) trust companies or similar institutions, (iii) broker-dealers, banks, trust companies and similar institutions that clear Fund share transactions for their client or customer investment advisory or similar accounts through designated
selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R4 eligibility apart from selling, servicing or similar agreements, (iv) 501(c)(3) charitable
organizations, (v) 529 plans and (vi) health savings accounts.
Prior to October 31, 2012, Class R4 shares were named Class R3
shares.
Class R5 Shares
Class R5 shares are available only to (i) certain registered
investment advisers that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with
respect to Class R5 eligibility apart from selling, servicing or similar agreements and (ii) omnibus retirement plans. Prior to November 8, 2012, Class R5 shares were closed to new investors and new accounts, subject to certain exceptions. Existing
shareholders who do not satisfy the new eligibility requirements for investment in Class R5 may not establish new Class R5 accounts but may continue to make additional purchases of Class R5 shares in accounts opened and funded prior to November 8,
2012; provided, however, that investment advisory programs and similar programs that opened a Class R5 account as of May 1, 2010, and continuously hold Class R5 shares in such account after such date, may generally not only continue to make
additional purchases of Class R5 shares but also open new Class R5 accounts for such pre-existing programs and add new shareholders in the program.
Class T Shares
Class T shares are available only to investors who received
(and who have continuously held) Class T shares in connection with the merger of certain Galaxy funds into certain Funds that were then named Liberty funds.
Class W Shares
Class W shares are available only to investors purchasing
through authorized investment programs managed by investment professionals, including discretionary managed account programs. Class W shares may be purchased, sold or exchanged only through the Distributor or an authorized selling agent. Shares
originally purchased in a
Columbia Large Core Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
discretionary managed account may continue to be held in Class W outside of a
discretionary managed account, but no additional Class W purchases may be made and no exchanges to Class W shares of another Fund may be made outside of a discretionary managed account.
Class Y Shares
Class Y shares, except as noted below, are available only to
retirement plans that maintain plan-level or omnibus accounts with the Fund (through the Transfer Agent).
Prior to November 8, 2012, Class Y shares were offered only to
certain former shareholders of series of the former Columbia Funds Institutional Trust (together, Former CFIT Shareholders). Former CFIT Shareholders who opened and funded a Class Y account with a Fund as of the close of business on November 7, 2012
may continue to make additional purchases of Class Y shares even if they do not satisfy the current eligibility requirements but may not establish new Class Y shares accounts and will not be eligible to exchange Class Y shares of a Fund into Class Y
shares of other Funds. Former CFIT Shareholders may exchange Class Y shares of a Fund for Class Z shares of the same Fund or Class Z shares of another Fund, subject to applicable minimum investments.
Class Z Shares
Class Z shares are available only to the categories of
eligible investors described below under
Class Z Shares Minimum Initial Investments
.
Selling agents that clear Fund share transactions through designated selling agents and
their mutual fund trading platforms that were given specific written notice from the Transfer Agent of the termination, effective March 29, 2013, of their eligibility for new purchases of Class Z shares and omnibus retirement plans are not permitted
to establish new Class Z accounts, subject to certain exceptions described below.
Omnibus retirement plans that opened and, subject to certain
exceptions, funded a Class Z account with the Fund as of the close of business on March 28, 2013, and have continuously held Class Z shares in such account after such date, may generally continue to make additional purchases of Class Z shares, open
new Class Z accounts and add new participants. In addition, an omnibus retirement plan affiliated with a grandfathered plan may, in the sole discretion of the Distributor, open new Class Z accounts in a Fund if the affiliated plan opened a Class Z
account on or before March 28, 2013. If an omnibus retirement plan invested in Class Z shares changes recordkeepers after March 28, 2013, any new accounts established for that plan may not be established in Class Z shares, but such a plan may
establish new accounts in a different share class for which the plan is eligible. The Distributor may, in its sole discretion, delay the funding requirement described above for omnibus retirement plans to allow an omnibus retirement plan that opened
a Class Z account (the initial Class Z account) with the Fund as of the close of business on March 28, 2013 to make additional purchases of Class Z shares, open new Class Z accounts and add new participants so long as the initial Class Z account was
funded by July 2, 2013.
Accounts of selling agents
(other than omnibus retirement plans, which are discussed above) that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that received specific written notice
from the Transfer Agent of the termination, effective March 29, 2013, of their eligibility for new purchases of Class Z shares will not be permitted to establish new Class Z accounts or make additional purchases of Class Z shares (other than through
reinvestment of distributions). Such accounts may, at their holder’s option, exchange Class Z shares of a Fund, without the payment of a sales charge, for Class A shares of the same Fund.
Additional Eligible Investors
In addition, the Distributor, in its sole discretion, may
accept investments in any share class from investors other than those listed in this prospectus.
Minimum Initial Investments
The table below shows the Fund's minimum initial investment
requirements, which may vary by Fund, class and type of account.
Columbia Large Core Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Minimum
Initial Investments
|
|
Minimum
Initial
Investment
(a)
|
Minimum
Initial Investment
for Accounts
with Systematic
Investment Plans
|
For
all Funds, classes and account types except those listed below
|
$2,000
|
$100
(b)
|
Individual
Retirement Accounts for all Funds and classes except those listed below
|
$1,000
|
$100
(c)
|
Columbia
Absolute Return Currency and Income Fund
|
$10,000
|
$10,000
|
Columbia
Floating Rate Fund and Columbia Inflation Protected Securities Fund
|
$5,000
|
$5,000
|
Class
I, Class K, Class R, Class R4 and Class Y
|
None
|
N/A
|
Class
R5
|
variable
(d)
|
N/A
|
Class
W
|
$500
|
N/A
|
Class
Z
|
variable
(e)
|
$100
|
(a)
|
If your Class A, Class B, Class
C, Class T or Class Z shares account balance falls below the minimum initial investment amount for any reason, including a market decline, you may be asked to increase it to the minimum initial investment amount or establish a monthly Systematic
Investment Plan. If you do not do so, your account will be subject to a $20 annual low balance fee and/or shares may be automatically redeemed and the proceeds mailed to you if the account falls below the minimum account balance. See
Buying, Selling and Exchanging Shares — Transaction Rules and Policies
above.
|
(b)
|
Columbia Money Market Fund
—
$2,000
|
(c)
|
Columbia Money Market Fund
—
$1,000
|
(d)
|
There is no minimum initial
investment in Class R5 shares for omnibus retirement plans. A minimum initial investment of $100,000 applies to aggregate purchases of Class R5 shares of a Fund for combined underlying accounts of any registered investment adviser that clears Fund
share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R5 eligibility
apart from selling, servicing or similar agreements.
|
(e)
|
The minimum initial investment
amount for Class Z shares is $0, $1,000 or $2,000 depending upon the category of eligible investor. See
—
Class Z Shares Minimum Initial Investments
below. The
minimum initial investment amount for systematic investment plan accounts is the same as the amount set forth in the first two rows of the table, as applicable.
|
The minimum initial investment requirements may be waived for
accounts that are managed by an investment professional, for accounts held in approved discretionary or non-discretionary wrap programs, or for accounts that are a part of an employer-sponsored retirement plan. The Distributor, in its sole
discretion, may also waive minimum initial investment requirements for other account types.
Minimum investment and related requirements may be modified at
any time, with or without prior notice. If your account is closed and then re-opened with a systematic investment plan, your account must meet the then-current applicable minimum initial investment.
Class Z Shares 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 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.
|
■
|
Any investor participating
in a wrap program sponsored by a selling agent 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:
Columbia Large Core Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
■
|
Any individual retirement
plan for which a selling agent 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 employee of Columbia
Management Investment Advisers, LLC, the Distributor or the Transfer Agent and immediate family members of any of the foregoing who share the same address and any persons employed as of April 30, 2010 by Columbia Management Advisors, LLC, Columbia
Management Distributors, Inc., or Columbia Management Services, Inc., the adviser, distributor and transfer agent of series of CFST and CFST I prior to May 1, 2010 (the Previous Service Providers) and immediate family members of any of the foregoing
who share the same address are eligible to make new and subsequent purchases in Class Z shares through an individual retirement account. If you maintain your account with a selling agent, you must contact that selling agent each time you seek to
purchase shares to notify them that you qualify for Class Z shares.
|
The minimum initial investment in Class Z shares for the
following categories of eligible investors is $2,000:
■
|
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 a series of CFST or CFST I distributed by the Distributor.
|
■
|
Any investor participating
in an account offered by a selling agent 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.
|
■
|
Any employee of Columbia
Management Investment Advisers, LLC, the Distributor or the Transfer Agent and immediate family members of any of the foregoing who share the same address and any persons employed as of April 30, 2010 by the Previous Service Providers and any of
their immediate family members who share the same address are eligible to make new and subsequent purchases in Class Z shares through a non-retirement account. If you maintain your account with a selling agent, you must contact that selling agent
each time you seek to purchase shares to notify them that you qualify for Class Z shares.
|
■
|
Certain other investors as
set forth in more detail in the SAI.
|
Systematic Investment Plan
The Systematic Investment Plan allows you to schedule regular
purchases via automatic transfers from your bank account to the Fund on a monthly, quarterly or semiannual basis. Contact the Transfer Agent or your selling agent to set up the plan. Systematic Investment Plans may not be available for all share
classes.
Dividend Diversification
Generally, you may automatically invest distributions made by
another Fund into the same class of shares (and in some cases certain other classes of shares) of a Fund at no additional sales charge. A sales charge may apply when you invest distributions made with respect to shares that were not subject to a
sales charge at the time of your initial purchase. Call the Transfer Agent at 800.345.6611 for details. The ability to invest distributions from one Fund to another Fund may not be available to accounts held at all selling agents.
Columbia Large Core Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Other Purchase Rules You Should Know
■
|
Once the Transfer Agent or
your selling 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
and Class T shares at the public offering price per share because purchases of these share classes are generally subject to a front-end sales charge.
|
■
|
You buy Class B, Class C,
Class I, Class K, Class R, Class R4, Class R5, Class W, Class Y and Class Z shares at net asset value per share because no front-end sales charge applies to purchases of these share classes.
|
■
|
The Distributor and the
Transfer Agent reserve the right to cancel your order if the Fund 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 agents are
responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.
|
■
|
Shares purchased 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. The payment will be sent within seven days after your request is received in “good form.” When you sell shares, the amount you receive may be more or less than the amount you invested.
Your sale price will be the next NAV calculated after your
request is received in “good form,” minus any applicable CDSC.
Systematic Withdrawal Plan
The Systematic Withdrawal Plan allows you to schedule regular
redemptions from your account any business day on a monthly, quarterly or semiannual basis. Currently, Systematic Withdrawal Plans are generally available for Class A, Class B, Class C, Class R4, Class R5, Class T, Class W, Class Y and Class Z share
accounts. Contact the Transfer Agent or your financial advisor to set up the plan. To set up the plan, your account balance must meet the class minimum initial investment amount. 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 Signature Guaranteed.
You can choose to receive your withdrawals via check or direct
deposit into your bank account. The Fund will deduct any applicable CDSC from the withdrawals before sending the balance to you. You can cancel the plan by giving the Fund 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 withdraw your entire investment.
Check Redemption Service (for Columbia Money Market Fund)
Class A and Class Z shares of Columbia Money Market Fund offer
check writing privileges. If you have $2,000 in Columbia Money Market Fund, you may request checks which may be drawn against your account. The amount of any check drawn against your Columbia Money Market Fund must be at least $100. You can elect
this service on your initial application or thereafter. Call 800.345.6611 for the appropriate forms to establish this service. If you own Class A shares that were originally purchased in another Fund at NAV because of the size of the purchase, and
then exchanged into Columbia Money Market Fund, check redemptions may be subject to a CDSC. A $15 charge will be assessed for any stop payment order requested by you or any overdraft in connection with checks written against your Columbia Money
Market Fund account. Note that a Medallion Signature Guarantee may be required if this service is established after the account is opened.
Columbia Large Core Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
In-Kind Redemptions
The Fund reserves the right to honor redemption orders with
in-kind distributions of portfolio securities instead of cash. In the event the Fund distributes portfolio securities in-kind, you may incur 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. For U.S. federal income tax purposes redemptions paid in securities are generally treated the same as redemptions paid in cash.
Other Redemption Rules You Should Know
■
|
Once the Transfer Agent or
your selling agent receives your redemption order in “good form,” your shares will be sold at the next calculated NAV 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 that
are held directly with the Funds (through the Transfer Agent), we will normally send the redemption proceeds by mail or electronically transfer them to your bank account within three business days after the Transfer Agent or your selling agent
receives your order in “good form.”
|
■
|
If you sell your shares
through a selling agent, the Funds will normally send the redemption proceeds by Fedwire within three business days after the Transfer Agent or your selling agent receives your order in “good form.”
|
■
|
If you paid for your shares
by check or from your bank account as an ACH transaction, the Funds will hold the redemption proceeds when you sell those shares for a period of time after the trade date of the purchase.
|
■
|
No interest will be paid on
uncashed redemption checks.
|
■
|
The Funds can delay payment
of the redemption proceeds for up to seven days and may suspend redemptions and/or further postpone payment of redemption proceeds when the NYSE is closed or trading thereon is restricted or during emergency or other circumstances, including as
determined by the SEC.
|
■
|
Other restrictions may apply
to retirement accounts. For information about these restrictions, contact your retirement plan administrator.
|
■
|
The Fund reserves the right
to redeem your shares if your account falls below the Fund's minimum initial investment requirement.
|
■
|
Also keep in mind the 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 your Fund to buy shares of
another Fund, in what is called an exchange. You should read the prospectus of, and make sure you understand the investment objective, principal investment strategies, risks, fees and expenses of, the Fund into which you are exchanging.
You may be subject to a sales charge if you exchange from
Columbia Money Market Fund or any other Fund that does not charge a front-end sales charge into a non-money market Fund.
If you hold your Fund shares through certain selling agents, including Ameriprise Financial
Services, Inc., you may have limited exchangeability among the Funds.
Please contact your selling agent for more information.
You can generally make exchanges between like share classes of
any Fund and, subject to eligibility requirements, other share classes of any Fund. Some exceptions apply. Although the Funds allow certain exchanges from one share class to another share class with higher expenses, you should consider the expenses
of each class before making such an exchange.
Systematic
Exchanges
You may buy Class A, Class C, Class T, Class
W, Class Y and/or Class Z shares of a Fund by exchanging each month from another Fund for shares of the same class of the Fund at no additional cost, subject to the following exchange amount minimums: $50 each month for individual retirement
accounts (i.e. tax qualified accounts); and $100 each month for non-retirement accounts. Contact the Transfer Agent or your selling agent to set up the plan. If you set up your plan to exchange more than $100,000 each month, you must obtain a
Medallion Signature Guarantee.
Columbia Large Core Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Exchanges will continue as long as your balance is sufficient
to complete the systematic monthly transfers, subject to the 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 $50 and $100 minimum requirements noted immediately above) by calling the Transfer Agent at 800.345.6611. A sales charge may apply when you exchange shares of a Fund that were
not assessed a sales charge at the time of your initial purchase.
Other Exchange Rules You Should Know
■
|
Exchanges are made at the
NAV next calculated after your exchange order is received in “good form.”
|
■
|
Once the Fund receives your
exchange request, you cannot cancel it after the market closes.
|
■
|
The rules for buying shares
of a Fund generally apply to exchanges into that Fund, including, if your exchange creates a new Fund account, it must satisfy the minimum investment amount, unless a waiver applies.
|
■
|
Shares of the purchased Fund
may not be used on the same day for another exchange or sale.
|
■
|
If you exchange shares from
Class A shares of Columbia Money Market Fund to a non-money market Fund, any further exchanges must be between shares of the same class. For example, if you exchange from Class A shares of Columbia Money Market Fund into Class C shares of a
non-money market Fund, you may not exchange from Class C shares of that non-money market Fund back to Class A shares of Columbia Money Market Fund.
|
■
|
A sales charge may apply when
you exchange shares of a Fund that were not assessed a sales charge at the time of your initial purchase. For example, if your initial investment was in Columbia Money Market Fund and you exchange into a non-money market Fund, your transaction is
subject to a front-end sales charge if you exchange into Class A shares and to a CDSC if you exchange into Class C shares of the Funds.
|
■
|
If your initial investment
was in Class A shares of a non-money market Fund and you exchange shares into Columbia Money Market Fund, you may exchange that amount to another Fund, including dividends earned on that amount, without paying a sales charge.
|
■
|
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 Fund and ends when you sell the shares of the Fund you received from the exchange. The applicable CDSC will be the CDSC of the original Fund.
|
■
|
You may make exchanges only
into a Fund that is legally offered and sold in your state of residence. Contact the Transfer Agent or your selling agent for more information.
|
■
|
You generally may make an
exchange only into a 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.
|
■
|
Changing your investment to
a different Fund will be treated as a sale and purchase, and you will be subject to applicable taxes on the sale and sales charges on the purchase of the new Fund.
|
■
|
Class Z shares of a Fund may
be exchanged for Class A or Class Z shares of another Fund. In certain circumstances, the front-end sales charge applicable to Class A shares may be waived on exchanges of Class Z shares for Class A shares. See
Buying, Selling and Exchanging Shares — Buying Shares — Eligible Investors — Class Z Shares
for details.
|
■
|
You may generally exchange
Class T shares of a Fund for Class A shares of another Fund if the other Fund does not offer Class T shares. Class T shares exchanged into Class A shares cannot be exchanged back into Class T shares.
|
■
|
Class W shares originally
purchased, but no longer held, in a discretionary managed account, may not be exchanged for Class W shares of another Fund.
|
Columbia Large Core Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
■
|
Former CFIT Shareholders may
not exchange Class Y shares of a Fund into Class Y shares of another Fund.
|
Same-Fund Exchange Privilege
Certain shareholders of a Fund may be or become eligible to
invest in other classes of shares of the same Fund. Upon a determination of such eligibility, such shareholders may be eligible to exchange their shares for shares of the other share class, if offered. Such exchanges include exchanges of shares of
one class for shares of another share class with higher expenses. Before making such an exchange, you should consider the expenses of each class. Investors should contact their selling agents to learn more about the details of the exchange
privilege.
Note the following rules relating to
same-Fund exchanges:
■
|
No sales charges or other
charges will apply to any such exchange, except that when Class B shares are exchanged, any CDSC applicable to Class B shares will be applied.
|
■
|
Ordinarily, shareholders
will not recognize a gain or loss for U.S. federal income tax purposes upon such an exchange. You should consult your tax advisor about your particular exchanges.
|
Columbia Large Core Quantitative Fund
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 generally unrealized. If the fund sells an investment, it generally will realize a capital gain if it sells that investment for a
higher price than its adjusted cost basis, and will generally realize a capital loss if it sells that investment for a lower price than its adjusted cost basis. Capital gains and losses are either short-term or long-term, depending on whether the
fund holds the securities for one year or less (short-term) or more than one year (long-term).
|
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 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
|
Annually
|
Distributions
|
Annually
|
The Fund may, however, declare or
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 distribution was declared (or, if the Fund declares distributions daily, 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 (the selling agent through which you purchased shares may have different policies). You can do this by contacting the Funds at
the addresses and telephone numbers listed at the beginning of the section entitled
Choosing a Share Class
. No sales charges apply to the purchase or sale of such shares.
For accounts held directly with the Fund (through the Transfer
Agent), 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.
Columbia Large Core Quantitative Fund
Distributions and Taxes
(continued)
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) of net
investment income or net realized capital gain, because doing so can cost you money in taxes to the extent 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,” before you invest check the Fund's distribution schedule, which is available at the Funds' website and/or by calling the Funds' telephone
number listed at the beginning of the section entitled
Choosing a Share Class
.
Taxes
You should be aware of the following considerations applicable
to all Funds (unless otherwise noted):
■
|
The Fund intends to qualify
and to be eligible for treatment 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 for treatment as a regulated investment company would result in Fund-level taxation, and consequently, a reduction in income available for distribution to you and in the net asset value of your shares. Even if the Fund
qualifies for treatment as a regulated investment company, the Fund may be subject to federal excise tax on certain undistributed income or gains.
|
■
|
Distributions, if taxable,
generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional Fund shares. Dividends paid in January are deemed paid on December 31 of the prior year if the dividend was declared and payable to
shareholders of record in October, November, or December of such prior year.
|
■
|
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.
|
■
|
From time to time, a
distribution from the Fund could constitute a return of capital, which is not taxable to you so long as the amount of the distribution does not exceed your tax basis in your Fund shares. A return of capital reduces your tax basis in your Fund
shares, with any amounts exceeding such basis generally taxable as capital gain.
|
■
|
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 the lower net long-term capital gain rates instead of the higher
ordinary income rates. 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.
|
■
|
Certain high-income
individuals (as well as estates and trusts) are subject to a 3.8% tax on net investment income. For individuals, the 3.8% tax applies to the lesser of (1) the amount (if any) by which the taxpayer's modified adjusted gross income exceeds certain
threshold amounts or (2) the taxpayer's “net investment income.”
|
|
Net investment income
generally includes for this purpose dividends, including any capital gain dividends, paid by the Fund, and net gains recognized on the sale, redemption or exchange of shares of the Fund.
|
■
|
Certain derivative
instruments when held in the Fund's portfolio subject the Fund to special tax rules, the effect of which may be to, among other things, accelerate income to the Fund, defer Fund losses, cause adjustments in the holding periods of Fund portfolio
securities, or convert capital gains into ordinary income, short-term capital losses into long-term capital losses or long-term capital gains into short-term capital gains. These rules could therefore affect the amount, timing and/or character of
distributions to shareholders.
|
■
|
Certain Funds may purchase
or write options, as described further in the SAI. Generally, a Fund realizes a capital gain or loss on an option when the option expires, or when it is exercised, sold or otherwise terminated. However, if an option is a “section 1256
contract,” which includes most traded options on a broad-based index, and the
|
Columbia Large Core Quantitative Fund
Distributions and Taxes
(continued)
|
Fund holds such option at
the end of its taxable year, the Fund is deemed to sell such option at fair market value at such time and recognize any gain or loss thereon, which is generally deemed to be 60% long-term and 40% short-term gain or loss, as described further in the
SAI.
|
■
|
If at the end of the taxable
year more than 50% of the value of the Fund's assets consists of securities of foreign corporations, and the Fund makes a special election, you will generally be required to include in your income for U.S. federal income tax purposes your share of
the qualifying foreign income taxes paid by the Fund in respect of its foreign portfolio securities. You may be able to claim a foreign tax credit or deduction in respect of this amount, subject to certain limitations. There is no assurance that the
Fund will make this election for a taxable year, even if it is eligible to do so.
|
■
|
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 your adjusted tax basis in the shares, which is generally 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; in other circumstances, capital losses may be disallowed under the “wash sale” rules.
|
■
|
The Fund generally is
required to report to shareholders and the Internal Revenue Service (the IRS) upon the sale, exchange or redemption of Fund shares cost basis information with respect to those shares. The Fund uses average cost basis as its default method of
calculating cost basis. Please see columbiathreadneedle.com/us or contact the Fund at 800.345.6611 for more information regarding average cost basis reporting, other available cost basis methods and how to select or change a particular method or to
choose specific shares to sell, redeem or exchange. If you hold Fund shares through a selling agent, you should contact your selling agent to learn about its cost basis reporting default method and the reporting elections available to your account.
|
■
|
The Fund is required by
federal law to withhold tax on any taxable or tax-exempt distributions and redemption 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 TIN or haven't certified to the Fund that withholding doesn't apply; the 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.
|
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. Please see the SAI for more detailed tax information. 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.
Additional Information About the Fund
Additional information about the Fund’s investments is available in
the Fund’s annual and semiannual 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.
The SAI also provides additional information about the Fund and its policies. The SAI, which has been filed with the SEC, is legally part of this prospectus (incorporated by reference). To obtain these documents free of charge, to request other
information about the Fund and to make shareholder inquiries, please contact the Fund as follows:
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:
columbiathreadneedle.com/us
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, D.C. 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, D.C. 20549-1520.
The investment company registration number of Columbia Funds
Series Trust II, of which the Fund is a series, is 811-21852.
© 2015 Columbia Management Investment Distributors,
Inc.
225 Franklin Street, Boston, MA 02110
800.345.6611
Prospectus
June 1,
2015
Columbia Large
Growth Quantitative Fund
Class
|
|
Ticker
Symbol
|
Class
R4 Shares
|
|
CGQFX
|
Class
Y Shares
|
|
CGQYX
|
As with all mutual funds, the Securities and Exchange Commission (SEC) has
not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Columbia Large Growth Quantitative Fund
|
3
|
|
3
|
|
3
|
|
3
|
|
4
|
|
5
|
|
6
|
|
6
|
|
7
|
|
7
|
|
8
|
|
8
|
|
8
|
|
8
|
|
11
|
|
14
|
|
16
|
|
17
|
|
18
|
|
18
|
|
18
|
|
23
|
|
31
|
|
33
|
|
36
|
|
38
|
|
38
|
|
39
|
|
45
|
|
47
|
|
53
|
|
54
|
|
56
|
|
56
|
|
57
|
Columbia Large Growth Quantitative Fund
Investment
Objective
Columbia Large Growth Quantitative Fund (the
Fund) seeks to provide shareholders with long-term capital growth.
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)
|
|
|
R4
and Y
|
Maximum
sales charge (load) imposed on purchases
|
|
None
|
Maximum
deferred sales charge (load) imposed on redemptions
|
|
None
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
Class
R4
|
Class
Y
|
Management
fees
|
0.69%
|
0.69%
|
Distribution
and/or service (12b-1) fees
|
0.00%
|
0.00%
|
Other
expenses
(a)
|
0.34%
|
0.11%
|
Total
annual Fund operating expenses
|
1.03%
|
0.80%
|
(a)
|
Other expenses are based on
estimated amounts for the Fund’s current fiscal year.
|
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 the
applicable class of Fund shares 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
Annual Fund Operating Expenses
table above.
|
Although your actual costs may be higher or
lower, based on the assumptions listed above, your costs would be:
|
1
year
|
3
years
|
5
years
|
10
years
|
Class
R4
(whether or not shares are redeemed)
|
$105
|
$328
|
$569
|
$1,259
|
Class
Y
(whether or not shares are redeemed)
|
$
82
|
$255
|
$444
|
$
990
|
Portfolio Turnover
The Fund may pay 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 105% of the average value of its portfolio.
Principal Investment Strategies
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in equity securities of companies with market capitalizations greater than $5 billion at the time of purchase or that are within the market
capitalization range of companies in the Russell 1000
®
Growth Index (the Index) at the time of purchase. These equity securities generally include common stocks.
The market capitalization range and composition of the companies in the Index
are subject to change.
Columbia Large Growth Quantitative Fund
Summary of the Fund
(continued)
The Fund primarily invests in securities included in the Index
but generally holds fewer stocks than the Index and may hold securities that are not in the Index. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the consumer discretionary sector and
the information technology sector.
The Fund may invest
in derivatives, such as futures contracts, for cash equitization and investment flexibility.
In pursuit of the Fund’s objective, the portfolio
managers use quantitative analysis to evaluate the relative attractiveness of potential investments.
The Fund’s investment strategy may involve the frequent
trading of portfolio securities.
Principal Risks
An investment in the Fund involves risk, including those
described below.
There is no assurance that the Fund will achieve its investment objective and you may lose money
. The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV)
and share price may go down.
Active Management Risk.
Although the Fund is managed based primarily on quantitative methods, a qualitative review of the quantitative output is conducted by the portfolio managers. Therefore, the Fund’s performance will reflect, in
part, the ability of the portfolio managers to make active, qualitative decisions, including allocation decisions that seek to achieve the Fund’s investment objective.
Derivatives Risk.
Losses
involving derivative instruments may be substantial, because a relatively small movement in the price of an underlying security, instrument, commodity, currency or index may result in a substantial loss for the Fund. In addition to the potential for
increased losses, the use of derivative instruments may lead to increased volatility for the Fund. Derivative investments will typically increase the Fund’s exposure to principal risks to which it is otherwise exposed, and may expose the Fund
to additional risks, including correlation risk, counterparty risk, hedging risk, leverage risk and/or liquidity risk.
Derivatives Risk/Futures Contracts Risk.
The loss that may be incurred in entering into futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets are highly volatile and the use of futures may increase the
volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract may result in substantial losses for the Fund. Futures
contracts may be illiquid. Furthermore, exchanges may limit fluctuations in futures contract prices during a trading session by imposing a maximum permissible price movement on each futures contract. The Fund may be disadvantaged if it is prohibited
from executing a trade outside the daily permissible price movement. Futures contracts executed on foreign exchanges may not provide the same protection as U.S. exchanges. These transactions involve additional risks, including counterparty risk,
hedging risk and pricing risk.
Frequent
Trading Risk.
The portfolio managers may actively and frequently trade investments in the Fund's portfolio to carry out its investment strategies. Frequent trading of investments increases the possibility
that the Fund, as relevant, will realize taxable capital gains (including short-term capital gains, which are generally taxable to shareholders 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. The trading costs and tax effects associated with portfolio turnover may adversely affect the
Fund’s performance.
Growth Securities Risk.
Growth securities typically trade at a higher multiple of earnings than other types of equity securities. Accordingly, the market values of growth securities may never reach their expected market value
and may decline in price. In addition, growth securities, at times, may not perform as well as value securities or the stock market in general, and may be out of favor with investors for varying periods of time.
Issuer Risk.
An issuer in
which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may be caused by poor management decisions,
competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or factors.
Columbia Large Growth Quantitative Fund
Summary of the Fund
(continued)
Market Risk.
Market risk
refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. An investment in the Fund could lose money over short or long periods.
Although equity securities generally tend to have greater price volatility than debt securities, under certain market conditions, debt securities may have comparable or greater price volatility.
Quantitative Model Risk.
Investments selected using quantitative methods may perform differently from the market as a whole. There can be no assurance that these methodologies will enable the Fund to achieve its objective.
Sector Risk.
At times, the
Fund may have a significant portion of its assets invested in securities of companies conducting business in a related group of industries within an economic sector, including the consumer discretionary sector and the information technology
sector. Companies in the same economic sector may be similarly affected by economic, regulatory, political or market events or conditions, which may make the Fund more vulnerable to unfavorable developments in that economic sector than
funds that invest more broadly. Generally, the more broadly the Fund invests, the more it spreads risk and potentially reduces the risks of loss and volatility.
The Fund may be more susceptible to the particular risks that
may affect companies in the consumer discretionary sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the consumer discretionary sector are subject to certain risks, including fluctuations in the
performance of the overall domestic and international economy, interest rate changes, increased competition and consumer confidence. Performance of such companies may be affected by factors including reduced disposable household income, reduced
consumer spending, changing demographics and consumer tastes.
The Fund may be more susceptible to the particular risks that
may affect companies in the information technology sector, as well as other technology-related sectors (collectively, the technology sectors) than if it were invested in a wider variety of companies in unrelated sectors. Companies in the technology
sectors are subject to certain risks, including the risk that new services, equipment or technologies will not be accepted by consumers and businesses or will become rapidly obsolete. Performance of such companies may be affected by factors
including obtaining and protecting patents (or the failure to do so) and significant competitive pressures, including aggressive pricing of their products or services, new market entrants, competition for market share and short product cycles due to
an accelerated rate of technological developments. Such competitive pressures may lead to limited earnings and/or falling profit margins. As a result, the value of their securities may fall or fail to rise. In addition, many technology sector
companies have limited operating histories and prices of these companies’ securities historically have been more volatile than other securities, especially over the short term.
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 bar chart shows how the Fund’s Class A share performance (without sales charges) has varied for each full calendar year shown. If the sales charges were
reflected, returns shown would be lower. Class A shares are offered in a separate prospectus. The table below the bar chart compares the Fund’s returns (after applicable sales charges) for the periods shown with a broad measure of market
performance.
Class R4 and Class Y shares of the Fund did
not commence operations prior to the date of this prospectus and, therefore, performance is not yet available. Any share class that does not have available performance would have annual returns substantially similar to those of Class A shares.
Except for differences in annual returns resulting from differences in expenses and sales charges (where applicable), the share classes of the Fund would have substantially similar annual returns because all share classes of the Fund invest in the
same portfolio of securities.
The after-tax returns
shown in the
Average Annual Total Returns
table below are calculated using the highest historical individual U.S. 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 Individual Retirement Accounts (IRAs). The after-tax returns are shown only for Class A shares and will vary for other share classes.
Columbia Large Growth Quantitative Fund
Summary of the Fund
(continued)
The Fund’s past performance (before and after taxes) is no
guarantee of how the Fund will perform in the future.
Updated performance information can be obtained by calling toll-free 800.345.6611 or visiting columbiathreadneedle.com/us.
Year
by Year Total Return (%)
as of December 31 Each Year*
|
Best
and Worst Quarterly Returns
During the Period Shown in the Bar Chart
|
|
Best
|
1st Quarter 2012
|
16.07%
|
Worst
|
4th Quarter 2008
|
-21.80%
|
*
|
Year to Date return as of
March 31, 2015: 4.44%
|
Average Annual Total Returns After Applicable Sales
Charges (for periods ended December 31, 2014)
|
Share
Class
Inception Date
|
1
Year
|
5
Years
|
Life
of Fund
|
Class
A
|
05/17/2007
|
|
|
|
returns
before taxes
|
|
9.21%
|
14.54%
|
6.31%
|
returns
after taxes on distributions
|
|
5.88%
|
11.25%
|
4.22%
|
returns
after taxes on distributions and sale of Fund shares
|
|
7.00%
|
11.00%
|
4.55%
|
Russell
1000 Growth Index
(reflects no deductions for fees, expenses or taxes)
|
|
13.05%
|
15.81%
|
8.23%
|
Fund Management
Investment Manager:
Columbia
Management Investment Advisers, LLC
Portfolio
Manager
|
|
Title
|
|
Role
with Fund
|
|
Managed
Fund Since
|
Brian
Condon, CFA
|
|
Senior
Portfolio Manager and Head of Quantitative Strategies
|
|
Co-manager
|
|
2010
|
Peter
Albanese
|
|
Senior
Portfolio Manager
|
|
Co-manager
|
|
August
2014
|
Purchase and Sale of Fund
Shares
You may purchase or redeem shares of the Fund on
any business day by contacting the Fund in the ways described below:
Online
|
|
Regular
Mail
|
|
Express
Mail
|
|
By
Telephone
|
columbiathreadneedle.com/us
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
30 Dan Road, Suite 8081
Canton, MA 02021-2809
|
|
800.422.3737
|
You may purchase shares and receive
redemption proceeds by electronic funds transfer, by check or by wire. If you maintain your account with a broker-dealer or other financial intermediary, you must contact that financial intermediary to buy, sell or exchange shares of the Fund
through your account with the intermediary.
Columbia Large Growth Quantitative Fund
Summary of the Fund
(continued)
The minimum initial investment amounts for the share classes
offered by the Fund are shown below:
Minimum Initial
Investment
Class
|
Category
of eligible account
|
For
accounts other than
systematic investment
plan accounts
|
For
systematic investment
plan accounts
|
Classes
R4 & Y
|
All
eligible accounts
|
None
|
N/A
|
There is no minimum additional investment for any share
class.
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, qualified dividend income or capital gains, unless you are investing through a tax-advantaged account, such as a 401(k) plan or an
IRA. If you are investing through a tax-advantaged account, you may be taxed upon withdrawals from that 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 Investment Manager), 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.
Columbia Large Growth Quantitative Fund
More Information About the
Fund
Investment Objective
Columbia Large Growth Quantitative Fund (the Fund) seeks to
provide shareholders with long-term capital growth.
Only shareholders
can change the Fund’s investment objective. Because any investment involves risk, there is no assurance the Fund’s objective will be achieved.
Principal Investment Strategies
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in equity securities of companies with market capitalizations greater than $5 billion at the time of purchase or that are within the market
capitalization range of companies in the Russell 1000
®
Growth Index (the Index) at the time of purchase. These equity securities generally include common stocks.
The market capitalization range and composition of the companies in the Index
are subject to change. As such, the size of the companies in which the Fund invests may change. As long as an investment continues to meet the Fund’s other investment criteria, the Fund may choose to continue to hold a stock even if the
company’s market capitalization grows beyond the market capitalization of the largest company within the Index or falls below the market capitalization of the smallest company within the Index.
The Fund primarily invests in securities included in the Index
but generally holds fewer stocks than the Index and may hold securities that are not in the Index. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the consumer discretionary sector and
the information technology sector.
The Fund may invest
in derivatives, such as futures contracts, for cash equitization and investment flexibility.
In pursuit of the Fund’s objective, the portfolio
managers use quantitative analysis to evaluate the relative attractiveness of potential investments.
Columbia Management Investment Advisers, LLC (the Investment
Manager) considers a variety of factors in identifying investment opportunities and constructing the Fund’s portfolio which may include, among others, the following:
■
|
Valuation factors, such as
earnings and cash flow relative to market values;
|
■
|
Catalyst factors, such as
relative stock price performance, business momentum, and short interest measures; and
|
■
|
Quality factors, such as
quality of earnings and financial strength.
|
The Investment Manager may sell a security when it believes
other stocks in the Index or other investments are more attractive, if the security is believed to be overvalued relative to other potential investments, when the company no longer meets the Investment Manager’s performance expectation, when
the security is removed from the Index, or for other reasons.
The Fund’s investment strategy may involve the frequent
trading of portfolio securities.
The Fund’s
investment policy with respect to 80% of its net assets may be changed by the Board of Trustees without shareholder approval as long as shareholders are given 60 days advance written notice of the change.
Principal Risks
An investment in the Fund involves risk, including those
described below.
There is no assurance that the Fund will achieve its investment objective and you may lose money
. The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV)
and share price may go down.
Active Management Risk.
Although the Fund is managed based primarily on quantitative methods, a qualitative review of the quantitative output is conducted by the portfolio managers. Therefore, the Fund’s performance will reflect, in
part, the ability of the portfolio managers to make active, qualitative decisions, including allocation decisions that seek to achieve the Fund’s investment objective.
Columbia Large Growth Quantitative Fund
More Information About the
Fund
(continued)
Derivatives Risk.
Derivatives
are financial instruments whose value depends on, or is derived from, the value of other underlying assets. Losses involving derivative instruments may be substantial, because a relatively small movement in the price of an underlying security,
instrument, commodity, currency or index may result in a substantial loss for the Fund. In addition to the potential for increased losses, the use of derivative instruments may lead to increased volatility for the Fund. Derivative investments will
typically increase the Fund’s exposure to principal risks to which it is otherwise exposed, and may expose the Fund to additional risks. Depending on the type and purpose of the Fund’s derivative investments, these risks may include:
correlation risk (there may be an imperfect correlation between the hedge and the opposite position, which is related to hedging risk), counterparty risk (the counterparty to the instrument may not perform or be able to perform in accordance with
the terms of the instrument), leverage risk (losses from the derivative instrument may be greater than the amount invested in the derivative instrument), hedging risk (the risk that a hedging strategy may not eliminate the risk that it is intended
to offset, and may offset gains), and/or liquidity risk (it may not be possible for the Fund to liquidate the instrument at an advantageous time or price), each of which may result in significant losses for the Fund.
Derivatives Risk/Futures Contracts Risk.
The use of futures contracts is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. A futures contract is a sales
contract between a buyer (holding the “long” position) and a seller (holding the “short” position) for an asset with delivery deferred until a future date. The buyer agrees to pay a fixed price at the agreed future date and
the seller agrees to deliver the asset. The seller hopes that the market price on the delivery date is less than the agreed upon price, while the buyer hopes for the contrary. The liquidity of the futures markets depends on participants entering
into offsetting transactions rather than making or taking delivery. To the extent participants decide to make or take delivery, liquidity in the futures market could be reduced. In addition, futures exchanges often impose a maximum permissible price
movement on each futures contract for each trading session. The Fund may be disadvantaged if it is prohibited from executing a trade outside the daily permissible price movement. Moreover, to the extent the Fund engages in futures contracts on
foreign exchanges, such exchanges may not provide the same protection as U.S. exchanges. The loss that the Fund may incur in entering into futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets
are highly volatile and the use of futures may increase the volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract
may result in substantial losses for the Fund. Investments in these instruments involve risks, including counterparty risk (the risk that the counterparty to the instrument may not perform or be able to perform in accordance with the terms of the
instrument), hedging risk (the risk that a hedging strategy may not eliminate the risk that it is intended to offset, and may offset gains) and pricing risk (the risk that the instrument may be difficult to value), each of which may result in
significant losses for the Fund.
Frequent
Trading Risk.
The portfolio managers may actively and frequently trade investments in the Fund's portfolio to carry out its investment strategies. Frequent trading of investments increases the possibility
that the Fund, as relevant, will realize taxable capital gains (including short-term capital gains, which are generally taxable to shareholders 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. The trading costs and tax effects associated with portfolio turnover may adversely affect the
Fund’s performance.
Growth Securities Risk.
Growth securities typically trade at a higher multiple of earnings than other types of equity securities. Accordingly, the market values of growth securities may never reach their expected market value
and may decline in price. In addition, growth securities, at times, may not perform as well as value securities or the stock market in general, and may be out of favor with investors for varying periods of time.
Issuer Risk.
An issuer in
which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may be caused by poor management decisions,
competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or factors.
Columbia Large Growth Quantitative Fund
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Market Risk.
Market risk
refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. Security values may fall or fail to rise because of a variety of actual or
perceived factors affecting an issuer (e.g., an unfavorable earnings report), the industry or sector in which it operates, or the market as a whole, which may reduce the value of an investment in the Fund. Accordingly, an investment in the Fund
could lose money over short or long periods. The market values of the securities the Fund holds 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. Although equity securities generally tend to have greater price volatility than debt securities, under certain market conditions, debt securities may have comparable or greater price volatility. In addition, stock prices may be sensitive to
rising interest rates, as the cost of capital rises and borrowing costs increase.
Quantitative Model Risk.
The
Fund may use quantitative methods to select investments. Securities or other investments selected using quantitative methods may perform differently from the market as a whole or from their expected performance for many reasons, including factors
used in building the quantitative analytical framework, the weights placed on each factor, and changing sources of market returns, among others. Any errors or imperfections in the Fund portfolio manager’s quantitative analyses or models, or in
the data on which they are based, could adversely affect the portfolio manager’s effective use of such analyses or models, which in turn could adversely affect the Fund’s performance. It is not possible or practicable for a manager to
factor all relevant, available data into quantitative model forecasts and/or trading decisions. Quantitative managers will use their discretion to determine what data to gather with respect to an investment strategy and what data the models will
take into account to produce forecasts that may have an impact on ultimate trading decisions. Shareholders should be aware that there is no guarantee that a quantitative manager will use any specific data or type of data in making trading decisions
on behalf of the Fund, nor is there any guarantee that the data actually utilized in generating forecasts or making trading decisions on behalf of the Fund will be the most accurate data available or free from errors. There can be no assurance that
these methodologies will enable the Fund to achieve its objective.
Sector Risk.
At times, the
Fund may have a significant portion of its assets invested in securities of companies conducting business in a related group of industries within an economic sector, including the consumer discretionary sector and the information technology
sector. Companies in the same economic sector may be similarly affected by economic, regulatory, political or market events or conditions, which may make the Fund more vulnerable to unfavorable developments in that economic sector than
funds that invest more broadly. Generally, the more broadly the Fund invests, the more it spreads risk and potentially reduces the risks of loss and volatility.
The Fund may be more susceptible to the particular risks that
may affect companies in the consumer discretionary sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the consumer discretionary sector are subject to certain risks, including fluctuations in the
performance of the overall domestic and international economy, interest rate changes, increased competition and consumer confidence. Performance of such companies may be affected by factors including reduced disposable household income, reduced
consumer spending, changing demographics and consumer tastes.
The Fund may be more susceptible to the particular risks that
may affect companies in the information technology sector, as well as other technology-related sectors (collectively, the technology sectors) than if it were invested in a wider variety of companies in unrelated sectors. Companies in the technology
sectors are subject to certain risks, including the risk that new services, equipment or technologies will not be accepted by consumers and businesses or will become rapidly obsolete. Performance of such companies may be affected by factors
including obtaining and protecting patents (or the failure to do so) and significant competitive pressures, including aggressive pricing of their products or services, new market entrants, competition for market share and short product cycles due to
an accelerated rate of technological developments. Such competitive pressures may lead to limited earnings and/or falling profit margins. As a result, the value of their securities may fall or fail to rise. In addition, many technology sector
companies have limited operating histories and prices of these companies’ securities historically have been more volatile than other securities, especially over the short term.
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Additional Investment Strategies and Policies
This section describes certain investment strategies and
policies that the Fund may utilize in pursuit of its investment objective and some additional factors and risks involved with investing in the Fund.
Investment Guidelines
As a general matter, and except as specifically described in
the discussion of the Fund's principal investment strategies in this prospectus or as otherwise required by the Investment Company Act of 1940, as amended (the 1940 Act), the rules and regulations thereunder and any applicable exemptive relief,
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 investment in the security or asset.
Holding Other Kinds of Investments
The Fund may hold investments that are not part of its
principal investment strategies. These investments and their risks are described below and/or 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.
Information on the Fund’s holdings can be found in the Fund’s shareholder reports or by visiting columbiathreadneedle.com/us.
Transactions in Derivatives
The Fund may enter into derivative transactions or otherwise
have exposure to derivative transactions through underlying investments. 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 the London Interbank Offered Rate (commonly known as LIBOR)) or market indices (such as the Standard & Poor's (S&P)
500
®
Index). The use of derivatives is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities
transactions. 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 directly. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility in
the value of the derivative and/or the Fund’s shares, 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. U.S. federal legislation has been enacted that provides for new clearing, margin, reporting and
registration requirements for participants in the derivatives market. These changes could restrict and/or impose significant costs or other burdens upon the Fund’s participation in derivatives transactions. For more information on the risks of
derivative investments and strategies, see the SAI.
Investing in Affiliated Funds
The Investment Manager or an affiliate serves as investment
adviser to mutual funds using the Columbia brand (Columbia Funds), including those that are structured as “fund-of-funds”, and provides asset-allocation services to (i) shareholders by investing in shares of other Columbia
Funds, which may include the Fund (collectively referred to in this section as Underlying Funds), and (ii) discretionary managed accounts (collectively referred to as affiliated products) that invest exclusively in Underlying Funds. These
affiliated products, individually or collectively, may own a significant percentage of the outstanding shares of one or more Underlying Funds, and the Investment Manager seeks to balance potential conflicts of interest between the affiliated
products and the Underlying Funds in which
Columbia Large Growth Quantitative Fund
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(continued)
they invest. The affiliated products’ investment in the Underlying
Funds may have the effect of creating economies of scale, possibly resulting in lower expense ratios for the Underlying Funds, because the affiliated products may own substantial portions of the shares of Underlying Funds. However, redemption of
Underlying Fund shares by one or more affiliated products could cause the expense ratio of an Underlying Fund to increase, as its fixed costs would be spread over a smaller asset base. Because of large positions of certain affiliated products, the
Underlying Funds may experience relatively large inflows and outflows of cash due to affiliated products’ purchases and sales of Underlying Fund shares. Although the Investment Manager or its affiliate may seek to minimize the impact of these
transactions where possible, for example, by structuring them over a reasonable period of time or through other measures, Underlying Funds may experience increased expenses as they buy and sell portfolio securities to manage the cash flow effect
related to these transactions. Further, when the Investment Manager or its affiliate structures transactions over a reasonable period of time in order to manage the potential impact of the buy and sell decisions for the affiliated products, those
affiliated products, including funds-of-funds, may pay more or less (for purchase activity), or receive more or less (for redemption activity), for shares of the Underlying Funds than if the transactions were executed in one transaction. In
addition, substantial redemptions by affiliated products within a short period of time could require the Underlying Fund to liquidate positions more rapidly than would otherwise be desirable, which may have the effect of reducing or eliminating
potential gain or causing it to realize a loss. Substantial redemptions may also adversely affect the ability of the Underlying Fund to implement its investment strategy. The Investment Manager or its affiliate also has an economic conflict of
interest in determining the allocation of affiliated products’ assets among the Underlying Funds, as it earns different fees from the various Underlying Funds.
Investing in Money Market Funds
The Fund may invest cash in, or hold as collateral for certain
investments, shares of registered or unregistered money market funds, including funds advised by the Investment Manager or its affiliates. These funds are not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency. 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.
Lending of Portfolio Securities
The Fund may lend portfolio securities to 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 currently does not participate in the securities
lending program but the Board of Trustees (the Board) may determine to renew participation in the future. For more information on lending of portfolio securities and the risks involved, see the Fund’s SAI and its annual and semiannual reports
to shareholders.
Investing Defensively
The Fund may from time to time take temporary defensive
investment positions that may be inconsistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, social or other conditions, including, without limitation, investing some or all of
its assets in money market instruments or shares of affiliated or unaffiliated money market funds or holding some or all of its assets in cash or cash equivalents. The Fund may take such defensive investment positions for as long a period as deemed
necessary.
The Fund may not achieve its investment
objective while it is investing defensively. Investing defensively may adversely affect Fund performance. During these times, the portfolio managers may make frequent portfolio holding changes, which could result in increased trading
expenses and taxes, and decreased Fund performance. See also
Investing in Money Market Funds
above for more information.
Other Strategic and Investment Measures
The Fund may also from time to time take temporary portfolio
positions that may or may not be consistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, social or other conditions, including, without limitation, investing in derivatives,
such as futures (e.g., index futures) or options
Columbia Large Growth Quantitative Fund
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(continued)
on futures, for various purposes, including among others, investing in
particular derivatives to achieve indirect investment exposures to a sector, country or region where the Investment Manager believes such positioning is appropriate. The Fund may take such portfolio positions for as long a period as deemed
necessary. While the Fund is so positioned, derivatives could comprise a substantial portion of the Fund’s investments and the Fund may not achieve its investment objective. Investing in this manner may adversely affect Fund performance.
During these times, the portfolio managers may make frequent portfolio holding changes, which could result in increased trading expenses and taxes, and decreased Fund performance. For information on the risks of investing in derivatives, see
Transactions in Derivatives
above.
Portfolio Holdings Disclosure
The Board has adopted policies and procedures that govern the
timing and circumstances of disclosure to shareholders and third parties of information regarding the securities owned by the Fund. A description of these policies and procedures is included in the SAI. Fund policy generally permits the disclosure
of portfolio holdings information on the Fund's website (columbiathreadneedle.com/us) only after a certain amount of time has passed, as described in the SAI.
Purchases and sales of portfolio securities can take place at
any time, so the portfolio holdings information available on the Fund's website may not always be current.
Portfolio Holdings Versus the
Benchmarks
The Fund does not limit
its investments to the securities within its benchmark(s), and accordingly the Fund's holdings may diverge significantly from those of its benchmark(s). In addition, the Fund may invest in securities outside any industry and geographic sectors
represented in its benchmark(s). The Fund's weightings in individual securities, and in industry and geographic sectors, may also vary considerably from those of its benchmark(s).
Mailings to Households
In order to reduce shareholder expenses, the Fund may, if
prior consent has been provided, mail only one copy of the Fund’s prospectus and each annual and semiannual report to those addresses shared by two or more accounts. If you wish to receive separate copies of these documents, call 800.345.6611
or, if your shares are held through a financial intermediary, contact your intermediary directly.
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 shareholders redeeming Fund shares could require the Fund to sell portfolio securities at less than opportune times or to
hold ready reserves of uninvested cash in amounts larger than might otherwise be the case to meet shareholder redemptions. Either situation could adversely impact the Fund’s performance.
Understanding Annual Fund Operating Expenses
The Fund’s annual operating expenses, as presented in
the
Annual Fund Operating Expenses
table in the
Fees and Expenses of the Fund
section of this prospectus, generally are based on expenses incurred during the
Fund’s most recently completed fiscal year and are expressed as a percentage (expense ratio) of the Fund’s average net assets during that fiscal year. The expense ratios for Class R4 and Class Y shares are based on
estimated amounts for the Fund’s current fiscal year. The expense ratios reflect the Fund’s fee arrangements as of the date of this prospectus and, unless indicated otherwise, are based on expenses incurred during the Fund’s most
recent fiscal year. The Fund’s assets will fluctuate, but no adjustments have been or will be made to the expense ratios to reflect any differences in the Fund’s average net assets between the most recently completed fiscal year and the
date of this prospectus or a later date. In general, the Fund’s expense ratios will increase as its net assets decrease, such that the Fund’s actual expense ratios may be higher than the expense ratios presented in the
Annual Fund Operating Expenses
table if assets fall. Any commitment by the Investment Manager and/or its affiliates to waive fees and/or
Columbia Large Growth Quantitative Fund
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(continued)
cap (reimburse) expenses is expected, in part, to limit the impact of any
increase in the Fund’s operating expense ratios that would otherwise result because of a decrease in the Fund’s assets in the current fiscal year. The Fund’s annual operating expenses are comprised of (i) investment management
fees, (ii) distribution and/or service fees, and (iii) other expenses. Management fees do not vary by class, but distribution and/or service fees and other expenses may vary by class.
Other Expenses
“Other expenses” consist of the
fees the Fund pays to its administrator, custodian, transfer agent, auditors, lawyers and trustees, costs relating to compliance and miscellaneous expenses. Generally, these expenses are the same for each share class and are allocated on a pro rata
basis across all share classes. Transfer agent fees and certain shareholder servicing fees, however, are class specific. They differ by share class because the shareholder services provided to each share class may be different. Accordingly, the
differences in “other expenses” among share classes are primarily the result of the different transfer agent and shareholder servicing fees applicable to each share class. For more information on these fees, see
Choosing a Share Class — Selling Agent Compensation.
Fee Waiver/Expense Reimbursement Arrangements and Impact on
Past Performance
The Investment Manager and certain of
its affiliates have voluntarily agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below), so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any
balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the annual rates of:
Columbia
Large Growth Quantitative Fund
|
Class
R4
|
1.05%
|
Class
Y
|
0.88%
|
Under the arrangement, the
following fees and expenses are excluded from the Fund’s operating expenses when calculating the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including foreign transaction taxes), expenses
associated with investment in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program, dividend
expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest and extraordinary expenses. This arrangement may be revised or discontinued at any
time.
Effect of Fee Waivers and/or Expense Reimbursements
on Past Performance.
The Fund’s returns shown in the
Performance Information
section of this prospectus
reflect the effect of any fee waivers and/or reimbursements of Fund expenses by the Investment Manager and/or any of its affiliates that were in place during the performance period shown. Without such fee waivers/expense reimbursements, the
Fund’s returns might have been lower.
Primary
Service Providers
The Investment Manager, which also
serves as the Fund’s administrator (the Administrator), the Distributor and the Transfer Agent are all affiliates of Ameriprise Financial, Inc. (Ameriprise Financial). They and their affiliates currently provide key services, including
investment advisory, administration, distribution, shareholder servicing and transfer agency services, to the Fund and various other funds, including the Columbia Funds, and are paid for providing these services. These service relationships are
described below.
Columbia Large Growth Quantitative Fund
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(continued)
The Investment Manager
Columbia Management Investment Advisers, LLC is located at 225
Franklin Street, Boston, MA 02110 and serves as investment adviser to the Columbia Funds. The Investment Manager is a registered investment adviser and a wholly-owned subsidiary of Ameriprise Financial. The Investment Manager’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 traditional mutual funds, exchange-traded funds and closed-end funds,
the Investment Manager acts as an investment adviser for itself, its affiliates, individuals, corporations, retirement plans, private investment companies and financial intermediaries.
Subject to oversight by the Board, the Investment Manager
manages the day-to-day operations of the Fund, determining what securities and other investments the Fund should buy or sell and executing portfolio transactions. The Investment Manager may use the research and other capabilities of its affiliates
and third parties in managing the Fund’s investments.
The SEC has issued an order that permits the Investment
Manager, 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 Investment Manager 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 Investment Manager does not consider any other relationship it or its affiliates may have with a subadviser, and the Investment Manager discloses to the Board the nature of any material relationships it has with
a subadviser or its affiliates. At present, the Investment Manager has not engaged any investment subadviser for the Fund.
The Fund pays the Investment Manager 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 the Investment Manager by the Fund amounted to
0.69% of average daily net assets of the Fund. A discussion regarding the basis for the Board approving the renewal of the Fund's investment management services agreement with the Investment Manager is available in the Fund’s annual report to
shareholders for the fiscal year ended July 31, 2014.
Portfolio Managers
Information about the portfolio managers primarily responsible
for overseeing the Fund’s investments is shown below. The SAI provides additional information about the portfolio managers, including information relating to compensation, other accounts managed by the portfolio managers and ownership by the
portfolio managers of Fund shares.
Portfolio
Manager
|
|
Title
|
|
Role
with Fund
|
|
Managed
Fund Since
|
Brian
Condon, CFA
|
|
Senior
Portfolio Manager and Head of Quantitative Strategies
|
|
Co-manager
|
|
2010
|
Peter
Albanese
|
|
Senior
Portfolio Manager
|
|
Co-manager
|
|
August
2014
|
Mr. Condon
joined the Investment Manager in May 2010 when it acquired the long-term asset management business of Columbia Management Group, where he was a portfolio manager since 1999. Mr. Condon began his investment career in
1993 and earned a B.A. from Bryant University and an M.S. in finance from Bentley University.
Mr. Albanese
joined the
Investment Manager in August 2014. Prior to joining the Investment Manager, Mr. Albanese was a Managing Director and Senior Portfolio Manager at Robeco Investment Management. Mr. Albanese began his investment career in 1991 and earned a B.S. from
Stony Brook University and an M.B.A. from the Stern School of Business at New York University.
Columbia Large Growth Quantitative Fund
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(continued)
The Administrator
Columbia Management Investment Advisers, LLC 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 related clerical and administrative services. The
Fund pays the Administrator a fee (plus certain out-of-pocket expenses) for the administrative services it provides to the Fund.
The Distributor
Shares of the Fund are distributed by Columbia Management
Investment Distributors, Inc., which is located at 225 Franklin Street, Boston, MA 02110. 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
Columbia Management Investment Services Corp. is a registered
transfer agent and wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent is located at 225 Franklin Street, Boston, MA 02110, and its responsibilities include processing purchases, redemptions and exchanges of Fund shares, calculating
and paying distributions, maintaining shareholder records, preparing account statements and providing customer service. The Transfer Agent has engaged DST Systems, Inc., including its affiliate, Boston Financial Data Services, to provide various
shareholder services. In addition, the Transfer Agent enters into agreements with various financial intermediaries through which you may hold Fund shares, pursuant to which the Transfer Agent pays these financial intermediaries for providing certain
shareholder services. The Fund generally pays the Transfer Agent a per account fee, pays a fee based on the assets invested through omnibus accounts and reimburses the Transfer Agent for certain out-of-pocket expenses.
Other Roles and Relationships of Ameriprise Financial and its
Affiliates — Certain Conflicts of Interest
The
Investment Manager, Distributor and Transfer Agent, all affiliates of Ameriprise Financial, provide various services to the Fund and other Columbia 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 Investment Manager 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 Investment Manager, 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 Investment Manager 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 Investment Manager 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 Investment Manager and other Ameriprise Financial affiliates;
|
■
|
regulatory and other
investment restrictions on investment activities of the Investment Manager and other Ameriprise Financial affiliates and accounts advised/managed by them;
|
Columbia Large Growth Quantitative Fund
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Fund
(continued)
■
|
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 Investment Manager, and a Columbia Fund.
|
The Investment Manager 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 Management and Other Services — Other Roles and Relationships of Ameriprise Financial and its Affiliates —
Certain Conflicts of Interest
section of the SAI. 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 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. 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 quarterly (10-Q), annual (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 sec.gov.
Columbia Large Growth Quantitative Fund
The
Funds
The Columbia Funds (referred to as the Funds)
generally share the same policies and procedures for investor services, as described below. Each Fund is a series of Columbia Funds Series Trust (CFST), Columbia Funds Series Trust I (CFST I) or Columbia Funds Series Trust II (CFST II), and certain
features of distribution and/or service plans may differ among these trusts. The Fund offered by this prospectus is a series of CFST II. Columbia Funds with names that include the words “Tax-Exempt”, “Municipal”, or
“Muni” (the Tax-Exempt Funds) have certain policies that differ from other Columbia Funds (the Taxable Funds). The Fund offered by this prospectus is a Taxable Fund.
Funds Contact Information
Additional information about the Funds can be obtained at
columbiathreadneedle.com/us,* by calling toll-free 800.345.6611, or by writing (regular mail) to Columbia Management Investment Services Corp., P.O. Box 8081, Boston, MA 02266-8081 or (express mail) Columbia Management Investment Services Corp., c/o
Boston Financial, 30 Dan Road, Suite 8081, Canton, MA 02021-2809.
*
|
The website references in this
prospectus are inactive links and information contained in or otherwise accessible through the referenced websites does not form a part of this prospectus.
|
Selling and/or Servicing Agents
The terms “selling agent” and
“servicing agent” (collectively, selling agents) refer to the financial intermediaries that are authorized to sell shares of the Funds. Selling agents include broker-dealers and financial advisors as well as firms that employ such
broker-dealers and financial advisors, including, for example, brokerage firms, banks, investment advisers, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.
Omnibus Accounts
The term “omnibus account”
refers to a selling agent’s account with the Fund (through the Transfer Agent) that represents the combined holdings of, and transactions in, Fund shares of one or more clients of the selling agent (beneficial shareholders). Omnibus accounts
are held in the name of the selling agents and not in the name of the beneficial shareholders invested in the Fund through omnibus accounts.
Retirement Plans and Omnibus Retirement
Plans
The term “retirement
plan” refers to retirement plans created under sections 401(a), 401(k), 457 and 403(b) of the Internal Revenue Code of 1986, as amended (the Code), non-qualified deferred compensation plans governed by section 409A of the Code and similar
plans, but does not refer to individual retirement plans. The term “omnibus retirement plan” refers to a retirement plan that has a plan-level or omnibus account with the Transfer Agent.
Summary of Share Class Features
Each share class has its own investment eligibility criteria,
cost structure and other features. You may not be eligible for every share class. If you purchase shares of a Fund through a retirement plan or other product or program offered by your selling agent, not all share classes of the Fund may be made
available to you. When deciding which class of shares to buy, you should consider, among other things:
■
|
The amount you plan to
invest.
|
■
|
How long you intend to
remain invested in the Fund.
|
■
|
The expenses for each share
class.
|
■
|
Whether you may be eligible
for a reduction or waiver of sales charges when you buy or sell shares.
|
Each investor's personal situation is different and you may
wish to discuss with your selling agent which share classes are available to you and which share class is appropriate for you.
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
The following summarizes the primary features of Class A,
Class B, Class C, Class I, Class K, Class R, Class R4, Class R5, Class T, Class W, Class Y and Class Z shares.
Not all Funds offer every class of shares. The Fund offers the
class(es) of shares set forth on the cover of this prospectus and may offer other share classes through a separate prospectus. Although certain share classes are generally closed to new or existing investors, information relating to these share
classes is included in the table below because certain qualifying purchase orders are permitted, as described below.
Share Class Features
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
A
|
Eligibility:
Available to the general public for investment
Minimum Initial Investment:
$2,000 for most investors
|
Taxable
Funds:
5.75% maximum, declining to 0.00% on investments of $1 million or more
Tax-Exempt Funds:
3.00% maximum, declining to 0.00% on
investments of $500,000 or more
(e)
None for Columbia Money Market Fund and certain other
Funds
(e)
|
Taxable
Funds:
CDSC on certain investments of between $1 million and $50 million redeemed within 18 months after purchase charged as follows:
• 1.00% CDSC if redeemed within 12
months after purchase and
• 0.50% CDSC if redeemed more than 12, but less than 18, months after purchase
(e)
Tax-Exempt Funds:
Maximum CDSC of 0.75% on certain investments of $500,000 or more redeemed within 12 months after purchase. The CDSC on shares purchased prior to February
19, 2015 differs
(e)
|
Distribution
and Service
Fees:
up to 0.25%
|
Class
B
|
Eligibility:
Closed to new investors
(f)
Note:
Class B shares convert to Class A shares
generally eight years after purchase
(g)
Minimum Initial Investment:
N/A
|
None
|
5.00%
maximum, gradually declining to 0.00% after six years
(g)
|
Distribution
Fee:
0.75%
Service Fee:
0.25%
|
Class
C
|
Eligibility:
Available to the general public for investment
Minimum Initial Investment:
$2,000 for most investors
Purchase Order Limit for Tax-Exempt Funds:
$499,999
(h)
, none for omnibus retirement plans
Purchase Order Limit for Taxable Funds:
$999,999
(h)
; none for omnibus retirement plans
|
None
|
1.00%
on certain investments redeemed within one year of purchase
|
Distribution
Fee:
0.75%
Service Fee:
0.25%
|
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
I
|
Eligibility:
Available only to other Columbia Funds (i.e., fund-of-fund investments)
Minimum Initial Investment:
None
|
None
|
None
|
None
|
Class
K
|
Eligibility:
Closed to new investors; available only to qualified employee benefit plans, trust companies or similar institutions, 501(c)(3) charitable organizations, non-qualified deferred compensation plans whose participants
are included in a qualified employee benefit plan described above, 529 plans, and health savings accounts
(f)
Minimum Initial Investment:
N/A
|
None
|
None
|
Plan
Administration Services Fee:
0.25%
|
Class
R
|
Eligibility:
Available only to eligible retirement plans, health savings accounts and, in the sole discretion of the Distributor, other types of retirement accounts held through platforms maintained by selling agents approved by
the Distributor
Minimum Initial Investment:
None
|
None
|
None
|
Series
of CFST & CFST I:
distribution fee of 0.50%
Series of CFST II:
distribution and service fee of 0.50%, of which the service fee may
be up to 0.25%
|
Class
R4
|
Eligibility:
Available only to (i) omnibus retirement plans, (ii) trust companies or similar institutions, (iii) broker-dealers, banks, trust companies and similar institutions that clear Fund share transactions for their client
or customer investment advisory or similar accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R4 eligibility apart
from selling, servicing or similar agreements, (iv) 501(c)(3) charitable organizations, (v) 529 plans and (vi) health savings accounts
Minimum Initial Investment:
None
|
None
|
None
|
None
|
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
R5
|
Eligibility:
Available only to (i) certain registered investment advisers that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that
have been granted specific written authorization from the Transfer Agent with respect to Class R5 eligibility apart from selling, servicing or similar agreements and (ii) omnibus retirement
plans
(f)
Minimum Initial Investment:
None for omnibus retirement plans; $100,000 for combined underlying
accounts of eligible registered investment advisers
|
None
|
None
|
None
|
Class
T
|
Eligibility:
Generally closed to new investors
(f)
Minimum Initial Investment:
N/A
|
5.75%
maximum, declining to 0.00% on investments of $1 million or more
|
CDSC
on certain investments of between $1 million and $50 million redeemed within 18 months after purchase, charged as follows:
• 1.00% CDSC if redeemed within 12 months after purchase
and
• 0.50% CDSC if redeemed more than 12, but less than 18, months after purchase
|
Service
Fee:
up to 0.50%
|
Class
W
|
Eligibility:
Available only to investors purchasing through certain authorized investment programs managed by investment professionals, including discretionary managed account programs
Minimum Initial Investment:
$500
|
None
|
None
|
Distribution
and Service Fees:
0.25%
|
Class
Y
|
Eligibility:
Available only to retirement plans that maintain plan-level or omnibus accounts with the Fund
(f)
Minimum
Initial Investment:
None
|
None
|
None
|
None
|
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
Z
|
Eligibility:
Available only to certain eligible investors, which are subject to different minimum investment requirements, ranging from $0 to $2,000; effective March 29, 2013, closed to (i) accounts of selling agents that clear
Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been given specific written notice from the Transfer Agent of the termination of their eligibility for
new purchases of Class Z shares and (ii) omnibus retirement plans, subject to certain exceptions
(f)
Minimum Initial Investment:
See
Eligibility
above
|
None
|
None
|
None
|
(a)
|
For Columbia Money Market Fund,
new investments must be made in Class A, Class I, Class W or Class Z shares, subject to eligibility. Class C and Class R shares of Columbia Money Market Fund are available as a new investment only to investors in the Distributor's proprietary 401(k)
products, provided that such investor is eligible to invest in the class and transact directly with the Fund or the Transfer Agent through a third party administrator or third party recordkeeper. Columbia Money Market Fund offers other classes of
shares only to facilitate exchanges with other Funds offering such share classes.
|
(b)
|
The minimum initial investment
requirement is $5,000 for Columbia Floating Rate Fund and Columbia Inflation Protected Securities Fund, and $10,000 for Columbia Absolute Return Currency and Income Fund. See
Buying, Selling and Exchanging Shares
— Buying Shares
for more details on the eligible investors and minimum initial investment requirements. Certain share classes are subject to minimum account balance requirements, as described in
Buying,
Selling and Exchanging Shares — Transaction Rules and Policies.
|
(c)
|
Actual front-end sales charges
and CDSCs vary among the Funds. For more information on applicable sales charges, see
Choosing a Share Class — Sales Charges and Commissions
and for information about certain exceptions to these sales
charges, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
|
(d)
|
These are the maximum
applicable distribution and/or service fees. Fee rates and fee components (i.e., the portion of a combined fee that is a distribution or service fee) may vary among Funds. Because these fees are paid out of Fund assets on an ongoing basis, over time
these fees will increase the cost of your investment and may cost you more than paying other types of distribution and/or shareholder service fees. Although Class A shares of certain series of CFST I are subject to a combined distribution and
service fee of up to 0.35%, these Funds currently limit the combined fee to 0.25%. Columbia Money Market Fund pays a distribution and service fee of up to 0.10% on Class A shares, up to 0.75% distribution fee and up to 0.10% service fee on Class B
shares, up to 0.75% distribution fee on Class C shares, and 0.10% distribution and service fees on Class W shares. Columbia AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund pay a service fee of up
to 0.20% on Class A, Class B and Class C shares. Columbia AMT-Free Intermediate Muni Bond Fund pays a distribution fee of up to 0.65% on Class B and Class C shares. For more information on distribution and service fees, see
Choosing a Share Class — Distribution and Service Fees.
|
(e)
|
For Columbia Short Term
Municipal Bond Fund, a CDSC of 0.50% is charged on certain investments of $500,000 or more redeemed within 12 months after purchase. The following Funds are not subject to a front-end sales charge or a CDSC on Class A shares: Columbia Money Market
Fund, Columbia Large Cap Index Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Index Fund, Columbia Small Cap Index Fund and Columbia U.S. Treasury Index Fund. Investments in Class A shares of Tax-Exempt Funds made prior to February
19, 2015 of between $1 million and $50 million are subject to a CDSC of 1.00% if redeemed within 12 months after purchase and 0.50% if redeemed more than 12, but less than 18, months after purchase.
|
(f)
|
These share classes are closed
to new accounts, or closed to previously eligible investors, subject to certain conditions, as summarized below and described in more detail under
Buying, Selling and Exchanging Shares — Buying Shares —
Eligible Investors:
|
•
Class B Shares
. The Funds no longer accept investments from new or existing investors in Class B shares, except through reinvestment of dividend and/or capital gain distributions by existing Class B shareholders,
or a permitted exchange.
•
Class K Shares
. Shareholders who opened and funded a Class K account with a Fund as of the close of business on December 31, 2010 may continue to make additional purchases of such share class, and existing Class K
accounts may continue to allow new investors or participants to be established in their Fund account.
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
•
Class R5 Shares
. Shareholders with Class R5 accounts funded before November 8, 2012 who do not satisfy the current eligibility criteria for Class R5 shares may not establish new Class R5 accounts but may continue
to make additional purchases of Class R5 shares in existing accounts. In addition, investment advisory programs and similar programs that opened a Class R5 account as of May 1, 2010 and continuously hold Class R5 shares in such account after such
date, may generally not only continue to make additional purchases of Class R5 shares but also open new Class R5 accounts for such pre-existing programs and add new shareholders in the program.
•
Class T Shares.
Shareholders
with Class T accounts who received, and have continuously held, Class T shares in connection with the merger of certain Galaxy funds into certain
Funds that were then named Liberty funds may continue to make additional purchases of such share class.
•
Class Y Shares
. Shareholders with Class Y accounts funded before November 8, 2012 who do not satisfy the current eligibility criteria for Class Y shares may not establish new accounts for such share class but may
continue to make additional purchases of Class Y shares in existing accounts.
•
Class Z Shares
. Effective March 29, 2013, selling agents that clear Fund share transactions through designated selling agents and their mutual fund trading platforms that have been given specific written notice
from the Transfer Agent of the termination of their eligibility for new purchases of Class Z shares and omnibus retirement plans are no longer permitted to establish new Class Z accounts, subject to certain exceptions. Omnibus retirement plans that
opened and, subject to exceptions, funded a Class Z account as of close of business on March 28, 2013 and continuously hold Class Z shares in such account after such date, may generally continue to make additional purchases of Class Z shares, open
new Class Z accounts and add new participants. In certain circumstances and in the sole discretion of the Distributor, omnibus retirement plans affiliated with a grandfathered plan may also open new Class Z accounts. Accounts of selling agents
(other than omnibus retirement plans) that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms are not permitted to establish new Class Z accounts or make
additional purchases of Class Z shares (other than through reinvestment of distributions).
(g)
|
Timing of conversion and CDSC
schedules will vary depending on the Fund and the date of your original purchase of Class B shares. For more information on the conversion of Class B shares to Class A shares, see
Choosing a Share Class — Sales
Charges and Commissions.
Class B shares of Columbia Short Term Municipal Bond Fund do not charge a CDSC and do not convert to Class A shares.
|
(h)
|
If you are eligible to invest
in Class A shares without a front-end sales charge, you should discuss your options with your selling agent. For more information, see
Choosing a Share Class – Reductions/Waivers of Sales Charges.
|
Sales Charges and Commissions
Sales charges, commissions and distribution and service fees
(discussed in a separate sub-section below) compensate selling agents (typically your financial advisor) for selling shares to you and for maintaining and servicing the shares held in your account with them. These charges, commissions and fees are
intended to provide incentives for selling agents to provide such 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 CDSC
and/or over time in the form of increased ongoing fees.
Whether the ultimate cost is higher for one class over another
depends on the amount you invest, how long you hold your shares and whether you are eligible for reduced or waived sales charges. The differential between classes also will vary depending on the actual investment return for any given investment
period. You are responsible for choosing the share class most appropriate for you after taking into account your share class eligibility and the value of accounts that you are eligible to include for the right of accumulation, which may reduce
or eliminate otherwise applicable sales charges. See
Choosing a Share Class – Reductions/Waivers of Sales Charges
. We encourage you to consult with a financial advisor who can help you with your
investment decisions.
Class A Shares — Front-End
Sales Charge
You'll pay a front-end sales charge when
you buy Class A shares (other than shares of Columbia Money Market Fund and certain other Funds), resulting in a smaller dollar amount being invested in a Fund than the purchase price you pay, unless you qualify for a waiver of the sales charge
or you buy the shares through reinvested distributions. For more information, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
The Distributor receives the sales charge and re-allows (or
pays) a portion of the sales charge to the selling agent through which you purchased the shares. The Distributor retains the balance of the sales charge. The Distributor retains the full sales charge you pay when you purchase shares of the Fund
directly from the Fund (through the Transfer Agent, rather than through a selling agent). Sales charges vary depending on the amount of your purchase.
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
Front-End Sales Charge Calculation
The table below presents the front-end
sales charge as a percentage of both the offering price and the net amount invested.
■
|
The net asset value (or NAV)
per share is the price of a share calculated by the Fund every business day.
|
■
|
The
offering price per share is the NAV per share plus any front-end sales charge that applies.
|
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 for the Fund) and the NAV 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 any other accounts eligible for aggregation of which you or your selling agent notifies the Fund) and base the sales charge on the aggregate amount. See
Choosing a Share Class — Reductions/Waivers of Sales Charges
for a discussion of account value aggregation. There is no initial sales charge on reinvested dividend or capital gain distributions.
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 (and any other accounts eligible for aggregation of which you or your selling agent notifies the Fund).
|
Class
A Shares — Front-End Sales Charge — Breakpoint Schedule*
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Equity
Funds,
Columbia Adaptive Alternatives Fund,
Columbia Adaptive Risk Allocation Fund,
Columbia Commodity Strategy Fund,
Columbia Diversified Absolute Return Fund
and Funds-of-Funds (equity)*
|
$
0–$49,999
|
5.75%
|
6.10%
|
5.00%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
3.00%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.15%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Fixed
Income Funds (except those listed below),
Columbia Multi-Asset Income Fund
and Funds-of-Funds (fixed income)*
|
$
0-$49,999
|
4.75%
|
4.99%
|
4.00%
|
$
50,000–$99,999
|
4.25%
|
4.44%
|
3.50%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
3.00%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.15%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Tax-Exempt
Funds (other than Columbia Short Term Municipal Bond Fund)
|
$
0-$99,999
|
3.00%
|
3.09%
|
2.50%
|
$100,000–$249,999
|
2.50%
|
2.56%
|
2.15%
|
$250,000–$499,999
|
1.50
%
|
1.53%
|
1.25%
|
$
500,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
Class
A Shares — Front-End Sales Charge — Breakpoint Schedule*
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Columbia
Absolute Return Currency and Income Fund,
Columbia Floating Rate Fund,
Columbia Inflation Protected Securities Fund,
Columbia Intermediate Bond Fund,
Columbia Limited Duration Credit Fund,
Columbia Mortgage Opportunities
Fund,
Columbia U.S. Government Mortgage Fund and
Columbia U.S. Social Bond Fund
|
$
0-$99,999
|
3.00%
|
3.09%
|
2.50%
|
$100,000–$249,999
|
2.50%
|
2.56%
|
2.15%
|
$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%
|
0.00%
(c)
|
|
|
|
|
|
Columbia
Short Term Bond Fund
|
$
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%
|
0.00%
(c)
|
|
|
|
|
|
Columbia
Short Term Municipal Bond Fund
|
$
0-$99,999
|
0.75%
|
0.76%
|
0.50%
|
$250,000–$499,999
|
0.50%
|
0.50%
|
0.40%
|
$
500,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
*
|
The following Funds are not
subject to a front-end sales charge or CDSC on Class A shares: Columbia Money Market Fund, Columbia Large Cap Index Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Index Fund, Columbia Small Cap Index Fund and Columbia U.S. Treasury
Index Fund.
"Funds-of-Funds (equity)"
includes Columbia Capital Allocation Aggressive Portfolio, Columbia Capital Allocation Moderate Aggressive Portfolio, Columbia Capital Allocation Moderate
Conservative Portfolio, Columbia Capital Allocation Moderate Portfolio and Columbia LifeGoal® Growth Portfolio
. "Funds-of-Funds (fixed income)"
includes Columbia Capital Allocation Conservative Portfolio
and Columbia Income Builder Fund. Columbia Balanced Fund and Columbia Global Opportunities Fund are treated as equity Funds for purposes of the table.
|
(a)
|
Purchase amounts and account
values may be aggregated among all eligible Fund accounts for the purposes of this table. See
Choosing a Share Class — Reductions/Waivers of Sales Charges
for a discussion of account value aggregation.
|
(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. Purchase price includes the sales charge.
|
(c)
|
For information regarding
cumulative commissions paid to your selling agent when you buy Class A shares of a Fund in amounts not subject to initial sales charges, see
Class A Shares — Commissions
below.
|
Class A Shares — CDSC
In some cases, you'll pay a CDSC if you sell Class A shares
that you purchased without an initial sales charge.
Tax-Exempt Funds
■
|
If you purchased Class A
shares of any Tax-Exempt Fund other than Columbia Short Term Municipal Bond Fund on or after February 19, 2015 without an initial sales charge because your accounts aggregated $500,000 or more at the time of purchase, you will incur a CDSC of 0.75%
if you redeem those shares within 12 months after purchase. Subsequent Class A share purchases made on or after February 19, 2015 that bring your aggregate account value to $500,000 or more will also be subject to a CDSC of 0.75% if you redeem them
within 12 months after purchase.
|
■
|
If you purchased Class A
shares of Columbia Short Term Municipal Bond Fund on or after February 19, 2015 without an initial sales charge because your accounts aggregated $500,000 or more at the time of purchase, you
|
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
|
will incur a CDSC of 0.50%
if you redeem those shares within 12 months after purchase. Subsequent Class A share purchases made on or after February 19, 2015 that bring your aggregate account value to $500,000 or more will also be subject to a CDSC of 0.50% if you redeem them
within 12 months after purchase.
|
■
|
If you purchased Class A
shares of any Tax-Exempt Fund prior to February 19, 2015 without an initial sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months
after purchase, which is charged as follows: 1.00% CDSC if shares are redeemed within 12 months after purchase; and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase. Subsequent Class A share purchases made
prior to February 19, 2015 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 18 months after purchase as described in this paragraph.
|
Taxable Funds
■
|
If you purchased Class A
shares of any Taxable Fund without an initial sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months after purchase, which is
charged as follows: 1.00% CDSC if shares are redeemed within 12 months after purchase; and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase. 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 18 months after purchase as described in this paragraph.
|
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. A CDSC is applied to the NAV at the time
of your purchase or sale, whichever is lower, and will not be applied to any shares you receive through reinvested distributions or any amount that represents appreciation in the value of your shares. For purposes of calculating a CDSC, the start of
the holding period is generally the first day of the month in which your purchase was made.
When you place an order to sell shares of a
class that has a CDSC, the Fund will first redeem any shares that aren't subject to a CDSC, followed by those you have held the longest. This means that if a CDSC is imposed, you cannot designate the individual shares being redeemed for U.S. federal
income tax purposes. You should consult your tax advisor about the tax consequences of investing in the Fund. In certain circumstances, the CDSC may not apply. See
Choosing a Share Class — Reductions/Waivers of
Sales Charges
for details.
Class A Shares
— Commissions
The Distributor may pay your selling
agent an up-front commission when you buy Class A shares. The Distributor generally funds the commission through the applicable sales charge paid by you. For more information, see
Class A Shares — Front-End
Sales Charge — Breakpoint Schedule.
The
Distributor may also pay your selling agent a cumulative commission when you buy Class A shares in amounts not subject to initial sales charges, according to the following schedule:
Class
A Shares of Tax-Exempt Funds — Commission Schedule (Paid by the Distributor to Selling Agents)
|
Purchase
Amount
|
Commission
Level*
(as a % of net asset
value per share)
|
$500,000
– $3,999,999
|
0.75%**
|
$4
million – $19,999,999
|
0.50%
|
$20
million or more
|
0.25%
|
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
*
|
The commission level applies to
the applicable asset level so, for example, for a purchase of $5 million, the Distributor would pay a commission of 0.75% on the first $4 million and 0.50% on the remaining $1 million.
|
**
|
The commission level on
purchases of Class A shares of Columbia Short Term Municipal Bond Fund is: 0.50% on purchases of $500,000 to $19,999,999 and 0.25% on purchases of $20 million or more.
|
Class
A Shares of Taxable Funds — Commission Schedule (Paid by the Distributor to Selling Agents)*
|
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%
|
*
|
Not applicable to Funds that do
not assess a front-end sales charge.
|
**
|
The commission level applies to
the applicable asset level so, for example, for a purchase of $5 million, the Distributor would pay a commission of 1.00% on the first $3 million and 0.50% on the remaining $2 million.
|
Class B Shares — Sales Charges
The Funds no longer accept new investments in Class B shares,
except for certain limited transactions as described in more detail under
Buying, Selling and Exchanging Shares — Buying Shares — Eligible Investors — Class B Shares (Closed).
You don't pay a front-end sales charge when you buy Class B
shares, but you may pay a CDSC when you sell Class B shares.
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
Class B Shares — CDSC
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 and generally declines each year until there is no sales charge, as follows:
Class
B Shares — CDSC Schedule for the Funds (except those listed below)
|
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
|
*
|
Because of rounding in the
calculation, the actual CDSC you pay may be more or less than the CDSC calculated using these percentages.
|
Class
B Shares — CDSC Schedule for Columbia AMT-Free Intermediate Muni Bond Fund, the AMT-Free State-specific Intermediate Muni Bond Funds, Columbia Intermediate Bond Fund and Columbia Short Term Bond Fund
|
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
|
*
|
Because of rounding in the
calculation, the actual CDSC you pay may be more or less than the CDSC calculated using these percentages.
|
Class B shares of Columbia Short Term Municipal Bond Fund are
not subject to a CDSC.
Class B Shares —
Commissions
The Distributor paid an up-front commission
directly to your selling agent when you bought the Class B shares (a portion of this commission may have been paid to your financial advisor).
This up-front commission, which varies across the Funds, was
up to 4.00% of the net asset value per share of Funds with a maximum CDSC of 5.00% and of Class B shares of Columbia Short Term Municipal Bond Fund and up to 2.75% of the net asset value per share of Funds with a maximum CDSC of 3.00%. 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. For more information, see
Choosing a Share Class — Distribution and Service Fees.
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
Class B Shares — Conversion to Class A Shares
Class B shares of the Funds automatically convert to Class A
shares at different times depending upon the Fund. In general, Class B shares convert to Class A shares after eight years. For details and related information about how the Funds' Class B shares convert to Class A shares, see Appendix S to the SAI.
Class B shares of Columbia Short Term Municipal Bond Fund do not convert to Class A shares.
Class C Shares — Front-End Sales Charge
You don't pay a front-end sales charge when you buy Class C
shares. Although Class C shares do not have a front-end sales charge, over time Class C shares can incur distribution and/or service fees that are equal to or more than the front-end sales charge and distribution and/or service fees you would pay
for Class A shares. Thus, although the full amount of your purchase of Class C shares is invested in a Fund, any positive investment return on this money may be partially or fully offset by the expected higher annual expenses of Class C shares. If
you are eligible to invest in Class A shares without a front-end sales charge, you should discuss your options with your Selling Agent. For more information, see
Choosing a Share Class – Reductions/Waivers of
Sales Charges.
Class C Shares — CDSC
You'll pay a CDSC of 1.00% if you redeem Class C shares within
12 months of buying them unless you qualify for a waiver of the CDSC or the shares you're selling were purchased through reinvested distributions. For more information, see
Choosing a Share Class —
Reductions/Waivers of Sales Charges
. Redemptions of Class C shares are not subject to a CDSC if redeemed after 12 months.
Class C Shares — Commissions
Although there is no front-end sales charge when you buy Class
C shares, the Distributor pays an up-front commission directly to your selling agent of up to 1.00% of the NAV per share when you buy Class C shares (a portion of this commission may be paid to your financial advisor). The Distributor seeks to
recover this commission through distribution fees it receives under the Fund's distribution and/or service plan and any applicable CDSC applied when you sell your shares. For more information, see
Choosing a Share
Class — Distribution and Service Fees.
Class
R Shares — Sales Charges and Commissions
You don't
pay a front-end sales charge when you buy Class R shares or a CDSC when you sell Class R shares. The Distributor pays an up-front commission directly to your selling agent when you buy Class R shares (a portion of this commission may be paid to your
financial advisor), according to the following schedule:
Class
R Shares — Commission Schedule (Paid by the Distributor to Selling Agents)
|
Purchase
Amount
|
Commission
Level
(as a % of net asset
value per share)
|
$0
– $49,999,999
|
0.50%
|
$50
million or more
|
0.25%
|
The Distributor seeks to recover
this commission through distribution fees it receives under the Fund's distribution plan. For more information, see
Choosing a Share Class — Distribution and Service Fees.
Class T Shares — Front-End Sales Charge
You'll pay a front-end sales charge when you buy Class T
shares, resulting in a smaller dollar amount being invested in a Fund than the purchase price you pay, unless you qualify for a waiver of the sales charge or you buy the shares through reinvested distributions. For more information, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
The front-end sales charge you'll pay on Class T 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 (and any other accounts eligible for aggregation of which you or your selling agent notifies the Fund).
|
Class
T Shares — Front-End Sales Charge — Breakpoint Schedule
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Equity
Funds
|
$
0–$49,999
|
5.75%
|
6.10%
|
5.00%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
2.75%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.00%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Fixed
Income Funds
|
$
0–$49,999
|
4.75%
|
4.99%
|
4.25%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
2.75%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.00%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
(a)
|
Purchase amounts and account
values are aggregated among all eligible 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)
|
For more information regarding
cumulative commissions paid to your selling agent when you buy $1 million or more of Class T shares, see
Class T Shares — Commissions
below.
|
Class T Shares — CDSC
In some cases, you'll pay a CDSC if you sell Class T shares
that you bought without an initial sales charge.
■
|
If you purchased Class T
shares without a front-end sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months after purchase, which is charged as follows: 1.00%
CDSC if shares are redeemed within 12 months after purchase, and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase.
|
■
|
Subsequent Class T 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 the time periods noted above.
|
Class T Shares — Commissions
The Distributor may pay your selling agent an up-front
commission when you buy Class T shares (a portion of this commission may, in turn, be paid to your financial advisor). For more information, see
Class T Shares — Front-End Sales Charge — Breakpoint
Schedule, Amount retained by or paid to selling agents as a % of the offering price.
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
The Distributor may also pay your selling agent a cumulative
commission when you buy $1 million or more of Class T shares, according to the following schedule:
Class
T Shares
—
Commission Schedule (Paid by the Distributor to Selling Agents)
|
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%
|
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 or Class T shares of a Fund. These types of sales charge reductions are also referred to as breakpoint discounts.
First, through the right of accumulation (ROA), you may
combine the value of eligible accounts maintained by you and members of 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 Fund accounts in the
particular class of shares, the Fund will use the current public offering price per share. For purposes of obtaining a breakpoint discount through ROA, you may aggregate your or your immediate family members' ownership of different classes of
shares, except for Class I, Class K, Class R and Class Y shares of the Funds, Class R4 and Class R5 shares of the Funds held in retirement plan accounts and direct purchases of Columbia Money Market Fund shares, which may not be aggregated. Shares
of Columbia Money Market Fund acquired by exchange from other Funds may be combined for ROA purposes.
Second, by making a statement of intent to purchase additional
shares (commonly referred to as a letter of intent (LOI)), you may pay a lower sales charge on all purchases (including existing ROA purchases) of Class A shares or Class T shares made within 13 months after the date of your LOI. Your LOI must state
the aggregate amount of purchases you intend to make in that 13-month period, which must be at least $50,000 (or $100,000 for Funds with breakpoint discounts beginning at $100,000). The required form of LOI may vary by selling agent, so please
contact them directly for more information. Five percent of the purchase commitment amount will be placed in escrow. At the end of the 13-month period, the shares will be released from escrow, provided that you have invested the commitment amount.
If you do not invest the commitment amount by the end of the 13 months, the remaining amount of the unpaid sales charge will be redeemed from the escrowed shares and the remaining balance released from escrow. To calculate the total value of the
purchases you've made under an LOI, the Fund will use the historic cost (i.e., dollars invested) of the shares held in each eligible account. For purposes of making an LOI to purchase additional shares, you may aggregate your ownership of different
classes of shares, except for Class I, Class K, Class R and Class Y shares of the Funds, Class R4 and Class R5 shares of the Funds held in retirement plan accounts and direct purchases of Columbia Money Market Fund shares, which may not be
aggregated. Shares of Columbia Money Market Fund acquired by exchange from other Funds may be combined for LOI purposes.
You must request the reduced sales charge (whether through ROA
or an LOI) when you buy shares. If you do not complete and file an LOI, or do not request the reduced sales charge at the time of purchase, you will not be eligible for the reduced sales charge. To obtain a breakpoint discount, you must notify your
selling agent in writing at the time you buy your shares of each eligible account maintained by you and members of your immediate family, including accounts maintained through different selling agents. You and your selling agent are responsible for
ensuring that you receive discounts for which you are eligible. The Fund is not responsible for a selling agent's failure to apply the eligible discount to your account. You may be asked by your selling agent for account statements or other records
to verify your discount eligibility, including, when applicable, records for accounts opened with a different selling agent and records of accounts established by members of your immediate family.
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
Your “Immediate Family” and
Account Value Aggregation
For
purposes of obtaining a breakpoint discount for Class A shares or Class T shares the value of your account will be deemed to include the value of all applicable shares in eligible Fund accounts that are held by you and your “immediate
family,” which includes your spouse, domestic partner, parent, step-parent, legal guardian, child under 21, step-child under 21, father-in-law and mother-in-law, provided that you and your immediate family members share the same mailing
address. Any Fund accounts linked together for account value aggregation purposes as of the close of business on September 3, 2010 will be permitted to remain linked together. Group plan accounts are valued at the plan level.
Eligible Accounts
The following accounts are eligible for account value
aggregation as described above, provided that they are invested in Class A, Class B, Class C, Class E, Class F, Class T, Class W or Class Z shares of a Fund: individual or joint accounts; Roth and traditional Individual Retirement Accounts (IRAs);
Simplified Employee Pension accounts (SEPs), Savings Investment Match Plans for Employees of Small Employers accounts (SIMPLEs) and Tax Sheltered Custodial Accounts (TSCAs); Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
accounts for which you, your spouse, or your domestic partner is parent or guardian of the minor child; revocable trust accounts for which you or an immediate family member, individually, is the beneficial owner/grantor; accounts held in the name of
your, your spouse’s, or your domestic partner’s sole proprietorship or single owner limited liability company or S corporation; qualified retirement plan assets, provided that you are the sole owner of the business sponsoring the plan,
are the sole participant (other than a spouse) in the plan, and have no intention of adding participants to the plan; and investments in wrap accounts.
The following accounts are
not eligible
for account value aggregation as described above: accounts of pension and retirement plans with multiple participants, such as 401(k) plans (which are combined to reduce the sales charge for the
entire pension or retirement plan and therefore are not used to reduce the sales charge for your individual accounts); investments in 529 plans, donor advised funds, variable annuities, variable insurance products or managed separate accounts;
charitable and irrevocable trust accounts; accounts holding shares of money market funds that used the Columbia brand before May 1, 2010; and accounts invested in Class I, Class K, Class R, Class R4, Class R5 or Class Y shares of a Fund.
Front-End Sales Charge Waivers
The Distributor may waive front-end sales charges on purchases
of Class A and Class T shares of the Funds by certain categories of investors, including Board members, certain employees of selling agents, Fund portfolio managers and certain retirement and employee benefit plans. The Distributor may waive
front-end sales charges on (i) purchases (including exchanges) of Class A shares in accounts of selling agents that have entered into agreements with the Distributor to offer Fund shares to self-directed investment brokerage accounts that may or may
not charge a transaction fee to customers and (ii) exchanges of Class Z shares of a Fund for Class A shares of the Fund. For a more complete description of categories of investors who may purchase Class A and Class T shares of the Funds at NAV,
without payment of any front-end sales charge that would otherwise apply, see Appendix S to the SAI. In addition, certain types of purchases of Class A and Class T shares may be made at NAV. For a description of these eligible transactions, see
Appendix S to the SAI.
CDSC Waivers
You may be able to avoid an otherwise applicable CDSC when you
sell Class A, Class B, Class C or Class T 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 Funds or for other reasons. For example, the CDSC will be waived
on redemptions of shares in the event of the shareholder's death; that result from required minimum distributions taken from retirement accounts when the shareholder reaches age 70½; in connection with the Fund's Small Account Policy (which is
described in
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
Buying, Selling and Exchanging Shares — Transaction Rules and Policies
); and by certain other investors and in certain other types of transactions. For a more complete description of the available waivers of the CDSC on redemptions of Class A, Class B, Class C or Class T shares, see
Appendix S to the SAI.
Repurchases
Investors can also buy Class A shares without paying a sales
charge if the purchase is made from the proceeds of a redemption of any Class A, Class B, Class C or Class T shares of a Fund (other than Columbia Money Market Fund) within 90 days, up to the amount of the redemption proceeds. Any CDSC paid upon
redemption of your Class A, Class B, Class C or Class T shares of a Fund will not be reimbursed.
To be eligible for the reinstatement privilege, the purchase
must be made into an account for the same owner, but does not need to be into the same Fund from which the shares were sold. The Transfer Agent, Distributor or their agents must receive a written reinstatement request from you or your selling agent
within 90 days after the shares are redeemed 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 form.” The repurchased
shares will be deemed to have the original purchase date for purposes of applying the CDSC (if any) to subsequent redemptions. Systematic withdrawals and purchases are excluded from this policy.
Restrictions and Changes in Terms and Conditions
Restrictions may apply to certain accounts and certain
transactions. The Funds may change or cancel these terms and conditions at any time. Unless you provide your selling agent with information in writing about all of the factors that may count toward a waiver of a sales charge, there can be no
assurance that you will receive all of the waivers for which you may be eligible. You should request that your selling agent provide this information to the Fund when placing your purchase order. Please see Appendix S of the SAI for more information
about the sales charge reductions and waivers.
Distribution and Service Fees
The Board has approved, and the Funds have adopted,
distribution and/or shareholder service plans which set the distribution and/or service fees that are periodically deducted from the Funds’ assets. These fees are calculated daily, may vary by share class and are intended to compensate the
Distributor and/or eligible selling agents for selling Fund shares and directly or indirectly providing services to shareholders. 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/or service fees (as an annual % of average daily net assets) and the combined amount of such fees applicable to each share class:
|
Distribution
Fee
|
Service
Fee
|
Combined
Total
|
Class
A
|
up
to 0.25%
|
up
to 0.25%
|
up
to 0.35%
(a)(b)(c)
|
Class
B
|
0.75%
(d)
|
0.25%
|
1.00%
(b)
|
Class
C
|
0.75%
(c)(e)
|
0.25%
|
1.00%
(b)
|
Class
I
|
None
|
None
|
None
|
Class
K
|
None
|
0.25%
(f)
|
0.25%
(f)
|
Class
R (series of CFST and CFST I)
|
0.50%
|
—
(g)
|
0.50%
|
Class
R (series of CFST II)
|
up
to 0.50%
(c)
|
up
to 0.25%
|
0.50%
(g)
|
Class
R4
|
None
|
None
|
None
|
Class
R5
|
None
|
None
|
None
|
Class
T
|
None
|
0.50%
(h)
|
0.50%
(h)
|
Class
W
|
up
to 0.25%
|
up
to 0.25%
|
0.25%
(c)
|
Class
Y
|
None
|
None
|
None
|
Class
Z
|
None
|
None
|
None
|
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
(a)
|
The maximum distribution and
service fees of Class A shares varies among the Funds, as shown in the table below:
|
Funds
|
Maximum
Class A
Distribution Fee
|
Maximum
Class A
Service Fee
|
Maximum
Class A
Combined Total
|
Series
of CFST
|
—
|
—
|
0.25%;
these Funds pay a
combined distribution and
service fee
|
Series
of CFST II (other than Columbia
Money Market Fund)
|
up
to 0.25%
|
up
to 0.25%
|
0.25%
|
Columbia
Money Market Fund
|
—
|
—
|
0.10%
|
Columbia
AMT-Free Oregon Intermediate Muni Bond Fund, Columbia Balanced Fund, Columbia Contrarian Core Fund, Columbia Dividend Income Fund, Columbia Global Technology Growth Fund, Columbia Intermediate Bond Fund, Columbia Large Cap Growth Fund, Columbia Mid
Cap Growth Fund, Columbia Real Estate Equity Fund, Columbia Small Cap Core Fund, Columbia Small Cap Growth Fund I
|
up
to 0.10%
|
up
to 0.25%
|
up
to 0.35%; these Funds may
pay distribution and service fees
up to a maximum of 0.35% of their
average daily net assets
attributable to Class A shares
(comprised of up to 0.10% for
distribution services and up to
0.25%
for shareholder liaison
services) but currently limit such
fees to an aggregate fee of not
more than 0.25% for
Class A shares
|
Columbia
Adaptive Alternatives Fund, Columbia Adaptive Risk Allocation Fund, Columbia AMT-Free Connecticut Intermediate Muni Bond Fund, Columbia AMT-Free Massachusetts Intermediate Muni Bond Fund, Columbia AMT-Free New York Intermediate Muni Bond Fund,
Columbia Bond Fund, Columbia California Tax-Exempt Fund, Columbia Corporate Income Fund, Columbia Diversified Absolute Return Fund, Columbia Diversified Real Return Fund, Columbia Emerging Markets Fund, Columbia Global Dividend Opportunity Fund,
Columbia Global Energy and Natural Resources Fund, Columbia Greater China Fund, Columbia Multi-Asset Income Fund, Columbia New York Tax-Exempt Fund, Columbia Pacific/Asia Fund, Columbia Select Large Cap Growth Fund, Columbia Small Cap Value Fund I,
Columbia Strategic Income Fund, Columbia U.S. Social Bond Fund, Columbia U.S. Treasury Index Fund, Columbia Value and Restructuring Fund
|
—
|
0.25%
|
0.25%
|
Columbia
AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund, Columbia Tax Exempt Fund
|
—
|
0.20%
|
0.20%
|
(b)
|
The service fees for Class A,
Class B and Class C shares of certain Funds vary. Service Fee for Class A, Class B and Class C shares of Columbia AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund — The annual service fee
may equal up to 0.20% of the average daily net asset value of all shares of such Fund class. Distribution Fee for Class B and Class C shares for Columbia AMT-Free Intermediate Muni Bond Fund
—
The annual
distribution fee shall be 0.65% of the average daily net assets of the Fund's Class B and Class C shares. Fee amounts noted apply to Class B shares of the Funds other than Class B shares of Columbia Money Market Fund, which pays distribution fees of
up to 0.75% and service fees of up to 0.10% for a combined total of 0.85%. The Distributor has currently agreed not to be reimbursed by the Fund for 0.10% of the 0.85% fee for Class B shares of Columbia Money Market Fund. The Distributor has
voluntarily agreed to waive the service fee for Class A, Class B and Class C shares of Columbia U.S. Treasury Index Fund so that the service fee does not exceed 0.15% annually. This arrangement may be modified or terminated by the Distributor at any
time.
|
(c)
|
Fee amounts noted apply to all
Funds other than Columbia Money Market Fund, which, for each of Class A and Class W shares, pays distribution and service fees of 0.10%, and for Class C shares pays distribution fees of 0.75%. The Distributor has currently agreed not to be
reimbursed by the Fund for 0.25% of the 0.50% fee for Class R shares of Columbia Money Market Fund. The Distributor has voluntarily agreed to waive the 12b-1 fees it receives from Class A, Class C, Class R and Class W shares of Columbia Money Market
Fund. This arrangement may be modified or terminated by the Distributor at any time. Compensation paid to broker-dealers and other selling agents may be suspended to the extent of the Distributor's waiver of the 12b-1 fees on these specific share
classes of these Funds.
|
(d)
|
The Distributor has voluntarily
agreed to waive a portion of the distribution fee it receives from Class B shares of Columbia Short Term Bond Fund so that the distribution fee does not exceed 0.30% annually. This arrangement may be modified or terminated by the Distributor at any
time.
|
(e)
|
The Distributor has voluntarily
agreed to waive a portion of the distribution fee for Class C shares of the following Funds so that the distribution fee does not exceed the specified percentage annually: 0.45% for Columbia AMT-Free Connecticut Intermediate Muni Bond Fund, Columbia
AMT-Free Massachusetts Intermediate Muni Bond Fund, Columbia AMT-Free New York Intermediate Muni Bond Fund, Columbia AMT-Free
|
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
|
Oregon Intermediate Muni Bond
Fund, Columbia California Tax-Exempt Fund and Columbia New York Tax-Exempt Fund; 0.60% for Columbia Corporate Income Fund and Columbia Short Term Bond Fund; 0.65% for Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund; and 0.70% for
Columbia U.S. Treasury Index Fund. These arrangements may be modified or terminated by the Distributor at any time.
|
(f)
|
The shareholder service fees
for Class K shares are not paid pursuant to a 12b-1 plan. Under a plan administration services agreement, the Funds' Class K shares pay for plan administration services. See
Class K Plan Administration Services
Fee
below for more information.
|
(g)
|
Class R shares of series of
CFST and CFST I pay a distribution fee pursuant to a distribution (Rule 12b-1) plan for Class R shares. The Funds do not have a shareholder service plan for Class R shares. Series of CFST II have a distribution and shareholder service plan for Class
R shares, which, prior to the close of business on September 3, 2010, were known as Class R2 shares. For Class R shares of series of CFST II, the maximum fee under the plan reimbursed for distribution expenses is equal on an annual basis to 0.50% of
the average daily net assets of the Fund attributable to Class R shares. Of that amount, up to 0.25% may be reimbursed for shareholder service expenses.
|
(h)
|
The shareholder servicing fees
for Class T shares are up to 0.50% of average daily net assets attributable to Class T shares for equity Funds and 0.40% for fixed income Funds. In general, the Funds currently limit such fees to a maximum of 0.25% for equity Funds and 0.15% for
fixed-income Funds. See
Class T Shareholder Service Fees
below for more information.
|
The distribution and/or service fees for Class A, Class B,
Class C, Class R and Class W shares, as applicable, may be subject to the requirements of Rule 12b-1 under the 1940 Act. The Distributor may retain these fees otherwise payable to selling agents if the amounts due are below an amount determined by
the Distributor in its sole discretion.
Series of CFST
II.
For Class A, Class B and Class W shares, the Distributor begins to pay these fees immediately after purchase. For Class C shares, the Distributor pays these fees in advance for the first 12 months. Selling agents
also receive distribution fees up to 0.75% of the average daily net assets of Class C shares sold and held through them, which the Distributor begins to pay 12 months after purchase. For Class B shares and for the first 12 months following the sale
of Class C shares, the Distributor retains the distribution fee of up to 0.75% in order to finance the payment of sales commissions to selling agents and to pay for other distribution related expenses. Selling agents may compensate their financial
advisors with the shareholder service and distribution fees paid to them by the Distributor. The maximum fee for services under the distribution and/or shareholder servicing plan for series of CFST II is the lesser of the amount of reimbursable
expenses and the fee rates in the table above. If a share class of a series of CFST II has no reimbursable distribution or shareholder servicing expenses, it will suspend the payment of any such fee.
Series of CFST and CFST I.
For Class R shares and, with the exception noted in the next sentence, Class A shares, the Distributor begins to pay these fees immediately after purchase. For Class B shares, Class A shares (if purchased as part of a purchase of shares of $1
million or more) and, with the exception noted in the next sentence, Class C shares, the Distributor begins to pay these fees 12 months after purchase (for Class B share, and for the first 12 months following the sale of Class C shares, the
Distributor retains the distribution fee of up to 0.75% in order to finance the payment of sales commissions to selling agents and to pay for other distribution related expenses). For Class C shares, selling agents may opt to decline payment of
sales commission and, instead, may receive these fees immediately after purchase. Selling agents may compensate their financial advisors with the shareholder service and distribution fees paid to them by the Distributor.
If you maintain shares of the Fund directly with the Fund,
without working directly with a financial advisor or other selling agent, distribution and service fees may be retained by the Distributor as payment or reimbursement for incurring certain distribution and shareholder service related expenses.
Over time, these distribution and/or service fees will reduce
the return on your investment and may cost you more than paying other types of sales charges. The Fund will pay these fees to the Distributor and/or to eligible selling agents for as long as the distribution plan and/or shareholder servicing plans
continue in effect, which is expected to be indefinitely. The Fund may reduce or discontinue payments at any time. Your selling agent may also charge you other additional fees for providing services to your account, which may be different from those
described here.
Class K Plan Administration Services
Fee
Class K shares pay an annual plan administration
services fee for the provision of various administrative, recordkeeping, communication and educational services, including services such as implementation and conversion services, account set-up and maintenance, reconciliation and account
recordkeeping and administration to various plan types, including 529 plans, retirement plans and health savings accounts. The fee for Class K shares is equal on an annual basis to 0.25% of average daily net assets attributable to the class.
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
Class T Shareholder Services Fees
The Funds that offer Class T shares have adopted a shareholder
services plan that permits them to pay for certain services provided to Class T shareholders by their selling agents. Equity Funds may pay shareholder servicing fees up to an aggregate annual rate of 0.50% of the Fund's average daily net assets
attributable to Class T shares (comprised of up to 0.25% for shareholder liaison services and up to 0.25% for administrative support services). Fixed income Funds may pay shareholder servicing fees up to an aggregate annual rate of 0.40% of the
Fund's average daily net assets attributable to Class T shares (comprised of up to 0.20% for shareholder liaison services and up to 0.20% for administrative support services). These fees are currently limited to an aggregate annual rate of not more
than 0.25% for equity Funds and not more than 0.15% for fixed income Funds. With respect to those Funds that declare dividends on a daily basis, the shareholder servicing fee shall be waived by the selling agents to the extent necessary to prevent
net investment income from falling below 0% on a daily basis.
Selling Agent Compensation
The Distributor, the Investment Manager and their affiliates
make payments, from their own resources, to selling agents, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Funds (Marketing Support Payments). Such payments are generally based upon one or more
of the following factors: average net assets of the Funds sold by the Distributor attributable to that selling agent; gross sales of the Funds distributed by the Distributor attributable to that selling agent; reimbursement of ticket charges (fees
that a selling agent charges its representatives for effecting transactions in Fund shares); or a negotiated lump sum payment. While the financial arrangements may vary for each selling agent, Marketing Support Payments to any one selling agent are
generally between 0.05% and 0.40% on an annual basis for payments based on average net assets of the Fund attributable to the selling agent, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the
Funds attributable to the selling agent. The Distributor, the Investment Manager and their affiliates may make payments in larger amounts or on a basis other than those described above when dealing with certain selling agents, including certain
affiliates of Bank of America Corporation (Bank of America). Such increased payments may enable such selling agents to offset credits that they may provide to customers. The Distributor, the Investment Manager and their affiliates do not make
Marketing Support Payments with respect to Class Y shares; provided, however, that such payments are made to Bank of America with respect to Class Y shares of Columbia Bond Fund, Columbia Global Dividend Opportunity Fund, Columbia Income
Opportunities Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Growth Fund, Columbia Mid Cap Value Fund, Columbia Select International Equity Fund, Columbia Short Term Bond Fund, Columbia Small Cap Growth Fund I and Columbia Small Cap
Value Fund I.
In addition, the Transfer Agent has
certain arrangements in place to compensate selling agents, including other Ameriprise Financial affiliates, that hold Fund shares through omnibus accounts, including omnibus retirement plans, for services that they provide to beneficial
shareholders (Shareholder Services). Shareholder Services may include sub-accounting, sub-transfer agency, participant recordkeeping, shareholder or participant reporting, shareholder or participant transaction processing, maintenance of shareholder
records, preparation of account statements and provision of customer service. Payments for Shareholder Services vary by selling agent but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of
the Fund’s shares.
Generally, each Fund (other than the Columbia
Acorn Funds) pays a percentage of the average aggregate value of shares maintained in omnibus accounts: 0.20% for all share classes other than Class I, K, R5 and Y shares; 0.05% for Class K and R5 shares; and 0% for Class I and Y shares. The amounts
in excess of that reimbursed by the Fund are borne by the Distributor, the Investment Manager and/or their affiliates. The Transfer Agent does not pay selling agents for Shareholder Services and the Fund does not pay the Transfer Agent for any
Shareholder Services provided by selling agents, with respect to Class Y shares.
In addition to the payments described above, the Distributor,
the Investment Manager and their affiliates 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.
Columbia Large Growth Quantitative Fund
Choosing a Share Class
(continued)
Amounts paid by the Distributor, the Investment Manager and
their affiliates are paid out of their own resources and do not increase the amount paid by you or the Fund. You can find further details in the SAI about the payments made by the Distributor, the Investment Manager and their affiliates, as well as
a list of the selling agents, including Ameriprise Financial affiliates, to which the Distributor and the Investment Manager have agreed to make Marketing Support Payments and pay Shareholder Services fees.
Your selling agent may charge you fees and commissions in
addition to those described in this prospectus. You should consult with your selling agent and review carefully any disclosure your selling agent provides regarding its services and compensation. Depending on the financial arrangement in place at
any particular time, a selling agent and its financial advisors may have a financial incentive for recommending the Fund or a particular share class over others.
Columbia Large Growth Quantitative Fund
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 NAV per share for each class of shares of the Fund at the end of each business day.
NAV Calculation
Each of the Fund's share classes calculates
its NAV as follows:
NAV
=
(Value of assets of the share class) – (Liabilities of the share class)
Number of outstanding shares of the class
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 NAV 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.
Equity
securities are valued primarily on the basis of market quotations or valuations reported on stock exchanges and other securities markets around the world. If an equity security is listed on a national exchange, the security is valued at the closing
price or, if the closing price is not readily available, the mean of the closing bid and asked prices. Certain equity securities, debt securities and other assets are valued differently. For instance, bank loans trading in the secondary market are
valued primarily on the basis of indicative bids, fixed-income investments maturing in 60 days or less are valued primarily using the amortized cost method, unless this methodology results in a valuation that does not approximate the market value of
these securities, and those maturing in excess of 60 days are valued primarily using a market-based price obtained from a pricing service, if available. Investments in other open-end funds are valued at their latest NAVs. Both market quotations and
indicative bids are obtained from outside pricing services approved and monitored pursuant to a policy approved by the Fund's Board. For a money market fund, the Fund's investments are generally valued at amortized cost, which approximates market
value.
If a market price is not readily available or is
deemed not to reflect market value, the Fund will determine the price of a portfolio security based on a determination of the security's fair value pursuant to a policy approved by the Fund's Board. 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) corporate actions, earnings announcements, litigation or
other events 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 foreign security's market price is readily available and reflective of market value and, if not, the fair value of
the security. To the extent the Fund has significant holdings of small cap stocks, high-yield bonds, floating rate loans, or tax-exempt, foreign or other securities that may trade infrequently, fair valuation may be used more frequently than for
other funds.
Columbia Large Growth Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
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 fund would have priced the security. 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 one or more independent fair valuation pricing services to assist in the fair valuation process for
foreign securities.
Transaction Rules and Policies
The Fund, the Distributor or the Transfer Agent may refuse any
order to buy or exchange shares. If this happens, the Fund will return any money it received, but no interest will be paid on that money.
Order Processing
Orders to buy, sell or exchange Fund shares are processed on
business days. Depending upon the class of shares, orders can be made by mail, by telephone or online. Orders received in “good form” by the Transfer Agent or your selling agent before the end of a business day are priced at the NAV per
share of the Fund's applicable share class on that day. Orders received after the end of a business day will receive the next business day's NAV per share. When a written order to buy, sell or exchange shares is sent to the Transfer Agent, the share
price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the P.O. Box provided for regular mail delivery. 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 NAV per share. The business day that applies to your order is also called the trade date.
“Good Form”
An order is in “good form” if the Transfer Agent
or your selling 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 greater than $100,000 and other transactions, as described below, 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
The Transfer Agent may require a Medallion Signature Guarantee
for your signature in order to process certain transactions. A Medallion Signature Guarantee helps assure that a signature is genuine and not a forgery. A Medallion Signature Guarantee must be provided by an eligible guarantor institution including,
but not limited to, the following: a bank, credit union, savings association, broker or dealer that participates in the Securities Transfer Association Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) or the New York Stock
Exchange Medallion Signature Program (MSP). Notarization by a notary public is not an acceptable signature guarantee. The Transfer Agent reserves the right to reject a signature guarantee and to request additional documentation for any
transaction.
A Medallion Signature Guarantee is required
if: (i) the transaction amount is over $100,000; (ii) you want your check made payable to someone other than the registered account owner(s); (iii) the address of record has changed within the last 30 days; (iv) you want the check mailed to an
address other than the address of record; (v) you want proceeds to be sent according to existing bank account instructions not coded for outgoing Automated Clearing House (ACH) or wire, or to a bank account not on file; (vi) you are the beneficiary
of the account and the account owner is deceased (other documentation may be required); or (vii) you are changing legal ownership of your account.
Columbia Large Growth Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
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 (e.g., social security number (SSN) or
other taxpayer identification number (TIN)). 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 take other steps as deemed reasonable. The Fund will not be liable for any loss resulting from any purchase
delay, application rejection or account closure due to a failure to provide proper identifying information.
Columbia Large Growth Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Small Account Policy — Class A, Class B, Class C, Class T
and Class Z Share Accounts Below the Minimum Account Balance
The Funds generally will automatically sell your shares if the
value of your Fund account (treating each account of the Fund you own separately from any other account of the Fund you may own) falls below the applicable Minimum Account Balance. The Minimum Account Balance varies among Funds, share classes and
types of accounts, as follows:
Minimum
Account Balance
|
|
|
Minimum
Account
Balance
|
For
all Funds, classes and account types except those listed below
|
$250
(None for accounts with
Systematic Investment Plans)
|
Individual
Retirement Accounts for all Funds and classes except those listed below
|
None
|
Columbia
Absolute Return Currency and Income Fund
|
$5,000
|
Columbia
Floating Rate Fund and Columbia Inflation Protected Securities Fund
|
$2,500
|
Class
I, Class K, Class R, Class R4, Class R5, Class W and Class Y
|
None
|
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 Fund in which you hold shares, or
setting up a Systematic Investment Plan. For more information, contact the Transfer Agent or your selling agent. The Transfer Agent's contact information (toll-free number and mailing addresses) as well as the Funds' website address can be found at
the beginning of the section
Choosing a Share Class
.
The Fund also may sell your Fund shares if your selling agent
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 — Class A, Class B, Class C, Class T
and Class Z Share Accounts Minimum Balance Fee
If the
value of your Fund 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 for any reason, including as a result of market
decline, your account generally will be subject to a $20 annual fee. This fee will be assessed through the automatic sale of Fund 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 Fund account balance, consolidating your Fund accounts through an exchange of shares of another Fund in which you hold shares, or setting up a Systematic Investment Plan that invests at least monthly. For more information,
contact the Transfer Agent or your selling agent. The Transfer Agent's contact information (toll-free number and mailing address(es)) as well as the Funds' website address can be found at the beginning of the section
Choosing a Share Class
.
The Funds 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 Small Account Policy (Accounts
Below Minimum Account Balance and Minimum Balance Fee)
The automatic sale of Fund shares of accounts under $250 and
the annual minimum balance fee described above do not apply to shareholders of Class I, Class K, Class R, Class R4, Class R5, Class W and Class Y shares; shareholders holding their shares through broker-dealer networked accounts; wrap fee and
omnibus accounts;
Columbia Large Growth Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
accounts with active Systematic Investment Plans; certain qualified
retirement plans; and health savings accounts. The automatic sale of Fund shares of accounts under the applicable Minimum Account Balance does not apply to individual retirement plans.
Small Account Policy — Broker-Dealer and Wrap Fee
Accounts
The Funds may automatically redeem, at any
time, broker-dealer networked accounts and wrap fee accounts that have account balances of $20 or less or have less than one share.
Information Sharing Agreements
As required by Rule 22c-2 under the 1940 Act, the Funds or
certain of their service providers will enter into information sharing agreements with selling agents, including participating life insurance companies and selling agents that sponsor or offer retirement plans through which shares of the Funds are
made available for purchase. Pursuant to Rule 22c-2, selling agents 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.
Excessive Trading Practices Policy of Non-Money Market
Funds
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 purchase 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 sole discretion restrict or reject a purchase or exchange order even if the transaction is
not subject to the specific 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 purchase or exchange transactions communicated directly to the Transfer Agent and to those received by selling agents.
Specific Buying and Exchanging Limitations
— If a Fund detects that an investor has made two “material round trips” in any 28-day period, it will generally reject the investor's future purchase orders, including exchange purchase orders,
involving any 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 sole 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 in 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. In addition, the Fund may, in its sole discretion, reinstate trading privileges that have been revoked under the Fund's Excessive Trading Policies and Procedures.
Columbia Large Growth Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
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 or exchange orders through selling agents, and cannot always know of or reasonably detect excessive trading that may be facilitated by selling agents 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 selling agents such as broker-dealers, retirement plans and variable insurance products. These arrangements often permit selling
agents to aggregate their clients' transactions and accounts, and in these circumstances, the identity of the shareholders is often not known to the Fund.
Some selling agents 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 Fund 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.
Excessive
Trading Practices Policy of Columbia Money Market Fund
A
money market fund is designed to offer investors a liquid cash option that they may buy and sell as often as they wish. Accordingly, the Board has not adopted policies and procedures designed to discourage excessive or short-term trading of Columbia
Money Market Fund shares. However, since frequent purchases and sales of Columbia Money
Columbia Large Growth Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Market Fund shares could in certain instances harm shareholders in various
ways, including reducing the returns to long-term shareholders by increasing costs (such as spreads paid to dealers who trade money market instruments with Columbia Money Market Fund) and disrupting portfolio management strategies, Columbia Money
Market Fund reserves the right, but has no obligation, to reject any purchase or exchange transaction at any time. Except as expressly described in this prospectus (such as minimum purchase amounts), Columbia Money Market Fund has no limits on
purchase or exchange transactions. In addition, Columbia Money Market Fund reserves the right to impose or modify restrictions on purchases, exchanges or trading of Fund shares at any time.
Columbia Large Growth Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Opening an Account and Placing Orders
We encourage 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 or exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling agent.
As described below, once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.
The Funds are generally available directly and through
broker-dealers, banks and other selling agents or institutions, and through certain qualified and non-qualified plans, wrap fee products or other investment products sponsored by selling agents. You may exchange or sell shares through your selling
agent. If you maintain your account directly with your selling agent, you must contact that agent to process your transaction.
Not all selling agents offer the Funds and certain selling
agents that offer the Funds may not offer all Funds on all investment platforms or programs.
Please consult with your financial advisor to determine the availability of the Funds. If you set up an account at a
selling agent that does not have, and is unable to obtain, a selling agreement with the Distributor, you will not be able to transfer Fund holdings to that account. In that event, you must either maintain your Fund holdings with your current selling
agent, find another selling agent with a selling agreement, or sell your Fund shares, paying any applicable CDSC. Please be aware that transactions in taxable accounts are taxable events and may result in income tax liability.
Selling agents that offer the Funds may charge you additional
fees for the services they provide and they may have different policies that are not described in this prospectus.
Some policy differences may include different minimum investment amounts, exchange privileges, Fund
choices and cutoff times for investments. Additionally, recordkeeping, transaction processing and payments of distributions relating to your account may be performed by the selling agents through which your shares of the Fund are held. Since the
Fund (and its service providers) may not have a record of your account transactions, you should always contact the financial advisor employed by the selling agent through which you purchased or at which you maintain your shares of the Fund to make
changes to your account or to give instructions concerning your account, or to obtain information about your account. The Fund and its service providers, including the Distributor and the Transfer Agent, are not responsible for the failure of these
selling agents to carry out their obligations to its customers.
The Fund may engage selling agents to receive purchase,
exchange and sell orders on its behalf. Accounts established directly with the Fund will be serviced by the Transfer Agent. The Funds, the Transfer Agent and the Distributor do not provide investment advice.
Accounts Established Directly with the Fund
You or the financial advisor through which you buy shares may
establish an account with the Fund. To do so, complete a Fund account application with your financial advisor or investment professional, and mail the account application to the Transfer Agent. Account applications may be obtained at
columbiathreadneedle.com/us or may be requested by calling 800.345.6611. Make your check payable to the Fund. You will be assessed a $15 fee for any checks rejected by your financial institution due to insufficient funds or other reasons. The Funds
do not accept cash, credit card convenience checks, money orders, traveler's checks, starter checks, third or fourth party checks, or other cash equivalents.
Mail your check and completed application to the Transfer
Agent at its address that can be found at the beginning of the section
Choosing a Share Class.
You may also use these addresses to request an exchange or redemption of Fund shares. When a written order to buy,
sell or exchange shares is sent to the Transfer Agent, the share price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the
P.O. Box provided for regular mail delivery.
You will be
sent a statement confirming your purchase and any subsequent transactions in your account. You will also be sent quarterly and annual statements detailing your transactions in the Fund and the other Funds you own under the same account number.
Duplicate quarterly account statements for the current year and duplicate annual statements for the most recent prior calendar year will be sent to you free of charge. Copies of year-end statements for prior years are available for a fee. Please
contact the Transfer Agent for more information.
Columbia Large Growth Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Written Transactions
Once you have an account, you can communicate written buy,
sell or exchange orders to the Transfer Agent at its address that can be found at the beginning of the section
Choosing a Share Class
. When a written order to buy, sell or exchange shares is sent to the
Transfer Agent, the share price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the P.O. Box provided for regular mail
delivery.
Include in your letter: your name; the name of
the Fund(s); your account number; the class of shares to be exchanged or sold; your SSN or other TIN; the dollar amount or number of shares you want to exchange or sell; specific instructions regarding delivery of redemption proceeds or exchange
destination; signature(s) of registered account owner(s); and any special documents the Transfer Agent may require in order to process your order.
Corporate, trust or partnership accounts may need to send
additional documents. Payment will be mailed to the address of record and made payable to the names listed on the account, unless your request specifies differently and is signed by all owners.
Telephone Transactions
For Class A, Class B, Class C, Class R, Class T, Class Y and
Class Z shares, 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 SSN or TIN available when calling.
You can sell Fund shares via the telephone, by electronic
funds transfer or by check to the address of record, up to and including an aggregate of $100,000 of shares per day, per Fund account, if you qualify for telephone orders. Wire redemptions requested via the telephone are subject to a maximum of $3
million of shares per day, per Fund. You can buy up to and including $100,000 of shares per day, per Fund account through your bank account as an Automated Clearing House (ACH) transaction via the telephone if you qualify for telephone orders.
Telephone orders may not be as secure as written orders. The
Fund 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
For Class A, Class B, Class C, Class R, Class T, Class Y and
Class Z shares, once you have an account, you may contact the Transfer Agent 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 and
including an aggregate of $100,000 of shares per day, per Fund account through the internet if you qualify for internet orders.
Wire Transactions
You may buy (or redeem) Class A, Class B (redemptions only),
Class C, Class T, Class W (redemptions only), Class Y and Class Z shares of a Fund by wiring money from (or to) your bank account to (or from) your Fund account by calling the Transfer Agent at 800.422.3737. You must set up this feature prior to
your request unless you are submitting your request in writing with a Medallion Signature Guarantee. The Transfer Agent charges a fee for shares sold by Fedwire. The Transfer Agent may waive the fee for certain accounts. In the case of a redemption,
the receiving bank may charge an additional fee. The minimum amount that can be redeemed by wire is $500. The maximum amount that can be redeemed over the telephone is $3 million per day, per Fund account.
Columbia Large Growth Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Electronic Funds Transfer
You may buy (or redeem) Class A, Class B (redemptions only),
Class C, Class T, Class Y and Class Z shares of a Fund by electronically transferring money from (or to) your bank account to (or from) 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.
Important:
Payments sent by an
electronic fund transfer, a bank authorization, or check that are not guaranteed may take up to 10 or more days to clear. If you request a redemption before the purchase funds clear, this may cause your redemption request to fail to process if the
requested amount includes unguaranteed funds. If you purchased your shares by check or from your bank account as an ACH transaction, the Fund may hold the redemption proceeds when you sell those shares for a period of time after the trade date of
the purchase.
Buying Shares
Eligible Investors
Class A and Class C Shares
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. As described in this prospectus,
Class A shares but not Class C shares are generally subject to a front-end sales charge, which reduces the dollar amount invested in a Fund. However, Class C shares are generally subject to higher fees than Class A shares, which will reduce any
returns on Class C shares relative to Class A shares. You may be eligible to purchase Class A shares without a front-end sales charge if the value of your Columbia Fund shares held in eligible accounts reaches $1,000,000 (in the case of a purchase
of Class A shares of a Taxable Fund) or $500,000 (in the case of a purchase of Class A shares of a Tax-Exempt Fund). If you are eligible to invest in Class A shares without a front-end sales charge, you should discuss your options with your selling
agent. For more information, see
Choosing a Share Class – Reductions/Waivers of Sales Charges
. A purchase order for Class C shares of a Taxable or Tax-Exempt Fund is limited to $999,999 and $499,999,
respectively. Your selling agent may impose additional limits on investments in Class C shares.
For Columbia Money Market Fund, new investments must be made
in Class A, Class I, Class W or Class Z shares, subject to eligibility. Class C and Class R shares of Columbia Money Market Fund are available as a new investment only to investors in the Distributor's proprietary 401(k) products, provided that such
investor is eligible to invest in the class and transacts directly with the Fund or the Transfer Agent through a third party administrator or third party recordkeeper. Columbia Money Market Fund offers other classes of shares only to facilitate
exchanges with other Funds offering these classes of shares.
Class B Shares (Closed)
The Funds no longer accept 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):
■
|
Dividend and/or capital gain
distributions may continue to be reinvested in Class B shares of a Fund.
|
■
|
Shareholders invested in Class
B shares of a Fund may exchange those shares for Class B shares of other Funds offering such shares. Certain exceptions apply, including that not all Funds may permit exchanges.
|
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, any purchase orders (except those submitted by a selling agent through the National Securities Clearing Corporation (NSCC) as described in more detail below) that are orders for additional Class B shares of the Fund received from existing
investors in Class B shares, including orders
Columbia Large Growth Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
made through an active systematic investment plan, will automatically be
invested in Class A shares of the Fund, without regard to the normal minimum initial investment requirement for Class A shares, but subject to the front-end sales charge that generally applies to Class A shares. See
Choosing a Share Class — Sales Charges and Commissions — Class A Shares — Front-End Sales Charge
for additional information. Your selling agent may have different policies not described here,
including a policy to reject purchase orders for a Fund's Class B shares or to automatically invest the purchase amount in Columbia Money Market Fund. Please consult your selling agent to understand its policy.
Additional purchase orders for a Fund's Class B shares by an
existing Class B shareholder, submitted by such shareholder's selling agent through the NSCC, will be rejected due to operational limitations of the NSCC. Investors should consult their selling agent if they wish to invest in the Fund by purchasing
a share class of the Fund other than Class B shares.
Dividend and/or capital gain distributions from Class B shares
of a Fund will not be automatically invested in Class B shares of another 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 Fund will be
reinvested in Class B shares of the same Fund that is making the distribution.
Class I Shares
Class I shares are available only to the Funds (i.e.,
fund-of-funds investments).
Class K Shares (Closed)
Class K shares are closed to new investors and new accounts,
subject to certain limited exceptions described below.
Shareholders who opened and funded a Class K account with the
Fund as of the close of business on December 31, 2010 (including accounts once funded that subsequently reached a zero balance) may continue to make additional purchases of Class K shares. Plans may continue to make additional purchases of Fund
shares and add new participants, and new plans sponsored by the same or an affiliated sponsor may invest in the Fund (and add new participants) if an initial plan so sponsored invested in the Fund as of December 31, 2010 (or had approved the Fund as
an investment option as of December 31, 2010 and funded its initial account with the Fund prior to March 31, 2011) and holds Fund shares at the plan level.
An order to purchase Class K shares received by the Fund or
the Transfer Agent after the close of business on December 31, 2010 (other than as described above) from a new investor or a new account that is not eligible to purchase shares will be refused by the Fund and the Transfer Agent and any money that
the Fund or the Transfer Agent received with the order will be returned to the investor or the selling agent, as appropriate, without interest.
Class K shares are designed for qualified employee benefit
plans, trust companies or similar institutions, charitable organizations that meet the definition in Section 501(c)(3) of the Code, non-qualified deferred compensation plans whose participants are included in a qualified employee benefit plan
described above, state sponsored college savings plans established under Section 529 of the Code, and health savings accounts created pursuant to public law 108-173. Class K shares may be purchased, sold or exchanged only through the Distributor or
an authorized selling agent.
Prior to October 25, 2012,
Class K shares were named Class R4 shares.
Class R
Shares
Class R shares are available only to eligible
health savings accounts sponsored by third party platforms, including those sponsored by Ameriprise Financial affiliates, eligible retirement plans and, in the sole discretion of the Distributor, other types of retirement accounts held through
platforms maintained by selling agents approved by the Distributor. Eligible retirement plans include any retirement plan other than individual 403(b) plans. Class R shares are generally not available for investment through retail nonretirement
accounts, traditional and Roth IRAs, Coverdell Education Savings Accounts, SEPs, SAR-SEPs, Simple IRAs or 529 tuition programs. Contact the Transfer Agent or your retirement plan or health savings account administrator for more information about
investing in Class R shares.
Columbia Large Growth Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Class R4 Shares
Class R4 shares are available only to (i) omnibus retirement
plans, (ii) trust companies or similar institutions, (iii) broker-dealers, banks, trust companies and similar institutions that clear Fund share transactions for their client or customer investment advisory or similar accounts through designated
selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R4 eligibility apart from selling, servicing or similar agreements, (iv) 501(c)(3) charitable
organizations, (v) 529 plans and (vi) health savings accounts.
Prior to October 31, 2012, Class R4 shares were named Class R3
shares.
Class R5 Shares
Class R5 shares are available only to (i) certain registered
investment advisers that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with
respect to Class R5 eligibility apart from selling, servicing or similar agreements and (ii) omnibus retirement plans. Prior to November 8, 2012, Class R5 shares were closed to new investors and new accounts, subject to certain exceptions. Existing
shareholders who do not satisfy the new eligibility requirements for investment in Class R5 may not establish new Class R5 accounts but may continue to make additional purchases of Class R5 shares in accounts opened and funded prior to November 8,
2012; provided, however, that investment advisory programs and similar programs that opened a Class R5 account as of May 1, 2010, and continuously hold Class R5 shares in such account after such date, may generally not only continue to make
additional purchases of Class R5 shares but also open new Class R5 accounts for such pre-existing programs and add new shareholders in the program.
Class T Shares
Class T shares are available only to investors who received
(and who have continuously held) Class T shares in connection with the merger of certain Galaxy funds into certain Funds that were then named Liberty funds.
Class W Shares
Class W shares are available only to investors purchasing
through authorized investment programs managed by investment professionals, including discretionary managed account programs. Class W shares may be purchased, sold or exchanged only through the Distributor or an authorized selling agent. Shares
originally purchased in a discretionary managed account may continue to be held in Class W outside of a discretionary managed account, but no additional Class W purchases may be made and no exchanges to Class W shares of another Fund may be made
outside of a discretionary managed account.
Class Y
Shares
Class Y shares, except as noted below, are
available only to retirement plans that maintain plan-level or omnibus accounts with the Fund (through the Transfer Agent).
Prior to November 8, 2012, Class Y shares were offered only to
certain former shareholders of series of the former Columbia Funds Institutional Trust (together, Former CFIT Shareholders). Former CFIT Shareholders who opened and funded a Class Y account with a Fund as of the close of business on November 7, 2012
may continue to make additional purchases of Class Y shares even if they do not satisfy the current eligibility requirements but may not establish new Class Y shares accounts and will not be eligible to exchange Class Y shares of a Fund into Class Y
shares of other Funds. Former CFIT Shareholders may exchange Class Y shares of a Fund for Class Z shares of the same Fund or Class Z shares of another Fund, subject to applicable minimum investments.
Columbia Large Growth Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Class Z Shares
Class Z shares are available only to the categories of
eligible investors described below under
Class Z Shares Minimum Initial Investments
.
Selling agents that clear Fund share transactions through designated selling agents and
their mutual fund trading platforms that were given specific written notice from the Transfer Agent of the termination, effective March 29, 2013, of their eligibility for new purchases of Class Z shares and omnibus retirement plans are not permitted
to establish new Class Z accounts, subject to certain exceptions described below.
Omnibus retirement plans that opened and, subject to certain
exceptions, funded a Class Z account with the Fund as of the close of business on March 28, 2013, and have continuously held Class Z shares in such account after such date, may generally continue to make additional purchases of Class Z shares, open
new Class Z accounts and add new participants. In addition, an omnibus retirement plan affiliated with a grandfathered plan may, in the sole discretion of the Distributor, open new Class Z accounts in a Fund if the affiliated plan opened a Class Z
account on or before March 28, 2013. If an omnibus retirement plan invested in Class Z shares changes recordkeepers after March 28, 2013, any new accounts established for that plan may not be established in Class Z shares, but such a plan may
establish new accounts in a different share class for which the plan is eligible. The Distributor may, in its sole discretion, delay the funding requirement described above for omnibus retirement plans to allow an omnibus retirement plan that opened
a Class Z account (the initial Class Z account) with the Fund as of the close of business on March 28, 2013 to make additional purchases of Class Z shares, open new Class Z accounts and add new participants so long as the initial Class Z account was
funded by July 2, 2013.
Accounts of selling agents
(other than omnibus retirement plans, which are discussed above) that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that received specific written notice
from the Transfer Agent of the termination, effective March 29, 2013, of their eligibility for new purchases of Class Z shares will not be permitted to establish new Class Z accounts or make additional purchases of Class Z shares (other than through
reinvestment of distributions). Such accounts may, at their holder’s option, exchange Class Z shares of a Fund, without the payment of a sales charge, for Class A shares of the same Fund.
Additional Eligible Investors
In addition, the Distributor, in its sole discretion, may
accept investments in any share class from investors other than those listed in this prospectus.
Minimum Initial Investments
The table below shows the Fund's minimum initial investment
requirements, which may vary by Fund, class and type of account.
Minimum
Initial Investments
|
|
Minimum
Initial
Investment
(a)
|
Minimum
Initial Investment
for Accounts
with Systematic
Investment Plans
|
For
all Funds, classes and account types except those listed below
|
$2,000
|
$100
(b)
|
Individual
Retirement Accounts for all Funds and classes except those listed below
|
$1,000
|
$100
(c)
|
Columbia
Absolute Return Currency and Income Fund
|
$10,000
|
$10,000
|
Columbia
Floating Rate Fund and Columbia Inflation Protected Securities Fund
|
$5,000
|
$5,000
|
Class
I, Class K, Class R, Class R4 and Class Y
|
None
|
N/A
|
Class
R5
|
variable
(d)
|
N/A
|
Class
W
|
$500
|
N/A
|
Class
Z
|
variable
(e)
|
$100
|
Columbia Large Growth Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
(a)
|
If your Class A, Class B, Class
C, Class T or Class Z shares account balance falls below the minimum initial investment amount for any reason, including a market decline, you may be asked to increase it to the minimum initial investment amount or establish a monthly Systematic
Investment Plan. If you do not do so, your account will be subject to a $20 annual low balance fee and/or shares may be automatically redeemed and the proceeds mailed to you if the account falls below the minimum account balance. See
Buying, Selling and Exchanging Shares — Transaction Rules and Policies
above.
|
(b)
|
Columbia Money Market Fund
—
$2,000
|
(c)
|
Columbia Money Market Fund
—
$1,000
|
(d)
|
There is no minimum initial
investment in Class R5 shares for omnibus retirement plans. A minimum initial investment of $100,000 applies to aggregate purchases of Class R5 shares of a Fund for combined underlying accounts of any registered investment adviser that clears Fund
share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R5 eligibility
apart from selling, servicing or similar agreements.
|
(e)
|
The minimum initial investment
amount for Class Z shares is $0, $1,000 or $2,000 depending upon the category of eligible investor. See
—
Class Z Shares Minimum Initial Investments
below. The
minimum initial investment amount for systematic investment plan accounts is the same as the amount set forth in the first two rows of the table, as applicable.
|
The minimum initial investment requirements may be waived for
accounts that are managed by an investment professional, for accounts held in approved discretionary or non-discretionary wrap programs, or for accounts that are a part of an employer-sponsored retirement plan. The Distributor, in its sole
discretion, may also waive minimum initial investment requirements for other account types.
Minimum investment and related requirements may be modified at
any time, with or without prior notice. If your account is closed and then re-opened with a systematic investment plan, your account must meet the then-current applicable minimum initial investment.
Class Z Shares 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 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.
|
■
|
Any investor participating
in a wrap program sponsored by a selling agent 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 for which a selling agent 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 employee of Columbia
Management Investment Advisers, LLC, the Distributor or the Transfer Agent and immediate family members of any of the foregoing who share the same address and any persons employed as of April 30, 2010 by Columbia Management Advisors, LLC, Columbia
Management Distributors, Inc., or Columbia Management Services, Inc., the adviser, distributor and transfer agent of series of CFST and CFST I prior to May 1, 2010 (the Previous Service Providers) and immediate family members of any of the foregoing
who share the same address are eligible to make new and subsequent purchases in Class Z shares through an individual retirement account. If you maintain your account with a selling agent, you must contact that selling agent each time you seek to
purchase shares to notify them that you qualify for Class Z shares.
|
The minimum initial investment in Class Z shares for the
following categories of eligible investors is $2,000:
■
|
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
|
Columbia Large Growth Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
|
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 a series of CFST or CFST I distributed by the Distributor.
|
■
|
Any investor participating
in an account offered by a selling agent 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.
|
■
|
Any employee of Columbia
Management Investment Advisers, LLC, the Distributor or the Transfer Agent and immediate family members of any of the foregoing who share the same address and any persons employed as of April 30, 2010 by the Previous Service Providers and any of
their immediate family members who share the same address are eligible to make new and subsequent purchases in Class Z shares through a non-retirement account. If you maintain your account with a selling agent, you must contact that selling agent
each time you seek to purchase shares to notify them that you qualify for Class Z shares.
|
■
|
Certain other investors as
set forth in more detail in the SAI.
|
Systematic Investment Plan
The Systematic Investment Plan allows you to schedule regular
purchases via automatic transfers from your bank account to the Fund on a monthly, quarterly or semiannual basis. Contact the Transfer Agent or your selling agent to set up the plan. Systematic Investment Plans may not be available for all share
classes.
Dividend Diversification
Generally, you may automatically invest distributions made by
another Fund into the same class of shares (and in some cases certain other classes of shares) of a Fund at no additional sales charge. A sales charge may apply when you invest distributions made with respect to shares that were not subject to a
sales charge at the time of your initial purchase. Call the Transfer Agent at 800.345.6611 for details. The ability to invest distributions from one Fund to another Fund may not be available to accounts held at all selling agents.
Other Purchase Rules You Should Know
■
|
Once the Transfer Agent or
your selling 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
and Class T shares at the public offering price per share because purchases of these share classes are generally subject to a front-end sales charge.
|
■
|
You buy Class B, Class C,
Class I, Class K, Class R, Class R4, Class R5, Class W, Class Y and Class Z shares at net asset value per share because no front-end sales charge applies to purchases of these share classes.
|
■
|
The Distributor and the
Transfer Agent reserve the right to cancel your order if the Fund 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 agents are
responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.
|
■
|
Shares purchased are
recorded on the books of the Fund. The Fund doesn't issue certificates.
|
Columbia Large Growth Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Selling Shares
When you sell your shares, the Fund is effectively buying them
back from you. This is called a redemption. The payment will be sent within seven days after your request is received in “good form.” When you sell shares, the amount you receive may be more or less than the amount you invested.
Your sale price will be the next NAV calculated after your
request is received in “good form,” minus any applicable CDSC.
Systematic Withdrawal Plan
The Systematic Withdrawal Plan allows you to schedule regular
redemptions from your account any business day on a monthly, quarterly or semiannual basis. Currently, Systematic Withdrawal Plans are generally available for Class A, Class B, Class C, Class R4, Class R5, Class T, Class W, Class Y and Class Z share
accounts. Contact the Transfer Agent or your financial advisor to set up the plan. To set up the plan, your account balance must meet the class minimum initial investment amount. 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 Signature Guaranteed.
You can choose to receive your withdrawals via check or direct
deposit into your bank account. The Fund will deduct any applicable CDSC from the withdrawals before sending the balance to you. You can cancel the plan by giving the Fund 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 withdraw your entire investment.
Check Redemption Service (for Columbia Money Market Fund)
Class A and Class Z shares of Columbia Money Market Fund offer
check writing privileges. If you have $2,000 in Columbia Money Market Fund, you may request checks which may be drawn against your account. The amount of any check drawn against your Columbia Money Market Fund must be at least $100. You can elect
this service on your initial application or thereafter. Call 800.345.6611 for the appropriate forms to establish this service. If you own Class A shares that were originally purchased in another Fund at NAV because of the size of the purchase, and
then exchanged into Columbia Money Market Fund, check redemptions may be subject to a CDSC. A $15 charge will be assessed for any stop payment order requested by you or any overdraft in connection with checks written against your Columbia Money
Market Fund account. Note that a Medallion Signature Guarantee may be required if this service is established after the account is opened.
In-Kind Redemptions
The Fund reserves the right to honor redemption orders with
in-kind distributions of portfolio securities instead of cash. In the event the Fund distributes portfolio securities in-kind, you may incur 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. For U.S. federal income tax purposes redemptions paid in securities are generally treated the same as redemptions paid in cash.
Other Redemption Rules You Should Know
■
|
Once the Transfer Agent or
your selling agent receives your redemption order in “good form,” your shares will be sold at the next calculated NAV 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 that
are held directly with the Funds (through the Transfer Agent), we will normally send the redemption proceeds by mail or electronically transfer them to your bank account within three business days after the Transfer Agent or your selling agent
receives your order in “good form.”
|
■
|
If you sell your shares
through a selling agent, the Funds will normally send the redemption proceeds by Fedwire within three business days after the Transfer Agent or your selling agent receives your order in “good form.”
|
■
|
If you paid for your shares
by check or from your bank account as an ACH transaction, the Funds will hold the redemption proceeds when you sell those shares for a period of time after the trade date of the purchase.
|
Columbia Large Growth Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
■
|
No interest will be paid on
uncashed redemption checks.
|
■
|
The Funds can delay payment
of the redemption proceeds for up to seven days and may suspend redemptions and/or further postpone payment of redemption proceeds when the NYSE is closed or trading thereon is restricted or during emergency or other circumstances, including as
determined by the SEC.
|
■
|
Other restrictions may apply
to retirement accounts. For information about these restrictions, contact your retirement plan administrator.
|
■
|
The Fund reserves the right
to redeem your shares if your account falls below the Fund's minimum initial investment requirement.
|
■
|
Also keep in mind the 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 your Fund to buy shares of
another Fund, in what is called an exchange. You should read the prospectus of, and make sure you understand the investment objective, principal investment strategies, risks, fees and expenses of, the Fund into which you are exchanging.
You may be subject to a sales charge if you exchange from
Columbia Money Market Fund or any other Fund that does not charge a front-end sales charge into a non-money market Fund.
If you hold your Fund shares through certain selling agents, including Ameriprise Financial
Services, Inc., you may have limited exchangeability among the Funds.
Please contact your selling agent for more information.
You can generally make exchanges between like share classes of
any Fund and, subject to eligibility requirements, other share classes of any Fund. Some exceptions apply. Although the Funds allow certain exchanges from one share class to another share class with higher expenses, you should consider the expenses
of each class before making such an exchange.
Systematic
Exchanges
You may buy Class A, Class C, Class T, Class
W, Class Y and/or Class Z shares of a Fund by exchanging each month from another Fund for shares of the same class of the Fund at no additional cost, subject to the following exchange amount minimums: $50 each month for individual retirement
accounts (i.e. tax qualified accounts); and $100 each month for non-retirement accounts. Contact the Transfer Agent or your selling agent to set up the plan. If you set up your plan to exchange more than $100,000 each month, you must obtain a
Medallion Signature Guarantee.
Exchanges will continue
as long as your balance is sufficient to complete the systematic monthly transfers, subject to the 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 $50 and $100 minimum requirements noted immediately above) by calling the Transfer Agent at 800.345.6611. A sales charge may apply when
you exchange shares of a Fund that were not assessed a sales charge at the time of your initial purchase.
Other Exchange Rules You Should Know
■
|
Exchanges are made at the
NAV next calculated after your exchange order is received in “good form.”
|
■
|
Once the Fund receives your
exchange request, you cannot cancel it after the market closes.
|
■
|
The rules for buying shares
of a Fund generally apply to exchanges into that Fund, including, if your exchange creates a new Fund account, it must satisfy the minimum investment amount, unless a waiver applies.
|
■
|
Shares of the purchased Fund
may not be used on the same day for another exchange or sale.
|
■
|
If you exchange shares from
Class A shares of Columbia Money Market Fund to a non-money market Fund, any further exchanges must be between shares of the same class. For example, if you exchange from Class A shares of Columbia Money Market Fund into Class C shares of a
non-money market Fund, you may not exchange from Class C shares of that non-money market Fund back to Class A shares of Columbia Money Market Fund.
|
Columbia Large Growth Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
■
|
A sales charge may apply when
you exchange shares of a Fund that were not assessed a sales charge at the time of your initial purchase. For example, if your initial investment was in Columbia Money Market Fund and you exchange into a non-money market Fund, your transaction is
subject to a front-end sales charge if you exchange into Class A shares and to a CDSC if you exchange into Class C shares of the Funds.
|
■
|
If your initial investment
was in Class A shares of a non-money market Fund and you exchange shares into Columbia Money Market Fund, you may exchange that amount to another Fund, including dividends earned on that amount, without paying a sales charge.
|
■
|
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 Fund and ends when you sell the shares of the Fund you received from the exchange. The applicable CDSC will be the CDSC of the original Fund.
|
■
|
You may make exchanges only
into a Fund that is legally offered and sold in your state of residence. Contact the Transfer Agent or your selling agent for more information.
|
■
|
You generally may make an
exchange only into a 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.
|
■
|
Changing your investment to
a different Fund will be treated as a sale and purchase, and you will be subject to applicable taxes on the sale and sales charges on the purchase of the new Fund.
|
■
|
Class Z shares of a Fund may
be exchanged for Class A or Class Z shares of another Fund. In certain circumstances, the front-end sales charge applicable to Class A shares may be waived on exchanges of Class Z shares for Class A shares. See
Buying, Selling and Exchanging Shares — Buying Shares — Eligible Investors — Class Z Shares
for details.
|
■
|
You may generally exchange
Class T shares of a Fund for Class A shares of another Fund if the other Fund does not offer Class T shares. Class T shares exchanged into Class A shares cannot be exchanged back into Class T shares.
|
■
|
Class W shares originally
purchased, but no longer held, in a discretionary managed account, may not be exchanged for Class W shares of another Fund.
|
■
|
Former CFIT Shareholders may
not exchange Class Y shares of a Fund into Class Y shares of another Fund.
|
Same-Fund Exchange Privilege
Certain shareholders of a Fund may be or become eligible to
invest in other classes of shares of the same Fund. Upon a determination of such eligibility, such shareholders may be eligible to exchange their shares for shares of the other share class, if offered. Such exchanges include exchanges of shares of
one class for shares of another share class with higher expenses. Before making such an exchange, you should consider the expenses of each class. Investors should contact their selling agents to learn more about the details of the exchange
privilege.
Note the following rules relating to
same-Fund exchanges:
■
|
No sales charges or other
charges will apply to any such exchange, except that when Class B shares are exchanged, any CDSC applicable to Class B shares will be applied.
|
■
|
Ordinarily, shareholders
will not recognize a gain or loss for U.S. federal income tax purposes upon such an exchange. You should consult your tax advisor about your particular exchanges.
|
Columbia Large Growth Quantitative Fund
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 generally unrealized. If the fund sells an investment, it generally will realize a capital gain if it sells that investment for a
higher price than its adjusted cost basis, and will generally realize a capital loss if it sells that investment for a lower price than its adjusted cost basis. Capital gains and losses are either short-term or long-term, depending on whether the
fund holds the securities for one year or less (short-term) or more than one year (long-term).
|
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 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
|
Annually
|
Distributions
|
Annually
|
The Fund may, however, declare or
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 distribution was declared (or, if the Fund declares distributions daily, 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 (the selling agent through which you purchased shares may have different policies). You can do this by contacting the Funds at
the addresses and telephone numbers listed at the beginning of the section entitled
Choosing a Share Class
. No sales charges apply to the purchase or sale of such shares.
For accounts held directly with the Fund (through the Transfer
Agent), 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.
Columbia Large Growth Quantitative Fund
Distributions and Taxes
(continued)
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) of net
investment income or net realized capital gain, because doing so can cost you money in taxes to the extent 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,” before you invest check the Fund's distribution schedule, which is available at the Funds' website and/or by calling the Funds' telephone
number listed at the beginning of the section entitled
Choosing a Share Class
.
Taxes
You should be aware of the following considerations applicable
to all Funds (unless otherwise noted):
■
|
The Fund intends to qualify
and to be eligible for treatment 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 for treatment as a regulated investment company would result in Fund-level taxation, and consequently, a reduction in income available for distribution to you and in the net asset value of your shares. Even if the Fund
qualifies for treatment as a regulated investment company, the Fund may be subject to federal excise tax on certain undistributed income or gains.
|
■
|
Distributions, if taxable,
generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional Fund shares. Dividends paid in January are deemed paid on December 31 of the prior year if the dividend was declared and payable to
shareholders of record in October, November, or December of such prior year.
|
■
|
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.
|
■
|
From time to time, a
distribution from the Fund could constitute a return of capital, which is not taxable to you so long as the amount of the distribution does not exceed your tax basis in your Fund shares. A return of capital reduces your tax basis in your Fund
shares, with any amounts exceeding such basis generally taxable as capital gain.
|
■
|
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 the lower net long-term capital gain rates instead of the higher
ordinary income rates. 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.
|
■
|
Certain high-income
individuals (as well as estates and trusts) are subject to a 3.8% tax on net investment income. For individuals, the 3.8% tax applies to the lesser of (1) the amount (if any) by which the taxpayer's modified adjusted gross income exceeds certain
threshold amounts or (2) the taxpayer's “net investment income.”
|
|
Net investment income
generally includes for this purpose dividends, including any capital gain dividends, paid by the Fund, and net gains recognized on the sale, redemption or exchange of shares of the Fund.
|
■
|
Certain derivative
instruments when held in the Fund's portfolio subject the Fund to special tax rules, the effect of which may be to, among other things, accelerate income to the Fund, defer Fund losses, cause adjustments in the holding periods of Fund portfolio
securities, or convert capital gains into ordinary income, short-term capital losses into long-term capital losses or long-term capital gains into short-term capital gains. These rules could therefore affect the amount, timing and/or character of
distributions to shareholders.
|
■
|
Certain Funds may purchase
or write options, as described further in the SAI. Generally, a Fund realizes a capital gain or loss on an option when the option expires, or when it is exercised, sold or otherwise terminated. However, if an option is a “section 1256
contract,” which includes most traded options on a broad-based index, and the
|
Columbia Large Growth Quantitative Fund
Distributions and Taxes
(continued)
|
Fund holds such option at
the end of its taxable year, the Fund is deemed to sell such option at fair market value at such time and recognize any gain or loss thereon, which is generally deemed to be 60% long-term and 40% short-term gain or loss, as described further in the
SAI.
|
■
|
If at the end of the taxable
year more than 50% of the value of the Fund's assets consists of securities of foreign corporations, and the Fund makes a special election, you will generally be required to include in your income for U.S. federal income tax purposes your share of
the qualifying foreign income taxes paid by the Fund in respect of its foreign portfolio securities. You may be able to claim a foreign tax credit or deduction in respect of this amount, subject to certain limitations. There is no assurance that the
Fund will make this election for a taxable year, even if it is eligible to do so.
|
■
|
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 your adjusted tax basis in the shares, which is generally 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; in other circumstances, capital losses may be disallowed under the “wash sale” rules.
|
■
|
The Fund generally is
required to report to shareholders and the Internal Revenue Service (the IRS) upon the sale, exchange or redemption of Fund shares cost basis information with respect to those shares. The Fund uses average cost basis as its default method of
calculating cost basis. Please see columbiathreadneedle.com/us or contact the Fund at 800.345.6611 for more information regarding average cost basis reporting, other available cost basis methods and how to select or change a particular method or to
choose specific shares to sell, redeem or exchange. If you hold Fund shares through a selling agent, you should contact your selling agent to learn about its cost basis reporting default method and the reporting elections available to your account.
|
■
|
The Fund is required by
federal law to withhold tax on any taxable or tax-exempt distributions and redemption 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 TIN or haven't certified to the Fund that withholding doesn't apply; the 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.
|
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. Please see the SAI for more detailed tax information. 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.
[This page intentionally left blank]
Additional Information About the Fund
Additional information about the Fund’s investments is available in
the Fund’s annual and semiannual 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.
The SAI also provides additional information about the Fund and its policies. The SAI, which has been filed with the SEC, is legally part of this prospectus (incorporated by reference). To obtain these documents free of charge, to request other
information about the Fund and to make shareholder inquiries, please contact the Fund as follows:
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:
columbiathreadneedle.com/us
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, D.C. 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, D.C. 20549-1520.
The investment company registration number of Columbia Funds
Series Trust II, of which the Fund is a series, is 811-21852.
© 2015 Columbia Management Investment Distributors,
Inc.
225 Franklin Street, Boston, MA 02110
800.345.6611
Prospectus
June 1,
2015
Columbia Large
Value Quantitative Fund
Class
|
|
Ticker
Symbol
|
Class
R4 Shares
|
|
COLEX
|
Class
R5 Shares
|
|
COLVX
|
Class
Y Shares
|
|
COLYX
|
As with all mutual funds, the Securities and Exchange Commission (SEC) has
not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Columbia Large Value Quantitative Fund
|
3
|
|
3
|
|
3
|
|
4
|
|
4
|
|
5
|
|
6
|
|
6
|
|
7
|
|
7
|
|
8
|
|
8
|
|
8
|
|
8
|
|
10
|
|
14
|
|
16
|
|
17
|
|
18
|
|
18
|
|
18
|
|
23
|
|
31
|
|
33
|
|
36
|
|
37
|
|
37
|
|
38
|
|
42
|
|
44
|
|
50
|
|
51
|
|
54
|
|
54
|
|
55
|
Columbia Large Value Quantitative Fund
Investment
Objective
Columbia Large Value Quantitative Fund (the
Fund) seeks to provide shareholders with long-term capital growth.
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)
|
|
|
Classes
R4,
R5 and Y
|
Maximum
sales charge (load) imposed on purchases
|
|
None
|
Maximum
deferred sales charge (load) imposed on redemptions
|
|
None
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
Class
R4
|
Class
R5
|
Class
Y
|
Management
fees
|
0.68%
|
0.68%
|
0.68%
|
Distribution
and/or service (12b-1) fees
|
0.00%
|
0.00%
|
0.00%
|
Other
expenses
(a)
|
0.31%
|
0.16%
|
0.11%
|
Acquired
fund fees and expenses
|
0.03%
|
0.03%
|
0.03%
|
Total
annual Fund operating expenses
|
1.02%
|
0.87%
|
0.82%
|
(a)
|
Other expenses are based on
estimated amounts for the Fund’s current fiscal year.
|
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 the
applicable class of Fund shares 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
Annual Fund Operating Expenses
table above.
|
Although your actual costs may be higher or
lower, based on the assumptions listed above, your costs would be:
|
1
year
|
3
years
|
5
years
|
10
years
|
Class
R4
(whether or not shares are redeemed)
|
$104
|
$325
|
$563
|
$1,248
|
Class
R5
(whether or not shares are redeemed)
|
$
89
|
$278
|
$482
|
$1,073
|
Class
Y
(whether or not shares are redeemed)
|
$
84
|
$262
|
$455
|
$1,014
|
Portfolio Turnover
The Fund may pay 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 90% of the average value of its portfolio.
Columbia Large Value Quantitative Fund
Summary of the Fund
(continued)
Principal Investment Strategies
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in equity securities of companies with market capitalizations greater than $5 billion at the time of purchase or that are within the market
capitalization range of companies in the Russell 1000
®
Value Index (the Index) at the time of purchase. These equity securities
generally include common stocks. The market capitalization range and composition of the companies in the Index are subject to change.
The Fund primarily invests in securities included in the Index
but generally holds fewer stocks than the Index and may hold securities that are not in the Index. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector.
The Fund may invest in derivatives, such as futures contracts,
for cash equitization and investment flexibility.
In
pursuit of the Fund’s objective, the portfolio managers use quantitative analysis to evaluate the relative attractiveness of potential investments.
Principal Risks
An investment in the Fund involves risk, including those
described below.
There is no assurance that the Fund will achieve its investment objective and you may lose money
. The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV)
and share price may go down.
Active Management Risk.
Although the Fund is managed based primarily on quantitative methods, a qualitative review of the quantitative output is conducted by the portfolio managers. Therefore, the Fund’s performance will reflect, in
part, the ability of the portfolio managers to make active, qualitative decisions, including allocation decisions that seek to achieve the Fund’s investment objective.
Derivatives Risk.
Losses
involving derivative instruments may be substantial, because a relatively small movement in the price of an underlying security, instrument, commodity, currency or index may result in a substantial loss for the Fund. In addition to the potential for
increased losses, the use of derivative instruments may lead to increased volatility for the Fund. Derivative investments will typically increase the Fund’s exposure to principal risks to which it is otherwise exposed, and may expose the Fund
to additional risks, including correlation risk, counterparty risk, hedging risk, leverage risk and/or liquidity risk.
Derivatives Risk/Futures Contracts Risk.
The loss that may be incurred in entering into futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets are highly volatile and the use of futures may increase the
volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract may result in substantial losses for the Fund. Futures
contracts may be illiquid. Furthermore, exchanges may limit fluctuations in futures contract prices during a trading session by imposing a maximum permissible price movement on each futures contract. The Fund may be disadvantaged if it is prohibited
from executing a trade outside the daily permissible price movement. Futures contracts executed on foreign exchanges may not provide the same protection as U.S. exchanges. These transactions involve additional risks, including counterparty risk,
hedging risk and pricing risk.
Frequent
Trading Risk.
The portfolio managers may actively and frequently trade investments in the Fund's portfolio to carry out its investment strategies. Frequent trading of investments increases the possibility
that the Fund, as relevant, will realize taxable capital gains (including short-term capital gains, which are generally taxable to shareholders 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. The trading costs and tax effects associated with portfolio turnover may adversely affect the
Fund’s performance.
Issuer Risk.
An issuer in which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may
be caused by poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or
factors.
Columbia Large Value Quantitative Fund
Summary of the Fund
(continued)
Market Risk.
Market risk
refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. An investment in the Fund could lose money over short or long periods.
Although equity securities generally tend to have greater price volatility than debt securities, under certain market conditions, debt securities may have comparable or greater price volatility.
Quantitative Model Risk.
Investments selected using quantitative methods may perform differently from the market as a whole. There can be no assurance that these methodologies will enable the Fund to achieve its objective.
Sector Risk.
At times, the
Fund may have a significant portion of its assets invested in securities of companies conducting business in a related group of industries within an economic sector, including the financial services sector. Companies in the same economic
sector may be similarly affected by economic, regulatory, political or market events or conditions, which may make the Fund more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly. Generally, the
more broadly the Fund invests, the more it spreads risk and potentially reduces the risks of loss and volatility.
The Fund may be more susceptible to the particular risks that
may affect companies in the financial services sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the financial services sector are subject to certain risks, including the risk of regulatory change,
decreased liquidity in credit markets and unstable interest rates. Such companies may have concentrated portfolios, such as a high level of loans to real estate developers, which makes them vulnerable to economic conditions that affect that
industry. Performance of such companies may be affected by competitive pressures and exposure to investments or agreements that, under certain circumstances, may lead to losses (e.g., subprime loans). Companies in the financial services sector are
subject to extensive governmental regulation that may limit the amount and types of loans and other financial commitments they can make, and interest rates and fees that they may charge. In addition, profitability of such companies is largely
dependent upon the availability and the cost of capital.
Value Securities Risk.
Value securities are securities of companies that may have experienced, for example, adverse business, industry or other developments or may be subject to special risks that have caused the securities to be out of favor and, in turn, potentially
undervalued. The market value of a portfolio security may not meet the portfolio manager's perceived value assessment of that security, or may decline in price, even though the portfolio manager(s) believe(s) the securities are already undervalued.
There is also a risk that it may take longer than expected for the value of these investments to rise to the portfolio manager’s perceived value. In addition, value securities, at times, may not perform as well as growth securities or the
stock market in general, and may be out of favor with investors for varying periods of time.
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 bar chart shows how the Fund’s Class A share performance (without sales charges) has varied for each full calendar year shown. If the sales charges were
reflected, returns shown would be lower. Class A shares are offered in a separate prospectus. The table below the bar chart compares the Fund’s returns (after applicable sales charges) for the periods shown with a broad measure of market
performance.
Class R4, Class R5 and Class Y shares of
the Fund did not commence operations prior to the date of this prospectus and, therefore, performance is not yet available. Any share class that does not have available performance would have annual returns substantially similar to those of Class A
shares. Except for differences in annual returns resulting from differences in expenses and sales charges (where applicable), the share classes of the Fund would have substantially similar annual returns because all share classes of the Fund invest
in the same portfolio of securities.
The after-tax
returns shown in the
Average Annual Total Returns
table below are calculated using the highest historical individual U.S. 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 Individual Retirement Accounts (IRAs). The after-tax returns are shown only for Class A shares and will vary for other share classes.
Columbia Large Value Quantitative Fund
Summary of the Fund
(continued)
The Fund’s past performance (before and after taxes) is no
guarantee of how the Fund will perform in the future.
Updated performance information can be obtained by calling toll-free 800.345.6611 or visiting columbiathreadneedle.com/us.
Year
by Year Total Return (%)
as of December 31 Each Year*
|
Best
and Worst Quarterly Returns
During the Period Shown in the Bar Chart
|
|
Best
|
3rd Quarter 2009
|
18.96%
|
Worst
|
1st Quarter 2009
|
-16.74%
|
*
|
Year to Date return as of
March 31, 2015: -0.52%
|
Average Annual Total Returns After Applicable Sales
Charges (for periods ended December 31, 2014)
|
Share
Class
Inception Date
|
1
Year
|
5
Years
|
Life
of Fund
|
Class
A
|
08/01/2008
|
|
|
|
returns
before taxes
|
|
8.61%
|
15.28%
|
7.86%
|
returns
after taxes on distributions
|
|
6.86%
|
12.80%
|
5.75%
|
returns
after taxes on distributions and sale of Fund shares
|
|
5.79%
|
11.86%
|
5.73%
|
Russell
1000 Value Index
(reflects no deductions for fees, expenses or taxes)
|
|
13.45%
|
15.42%
|
9.63%
|
Fund Management
Investment Manager:
Columbia
Management Investment Advisers, LLC
Portfolio
Manager
|
|
Title
|
|
Role
with Fund
|
|
Managed
Fund Since
|
Brian
Condon, CFA
|
|
Senior
Portfolio Manager and Head of Quantitative Strategies
|
|
Co-manager
|
|
2010
|
Peter
Albanese
|
|
Senior
Portfolio Manager
|
|
Co-manager
|
|
August
2014
|
Purchase and Sale of Fund
Shares
You may purchase or redeem shares of the Fund on
any business day by contacting the Fund in the ways described below:
Online
|
|
Regular
Mail
|
|
Express
Mail
|
|
By
Telephone
|
columbiathreadneedle.com/us
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
|
|
Columbia
Funds,
c/o Columbia Management
Investment Services Corp.
30 Dan Road, Suite 8081
Canton, MA 02021-2809
|
|
800.422.3737
|
You may purchase shares and receive
redemption proceeds by electronic funds transfer, by check or by wire. If you maintain your account with a broker-dealer or other financial intermediary, you must contact that financial intermediary to buy, sell or exchange shares of the Fund
through your account with the intermediary.
The minimum
initial investment amounts for the share classes offered by the Fund are shown below:
Columbia Large Value Quantitative Fund
Summary of the Fund
(continued)
Minimum Initial Investment
Class
|
Category
of eligible account
|
For
accounts other than
systematic investment
plan accounts
|
For
systematic investment
plan accounts
|
Classes
R4 and Y
|
All
eligible accounts
|
None
|
N/A
|
Class
R5
|
Combined
underlying accounts of eligible registered investment advisers
|
$100,000
|
N/A
|
Omnibus
retirement plans
|
None
|
N/A
|
There is no minimum additional investment for any share
class.
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, qualified dividend income or capital gains, unless you are investing through a tax-advantaged account, such as a 401(k) plan or an
IRA. If you are investing through a tax-advantaged account, you may be taxed upon withdrawals from that 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 Investment Manager), 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.
Columbia Large Value Quantitative Fund
More Information About the
Fund
Investment Objective
Columbia Large Value Quantitative Fund (the Fund) seeks to
provide shareholders with long-term capital growth. Only shareholders can change the Fund’s investment objective. Because any investment involves risk, there is no assurance the Fund’s objective will be achieved.
Principal Investment Strategies
Under normal market conditions, at least 80% of the
Fund’s net assets (including the amount of any borrowings for investment purposes) are invested in equity securities of companies with market capitalizations greater than $5 billion at the time of purchase or that are within the market
capitalization range of companies in the Russell 1000
®
Value Index (the Index) at the time of purchase. These equity securities
generally include common stocks. The market capitalization range and composition of the companies in the Index are subject to change. As such, the size of the companies in which the Fund invests may change. As long as an investment continues to meet
the Fund’s other investment criteria, the Fund may choose to continue to hold a stock even if the company’s market capitalization grows beyond the market capitalization of the largest company within the Index or falls below the market
capitalization of the smallest company within the Index.
The Fund primarily invests in securities included in the Index
but generally holds fewer stocks than the Index and may hold securities that are not in the Index. The Fund may from time to time emphasize one or more economic sectors in selecting its investments, including the financial services sector.
The Fund may invest in derivatives, such as futures contracts,
for cash equitization and investment flexibility.
In
pursuit of the Fund’s objective, the portfolio managers use quantitative analysis to evaluate the relative attractiveness of potential investments.
Columbia Management Investment Advisers, LLC (the Investment
Manager) considers a variety of factors in identifying investment opportunities and constructing the Fund’s portfolio which may include, among others, the following:
■
|
Valuation factors, such as
earnings and cash flow relative to market values;
|
■
|
Catalyst factors, such as
relative stock price performance, business momentum, and short interest measures; and
|
■
|
Quality factors, such as
quality of earnings and financial strength.
|
The Investment Manager may sell a security when it believes
other stocks in the Index or other investments are more attractive, if the security is believed to be overvalued relative to other potential investments, when the company no longer meets the Investment Manager’s performance expectation, when
the security is removed from the Index, or for other reasons.
The Fund’s investment policy with respect to 80% of its
net assets may be changed by the Board of Trustees without shareholder approval as long as shareholders are given 60 days advance written notice of the change.
Principal Risks
An investment in the Fund involves risk, including those
described below.
There is no assurance that the Fund will achieve its investment objective and you may lose money
. The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV)
and share price may go down.
Active Management Risk.
Although the Fund is managed based primarily on quantitative methods, a qualitative review of the quantitative output is conducted by the portfolio managers. Therefore, the Fund’s performance will reflect, in
part, the ability of the portfolio managers to make active, qualitative decisions, including allocation decisions that seek to achieve the Fund’s investment objective.
Derivatives Risk.
Derivatives
are financial instruments whose value depends on, or is derived from, the value of other underlying assets. Losses involving derivative instruments may be substantial, because a relatively small movement in the price of an underlying security,
instrument, commodity, currency or index may result in a substantial loss for
Columbia Large Value Quantitative Fund
More Information About the
Fund
(continued)
the Fund. In addition to the potential for increased losses, the use of
derivative instruments may lead to increased volatility for the Fund. Derivative investments will typically increase the Fund’s exposure to principal risks to which it is otherwise exposed, and may expose the Fund to additional risks.
Depending on the type and purpose of the Fund’s derivative investments, these risks may include: correlation risk (there may be an imperfect correlation between the hedge and the opposite position, which is related to hedging risk),
counterparty risk (the counterparty to the instrument may not perform or be able to perform in accordance with the terms of the instrument), leverage risk (losses from the derivative instrument may be greater than the amount invested in the
derivative instrument), hedging risk (the risk that a hedging strategy may not eliminate the risk that it is intended to offset, and may offset gains), and/or liquidity risk (it may not be possible for the Fund to liquidate the instrument at an
advantageous time or price), each of which may result in significant losses for the Fund.
Derivatives Risk/Futures Contracts Risk.
The use of futures contracts is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. A futures contract is a sales
contract between a buyer (holding the “long” position) and a seller (holding the “short” position) for an asset with delivery deferred until a future date. The buyer agrees to pay a fixed price at the agreed future date and
the seller agrees to deliver the asset. The seller hopes that the market price on the delivery date is less than the agreed upon price, while the buyer hopes for the contrary. The liquidity of the futures markets depends on participants entering
into offsetting transactions rather than making or taking delivery. To the extent participants decide to make or take delivery, liquidity in the futures market could be reduced. In addition, futures exchanges often impose a maximum permissible price
movement on each futures contract for each trading session. The Fund may be disadvantaged if it is prohibited from executing a trade outside the daily permissible price movement. Moreover, to the extent the Fund engages in futures contracts on
foreign exchanges, such exchanges may not provide the same protection as U.S. exchanges. The loss that the Fund may incur in entering into futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets
are highly volatile and the use of futures may increase the volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract
may result in substantial losses for the Fund. Investments in these instruments involve risks, including counterparty risk (the risk that the counterparty to the instrument may not perform or be able to perform in accordance with the terms of the
instrument), hedging risk (the risk that a hedging strategy may not eliminate the risk that it is intended to offset, and may offset gains) and pricing risk (the risk that the instrument may be difficult to value), each of which may result in
significant losses for the Fund.
Frequent
Trading Risk.
The portfolio managers may actively and frequently trade investments in the Fund's portfolio to carry out its investment strategies. Frequent trading of investments increases the possibility
that the Fund, as relevant, will realize taxable capital gains (including short-term capital gains, which are generally taxable to shareholders 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. The trading costs and tax effects associated with portfolio turnover may adversely affect the
Fund’s performance.
Issuer Risk.
An issuer in which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may
be caused by poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or
factors.
Market Risk.
Market risk refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. Security values may fall or fail
to rise because of a variety of actual or perceived factors affecting an issuer (e.g., an unfavorable earnings report), the industry or sector in which it operates, or the market as a whole, which may reduce the value of an investment in the Fund.
Accordingly, an investment in the Fund could lose money over short or long periods. The market values of the securities the Fund holds 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. Although equity securities generally tend
Columbia Large Value Quantitative Fund
More Information About the
Fund
(continued)
to have greater price volatility than debt securities, under certain market
conditions, debt securities may have comparable or greater price volatility. In addition, stock prices may be sensitive to rising interest rates, as the cost of capital rises and borrowing costs increase.
Quantitative Model Risk.
The
Fund may use quantitative methods to select investments. Securities or other investments selected using quantitative methods may perform differently from the market as a whole or from their expected performance for many reasons, including factors
used in building the quantitative analytical framework, the weights placed on each factor, and changing sources of market returns, among others. Any errors or imperfections in the Fund portfolio manager’s quantitative analyses or models, or in
the data on which they are based, could adversely affect the portfolio manager’s effective use of such analyses or models, which in turn could adversely affect the Fund’s performance. It is not possible or practicable for a manager to
factor all relevant, available data into quantitative model forecasts and/or trading decisions. Quantitative managers will use their discretion to determine what data to gather with respect to an investment strategy and what data the models will
take into account to produce forecasts that may have an impact on ultimate trading decisions. Shareholders should be aware that there is no guarantee that a quantitative manager will use any specific data or type of data in making trading decisions
on behalf of the Fund, nor is there any guarantee that the data actually utilized in generating forecasts or making trading decisions on behalf of the Fund will be the most accurate data available or free from errors. There can be no assurance that
these methodologies will enable the Fund to achieve its objective.
Sector Risk.
At times, the
Fund may have a significant portion of its assets invested in securities of companies conducting business in a related group of industries within an economic sector, including the financial services sector. Companies in the same economic
sector may be similarly affected by economic, regulatory, political or market events or conditions, which may make the Fund more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly. Generally, the
more broadly the Fund invests, the more it spreads risk and potentially reduces the risks of loss and volatility.
The Fund may be more susceptible to the particular risks that
may affect companies in the financial services sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the financial services sector are subject to certain risks, including the risk of regulatory change,
decreased liquidity in credit markets and unstable interest rates. Such companies may have concentrated portfolios, such as a high level of loans to real estate developers, which makes them vulnerable to economic conditions that affect that
industry. Performance of such companies may be affected by competitive pressures and exposure to investments or agreements that, under certain circumstances, may lead to losses (e.g., subprime loans). Companies in the financial services sector are
subject to extensive governmental regulation that may limit the amount and types of loans and other financial commitments they can make, and interest rates and fees that they may charge. In addition, profitability of such companies is largely
dependent upon the availability and the cost of capital.
Value Securities Risk.
Value securities are securities of companies that may have experienced, for example, adverse business, industry or other developments or may be subject to special risks that have caused the securities to be out of favor and, in turn, potentially
undervalued. The market value of a portfolio security may not meet the portfolio manager's perceived value assessment of that security, or may decline in price, even though the portfolio manager(s) believe(s) the securities are already undervalued.
There is also a risk that it may take longer than expected for the value of these investments to rise to the portfolio manager’s perceived value. In addition, value securities, at times, may not perform as well as growth securities or the
stock market in general, and may be out of favor with investors for varying periods of time.
Additional Investment Strategies and Policies
This section describes certain investment strategies and
policies that the Fund may utilize in pursuit of its investment objective and some additional factors and risks involved with investing in the Fund.
Investment Guidelines
As a general matter, and except as specifically described in
the discussion of the Fund's principal investment strategies in this prospectus or as otherwise required by the Investment Company Act of 1940, as amended (the 1940 Act), the rules and regulations thereunder and any applicable exemptive relief,
whenever an investment policy
Columbia Large Value Quantitative Fund
More Information About the
Fund
(continued)
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 investment in the security or asset.
Holding Other Kinds of Investments
The Fund may hold investments that are not part of its
principal investment strategies. These investments and their risks are described below and/or 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.
Information on the Fund’s holdings can be found in the Fund’s shareholder reports or by visiting columbiathreadneedle.com/us.
Transactions in Derivatives
The Fund may enter into derivative transactions or otherwise
have exposure to derivative transactions through underlying investments. 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 the London Interbank Offered Rate (commonly known as LIBOR)) or market indices (such as the Standard & Poor's (S&P)
500
®
Index). The use of derivatives is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities
transactions. 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 directly. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility in
the value of the derivative and/or the Fund’s shares, 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. U.S. federal legislation has been enacted that provides for new clearing, margin, reporting and
registration requirements for participants in the derivatives market. These changes could restrict and/or impose significant costs or other burdens upon the Fund’s participation in derivatives transactions. For more information on the risks of
derivative investments and strategies, see the SAI.
Investing in Affiliated Funds
The Investment Manager or an affiliate serves as investment
adviser to mutual funds using the Columbia brand (Columbia Funds), including those that are structured as “fund-of-funds”, and provides asset-allocation services to (i) shareholders by investing in shares of other Columbia
Funds, which may include the Fund (collectively referred to in this section as Underlying Funds), and (ii) discretionary managed accounts (collectively referred to as affiliated products) that invest exclusively in Underlying Funds. These
affiliated products, individually or collectively, may own a significant percentage of the outstanding shares of one or more Underlying Funds, and the Investment Manager seeks to balance potential conflicts of interest between the affiliated
products and the Underlying Funds in which they invest. The affiliated products’ investment in the Underlying Funds may have the effect of creating economies of scale, possibly resulting in lower expense ratios for the Underlying Funds,
because the affiliated products may own substantial portions of the shares of Underlying Funds. However, redemption of Underlying Fund shares by one or more affiliated products could cause the expense ratio of an Underlying Fund to increase, as its
fixed costs would be spread over a smaller asset base. Because of large positions of certain affiliated products, the Underlying Funds may experience relatively large inflows and outflows of cash due to affiliated products’ purchases and sales
of Underlying Fund shares. Although the Investment Manager or its affiliate may seek to minimize the impact of these transactions where possible, for example, by structuring them over a reasonable period of time or through other measures, Underlying
Funds may experience increased expenses as they buy and sell portfolio securities to manage the cash
Columbia Large Value Quantitative Fund
More Information About the
Fund
(continued)
flow effect related to these transactions. Further, when the Investment
Manager or its affiliate structures transactions over a reasonable period of time in order to manage the potential impact of the buy and sell decisions for the affiliated products, those affiliated products, including funds-of-funds, may pay more or
less (for purchase activity), or receive more or less (for redemption activity), for shares of the Underlying Funds than if the transactions were executed in one transaction. In addition, substantial redemptions by affiliated products within a short
period of time could require the Underlying Fund to liquidate positions more rapidly than would otherwise be desirable, which may have the effect of reducing or eliminating potential gain or causing it to realize a loss. Substantial redemptions may
also adversely affect the ability of the Underlying Fund to implement its investment strategy. The Investment Manager or its affiliate also has an economic conflict of interest in determining the allocation of affiliated products’ assets among
the Underlying Funds, as it earns different fees from the various Underlying Funds.
Investing in Money Market Funds
The Fund may invest cash in, or hold as collateral for certain
investments, shares of registered or unregistered money market funds, including funds advised by the Investment Manager or its affiliates. These funds are not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency. 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.
Lending of Portfolio Securities
The Fund may lend portfolio securities to 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 currently does not participate in the securities
lending program but the Board of Trustees (the Board) may determine to renew participation in the future. For more information on lending of portfolio securities and the risks involved, see the Fund’s SAI and its annual and semiannual reports
to shareholders.
Investing Defensively
The Fund may from time to time take temporary defensive
investment positions that may be inconsistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, social or other conditions, including, without limitation, investing some or all of
its assets in money market instruments or shares of affiliated or unaffiliated money market funds or holding some or all of its assets in cash or cash equivalents. The Fund may take such defensive investment positions for as long a period as deemed
necessary.
The Fund may not achieve its investment
objective while it is investing defensively. Investing defensively may adversely affect Fund performance. During these times, the portfolio managers may make frequent portfolio holding changes, which could result in increased trading
expenses and taxes, and decreased Fund performance. See also
Investing in Money Market Funds
above for more information.
Other Strategic and Investment Measures
The Fund may also from time to time take temporary portfolio
positions that may or may not be consistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, social or other conditions, including, without limitation, investing in derivatives,
such as futures (e.g., index futures) or options on futures, for various purposes, including among others, investing in particular derivatives to achieve indirect investment exposures to a sector, country or region where the Investment Manager
believes such positioning is appropriate. The Fund may take such portfolio positions for as long a period as deemed necessary. While the Fund is so positioned, derivatives could comprise a substantial portion of the Fund’s investments and the
Fund may not achieve its investment objective. Investing in this manner may adversely affect Fund performance. During these times, the portfolio managers may make frequent portfolio holding changes, which could result in increased trading
expenses and taxes, and decreased Fund performance. For information on the risks of investing in derivatives, see
Transactions in Derivatives
above.
Columbia Large Value Quantitative Fund
More Information About the
Fund
(continued)
Portfolio Holdings Disclosure
The Board has adopted policies and procedures that govern the
timing and circumstances of disclosure to shareholders and third parties of information regarding the securities owned by the Fund. A description of these policies and procedures is included in the SAI. Fund policy generally permits the disclosure
of portfolio holdings information on the Fund's website (columbiathreadneedle.com/us) only after a certain amount of time has passed, as described in the SAI.
Purchases and sales of portfolio securities can take place at
any time, so the portfolio holdings information available on the Fund's website may not always be current.
Portfolio Holdings Versus the
Benchmarks
The Fund does not limit
its investments to the securities within its benchmark(s), and accordingly the Fund's holdings may diverge significantly from those of its benchmark(s). In addition, the Fund may invest in securities outside any industry and geographic sectors
represented in its benchmark(s). The Fund's weightings in individual securities, and in industry and geographic sectors, may also vary considerably from those of its benchmark(s).
Mailings to Households
In order to reduce shareholder expenses, the Fund may, if
prior consent has been provided, mail only one copy of the Fund’s prospectus and each annual and semiannual report to those addresses shared by two or more accounts. If you wish to receive separate copies of these documents, call 800.345.6611
or, if your shares are held through a financial intermediary, contact your intermediary directly.
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 shareholders redeeming Fund shares could require the Fund to sell portfolio securities at less than opportune times or to
hold ready reserves of uninvested cash in amounts larger than might otherwise be the case to meet shareholder redemptions. Either situation could adversely impact the Fund’s performance.
Understanding Annual Fund Operating Expenses
The Fund’s annual operating expenses, as presented in
the
Annual Fund Operating Expenses
table in the
Fees and Expenses of the Fund
section of this prospectus, generally are based on expenses incurred during the
Fund’s most recently completed fiscal year and are expressed as a percentage (expense ratio) of the Fund’s average net assets during that fiscal year. The expense ratios for Class R4, Class R5 and Class
Y shares are based on estimated amounts for the Fund’s current fiscal year. The expense ratios reflect the Fund’s fee arrangements as of the date of this prospectus and, unless indicated otherwise, are based on expenses
incurred during the Fund’s most recent fiscal year. The Fund’s assets will fluctuate, but no adjustments have been or will be made to the expense ratios to reflect any differences in the Fund’s average net assets between the most
recently completed fiscal year and the date of this prospectus or a later date. In general, the Fund’s expense ratios will increase as its net assets decrease, such that the Fund’s actual expense ratios may be higher than the expense
ratios presented in the
Annual Fund Operating Expenses
table if assets fall. Any commitment by the Investment Manager and/or its affiliates to waive fees and/or cap (reimburse) expenses is expected, in part,
to limit the impact of any increase in the Fund’s operating expense ratios that would otherwise result because of a decrease in the Fund’s assets in the current fiscal year. The Fund’s annual operating expenses are comprised of (i)
investment management fees, (ii) distribution and/or service fees, and (iii) other expenses. Management fees do not vary by class, but distribution and/or service fees and other expenses may vary by class.
Columbia Large Value Quantitative Fund
More Information About the
Fund
(continued)
Other Expenses
“Other expenses” consist of the
fees the Fund pays to its administrator, custodian, transfer agent, auditors, lawyers and trustees, costs relating to compliance and miscellaneous expenses. Generally, these expenses are the same for each share class and are allocated on a pro rata
basis across all share classes. Transfer agent fees and certain shareholder servicing fees, however, are class specific. They differ by share class because the shareholder services provided to each share class may be different. Accordingly, the
differences in “other expenses” among share classes are primarily the result of the different transfer agent and shareholder servicing fees applicable to each share class. For more information on these fees, see
Choosing a Share Class — Selling Agent Compensation.
Fee Waiver/Expense Reimbursement Arrangements and Impact on
Past Performance
The Investment Manager and certain of
its affiliates have voluntarily agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below), so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any
balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the annual rates of:
Columbia
Large Value Quantitative Fund
|
Class
R4
|
0.93%
|
Class
R5
|
0.83%
|
Class
Y
|
0.78%
|
Under the arrangement, the
following fees and expenses are excluded from the Fund’s operating expenses when calculating the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including foreign transaction taxes), expenses
associated with investment in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program, dividend
expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest and extraordinary expenses. This arrangement may be revised or discontinued at any
time.
Effect of Fee Waivers and/or Expense Reimbursements
on Past Performance.
The Fund’s returns shown in the
Performance Information
section of this prospectus
reflect the effect of any fee waivers and/or reimbursements of Fund expenses by the Investment Manager and/or any of its affiliates that were in place during the performance period shown. Without such fee waivers/expense reimbursements, the
Fund’s returns might have been lower.
Primary
Service Providers
The Investment Manager, which also
serves as the Fund’s administrator (the Administrator), the Distributor and the Transfer Agent are all affiliates of Ameriprise Financial, Inc. (Ameriprise Financial). They and their affiliates currently provide key services, including
investment advisory, administration, distribution, shareholder servicing and transfer agency services, to the Fund and various other funds, including the Columbia Funds, and are paid for providing these services. These service relationships are
described below.
The Investment Manager
Columbia Management Investment Advisers, LLC is located at 225
Franklin Street, Boston, MA 02110 and serves as investment adviser to the Columbia Funds. The Investment Manager is a registered investment adviser and a wholly-owned subsidiary of Ameriprise Financial. The Investment Manager’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 traditional mutual funds, exchange-traded funds and closed-end funds,
the Investment Manager acts as an investment adviser for itself, its affiliates, individuals, corporations, retirement plans, private investment companies and financial intermediaries.
Columbia Large Value Quantitative Fund
More Information About the
Fund
(continued)
Subject to oversight by the Board, the Investment Manager
manages the day-to-day operations of the Fund, determining what securities and other investments the Fund should buy or sell and executing portfolio transactions. The Investment Manager may use the research and other capabilities of its affiliates
and third parties in managing the Fund’s investments.
The SEC has issued an order that permits the Investment
Manager, 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 Investment Manager 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 Investment Manager does not consider any other relationship it or its affiliates may have with a subadviser, and the Investment Manager discloses to the Board the nature of any material relationships it has with
a subadviser or its affiliates. At present, the Investment Manager has not engaged any investment subadviser for the Fund.
The Fund pays the Investment Manager 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 the Investment Manager by the Fund amounted to
0.68% of average daily net assets of the Fund. A discussion regarding the basis for the Board approving the renewal of the Fund's investment management services agreement with the Investment Manager is available in the Fund’s annual report to
shareholders for the fiscal year ended July 31, 2014.
Portfolio Managers
Information about the portfolio managers primarily responsible
for overseeing the Fund’s investments is shown below. The SAI provides additional information about the portfolio managers, including information relating to compensation, other accounts managed by the portfolio managers and ownership by the
portfolio managers of Fund shares.
Portfolio
Manager
|
|
Title
|
|
Role
with Fund
|
|
Managed
Fund Since
|
Brian
Condon, CFA
|
|
Senior
Portfolio Manager and Head of Quantitative Strategies
|
|
Co-manager
|
|
2010
|
Peter
Albanese
|
|
Senior
Portfolio Manager
|
|
Co-manager
|
|
August
2014
|
Mr. Condon
joined the Investment Manager in May 2010 when it acquired the long-term asset management business of Columbia Management Group, where he was a portfolio manager since 1999. Mr. Condon began his investment career in
1993 and earned a B.A. from Bryant University and an M.S. in finance from Bentley University.
Mr. Albanese
joined the
Investment Manager in August 2014. Prior to joining the Investment Manager, Mr. Albanese was a Managing Director and Senior Portfolio Manager at Robeco Investment Management. Mr. Albanese began his investment career in 1991 and earned a B.S. from
Stony Brook University and an M.B.A. from the Stern School of Business at New York University.
The Administrator
Columbia Management Investment Advisers, LLC 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 related clerical and administrative services. The
Fund pays the Administrator a fee (plus certain out-of-pocket expenses) for the administrative services it provides to the Fund.
Columbia Large Value Quantitative Fund
More Information About the
Fund
(continued)
The Distributor
Shares of the Fund are distributed by Columbia Management
Investment Distributors, Inc., which is located at 225 Franklin Street, Boston, MA 02110. 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
Columbia Management Investment Services Corp. is a registered
transfer agent and wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent is located at 225 Franklin Street, Boston, MA 02110, and its responsibilities include processing purchases, redemptions and exchanges of Fund shares, calculating
and paying distributions, maintaining shareholder records, preparing account statements and providing customer service. The Transfer Agent has engaged DST Systems, Inc., including its affiliate, Boston Financial Data Services, to provide various
shareholder services. In addition, the Transfer Agent enters into agreements with various financial intermediaries through which you may hold Fund shares, pursuant to which the Transfer Agent pays these financial intermediaries for providing certain
shareholder services. The Fund generally pays the Transfer Agent a per account fee, pays a fee based on the assets invested through omnibus accounts and reimburses the Transfer Agent for certain out-of-pocket expenses.
Other Roles and Relationships of Ameriprise Financial and its
Affiliates — Certain Conflicts of Interest
The
Investment Manager, Distributor and Transfer Agent, all affiliates of Ameriprise Financial, provide various services to the Fund and other Columbia 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 Investment Manager 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 Investment Manager, 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 Investment Manager 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 Investment Manager 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 Investment Manager and other Ameriprise Financial affiliates;
|
■
|
regulatory and other
investment restrictions on investment activities of the Investment Manager 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 Investment Manager, and a Columbia Fund.
|
Columbia Large Value Quantitative Fund
More Information About the
Fund
(continued)
The Investment Manager 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 Management and Other Services — Other Roles and Relationships of Ameriprise Financial and its Affiliates —
Certain Conflicts of Interest
section of the SAI. 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 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. 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 quarterly (10-Q), annual (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 sec.gov.
Columbia Large Value Quantitative Fund
The
Funds
The Columbia Funds (referred to as the Funds)
generally share the same policies and procedures for investor services, as described below. Each Fund is a series of Columbia Funds Series Trust (CFST), Columbia Funds Series Trust I (CFST I) or Columbia Funds Series Trust II (CFST II), and certain
features of distribution and/or service plans may differ among these trusts. The Fund offered by this prospectus is a series of CFST II. Columbia Funds with names that include the words “Tax-Exempt”, “Municipal”, or
“Muni” (the Tax-Exempt Funds) have certain policies that differ from other Columbia Funds (the Taxable Funds). The Fund offered by this prospectus is a Taxable Fund.
Funds Contact Information
Additional information about the Funds can be obtained at
columbiathreadneedle.com/us,* by calling toll-free 800.345.6611, or by writing (regular mail) to Columbia Management Investment Services Corp., P.O. Box 8081, Boston, MA 02266-8081 or (express mail) Columbia Management Investment Services Corp., c/o
Boston Financial, 30 Dan Road, Suite 8081, Canton, MA 02021-2809.
*
|
The website references in this
prospectus are inactive links and information contained in or otherwise accessible through the referenced websites does not form a part of this prospectus.
|
Selling and/or Servicing Agents
The terms “selling agent” and
“servicing agent” (collectively, selling agents) refer to the financial intermediaries that are authorized to sell shares of the Funds. Selling agents include broker-dealers and financial advisors as well as firms that employ such
broker-dealers and financial advisors, including, for example, brokerage firms, banks, investment advisers, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.
Omnibus Accounts
The term “omnibus account”
refers to a selling agent’s account with the Fund (through the Transfer Agent) that represents the combined holdings of, and transactions in, Fund shares of one or more clients of the selling agent (beneficial shareholders). Omnibus accounts
are held in the name of the selling agents and not in the name of the beneficial shareholders invested in the Fund through omnibus accounts.
Retirement Plans and Omnibus Retirement
Plans
The term “retirement
plan” refers to retirement plans created under sections 401(a), 401(k), 457 and 403(b) of the Internal Revenue Code of 1986, as amended (the Code), non-qualified deferred compensation plans governed by section 409A of the Code and similar
plans, but does not refer to individual retirement plans. The term “omnibus retirement plan” refers to a retirement plan that has a plan-level or omnibus account with the Transfer Agent.
Summary of Share Class Features
Each share class has its own investment eligibility criteria,
cost structure and other features. You may not be eligible for every share class. If you purchase shares of a Fund through a retirement plan or other product or program offered by your selling agent, not all share classes of the Fund may be made
available to you. When deciding which class of shares to buy, you should consider, among other things:
■
|
The amount you plan to
invest.
|
■
|
How long you intend to
remain invested in the Fund.
|
■
|
The expenses for each share
class.
|
■
|
Whether you may be eligible
for a reduction or waiver of sales charges when you buy or sell shares.
|
Each investor's personal situation is different and you may
wish to discuss with your selling agent which share classes are available to you and which share class is appropriate for you.
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
The following summarizes the primary features of Class A,
Class B, Class C, Class I, Class K, Class R, Class R4, Class R5, Class T, Class W, Class Y and Class Z shares.
Not all Funds offer every class of shares. The Fund offers the
class(es) of shares set forth on the cover of this prospectus and may offer other share classes through a separate prospectus. Although certain share classes are generally closed to new or existing investors, information relating to these share
classes is included in the table below because certain qualifying purchase orders are permitted, as described below.
Share Class Features
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
A
|
Eligibility:
Available to the general public for investment
Minimum Initial Investment:
$2,000 for most investors
|
Taxable
Funds:
5.75% maximum, declining to 0.00% on investments of $1 million or more
Tax-Exempt Funds:
3.00% maximum, declining to 0.00% on
investments of $500,000 or more
(e)
None for Columbia Money Market Fund and certain other
Funds
(e)
|
Taxable
Funds:
CDSC on certain investments of between $1 million and $50 million redeemed within 18 months after purchase charged as follows:
• 1.00% CDSC if redeemed within 12
months after purchase and
• 0.50% CDSC if redeemed more than 12, but less than 18, months after purchase
(e)
Tax-Exempt Funds:
Maximum CDSC of 0.75% on certain investments of $500,000 or more redeemed within 12 months after purchase. The CDSC on shares purchased prior to February
19, 2015 differs
(e)
|
Distribution
and Service
Fees:
up to 0.25%
|
Class
B
|
Eligibility:
Closed to new investors
(f)
Note:
Class B shares convert to Class A shares
generally eight years after purchase
(g)
Minimum Initial Investment:
N/A
|
None
|
5.00%
maximum, gradually declining to 0.00% after six years
(g)
|
Distribution
Fee:
0.75%
Service Fee:
0.25%
|
Class
C
|
Eligibility:
Available to the general public for investment
Minimum Initial Investment:
$2,000 for most investors
Purchase Order Limit for Tax-Exempt Funds:
$499,999
(h)
, none for omnibus retirement plans
Purchase Order Limit for Taxable Funds:
$999,999
(h)
; none for omnibus retirement plans
|
None
|
1.00%
on certain investments redeemed within one year of purchase
|
Distribution
Fee:
0.75%
Service Fee:
0.25%
|
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
I
|
Eligibility:
Available only to other Columbia Funds (i.e., fund-of-fund investments)
Minimum Initial Investment:
None
|
None
|
None
|
None
|
Class
K
|
Eligibility:
Closed to new investors; available only to qualified employee benefit plans, trust companies or similar institutions, 501(c)(3) charitable organizations, non-qualified deferred compensation plans whose participants
are included in a qualified employee benefit plan described above, 529 plans, and health savings accounts
(f)
Minimum Initial Investment:
N/A
|
None
|
None
|
Plan
Administration Services Fee:
0.25%
|
Class
R
|
Eligibility:
Available only to eligible retirement plans, health savings accounts and, in the sole discretion of the Distributor, other types of retirement accounts held through platforms maintained by selling agents approved by
the Distributor
Minimum Initial Investment:
None
|
None
|
None
|
Series
of CFST & CFST I:
distribution fee of 0.50%
Series of CFST II:
distribution and service fee of 0.50%, of which the service fee may
be up to 0.25%
|
Class
R4
|
Eligibility:
Available only to (i) omnibus retirement plans, (ii) trust companies or similar institutions, (iii) broker-dealers, banks, trust companies and similar institutions that clear Fund share transactions for their client
or customer investment advisory or similar accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R4 eligibility apart
from selling, servicing or similar agreements, (iv) 501(c)(3) charitable organizations, (v) 529 plans and (vi) health savings accounts
Minimum Initial Investment:
None
|
None
|
None
|
None
|
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
R5
|
Eligibility:
Available only to (i) certain registered investment advisers that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that
have been granted specific written authorization from the Transfer Agent with respect to Class R5 eligibility apart from selling, servicing or similar agreements and (ii) omnibus retirement
plans
(f)
Minimum Initial Investment:
None for omnibus retirement plans; $100,000 for combined underlying
accounts of eligible registered investment advisers
|
None
|
None
|
None
|
Class
T
|
Eligibility:
Generally closed to new investors
(f)
Minimum Initial Investment:
N/A
|
5.75%
maximum, declining to 0.00% on investments of $1 million or more
|
CDSC
on certain investments of between $1 million and $50 million redeemed within 18 months after purchase, charged as follows:
• 1.00% CDSC if redeemed within 12 months after purchase
and
• 0.50% CDSC if redeemed more than 12, but less than 18, months after purchase
|
Service
Fee:
up to 0.50%
|
Class
W
|
Eligibility:
Available only to investors purchasing through certain authorized investment programs managed by investment professionals, including discretionary managed account programs
Minimum Initial Investment:
$500
|
None
|
None
|
Distribution
and Service Fees:
0.25%
|
Class
Y
|
Eligibility:
Available only to retirement plans that maintain plan-level or omnibus accounts with the Fund
(f)
Minimum
Initial Investment:
None
|
None
|
None
|
None
|
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
Share
Class
|
Eligible
Investors
(a)
;
Minimum Initial Investments
(b)
|
Front-End
Sales Charges
(c)
|
Contingent
Deferred
Sales Charges
(CDSCs)
(c)
|
Maximum
Distribution
and/or Service Fees
(d)
|
Class
Z
|
Eligibility:
Available only to certain eligible investors, which are subject to different minimum investment requirements, ranging from $0 to $2,000; effective March 29, 2013, closed to (i) accounts of selling agents that clear
Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been given specific written notice from the Transfer Agent of the termination of their eligibility for
new purchases of Class Z shares and (ii) omnibus retirement plans, subject to certain exceptions
(f)
Minimum Initial Investment:
See
Eligibility
above
|
None
|
None
|
None
|
(a)
|
For Columbia Money Market Fund,
new investments must be made in Class A, Class I, Class W or Class Z shares, subject to eligibility. Class C and Class R shares of Columbia Money Market Fund are available as a new investment only to investors in the Distributor's proprietary 401(k)
products, provided that such investor is eligible to invest in the class and transact directly with the Fund or the Transfer Agent through a third party administrator or third party recordkeeper. Columbia Money Market Fund offers other classes of
shares only to facilitate exchanges with other Funds offering such share classes.
|
(b)
|
The minimum initial investment
requirement is $5,000 for Columbia Floating Rate Fund and Columbia Inflation Protected Securities Fund, and $10,000 for Columbia Absolute Return Currency and Income Fund. See
Buying, Selling and Exchanging Shares
— Buying Shares
for more details on the eligible investors and minimum initial investment requirements. Certain share classes are subject to minimum account balance requirements, as described in
Buying,
Selling and Exchanging Shares — Transaction Rules and Policies.
|
(c)
|
Actual front-end sales charges
and CDSCs vary among the Funds. For more information on applicable sales charges, see
Choosing a Share Class — Sales Charges and Commissions
and for information about certain exceptions to these sales
charges, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
|
(d)
|
These are the maximum
applicable distribution and/or service fees. Fee rates and fee components (i.e., the portion of a combined fee that is a distribution or service fee) may vary among Funds. Because these fees are paid out of Fund assets on an ongoing basis, over time
these fees will increase the cost of your investment and may cost you more than paying other types of distribution and/or shareholder service fees. Although Class A shares of certain series of CFST I are subject to a combined distribution and
service fee of up to 0.35%, these Funds currently limit the combined fee to 0.25%. Columbia Money Market Fund pays a distribution and service fee of up to 0.10% on Class A shares, up to 0.75% distribution fee and up to 0.10% service fee on Class B
shares, up to 0.75% distribution fee on Class C shares, and 0.10% distribution and service fees on Class W shares. Columbia AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund pay a service fee of up
to 0.20% on Class A, Class B and Class C shares. Columbia AMT-Free Intermediate Muni Bond Fund pays a distribution fee of up to 0.65% on Class B and Class C shares. For more information on distribution and service fees, see
Choosing a Share Class — Distribution and Service Fees.
|
(e)
|
For Columbia Short Term
Municipal Bond Fund, a CDSC of 0.50% is charged on certain investments of $500,000 or more redeemed within 12 months after purchase. The following Funds are not subject to a front-end sales charge or a CDSC on Class A shares: Columbia Money Market
Fund, Columbia Large Cap Index Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Index Fund, Columbia Small Cap Index Fund and Columbia U.S. Treasury Index Fund. Investments in Class A shares of Tax-Exempt Funds made prior to February
19, 2015 of between $1 million and $50 million are subject to a CDSC of 1.00% if redeemed within 12 months after purchase and 0.50% if redeemed more than 12, but less than 18, months after purchase.
|
(f)
|
These share classes are closed
to new accounts, or closed to previously eligible investors, subject to certain conditions, as summarized below and described in more detail under
Buying, Selling and Exchanging Shares — Buying Shares —
Eligible Investors:
|
•
Class B Shares
. The Funds no longer accept investments from new or existing investors in Class B shares, except through reinvestment of dividend and/or capital gain distributions by existing Class B shareholders,
or a permitted exchange.
•
Class K Shares
. Shareholders who opened and funded a Class K account with a Fund as of the close of business on December 31, 2010 may continue to make additional purchases of such share class, and existing Class K
accounts may continue to allow new investors or participants to be established in their Fund account.
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
•
Class R5 Shares
. Shareholders with Class R5 accounts funded before November 8, 2012 who do not satisfy the current eligibility criteria for Class R5 shares may not establish new Class R5 accounts but may continue
to make additional purchases of Class R5 shares in existing accounts. In addition, investment advisory programs and similar programs that opened a Class R5 account as of May 1, 2010 and continuously hold Class R5 shares in such account after such
date, may generally not only continue to make additional purchases of Class R5 shares but also open new Class R5 accounts for such pre-existing programs and add new shareholders in the program.
•
Class T Shares.
Shareholders
with Class T accounts who received, and have continuously held, Class T shares in connection with the merger of certain Galaxy funds into certain
Funds that were then named Liberty funds may continue to make additional purchases of such share class.
•
Class Y Shares
. Shareholders with Class Y accounts funded before November 8, 2012 who do not satisfy the current eligibility criteria for Class Y shares may not establish new accounts for such share class but may
continue to make additional purchases of Class Y shares in existing accounts.
•
Class Z Shares
. Effective March 29, 2013, selling agents that clear Fund share transactions through designated selling agents and their mutual fund trading platforms that have been given specific written notice
from the Transfer Agent of the termination of their eligibility for new purchases of Class Z shares and omnibus retirement plans are no longer permitted to establish new Class Z accounts, subject to certain exceptions. Omnibus retirement plans that
opened and, subject to exceptions, funded a Class Z account as of close of business on March 28, 2013 and continuously hold Class Z shares in such account after such date, may generally continue to make additional purchases of Class Z shares, open
new Class Z accounts and add new participants. In certain circumstances and in the sole discretion of the Distributor, omnibus retirement plans affiliated with a grandfathered plan may also open new Class Z accounts. Accounts of selling agents
(other than omnibus retirement plans) that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms are not permitted to establish new Class Z accounts or make
additional purchases of Class Z shares (other than through reinvestment of distributions).
(g)
|
Timing of conversion and CDSC
schedules will vary depending on the Fund and the date of your original purchase of Class B shares. For more information on the conversion of Class B shares to Class A shares, see
Choosing a Share Class — Sales
Charges and Commissions.
Class B shares of Columbia Short Term Municipal Bond Fund do not charge a CDSC and do not convert to Class A shares.
|
(h)
|
If you are eligible to invest
in Class A shares without a front-end sales charge, you should discuss your options with your selling agent. For more information, see
Choosing a Share Class – Reductions/Waivers of Sales Charges.
|
Sales Charges and Commissions
Sales charges, commissions and distribution and service fees
(discussed in a separate sub-section below) compensate selling agents (typically your financial advisor) for selling shares to you and for maintaining and servicing the shares held in your account with them. These charges, commissions and fees are
intended to provide incentives for selling agents to provide such 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 CDSC
and/or over time in the form of increased ongoing fees.
Whether the ultimate cost is higher for one class over another
depends on the amount you invest, how long you hold your shares and whether you are eligible for reduced or waived sales charges. The differential between classes also will vary depending on the actual investment return for any given investment
period. You are responsible for choosing the share class most appropriate for you after taking into account your share class eligibility and the value of accounts that you are eligible to include for the right of accumulation, which may reduce
or eliminate otherwise applicable sales charges. See
Choosing a Share Class – Reductions/Waivers of Sales Charges
. We encourage you to consult with a financial advisor who can help you with your
investment decisions.
Class A Shares — Front-End
Sales Charge
You'll pay a front-end sales charge when
you buy Class A shares (other than shares of Columbia Money Market Fund and certain other Funds), resulting in a smaller dollar amount being invested in a Fund than the purchase price you pay, unless you qualify for a waiver of the sales charge
or you buy the shares through reinvested distributions. For more information, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
The Distributor receives the sales charge and re-allows (or
pays) a portion of the sales charge to the selling agent through which you purchased the shares. The Distributor retains the balance of the sales charge. The Distributor retains the full sales charge you pay when you purchase shares of the Fund
directly from the Fund (through the Transfer Agent, rather than through a selling agent). Sales charges vary depending on the amount of your purchase.
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
Front-End Sales Charge Calculation
The table below presents the front-end
sales charge as a percentage of both the offering price and the net amount invested.
■
|
The net asset value (or NAV)
per share is the price of a share calculated by the Fund every business day.
|
■
|
The
offering price per share is the NAV per share plus any front-end sales charge that applies.
|
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 for the Fund) and the NAV 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 any other accounts eligible for aggregation of which you or your selling agent notifies the Fund) and base the sales charge on the aggregate amount. See
Choosing a Share Class — Reductions/Waivers of Sales Charges
for a discussion of account value aggregation. There is no initial sales charge on reinvested dividend or capital gain distributions.
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 (and any other accounts eligible for aggregation of which you or your selling agent notifies the Fund).
|
Class
A Shares — Front-End Sales Charge — Breakpoint Schedule*
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Equity
Funds,
Columbia Adaptive Alternatives Fund,
Columbia Adaptive Risk Allocation Fund,
Columbia Commodity Strategy Fund,
Columbia Diversified Absolute Return Fund
and Funds-of-Funds (equity)*
|
$
0–$49,999
|
5.75%
|
6.10%
|
5.00%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
3.00%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.15%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Fixed
Income Funds (except those listed below),
Columbia Multi-Asset Income Fund
and Funds-of-Funds (fixed income)*
|
$
0-$49,999
|
4.75%
|
4.99%
|
4.00%
|
$
50,000–$99,999
|
4.25%
|
4.44%
|
3.50%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
3.00%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.15%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Tax-Exempt
Funds (other than Columbia Short Term Municipal Bond Fund)
|
$
0-$99,999
|
3.00%
|
3.09%
|
2.50%
|
$100,000–$249,999
|
2.50%
|
2.56%
|
2.15%
|
$250,000–$499,999
|
1.50
%
|
1.53%
|
1.25%
|
$
500,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
Class
A Shares — Front-End Sales Charge — Breakpoint Schedule*
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Columbia
Absolute Return Currency and Income Fund,
Columbia Floating Rate Fund,
Columbia Inflation Protected Securities Fund,
Columbia Intermediate Bond Fund,
Columbia Limited Duration Credit Fund,
Columbia Mortgage Opportunities
Fund,
Columbia U.S. Government Mortgage Fund and
Columbia U.S. Social Bond Fund
|
$
0-$99,999
|
3.00%
|
3.09%
|
2.50%
|
$100,000–$249,999
|
2.50%
|
2.56%
|
2.15%
|
$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%
|
0.00%
(c)
|
|
|
|
|
|
Columbia
Short Term Bond Fund
|
$
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%
|
0.00%
(c)
|
|
|
|
|
|
Columbia
Short Term Municipal Bond Fund
|
$
0-$99,999
|
0.75%
|
0.76%
|
0.50%
|
$250,000–$499,999
|
0.50%
|
0.50%
|
0.40%
|
$
500,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
*
|
The following Funds are not
subject to a front-end sales charge or CDSC on Class A shares: Columbia Money Market Fund, Columbia Large Cap Index Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Index Fund, Columbia Small Cap Index Fund and Columbia U.S. Treasury
Index Fund.
"Funds-of-Funds (equity)"
includes Columbia Capital Allocation Aggressive Portfolio, Columbia Capital Allocation Moderate Aggressive Portfolio, Columbia Capital Allocation Moderate
Conservative Portfolio, Columbia Capital Allocation Moderate Portfolio and Columbia LifeGoal® Growth Portfolio
. "Funds-of-Funds (fixed income)"
includes Columbia Capital Allocation Conservative Portfolio
and Columbia Income Builder Fund. Columbia Balanced Fund and Columbia Global Opportunities Fund are treated as equity Funds for purposes of the table.
|
(a)
|
Purchase amounts and account
values may be aggregated among all eligible Fund accounts for the purposes of this table. See
Choosing a Share Class — Reductions/Waivers of Sales Charges
for a discussion of account value aggregation.
|
(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. Purchase price includes the sales charge.
|
(c)
|
For information regarding
cumulative commissions paid to your selling agent when you buy Class A shares of a Fund in amounts not subject to initial sales charges, see
Class A Shares — Commissions
below.
|
Class A Shares — CDSC
In some cases, you'll pay a CDSC if you sell Class A shares
that you purchased without an initial sales charge.
Tax-Exempt Funds
■
|
If you purchased Class A
shares of any Tax-Exempt Fund other than Columbia Short Term Municipal Bond Fund on or after February 19, 2015 without an initial sales charge because your accounts aggregated $500,000 or more at the time of purchase, you will incur a CDSC of 0.75%
if you redeem those shares within 12 months after purchase. Subsequent Class A share purchases made on or after February 19, 2015 that bring your aggregate account value to $500,000 or more will also be subject to a CDSC of 0.75% if you redeem them
within 12 months after purchase.
|
■
|
If you purchased Class A
shares of Columbia Short Term Municipal Bond Fund on or after February 19, 2015 without an initial sales charge because your accounts aggregated $500,000 or more at the time of purchase, you
|
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
|
will incur a CDSC of 0.50%
if you redeem those shares within 12 months after purchase. Subsequent Class A share purchases made on or after February 19, 2015 that bring your aggregate account value to $500,000 or more will also be subject to a CDSC of 0.50% if you redeem them
within 12 months after purchase.
|
■
|
If you purchased Class A
shares of any Tax-Exempt Fund prior to February 19, 2015 without an initial sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months
after purchase, which is charged as follows: 1.00% CDSC if shares are redeemed within 12 months after purchase; and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase. Subsequent Class A share purchases made
prior to February 19, 2015 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 18 months after purchase as described in this paragraph.
|
Taxable Funds
■
|
If you purchased Class A
shares of any Taxable Fund without an initial sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months after purchase, which is
charged as follows: 1.00% CDSC if shares are redeemed within 12 months after purchase; and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase. 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 18 months after purchase as described in this paragraph.
|
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. A CDSC is applied to the NAV at the time
of your purchase or sale, whichever is lower, and will not be applied to any shares you receive through reinvested distributions or any amount that represents appreciation in the value of your shares. For purposes of calculating a CDSC, the start of
the holding period is generally the first day of the month in which your purchase was made.
When you place an order to sell shares of a
class that has a CDSC, the Fund will first redeem any shares that aren't subject to a CDSC, followed by those you have held the longest. This means that if a CDSC is imposed, you cannot designate the individual shares being redeemed for U.S. federal
income tax purposes. You should consult your tax advisor about the tax consequences of investing in the Fund. In certain circumstances, the CDSC may not apply. See
Choosing a Share Class — Reductions/Waivers of
Sales Charges
for details.
Class A Shares
— Commissions
The Distributor may pay your selling
agent an up-front commission when you buy Class A shares. The Distributor generally funds the commission through the applicable sales charge paid by you. For more information, see
Class A Shares — Front-End
Sales Charge — Breakpoint Schedule.
The
Distributor may also pay your selling agent a cumulative commission when you buy Class A shares in amounts not subject to initial sales charges, according to the following schedule:
Class
A Shares of Tax-Exempt Funds — Commission Schedule (Paid by the Distributor to Selling Agents)
|
Purchase
Amount
|
Commission
Level*
(as a % of net asset
value per share)
|
$500,000
– $3,999,999
|
0.75%**
|
$4
million – $19,999,999
|
0.50%
|
$20
million or more
|
0.25%
|
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
*
|
The commission level applies to
the applicable asset level so, for example, for a purchase of $5 million, the Distributor would pay a commission of 0.75% on the first $4 million and 0.50% on the remaining $1 million.
|
**
|
The commission level on
purchases of Class A shares of Columbia Short Term Municipal Bond Fund is: 0.50% on purchases of $500,000 to $19,999,999 and 0.25% on purchases of $20 million or more.
|
Class
A Shares of Taxable Funds — Commission Schedule (Paid by the Distributor to Selling Agents)*
|
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%
|
*
|
Not applicable to Funds that do
not assess a front-end sales charge.
|
**
|
The commission level applies to
the applicable asset level so, for example, for a purchase of $5 million, the Distributor would pay a commission of 1.00% on the first $3 million and 0.50% on the remaining $2 million.
|
Class B Shares — Sales Charges
The Funds no longer accept new investments in Class B shares,
except for certain limited transactions as described in more detail under
Buying, Selling and Exchanging Shares — Buying Shares — Eligible Investors — Class B Shares (Closed).
You don't pay a front-end sales charge when you buy Class B
shares, but you may pay a CDSC when you sell Class B shares.
Class B Shares — CDSC
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 and generally declines each year until there is no sales charge, as follows:
Class
B Shares — CDSC Schedule for the Funds (except those listed below)
|
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
|
*
|
Because of rounding in the
calculation, the actual CDSC you pay may be more or less than the CDSC calculated using these percentages.
|
Class
B Shares — CDSC Schedule for Columbia AMT-Free Intermediate Muni Bond Fund, the AMT-Free State-specific Intermediate Muni Bond Funds, Columbia Intermediate Bond Fund and Columbia Short Term Bond Fund
|
Number
of Years
Class B Shares Held
|
Applicable
CDSC*
|
One
|
3.00%
|
Two
|
3.00%
|
Three
|
2.00%
|
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
Class
B Shares — CDSC Schedule for Columbia AMT-Free Intermediate Muni Bond Fund, the AMT-Free State-specific Intermediate Muni Bond Funds, Columbia Intermediate Bond Fund and Columbia Short Term Bond Fund
|
Number
of Years
Class B Shares Held
|
Applicable
CDSC*
|
Four
|
1.00%
|
Five
|
None
|
Six
|
None
|
Seven
|
None
|
Eight
|
None
|
Nine
|
Conversion
to Class A Shares
|
*
|
Because of rounding in the
calculation, the actual CDSC you pay may be more or less than the CDSC calculated using these percentages.
|
Class B shares of Columbia Short Term Municipal Bond Fund are
not subject to a CDSC.
Class B Shares —
Commissions
The Distributor paid an up-front commission
directly to your selling agent when you bought the Class B shares (a portion of this commission may have been paid to your financial advisor).
This up-front commission, which varies across the Funds, was
up to 4.00% of the net asset value per share of Funds with a maximum CDSC of 5.00% and of Class B shares of Columbia Short Term Municipal Bond Fund and up to 2.75% of the net asset value per share of Funds with a maximum CDSC of 3.00%. 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. For more information, see
Choosing a Share Class — Distribution and Service Fees.
Class B Shares — Conversion to Class A Shares
Class B shares of the Funds automatically convert to Class A
shares at different times depending upon the Fund. In general, Class B shares convert to Class A shares after eight years. For details and related information about how the Funds' Class B shares convert to Class A shares, see Appendix S to the SAI.
Class B shares of Columbia Short Term Municipal Bond Fund do not convert to Class A shares.
Class C Shares — Front-End Sales Charge
You don't pay a front-end sales charge when you buy Class C
shares. Although Class C shares do not have a front-end sales charge, over time Class C shares can incur distribution and/or service fees that are equal to or more than the front-end sales charge and distribution and/or service fees you would pay
for Class A shares. Thus, although the full amount of your purchase of Class C shares is invested in a Fund, any positive investment return on this money may be partially or fully offset by the expected higher annual expenses of Class C shares. If
you are eligible to invest in Class A shares without a front-end sales charge, you should discuss your options with your Selling Agent. For more information, see
Choosing a Share Class – Reductions/Waivers of
Sales Charges.
Class C Shares — CDSC
You'll pay a CDSC of 1.00% if you redeem Class C shares within
12 months of buying them unless you qualify for a waiver of the CDSC or the shares you're selling were purchased through reinvested distributions. For more information, see
Choosing a Share Class —
Reductions/Waivers of Sales Charges
. Redemptions of Class C shares are not subject to a CDSC if redeemed after 12 months.
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
Class C Shares — Commissions
Although there is no front-end sales charge when you buy Class
C shares, the Distributor pays an up-front commission directly to your selling agent of up to 1.00% of the NAV per share when you buy Class C shares (a portion of this commission may be paid to your financial advisor). The Distributor seeks to
recover this commission through distribution fees it receives under the Fund's distribution and/or service plan and any applicable CDSC applied when you sell your shares. For more information, see
Choosing a Share
Class — Distribution and Service Fees.
Class
R Shares — Sales Charges and Commissions
You don't
pay a front-end sales charge when you buy Class R shares or a CDSC when you sell Class R shares. The Distributor pays an up-front commission directly to your selling agent when you buy Class R shares (a portion of this commission may be paid to your
financial advisor), according to the following schedule:
Class
R Shares — Commission Schedule (Paid by the Distributor to Selling Agents)
|
Purchase
Amount
|
Commission
Level
(as a % of net asset
value per share)
|
$0
– $49,999,999
|
0.50%
|
$50
million or more
|
0.25%
|
The Distributor seeks to recover
this commission through distribution fees it receives under the Fund's distribution plan. For more information, see
Choosing a Share Class — Distribution and Service Fees.
Class T Shares — Front-End Sales Charge
You'll pay a front-end sales charge when you buy Class T
shares, resulting in a smaller dollar amount being invested in a Fund than the purchase price you pay, unless you qualify for a waiver of the sales charge or you buy the shares through reinvested distributions. For more information, see
Choosing a Share Class — Reductions/Waivers of Sales Charges.
The front-end sales charge you'll pay on Class T 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 (and any other accounts eligible for aggregation of which you or your selling agent notifies the Fund).
|
Class
T Shares — Front-End Sales Charge — Breakpoint Schedule
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Equity
Funds
|
$
0–$49,999
|
5.75%
|
6.10%
|
5.00%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
2.75%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.00%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
Class
T Shares — Front-End Sales Charge — Breakpoint Schedule
|
Breakpoint
Schedule For:
|
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
agents as a
% of the
offering price
|
Fixed
Income Funds
|
$
0–$49,999
|
4.75%
|
4.99%
|
4.25%
|
$
50,000–$99,999
|
4.50%
|
4.71%
|
3.75%
|
$100,000–$249,999
|
3.50%
|
3.63%
|
2.75%
|
$250,000–$499,999
|
2.50%
|
2.56%
|
2.00%
|
$500,000–$999,999
|
2.00%
|
2.04%
|
1.75%
|
$
1,000,000 or more
|
0.00%
|
0.00%
|
0.00%
(c)
|
|
|
|
|
|
(a)
|
Purchase amounts and account
values are aggregated among all eligible 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)
|
For more information regarding
cumulative commissions paid to your selling agent when you buy $1 million or more of Class T shares, see
Class T Shares — Commissions
below.
|
Class T Shares — CDSC
In some cases, you'll pay a CDSC if you sell Class T shares
that you bought without an initial sales charge.
■
|
If you purchased Class T
shares without a front-end sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months after purchase, which is charged as follows: 1.00%
CDSC if shares are redeemed within 12 months after purchase, and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months after purchase.
|
■
|
Subsequent Class T 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 the time periods noted above.
|
Class T Shares — Commissions
The Distributor may pay your selling agent an up-front
commission when you buy Class T shares (a portion of this commission may, in turn, be paid to your financial advisor). For more information, see
Class T Shares — Front-End Sales Charge — Breakpoint
Schedule, Amount retained by or paid to selling agents as a % of the offering price.
The Distributor may also pay your selling agent a cumulative
commission when you buy $1 million or more of Class T shares, according to the following schedule:
Class
T Shares
—
Commission Schedule (Paid by the Distributor to Selling Agents)
|
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%
|
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
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 or Class T shares of a Fund. These types of sales charge reductions are also referred to as breakpoint discounts.
First, through the right of accumulation (ROA), you may
combine the value of eligible accounts maintained by you and members of 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 Fund accounts in the
particular class of shares, the Fund will use the current public offering price per share. For purposes of obtaining a breakpoint discount through ROA, you may aggregate your or your immediate family members' ownership of different classes of
shares, except for Class I, Class K, Class R and Class Y shares of the Funds, Class R4 and Class R5 shares of the Funds held in retirement plan accounts and direct purchases of Columbia Money Market Fund shares, which may not be aggregated. Shares
of Columbia Money Market Fund acquired by exchange from other Funds may be combined for ROA purposes.
Second, by making a statement of intent to purchase additional
shares (commonly referred to as a letter of intent (LOI)), you may pay a lower sales charge on all purchases (including existing ROA purchases) of Class A shares or Class T shares made within 13 months after the date of your LOI. Your LOI must state
the aggregate amount of purchases you intend to make in that 13-month period, which must be at least $50,000 (or $100,000 for Funds with breakpoint discounts beginning at $100,000). The required form of LOI may vary by selling agent, so please
contact them directly for more information. Five percent of the purchase commitment amount will be placed in escrow. At the end of the 13-month period, the shares will be released from escrow, provided that you have invested the commitment amount.
If you do not invest the commitment amount by the end of the 13 months, the remaining amount of the unpaid sales charge will be redeemed from the escrowed shares and the remaining balance released from escrow. To calculate the total value of the
purchases you've made under an LOI, the Fund will use the historic cost (i.e., dollars invested) of the shares held in each eligible account. For purposes of making an LOI to purchase additional shares, you may aggregate your ownership of different
classes of shares, except for Class I, Class K, Class R and Class Y shares of the Funds, Class R4 and Class R5 shares of the Funds held in retirement plan accounts and direct purchases of Columbia Money Market Fund shares, which may not be
aggregated. Shares of Columbia Money Market Fund acquired by exchange from other Funds may be combined for LOI purposes.
You must request the reduced sales charge (whether through ROA
or an LOI) when you buy shares. If you do not complete and file an LOI, or do not request the reduced sales charge at the time of purchase, you will not be eligible for the reduced sales charge. To obtain a breakpoint discount, you must notify your
selling agent in writing at the time you buy your shares of each eligible account maintained by you and members of your immediate family, including accounts maintained through different selling agents. You and your selling agent are responsible for
ensuring that you receive discounts for which you are eligible. The Fund is not responsible for a selling agent's failure to apply the eligible discount to your account. You may be asked by your selling agent for account statements or other records
to verify your discount eligibility, including, when applicable, records for accounts opened with a different selling agent and records of accounts established by members of your immediate family.
Your “Immediate Family” and
Account Value Aggregation
For
purposes of obtaining a breakpoint discount for Class A shares or Class T shares the value of your account will be deemed to include the value of all applicable shares in eligible Fund accounts that are held by you and your “immediate
family,” which includes your spouse, domestic partner, parent, step-parent, legal guardian, child under 21, step-child under 21, father-in-law and mother-in-law, provided that you and your immediate family members share the same mailing
address. Any Fund accounts linked together for account value aggregation purposes as of the close of business on September 3, 2010 will be permitted to remain linked together. Group plan accounts are valued at the plan level.
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
Eligible Accounts
The following accounts are eligible for account value
aggregation as described above, provided that they are invested in Class A, Class B, Class C, Class E, Class F, Class T, Class W or Class Z shares of a Fund: individual or joint accounts; Roth and traditional Individual Retirement Accounts (IRAs);
Simplified Employee Pension accounts (SEPs), Savings Investment Match Plans for Employees of Small Employers accounts (SIMPLEs) and Tax Sheltered Custodial Accounts (TSCAs); Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
accounts for which you, your spouse, or your domestic partner is parent or guardian of the minor child; revocable trust accounts for which you or an immediate family member, individually, is the beneficial owner/grantor; accounts held in the name of
your, your spouse’s, or your domestic partner’s sole proprietorship or single owner limited liability company or S corporation; qualified retirement plan assets, provided that you are the sole owner of the business sponsoring the plan,
are the sole participant (other than a spouse) in the plan, and have no intention of adding participants to the plan; and investments in wrap accounts.
The following accounts are
not eligible
for account value aggregation as described above: accounts of pension and retirement plans with multiple participants, such as 401(k) plans (which are combined to reduce the sales charge for the
entire pension or retirement plan and therefore are not used to reduce the sales charge for your individual accounts); investments in 529 plans, donor advised funds, variable annuities, variable insurance products or managed separate accounts;
charitable and irrevocable trust accounts; accounts holding shares of money market funds that used the Columbia brand before May 1, 2010; and accounts invested in Class I, Class K, Class R, Class R4, Class R5 or Class Y shares of a Fund.
Front-End Sales Charge Waivers
The Distributor may waive front-end sales charges on purchases
of Class A and Class T shares of the Funds by certain categories of investors, including Board members, certain employees of selling agents, Fund portfolio managers and certain retirement and employee benefit plans. The Distributor may waive
front-end sales charges on (i) purchases (including exchanges) of Class A shares in accounts of selling agents that have entered into agreements with the Distributor to offer Fund shares to self-directed investment brokerage accounts that may or may
not charge a transaction fee to customers and (ii) exchanges of Class Z shares of a Fund for Class A shares of the Fund. For a more complete description of categories of investors who may purchase Class A and Class T shares of the Funds at NAV,
without payment of any front-end sales charge that would otherwise apply, see Appendix S to the SAI. In addition, certain types of purchases of Class A and Class T shares may be made at NAV. For a description of these eligible transactions, see
Appendix S to the SAI.
CDSC Waivers
You may be able to avoid an otherwise applicable CDSC when you
sell Class A, Class B, Class C or Class T 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 Funds or for other reasons. For example, the CDSC will be waived
on redemptions of shares in the event of the shareholder's death; that result from required minimum distributions taken from retirement accounts when the shareholder reaches age 70½; in connection with the Fund's Small Account Policy (which is
described in
Buying, Selling and Exchanging Shares — Transaction Rules and Policies
); and by certain other investors and in certain other types of transactions. For a more complete description of the
available waivers of the CDSC on redemptions of Class A, Class B, Class C or Class T shares, see Appendix S to the SAI.
Repurchases
Investors can also buy Class A shares without paying a sales
charge if the purchase is made from the proceeds of a redemption of any Class A, Class B, Class C or Class T shares of a Fund (other than Columbia Money Market Fund) within 90 days, up to the amount of the redemption proceeds. Any CDSC paid upon
redemption of your Class A, Class B, Class C or Class T shares of a Fund will not be reimbursed.
To be eligible for the reinstatement privilege, the purchase
must be made into an account for the same owner, but does not need to be into the same Fund from which the shares were sold. The Transfer Agent, Distributor or their agents must receive a written reinstatement request from you or your selling agent
within 90 days after the shares are redeemed and the purchase of Class A shares through this reinstatement privilege will be made at the NAV of
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
such shares next calculated after the request is received in “good
form.” The repurchased shares will be deemed to have the original purchase date for purposes of applying the CDSC (if any) to subsequent redemptions. Systematic withdrawals and purchases are excluded from this policy.
Restrictions and Changes in Terms and Conditions
Restrictions may apply to certain accounts and certain
transactions. The Funds may change or cancel these terms and conditions at any time. Unless you provide your selling agent with information in writing about all of the factors that may count toward a waiver of a sales charge, there can be no
assurance that you will receive all of the waivers for which you may be eligible. You should request that your selling agent provide this information to the Fund when placing your purchase order. Please see Appendix S of the SAI for more information
about the sales charge reductions and waivers.
Distribution and Service Fees
The Board has approved, and the Funds have adopted,
distribution and/or shareholder service plans which set the distribution and/or service fees that are periodically deducted from the Funds’ assets. These fees are calculated daily, may vary by share class and are intended to compensate the
Distributor and/or eligible selling agents for selling Fund shares and directly or indirectly providing services to shareholders. 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/or service fees (as an annual % of average daily net assets) and the combined amount of such fees applicable to each share class:
|
Distribution
Fee
|
Service
Fee
|
Combined
Total
|
Class
A
|
up
to 0.25%
|
up
to 0.25%
|
up
to 0.35%
(a)(b)(c)
|
Class
B
|
0.75%
(d)
|
0.25%
|
1.00%
(b)
|
Class
C
|
0.75%
(c)(e)
|
0.25%
|
1.00%
(b)
|
Class
I
|
None
|
None
|
None
|
Class
K
|
None
|
0.25%
(f)
|
0.25%
(f)
|
Class
R (series of CFST and CFST I)
|
0.50%
|
—
(g)
|
0.50%
|
Class
R (series of CFST II)
|
up
to 0.50%
(c)
|
up
to 0.25%
|
0.50%
(g)
|
Class
R4
|
None
|
None
|
None
|
Class
R5
|
None
|
None
|
None
|
Class
T
|
None
|
0.50%
(h)
|
0.50%
(h)
|
Class
W
|
up
to 0.25%
|
up
to 0.25%
|
0.25%
(c)
|
Class
Y
|
None
|
None
|
None
|
Class
Z
|
None
|
None
|
None
|
(a)
|
The maximum distribution and
service fees of Class A shares varies among the Funds, as shown in the table below:
|
Funds
|
Maximum
Class A
Distribution Fee
|
Maximum
Class A
Service Fee
|
Maximum
Class A
Combined Total
|
Series
of CFST
|
—
|
—
|
0.25%;
these Funds pay a
combined distribution and
service fee
|
Series
of CFST II (other than Columbia
Money Market Fund)
|
up
to 0.25%
|
up
to 0.25%
|
0.25%
|
Columbia
Money Market Fund
|
—
|
—
|
0.10%
|
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
Funds
|
Maximum
Class A
Distribution Fee
|
Maximum
Class A
Service Fee
|
Maximum
Class A
Combined Total
|
Columbia
AMT-Free Oregon Intermediate Muni Bond Fund, Columbia Balanced Fund, Columbia Contrarian Core Fund, Columbia Dividend Income Fund, Columbia Global Technology Growth Fund, Columbia Intermediate Bond Fund, Columbia Large Cap Growth Fund, Columbia Mid
Cap Growth Fund, Columbia Real Estate Equity Fund, Columbia Small Cap Core Fund, Columbia Small Cap Growth Fund I
|
up
to 0.10%
|
up
to 0.25%
|
up
to 0.35%; these Funds may
pay distribution and service fees
up to a maximum of 0.35% of their
average daily net assets
attributable to Class A shares
(comprised of up to 0.10% for
distribution services and up to
0.25%
for shareholder liaison
services) but currently limit such
fees to an aggregate fee of not
more than 0.25% for
Class A shares
|
Columbia
Adaptive Alternatives Fund, Columbia Adaptive Risk Allocation Fund, Columbia AMT-Free Connecticut Intermediate Muni Bond Fund, Columbia AMT-Free Massachusetts Intermediate Muni Bond Fund, Columbia AMT-Free New York Intermediate Muni Bond Fund,
Columbia Bond Fund, Columbia California Tax-Exempt Fund, Columbia Corporate Income Fund, Columbia Diversified Absolute Return Fund, Columbia Diversified Real Return Fund, Columbia Emerging Markets Fund, Columbia Global Dividend Opportunity Fund,
Columbia Global Energy and Natural Resources Fund, Columbia Greater China Fund, Columbia Multi-Asset Income Fund, Columbia New York Tax-Exempt Fund, Columbia Pacific/Asia Fund, Columbia Select Large Cap Growth Fund, Columbia Small Cap Value Fund I,
Columbia Strategic Income Fund, Columbia U.S. Social Bond Fund, Columbia U.S. Treasury Index Fund, Columbia Value and Restructuring Fund
|
—
|
0.25%
|
0.25%
|
Columbia
AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund, Columbia Tax Exempt Fund
|
—
|
0.20%
|
0.20%
|
(b)
|
The service fees for Class A,
Class B and Class C shares of certain Funds vary. Service Fee for Class A, Class B and Class C shares of Columbia AMT-Free Intermediate Muni Bond Fund, Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund — The annual service fee
may equal up to 0.20% of the average daily net asset value of all shares of such Fund class. Distribution Fee for Class B and Class C shares for Columbia AMT-Free Intermediate Muni Bond Fund
—
The annual
distribution fee shall be 0.65% of the average daily net assets of the Fund's Class B and Class C shares. Fee amounts noted apply to Class B shares of the Funds other than Class B shares of Columbia Money Market Fund, which pays distribution fees of
up to 0.75% and service fees of up to 0.10% for a combined total of 0.85%. The Distributor has currently agreed not to be reimbursed by the Fund for 0.10% of the 0.85% fee for Class B shares of Columbia Money Market Fund. The Distributor has
voluntarily agreed to waive the service fee for Class A, Class B and Class C shares of Columbia U.S. Treasury Index Fund so that the service fee does not exceed 0.15% annually. This arrangement may be modified or terminated by the Distributor at any
time.
|
(c)
|
Fee amounts noted apply to all
Funds other than Columbia Money Market Fund, which, for each of Class A and Class W shares, pays distribution and service fees of 0.10%, and for Class C shares pays distribution fees of 0.75%. The Distributor has currently agreed not to be
reimbursed by the Fund for 0.25% of the 0.50% fee for Class R shares of Columbia Money Market Fund. The Distributor has voluntarily agreed to waive the 12b-1 fees it receives from Class A, Class C, Class R and Class W shares of Columbia Money Market
Fund. This arrangement may be modified or terminated by the Distributor at any time. Compensation paid to broker-dealers and other selling agents may be suspended to the extent of the Distributor's waiver of the 12b-1 fees on these specific share
classes of these Funds.
|
(d)
|
The Distributor has voluntarily
agreed to waive a portion of the distribution fee it receives from Class B shares of Columbia Short Term Bond Fund so that the distribution fee does not exceed 0.30% annually. This arrangement may be modified or terminated by the Distributor at any
time.
|
(e)
|
The Distributor has voluntarily
agreed to waive a portion of the distribution fee for Class C shares of the following Funds so that the distribution fee does not exceed the specified percentage annually: 0.45% for Columbia AMT-Free Connecticut Intermediate Muni Bond Fund, Columbia
AMT-Free Massachusetts Intermediate Muni Bond Fund, Columbia AMT-Free New York Intermediate Muni Bond Fund, Columbia AMT-Free Oregon Intermediate Muni Bond Fund, Columbia California Tax-Exempt Fund and Columbia New York Tax-Exempt Fund; 0.60% for
Columbia Corporate Income Fund and Columbia Short Term Bond Fund; 0.65% for Columbia High Yield Municipal Fund and Columbia Tax-Exempt Fund; and 0.70% for Columbia U.S. Treasury Index Fund. These arrangements may be modified or terminated by the
Distributor at any time.
|
(f)
|
The shareholder service fees
for Class K shares are not paid pursuant to a 12b-1 plan. Under a plan administration services agreement, the Funds' Class K shares pay for plan administration services. See
Class K Plan Administration Services
Fee
below for more information.
|
(g)
|
Class R shares of series of
CFST and CFST I pay a distribution fee pursuant to a distribution (Rule 12b-1) plan for Class R shares. The Funds do not have a shareholder service plan for Class R shares. Series of CFST II have a distribution and shareholder service plan for Class
R shares, which, prior to the close of business on September 3, 2010, were known as Class R2 shares. For Class R shares of series of CFST II, the maximum fee under the plan reimbursed for distribution expenses is equal on an annual basis to 0.50% of
the average daily net assets of the Fund attributable to Class R shares. Of that amount, up to 0.25% may be reimbursed for shareholder service expenses.
|
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
(h)
|
The shareholder servicing fees
for Class T shares are up to 0.50% of average daily net assets attributable to Class T shares for equity Funds and 0.40% for fixed income Funds. In general, the Funds currently limit such fees to a maximum of 0.25% for equity Funds and 0.15% for
fixed-income Funds. See
Class T Shareholder Service Fees
below for more information.
|
The distribution and/or service fees for Class A, Class B,
Class C, Class R and Class W shares, as applicable, may be subject to the requirements of Rule 12b-1 under the 1940 Act. The Distributor may retain these fees otherwise payable to selling agents if the amounts due are below an amount determined by
the Distributor in its sole discretion.
Series of CFST
II.
For Class A, Class B and Class W shares, the Distributor begins to pay these fees immediately after purchase. For Class C shares, the Distributor pays these fees in advance for the first 12 months. Selling agents
also receive distribution fees up to 0.75% of the average daily net assets of Class C shares sold and held through them, which the Distributor begins to pay 12 months after purchase. For Class B shares and for the first 12 months following the sale
of Class C shares, the Distributor retains the distribution fee of up to 0.75% in order to finance the payment of sales commissions to selling agents and to pay for other distribution related expenses. Selling agents may compensate their financial
advisors with the shareholder service and distribution fees paid to them by the Distributor. The maximum fee for services under the distribution and/or shareholder servicing plan for series of CFST II is the lesser of the amount of reimbursable
expenses and the fee rates in the table above. If a share class of a series of CFST II has no reimbursable distribution or shareholder servicing expenses, it will suspend the payment of any such fee.
Series of CFST and CFST I.
For Class R shares and, with the exception noted in the next sentence, Class A shares, the Distributor begins to pay these fees immediately after purchase. For Class B shares, Class A shares (if purchased as part of a purchase of shares of $1
million or more) and, with the exception noted in the next sentence, Class C shares, the Distributor begins to pay these fees 12 months after purchase (for Class B share, and for the first 12 months following the sale of Class C shares, the
Distributor retains the distribution fee of up to 0.75% in order to finance the payment of sales commissions to selling agents and to pay for other distribution related expenses). For Class C shares, selling agents may opt to decline payment of
sales commission and, instead, may receive these fees immediately after purchase. Selling agents may compensate their financial advisors with the shareholder service and distribution fees paid to them by the Distributor.
If you maintain shares of the Fund directly with the Fund,
without working directly with a financial advisor or other selling agent, distribution and service fees may be retained by the Distributor as payment or reimbursement for incurring certain distribution and shareholder service related expenses.
Over time, these distribution and/or service fees will reduce
the return on your investment and may cost you more than paying other types of sales charges. The Fund will pay these fees to the Distributor and/or to eligible selling agents for as long as the distribution plan and/or shareholder servicing plans
continue in effect, which is expected to be indefinitely. The Fund may reduce or discontinue payments at any time. Your selling agent may also charge you other additional fees for providing services to your account, which may be different from those
described here.
Class K Plan Administration Services
Fee
Class K shares pay an annual plan administration
services fee for the provision of various administrative, recordkeeping, communication and educational services, including services such as implementation and conversion services, account set-up and maintenance, reconciliation and account
recordkeeping and administration to various plan types, including 529 plans, retirement plans and health savings accounts. The fee for Class K shares is equal on an annual basis to 0.25% of average daily net assets attributable to the class.
Class T Shareholder Services Fees
The Funds that offer Class T shares have adopted a shareholder
services plan that permits them to pay for certain services provided to Class T shareholders by their selling agents. Equity Funds may pay shareholder servicing fees up to an aggregate annual rate of 0.50% of the Fund's average daily net assets
attributable to Class T shares (comprised of up to 0.25% for shareholder liaison services and up to 0.25% for administrative support services). Fixed income Funds may pay shareholder servicing fees up to an aggregate annual rate of 0.40% of the
Fund's average daily net assets attributable to Class T shares (comprised of up to 0.20% for shareholder liaison services and up to 0.20% for administrative support services). These fees are currently limited to an aggregate annual rate of
Columbia Large Value Quantitative Fund
Choosing a Share Class
(continued)
not more than 0.25% for equity Funds and not more than 0.15% for fixed income
Funds. With respect to those Funds that declare dividends on a daily basis, the shareholder servicing fee shall be waived by the selling agents to the extent necessary to prevent net investment income from falling below 0% on a daily basis.
Selling Agent Compensation
The Distributor, the Investment Manager and their affiliates
make payments, from their own resources, to selling agents, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Funds (Marketing Support Payments). Such payments are generally based upon one or more
of the following factors: average net assets of the Funds sold by the Distributor attributable to that selling agent; gross sales of the Funds distributed by the Distributor attributable to that selling agent; reimbursement of ticket charges (fees
that a selling agent charges its representatives for effecting transactions in Fund shares); or a negotiated lump sum payment. While the financial arrangements may vary for each selling agent, Marketing Support Payments to any one selling agent are
generally between 0.05% and 0.40% on an annual basis for payments based on average net assets of the Fund attributable to the selling agent, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the
Funds attributable to the selling agent. The Distributor, the Investment Manager and their affiliates may make payments in larger amounts or on a basis other than those described above when dealing with certain selling agents, including certain
affiliates of Bank of America Corporation (Bank of America). Such increased payments may enable such selling agents to offset credits that they may provide to customers. The Distributor, the Investment Manager and their affiliates do not make
Marketing Support Payments with respect to Class Y shares; provided, however, that such payments are made to Bank of America with respect to Class Y shares of Columbia Bond Fund, Columbia Global Dividend Opportunity Fund, Columbia Income
Opportunities Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Growth Fund, Columbia Mid Cap Value Fund, Columbia Select International Equity Fund, Columbia Short Term Bond Fund, Columbia Small Cap Growth Fund I and Columbia Small Cap
Value Fund I.
In addition, the Transfer Agent has
certain arrangements in place to compensate selling agents, including other Ameriprise Financial affiliates, that hold Fund shares through omnibus accounts, including omnibus retirement plans, for services that they provide to beneficial
shareholders (Shareholder Services). Shareholder Services may include sub-accounting, sub-transfer agency, participant recordkeeping, shareholder or participant reporting, shareholder or participant transaction processing, maintenance of shareholder
records, preparation of account statements and provision of customer service. Payments for Shareholder Services vary by selling agent but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of
the Fund’s shares.
Generally, each Fund (other than the Columbia
Acorn Funds) pays a percentage of the average aggregate value of shares maintained in omnibus accounts: 0.20% for all share classes other than Class I, K, R5 and Y shares; 0.05% for Class K and R5 shares; and 0% for Class I and Y shares. The amounts
in excess of that reimbursed by the Fund are borne by the Distributor, the Investment Manager and/or their affiliates. The Transfer Agent does not pay selling agents for Shareholder Services and the Fund does not pay the Transfer Agent for any
Shareholder Services provided by selling agents, with respect to Class Y shares.
In addition to the payments described above, the Distributor,
the Investment Manager and their affiliates 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, the
Investment Manager and their affiliates are paid out of their own resources and do not increase the amount paid by you or the Fund. You can find further details in the SAI about the payments made by the Distributor, the Investment Manager and their
affiliates, as well as a list of the selling agents, including Ameriprise Financial affiliates, to which the Distributor and the Investment Manager have agreed to make Marketing Support Payments and pay Shareholder Services fees.
Your selling agent may charge you fees and commissions in
addition to those described in this prospectus. You should consult with your selling agent and review carefully any disclosure your selling agent provides regarding its services and compensation. Depending on the financial arrangement in place at
any particular time, a selling agent and its financial advisors may have a financial incentive for recommending the Fund or a particular share class over others.
Columbia Large Value Quantitative Fund
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 NAV per share for each class of shares of the Fund at the end of each business day.
NAV Calculation
Each of the Fund's share classes calculates
its NAV as follows:
NAV
=
(Value of assets of the share class) – (Liabilities of the share class)
Number of outstanding shares of the class
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 NAV 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.
Equity
securities are valued primarily on the basis of market quotations or valuations reported on stock exchanges and other securities markets around the world. If an equity security is listed on a national exchange, the security is valued at the closing
price or, if the closing price is not readily available, the mean of the closing bid and asked prices. Certain equity securities, debt securities and other assets are valued differently. For instance, bank loans trading in the secondary market are
valued primarily on the basis of indicative bids, fixed-income investments maturing in 60 days or less are valued primarily using the amortized cost method, unless this methodology results in a valuation that does not approximate the market value of
these securities, and those maturing in excess of 60 days are valued primarily using a market-based price obtained from a pricing service, if available. Investments in other open-end funds are valued at their latest NAVs. Both market quotations and
indicative bids are obtained from outside pricing services approved and monitored pursuant to a policy approved by the Fund's Board. For a money market fund, the Fund's investments are generally valued at amortized cost, which approximates market
value.
If a market price is not readily available or is
deemed not to reflect market value, the Fund will determine the price of a portfolio security based on a determination of the security's fair value pursuant to a policy approved by the Fund's Board. 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) corporate actions, earnings announcements, litigation or
other events 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 foreign security's market price is readily available and reflective of market value and, if not, the fair value of
the security. To the extent the Fund has significant holdings of small cap stocks, high-yield bonds, floating rate loans, or tax-exempt, foreign or other securities that may trade infrequently, fair valuation may be used more frequently than for
other funds.
Columbia Large Value Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
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 fund would have priced the security. 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 one or more independent fair valuation pricing services to assist in the fair valuation process for
foreign securities.
Transaction Rules and Policies
The Fund, the Distributor or the Transfer Agent may refuse any
order to buy or exchange shares. If this happens, the Fund will return any money it received, but no interest will be paid on that money.
Order Processing
Orders to buy, sell or exchange Fund shares are processed on
business days. Depending upon the class of shares, orders can be made by mail, by telephone or online. Orders received in “good form” by the Transfer Agent or your selling agent before the end of a business day are priced at the NAV per
share of the Fund's applicable share class on that day. Orders received after the end of a business day will receive the next business day's NAV per share. When a written order to buy, sell or exchange shares is sent to the Transfer Agent, the share
price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the P.O. Box provided for regular mail delivery. 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 NAV per share. The business day that applies to your order is also called the trade date.
“Good Form”
An order is in “good form” if the Transfer Agent
or your selling 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 greater than $100,000 and other transactions, as described below, 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
The Transfer Agent may require a Medallion Signature Guarantee
for your signature in order to process certain transactions. A Medallion Signature Guarantee helps assure that a signature is genuine and not a forgery. A Medallion Signature Guarantee must be provided by an eligible guarantor institution including,
but not limited to, the following: a bank, credit union, savings association, broker or dealer that participates in the Securities Transfer Association Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) or the New York Stock
Exchange Medallion Signature Program (MSP). Notarization by a notary public is not an acceptable signature guarantee. The Transfer Agent reserves the right to reject a signature guarantee and to request additional documentation for any
transaction.
A Medallion Signature Guarantee is required
if: (i) the transaction amount is over $100,000; (ii) you want your check made payable to someone other than the registered account owner(s); (iii) the address of record has changed within the last 30 days; (iv) you want the check mailed to an
address other than the address of record; (v) you want proceeds to be sent according to existing bank account instructions not coded for outgoing Automated Clearing House (ACH) or wire, or to a bank account not on file; (vi) you are the beneficiary
of the account and the account owner is deceased (other documentation may be required); or (vii) you are changing legal ownership of your account.
Columbia Large Value Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
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 (e.g., social security number (SSN) or
other taxpayer identification number (TIN)). 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 take other steps as deemed reasonable. The Fund will not be 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 — Class A, Class B, Class C, Class T
and Class Z Share Accounts Below the Minimum Account Balance
The Funds generally will automatically sell your shares if the
value of your Fund account (treating each account of the Fund you own separately from any other account of the Fund you may own) falls below the applicable Minimum Account Balance. The Minimum Account Balance varies among Funds, share classes and
types of accounts, as follows:
Minimum
Account Balance
|
|
|
Minimum
Account
Balance
|
For
all Funds, classes and account types except those listed below
|
$250
(None for accounts with
Systematic Investment Plans)
|
Individual
Retirement Accounts for all Funds and classes except those listed below
|
None
|
Columbia
Absolute Return Currency and Income Fund
|
$5,000
|
Columbia
Floating Rate Fund and Columbia Inflation Protected Securities Fund
|
$2,500
|
Class
I, Class K, Class R, Class R4, Class R5, Class W and Class Y
|
None
|
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 Fund in which you hold shares, or
setting up a Systematic Investment Plan. For more information, contact the Transfer Agent or your selling agent. The Transfer Agent's contact information (toll-free number and mailing addresses) as well as the Funds' website address can be found at
the beginning of the section
Choosing a Share Class
.
The Fund also may sell your Fund shares if your selling agent
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 — Class A, Class B, Class C, Class T
and Class Z Share Accounts Minimum Balance Fee
If the
value of your Fund 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 for any reason, including as a result of market
decline, your account generally will be subject to a $20 annual fee. This fee will be assessed through the automatic sale of Fund 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 Fund account balance, consolidating your Fund accounts through an exchange of shares of another Fund in which you hold shares,
Columbia Large Value Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
or setting up a Systematic Investment Plan that invests at least monthly. For
more information, contact the Transfer Agent or your selling agent. The Transfer Agent's contact information (toll-free number and mailing address(es)) as well as the Funds' website address can be found at the beginning of the section
Choosing a Share Class
.
The Funds 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 Small Account Policy (Accounts
Below Minimum Account Balance and Minimum Balance Fee)
The automatic sale of Fund shares of accounts under $250 and
the annual minimum balance fee described above do not apply to shareholders of Class I, Class K, Class R, Class R4, Class R5, Class W and Class Y shares; shareholders holding their shares through broker-dealer networked accounts; wrap fee and
omnibus accounts; accounts with active Systematic Investment Plans; certain qualified retirement plans; and health savings accounts. The automatic sale of Fund shares of accounts under the applicable Minimum Account Balance does not apply to
individual retirement plans.
Small Account Policy —
Broker-Dealer and Wrap Fee Accounts
The Funds may
automatically redeem, at any time, broker-dealer networked accounts and wrap fee accounts that have account balances of $20 or less or have less than one share.
Information Sharing Agreements
As required by Rule 22c-2 under the 1940 Act, the Funds or
certain of their service providers will enter into information sharing agreements with selling agents, including participating life insurance companies and selling agents that sponsor or offer retirement plans through which shares of the Funds are
made available for purchase. Pursuant to Rule 22c-2, selling agents 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.
Excessive Trading Practices Policy of Non-Money Market
Funds
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 purchase 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 sole discretion restrict or reject a purchase or exchange order even if the transaction is
not subject to the specific 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 purchase or exchange transactions communicated directly to the Transfer Agent and to those received by selling agents.
Specific Buying and Exchanging Limitations
— If a Fund detects that an investor has made two “material round trips” in any 28-day period, it will generally reject the investor's future purchase orders, including exchange purchase orders,
involving any 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 sole discretion, reject future buy orders by any person, group or account that appears to
have engaged in any type of excessive trading activity.
Columbia Large Value Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
These limits generally do not apply to automated transactions
or transactions by registered investment companies in 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. In addition, the Fund may, in its sole discretion, reinstate trading privileges that have been revoked under the Fund's Excessive Trading Policies and Procedures.
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 or exchange orders through selling agents, and cannot always know of or reasonably detect excessive trading that may be facilitated by selling agents 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 selling agents such as broker-dealers, retirement plans and variable insurance products. These arrangements often permit selling
agents to aggregate their clients' transactions and accounts, and in these circumstances, the identity of the shareholders is often not known to the Fund.
Some selling agents 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.
Columbia Large Value Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
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 Fund 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.
Excessive
Trading Practices Policy of Columbia Money Market Fund
A
money market fund is designed to offer investors a liquid cash option that they may buy and sell as often as they wish. Accordingly, the Board has not adopted policies and procedures designed to discourage excessive or short-term trading of Columbia
Money Market Fund shares. However, since frequent purchases and sales of Columbia Money Market Fund shares could in certain instances harm shareholders in various ways, including reducing the returns to long-term shareholders by increasing costs
(such as spreads paid to dealers who trade money market instruments with Columbia Money Market Fund) and disrupting portfolio management strategies, Columbia Money Market Fund reserves the right, but has no obligation, to reject any purchase or
exchange transaction at any time. Except as expressly described in this prospectus (such as minimum purchase amounts), Columbia Money Market Fund has no limits on purchase or exchange transactions. In addition, Columbia Money Market Fund reserves
the right to impose or modify restrictions on purchases, exchanges or trading of Fund shares at any time.
Opening an Account and Placing Orders
We encourage 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 or exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling agent.
As described below, once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.
The Funds are generally available directly and through
broker-dealers, banks and other selling agents or institutions, and through certain qualified and non-qualified plans, wrap fee products or other investment products sponsored by selling agents. You may exchange or sell shares through your selling
agent. If you maintain your account directly with your selling agent, you must contact that agent to process your transaction.
Not all selling agents offer the Funds and certain selling
agents that offer the Funds may not offer all Funds on all investment platforms or programs.
Please consult with your financial advisor to determine the availability of the Funds. If you set up an account at a
selling agent that does not have, and is unable to obtain, a selling agreement with the Distributor, you will not be able to transfer Fund holdings to that account. In that event, you must either maintain your Fund holdings with your current selling
agent, find another selling agent with a selling agreement, or sell your Fund shares, paying any applicable CDSC. Please be aware that transactions in taxable accounts are taxable events and may result in income tax liability.
Selling agents that offer the Funds may charge you additional
fees for the services they provide and they may have different policies that are not described in this prospectus.
Some policy differences may include different minimum investment amounts, exchange privileges, Fund
choices and cutoff times for investments. Additionally, recordkeeping, transaction processing and payments of distributions relating to your account may be performed by the selling agents through which your shares of the Fund are held. Since the
Fund (and its service providers) may not have a record of your account transactions, you should always contact the financial advisor employed by the selling agent through which you purchased or at which you maintain your shares of the Fund to make
changes to your account or to give instructions concerning your account, or to obtain information about your account. The Fund and its service providers, including the Distributor and the Transfer Agent, are not responsible for the failure of these
selling agents to carry out their obligations to its customers.
The Fund may engage selling agents to receive purchase,
exchange and sell orders on its behalf. Accounts established directly with the Fund will be serviced by the Transfer Agent. The Funds, the Transfer Agent and the Distributor do not provide investment advice.
Columbia Large Value Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Accounts Established Directly with the Fund
You or the financial advisor through which you buy shares may
establish an account with the Fund. To do so, complete a Fund account application with your financial advisor or investment professional, and mail the account application to the Transfer Agent. Account applications may be obtained at
columbiathreadneedle.com/us or may be requested by calling 800.345.6611. Make your check payable to the Fund. You will be assessed a $15 fee for any checks rejected by your financial institution due to insufficient funds or other reasons. The Funds
do not accept cash, credit card convenience checks, money orders, traveler's checks, starter checks, third or fourth party checks, or other cash equivalents.
Mail your check and completed application to the Transfer
Agent at its address that can be found at the beginning of the section
Choosing a Share Class.
You may also use these addresses to request an exchange or redemption of Fund shares. When a written order to buy,
sell or exchange shares is sent to the Transfer Agent, the share price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the
P.O. Box provided for regular mail delivery.
You will be
sent a statement confirming your purchase and any subsequent transactions in your account. You will also be sent quarterly and annual statements detailing your transactions in the Fund and the other Funds you own under the same account number.
Duplicate quarterly account statements for the current year and duplicate annual statements for the most recent prior calendar year will be sent to you free of charge. Copies of year-end statements for prior years are available for a fee. Please
contact the Transfer Agent for more information.
Written
Transactions
Once you have an account, you can
communicate written buy, sell or exchange orders to the Transfer Agent at its address that can be found at the beginning of the section
Choosing a Share Class
. When a written order to buy, sell or exchange
shares is sent to the Transfer Agent, the share price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the P.O. Box
provided for regular mail delivery.
Include in your
letter: your name; the name of the Fund(s); your account number; the class of shares to be exchanged or sold; your SSN or other TIN; the dollar amount or number of shares you want to exchange or sell; specific instructions regarding delivery of
redemption proceeds or exchange destination; signature(s) of registered account owner(s); and any special documents the Transfer Agent may require in order to process your order.
Corporate, trust or partnership accounts may need to send
additional documents. Payment will be mailed to the address of record and made payable to the names listed on the account, unless your request specifies differently and is signed by all owners.
Telephone Transactions
For Class A, Class B, Class C, Class R, Class T, Class Y and
Class Z shares, 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 SSN or TIN available when calling.
You can sell Fund shares via the telephone, by electronic
funds transfer or by check to the address of record, up to and including an aggregate of $100,000 of shares per day, per Fund account, if you qualify for telephone orders. Wire redemptions requested via the telephone are subject to a maximum of $3
million of shares per day, per Fund. You can buy up to and including $100,000 of shares per day, per Fund account through your bank account as an Automated Clearing House (ACH) transaction via the telephone if you qualify for telephone orders.
Telephone orders may not be as secure as written orders. The
Fund 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.
Columbia Large Value Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Online Transactions
For Class A, Class B, Class C, Class R, Class T, Class Y and
Class Z shares, once you have an account, you may contact the Transfer Agent 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 and
including an aggregate of $100,000 of shares per day, per Fund account through the internet if you qualify for internet orders.
Wire Transactions
You may buy (or redeem) Class A, Class B (redemptions only),
Class C, Class T, Class W (redemptions only), Class Y and Class Z shares of a Fund by wiring money from (or to) your bank account to (or from) your Fund account by calling the Transfer Agent at 800.422.3737. You must set up this feature prior to
your request unless you are submitting your request in writing with a Medallion Signature Guarantee. The Transfer Agent charges a fee for shares sold by Fedwire. The Transfer Agent may waive the fee for certain accounts. In the case of a redemption,
the receiving bank may charge an additional fee. The minimum amount that can be redeemed by wire is $500. The maximum amount that can be redeemed over the telephone is $3 million per day, per Fund account.
Electronic Funds Transfer
You may buy (or redeem) Class A, Class B (redemptions only),
Class C, Class T, Class Y and Class Z shares of a Fund by electronically transferring money from (or to) your bank account to (or from) 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.
Important:
Payments sent by an
electronic fund transfer, a bank authorization, or check that are not guaranteed may take up to 10 or more days to clear. If you request a redemption before the purchase funds clear, this may cause your redemption request to fail to process if the
requested amount includes unguaranteed funds. If you purchased your shares by check or from your bank account as an ACH transaction, the Fund may hold the redemption proceeds when you sell those shares for a period of time after the trade date of
the purchase.
Buying Shares
Eligible Investors
Class A and Class C Shares
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. As described in this prospectus,
Class A shares but not Class C shares are generally subject to a front-end sales charge, which reduces the dollar amount invested in a Fund. However, Class C shares are generally subject to higher fees than Class A shares, which will reduce any
returns on Class C shares relative to Class A shares. You may be eligible to purchase Class A shares without a front-end sales charge if the value of your Columbia Fund shares held in eligible accounts reaches $1,000,000 (in the case of a purchase
of Class A shares of a Taxable Fund) or $500,000 (in the case of a purchase of Class A shares of a Tax-Exempt Fund). If you are eligible to invest in Class A shares without a front-end sales charge, you should discuss your options with your selling
agent. For more information, see
Choosing a Share Class – Reductions/Waivers of Sales Charges
. A purchase order for Class C shares of a Taxable or Tax-Exempt Fund is limited to $999,999 and $499,999,
respectively. Your selling agent may impose additional limits on investments in Class C shares.
For Columbia Money Market Fund, new investments must be made
in Class A, Class I, Class W or Class Z shares, subject to eligibility. Class C and Class R shares of Columbia Money Market Fund are available as a new investment only to investors in the Distributor's proprietary 401(k) products, provided that such
investor is eligible to invest in
Columbia Large Value Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
the class and transacts directly with the Fund or the Transfer Agent through
a third party administrator or third party recordkeeper. Columbia Money Market Fund offers other classes of shares only to facilitate exchanges with other Funds offering these classes of shares.
Class B Shares (Closed)
The Funds no longer accept 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):
■
|
Dividend and/or capital gain
distributions may continue to be reinvested in Class B shares of a Fund.
|
■
|
Shareholders invested in Class
B shares of a Fund may exchange those shares for Class B shares of other Funds offering such shares. Certain exceptions apply, including that not all Funds may permit exchanges.
|
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, any purchase orders (except those submitted by a selling agent through the National Securities Clearing Corporation (NSCC) as described in more detail below) that are orders 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 automatically be invested in Class A shares of the Fund, without regard to the normal minimum initial investment requirement for Class A shares,
but subject to the front-end sales charge that generally applies to Class A shares. See
Choosing a Share Class — Sales Charges and Commissions — Class A Shares — Front-End Sales Charge
for
additional information. Your selling agent may have different policies not described here, including a policy to reject purchase orders for a Fund's Class B shares or to automatically invest the purchase amount in Columbia Money Market Fund. Please
consult your selling agent to understand its policy.
Additional purchase orders for a Fund's Class B shares by an
existing Class B shareholder, submitted by such shareholder's selling agent through the NSCC, will be rejected due to operational limitations of the NSCC. Investors should consult their selling agent if they wish to invest in the Fund by purchasing
a share class of the Fund other than Class B shares.
Dividend and/or capital gain distributions from Class B shares
of a Fund will not be automatically invested in Class B shares of another 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 Fund will be
reinvested in Class B shares of the same Fund that is making the distribution.
Class I Shares
Class I shares are available only to the Funds (i.e.,
fund-of-funds investments).
Class K Shares (Closed)
Class K shares are closed to new investors and new accounts,
subject to certain limited exceptions described below.
Shareholders who opened and funded a Class K account with the
Fund as of the close of business on December 31, 2010 (including accounts once funded that subsequently reached a zero balance) may continue to make additional purchases of Class K shares. Plans may continue to make additional purchases of Fund
shares and add new participants, and new plans sponsored by the same or an affiliated sponsor may invest in the Fund (and add new participants) if an initial plan so sponsored invested in the Fund as of December 31, 2010 (or had approved the Fund as
an investment option as of December 31, 2010 and funded its initial account with the Fund prior to March 31, 2011) and holds Fund shares at the plan level.
Columbia Large Value Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
An order to purchase Class K shares received by the Fund or
the Transfer Agent after the close of business on December 31, 2010 (other than as described above) from a new investor or a new account that is not eligible to purchase shares will be refused by the Fund and the Transfer Agent and any money that
the Fund or the Transfer Agent received with the order will be returned to the investor or the selling agent, as appropriate, without interest.
Class K shares are designed for qualified employee benefit
plans, trust companies or similar institutions, charitable organizations that meet the definition in Section 501(c)(3) of the Code, non-qualified deferred compensation plans whose participants are included in a qualified employee benefit plan
described above, state sponsored college savings plans established under Section 529 of the Code, and health savings accounts created pursuant to public law 108-173. Class K shares may be purchased, sold or exchanged only through the Distributor or
an authorized selling agent.
Prior to October 25, 2012,
Class K shares were named Class R4 shares.
Class R
Shares
Class R shares are available only to eligible
health savings accounts sponsored by third party platforms, including those sponsored by Ameriprise Financial affiliates, eligible retirement plans and, in the sole discretion of the Distributor, other types of retirement accounts held through
platforms maintained by selling agents approved by the Distributor. Eligible retirement plans include any retirement plan other than individual 403(b) plans. Class R shares are generally not available for investment through retail nonretirement
accounts, traditional and Roth IRAs, Coverdell Education Savings Accounts, SEPs, SAR-SEPs, Simple IRAs or 529 tuition programs. Contact the Transfer Agent or your retirement plan or health savings account administrator for more information about
investing in Class R shares.
Class R4 Shares
Class R4 shares are available only to (i) omnibus retirement
plans, (ii) trust companies or similar institutions, (iii) broker-dealers, banks, trust companies and similar institutions that clear Fund share transactions for their client or customer investment advisory or similar accounts through designated
selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R4 eligibility apart from selling, servicing or similar agreements, (iv) 501(c)(3) charitable
organizations, (v) 529 plans and (vi) health savings accounts.
Prior to October 31, 2012, Class R4 shares were named Class R3
shares.
Class R5 Shares
Class R5 shares are available only to (i) certain registered
investment advisers that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with
respect to Class R5 eligibility apart from selling, servicing or similar agreements and (ii) omnibus retirement plans. Prior to November 8, 2012, Class R5 shares were closed to new investors and new accounts, subject to certain exceptions. Existing
shareholders who do not satisfy the new eligibility requirements for investment in Class R5 may not establish new Class R5 accounts but may continue to make additional purchases of Class R5 shares in accounts opened and funded prior to November 8,
2012; provided, however, that investment advisory programs and similar programs that opened a Class R5 account as of May 1, 2010, and continuously hold Class R5 shares in such account after such date, may generally not only continue to make
additional purchases of Class R5 shares but also open new Class R5 accounts for such pre-existing programs and add new shareholders in the program.
Class T Shares
Class T shares are available only to investors who received
(and who have continuously held) Class T shares in connection with the merger of certain Galaxy funds into certain Funds that were then named Liberty funds.
Class W Shares
Class W shares are available only to investors purchasing
through authorized investment programs managed by investment professionals, including discretionary managed account programs. Class W shares may be purchased, sold or exchanged only through the Distributor or an authorized selling agent. Shares
originally purchased in a
Columbia Large Value Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
discretionary managed account may continue to be held in Class W outside of a
discretionary managed account, but no additional Class W purchases may be made and no exchanges to Class W shares of another Fund may be made outside of a discretionary managed account.
Class Y Shares
Class Y shares, except as noted below, are available only to
retirement plans that maintain plan-level or omnibus accounts with the Fund (through the Transfer Agent).
Prior to November 8, 2012, Class Y shares were offered only to
certain former shareholders of series of the former Columbia Funds Institutional Trust (together, Former CFIT Shareholders). Former CFIT Shareholders who opened and funded a Class Y account with a Fund as of the close of business on November 7, 2012
may continue to make additional purchases of Class Y shares even if they do not satisfy the current eligibility requirements but may not establish new Class Y shares accounts and will not be eligible to exchange Class Y shares of a Fund into Class Y
shares of other Funds. Former CFIT Shareholders may exchange Class Y shares of a Fund for Class Z shares of the same Fund or Class Z shares of another Fund, subject to applicable minimum investments.
Class Z Shares
Class Z shares are available only to the categories of
eligible investors described below under
Class Z Shares Minimum Initial Investments
.
Selling agents that clear Fund share transactions through designated selling agents and
their mutual fund trading platforms that were given specific written notice from the Transfer Agent of the termination, effective March 29, 2013, of their eligibility for new purchases of Class Z shares and omnibus retirement plans are not permitted
to establish new Class Z accounts, subject to certain exceptions described below.
Omnibus retirement plans that opened and, subject to certain
exceptions, funded a Class Z account with the Fund as of the close of business on March 28, 2013, and have continuously held Class Z shares in such account after such date, may generally continue to make additional purchases of Class Z shares, open
new Class Z accounts and add new participants. In addition, an omnibus retirement plan affiliated with a grandfathered plan may, in the sole discretion of the Distributor, open new Class Z accounts in a Fund if the affiliated plan opened a Class Z
account on or before March 28, 2013. If an omnibus retirement plan invested in Class Z shares changes recordkeepers after March 28, 2013, any new accounts established for that plan may not be established in Class Z shares, but such a plan may
establish new accounts in a different share class for which the plan is eligible. The Distributor may, in its sole discretion, delay the funding requirement described above for omnibus retirement plans to allow an omnibus retirement plan that opened
a Class Z account (the initial Class Z account) with the Fund as of the close of business on March 28, 2013 to make additional purchases of Class Z shares, open new Class Z accounts and add new participants so long as the initial Class Z account was
funded by July 2, 2013.
Accounts of selling agents
(other than omnibus retirement plans, which are discussed above) that clear Fund share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that received specific written notice
from the Transfer Agent of the termination, effective March 29, 2013, of their eligibility for new purchases of Class Z shares will not be permitted to establish new Class Z accounts or make additional purchases of Class Z shares (other than through
reinvestment of distributions). Such accounts may, at their holder’s option, exchange Class Z shares of a Fund, without the payment of a sales charge, for Class A shares of the same Fund.
Additional Eligible Investors
In addition, the Distributor, in its sole discretion, may
accept investments in any share class from investors other than those listed in this prospectus.
Minimum Initial Investments
The table below shows the Fund's minimum initial investment
requirements, which may vary by Fund, class and type of account.
Columbia Large Value Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Minimum
Initial Investments
|
|
Minimum
Initial
Investment
(a)
|
Minimum
Initial Investment
for Accounts
with Systematic
Investment Plans
|
For
all Funds, classes and account types except those listed below
|
$2,000
|
$100
(b)
|
Individual
Retirement Accounts for all Funds and classes except those listed below
|
$1,000
|
$100
(c)
|
Columbia
Absolute Return Currency and Income Fund
|
$10,000
|
$10,000
|
Columbia
Floating Rate Fund and Columbia Inflation Protected Securities Fund
|
$5,000
|
$5,000
|
Class
I, Class K, Class R, Class R4 and Class Y
|
None
|
N/A
|
Class
R5
|
variable
(d)
|
N/A
|
Class
W
|
$500
|
N/A
|
Class
Z
|
variable
(e)
|
$100
|
(a)
|
If your Class A, Class B, Class
C, Class T or Class Z shares account balance falls below the minimum initial investment amount for any reason, including a market decline, you may be asked to increase it to the minimum initial investment amount or establish a monthly Systematic
Investment Plan. If you do not do so, your account will be subject to a $20 annual low balance fee and/or shares may be automatically redeemed and the proceeds mailed to you if the account falls below the minimum account balance. See
Buying, Selling and Exchanging Shares — Transaction Rules and Policies
above.
|
(b)
|
Columbia Money Market Fund
—
$2,000
|
(c)
|
Columbia Money Market Fund
—
$1,000
|
(d)
|
There is no minimum initial
investment in Class R5 shares for omnibus retirement plans. A minimum initial investment of $100,000 applies to aggregate purchases of Class R5 shares of a Fund for combined underlying accounts of any registered investment adviser that clears Fund
share transactions for their client or customer accounts through designated selling agents and their mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R5 eligibility
apart from selling, servicing or similar agreements.
|
(e)
|
The minimum initial investment
amount for Class Z shares is $0, $1,000 or $2,000 depending upon the category of eligible investor. See
—
Class Z Shares Minimum Initial Investments
below. The
minimum initial investment amount for systematic investment plan accounts is the same as the amount set forth in the first two rows of the table, as applicable.
|
The minimum initial investment requirements may be waived for
accounts that are managed by an investment professional, for accounts held in approved discretionary or non-discretionary wrap programs, or for accounts that are a part of an employer-sponsored retirement plan. The Distributor, in its sole
discretion, may also waive minimum initial investment requirements for other account types.
Minimum investment and related requirements may be modified at
any time, with or without prior notice. If your account is closed and then re-opened with a systematic investment plan, your account must meet the then-current applicable minimum initial investment.
Class Z Shares 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 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.
|
■
|
Any investor participating
in a wrap program sponsored by a selling agent 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:
Columbia Large Value Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
■
|
Any individual retirement
plan for which a selling agent 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 employee of Columbia
Management Investment Advisers, LLC, the Distributor or the Transfer Agent and immediate family members of any of the foregoing who share the same address and any persons employed as of April 30, 2010 by Columbia Management Advisors, LLC, Columbia
Management Distributors, Inc., or Columbia Management Services, Inc., the adviser, distributor and transfer agent of series of CFST and CFST I prior to May 1, 2010 (the Previous Service Providers) and immediate family members of any of the foregoing
who share the same address are eligible to make new and subsequent purchases in Class Z shares through an individual retirement account. If you maintain your account with a selling agent, you must contact that selling agent each time you seek to
purchase shares to notify them that you qualify for Class Z shares.
|
The minimum initial investment in Class Z shares for the
following categories of eligible investors is $2,000:
■
|
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 a series of CFST or CFST I distributed by the Distributor.
|
■
|
Any investor participating
in an account offered by a selling agent 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.
|
■
|
Any employee of Columbia
Management Investment Advisers, LLC, the Distributor or the Transfer Agent and immediate family members of any of the foregoing who share the same address and any persons employed as of April 30, 2010 by the Previous Service Providers and any of
their immediate family members who share the same address are eligible to make new and subsequent purchases in Class Z shares through a non-retirement account. If you maintain your account with a selling agent, you must contact that selling agent
each time you seek to purchase shares to notify them that you qualify for Class Z shares.
|
■
|
Certain other investors as
set forth in more detail in the SAI.
|
Systematic Investment Plan
The Systematic Investment Plan allows you to schedule regular
purchases via automatic transfers from your bank account to the Fund on a monthly, quarterly or semiannual basis. Contact the Transfer Agent or your selling agent to set up the plan. Systematic Investment Plans may not be available for all share
classes.
Dividend Diversification
Generally, you may automatically invest distributions made by
another Fund into the same class of shares (and in some cases certain other classes of shares) of a Fund at no additional sales charge. A sales charge may apply when you invest distributions made with respect to shares that were not subject to a
sales charge at the time of your initial purchase. Call the Transfer Agent at 800.345.6611 for details. The ability to invest distributions from one Fund to another Fund may not be available to accounts held at all selling agents.
Columbia Large Value Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Other Purchase Rules You Should Know
■
|
Once the Transfer Agent or
your selling 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
and Class T shares at the public offering price per share because purchases of these share classes are generally subject to a front-end sales charge.
|
■
|
You buy Class B, Class C,
Class I, Class K, Class R, Class R4, Class R5, Class W, Class Y and Class Z shares at net asset value per share because no front-end sales charge applies to purchases of these share classes.
|
■
|
The Distributor and the
Transfer Agent reserve the right to cancel your order if the Fund 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 agents are
responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.
|
■
|
Shares purchased 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. The payment will be sent within seven days after your request is received in “good form.” When you sell shares, the amount you receive may be more or less than the amount you invested.
Your sale price will be the next NAV calculated after your
request is received in “good form,” minus any applicable CDSC.
Systematic Withdrawal Plan
The Systematic Withdrawal Plan allows you to schedule regular
redemptions from your account any business day on a monthly, quarterly or semiannual basis. Currently, Systematic Withdrawal Plans are generally available for Class A, Class B, Class C, Class R4, Class R5, Class T, Class W, Class Y and Class Z share
accounts. Contact the Transfer Agent or your financial advisor to set up the plan. To set up the plan, your account balance must meet the class minimum initial investment amount. 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 Signature Guaranteed.
You can choose to receive your withdrawals via check or direct
deposit into your bank account. The Fund will deduct any applicable CDSC from the withdrawals before sending the balance to you. You can cancel the plan by giving the Fund 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 withdraw your entire investment.
Check Redemption Service (for Columbia Money Market Fund)
Class A and Class Z shares of Columbia Money Market Fund offer
check writing privileges. If you have $2,000 in Columbia Money Market Fund, you may request checks which may be drawn against your account. The amount of any check drawn against your Columbia Money Market Fund must be at least $100. You can elect
this service on your initial application or thereafter. Call 800.345.6611 for the appropriate forms to establish this service. If you own Class A shares that were originally purchased in another Fund at NAV because of the size of the purchase, and
then exchanged into Columbia Money Market Fund, check redemptions may be subject to a CDSC. A $15 charge will be assessed for any stop payment order requested by you or any overdraft in connection with checks written against your Columbia Money
Market Fund account. Note that a Medallion Signature Guarantee may be required if this service is established after the account is opened.
Columbia Large Value Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
In-Kind Redemptions
The Fund reserves the right to honor redemption orders with
in-kind distributions of portfolio securities instead of cash. In the event the Fund distributes portfolio securities in-kind, you may incur 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. For U.S. federal income tax purposes redemptions paid in securities are generally treated the same as redemptions paid in cash.
Other Redemption Rules You Should Know
■
|
Once the Transfer Agent or
your selling agent receives your redemption order in “good form,” your shares will be sold at the next calculated NAV 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 that
are held directly with the Funds (through the Transfer Agent), we will normally send the redemption proceeds by mail or electronically transfer them to your bank account within three business days after the Transfer Agent or your selling agent
receives your order in “good form.”
|
■
|
If you sell your shares
through a selling agent, the Funds will normally send the redemption proceeds by Fedwire within three business days after the Transfer Agent or your selling agent receives your order in “good form.”
|
■
|
If you paid for your shares
by check or from your bank account as an ACH transaction, the Funds will hold the redemption proceeds when you sell those shares for a period of time after the trade date of the purchase.
|
■
|
No interest will be paid on
uncashed redemption checks.
|
■
|
The Funds can delay payment
of the redemption proceeds for up to seven days and may suspend redemptions and/or further postpone payment of redemption proceeds when the NYSE is closed or trading thereon is restricted or during emergency or other circumstances, including as
determined by the SEC.
|
■
|
Other restrictions may apply
to retirement accounts. For information about these restrictions, contact your retirement plan administrator.
|
■
|
The Fund reserves the right
to redeem your shares if your account falls below the Fund's minimum initial investment requirement.
|
■
|
Also keep in mind the 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 your Fund to buy shares of
another Fund, in what is called an exchange. You should read the prospectus of, and make sure you understand the investment objective, principal investment strategies, risks, fees and expenses of, the Fund into which you are exchanging.
You may be subject to a sales charge if you exchange from
Columbia Money Market Fund or any other Fund that does not charge a front-end sales charge into a non-money market Fund.
If you hold your Fund shares through certain selling agents, including Ameriprise Financial
Services, Inc., you may have limited exchangeability among the Funds.
Please contact your selling agent for more information.
You can generally make exchanges between like share classes of
any Fund and, subject to eligibility requirements, other share classes of any Fund. Some exceptions apply. Although the Funds allow certain exchanges from one share class to another share class with higher expenses, you should consider the expenses
of each class before making such an exchange.
Systematic
Exchanges
You may buy Class A, Class C, Class T, Class
W, Class Y and/or Class Z shares of a Fund by exchanging each month from another Fund for shares of the same class of the Fund at no additional cost, subject to the following exchange amount minimums: $50 each month for individual retirement
accounts (i.e. tax qualified accounts); and $100 each month for non-retirement accounts. Contact the Transfer Agent or your selling agent to set up the plan. If you set up your plan to exchange more than $100,000 each month, you must obtain a
Medallion Signature Guarantee.
Columbia Large Value Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
Exchanges will continue as long as your balance is sufficient
to complete the systematic monthly transfers, subject to the 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 $50 and $100 minimum requirements noted immediately above) by calling the Transfer Agent at 800.345.6611. A sales charge may apply when you exchange shares of a Fund that were
not assessed a sales charge at the time of your initial purchase.
Other Exchange Rules You Should Know
■
|
Exchanges are made at the
NAV next calculated after your exchange order is received in “good form.”
|
■
|
Once the Fund receives your
exchange request, you cannot cancel it after the market closes.
|
■
|
The rules for buying shares
of a Fund generally apply to exchanges into that Fund, including, if your exchange creates a new Fund account, it must satisfy the minimum investment amount, unless a waiver applies.
|
■
|
Shares of the purchased Fund
may not be used on the same day for another exchange or sale.
|
■
|
If you exchange shares from
Class A shares of Columbia Money Market Fund to a non-money market Fund, any further exchanges must be between shares of the same class. For example, if you exchange from Class A shares of Columbia Money Market Fund into Class C shares of a
non-money market Fund, you may not exchange from Class C shares of that non-money market Fund back to Class A shares of Columbia Money Market Fund.
|
■
|
A sales charge may apply when
you exchange shares of a Fund that were not assessed a sales charge at the time of your initial purchase. For example, if your initial investment was in Columbia Money Market Fund and you exchange into a non-money market Fund, your transaction is
subject to a front-end sales charge if you exchange into Class A shares and to a CDSC if you exchange into Class C shares of the Funds.
|
■
|
If your initial investment
was in Class A shares of a non-money market Fund and you exchange shares into Columbia Money Market Fund, you may exchange that amount to another Fund, including dividends earned on that amount, without paying a sales charge.
|
■
|
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 Fund and ends when you sell the shares of the Fund you received from the exchange. The applicable CDSC will be the CDSC of the original Fund.
|
■
|
You may make exchanges only
into a Fund that is legally offered and sold in your state of residence. Contact the Transfer Agent or your selling agent for more information.
|
■
|
You generally may make an
exchange only into a 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.
|
■
|
Changing your investment to
a different Fund will be treated as a sale and purchase, and you will be subject to applicable taxes on the sale and sales charges on the purchase of the new Fund.
|
■
|
Class Z shares of a Fund may
be exchanged for Class A or Class Z shares of another Fund. In certain circumstances, the front-end sales charge applicable to Class A shares may be waived on exchanges of Class Z shares for Class A shares. See
Buying, Selling and Exchanging Shares — Buying Shares — Eligible Investors — Class Z Shares
for details.
|
■
|
You may generally exchange
Class T shares of a Fund for Class A shares of another Fund if the other Fund does not offer Class T shares. Class T shares exchanged into Class A shares cannot be exchanged back into Class T shares.
|
■
|
Class W shares originally
purchased, but no longer held, in a discretionary managed account, may not be exchanged for Class W shares of another Fund.
|
Columbia Large Value Quantitative Fund
Buying, Selling and
Exchanging Shares
(continued)
■
|
Former CFIT Shareholders may
not exchange Class Y shares of a Fund into Class Y shares of another Fund.
|
Same-Fund Exchange Privilege
Certain shareholders of a Fund may be or become eligible to
invest in other classes of shares of the same Fund. Upon a determination of such eligibility, such shareholders may be eligible to exchange their shares for shares of the other share class, if offered. Such exchanges include exchanges of shares of
one class for shares of another share class with higher expenses. Before making such an exchange, you should consider the expenses of each class. Investors should contact their selling agents to learn more about the details of the exchange
privilege.
Note the following rules relating to
same-Fund exchanges:
■
|
No sales charges or other
charges will apply to any such exchange, except that when Class B shares are exchanged, any CDSC applicable to Class B shares will be applied.
|
■
|
Ordinarily, shareholders
will not recognize a gain or loss for U.S. federal income tax purposes upon such an exchange. You should consult your tax advisor about your particular exchanges.
|
Columbia Large Value Quantitative Fund
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 generally unrealized. If the fund sells an investment, it generally will realize a capital gain if it sells that investment for a
higher price than its adjusted cost basis, and will generally realize a capital loss if it sells that investment for a lower price than its adjusted cost basis. Capital gains and losses are either short-term or long-term, depending on whether the
fund holds the securities for one year or less (short-term) or more than one year (long-term).
|
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 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
|
Annually
|
Distributions
|
Annually
|
The Fund may, however, declare or
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 distribution was declared (or, if the Fund declares distributions daily, 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 (the selling agent through which you purchased shares may have different policies). You can do this by contacting the Funds at
the addresses and telephone numbers listed at the beginning of the section entitled
Choosing a Share Class
. No sales charges apply to the purchase or sale of such shares.
For accounts held directly with the Fund (through the Transfer
Agent), 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.
Columbia Large Value Quantitative Fund
Distributions and Taxes
(continued)
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) of net
investment income or net realized capital gain, because doing so can cost you money in taxes to the extent 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,” before you invest check the Fund's distribution schedule, which is available at the Funds' website and/or by calling the Funds' telephone
number listed at the beginning of the section entitled
Choosing a Share Class
.
Taxes
You should be aware of the following considerations applicable
to all Funds (unless otherwise noted):
■
|
The Fund intends to qualify
and to be eligible for treatment 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 for treatment as a regulated investment company would result in Fund-level taxation, and consequently, a reduction in income available for distribution to you and in the net asset value of your shares. Even if the Fund
qualifies for treatment as a regulated investment company, the Fund may be subject to federal excise tax on certain undistributed income or gains.
|
■
|
Distributions, if taxable,
generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional Fund shares. Dividends paid in January are deemed paid on December 31 of the prior year if the dividend was declared and payable to
shareholders of record in October, November, or December of such prior year.
|
■
|
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.
|
■
|
From time to time, a
distribution from the Fund could constitute a return of capital, which is not taxable to you so long as the amount of the distribution does not exceed your tax basis in your Fund shares. A return of capital reduces your tax basis in your Fund
shares, with any amounts exceeding such basis generally taxable as capital gain.
|
■
|
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 the lower net long-term capital gain rates instead of the higher
ordinary income rates. 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.
|
■
|
Certain high-income
individuals (as well as estates and trusts) are subject to a 3.8% tax on net investment income. For individuals, the 3.8% tax applies to the lesser of (1) the amount (if any) by which the taxpayer's modified adjusted gross income exceeds certain
threshold amounts or (2) the taxpayer's “net investment income.”
|
|
Net investment income
generally includes for this purpose dividends, including any capital gain dividends, paid by the Fund, and net gains recognized on the sale, redemption or exchange of shares of the Fund.
|
■
|
Certain derivative
instruments when held in the Fund's portfolio subject the Fund to special tax rules, the effect of which may be to, among other things, accelerate income to the Fund, defer Fund losses, cause adjustments in the holding periods of Fund portfolio
securities, or convert capital gains into ordinary income, short-term capital losses into long-term capital losses or long-term capital gains into short-term capital gains. These rules could therefore affect the amount, timing and/or character of
distributions to shareholders.
|
■
|
Certain Funds may purchase
or write options, as described further in the SAI. Generally, a Fund realizes a capital gain or loss on an option when the option expires, or when it is exercised, sold or otherwise terminated. However, if an option is a “section 1256
contract,” which includes most traded options on a broad-based index, and the
|
Columbia Large Value Quantitative Fund
Distributions and Taxes
(continued)
|
Fund holds such option at
the end of its taxable year, the Fund is deemed to sell such option at fair market value at such time and recognize any gain or loss thereon, which is generally deemed to be 60% long-term and 40% short-term gain or loss, as described further in the
SAI.
|
■
|
If at the end of the taxable
year more than 50% of the value of the Fund's assets consists of securities of foreign corporations, and the Fund makes a special election, you will generally be required to include in your income for U.S. federal income tax purposes your share of
the qualifying foreign income taxes paid by the Fund in respect of its foreign portfolio securities. You may be able to claim a foreign tax credit or deduction in respect of this amount, subject to certain limitations. There is no assurance that the
Fund will make this election for a taxable year, even if it is eligible to do so.
|
■
|
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 your adjusted tax basis in the shares, which is generally 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; in other circumstances, capital losses may be disallowed under the “wash sale” rules.
|
■
|
The Fund generally is
required to report to shareholders and the Internal Revenue Service (the IRS) upon the sale, exchange or redemption of Fund shares cost basis information with respect to those shares. The Fund uses average cost basis as its default method of
calculating cost basis. Please see columbiathreadneedle.com/us or contact the Fund at 800.345.6611 for more information regarding average cost basis reporting, other available cost basis methods and how to select or change a particular method or to
choose specific shares to sell, redeem or exchange. If you hold Fund shares through a selling agent, you should contact your selling agent to learn about its cost basis reporting default method and the reporting elections available to your account.
|
■
|
The Fund is required by
federal law to withhold tax on any taxable or tax-exempt distributions and redemption 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 TIN or haven't certified to the Fund that withholding doesn't apply; the 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.
|
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. Please see the SAI for more detailed tax information. 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.
[This page intentionally left blank]
[This page intentionally left blank]
[This page intentionally left blank]
Additional Information About the Fund
Additional information about the Fund’s investments is available in
the Fund’s annual and semiannual 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.
The SAI also provides additional information about the Fund and its policies. The SAI, which has been filed with the SEC, is legally part of this prospectus (incorporated by reference). To obtain these documents free of charge, to request other
information about the Fund and to make shareholder inquiries, please contact the Fund as follows:
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:
columbiathreadneedle.com/us
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, D.C. 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, D.C. 20549-1520.
The investment company registration number of Columbia Funds
Series Trust II, of which the Fund is a series, is 811-21852.
© 2015 Columbia Management Investment Distributors,
Inc.
225 Franklin Street, Boston, MA 02110
800.345.6611
STATEMENT OF ADDITIONAL INFORMATION
June 1, 2015
Columbia Funds Series Trust
Columbia
AMT-Free California Intermediate Muni
Bond Fund
|
Class
A: NACMX
|
Class
B: CCIBX
|
Class
C: CCICX
|
Class
R4: CCMRX
|
Class
R5: CNBRX
|
Class
Z: NCMAX
|
Columbia
AMT-Free Georgia Intermediate Muni
Bond Fund
|
Class
A: NGIMX
|
Class
B: NGITX
|
Class
C: NGINX
|
Class
R4: CGIMX
|
Class
Z: NGAMX
|
|
Columbia
AMT-Free Maryland Intermediate Muni
Bond Fund
|
Class
A: NMDMX
|
Class
B: NMITX
|
Class
C: NMINX
|
Class
R4: CMDMX
|
Class
Z: NMDBX
|
|
Columbia
AMT-Free North Carolina Intermediate Muni Bond Fund
|
Class
A: NNCIX
|
Class
B: NNITX
|
Class
C: NNINX
|
Class
R4: CNCEX
|
Class
Z: NNIBX
|
|
Columbia
AMT-Free South Carolina Intermediate Muni Bond Fund
|
Class
A: NSCIX
|
Class
B: NISCX
|
Class
C: NSICX
|
Class
R4: CSICX
|
Class
Z: NSCMX
|
|
Columbia
AMT-Free Virginia Intermediate Muni Bond Fund
|
Class
A: NVAFX
|
Class
B: NVANX
|
Class
C: NVRCX
|
Class
R4: CAIVX
|
Class
Z: NVABX
|
|
Columbia
Capital Allocation Moderate
Aggressive Portfolio
|
Class
A: NBIAX
|
Class
B: NLBBX
|
Class
C: NBICX
|
Class
K: CAMKX
|
Class
R: CLBRX
|
Class
R4: CGBRX
|
Class
R5: CLHRX
|
Class
T: CGGTX
|
Class
Y: CPHNX
|
Class
Z: NBGPX
|
|
|
Columbia
Capital Allocation Moderate
Conservative Portfolio
|
Class
A: NLGAX
|
Class
B: NLIBX
|
Class
C: NIICX
|
Class
K: CCAKX
|
Class
R: CLIRX
|
Class
R4: CHWRX
|
Class
R5: CLRRX
|
Class
Y: CPDGX
|
Class
Z: NIPAX
|
Columbia
Convertible Securities Fund
|
Class
A: PACIX
|
Class
B: NCVBX
|
Class
C: PHIKX
|
Class
I: CCSIX
|
Class
R: CVBRX
|
Class
R4: COVRX
|
Class
R5: COCRX
|
Class
W: CVBWX
|
Class
Y: CSFYX
|
Class
Z: NCIAX
|
|
|
Columbia
International Opportunities Fund
|
Class
A: MAIOX
|
Class
B: MBIOX
|
Class
C: MCIOX
|
Class
I: CMOIX
|
Class
R: CMORX
|
Class
R4: CLFRX
|
Class
Z: NMOAX
|
|
|
Columbia
International Value Fund
|
Class
A: NIVLX
|
Class
B: NBIVX
|
Class
C: NVICX
|
Class
I: CVLIX
|
Class
R: CIVRX
|
Class
R4: CVFRX
|
Class
R5: CLVRX
|
Class
Z: EMIEX
|
|
Columbia
Large Cap Enhanced Core Fund
|
Class
A: NMIAX
|
Class
I: CCEIX
|
Class
R: CCERX
|
Class
R5: CLNCX
|
Class
Y: CECYX
|
Class
Z: NMIMX
|
Columbia
Large Cap Index Fund
|
Class
A: NEIAX
|
Class
B: CLIBX
|
Class
I: CCXIX
|
Class
R5: CLXRX
|
Class
Z: NINDX
|
|
Columbia
LifeGoal
®
Growth Portfolio*
|
Class
A: NLGIX
|
Class
B: NLGBX
|
Class
C: NLGCX
|
Class
K: CGRUX
|
Class
R: CLGRX
|
Class
R4: CWPRX
|
Class
R5: CGPRX
|
Class
Z: NGPAX
|
|
Columbia
Marsico 21st Century Fund
|
Class
A: NMTAX
|
Class
B: NMTBX
|
Class
C: NMYCX
|
Class
R: CMTRX
|
Class
R4: CTFRX
|
Class
R5: CADQX
|
Class
Z: NMYAX
|
|
|
Columbia
Marsico Focused Equities Fund
|
Class
A: NFEAX
|
Class
B: NFEBX
|
Class
C: NFECX
|
Class
I: CMRIX
|
Class
R4: CSFRX
|
Class
R5: CADRX
|
Class
Z: NFEPX
|
|
|
Columbia
Marsico Global Fund
|
Class
A: COGAX
|
Class
C: COGCX
|
Class
R: COGRX
|
Class
R4: CADHX
|
Class
R5: CADIX
|
Class
Z: COGZX
|
Columbia
Marsico Growth Fund
|
Class
A: NMGIX
|
Class
B: NGIBX
|
Class
C: NMICX
|
Class
I: CMWIX
|
Class
R: CMWRX
|
Class
R4: CWSRX
|
Class
R5: CTGRX
|
Class
W: CMSWX
|
Class
Z: NGIPX
|
Columbia
Mid Cap Index Fund
|
Class
A: NTIAX
|
Class
I: CIDIX
|
Class
R5: CPXRX
|
Class
Z: NMPAX
|
|
|
Columbia
Mid Cap Value Fund
|
Class
A: CMUAX
|
Class
B: CMUBX
|
Class
C: CMUCX
|
Class
I: CMVUX
|
Class
K: CMUFX
|
Class
R: CMVRX
|
Class
R4: CFDRX
|
Class
R5: CVERX
|
Class
W: CMUWX
|
Class
Y: CMVYX
|
Class
Z: NAMAX
|
|
Columbia
Overseas Value Fund
|
Class
A: COAVX
|
Class
B: COBVX
|
Class
C: COCVX
|
Class
I: COVIX
|
Class
K: COKVX
|
Class
R: —
|
Class
W: COVWX
|
Class
Z: COSZX
|
|
Columbia
Select International Equity Fund
|
Class
A: NIIAX
|
Class
B: NIENX
|
Class
C: NITRX
|
Class
I: CUAIX
|
Class
K: CMEFX
|
Class
R: CIERX
|
Class
R4: CQYRX
|
Class
R5: CQQRX
|
Class
W: CMAWX
|
Class
Y: CMIYX
|
Class
Z: NIEQX
|
|
Columbia
Select Large Cap Equity Fund
|
Class
A: NSGAX
|
Class
B: NSIBX
|
Class
C: NSGCX
|
Class
I: CLPIX
|
Class
R5: CLCRX
|
Class
W: CLCWX
|
Class
Z: NSEPX
|
|
|
Columbia
Short Term Bond Fund
|
Class
A: NSTRX
|
Class
B: NSTFX
|
Class
C: NSTIX
|
Class
I: CTMIX
|
Class
K: CBRFX
|
Class
R: CSBRX
|
Class
R4: CMDRX
|
Class
R5: CCBRX
|
Class
W: CSBWX
|
Class
Y: CSBYX
|
Class
Z: NSTMX
|
|
Columbia
Short Term Municipal Bond Fund
|
Class
A: NSMMX
|
Class
B: NSMNX
|
Class
C: NSMUX
|
Class
R4: CSMTX
|
Class
R5: CNNRX
|
Class
Z: NSMIX
|
Columbia
Small Cap Index Fund
|
Class
A: NMSAX
|
Class
B: CIDBX
|
Class
I: CSIIX
|
Class
K: CIDUX
|
Class
R5: CXXRX
|
Class
W: CSMWX
|
Class
Z: NMSCX
|
|
|
Columbia
Small Cap Value Fund II
|
Class
A: COVAX
|
Class
B: COVBX
|
Class
C: COVCX
|
Class
I: CSLIX
|
Class
R: CCTRX
|
Class
R4: CLURX
|
Class
R5: CRRRX
|
Class
Y: CRRYX
|
Class Z:
NSVAX
|
Columbia Funds Series Trust II
Active
Portfolios
®
Multi-Manager Value Fund
|
Class
A: CDEIX
|
|
|
Columbia
Absolute Return Currency and Income Fund
|
Class
A: RARAX
|
Class
B: CARBX
|
Class
C: RARCX
|
Class
I: RVAIX
|
Class
R4: CARCX
|
Class
R5: COUIX
|
Class
W: RACWX
|
Class
Y: CABYX
|
Class
Z: CACZX
|
Columbia
AMT-Free Tax-Exempt Bond Fund
|
Class
A: INTAX
|
Class
B: ITEBX
|
Class
C: RTCEX
|
Class
R4: CATRX
|
Class
R5: CADNX
|
Class
Z: CATZX
|
Columbia
Asia Pacific ex-Japan Fund
|
Class
A: CAJAX
|
Class
C: CAJCX
|
Class
I: CAPIX
|
Class
R: CAJRX
|
Class
R5: TAPRX
|
Class
Z: CAJZX
|
Columbia
Capital Allocation Aggressive Portfolio
|
Class
A: AXBAX
|
Class
B: AXPBX
|
Class
C: RBGCX
|
Class
K: CAGRX
|
Class
R: CPARX
|
Class
R4: CPDAX
|
Class
R5: CPANX
|
Class
Y: CPDIX
|
Class
Z: CPAZX
|
Columbia
Capital Allocation Conservative Portfolio
|
Class
A: ABDAX
|
Class
B: ABBDX
|
Class
C: RPCCX
|
Class
K: CPVRX
|
Class
R: CBVRX
|
Class
R4: CPCYX
|
Class
R5: CPAOX
|
Class
Y: CPDHX
|
Class
Z: CBVZX
|
Columbia
Capital Allocation Moderate Portfolio
|
Class
A: ABUAX
|
Class
B: AURBX
|
Class
C: AMTCX
|
Class
K: CBRRX
|
Class
R: CBMRX
|
Class
R4: CPCZX
|
Class
R5: CPAMX
|
Class
Y: CPDMX
|
Class
Z: CBMZX
|
Columbia
Commodity Strategy Fund
|
Class
A: CCSAX
|
Class
C: CCSCX
|
Class
I: CCIYX
|
Class
R: CCSRX
|
Class
R4: CCOMX
|
Class
R5: CADLX
|
Class
W: CCSWX
|
Class
Y: CCFYX
|
Class
Z: CCSZX
|
Columbia
Diversified Equity Income Fund
|
Class
A: INDZX
|
Class
B: IDEBX
|
Class
C: ADECX
|
Class
I: ADIIX
|
Class
K: IDQYX
|
Class
R: RDEIX
|
Class
R4: RDERX
|
Class
R5: RSEDX
|
Class
W: CDEWX
|
Class
Y: CDEYX
|
Class
Z: CDVZX
|
|
Columbia
Dividend Opportunity Fund
|
Class
A: INUTX
|
Class
B: IUTBX
|
Class
C: ACUIX
|
Class
I: RSOIX
|
Class
K: RSORX
|
Class
R: RSOOX
|
Class
R4: CDORX
|
Class
R5: RSDFX
|
Class
W: CDOWX
|
Class
Y: CDOYX
|
Class
Z: CDOZX
|
|
Columbia
Emerging Markets Bond Fund
|
Class
A: REBAX
|
Class
B: CMBBX
|
Class
C: REBCX
|
Class
I: RSMIX
|
Class
K: CMKRX
|
Class
R: CMBRX
|
Class
R4: CEBSX
|
Class
R5: CEBRX
|
Class
W: REMWX
|
Class
Y: CEBYX
|
Class
Z: CMBZX
|
|
Columbia
European Equity Fund
|
Class
A: AXEAX
|
Class
B: AEEBX
|
Class
C: REECX
|
Class
I: CEEIX
|
Class
K: CEQRX
|
Class
R4: CADJX
|
Class
R5: CADKX
|
Class
W: CEEWX
|
Class
Z: CEEZX
|
Columbia
Flexible Capital Income Fund
|
Class
A: CFIAX
|
Class
C: CFIGX
|
Class
I: CFIIX
|
Class
R: CFIRX
|
Class
R4: CFCRX
|
Class
R5: CFXRX
|
Class
W: CFIWX
|
Class
Z: CFIZX
|
|
Columbia
Floating Rate Fund
|
Class
A: RFRAX
|
Class
B: RSFBX
|
Class
C: RFRCX
|
Class
I: RFRIX
|
Class
K: CFERX
|
Class
R: CFRRX
|
Class
R4: CFLRX
|
Class
R5: RFRFX
|
Class
W: RFRWX
|
Class
Y: CFRYX
|
Class
Z: CFRZX
|
|
Columbia
Global Bond Fund
|
Class
A: IGBFX
|
Class
B: IGLOX
|
Class
C: AGBCX
|
Class
I: AGBIX
|
Class
K: RGBRX
|
Class
R: RBGRX
|
Class
W: RGBWX
|
Class
Y: CGBYX
|
Class
Z: CGBZX
|
Columbia
Global Equity Value Fund
|
Class
A: IEVAX
|
Class
B: INEGX
|
Class
C: REVCX
|
Class
I: CEQIX
|
Class
K: AEVYX
|
Class
R: REVRX
|
Class
R4: RSEVX
|
Class
R5: RSEYX
|
Class
W: CEVWX
|
Class
Y: CEVYX
|
Class
Z: CEVZX
|
|
Columbia
Global Infrastructure Fund
|
Class
A: RRIAX
|
Class
B: RRIBX
|
Class
C: RRICX
|
Class
I: RRIIX
|
Class
K: RRIYX
|
Class
R: RRIRX
|
Class
R4: CRRIX
|
Class
R5: RRIZX
|
Class Z:
CRIZX
|
Columbia
Global Opportunities Fund
|
Class
A: IMRFX
|
Class
B: IMRBX
|
Class
C: RSSCX
|
Class
K: IDRYX
|
Class
R: CSARX
|
Class
R4: CSDRX
|
Class
R5: CLNRX
|
Class
W: CGOPX
|
Class
Z: CSAZX
|
Columbia
High Yield Bond Fund
|
Class
A: INEAX
|
Class
B: IEIBX
|
Class
C: APECX
|
Class
I: RSHIX
|
Class
K: RSHYX
|
Class
R: CHBRX
|
Class
R4: CYLRX
|
Class
R5: RSHRX
|
Class
W: RHYWX
|
Class
Y: CHYYX
|
Class
Z: CHYZX
|
|
Columbia
Income Builder Fund
|
Class
A: RBBAX
|
Class
B: RBBBX
|
Class
C: RBBCX
|
Class
K: CIPRX
|
Class
R: CBURX
|
Class
R4: CNMRX
|
Class
R5: CKKRX
|
Class
W: CINDX
|
Class
Z: CBUZX
|
Columbia
Income Opportunities Fund
|
Class
A: AIOAX
|
Class
B: AIOBX
|
Class
C: RIOCX
|
Class
I: AOPIX
|
Class
K: COPRX
|
Class
R: CIORX
|
Class
R4: CPPRX
|
Class
R5: CEPRX
|
Class
W: CIOWX
|
Class
Y: CIOYX
|
Class
Z: CIOZX
|
|
Columbia
Inflation Protected Securities Fund
|
Class
A: APSAX
|
Class
B: APSBX
|
Class
C: RIPCX
|
Class
I: AIPIX
|
Class
K: CISRX
|
Class
R: RIPRX
|
Class
R5: CFSRX
|
Class
W: RIPWX
|
Class
Z: CIPZX
|
Columbia
Large Core Quantitative Fund
|
Class
A: AQEAX
|
Class
B: AQEBX
|
Class
C: RDCEX
|
Class
I: ALEIX
|
Class
K: RQEYX
|
Class
R: CLQRX
|
Class
R4: CLCQX
|
Class
R5: RSIPX
|
Class
W: RDEWX
|
Class
Y: CCQYX
|
Class
Z: CCRZX
|
|
Columbia
Large Growth Quantitative Fund
|
Class
A: RDLAX
|
Class
B: CGQBX
|
Class
C: RDLCX
|
Class
I: RDLIX
|
Class
K: RDLFX
|
Class
R: CGQRX
|
Class
R4: CGQFX
|
Class
R5: CQURX
|
Class
W: RDLWX
|
Class
Y: CGQYX
|
Class
Z: CLQZX
|
|
Columbia
Large Value Quantitative Fund
|
Class
A: RLCAX
|
Class
B: CVQBX
|
Class
C: RDCCX
|
Class
I: CLQIX
|
Class
K: RLCYX
|
Class
R: RLCOX
|
Class
R4: COLEX
|
Class
R5: COLVX
|
Class
T: CVQTX
|
Class
W: RLCWX
|
Class
Y: COLYX
|
Class
Z: CVQZX
|
Columbia
Limited Duration Credit Fund
|
Class
A: ALDAX
|
Class
B: ALDBX
|
Class
C: RDCLX
|
Class
I: ALDIX
|
Class
K: CLDRX
|
Class
R4: CDLRX
|
Class
R5: CTLRX
|
Class
W: RLDWX
|
Class
Y: CLDYX
|
Class
Z: CLDZX
|
|
|
Columbia
Marsico Flexible Capital Fund
|
Class
A: CCMAX
|
Class
C: CCFCX
|
Class
I: CFCIX
|
Class
R: CCFRX
|
Class
R4: CMECX
|
Class
R5: CTXRX
|
Class
Z: CCMZX
|
|
|
Columbia
Minnesota Tax-Exempt Fund
|
Class
A: IMNTX
|
Class
B: IDSMX
|
Class
C: RMTCX
|
Class
R4: CLONX
|
Class
R5: CADOX
|
Class
Z: CMNZX
|
Columbia
Money Market Fund
|
Class
A: IDSXX
|
Class
B: ACBXX
|
Class
C: RCCXX
|
Class
I: RCIXX
|
Class
R: RVRXX
|
Class
R5: CMRXX
|
Class
W: RCWXX
|
Class
Z: IDYXX
|
|
Columbia
Mortgage Opportunities Fund
|
Class
A: CLMAX
|
Class
C: CLMCX
|
Class
I: CLMIX
|
Class
R4: CLMFX
|
Class
R5: CLMVX
|
Class
W: CLMWX
|
Class
Z: CLMZX
|
|
|
Columbia
Multi-Advisor Small Cap Value Fund
|
Class
A: ASVAX
|
Class
B: ASVBX
|
Class
C: APVCX
|
Class
I: CAVIX
|
Class
K: RSGLX
|
Class
R: RSVTX
|
Class
R4: RSVRX
|
Class
R5: RSCVX
|
Class
Z: CMAZX
|
Columbia
Select Global Equity Fund
|
Class
A: IGLGX
|
Class
B: IDGBX
|
Class
C: RGCEX
|
Class
I: CGEIX
|
Class
K: IDGYX
|
Class
R: CGERX
|
Class
R5: RGERX
|
Class
W: CGEWX
|
Class
Z: CGEZX
|
Columbia
Select Large-Cap Value Fund
|
Class
A: SLVAX
|
Class
B: SLVBX
|
Class
C: SVLCX
|
Class
I: CLVIX
|
Class
K: SLVTX
|
Class
R: SLVRX
|
Class
R4: CSERX
|
Class
R5: SLVIX
|
Class
W: CSVWX
|
Class
Y: CSRYX
|
Class
Z: CSVZX
|
|
Columbia
Select Smaller-Cap Value Fund
|
Class
A: SSCVX
|
Class
B: SSCBX
|
Class
C: SVMCX
|
Class
I: CSSIX
|
Class
K: SSLRX
|
Class
R: SSVRX
|
Class
R4: CSPRX
|
Class
R5: SSVIX
|
Class
Y: CSSYX
|
Class
Z: CSSZX
|
|
|
Columbia
Seligman Communications and
Information Fund
|
Class
A: SLMCX
|
Class
B: SLMBX
|
Class
C: SCICX
|
Class
I: CSFIX
|
Class
K: SCIFX
|
Class
R: SCIRX
|
Class
R4: SCIOX
|
Class
R5: SCMIX
|
Class
Z: CCIZX
|
Columbia
Seligman Global Technology Fund
|
Class
A: SHGTX
|
Class
B: SHTBX
|
Class
C: SHTCX
|
Class
I: CSYIX
|
Class
K: SGTSX
|
Class
R: SGTRX
|
Class
R4: CCHRX
|
Class
R5: SGTTX
|
Class Z:
CSGZX
|
Columbia
Small/Mid Cap Value Fund
|
Class
A: AMVAX
|
Class
B: AMVBX
|
Class
C: AMVCX
|
Class
I: RMCIX
|
Class
K: RMCVX
|
Class
R: RMVTX
|
Class
R4: RMCRX
|
Class
R5: RSCMX
|
Class
W: CVOWX
|
Class
Y: CPHPX
|
Class
Z: CMOZX
|
|
Columbia
U.S. Government Mortgage Fund
|
Class
A: AUGAX
|
Class
B: AUGBX
|
Class
C: AUGCX
|
Class
I: RVGIX
|
Class
K: RSGYX
|
Class
R4: CUVRX
|
Class
R5: CGVRX
|
Class
W: CGMWX
|
Class
Y: CUGYX
|
Class
Z: CUGZX
|
|
|
*
|
Effective June 2, 2015,
Columbia LifeGoal
®
Growth Portfolio’s name will be changed to Columbia Global Strategic Equity Fund.
|
Unless the context indicates otherwise, references
herein to “each Fund”, “the Funds”, “a Fund” or “Funds” refers to each Fund listed above.
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 each Fund’s current prospectus (as amended or supplemented), the date of which may be found in the section of this SAI entitled
About the Trusts
.
The most recent annual report for each Fund, which includes the Fund’s audited financial statements for its most recent fiscal period, is incorporated by
reference into this SAI.
Copies of the
Funds' current prospectuses and annual and semiannual reports may be obtained without charge by writing Columbia Funds, c/o 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.columbiathreadneedle.com/us.
Table of Contents
|
2
|
|
7
|
|
11
|
|
21
|
|
21
|
|
57
|
|
80
|
|
80
|
|
81
|
|
81
|
|
101
|
|
106
|
|
109
|
|
113
|
|
116
|
|
121
|
|
124
|
|
127
|
|
131
|
|
131
|
|
134
|
|
134
|
|
146
|
|
151
|
|
151
|
|
154
|
|
157
|
|
159
|
|
163
|
|
163
|
|
163
|
|
163
|
|
168
|
|
170
|
|
172
|
|
172
|
|
174
|
|
174
|
|
175
|
|
178
|
|
199
|
|
275
|
|
A-1
|
|
B-1
|
|
C-1
|
|
D-1
|
|
S-1
|
Statement
of Additional Information – June 1, 2015
|
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.columbiathreadneedle.com/us or by accessing the
SEC’s website at www.sec.gov.
For
purposes of any electronic version of this SAI, all references to websites, or universal resource locators (URLs), are intended to be inactive and are not meant to incorporate the contents of any such website or URL into this SAI.
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 each 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 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, as amended, if applicable, between a Trust, on behalf of the Funds, and the Administrator
|
Administrator
|
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.
|
Barrow
Hanley
|
Barrow,
Hanley, Mewhinney & Strauss, LLC
|
Board
|
The
Trusts' Board of Trustees
|
Board
Services
|
Board
Services Corporation
|
Business
Day
|
Any
day on which the NYSE is open for business
|
Capital
Allocation Portfolios
|
Collectively,
Columbia Capital Allocation Aggressive Portfolio, Columbia Capital Allocation Conservative Portfolio, Columbia Capital Allocation Moderate Aggressive Portfolio, Columbia Capital Allocation Moderate Conservative Portfolio and Columbia Capital
Allocation Moderate Portfolio
|
CEA
|
Commodity
Exchange Act
|
CFST
|
Columbia
Funds Series Trust
|
CFST
I
|
Columbia
Funds Series Trust I
|
CFST
II
|
Columbia
Funds Series Trust II
|
CFTC
|
The
United States Commodities Futures Trading Commission
|
CMOs
|
Collateralized
mortgage obligations
|
Statement
of Additional Information – June 1, 2015
|
2
|
Code
|
Internal
Revenue Code of 1986, as amended
|
Codes
of Ethics
|
The
codes of ethics adopted by the Funds, the Investment Manager, the Distributor and/or any sub-adviser, as applicable, pursuant to Rule 17j-1 under the 1940 Act
|
Columbia
Funds Complex
|
The
fund complex that is comprised of the registered investment companies advised by the Investment Manager or its affiliates
|
Columbia
Funds or Columbia Fund Family
|
The
open-end investment management companies, including the Funds, advised by the Investment Manager or its affiliates or principally underwritten by Columbia Management Investment Distributors, Inc.
|
Columbia
Management
|
Columbia
Management Investment Advisers, LLC
|
Custodian
|
JPMorgan
Chase Bank, N.A.
|
CVP
– Managed Volatility Funds
|
Columbia
Variable Portfolio – Managed Volatility Conservative Fund, Columbia Variable Portfolio – Managed Volatility Conservative Growth Fund, Columbia Variable Portfolio – Managed Volatility Growth Fund and Columbia Variable Portfolio
– Managed Volatility Moderate Growth Fund
|
DFA
|
Dimensional
Fund Advisers LP
|
Distribution
Agreement
|
The
Distribution Agreement between a 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.
|
Donald
Smith
|
Donald
Smith & Co., Inc.
|
FDIC
|
Federal
Deposit Insurance Corporation
|
Feeder
Fund(s)
|
One
or more of the series of CFST that had invested all of its assets in a corresponding Master Portfolio that is a series of Columbia Funds Master Investment Trust, LLC (CMIT); after the close of business on December 13, 2013 the only Feeder Fund,
International Value Fund, converted to a stand-alone Fund and ceased being a Feeder Fund
|
FHLMC
|
The
Federal Home Loan Mortgage 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
|
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
Trustees
|
The
Trustees of the Board who are currently treated as “interested persons” (as defined in the 1940 Act) of the Funds
|
Investment
Management Services Agreement
|
The
Investment Management Services Agreements, as amended, between a Trust, on behalf of the Funds, and the Investment Manager
|
Investment
Manager
|
Columbia
Management Investment Advisers, LLC
|
IRS
|
United
States Internal Revenue Service
|
JPMorgan
|
JPMorgan
Chase Bank, N.A., the Funds' custodian
|
Nations
Funds
|
The
funds within the Columbia Funds Complex that historically bore the Nations brand and includes series of Columbia Funds Series Trust
|
LIBOR
|
London
Interbank Offered Rate
|
Marsico
Capital
|
Marsico
Capital Management, LLC
|
Master
Portfolio
|
Columbia
International Value Master Portfolio, a series of Columbia Funds Master Investment Trust, LLC
|
MetWest
Capital
|
Metropolitan
West Capital Management, LLC
|
Moody’s
|
Moody’s
Investors Service, Inc.
|
NASDAQ
|
National
Association of Securities Dealers Automated Quotations system
|
Statement
of Additional Information – June 1, 2015
|
3
|
NAV
|
Net
asset value per share of a Fund
|
NRSRO
|
Nationally
recognized statistical ratings organization (such as, for example, Moody’s, Fitch or S&P)
|
NSCC
|
National
Securities Clearing Corporation
|
NYSE
|
New
York Stock Exchange
|
Previous
Adviser
|
Columbia
Management Advisors, LLC, the investment adviser of certain Columbia Funds prior to May 1, 2010 when Ameriprise Financial acquired the long-term asset management business of the Previous Adviser, which is an indirect wholly-owned subsidiary of Bank
of America.
|
Previous
Distributor
|
Columbia
Management Distributors, Inc., the distributor of certain Columbia Funds prior to May 1, 2010 when Ameriprise Financial acquired the long-term asset management business of the Previous Adviser, which is an indirect wholly-owned subsidiary of Bank
of America.
|
Previous
Transfer Agent
|
Columbia
Management Services, Inc., the transfer agent of certain Columbia Funds prior to May 1, 2010 when Ameriprise Financial acquired the long-term asset management business of the Previous Adviser, which is an indirect wholly-owned subsidiary of Bank of
America.
|
REIT
|
Real
estate investment trust
|
REMIC
|
Real
estate mortgage investment conduit
|
RIC
|
A
“regulated investment company,” as such term is used in the Code
|
RiverSource
Funds
|
The
funds within the Columbia Funds Complex that historically bore the RiverSource brand and includes series of Columbia Funds Series Trust II
|
S&P
|
Standard
& Poor’s, a division of The McGraw-Hill Companies, Inc. (“Standard & Poor’s” and “S&P” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the Investment Manager. 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, as amended and supplemented from time-to-time
|
SBH
|
Segall
Bryant & Hamill, LLC
|
Seligman
Funds
|
The
funds within the Columbia Fund Complex that historically bore the Seligman brand and includes series of Columbia Funds Series Trust II
|
SEC
|
United
States Securities and Exchange Commission
|
Selling
Agent(s)
|
One
or more of the financial intermediaries that are authorized to sell shares of the Funds, which include, broker-dealers and financial advisors as well as firms that employ such broker-dealers and financial advisors, including, for example, brokerage
firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.
|
Shares
|
Shares
of a Fund
|
State
Street
|
State
Street Bank and Trust Company, the former custodian for series of CFST
|
State
Tax-Exempt Funds and State Municipal Bond Funds
|
Collectively,
AMT-Free CA Intermediate Muni Bond Fund, AMT-Free GA Intermediate Muni Bond Fund, AMT-Free MD Intermediate Muni Bond Fund, MN Tax-Exempt Fund, AMT-Free NC Intermediate Muni Bond Fund, AMT-Free SC Intermediate Muni Bond Fund and AMT-Free VA
Intermediate Muni Bond Fund
|
Sub-Advisory
Agreement
|
The
Subadvisory Agreement among the Trust on behalf of the Fund(s), the Investment Manager and a Fund’s investment subadviser(s), as the context may require
|
Subsidiary
|
One
or more wholly-owned subsidiaries of a Fund
|
Threadneedle
|
Threadneedle
International Limited
|
Transfer
Agency Agreement
|
The
Transfer and Dividend Disbursing Agent Agreement between the Trust, on behalf of the Funds, and the Transfer Agent
|
Statement
of Additional Information – June 1, 2015
|
4
|
Transfer
Agent
|
Columbia
Management Investment Services Corp.
|
Trustee(s)
|
One
or more of the Board’s Trustees
|
Trusts
|
CFST
and CFST II, the registered investment companies in the Columbia Fund Family to which this SAI relates
|
Throughout this SAI, the Funds are referred to as
follows:
Fund
Name:
|
|
Referred
to as:
|
Active
Portfolios
Multi-Manager Value Fund
|
|
AP
- Multi-Manager Value Fund
|
Columbia
Absolute Return Currency and Income Fund
|
|
Absolute
Return Currency and Income Fund
|
Columbia
AMT-Free California Intermediate Muni Bond Fund
|
|
AMT-Free
CA Intermediate Muni Bond Fund
|
Columbia
AMT-Free Georgia Intermediate Muni Bond Fund
|
|
AMT-Free
GA Intermediate Muni Bond Fund
|
Columbia
AMT-Free Maryland Intermediate Muni Bond Fund
|
|
AMT-Free
MD Intermediate Muni Bond Fund
|
Columbia
AMT-Free North Carolina Intermediate Muni Bond Fund
|
|
AMT-Free
NC Intermediate Muni Bond Fund
|
Columbia
AMT-Free South Carolina Intermediate Muni Bond Fund
|
|
AMT-Free
SC Intermediate Muni Bond Fund
|
Columbia
AMT-Free Tax-Exempt Bond Fund
|
|
AMT-Free
Tax-Exempt Bond Fund
|
Columbia
AMT-Free Virginia Intermediate Muni Bond Fund
|
|
AMT-Free
VA Intermediate Muni Bond Fund
|
Columbia
Asia Pacific ex-Japan Fund
|
|
Asia
Pacific ex-Japan Fund
|
Columbia
Capital Allocation Aggressive Portfolio
|
|
Capital
Allocation Aggressive Portfolio
|
Columbia
Capital Allocation Conservative Portfolio
|
|
Capital
Allocation Conservative Portfolio
|
Columbia
Capital Allocation Moderate Aggressive Portfolio
|
|
Capital
Allocation Moderate Aggressive Portfolio
|
Columbia
Capital Allocation Moderate Conservative Portfolio
|
|
Capital
Allocation Moderate Conservative Portfolio
|
Columbia
Capital Allocation Moderate Portfolio
|
|
Capital
Allocation Moderate Portfolio
|
Columbia
Commodity Strategy Fund
|
|
Commodity
Strategy Fund
|
Columbia
Convertible Securities Fund
|
|
Convertible
Securities Fund
|
Columbia
Diversified Equity Income Fund
|
|
Diversified
Equity Income Fund
|
Columbia
Dividend Opportunity Fund
|
|
Dividend
Opportunity Fund
|
Columbia
Emerging Markets Bond Fund
|
|
Emerging
Markets Bond Fund
|
Columbia
European Equity Fund
|
|
European
Equity Fund
|
Columbia
Flexible Capital Income Fund
|
|
Flexible
Capital Income Fund
|
Columbia
Floating Rate Fund
|
|
Floating
Rate Fund
|
Columbia
Global Bond Fund
|
|
Global
Bond Fund
|
Columbia
Global Equity Value Fund
|
|
Global
Equity Value Fund
|
Columbia
Global Infrastructure Fund
|
|
Global
Infrastructure Fund
|
Columbia
Global Opportunities Fund
|
|
Global
Opportunities Fund
|
Columbia
High Yield Bond Fund
|
|
High
Yield Bond Fund
|
Columbia
Income Builder Fund
|
|
Income
Builder Fund
|
Columbia
Income Opportunities Fund
|
|
Income
Opportunities Fund
|
Columbia
Inflation Protected Securities Fund
|
|
Inflation
Protected Securities Fund
|
Columbia
International Opportunities Fund
|
|
International
Opportunities Fund
|
Columbia
International Value Fund
|
|
International
Value Fund
|
Columbia
Large Cap Enhanced Core Fund
|
|
Large
Cap Enhanced Core Fund
|
Columbia
Large Cap Index Fund
|
|
Large
Cap Index Fund
|
Columbia
Large Core Quantitative Fund
|
|
Large
Core Quantitative Fund
|
Columbia
Large Growth Quantitative Fund
|
|
Large
Growth Quantitative Fund
|
Columbia
Large Value Quantitative Fund
|
|
Large
Value Quantitative Fund
|
Columbia
LifeGoal Growth Portfolio*
|
|
LifeGoal
Growth Portfolio
|
Statement
of Additional Information – June 1, 2015
|
5
|
Fund
Name:
|
|
Referred
to as:
|
Columbia
Limited Duration Credit Fund
|
|
Limited
Duration Credit Fund
|
Columbia
Marsico 21st Century Fund
|
|
Marsico
21st Century Fund
|
Columbia
Marsico Flexible Capital Fund
|
|
Marsico
Flexible Capital Fund
|
Columbia
Marsico Focused Equities Fund
|
|
Marsico
Focused Equities Fund
|
Columbia
Marsico Global Fund
|
|
Marsico
Global Fund
|
Columbia
Marsico Growth Fund
|
|
Marsico
Growth Fund
|
Columbia
Mid Cap Index Fund
|
|
Mid
Cap Index Fund
|
Columbia
Mid Cap Value Fund
|
|
Mid
Cap Value Fund
|
Columbia
Minnesota Tax-Exempt Fund
|
|
MN
Tax-Exempt Fund
|
Columbia
Money Market Fund
|
|
Money
Market Fund
|
Columbia
Mortgage Opportunities Fund
|
|
Mortgage
Opportunities Fund
|
Columbia
Multi-Advisor Small Cap Value Fund
|
|
Multi-Advisor
Small Cap Value Fund
|
Columbia
Overseas Value Fund
|
|
Overseas
Value Fund
|
Columbia
Select Global Equity Fund
|
|
Select
Global Equity Fund
|
Columbia
Select International Equity Fund
|
|
Select
International Equity Fund
|
Columbia
Select Large Cap Equity Fund
|
|
Select
Large Cap Equity Fund
|
Columbia
Select Large-Cap Value Fund
|
|
Select
Large-Cap Value Fund
|
Columbia
Select Smaller-Cap Value Fund
|
|
Select
Smaller-Cap Value Fund
|
Columbia
Seligman Communications and Information Fund
|
|
Seligman
Communications and Information Fund
|
Columbia
Seligman Global Technology Fund
|
|
Seligman
Global Technology Fund
|
Columbia
Short Term Bond Fund
|
|
Short
Term Bond Fund
|
Columbia
Short Term Municipal Bond Fund
|
|
Short
Term Municipal Bond Fund
|
Columbia
Small Cap Index Fund
|
|
Small
Cap Index Fund
|
Columbia
Small Cap Value Fund II
|
|
Small
Cap Value Fund II
|
Columbia
Small/Mid Cap Value Fund
|
|
Small/Mid
Cap Value Fund
|
Columbia
U.S. Government Mortgage Fund
|
|
U.S.
Government Mortgage Fund
|
*
|
Effective June 2, 2015,
Columbia LifeGoal
®
Growth Portfolio’s name will be changed to Columbia Global Strategic Equity Fund.
|
Statement
of Additional Information – June 1, 2015
|
6
|
ABOUT THE Trusts
The Trusts are open-end management investment
companies registered under the 1940 Act located at 225 Franklin Street, Boston, Massachusetts 02110.
CFST 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, CFST changed its name from Nations Funds Trust to Columbia Funds Series Trust. CFST II was organized as a Massachusetts business trust on January 27, 2006. On
March 7, 2011, CFST II changed its name from RiverSource Series Trust to Columbia Funds Series Trust II and prior to September 11, 2007 was known as RiverSource Retirement Series Trust.
Fund
|
Fiscal
Year End
|
Prospectus
Date
|
Date
Began
Operations*
|
Diversified**
|
Fund
Investment Category***
|
Absolute
Return Currency and Income Fund
|
October
31
|
3/1/2015
|
6/15/2006
|
Yes
|
Alternative
|
AMT-Free
CA Intermediate Muni Bond Fund
|
April
30
(b)
|
9/1/2014
|
8/19/2002
|
Yes
|
Tax-exempt
fixed income
|
AMT-Free
GA Intermediate Muni Bond Fund
|
April
30
(b)
|
9/1/2014
|
3/1/1992
|
Yes
|
Tax-exempt
fixed income
|
AMT-Free
MD Intermediate Muni Bond Fund
|
April
30
(b)
|
9/1/2014
|
9/1/1990
|
No
|
Tax-exempt
fixed income
|
AMT-Free
NC Intermediate Muni Bond Fund
|
April
30
(b)
|
9/1/2014
|
12/11/1992
|
Yes
|
Tax-exempt
fixed income
|
AMT-Free
SC Intermediate Muni Bond Fund
|
April
30
(b)
|
9/1/2014
|
1/6/1992
|
Yes
|
Tax-exempt
fixed income
|
AMT-Free
Tax-Exempt Bond Fund
|
July
31
(a)
|
12/1/2014
|
11/24/1976
|
Yes
|
Tax-exempt
fixed income
|
AMT-Free
VA Intermediate Muni Bond Fund
|
April
30
(b)
|
9/1/2014
|
9/20/1989
|
Yes
|
Tax-exempt
fixed income
|
AP
- Multi-Manager Value Fund
|
May
31
|
10/1/2014
|
4/20/2012
|
Yes
|
Equity
|
Asia
Pacific ex-Japan Fund
|
October
31
|
3/1/2015
|
7/15/2009
|
Yes
|
Equity
|
Capital
Allocation Aggressive Portfolio
|
January
31
|
6/1/2015
|
3/4/2004
|
Yes
|
Fund-of-funds
– equity
|
Capital
Allocation Conservative Portfolio
|
January
31
|
6/1/2015
|
3/4/2004
|
Yes
|
Fund-of-funds
– fixed income
|
Capital
Allocation Moderate Aggressive Portfolio
|
January
31
(c)
|
6/1/2015
|
10/15/1996
|
Yes
|
Fund-of-funds
– equity
|
Capital
Allocation Moderate Conservative Portfolio
|
January
31
(c)
|
6/1/2015
|
10/15/1996
|
Yes
|
Fund-of-funds
– fixed income
|
Capital
Allocation Moderate Portfolio
|
January
31
|
6/1/2015
|
3/4/2004
|
Yes
|
Fund-of-funds
– equity
|
Commodity
Strategy Fund
|
May
31
|
10/1/2014
|
7/28/2011
|
Yes
|
Equity
|
Convertible
Securities Fund
|
February
28/29
|
6/25/2014
|
9/25/1987
|
Yes
|
Equity
|
Diversified
Equity Income Fund
|
May
31
(d)
|
10/1/2014
|
10/15/1990
|
Yes
|
Equity
|
Dividend
Opportunity Fund
|
May
31
(e)
|
10/1/2014
|
8/1/1988
|
Yes
|
Equity
|
Emerging
Markets Bond Fund
|
October
31
|
3/1/2015
|
2/16/2006
|
No
|
Taxable
fixed income
|
European
Equity Fund
|
October
31
|
3/1/2015
|
6/26/2000
|
Yes
|
Equity
|
Flexible
Capital Income Fund
|
May
31
|
10/1/2014
|
7/28/2011
|
Yes
|
Flexible
|
Floating
Rate Fund
|
July
31
|
12/1/2014
|
2/16/2006
|
Yes
|
Taxable
fixed income
|
Global
Bond Fund
|
October
31
|
3/1/2015
|
3/20/1989
|
No
|
Taxable
fixed income
|
Global
Equity Value Fund
|
February
28/29
(f)
|
6/25/2014
|
5/14/1984
|
Yes
|
Equity
|
Global
Infrastructure Fund
|
April
30
|
9/1/2014
|
2/19/2009
|
Yes
|
Equity
|
Global
Opportunities Fund
|
July
31
(g)
|
12/1/2014
|
1/28/1985
|
Yes
|
Flexible
|
High
Yield Bond Fund
|
May
31
|
10/1/2014
|
12/8/1983
|
Yes
|
Taxable
fixed income
|
Statement
of Additional Information – June 1, 2015
|
7
|
Fund
|
Fiscal
Year End
|
Prospectus
Date
|
Date
Began
Operations*
|
Diversified**
|
Fund
Investment Category***
|
Income
Builder Fund
|
January
31
|
6/1/2015
|
2/16/2006
|
Yes
|
Fund-of-funds
– fixed income
|
Income
Opportunities Fund
|
July
31
|
12/1/2014
|
6/19/2003
|
Yes
|
Taxable
fixed income
|
Inflation
Protected Securities Fund
|
July
31
|
12/1/2014
|
3/4/2004
|
No
|
Taxable
fixed income
|
International
Opportunities Fund
|
February
28/29
|
6/25/2014
|
8/1/2000
|
Yes
|
Equity
|
International
Value Fund
|
February
28/29
|
6/25/2014
|
12/27/1995
|
Yes
|
Equity
|
Large
Cap Enhanced Core Fund
|
February
28/29
|
6/25/2014
|
7/31/1996
|
Yes
|
Equity
|
Large
Cap Index Fund
|
February
28/29
|
6/25/2014
|
12/15/1993
|
Yes
|
Equity
|
Large
Core Quantitative Fund
|
July
31
|
12/1/2014
|
4/24/2003
|
Yes
|
Equity
|
Large
Growth Quantitative Fund
|
July
31
(g)
|
12/1/2014
|
5/17/2007
|
Yes
|
Equity
|
Large
Value Quantitative Fund
|
July
31
(g)
|
12/1/2014
|
8/1/2008
|
Yes
|
Equity
|
LifeGoal
Growth Portfolio
|
January
31
(c)
|
6/1/2015
|
10/15/1996
|
Yes
|
Fund-of-funds
– equity
|
Limited
Duration Credit Fund
|
July
31
|
12/1/2014
|
6/19/2003
|
Yes
|
Taxable
fixed income
|
Marsico
21st Century Fund
|
February
28/29
|
6/25/2014
|
4/10/2000
|
Yes
|
Equity
|
Marsico
Flexible Capital Fund
|
August
31
|
1/1/2015
|
9/28/2010
|
Yes
|
Flexible
|
Marsico
Focused Equities Fund
|
February
28/29
|
6/25/2014
|
12/31/1997
|
No
|
Equity
|
Marsico
Global Fund
|
February
28/29
|
6/25/2014
|
4/30/2008
|
Yes
|
Equity
|
Marsico
Growth Fund
|
February
28/29
|
6/25/2014
|
12/31/1997
|
Yes
|
Equity
|
Mid
Cap Index Fund
|
February
28/29
|
6/25/2014
|
3/31/2000
|
Yes
|
Equity
|
Mid
Cap Value Fund
|
February
28/29
|
6/25/2014
|
11/20/2001
|
Yes
|
Equity
|
MN
Tax-Exempt Fund
|
July
31
(h)
|
12/1/2014
|
8/18/1986
|
No
|
Tax-exempt
fixed income
|
Money
Market Fund
|
July
31
|
12/1/2014
|
10/6/1975
|
Yes
|
Taxable
money market
|
Mortgage
Opportunities Fund
|
May
31
|
4/28/2014
|
4/30/2014
|
No
|
Taxable
fixed income
|
Multi-Advisor
Small Cap Value Fund
|
May
31
|
10/1/2014
|
6/18/2001
|
Yes
|
Equity
|
Overseas
Value Fund
|
February
28/29
|
6/25/2014
|
3/31/2008
|
Yes
|
Equity
|
Select
Global Equity Fund
|
October
31
|
3/1/2015
|
5/29/1990
|
Yes
|
Equity
|
Select
International Equity Fund
|
February
28/29
|
6/25/2014
|
12/2/1991
|
Yes
|
Equity
|
Select
Large Cap Equity Fund
|
February
28/29
|
6/25/2014
|
10/2/1998
|
Yes
|
Equity
|
Select
Large-Cap Value Fund
|
May
31
(i)
|
10/1/2014
|
4/25/1997
|
Yes
|
Equity
|
Select
Smaller-Cap Value Fund
|
May
31
(i)
|
10/1/2014
|
4/25/1997
|
Yes
|
Equity
|
Seligman
Communications and Information Fund
|
May
31
(i)
|
10/1/2014
|
6/23/1983
|
No
|
Equity
|
Seligman
Global Technology Fund
|
October
31
|
3/1/2015
|
5/23/1994
|
No
|
Equity
|
Short
Term Bond Fund
|
March
31
|
8/1/2014
|
9/30/1992
|
Yes
|
Taxable
fixed income
|
Short
Term Municipal Bond Fund
|
April
30
(b)
|
9/1/2014
|
10/7/1993
|
Yes
|
Tax-exempt
fixed income
|
Small
Cap Index Fund
|
February
28/29
|
6/25/2014
|
10/15/1996
|
Yes
|
Equity
|
Small
Cap Value Fund II
|
February
28/29
|
6/25/2014
|
5/1/2002
|
Yes
|
Equity
|
Small/Mid
Cap Value Fund
|
May
31
(j)
|
10/1/2014
|
2/14/2002
|
Yes
|
Equity
|
U.S.
Government Mortgage Fund
|
May
31
|
10/1/2014
|
2/14/2002
|
Yes
|
Taxable
fixed income
|
*
|
Certain Funds reorganized into
series of the Trust. The date of operations for these Funds represents the date on which the predecessor funds began operation.
|
**
|
A “diversified”
Fund may not, with respect to 75% of its total assets, invest more than 5% of its total assets in securities of any one issuer or purchase more than 10% of the outstanding voting securities of any one issuer, except obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities and except securities of other investment companies. A “non-diversified” Fund may invest a
|
Statement
of Additional Information – June 1, 2015
|
8
|
|
greater percentage of its
total assets in the securities of fewer issuers than a “diversified” fund, which 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, a “non-diversified” Fund’s value will likely be more volatile than the value of a more diversified fund.
|
***
|
The Fund Investment Category is
used as a convenient way to describe Funds in this SAI and should not be deemed a description of the Fund’s principal investment strategies, which are described in the Fund’s prospectus.
|
(a)
|
The Fund changed its fiscal
year end in 2012 from November 30 to July 31.
|
(b)
|
The Fund changed its fiscal
year end in 2012 from March 31 to April 30.
|
(c)
|
The Fund changed its fiscal
year end in 2012 from March 31 to January 31.
|
(d)
|
The Fund changed its fiscal
year end in 2012 from September 30 to May 31.
|
(e)
|
The Fund changed its fiscal
year end in 2012 from June 30 to May 31.
|
(f)
|
The Fund changed its fiscal
year end in 2012 from March 31 to February 28/29.
|
(g)
|
The Fund changed its fiscal
year end in 2012 from September 30 to July 31.
|
(h)
|
The Fund changed its fiscal
year end in 2012 from August 31 to July 31.
|
(i)
|
The Fund changed its fiscal
year end in 2012 from December 31 to May 31.
|
(j)
|
The Fund changed its fiscal
year end in 2012 from November 30 to May 31.
|
Name Changes.
The table below identifies the Funds whose names have changed in the past five years, the effective date of the name change and the former name.
Fund*
|
Effective
Date of Name Change
|
Previous
Fund Name
|
AMT-Free
CA Intermediate Muni Bond Fund
|
July
7, 2014
|
Columbia
California Intermediate Municipal Bond Fund
|
AMT-Free
GA Intermediate Muni Bond Fund
|
July
7, 2014
|
Columbia
Georgia Intermediate Municipal Bond Fund
|
AMT-Free
MD Intermediate Muni Bond Fund
|
July
7, 2014
|
Columbia
Maryland Intermediate Municipal Bond Fund
|
AMT-Free
NC Intermediate Muni Bond Fund
|
July
7, 2014
|
Columbia
North Carolina Intermediate Municipal Bond Fund
|
AMT-Free
SC Intermediate Muni Bond Fund
|
July
7, 2014
|
Columbia
South Carolina Intermediate Municipal Bond Fund
|
AMT-Free
Tax-Exempt Bond Fund
|
September
27, 2010
|
RiverSource
Tax-Exempt Bond Fund
|
AMT-Free
VA Intermediate Muni Bond Fund
|
July
7, 2014
|
Columbia
Virginia Intermediate Municipal Bond Fund
|
AP
- Multi-Manager Value Fund
|
December
11, 2013
|
Columbia
Active Portfolios
– Diversified Equity Income Fund
|
Asia
Pacific ex-Japan Fund
|
September
27, 2010
|
Threadneedle
Asia Pacific Fund
|
Capital
Allocation Aggressive Portfolio
|
December
14, 2012
|
Columbia
Portfolio Builder Aggressive Fund
|
Capital
Allocation Conservative Portfolio
|
December
14, 2012
|
Columbia
Portfolio Builder Conservative Fund
|
Capital
Allocation Moderate Aggressive Portfolio
|
December
14, 2012
|
Columbia
LifeGoal Balanced Growth Fund
|
Capital
Allocation Moderate Conservative Portfolio
|
December
14, 2012
|
Columbia
LifeGoal Income and Growth Portfolio
|
Capital
Allocation Moderate Portfolio
|
December
14, 2012
|
Columbia
Portfolio Builder Moderate Fund
|
Global
Equity Value Fund
|
September
5, 2014
|
Columbia
Equity Value Fund
|
Global
Infrastructure Fund
|
December
11, 2013
|
Columbia
Recovery and Infrastructure Fund
|
Global
Opportunities Fund
|
December
14, 2012
|
Columbia
Strategic Allocation Fund
|
Income
Builder Fund
|
September
27, 2010
|
RiverSource
Income Builder Basic Income Fund
|
International
Opportunities Fund
|
May
1, 2015
|
Columbia
Marsico International Opportunities Fund
|
Large
Core Quantitative Fund
|
September
27, 2010
|
RiverSource
Disciplined Equity Fund
|
Large
Growth Quantitative Fund
|
September
27, 2010
|
RiverSource
Disciplined Large Cap Growth Fund
|
Statement
of Additional Information – June 1, 2015
|
9
|
Fund*
|
Effective
Date of Name Change
|
Previous
Fund Name
|
Large
Value Quantitative Fund
|
September
27, 2010
|
RiverSource
Disciplined Large Cap Value Fund
|
Limited
Duration Credit Fund
|
September
27, 2010
|
RiverSource
Limited Duration Credit Fund
|
Money
Market Fund
|
September
27, 2010
|
RiverSource
Cash Management Fund
|
Multi-Advisor
Small Cap Value Fund
|
September
27, 2010
|
RiverSource
Partners Small Cap Value Fund
|
Select
Global Equity Fund
|
January
15, 2015
|
Columbia
Global Equity Fund
|
Select
International Equity Fund
|
May
1, 2015
|
Columbia
Multi-Advisor International Equity Fund
|
Select
Large Cap Equity Fund
|
December
11, 2013
|
Columbia
Large Cap Core Fund
|
Select
Large-Cap Value Fund
|
September
27, 2010
|
Seligman
Large-Cap Value Fund
|
Select
Smaller-Cap Value Fund
|
September
27, 2010
|
Seligman
Smaller-Cap Value Fund
|
Seligman
Communications and Information Fund
|
September
27, 2010
|
Seligman
Communications and Information Fund, Inc.
|
Seligman
Global Technology Fund
|
September
27, 2010
|
Seligman
Global Technology Fund
|
Small/Mid
Cap Value Fund
|
July
7, 2014
September 27, 2010
|
Columbia
Mid Cap Value Opportunity
RiverSource Mid Cap Value Fund
|
*
|
Effective June 2, 2015,
Columbia LifeGoal
®
Growth Portfolio’s name will be changed to Columbia Global Strategic Equity Fund.
|
Statement
of Additional Information – June 1, 2015
|
10
|
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 only with Board approval and does not require shareholder approval.
Unless otherwise noted in a Fund’s prospectus
or this SAI, 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 (Time of Purchase Standard). Thus, a Fund may continue to hold a security even though it causes the Fund to exceed a
percentage limitation because of fluctuation in the value of the Fund’s assets.
Notwithstanding any of a Fund’s other
investment policies, the Fund, subject to certain limitations, may invest its assets in another investment company. These underlying funds have adopted their own investment policies that may be more or less restrictive than those of the Fund. Unless
a Fund has a policy to consider the policies of underlying funds, the Fund may engage in investment strategies indirectly that would otherwise be prohibited under the Fund’s investment policies.
In adhering to the fundamental and non-fundamental
investment restrictions and policies applicable to Commodity Strategy Fund, the Fund will, to the extent possible, treat any assets of its Subsidiary generally as if the assets were held directly by the Fund.
For all series of CFST II, except Mortgage
Opportunities Fund:
Notwithstanding any of a Fund’s other investment policies, the Fund may invest its assets in an open-end management investment company having substantially the same investment objectives,
policies, and restrictions as the Fund for the purpose of having those assets managed as part of a combined pool.
Fundamental Policies
The table below shows Fund-specific policies that
may be changed only with a “vote of a majority of the outstanding voting securities” of the Fund, which 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 table indicates whether or not the fund has a policy on a particular topic. A dash indicates that the Fund does not have a
Fundamental policy on a particular topic. The specific policy is stated in the paragraphs that follow the table.
Fund
|
A
Buy or
sell real
estate
|
B
Buy or sell
commodities
|
C
Issuer
Diversification
|
D
Concentrate
in any one
industry
|
E
Invest
80%
|
F
Act as an
underwriter
|
G
Lending
|
H
Borrow
money
|
I
Issue
senior
securities
|
J
Buy on
margin/
sell
short
|
Absolute
Return Currency and Income Fund
|
A1
|
B1
|
C5
|
D13
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
AMT-Free
CA Intermediate Muni Bond Fund
|
A5
|
B6
|
C2
|
D6
|
E3
|
F3
|
G3
|
H2
|
I3
|
—
|
AMT-Free
GA Intermediate Muni Bond Fund
|
A5
|
B6
|
C2
|
D6
|
E3
|
F3
|
G3
|
H2
|
I3
|
—
|
AMT-Free
MD Intermediate Muni Bond Fund
|
A5
|
B6
|
—
|
D6
|
E3
|
F3
|
G3
|
H2
|
I3
|
—
|
AMT-Free
NC Intermediate Muni Bond Fund
|
A5
|
B6
|
C2
|
D6
|
E3
|
F3
|
G3
|
H2
|
I3
|
—
|
AMT-Free
SC Intermediate Muni Bond Fund
|
A5
|
B6
|
C2
|
D6
|
E3
|
F3
|
G3
|
H2
|
I3
|
—
|
AMT-Free
Tax-Exempt Bond Fund
|
A1
|
B1
|
C1
|
D7
|
E2
(a)
|
F1
|
G1
|
H1
|
I1
|
—
|
AMT-Free
VA Intermediate Muni Bond Fund
|
A5
|
B6
|
C2
|
D6
|
E3
|
F3
|
G3
|
H2
|
I3
|
—
|
AP
- Multi-Manager Value Fund
|
A1
|
B8
|
C5
|
D13
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Asia
Pacific ex-Japan Fund
|
A1
|
B2
|
C5
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Capital
Allocation Aggressive Portfolio
|
A1
|
B1
|
C5
|
D2
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Capital
Allocation Conservative Portfolio
|
A1
|
B1
|
C5
|
D2
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Capital
Allocation Moderate Aggressive Portfolio
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
Capital
Allocation Moderate Conservative Portfolio
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
Capital
Allocation Moderate Portfolio
|
A1
|
B1
|
C5
|
D2
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Commodity
Strategy Fund
|
A1
|
B9
|
C5
|
D5
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Convertible
Securities Fund
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
Statement
of Additional Information – June 1, 2015
|
11
|
Fund
|
A
Buy or
sell real
estate
|
B
Buy or sell
commodities
|
C
Issuer
Diversification
|
D
Concentrate
in any one
industry
|
E
Invest
80%
|
F
Act as an
underwriter
|
G
Lending
|
H
Borrow
money
|
I
Issue
senior
securities
|
J
Buy on
margin/
sell
short
|
Diversified
Equity Income Fund
|
A1
|
B1
|
C1
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Dividend
Opportunity Fund
|
A1
|
B1
|
C1
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Emerging
Markets Bond Fund
|
A1
|
B3
|
—
|
D3
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
European
Equity Fund
|
A1
|
B1
|
—
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Flexible
Capital Income Fund
|
A1
|
B9
|
C5
|
D5
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Floating
Rate Fund
|
A1
|
B3
|
C1
|
D4
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Global
Bond Fund
|
A1
|
B1
|
C6
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Global
Equity Value Fund
|
A1
|
B1
|
C1
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Global
Infrastructure Fund
|
A1
|
B3
|
C5
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Global
Opportunities Fund
|
A1
|
B1
|
C1
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
High
Yield Bond Fund
|
A1
|
B1
|
C1
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Income
Builder Fund
|
A1
|
B3
|
C5
|
D2
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Income
Opportunities Fund
|
A1
|
B1
|
C1
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Inflation
Protected Securities Fund
|
A1
|
B1
|
—
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
International
Opportunities Fund
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
International
Value Fund
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
Large
Cap Enhanced Core Fund
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
Large
Cap Index Fund
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
Large
Core Quantitative Fund
|
A1
|
B1
|
C1
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Large
Growth Quantitative Fund
|
A1
|
B2
|
C1
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Large
Value Quantitative Fund
|
A1
|
B2
|
C5
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
LifeGoal
Growth Portfolio
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
Limited
Duration Credit Fund
|
A1
|
B1
|
C1
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Marsico
21st Century Fund
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
Marsico
Flexible Capital Fund
|
A4
|
B3
|
C5
|
D10
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Marsico
Focused Equities Fund
|
A5
|
B6
|
—
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
Marsico
Global Fund
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
Marsico
Growth Fund
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
Mid
Cap Index Fund
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
Mid
Cap Value Fund
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
MN
Tax-Exempt Fund
|
A1
|
B1
|
—
|
D7
|
E1
|
F1
|
G1
|
H1
|
I1
|
—
|
Money
Market Fund
|
A2
|
A2
|
C1
|
—
|
—
|
F1
|
G1
|
H1
|
I1
|
J1
|
Mortgage
Opportunities Fund
|
A1
|
B1
|
—
|
D12
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Multi-Advisor
Small Cap Value Fund
|
A1
|
B2
|
—
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Overseas
Value Fund
|
A6
|
B7
|
C4
|
D13
|
—
|
F4
|
G4
|
H3
|
I4
|
—
|
Select
Global Equity Fund
|
A1
|
B1
|
C1
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
Select
International Equity Fund
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
Select
Large Cap Equity Fund
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
Select
Large-Cap Value Fund
|
A3
|
B5
|
C3
|
D11
|
—
|
F2
|
G2
|
I2
|
I2
|
J2
|
Select
Smaller-Cap Value Fund
|
A3
|
B5
|
C3
|
D11
|
—
|
F2
|
G2
|
I2
|
I2
|
J2
|
Seligman
Communications and Information Fund
|
A3
|
B5
|
—
|
D9
|
—
|
F2
|
G2
|
I2
|
I2
|
J2
|
Seligman
Global Technology Fund
|
A3
|
B5
|
—
|
D8
|
—
|
F2
|
G2
|
I2
|
I2
|
J2
|
Statement
of Additional Information – June 1, 2015
|
12
|
Fund
|
A
Buy or
sell real
estate
|
B
Buy or sell
commodities
|
C
Issuer
Diversification
|
D
Concentrate
in any one
industry
|
E
Invest
80%
|
F
Act as an
underwriter
|
G
Lending
|
H
Borrow
money
|
I
Issue
senior
securities
|
J
Buy on
margin/
sell
short
|
Short
Term Bond Fund
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
Short
Term Municipal Bond Fund
|
A5
|
B6
|
C2
|
D6
|
E4
|
F3
|
G3
|
H2
|
I3
|
—
|
Small
Cap Index Fund
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
Small
Cap Value Fund II
|
A5
|
B6
|
C2
|
D6
|
—
|
F3
|
G3
|
H2
|
I3
|
—
|
Small/Mid
Cap Value Fund
|
A1
|
B1
|
C1
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
U.S.
Government Mortgage Fund
|
A1
|
B1
|
C1
|
D1
|
—
|
F1
|
G1
|
H1
|
I1
|
—
|
(a)
|
The Fund does not intend to
purchase bonds or other debt securities, the interest from which is subject to the alternative minimum tax.
|
A.
|
Buy or sell real
estate
|
A1 –
|
The Fund will not
buy or sell real estate, unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the Fund from investing in securities or other instruments backed by real estate or securities of companies engaged
in the real estate business or real estate investment trusts. For purposes of this policy, real estate includes real estate limited partnerships.
|
A2 –
|
The Fund will not
buy or sell real estate, commodities or commodity contracts. For purposes of this policy, real estate includes real estate limited partnerships.
|
A3 –
|
The Fund will not
purchase or hold any real estate, except that a Fund may invest in securities secured by real estate or interests therein or issued by persons (other than real estate investment trusts) which deal in real estate or interests therein.
|
A4 –
|
The Fund will not
buy or sell real estate, unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the Fund from investing in securities or other instruments backed by real estate or securities of companies engaged
in the real estate business, real estate investment trusts (REITs) or entities similar to REITs formed under the laws of non-U.S. companies. For purposes of this policy, real estate includes real estate limited partnerships.
|
A5 –
|
The Fund may not
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.
|
A6
–
|
The
Fund may not purchase or sell real estate, except the Fund may: (i) purchase securities of issuers which deal or invest in real estate, (ii) purchase securities which are secured by real estate or interests in real estate and (iii) hold and dispose
of real estate or interests in real estate acquired through the exercise of its rights as a holder of securities which are secured by real estate or interests therein.
|
B. Buy or sell physical commodities*
B1 –
|
The Fund will not
buy or sell physical commodities unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the Fund from buying or selling options and futures contracts (and, in the case of Mortgage Opportunities
Fund, swaps) or from investing in securities or other instruments backed by, or whose value is derived from, physical commodities.
|
B2 –
|
The Fund will not
buy or sell physical commodities unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the Fund from buying or selling options, futures contracts and foreign currency or from investing in
securities or other instruments backed by, or whose value is derived from, physical commodities.
|
B3 –
|
The Fund will not
buy or sell physical commodities unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the Fund from buying or selling options, futures contracts and foreign currency (and, in the case of Marsico
Flexible Capital Fund, swaps) or from entering into forward currency contracts or from investing in securities or other instruments backed by, or whose value is derived from, physical commodities.
|
B4
–
|
The
Fund will not buy or sell commodities, except that the Fund may to the extent consistent with its investment objective(s), 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 and enter into swap contracts and other financial transactions relating to commodities. This restriction does not apply to foreign currency transactions including
without limitation forward currency contracts.
|
Statement
of Additional Information – June 1, 2015
|
13
|
B5 –
|
The Fund will not
purchase or sell commodities or commodity contracts, except to the extent permissible under applicable law and interpretations, as they may be amended from time to time.
|
B6 –
|
The Fund may not
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.
|
B7 –
|
The Fund may not
purchase or sell commodities, except that the Fund may to the extent consistent with its investment objective: (i) invest in securities of companies that purchase or sell commodities or which invest in such programs, (ii) purchase and sell options,
forward contracts, futures contracts, and options on futures contracts and (iii) enter into swap contracts and other financial transactions relating to commodities. This limitation does not apply to foreign currency transactions including without
limitation forward currency contracts.
|
B8 –
|
The Fund will not
buy or sell commodities unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the Fund from transacting in derivative instruments relating to commodities, including but not limited to, buying or
selling options, swap contracts or futures contracts, or from investing in securities or other instruments backed by, or whose value is derived from, commodities.
|
B9
–
|
The
Fund will not buy or sell physical commodities, except that the Fund may to the extent consistent with its investment objective(s), invest in securities of companies that purchase or sell commodities or commodities contracts or which invest in such
programs, and the Fund may, without limitation by this restriction, purchase and sell options, forward contracts, commodities futures contracts, commodity-linked notes, and options on futures contracts and enter into swap contracts and other
financial transactions relating to, or that are secured by, physical commodities or commodity indices. This restriction does not apply to foreign currency transactions including without limitation forward currency contracts. This restriction also
does not prevent Columbia Commodity Strategy Fund from investing up to 25% of its total assets in one or more wholly-owned subsidiaries (as described further herein and referred to herein collectively as the “Subsidiary”), thereby
gaining exposure to the investment returns of commodities markets within the limitations of the federal tax requirements.
|
*
|
For purposes of the fundamental
investment policy on buying and selling physical commodities above, at the time of the establishment of the restriction for certain Funds, swap contracts on financial instruments or rates were not within the understanding of the term
“commodities.” Notwithstanding any federal legislation or regulatory action by the CFTC that subjects such swaps to regulation by the CFTC, these Funds will not consider such instruments to be commodities for purposes of this
restriction.
|
C.
|
Issuer
Diversification*
|
C1 –
|
The Fund will not
purchase more than 10% of the outstanding voting securities of an issuer, except that up to 25% of the Fund’s assets may be invested without regard to this 10% limitation. For tax-exempt Funds, for purposes of this policy, the terms of a
municipal security determine the issuer. The Fund will not invest more than 5% of its total assets in securities of any company, government, or political subdivision thereof, except the limitation will not apply to investments in securities issued
or guaranteed by the U.S. government, its agencies, or instrumentalities, or other investment companies, and except that up to 25% of the Fund’s total assets may be invested without regard to this 5% limitation. For tax-exempt Funds, for
purposes of this policy, the terms of a municipal security determine the issuer.
|
C2 –
|
The Fund may not
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 Fund.
|
C3 –
|
The Fund will not
make any investment inconsistent with its classification as a diversified company under the 1940 Act.
|
C4 –
|
The Fund may not
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: (a) up to 25% of its total assets may be invested without regard to these limitations; and (b) 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, or any applicable exemptive relief obtained by the Fund.
|
C5
–
|
The
Fund will not 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
|
Statement
of Additional Information – June 1, 2015
|
14
|
|
such issuer or it
would own more than 10% of the voting securities of such issuer, except that: (a) up to 25% of its total assets may be invested without regard to these limitations; and (b) 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, or any applicable exemptive relief.
|
C6
–
|
The
Fund will not purchase more than 10% of the outstanding voting securities of an issuer, except that up to 25% of the Fund’s assets may be invested without regard to this 10% limitation. For tax-exempt Funds, for purposes of this policy, the
terms of a municipal security determine the issuer.
|
*
|
For purposes of applying the
limitation set forth in its issuer diversification policy above, a Fund does not consider futures or swaps central counterparties, where the Fund has exposure to such central counterparties in the course of making investments in futures and
securities, to be issuers.
|
D1 –
|
The Fund will not
concentrate in any one industry. According to the present interpretation by the SEC, this means that up to 25% of the Fund’s total assets, based on current market value at time of purchase, can be invested in any one industry.
|
D2 –
|
The Fund will not
concentrate in any one industry. According to the present interpretation by the SEC, this means that up to 25% of the Fund’s total assets, based on current market value at time of purchase, can be invested in any one industry. The Fund itself
does not intend to concentrate, however, the aggregation of holdings of the underlying funds may result in the Fund indirectly investing more than 25% of its assets in a particular industry. The Fund does not control the investments of the
underlying funds and any indirect concentration will occur only as a result of the Fund following its investment objectives by investing in the underlying funds.
|
D3 –
|
While the Fund may
invest 25% or more of its total assets in the securities of foreign governmental and corporate entities located in the same country, it will not invest 25% or more of its total assets in any single foreign governmental issuer.
|
D4 –
|
The Fund will not
concentrate in any one industry. According to the present interpretation by the SEC, this means that up to 25% of the Fund’s total assets, based on current market value at time of purchase, can be invested in any one industry. For purposes of
this restriction, loans will be considered investments in the industry of the underlying borrower, rather than that of the seller of the loan.
|
D5 –
|
The Fund will not
invest 25% or more of its total assets in securities of corporate issuers engaged in any one industry. The foregoing restriction does not apply to securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities, or
repurchase agreements secured by them. In addition, the foregoing restriction shall not apply to or limit, Commodity Strategy Fund’s counterparties in commodities-related transactions.
|
D6 –
|
The Fund may not
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: a) 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 b) 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.
|
D7 –
|
The Fund will not
invest more than 25% of total assets, at market value, in any one industry; except that municipal securities and securities of the U.S. Government, its agencies and instrumentalities are not considered an industry for purposes of this limitation.
|
D8 –
|
The Fund will,
under normal market conditions, invest at least 25% of the value of its total assets at the time of purchase in the securities of issuers conducting their principal business activities in the technology and related group of industries, 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 or subsidiaries to the extent permitted by the 1940 Act, the rules and regulations thereunder and
any applicable exemptive relief.
|
D9
–
|
The
Fund will not invest 25% or more of its total assets, at market value, in the securities of issuers in any particular industry, except that the Fund will invest at least 25% of the value of its total assets in securities of companies principally
engaged in the communications, information and related industries and provided that this limitation shall exclude securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities.
|
Statement
of Additional Information – June 1, 2015
|
15
|
D10
–
|
The Fund will not
concentrate in any one industry (other than U.S. Government securities, provided that this limitation shall exclude securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities). According to the present
interpretation by the SEC, this means that up to 25% of the Fund’s total assets, based on current market value at time of purchase, can be invested in any one industry.
|
D11
–
|
The Fund will not
invest 25% or more of its total assets, at market value, in the securities of issuers in any particular industry, provided that this limitation shall exclude securities issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities.
|
D12
–
|
The Fund will not
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, municipality 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 applicable exemptive relief obtained by the Fund. Consistent with the Fund’s investment objective and strategies, the Fund may invest 25% or more of its total assets in securities issued by sovereign and quasi-sovereign (
e.g.
, government agencies or instrumentalities) foreign governmental issuers or obligors, including in emerging market countries, but it will not invest 25% or more of its total assets in any single foreign
governmental issuer.
|
D13
–
|
The
Fund will not 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 applicable exemptive relief.
|
*
|
For purposes of applying the
limitation set forth in its concentration policy, above, a Fund will generally use the industry classifications provided by the Global Industry Classification System (GICS) for classification of issuers of equity securities and the classifications
provided by the Barclays Capital Aggregate Bond Index for classification of issues of fixed-income securities. The Fund does not consider futures or swaps clearinghouses or securities clearinghouses, where the Fund has exposure to such
clearinghouses in the course of making investments in futures and securities, to be part of any industry.
|
E1 –
|
The Fund will not
under normal market conditions, invest less than 80% of its net assets in municipal obligations that are generally exempt from federal income tax as well as respective state and local income tax.
|
E2 –
|
The Fund will not
under normal market conditions, invest less than 80% of its net assets in bonds and other debt securities issued by or on behalf of state or local governmental units whose interest, in the opinion of counsel for the issuer, is exempt from federal
income tax.
|
E3 –
|
The Fund will
invest at least 80% of its net assets in securities that pay interest exempt from federal income tax, other than the federal alternative minimum tax, and state individual income tax.
|
E4
–
|
The
Fund will invest at least 80% of its net assets in securities that pay interest exempt from federal income tax, other than the federal alternative minimum tax
|
F1 –
|
The Fund will not
act as an underwriter (sell securities for others). However, under the securities laws, the Fund may be deemed to be an underwriter when it purchases securities directly from the issuer and later resells them.
|
F2 –
|
The Fund will not
underwrite the securities of other issuers, except insofar as the Fund may be deemed an underwriter under the 1933 Act in disposing of a portfolio security or in connection with investments in other investment companies.
|
F3 –
|
The Fund may not
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.
|
F4
–
|
The
Fund may not underwrite any issue of securities issued by other persons within the meaning of the 1933 Act except when it might be deemed to be an underwriter either: (i) in connection with the disposition of a portfolio
|
Statement
of Additional Information – June 1, 2015
|
16
|
|
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 investment
companies.
|
G1 –
|
The Fund will not
lend securities or participate in an interfund lending program if the total of all such loans would exceed 33
1
⁄
3
% of the
Fund’s total assets except this fundamental investment policy shall not prohibit the Fund from purchasing money market securities, loans, loan participation or other debt securities, or from entering into repurchase agreements. For
funds-of-funds – equity, under current Board policy, the Fund has no current intention to borrow to a material extent.
|
G2 –
|
The Fund will not
make loans, except as permitted by the 1940 Act or any rule thereunder, any SEC or SEC staff interpretations thereof or any exemptions therefrom which may be granted by the SEC.
|
G3 –
|
The Fund may not
make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Fund.
|
G4
–
|
The
Fund may not make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
|
H1 –
|
The Fund will not
borrow money, except for temporary purposes (not for leveraging or investment) in an amount not exceeding 33
1
⁄
3
% of its total
assets (including the amount borrowed) less liabilities (other than borrowings) immediately after the borrowings. For funds-of-funds – equity, under current Board policy, the Fund has no current intention to borrow to a material extent.
|
H2 –
|
The Fund may not
borrow money except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Fund.
|
H3
–
|
The
Fund may not borrow money except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
|
*
|
For purposes of the policies
described herein, this restriction shall not prevent the Funds from engaging in derivatives, short sales or other portfolio transactions that create leverage, as allowed by each Fund’s investment policies.
|
I.
|
Issue senior
securities
|
I1 –
|
The Fund will not
issue senior securities, except as permitted under the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
|
I2 –
|
The Fund will not
issue senior securities or borrow money, except as permitted by the 1940 Act or any rule thereunder, any SEC or SEC staff interpretations thereof or any exemptions therefrom which may be granted by the SEC.
|
I3 –
|
The Fund may not
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.
|
I4
–
|
The
Fund may not issue senior securities except to the extent permitted by the 1940 Act, th2 rules and regulations thereunder and any applicable exemptive relief.
|
J.
|
Buy on margin/sell
short
|
J1 –
|
The Fund will not
buy on margin or sell short or deal in options to buy or sell securities.
|
J2
–
|
The
Fund will not purchase securities on margin except as permitted by the 1940 Act or any rule thereunder, any SEC or SEC staff interpretations thereof or any exemptions therefrom which may be granted by the SEC.
|
In addition to the policies described above and any
fundamental policy described in the prospectus:
For Money Market Fund, the Fund will not:
■
|
Purchase common
stocks, preferred stocks, warrants, other equity securities, corporate bonds or debentures, state bonds, municipal bonds, or industrial revenue bonds.
|
For Seligman Communications and Information Fund,
Seligman Global Technology Fund, Select Large-Cap Value Fund and Select Smaller-Cap Value Fund, the Fund will not:
■
|
Purchase or hold
the securities of any issuer, if to its knowledge, directors or officers of the Fund and, only in the case of Seligman Global Technology Fund, the directors and officers of the Fund’s Investment Manager, individually owning beneficially more
than 0.5% of the outstanding securities of that issuer own in the aggregate more than 5% of such securities.
|
Statement
of Additional Information – June 1, 2015
|
17
|
■
|
Enter into
repurchase agreements of more than one week’s duration if more than 10% of the Fund’s net assets would be so invested.
|
Non-fundamental Policies
The following non-fundamental policies may be changed by the Board
at any time and may be in addition to those described in the prospectus.
Investment in Illiquid Securities
No more than 5% of a money market Fund’s total assets will be
held in securities and other instruments that are illiquid. No more than 15% of the net assets of any other Fund will be held in securities and other instruments that are illiquid. “Illiquid Securities” are defined in accordance with the
SEC staff’s current guidance and interpretations which provide that an illiquid security is a security 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 security.
Investment in Other
Investment Companies
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.
Investment in Foreign Securities
For AP - Multi-Manager Value Fund, Diversified Equity Income Fund,
Dividend Opportunity Fund, Flexible Capital Income Fund, Floating Rate Fund, High Yield Bond Fund, Income Opportunities Fund, Inflation Protected Securities Fund, Large Core Quant Fund, Large Growth Quant Fund, Large Value Quant Fund, Limited
Duration Credit Fund, Multi-Advisor Small Cap Value Fund, Select Large-Cap Value Fund, Select Smaller-Cap Value Fund, Seligman Communications and Information Fund and Small/Mid Cap Value Fund:
■
|
Up to 25% of the
Fund’s net assets may be invested in foreign investments.
|
For Convertible Securities Fund:
■
|
Up to 15% of its
total assets in Eurodollar convertible securities and up to an additional 20% of its total assets in foreign securities.
|
For Money Market Fund:
■
|
Up to 35% of the
Fund’s total assets may be invested in U.S. dollar-denominated foreign investments.
|
For Select Large Cap Equity Fund, Marsico Focused
Equities Fund, Mid Cap Value Fund and Small Cap Value Fund II:
■
|
Up to 20% of the
Fund’s total assets may be invested in foreign securities.
|
■
|
For Marsico Growth
Fund:
|
■
|
Up to 25% of its
total assets may be invested in foreign securities, including in emerging market securities.
|
For U.S. Government Mortgage Fund:
■
|
Up to 20% of the
Fund’s net assets may be invested in foreign investments.
|
Selling Securities Short
For series of CFST other than Funds with a fundamental policy with
respect to selling securities short:
■
|
The Funds may not
sell securities short, except as permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
|
Names Rule Policy
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 policy in place to comply with the Names Rule, such Fund 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.
Statement
of Additional Information – June 1, 2015
|
18
|
Purchasing Securities of Any One Issuer
For Marsico Focused Equities Fund and AMT-Free MD
Intermediate Muni Bond Fund:
■
|
The 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 Funds 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.
|
Additional Information About Concentration
Mortgage Opportunities Fund will consider the concentration
policies of any underlying funds in which it invests when evaluating compliance with its concentration policy.
Summary of 1940 Act Restrictions on Certain
Activities
Certain of the Fund’s fundamental and
non-fundamental policies set forth above prohibit transactions “except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief”. The following discussion summarizes the
flexibility that the Fund currently gains from these exceptions. To the extent the 1940 Act or the rules and regulations thereunder may, in the future, be amended to provide greater flexibility, or to the extent the SEC may in the future grant
exemptive relief providing greater flexibility, the Fund will be able to use that flexibility without seeking shareholder approval of its fundamental policies.
Borrowing money – The 1940 Act permits a Fund
to borrow up to 33
1
⁄
3
% of its total assets (including the amounts borrowed) from banks, plus an additional 5% of its total
assets for temporary purposes, which may be borrowed from banks or other sources. The exception in the fundamental policy allows the Funds to borrow money subject to these conditions. Compliance with this limitation is not measured under the Time of
Purchase Standard (meaning, a Fund may not exceed these thresholds including if, after borrowing, the Fund’s net assets decrease due to market fluctuations).
Investing in other investment companies – The
1940 Act, in summary, provides that a fund generally may not: (i) purchase more than 3% of the outstanding voting stock of another investment company; (ii) purchase securities issued by another registered investment company representing more than 5%
of the investing fund’s total assets; and (iii) purchase securities issued by investment companies that in the aggregate represent more than 10% of the acquiring fund’s total assets (the “3, 5 and 10 Rule”). Affiliated
funds-of-funds (i.e., those funds that invest in other funds within the same fund family), with respect to investments in such affiliated underlying funds, are not subject to the 3, 5 and 10 Rule and, therefore, may invest in affiliated underlying
funds without restriction. A fund-of-funds may also invest its assets in unaffiliated funds, but the fund-of-funds generally may not purchase more than 3% of the outstanding voting stock of any one unaffiliated fund. Additionally, certain exceptions
to these limitations apply to investments in money market mutual funds. If shares of the Fund are purchased by an affiliated fund beyond the 3, 5 and 10 Rule in reliance on Section 12(d)(1)(G) of the 1940 Act, for so long as shares of the Fund are
held by such other affiliated 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.
Issuing senior securities – A “senior
security” is an obligation with respect to the earnings or assets of a company that takes precedence over the claims of that company’s common stock with respect to the same earnings or assets. The 1940 Act prohibits a mutual fund from
issuing senior securities other than certain borrowings from a bank, but SEC staff interpretations allow a Fund to engage in certain types of transactions that otherwise might raise senior security concerns (such as short sales, buying and selling
financial futures contracts and other derivative instruments and selling put and call options), provided that the Fund segregates or designates on the Fund’s books and records liquid assets, or otherwise covers the transaction with offsetting
portfolio securities, in amounts sufficient to offset any liability associated with the transaction. The exception in the fundamental policy allows the Fund to operate in reliance upon these staff interpretations.
Making loans (Lending) – Under the 1940 Act, a
mutual fund may loan money or property to persons who do not control and are not under common control with the Fund, except that a Fund may make loans to a wholly-owned subsidiary. In addition, the SEC staff takes the position that a Fund may not
lend portfolio securities representing more than one-third of the Fund’s total value. A Fund must receive from the borrower collateral at least equal in value to the loaned securities, marked to market daily. The exception in the fundamental
policy allows the Fund to make loans to third parties, including loans of its portfolio securities, subject to these conditions.
Purchase of securities on margin – A purchase
on margin involves a loan from the broker-dealer arranging the transaction. The “margin” is the cash or securities that the buyer/borrower places with the broker-dealer as collateral against the loan. However, the purchase of securities
on margin is effectively prohibited by the 1940 Act because the Fund generally may borrow only from banks. Thus, under current law, this exception does not provide any additional flexibility to the Fund.
Statement
of Additional Information – June 1, 2015
|
19
|
Selling securities short – A Fund may sell a
security short by borrowing the security, then selling it to a third party. The Fund will eventually need to close out the short sale by buying the security and returning it, together with interest, to the party from whom the Fund borrowed the
security. The SEC staff takes the position that, as described under “Issuing senior securities” above, a mutual fund must segregate or designate on the Fund’s books and records liquid assets with a value equal to, or otherwise
cover the obligation to return, the security. The exception in the fundamental policy allows the Fund to sell securities short provided it designates liquid assets with a value equal to, or otherwise covers the obligation to return, the
security.
Statement
of Additional Information – June 1, 2015
|
20
|
ABOUT FUND INVESTMENTS
Each Fund’s investment objective, principal
investment strategies and related principal risks are discussed in each Fund’s prospectus. Each Fund’s prospectus identifies the types of securities in which the Fund invests principally and summarizes the principal risks to the
Fund’s portfolio as a whole associated with such investments. Unless otherwise indicated in the prospectus or this SAI, the investment objective and policies of a Fund may be changed without shareholder approval.
To the extent that a type of security identified in
the table below for a Fund is not described in the Fund’s prospectus (or as a sub-category of such security type in this SAI), the Fund generally invests in such security type, if at all, as part of its non-principal investment
strategies.
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 may invest in these types of securities, subject to its investment objective and fundamental and non-fundamental
investment policies. A Fund is not required to invest in any or all of the types of securities listed below.
Funds-of-funds invest in a combination of underlying
funds, although they may also invest directly in stocks, bonds and other securities. These underlying funds have their own investment strategies and types of investments they are allowed to engage in and purchase. Funds-of-funds may invest directly
or indirectly through investments in underlying funds, in securities and other instruments and may engage in the investment strategies indicated in the table below.
Certain Investment Activity Limits.
The overall investment and other activities of the Investment Manager and its affiliates may limit the investment opportunities for each Fund in certain markets, industries or transactions or in
individual issuers where limitations are imposed upon the aggregate amount of investment by the Funds and other accounts managed by the Investment Manager and accounts of its affiliates (collectively, affiliated investors). From time to time, each
Fund’s activities also may be restricted because of regulatory restrictions applicable to the Investment Manager and its affiliates and/or because of their internal policies. See
Investment Management and Other Services – Other
Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest
.
Temporary Defensive Positions.
Each Fund may from time to time take temporary defensive investment positions that may be inconsistent with the Fund’s principal investment strategies in attempting to respond to adverse market,
economic, political, social or other conditions, including, without limitation investing some or all of its assets in money market instruments or shares of affiliated or unaffiliated money market funds or holding some or all of its assets in cash or
cash equivalents. The Fund may take such defensive investment positions for as long a period as deemed necessary.
Other Strategic and Investment Measures.
Unless prohibited by its investment policies, a Fund may also from time to time take temporary portfolio positions that may or may not be consistent with the
Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, social or other conditions, including, without limitation, investing in derivatives, such as futures (
e.g.
, index futures) or options on futures, for various purposes, including among others, investing in particular derivatives to achieve indirect investment
exposure to a sector, country or region where the Investment Manager (or Fund subadviser, if applicable) believes such defensive positioning is appropriate. Each Fund may do so without limit and for as long a period as deemed necessary, when the
Investment Manager or the Fund’s subadviser, if applicable: (i) believes that market conditions are not favorable for profitable investing or to avoid losses, including under adverse market, economic, political or other conditions; (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 is so positioned,
derivatives could comprise a substantial portion of the Fund’s investments and the Fund may not achieve its investment objective. Investing in this manner may adversely affect Fund performance. During these times, the portfolio managers may
make frequent portfolio holding changes, which could result in increased trading expenses and taxes, and decreased Fund performance.
Types of Investments
A black circle indicates that the investment
strategy or type of investment generally is authorized for a category of funds. Exceptions are noted following the table. See
About the Trusts
for fund investment categories.
Type
of Investment
|
Alternative
|
Equity
and
Flexible
|
Funds-of-Funds
– Equity and
Fixed Income
|
Taxable
Fixed
Income
|
Taxable
Money Market
Fund
|
Tax-Exempt
Fixed
Income
|
Asset-Backed
Securities
|
•
|
•
|
•
|
•
|
•
|
•
|
Bank
Obligations (Domestic and Foreign)
|
•
|
•
|
•
|
•
|
•
|
•
|
Collateralized
Bond Obligations
|
•
|
•A
|
•
|
•
|
•
|
•
|
Statement
of Additional Information – June 1, 2015
|
21
|
Type
of Investment
|
Alternative
|
Equity
and
Flexible
|
Funds-of-Funds
– Equity and
Fixed Income
|
Taxable
Fixed
Income
|
Taxable
Money Market
Fund
|
Tax-Exempt
Fixed
Income
|
Commercial
Paper
|
•
|
•
|
•
|
•
|
•
|
•
|
Common
Stock
|
•
|
•
|
•
|
•B
|
—
|
—
|
Convertible
Securities
|
•
|
•C
|
•
|
•D
|
—
|
•
|
Corporate
Debt Securities
|
•
|
•
|
•
|
•
|
•E
|
•
|
Custody
Receipts and Trust Certificates
|
•
|
•F
|
•
|
•F
|
•
|
•F
|
Debt
Obligations
|
•
|
•
|
•
|
•
|
•
|
•
|
Depositary
Receipts
|
•
|
•
|
•
|
•
|
—
|
—
|
Derivatives
|
•
|
•
|
•
|
•
|
—
|
•
|
Dollar
Rolls
|
•
|
•
|
•
|
•
|
—
|
•
|
Foreign
Currency Transactions
|
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Foreign
Securities
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Guaranteed
Investment Contracts (Funding Agreements)
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High-Yield
Securities
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Illiquid
Securities
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Inflation
Protected Securities
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Initial
Public Offerings
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Inverse
Floaters
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Investments
in Other Investment Companies (Including ETFs)
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Listed
Private Equity Funds
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Money
Market Instruments
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Mortgage-Backed
Securities
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Municipal
Securities
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Participation
Interests
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Partnership
Securities
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Preferred
Stock
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Private
Placement and Other Restricted Securities
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Real
Estate Investment Trusts
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Repurchase
Agreements
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Reverse
Repurchase Agreements
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Short
Sales
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Sovereign
Debt
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Standby
Commitments
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U.S.
Government and Related Obligations
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Variable
and Floating Rate Obligations
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A.
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The following Fund is not
authorized to invest in collateralized bond obligations: Multi-Advisor Small Cap Value Fund.
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B.
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The following Fund is not
authorized to invest in common stock: U.S. Government Mortgage Fund.
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C.
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The following Fund is not
authorized to invest in convertible securities: Commodity Strategy Fund.
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D.
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The following Fund is not
authorized to invest in convertible securities: U.S. Government Mortgage Fund.
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E.
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While the Fund is prohibited
from investing in corporate bonds, it may invest in securities classified as corporate bonds if they meet the requirements of Rule 2a-7 of the 1940 Act.
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F.
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The following Equity, Flexible
and Taxable and Tax-Exempt Fixed Income Funds are not authorized to invest in Custody Receipts and Trust Certificates: each series of CFST.
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G.
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The following Funds are not
authorized to invest in Foreign Currency Transactions: State Tax-Exempt and State Municipal Bond Funds.
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H.
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The following flexible and
equity funds are authorized to invest in inverse floaters: Commodity Strategy Fund and Global Opportunities Fund.
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Statement
of Additional Information – June 1, 2015
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22
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I.
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The following flexible and
equity Funds are authorized to invest in mortgage dollar rolls: Global Opportunities Fund and Commodity Strategy Fund.
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J.
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The following Funds are not
authorized to invest in preferred stock: AMT-Free Tax-Exempt Bond Fund and U.S. Government Mortgage Fund.
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K.
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The Funds are not prohibited
from engaging in short sales, subject to any Fundamental or Non-Fundamental Investment policy, however, each Fund will seek Board approval prior to utilizing short sales as an active part of its investment strategy.
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L.
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The following flexible and
equity Funds are authorized to invest in Variable and Floating Rate Obligations: Commodity Strategy Fund, Global Opportunities Fund and each series of CFST.
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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 as, among others, motor vehicle installment sales, contracts, installment loan contracts, leases of various types of real and
personal property, and receivables from revolving (credit card) agreements. Such securities entitle the security holders to receive distributions (
i.e.
, principal and interest) that are tied to the payments
made by the borrower 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. Collateralized loan obligations (CLOs) are but one example of an asset-backed security. See
Types of Investments – Variable- and
Floating-Rate Obligations, Types of Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities
and
Types of Investments – Private Placement and Other Restricted
Securities
for more information.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with asset-backed securities include: Credit Risk, Interest Rate Risk, Liquidity Risk and Prepayment and Extension Risk.
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
Types of 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. 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 banks with interest and principal paid in U.S. dollars. Eurodollar and Yankee Dollar 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. See
Types of Investments – Eurodollar and Yankee Dollar and Related Derivative Instruments
. 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. 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.
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 and/or heightened 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 and/or interest on those obligations; (vi) there may be less publicly available information concerning foreign banks
issuing the
Statement
of Additional Information – June 1, 2015
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23
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obligations; and (vii) the reserve requirements and accounting,
auditing and financial reporting standards, practices and requirements applicable to foreign banks may differ (including, less stringent) from those applicable to domestic banks. Foreign banks generally are not subject to examination by any U.S.
Government agency or instrumentality. See
Types of Investments – Foreign Securities
.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with bank obligations include: Counterparty Risk, Credit Risk, Interest Rate Risk, Issuer Risk, Liquidity Risk, and Prepayment and Extension Risk.
Collateralized Bond Obligations
Collateralized bond obligations (CBOs) are investment grade bonds
backed by a pool of bonds, which may include junk bonds (which are considered speculative investments). CBOs are similar in concept to collateralized mortgage obligations (CMOs), but differ in that CBOs represent different degrees of credit quality
rather than different maturities. (See
Types of Investments – Mortgage-Backed Securities
and
– Asset-Backed Securities
.
) CBOs are often privately offered and sold, and thus not registered under the federal securities laws.
Underwriters of CBOs package a large and diversified
pool of high-risk, high-yield junk bonds, which is then structured into “tranches.” Typically, the first tranche represents a senior claim on collateral and pays the lowest interest rate; the second tranche is junior to the first tranche
and therefore subject to greater risk and pays a higher rate; the third tranche is junior to both the first and second tranche, represents the lowest credit quality and instead of receiving a fixed interest rate receives the residual interest
payments — money that is left over after the higher tranches have been paid. CBOs, like CMOs, are substantially overcollateralized and this, plus the diversification of the pool backing them, may earn certain of the tranches investment-grade
bond ratings. Holders of third-tranche CBOs stand to earn higher or lower yields depending on the rate of defaults in the collateral pool. See
Types of Investments – High-Yield
Securities
.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with CBOs include: Credit Risk, Illiquid Securities Risk, Interest Rate Risk, Liquidity Risk, High-Yield Securities Risk and Prepayment and Extension Risk.
Commercial Paper
Commercial paper is a short-term debt obligation, usually sold on a
discount basis, with a maturity ranging from 2 to 270 days issued by banks, corporations and other borrowers. It is sold to investors with temporary idle cash as a way to increase returns on a short-term basis. These instruments are generally
unsecured, which increases the credit risk associated with this type of investment. See
Types of Investments — Debt Obligations and Types of Investments — Illiquid Securities. See
Appendix A for a discussion of securities ratings.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with commercial paper include: Credit Risk and Liquidity Risk.
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. See
Types of Investments – Foreign
Securities
. Common stock may be privately placed or publicly offered. The price of common stock is generally determined by corporate earnings, type of products or services offered, projected growth rates, experience of management, liquidity,
and market conditions generally. In the event that a corporation declares bankruptcy or is liquidated, the claims of secured and unsecured creditors and owners of bonds and preferred stock take precedence over the claims of those who own common
stock. See
Types of Investments – Private Placement and Other Restricted Securities – Preferred Stock
and
– Convertible
Securities
for more information.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with common stock include: Issuer Risk and Market Risk.
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
Statement
of Additional Information – June 1, 2015
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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 common stock’s market movements can influence their value,
convertible securities generally are not as sensitive to changes in interest rates as similar non-convertible debt securities nor generally as sensitive to changes in share price as the 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
Types of Investments
– Variable- and Floating-Rate Obligations, Types of Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities, Types of Investments – Common Stock, Types of Investments – Corporate Debt Securities
and
Types of Investments – Private Placement and Other Restricted Securities
for more information.
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 at 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.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with convertible securities include: Convertible Securities Risk, Interest Rate Risk, Issuer Risk, Market Risk, Prepayment and Extension Risk, and Reinvestment Risk.
Corporate Debt Securities
Corporate debt securities are long and short term fixed income
securities typically issued by businesses to finance their operations. Corporate debt securities are issued by public or private companies, as distinct from debt securities issued by a government or its agencies. The issuer of a corporate debt
security often has a contractual obligation to pay interest at a stated rate on specific dates and to repay principal periodically or on a specified maturity date. Corporate debt securities typically have four distinguishing features: (1) they are
taxable; (2) they have a par value of $1,000; (3) they have a term maturity, which means they come due at a specified time period; and (4) many are traded on major securities exchanges. 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, as are debentures. 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. They may also be senior or subordinated obligations. See Appendix A for a discussion of securities ratings. See
Types of Investments – Variable- and
Floating-Rate Obligations, Types of Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities, Types of Investments – Private Placement and Other Restricted Securities, Types of Investments – Debt Obligations, Types of
Investments – Commercial Paper
and
Types of Investments – High-Yield 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.
Statement
of Additional Information – June 1, 2015
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Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with corporate debt securities include: Credit Risk, Interest Rate Risk, Issuer Risk, High Yield Securities Risk, Prepayment and Extension Risk and Reinvestment Risk.
Custody Receipts and Trust Certificates
Custody receipts and trust certificates are derivative products
that evidence direct ownership in a pool of securities. Typically, a sponsor will deposit a pool of securities with a custodian in exchange for custody receipts evidencing interests in those securities. The sponsor generally then will sell the
custody receipts or trust certificates in negotiated transactions at varying prices. Each custody receipt or trust certificate evidences the individual securities in the pool and the holder of a custody receipt or trust certificate generally will
have all the rights and privileges of owners of those securities.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with custody receipts and trust certificates include: Liquidity Risk and Counterparty Risk. In addition, custody receipts and trust certificates generally are subject to the same risks as the
securities evidenced by the receipts or certificates.
Debt Obligations
Many different types of debt obligations exist (for example, bills,
bonds, and notes). Issuers of debt obligations have a contractual obligation to pay interest at a fixed, variable or floating rate on specified dates and to repay principal by a specified maturity date. Certain debt obligations (usually intermediate
and long-term bonds) have provisions that allow the issuer to redeem or “call” a bond before its maturity. Issuers are most likely to call these securities during periods of falling interest rates. When this happens, an investor may have
to replace these securities with lower yielding securities, which could result in a lower return.
The market value of debt obligations is affected
primarily by changes in prevailing interest rates and the issuer’s perceived ability to repay the debt. The market value of a debt obligation generally reacts inversely to interest rate changes. When prevailing interest rates decline, the
market value of the bond usually rises, and when prevailing interest rates rise, the market value of the bond usually declines.
In general, the longer the maturity of a debt
obligation, the higher its yield and the greater the sensitivity to changes in interest rates. Conversely, the shorter the maturity, the lower the yield and the lower the sensitivity to changes in interest rates.
As noted, the values of debt obligations also may be
affected by changes in the credit rating or financial condition of their issuers. Generally, the lower the quality rating of a security, the higher the degree of risk as to the payment of interest and return of principal. To compensate investors for
taking on such increased risk, those issuers deemed to be less creditworthy generally must offer their investors higher interest rates than do issuers with better credit ratings. See
Types of
Investments – Corporate Debt Securities, Types of Investments – High-Yield Securities.
See
Types of Investments – Trust-Preferred Securities
for information with
respect to the trust-preferred or trust-issued securities.
Determining Investment Grade for Purposes of
Investment Policies.
Unless otherwise stated in the Fund’s prospectus, when determining, under a Fund’s investment policies, whether a debt instrument is investment grade or below
investment grade for purposes of purchase by the Fund, the Fund will apply a particular credit quality rating methodology, as described within the Fund’s shareholder reports, when available. These methodologies typically make use of credit
quality ratings assigned by a third-party rating agency or agencies, when available. Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily. Credit quality
ratings apply to the Fund’s debt instrument investments and not the Fund itself.
Ratings limitations under a Fund’s investment
policies are applied at the time of purchase by a Fund. Subsequent to purchase, a debt instrument may cease to be rated by a rating agency or its rating may be reduced by a rating agency(ies) below the minimum required for purchase by a Fund.
Neither event will require the sale of such debt instrument, but it may be a factor in considering whether to continue to hold the instrument. Unless otherwise stated in a Fund’s prospectus or in this SAI, a Fund may invest in debt instruments
that are not rated by a rating agency. When a debt instrument is not rated by a rating agency, the Investment Manager or, as applicable, a Fund subadviser determines, at the time of purchase, whether such debt instrument is of investment grade or
below investment grade (e.g., junk bond) quality. A Fund’s debt instrument holdings that are not rated by a rating agency are typically referred to as “Not Rated” within the Fund’s shareholder reports.
See Appendix A for a discussion of securities
ratings.
Although one or more of the other
risks described in this SAI may also apply, the risks typically associated with debt obligations include: Confidential Information Access Risk, Credit Risk, Highly Leveraged Transactions Risk, Impairment of Collateral Risk, Interest Rate Risk,
Issuer Risk, Liquidity Risk, Prepayment and Extension Risk and Reinvestment Risk.
Determining Average Maturity.
When determining the average maturity of a Fund's portfolio, the Fund may use the effective maturity of a portfolio security by, among other things, adjusting for interest rate reset dates, call dates
or “put” dates.
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of Additional Information – June 1, 2015
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26
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Depositary Receipts
See
Types of
Investments – Foreign Securities
below.
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), market indices (such as the S& P
500
®
Index) or customized baskets of securities or instruments. 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. Many derivative instruments often require little or no initial payment and therefore often create inherent economic leverage. Derivatives, when used properly, can enhance returns and be useful in
hedging portfolios and managing risk. 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 and rights; swap agreements and swaptions.
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 unfavorable 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; (vi) to manage the effective maturity or duration of its portfolio; and/or (vii) to maintain cash reserves while remaining fully invested.
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. The use of derivatives is a function of numerous variables, including market conditions. See also
Types of Investments – Warrants and Rights
and
When Issued, Delayed Delivery and Forward Commitment Transactions
.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with transactions in derivatives (including the derivatives instruments discussed below) include: Counterparty Risk, Credit Risk, Interest Rate Risk, Leverage Risk, Liquidity Risk, Market Risk,
Derivatives Risk, Derivatives Risk/Credit Default Swaps Risk, Derivatives Risk/Forward Foreign Currency Contracts Risk, Derivatives Risk/Commodity-Linked Futures Contracts Risk, Derivatives Risk/Commodity-Linked Structured Notes Risk, Derivatives
Risk/Commodity-Linked Swaps, Derivatives Risk/Forward Interest Rate Agreements Risk, Derivatives Risk/Futures Contracts Risk, Derivatives Risk/Interest Rate Swaps Risk, Derivatives Risk/Inverse Floaters Risk, Derivatives Risk/Options Risk,
Derivatives Risk/Portfolio Swaps and Total Return Swaps Risk, Derivatives Risk/Total Return Swaps Risk, and Derivatives Risk/Warrants Risk.
Indexed 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 or interest rates. For example, a Fund may invest in debt 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.
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. A trust funds the purchase of a bond by issuing two classes of certificates: short-term
floating rate notes (typically sold to third parties) and the inverse floaters (also known as residual certificates). No additional income beyond that provided by the trust’s underlying bond is created; rather, that income is merely divided-up
between the two classes of certificates. Generally,
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income on inverse floating rate bonds will decrease when interest
rates increase, and will increase when interest rates decrease. Such securities can have the effect of providing a degree of investment leverage, since they may increase or decrease in value in response to changes in market interest rates at a rate
that is a multiple of the actual 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. 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 securities are indirectly subject to the risks associated with derivative instruments. 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- and Currency-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 or securities.
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- and currency-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 may not perform as expected by a Fund’s
portfolio manager. Markets and underlying investments and indexes may move in a direction that was not anticipated by a Fund’s portfolio manager. 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, although the SEC has issued exemptive relief permitting investment companies such as the Funds to invest beyond the limits of Section 12(d)(1)(A) subject to certain conditions. SPDRs
generally 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.
Because linked securities 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 linked securities 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.
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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 currencies 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. 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 CEA by the CFTC, a U.S. Government agency. See
Types of
Investments – Derivatives – CFTC Regulation
below for information on CFTC regulation.
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.
Upon
entering into futures contracts, in compliance with regulatory requirements, cash or liquid securities, at least 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 designated on a Fund’s books and records.
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.
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. A 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 a 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 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 its portfolio manager’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.
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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, a Fund may use interest rate futures contracts as a defense, or hedge, against anticipated interest
rate changes. A 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 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.
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).
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
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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.
Commodity-Linked Futures Contracts.
Commodity-linked futures contracts are traded on futures exchanges. These futures exchanges offer a central marketplace in which to transact in futures contracts, a clearing corporation to process
trades, and standardization of expiration dates and contract sizes. Futures markets also specify the terms and conditions of delivery as well as the maximum permissible price movement during a trading session. Additionally, the commodity futures
exchanges may have position limit rules that limit the amount of futures contracts that any one party may hold in a particular commodity at any point in time. These position limit rules are designed to prevent any one participant from controlling a
significant portion of the market.
Commodity-linked futures contracts are generally
based upon commodities within six main commodity groups: (1) energy, which includes, among others, crude oil, brent crude oil, gas oil, natural gas, gasoline and heating oil; (2) livestock, which includes, among others, feeder cattle, live cattle
and hogs; (3) agriculture, which includes, among others, wheat (Kansas wheat and Chicago wheat), corn and soybeans; (4) industrial metals, which includes, among others, aluminum, copper, lead, nickel and zinc; and (5) precious metals, which
includes, among others, gold and silver; and (6) softs, which includes cotton, coffee, sugar and cocoa. A Fund may purchase commodity futures contracts, swaps on commodity futures contracts, options on futures contracts and options and futures on
commodity indices with respect to these six main commodity groups and the individual commodities within each group, as well as other types of commodities.
The price of a commodity futures contract will
reflect the storage costs of purchasing the physical commodity. These storage costs include the time value of money invested in the physical commodity plus the actual costs of storing the commodity less any benefits from ownership of the physical
commodity that are not obtained by the holder of a futures contract (this is sometimes referred to as the “convenience yield”). To the extent that these storage costs change for an underlying commodity while a Fund is long futures
contracts on that commodity, the value of the futures contract may change proportionately.
In the commodity futures markets, if producers of
the underlying commodity wish to hedge the price risk of selling the commodity, they will sell futures contracts today to lock in the price of the commodity at delivery tomorrow. In order to induce speculators to take the corresponding long side of
the same futures contract, the commodity producer must be willing to sell the futures contract at a price that is below the expected future spot price. Conversely, if the predominant hedgers in the futures market are the purchasers of the underlying
commodity who purchase futures contracts to hedge against a rise in prices, then speculators will only take the short side of the futures contract if the futures price is greater than the expected future spot price of the commodity.
The changing nature of the hedgers and speculators
in the commodity markets will influence whether futures contract prices are above or below the expected future spot price. This can have significant implications for a Fund when it is time to replace an existing contract with a new contract. If the
nature of hedgers and speculators in futures markets has shifted such that commodity purchasers are the predominant hedgers in the market, a Fund might open the new futures position at a higher price or choose other related commodity-linked
investments.
The values of commodities which
underlie commodity futures contracts are subject to additional variables which may be less significant to the values of traditional securities such as stocks and bonds. Variables such as drought, floods, weather, livestock disease, embargoes and
tariffs may have a larger impact on commodity prices and commodity-linked investments, including futures contracts, commodity-linked structured notes, commodity-linked options and commodity-linked swaps, than on traditional securities. These
additional variables may create additional investment risks which subject a Fund’s commodity-linked investments to greater volatility than investments in traditional securities.
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, but not the obligation, 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.
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A Fund will enter into written options on futures
contracts only when, in compliance with regulatory requirements, it has designated cash or liquid securities at least equal in value to the underlying security’s or other asset’s value (less any applicable margin deposits). 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.
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.
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 a Fund’s portfolio manager, 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.
Options on Stocks, Stock Indices and Other Indices.
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.
There is a key difference between stock options and
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.
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.
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 particular
securities or to various stock indices, except that a Fund may not write covered options on an index.
Writing Covered Options.
A Fund may write covered call options and covered put options on securities held in its portfolio. 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 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 liquid assets 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.
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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.
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.
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, including 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.
OTC options (options not traded on exchanges) are generally established through negotiation with the other party to the options contract. 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.
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, commodity futures,
equity, equity index, credit default, bond futures, total return, portfolio 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.
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Swap agreements are usually entered into without an
upfront payment because the value of each party’s position is the same. The market values of the underlying commitments will change over time, resulting in one of the commitments being worth more than the other and the net market value
creating a risk exposure for one party or the other.
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 amounts 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. In interest rate collar transactions, one party sells a cap and purchases a floor, or vice versa, in an attempt to protect itself against interest rate movements exceeding
given minimum or maximum levels or collar amounts.
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. In that case, 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.
Because swaps are
two-party contracts that may be subject to contractual restrictions on transferability and termination and because they may have terms of greater than seven days, swap agreements may be considered to be illiquid. If a swap is not liquid, it may not
be possible to initiate a transaction or liquidate a position at an advantageous time or price, which may result in significant losses.
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. When a counterparty’s obligations are not fully secured by collateral, then the Fund is essentially an unsecured
creditor of the counterparty. If the counterparty defaults, the Fund will have contractual remedies, but there is no assurance that a counterparty will be able to meet its obligations pursuant to such contracts or that, in the event of default, the
Fund will succeed in enforcing contractual remedies. Counterparty risk still exists even if a counterparty’s obligations are secured by collateral because the Fund’s interest in collateral may not be perfected or additional collateral
may not be promptly posted as required. Counterparty risk also may be more pronounced if a counterparty’s obligations exceed the amount of collateral held by the Fund (if any), the Fund is unable to exercise its interest in collateral upon
default by the counterparty, or the termination value of the instrument varies significantly from the marked-to-market value of the instrument.
Counterparty risk with respect to derivatives will
be affected by new rules and regulations affecting the derivatives market. Some derivatives transactions are required to be centrally cleared, and a party to a cleared derivatives transaction is subject to the credit risk of the clearing house and
the clearing member through which it holds its cleared position, rather than the credit risk of its original counterparty to the derivative transaction. Credit risk of market participants with respect to derivatives that are centrally cleared is
concentrated in a few clearing houses, and it is not clear how an insolvency proceeding of a clearing house would be conducted and what impact an insolvency of a clearing house would have on the financial system. A clearing member is obligated by
contract and by applicable regulation to segregate all funds received from customers with respect to cleared derivatives transactions from the clearing member’s proprietary assets. However, all funds and other property received by a clearing
broker from its customers are generally held by the clearing broker on a commingled basis in an omnibus account, and the clearing member may invest those funds in certain instruments permitted under the applicable regulations. The assets of a Fund
might not be fully protected in the event of the bankruptcy of a Fund’s clearing member, because the Fund would be limited to recovering only a pro rata share of all available funds segregated on behalf of the clearing broker’s customers
for a relevant account class. Also, the clearing member is required to transfer to the clearing organization the amount of margin required by the clearing organization for cleared derivatives, which amounts are generally held in an omnibus account
at the clearing organization for all customers of the clearing member. Regulations promulgated by the CFTC require that the clearing member notify the clearing house of the amount of initial margin provided by the clearing member to the clearing
organization that is attributable to each customer. However, if the clearing member does not provide accurate reporting, the Funds are subject to the risk that a clearing organization will use a Fund’s assets held in an omnibus account at the
clearing organization to satisfy payment obligations of a defaulting customer of the clearing member to the clearing organization. In addition, clearing members generally provide to the clearing organization the net amount of variation margin
required for cleared swaps for all of its
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customers in the aggregate, rather than the gross amount of each
customer. The Funds are therefore subject to the risk that a clearing organization will not make variation margin payments owed to a Fund if another customer of the clearing member has suffered a loss and is in default, and the risk that a Fund will
be required to provide additional variation margin to the clearing house before the clearing house will move the Fund’s cleared derivatives transactions to another clearing member. In addition, if a clearing member does not comply with the
applicable regulations or its agreement with the Funds, or in the event of fraud or misappropriation of customer assets by a clearing member, a Fund could have only an unsecured creditor claim in an insolvency of the clearing member with respect to
the margin held by the clearing member.
Interest
Rate Swaps.
Interest rate swap agreements are often used to obtain or preserve a desired return or spread at a lower cost than through a direct investment in an instrument that yields the desired
return or spread. They are financial instruments that involve the exchange of one type of interest rate cash flow for another type of interest rate cash flow on specified dates in the future. In a standard interest rate swap transaction, two parties
agree to exchange their respective commitments to pay fixed or floating interest rates on a predetermined specified (notional) amount. The swap agreement’s notional amount is the predetermined basis for calculating the obligations that the
swap counterparties have agreed to exchange. Under most swap agreements, the obligations of the parties are exchanged on a net basis. The two payment streams are netted out, with each party receiving or paying, as the case may be, only the net
amount of the two payments. Interest rate swaps can be based on various measures of interest rates, including LIBOR, swap rates, Treasury rates and foreign interest rates.
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 a credit default swap. 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.
A Fund’s
obligations under a credit default swap agreement will be accrued daily (offset against any amounts owing to the Fund). In connection with credit default swaps in which a Fund is the buyer, the Fund will segregate or designate cash or other liquid
assets or enter into certain offsetting positions, with a value at least equal to the Fund’s exposure (any accrued but unpaid net amounts owed by the Fund to any counterparty), on a mark-to-market basis. In connection with credit default swaps
in which a Fund is the seller, the Fund will segregate or designate cash or other liquid assets or enter into offsetting positions, with a value at least equal to the full notional amount of the swap (minus any amounts owed to the Fund). Such
segregation or designation will ensure that a Fund has assets available to satisfy its obligations with respect to the transaction. Such segregation or designation will not limit a Fund’s exposure to loss.
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.
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
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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 designated by a Fund on its
books and records. 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 designated
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.
Commodity-Linked Swaps.
Commodity-linked swaps are two-party contracts in which the parties agree to exchange the return or interest rate on one instrument for the return of a particular commodity, commodity index or
commodities futures or options contract. The payment streams are calculated by reference to an agreed upon notional amount. A one-period swap contract operates in a manner similar to a forward or futures contract because there is an agreement to
swap a commodity for cash at only one forward date. A Fund may engage in swap transactions that have more than one period and therefore more than one exchange of commodities.
A Fund may invest in total return commodity swaps to
gain exposure to the overall commodity markets. In a total return commodity swap, a Fund will receive the price appreciation of a commodity index, a portion of the index, or a single commodity in exchange for paying an agreed-upon fee. If the
commodity swap is for one period, the Fund will pay a fixed fee, established at the outset of the swap. However, if the term of the commodity swap is more than one period, with interim swap payments, the Fund will pay an adjustable or floating fee.
With a “floating” rate, the fee is pegged to a base rate such as LIBOR, and is adjusted each period. Therefore, if interest rates increase over the term of the swap contract, a Fund may be required to pay a higher fee at each swap reset
date.
Cross Currency Swaps.
Cross currency swaps are similar to interest rate swaps, except that they involve multiple currencies. A Fund may enter into a cross currency swap when it has exposure to one currency and desires
exposure to a different currency. Typically, the interest rates that determine the currency swap payments are fixed, although occasionally one or both parties may pay a floating rate of interest. Unlike an interest rate swap, however, the principal
amounts are exchanged at the beginning of the contract and returned at the end of the contract. In addition to paying and receiving amounts at the beginning and termination of the agreements, both sides will have to pay in full periodically based
upon the currency they have borrowed. Changes in foreign exchange currency rates and changes in interest rates, as described above, may negatively affect currency swaps.
Contracts for Differences.
Contracts for differences are swap arrangements in which the parties agree that their return (or loss) will be based on the relative performance of two different groups or baskets of securities. Often,
one or both baskets will be an established securities index. A Fund’s return will be based on changes in value of theoretical long futures positions in the securities comprising one basket (with an aggregate face value equal to the notional
amount of the contract for differences) and theoretical short futures positions in the securities comprising the other basket. A Fund also may use actual long and short futures positions and achieve similar market exposure by netting the payment
obligations of the two contracts. A Fund typically enters into contracts for differences (and analogous futures positions) when its portfolio manager believes that the basket of securities constituting the long position will outperform the basket
constituting the short position. If the short basket outperforms the long basket, a Fund will realize a loss — even in circumstances when the securities in both the long and short baskets appreciate in value.
Swaptions.
A swaption is an options contract on a swap agreement. These transactions give a party the right (but not the obligation) to enter into new swap agreements or to shorten, extend, cancel or otherwise
modify an existing swap agreement (which are described herein) at some designated future time on specified terms, in return for payment of the purchase price (the “premium”) of the option. A Fund may write (sell) and purchase put and
call swaptions to the same extent it may make use of standard options on securities or other instruments. The writer of the contract receives the premium and bears the risk of unfavorable changes in the market value on the underlying swap agreement.
Swaptions can be bundled and sold as a package. These are commonly called interest rate caps, floors and collars (which are described herein).
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Many swaps are complex and often valued
subjectively. Many over-the-counter derivatives are complex and their valuation often requires modeling and judgment, which increases the risk of mispricing or incorrect valuation. The pricing models used may not produce valuations that are
consistent with the values the Fund realizes when it closes or sells an over-the-counter derivative. Valuation risk is more pronounced when the Fund enters into over-the-counter derivatives with specialized terms because the market value of those
derivatives in some cases is determined in part by reference to similar derivatives with more standardized terms. Incorrect valuations may result in increased cash payment requirements to counterparties, undercollateralization and/or errors in
calculation of the Fund’s net asset value.
Title VII of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (the “Dodd-Frank Act”) established a framework for the regulation of OTC swap markets; the framework outlined the joint responsibility of the CFTC and the SEC in regulating swaps. The CFTC is responsible for the
regulation of swaps, the SEC is responsible for the regulation of security-based swaps and they are both jointly responsible for the regulation of mixed swaps.
Risk of Potential Governmental Regulation of
Derivatives
It is possible that government regulation of
various types of derivative instruments, including futures and swap agreements, may limit or prevent the Funds from using such instruments as a part of their investment strategy, and could ultimately prevent the Funds from being able to achieve
their investment objectives. The effects of present or future legislation and regulation in this area are not known, but the effects could be substantial and adverse.
The futures markets are subject to comprehensive
statutes, regulations, and margin requirements. In addition, the SEC, CFTC and the exchanges are authorized to take extraordinary actions in the event of a market emergency, including, for example, the implementation or reduction of speculative
position limits, the implementation of higher margin requirements, the establishment of daily price limits and the suspension of trading.
The regulation of swaps and futures transactions in
the U.S. is a rapidly changing area of law and is subject to modification by government and judicial action. There is a possibility of future regulatory changes altering, perhaps to a material extent, the nature of an investment in a Fund or the
ability of a Fund to continue to implement its investment strategies. In particular, the Dodd-Frank Act, which was signed into law in July 2010, will change the way in which the U.S. financial system is supervised and regulated. Title VII of the
Dodd-Frank Act sets forth a new legislative framework for OTC derivatives, such as swaps, in which the Funds may invest. Title VII of the Dodd-Frank Act makes broad changes to the OTC derivatives market, grants significant new authority to the SEC
and the CFTC to regulate OTC derivatives and market participants, and will require clearing of many OTC derivatives transactions.
Additional Risk Factors in Cleared Derivatives
Transactions
Under recently adopted rules and regulations,
transactions in some types of swaps (including interest rate swaps and credit default swaps on North American and European indices) are required to be centrally cleared. In a transaction involving those swaps (“cleared derivatives”), a
Fund’s counterparty is a clearing house, rather than a bank or broker. Since the Funds are not members of clearing houses and only members of a clearing house (“clearing members”) can participate directly in the clearing house, the
Funds will hold cleared derivatives through accounts at clearing members. In a cleared derivatives transaction, the Funds will make payments (including margin payments) to and receive payments from a clearing house through their accounts at clearing
members. Clearing members guarantee performance of their clients’ obligations to the clearing house.
In many ways, centrally cleared derivative
arrangements are less favorable to mutual funds than bilateral arrangements. For example, the Funds may be required to provide greater amounts of margin for cleared derivatives positions than for bilateral derivatives transactions. Also, in contrast
to a bilateral derivatives position, following a period of notice to a Fund, a clearing member generally can require termination of an existing cleared derivatives position at any time or increases in margin requirements above the margin that the
clearing member required at the beginning of a transaction. Clearing houses also have broad rights to increase margin requirements for existing positions or to terminate those positions at any time. Any increase in margin requirements or termination
of existing cleared derivatives positions by the clearing member or the clearing house could interfere with the ability of a Fund to pursue its investment strategy. Further, any increase in margin requirements by a clearing member could also expose
a Fund to greater credit risk to its clearing member, because margin for cleared derivatives transactions in excess of clearing house’s margin requirements typically is held by the clearing member. Also, a Fund is subject to risk if it enters
into a derivatives transaction that is required to be cleared (or that the Adviser expects to be cleared), and no clearing member is willing or able to clear the transaction on the Fund’s behalf. While the documentation in place between the
Funds and their clearing members generally provides that the clearing members will accept for clearing all transactions submitted for clearing that are within credit limits (specified in advance) for each Fund, the Funds are still subject to the
risk that no clearing member will be willing or able to clear a transaction. In those cases, the position might have to be terminated, and the Fund could lose some or all of the benefit of the position, including loss of an increase in the value of
the position and/or loss of hedging protection. In addition, the documentation governing the relationship between the Funds and clearing members is developed by the clearing members and generally is less favorable to the Funds than typical bilateral
derivatives
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documentation. For example, documentation relating to cleared
derivatives generally includes a one-way indemnity by the Funds in favor of the clearing member for losses the clearing member incurs as the Funds’ clearing member and typically does not provide the Funds any remedies if the clearing member
defaults or becomes insolvent. While futures contracts entail similar risks, the risks likely are more pronounced for cleared swaps due to their more limited liquidity and market history.
Some types of cleared derivatives are required to be
executed on an exchange or on a swap execution facility. A swap execution facility is a trading platform where multiple market participants can execute derivatives by accepting bids and offers made by multiple other participants in the platform.
While this execution requirement is designed to increase transparency and liquidity in the cleared derivatives market, trading on a swap execution facility can create additional costs and risks for the Funds. For example, swap execution facilities
typically charge fees, and if a Fund executes derivatives on a swap execution facility through a broker intermediary, the intermediary may impose fees as well. Also, a Fund may indemnify a swap execution facility, or a broker intermediary who
executes cleared derivatives on a swap execution facility on the Fund’s behalf, against any losses or costs that may be incurred as a result of the Fund’s transactions on the swap execution facility.
These and other new rules and regulations could,
among other things, further restrict a Fund’s ability to engage in, or increase the cost to the Fund of, derivatives transactions, for example, by making some types of derivatives no longer available to the Fund, increasing margin or capital
requirements, or otherwise limiting liquidity or increasing transaction costs. These regulations are new and evolving, so their potential impact on the Funds and the financial system are not yet known. While the new regulations and the central
clearing of some derivatives transactions are designed to reduce systemic risk (
i.e.
, the risk that the interdependence of large derivatives dealers could cause a number of those dealers to suffer liquidity,
solvency or other challenges simultaneously), there is no assurance that the new clearing mechanisms will achieve that result, and in the meantime, as noted above, central clearing and related requirements expose the Funds to new kinds of risks and
costs.
CFTC Regulation
Pursuant to Rule 4.5 under the CEA, Commodity Strategy Fund no
longer qualifies for an exclusion from the definition of a commodity pool. Accordingly, the Fund is registered as a "commodity pool" and the Investment Manager is registered as a “commodity pool operator” with respect to the Fund under
the CEA.
Each of the other Funds listed on the
cover of this SAI qualifies for an exclusion from the definition of a commodity pool under the CEA and has on file a notice of exclusion under CFTC Rule 4.5. Accordingly, the Investment Manager is not subject to registration or regulation as a
“commodity pool operator” under the CEA with respect to these Funds, although the Investment Manager is a registered “commodity pool operator” and “commodity trading advisor”. To remain eligible for the exclusion,
each of these Funds is limited in its ability to use certain financial instruments regulated under the CEA (“commodity interests”), including futures and options on futures and certain swaps transactions. In the event that a Fund’s
investments in commodity interests are not within the thresholds set forth in the exclusion, one or more Funds not currently registered as a “commodity pool” may be required to register as such, which could increase Fund expenses,
adversely affecting the Fund’s total return.
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 securities on a specified future date and price from the same party. 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. The investor also could be compensated through the receipt of fee income equivalent to a lower forward price.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with mortgage dollar rolls include: Counterparty Risk, Credit Risk and Interest Rate Risk.
Equity-Linked Notes
An equity-linked note (ELN) is a debt instrument whose value is
based on the value of a single equity security, basket of equity securities or an index of equity securities (each, an Underlying Equity). An ELN typically provides interest income, thereby offering a yield advantage over investing directly in an
Underlying Equity. The Fund may purchase ELNs that trade on a securities exchange or those that trade on the over-the-counter markets, including Rule 144A securities. The Fund may also purchase ELNs in a privately negotiated transaction with the
issuer of the ELNs (or its broker-dealer affiliate). The Fund may or may not hold an ELN until its maturity.
Equity-linked securities also 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
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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.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with equity-linked notes include: Counterparty Risk, Credit Risk, Liquidity Risk and Market Risk.
Eurodollar and Yankee Dollar and Related Derivative
Instruments
Eurodollar instruments are bonds that pay
interest and principal in U.S. dollars held in banks outside the United States, primarily in Europe. Eurodollar instruments are usually issued on behalf of multinational companies and foreign governments by large underwriting groups composed of
banks and issuing houses from many countries. Yankee Dollar instruments are U.S. dollar-denominated bonds issued in the United States by foreign banks and corporations. These investments involve risks that are different from investments in
securities issued by U.S. issuers.
Eurodollar
futures contracts enable purchasers to obtain a fixed rate for the lending of funds and sellers to obtain a fixed rate for borrowings. A Fund may use Eurodollar futures contracts and options thereon to hedge against changes in the LIBOR, to which
many interest rate swaps and fixed income instruments are linked.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with Eurodollar and Yankee Dollar instruments include: Credit Risk, Foreign Securities Risk, Interest Rate Risk and Issuer Risk.
Exchange-traded notes (ETNs)
ETNs are instruments that combine aspects of bonds and
exchange-traded funds (ETFs) and are designed to provide investors with access to the returns, less investor fees and expenses, of various market benchmarks or strategies to which they are usually linked. When an investor buys an ETN, the issuer,
typically an underwriting bank, promises to pay upon maturity the amount reflected in the benchmark or strategy (minus fees and expenses). Some ETNs make periodic coupon payments. Like ETFs, ETNs are traded on an exchange, but ETNs have additional
risks compared to ETFs, including that if the credit of the ETN issuer becomes suspect, the investment might lose some or all of its value. Though linked to the performance, for example, of a market benchmark, ETNs are not equities or index funds,
but they do share several characteristics. Similar to equities, ETNs are traded on an exchange and can be sold short. Similar to index funds, ETNs may be linked to the return of a benchmark or strategy, but ETNs don't have an ownership interest in
the instruments underlying the benchmark or strategy the ETN is tracking.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with exchange-traded notes include: Counterparty Risk, Credit Risk and Market Risk.
Foreign Currency Transactions
Because investments in foreign securities usually involve
currencies of foreign countries and because a Fund may hold cash and cash equivalent investments in foreign currencies, the value of a Fund’s assets as measured in U.S. dollars may be affected favorably or unfavorably by changes in currency
exchange rates and exchange control regulations. Also, a Fund may incur costs in connection with conversions between various currencies. Currency exchange rates may fluctuate significantly over short periods of time, causing a Fund’s NAV to
fluctuate. Currency exchange rates are generally determined by the forces of supply and demand in the foreign exchange markets, actual or anticipated changes in interest rates, and other complex factors. Currency exchange rates also can be affected
by the intervention of U.S. or foreign governments or central banks, or the failure to intervene, or by currency controls or political developments.
Spot Rates and Derivative Instruments
.
A Fund may conduct its foreign currency exchange transactions either at the spot (cash) rate prevailing in the foreign currency exchange market or by entering
into forward foreign currency exchange contracts (forward contracts). (See
Types of Investments – Derivatives
.) These contracts are traded in the interbank market conducted directly
between currency traders (usually large commercial banks) and their customers. Because foreign currency transactions occurring in the interbank market might involve substantially larger amounts than those involved in the use of such derivative
instruments, a Fund could be disadvantaged by having to deal in the odd lot market for the underlying foreign currencies at prices that are less favorable than for round lots.
A Fund may enter into forward contracts for a
variety of reasons, including for risk management (hedging) or for investment purposes.
When a Fund enters into a contract for the purchase
or sale of a security denominated in a foreign currency or has been notified of a dividend or interest payment, it may desire to lock in the price of the security or the amount of the payment, usually in U.S. dollars, although it could desire to
lock in the price of the security in another currency. By entering into a forward contract, a
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Fund would be able to protect itself against a possible loss
resulting from an adverse change in the relationship between different currencies from the date the security is purchased or sold to the date on which payment is made or received or when the dividend or interest is actually received.
A Fund may enter into forward contracts when
management of the Fund believes the currency of a particular foreign country may decline in value relative to another currency. When selling currencies forward in this fashion, a Fund may seek to hedge the value of foreign securities it holds
against an adverse move in exchange rates. The precise matching of forward contract amounts and the value of securities involved generally will not be possible since the future value of securities in foreign currencies more than likely will change
between the date the forward contract is entered into and the date it matures. The projection of short-term currency market movements is extremely difficult and successful execution of a short-term hedging strategy is highly uncertain.
This method of protecting the value of a
Fund’s securities against a decline in the value of a currency does not eliminate fluctuations in the underlying prices of the securities. It simply establishes a rate of exchange that can be achieved at some point in time. Although forward
contracts can be used to minimize the risk of loss due to a decline in value of hedged currency, they will also limit any potential gain that might result should the value of such currency increase.
A Fund may also enter into forward contracts when
the Fund’s portfolio manager believes the currency of a particular country will increase in value relative to another currency. A Fund may buy currencies forward to gain exposure to a currency without incurring the additional costs of
purchasing securities denominated in that currency.
For example, the combination of U.S.
dollar-denominated instruments with long forward currency exchange contracts creates a position economically equivalent to a position in the foreign currency, in anticipation of an increase in the value of the foreign currency against the U.S.
dollar. Conversely, the combination of U.S. dollar-denominated instruments with short forward currency exchange contracts is economically equivalent to borrowing the foreign currency for delivery at a specified date in the future, in anticipation of
a decrease in the value of the foreign currency against the U.S. dollar.
Unanticipated changes in the currency exchange
results could result in poorer performance for Funds that enter into these types of transactions.
A Fund may designate cash or securities in an amount
equal to the value of the Fund’s total assets committed to consummating forward contracts entered into under the circumstance set forth above. If the value of the securities declines, additional cash or securities will be designated on a daily
basis so that the value of the cash or securities will equal the amount of the Fund’s commitments on such contracts.
At maturity of a forward contract, a Fund may either
deliver (if a contract to sell) or take delivery of (if a contract to buy) the foreign currency or terminate its contractual obligation by entering into an offsetting contract with the same currency trader, having the same maturity date, and
covering the same amount of foreign currency.
If a Fund engages in an offsetting transaction, it
will incur a gain or loss to the extent there has been movement in forward contract prices. If a Fund engages in an offsetting transaction, it may subsequently enter into a new forward contract to buy or sell the foreign currency.
Although a Fund values its assets each business day
in terms of U.S. dollars, it may not intend to convert its foreign currencies into U.S. dollars on a daily basis. However, it will do so from time to time, and such conversions involve certain currency conversion costs. Although foreign exchange
dealers do not charge a fee for conversion, they do realize a profit based on the difference (spread) between the prices at which they buy and sell various currencies. Thus, a dealer may offer to sell a foreign currency to a Fund at one rate, while
offering a lesser rate of exchange should a Fund desire to resell that currency to the dealer.
It is possible, under certain circumstances,
including entering into forward currency contracts for investment purposes, that a Fund will be required to limit or restructure its forward contract currency transactions to qualify as a “regulated investment company” under the Internal
Revenue Code.
Options on Foreign Currencies.
A Fund may buy put and call options and write covered call and cash-secured put options on foreign currencies for hedging purposes and to gain exposure to foreign currencies. For example, a decline in
the dollar value of a foreign currency in which securities are denominated will reduce the dollar value of such securities, even if their value in the foreign currency remains constant. In order to protect against the diminutions in the value of
securities, a Fund may buy put options on the foreign currency. If the value of the currency does decline, a Fund would have the right to sell the currency for a fixed amount in dollars and would thereby offset, in whole or in part, the adverse
effect on its portfolio that otherwise would have resulted.
Conversely, where a change in the dollar value of a
currency would increase the cost of securities a Fund plans to buy, or where a Fund would benefit from increased exposure to the currency, a Fund may buy call options on the foreign currency, giving it the right to purchase the currency for a fixed
amount in dollars. The purchase of the options could offset, at least partially, the changes in exchange rates.
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As in the case of other types of options, however,
the benefit to a Fund derived from purchases of foreign currency options would be reduced by the amount of the premium and related transaction costs. In addition, where currency exchange rates do not move in the direction or to the extent
anticipated, a Fund could sustain losses on transactions in foreign currency options that would require it to forego a portion or all of the benefits of advantageous changes in rates.
A Fund may write options on foreign currencies for
similar purposes. For example, when a Fund anticipates a decline in the dollar value of foreign-denominated securities due to adverse fluctuations in exchange rates, it could, instead of purchasing a put option, write a call option on the relevant
currency, giving the option holder the right to purchase that currency from the Fund for a fixed amount in dollars. If the expected decline occurs, the option would most likely not be exercised and the diminution in value of securities would be
offset, at least partially, by the amount of the premium received.
Similarly, instead of purchasing a call option when
a foreign currency is expected to appreciate, a Fund could write a put option on the relevant currency, giving the option holder the right to that currency from the Fund for a fixed amount in dollars. If rates move in the manner projected, the put
option would expire unexercised and allow the Fund to hedge increased cost up to the amount of the premium.
As in the case of other types of options, however,
the writing of a foreign currency option will constitute only a partial hedge up to the amount of the premium, and only if rates move in the expected direction. If this does not occur, the option may be exercised and the Fund would be required to
buy or sell the underlying currency at a loss that may not be offset by the amount of the premium. Through the writing of options on foreign currencies, the Fund also may be required to forego all or a portion of the benefits that might otherwise
have been obtained from favorable movements on exchange rates.
An option written on foreign currencies is covered
if a Fund holds currency sufficient to cover the option or has an absolute and immediate right to acquire that currency without additional cash consideration upon conversion of assets denominated in that currency or exchange of other currency held
in its portfolio. An option writer could lose amounts substantially in excess of its initial investments, due to the margin and collateral requirements associated with such positions.
Options on foreign currencies are traded through
financial institutions acting as market-makers, although foreign currency options also are traded on certain national securities exchanges, such as the Philadelphia Stock Exchange and the Chicago Board Options Exchange, subject to SEC regulation. In
an over-the-counter trading environment, many of the protections afforded to exchange participants will not be available. For example, there are no daily price fluctuation limits, and adverse market movements could therefore continue to an unlimited
extent over a period of time. Although the purchaser of an option cannot lose more than the amount of the premium plus related transaction costs, this entire amount could be lost.
Foreign currency option positions entered into on a
national securities exchange are cleared and guaranteed by the OCC, thereby reducing the risk of counterparty default. Further, a liquid secondary market in options traded on a national securities exchange may be more readily available than in the
over-the-counter market, potentially permitting a Fund to liquidate open positions at a profit prior to exercise or expiration, or to limit losses in the event of adverse market movements.
Foreign Currency Futures and Related Options.
A Fund may enter into currency futures contracts to buy or sell currencies. It also may buy put and call options and write covered call and cash-secured put options on currency futures. Currency
futures contracts are similar to currency forward contracts, except that they are traded on exchanges (and have margin requirements) and are standardized as to contract size and delivery date. Most currency futures call for payment of delivery in
U.S. dollars. A Fund may use currency futures for the same purposes as currency forward contracts, subject to CFTC limitations.
Currency futures and options on futures values can
be expected to correlate with exchange rates, but will not reflect other factors that may affect the value of the Fund’s investments. A currency hedge, for example, should protect a Yen-denominated bond against a decline in the Yen, but will
not protect a Fund against price decline if the issuer’s creditworthiness deteriorates. Because the value of a Fund’s investments denominated in foreign currency will change in response to many factors other than exchange rates, it may
not be possible to match the amount of a forward contract to the value of a Fund’s investments denominated in that currency over time.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with foreign currency transactions include: Foreign Currency Risk, Derivatives Risk, Interest Rate Risk, and Liquidity Risk.
Foreign Securities
Unless otherwise stated in a Fund’s prospectus, stocks, bonds
and other securities or investments are deemed to be “foreign” based primarily on the issuer’s place of organization/incorporation, but the Fund may also consider the issuer’s domicile, its principal place of business, its
primary stock exchange listing, the source of its revenue or other factors. A Fund’s investments in foreign markets, may include issuers in emerging markets, as well as frontier markets, each of which carry heightened risks as compared with
investments in other typical foreign markets. Unless otherwise stated in a Fund’s prospectus, emerging market countries are generally those either defined by World Bank-defined per capita income brackets or determined to be an emerging market
based on the Fund portfolio manager’s qualitative judgments about a country’s level of economic and institutional
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development, among other factors. Frontier market countries
generally have smaller economies and even less developed capital markets than typical emerging market countries (which themselves have increased investment risk relative to investing in more developed markets) and, as a result, the risks of
investing in emerging market countries are magnified in frontier market countries. 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
Types of Investments – Variable- and Floating-Rate Obligations, Types of Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities
and
Types of Investments – Private Placement and Other Restricted Securities
for more information.
Due to the potential for foreign withholding taxes,
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 Investment Manager 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.
There is a practice in certain foreign
markets under which an issuer’s securities are blocked from trading at the custodian or sub-custodian level for a specified number of days before and, in certain instances, after a shareholder meeting where such shares are voted. This is
referred to as “share blocking”. The blocking period can last up to several weeks. Share blocking may prevent a Fund from buying or selling securities during this period, because during the time shares are blocked, trades in such
securities will not settle. It may be difficult or impossible to lift blocking restrictions, with the particular requirements varying widely by country. As a consequence of these restrictions, the Investment Manager, on behalf of a Fund, may abstain
from voting proxies in markets that require share blocking.
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.
Although one or more of
the other risks described in this SAI may also apply, the risks typically associated with foreign securities include: Emerging Markets Securities Risk, Foreign Currency Risk, Foreign Securities Risk, Frontier Market Risk, Geographic Concentration
Risk, Issuer Risk and Market Risk.
Guaranteed
Investment Contracts (Funding Agreements)
Guaranteed
investment contracts, or funding agreements, are short-term, privately placed 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. 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. See
Types of Investments – Illiquid Securities
.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with guaranteed investment contracts (funding agreements) include: Credit Risk and Liquidity Risk.
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High-Yield Securities
High-yield, or 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 a Fund’s portfolio manager 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. High-yield 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. Credit ratings issued by credit rating agencies are designed to evaluate the safety of principal and interest payments of rated securities. They do not, however, evaluate the market value risk of
lower-quality securities and, therefore, may not fully reflect the true risks of an investment. In addition, credit rating agencies may or may not make timely changes in a rating to reflect changes in the economy or in the condition of the issuer
that affect the market value of the securities. Consequently, credit ratings are used only as a preliminary indicator of investment quality. High-yield 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
Types of Investments – Variable- and Floating-Rate Obligations, Types of Investments –
Zero-Coupon, Pay-in-Kind and Step-Coupon Securities
and
Types of Investments – Private Placement and Other Restricted Securities
for more information.
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 Investment Manager’s (or, if applicable, a subadviser’s) credit analysis with respect to these types of securities than is the case for more highly rated
securities.
The market values of certain
high-yield securities and comparable unrated securities tend to be more sensitive to individual corporate developments and changes in economic conditions than are the market values of more highly rated securities. In addition, issuers of high-yield
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.
The
risk of loss due to default is greater for high-yield and comparable unrated securities than it is for higher rated securities because high-yield 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.
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.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with high-yield securities include: Credit Risk, Interest Rate Risk, High-Yield Securities Risk and Prepayment and Extension Risk.
Illiquid Securities
Illiquid securities are defined by a Fund consistent with the 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. Some securities are deemed to be illiquid because they are subject to contractual or legal restrictions on
resale. 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 at the time of purchase.
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Although one or more of the other risks described in
this SAI may also apply, the risk typically associated with illiquid securities include: Liquidity Risk.
Inflation-Protected Securities
Inflation is a general rise in prices of goods and services.
Inflation erodes the purchasing power of an investor’s assets. For example, if an investment provides a total return of 7% in a given year and inflation is 3% during that period, the inflation-adjusted, or real, return is 4%.
Inflation-protected securities are debt securities whose principal and/or interest payments are adjusted for inflation, unlike debt securities that make fixed principal and interest payments. One type of inflation-protected debt security is issued
by the U.S. Treasury. The principal of these securities is adjusted for inflation as indicated by the Consumer Price Index (CPI) for urban consumers and interest is paid on the adjusted amount. The CPI is a measurement of changes in the cost of
living, made up of components such as housing, food, transportation and energy.
If the CPI falls, the principal value of
inflation-protected securities will be adjusted downward, and consequently the interest payable on these securities (calculated with respect to a smaller principal amount) will be reduced. Conversely, if the CPI rises, the principal value of
inflation-protected securities will be adjusted upward, and consequently the interest payable on these securities will be increased. Repayment of the original bond principal upon maturity is guaranteed in the case of U.S. Treasury
inflation-protected securities, even during a period of deflation. However, the current market value of the inflation-protected securities is not guaranteed and will fluctuate. Other inflation-indexed securities include inflation-related bonds,
which may or may not provide a similar guarantee. If a guarantee of principal is not provided, the adjusted principal value of the bond repaid at maturity may be less than the original principal.
Other issuers of inflation-protected debt securities
include other U.S. government agencies or instrumentalities, corporations and foreign governments. There can be no assurance that the CPI or any foreign inflation index will accurately measure the real rate of inflation in the prices of goods and
services. Moreover, there can be no assurance that the rate of inflation in a foreign country will be correlated to the rate of inflation in the United States. If interest rates rise due to reasons other than inflation (for example, due to changes
in currency exchange rates), investors in these securities may not be protected to the extent that the increase is not reflected in the bond’s inflation measure.
Any increase in principal for an inflation-protected
security resulting from inflation adjustments is considered by IRS regulations to be taxable income in the year it occurs. For direct holders of an inflation-protected security, this means that taxes must be paid on principal adjustments even though
these amounts are not received until the bond matures. Similarly, a Fund treated as a regulated investment company (RIC) under the Code that holds these securities distributes both interest income and the income attributable to principal adjustments
in the form of cash or reinvested shares, which are taxable to shareholders.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with inflation-protected securities include: Inflation-Protected Securities Risk, Interest Rate Risk and Market Risk. In addition, inflation-protected securities issued by non-U.S. government
agencies or instrumentalities are subject to Credit Risk.
Initial Public Offerings
A 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. Fixed income funds frequently invest in these types of offerings of debt securities. A purchase of IPO securities often involves
higher transaction costs than those associated with the purchase of securities already traded on exchanges or markets. A 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 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 IPOs make a significant contribution to a Fund’s performance, there can be no assurance that similar contributions from IPOs will continue in the future.
Although one or more risks described in this SAI may
also apply, the risks typically associated with IPOs include: Initial Public Offering (IPO) Risk, Issuer Risk, Liquidity Risk, Market Risk and Small Company Securities Risk.
Inverse Floaters
See
Types of
Investments – Derivatives – Index or Linked Securities (Structured Products)
above.
Investments in Other Investment Companies (Including
ETFs)
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 relief currently or
in the future available to a Fund. These securities include shares of other open-end investment companies (
i.e.
, mutual funds), closed-end funds, exchange-traded funds (ETFs), UCITS funds (pooled investment
vehicles established in accordance with the Undertaking for Collective Investment in Transferable Securities adopted by European Union member states) and business development companies.
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Except with respect to funds structured as
funds-of-funds or so-called master/feeder funds or other funds whose strategies otherwise allow such investments, 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 a fund. Such other investment
companies may include ETFs, which are shares of publicly traded unit investment trusts, open-end funds or depositary receipts that may be passively managed (
e.g.
, they seek to track the performance of specific
indexes or companies in related industries) or they may be actively managed. The SEC has granted orders for exemptive relief to certain ETFs that permit investments in those ETFs by certain other registered investment companies in excess of these
limits.
ETFs are listed on an exchange and
trade in the secondary market on a per-share basis, which allows investors to purchase and sell ETF shares at their market price throughout the day. Certain ETFs, such as passively managed ETFs, hold portfolios of securities that are designed to
replicate, as closely as possible before expenses, the price and yield of a specified market index. The performance results of these ETFs will not replicate exactly the performance of the pertinent index due to transaction and other expenses,
including fees to service providers borne by ETFs. ETF shares are sold and redeemed at net asset value only in large blocks called creation units. The Funds’ ability to redeem creation units may be limited by the 1940 Act, which provides that
ETFs will not be obligated to redeem shares held by the Funds in an amount exceeding one percent of their total outstanding securities during any period of less than 30 days.
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. Because these investment companies may invest in other securities, they are also subject to the risks associated
with a variety of investment instruments as described in this SAI.
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 Management and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest
.
Although
one or more of the other risks described in this SAI may also apply, the risks typically associated with the securities of other investment companies include: Exchange-Traded Fund (ETF) Risk, Investing in Other Funds Risk, Issuer Risk and Market
Risk.
Listed Private Equity Funds
A Fund may invest directly in listed private equity
funds, which may include, among others, business development companies, investment holding companies, publicly traded limited partnership interests (common units), publicly traded venture capital funds, publicly traded venture capital trusts,
publicly traded private equity funds, publicly traded private equity investment trusts, publicly traded closed-end funds, publicly traded financial institutions that lend to or invest in privately held companies and any other publicly traded vehicle
whose purpose is to invest in privately held companies.
A Fund may invest in listed private equity funds
that hold investments in a wide array of businesses and industries at various stages of development, from early to later stage to fully mature businesses. A Fund may invest in listed private equity funds that emphasize making equity and equity-like
(preferred stock, convertible stock and warrants) investments in later stage to mature businesses, or may invest in listed private equity funds making debt investments or investments in companies at other stages of development. In addition, a Fund
may invest in the common stock of closed-end management investment companies, including business development companies that invest in securities of listed private equity companies.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with investment in listed private equity funds include: Credit Risk, Liquidity Risk, Market Risk, Sector Risk, and Valuation Risk.
Money Market Instruments
Money market instruments include cash equivalents and short-term
debt obligations which include: (i) bank obligations, including certificates of deposit (CDs), time deposits and bankers’ acceptances, and letters of credit of banks or savings and loan associations having capital surplus and undivided profits
(as of the date of its most recently published annual financial statements) in excess of $100 million (or the equivalent in the instance of a foreign branch of a U.S. bank) at the date of investment; (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
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be privately placed or publicly offered. A Fund may also invest in
affiliated and unaffiliated money market mutual funds, which invest primarily in money market instruments. See
Types of Investments – Variable- and Floating-Rate Obligations
and
Types of Investments – Private Placement and Other Restricted Securities
for more information.
With respect to money market securities, certain
U.S. Government obligations are backed or insured by the U.S. Government, its agencies or its instrumentalities. Other money market securities are backed only by the claims paying ability or creditworthiness of the issuer.
Bankers’ acceptances
are marketable short-term credit instruments used to finance the import, export, transfer or storage of goods. They are termed “accepted” when a bank unconditionally guarantees their payment at
maturity.
A Fund may invest its daily
cash balance in Columbia Short-Term Cash Fund, a money market fund established for the exclusive use of the funds in the Columbia Fund Complex and other institutional clients of the Investment Manager.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with money market instruments include: Credit Risk, Inflation Risk, Interest Rate Risk, Issuer Risk, Money Market Fund Risk and Regulatory Risk.
Mortgage-Backed Securities
Mortgage-backed securities are a type of asset-backed security that
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
Types of Investments – Variable- and Floating-Rate Obligations, Types of Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities
and
Types of 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. The U.S. Treasury has historically had the authority to purchase
obligations of Fannie Mae and Freddie Mac. In addition, in 2008, due to capitalization concerns, Congress provided the U.S. Treasury with additional authority to lend Fannie Mae and Freddie Mac emergency funds and to purchase the companies’
stock, as described below. In September 2008, the U.S. Treasury and the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac had been placed in conservatorship.
In the past Fannie Mae and Freddie Mac have received
significant capital support through U.S. Treasury preferred stock purchases and Federal Reserve purchases of their mortgage-backed securities. There can be no assurance that these or other agencies of the government will provide such support in the
future. The future status of Fannie Mae or Freddie Mac could be impacted by, among other things, the actions taken and restrictions placed on Fannie Mae or Freddie Mac by the FHFA in its role as conservator, the restrictions placed on Fannie
Mae’s or Freddie Mac’s operations and activities under the senior stock purchase agreements, market responses to developments at Fannie Mae or Freddie Mac, and future legislative and regulatory action that alters the operations,
ownership structure and/or mission of Fannie Mae or Freddie Mac, each of which may, in turn, impact the value of, and cash flows on, any securities guaranteed by Fannie Mae and Freddie Mac.
Stripped mortgage-backed securities are a type of
mortgage-backed security that receives differing proportions of the interest and principal payments from the underlying assets. Generally, there are two classes of stripped mortgage-backed securities: Interest Only (IO) and Principal Only (PO). IOs
entitle the holder to receive distributions consisting of all or a portion of the interest on the underlying pool of mortgage loans or mortgage-backed securities. POs entitle the holder to receive distributions consisting of all or a portion of the
principal of the underlying pool of mortgage loans or mortgage-backed securities. See
Types of Investments – Stripped Securities
for more information.
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Collateralized Mortgage Obligations (CMOs) are
hybrid mortgage-related instruments issued by special purpose entities secured by pools of mortgage loans or other mortgage-related securities, such as mortgage pass-through securities or stripped mortgage-backed securities. CMOs may be structured
into multiple classes, often referred to as “tranches,” with each class bearing a different stated maturity and entitled to a different schedule for payments of principal and interest, including prepayments. Principal prepayments on
collateral underlying a CMO may cause it to be retired substantially earlier than its stated maturity or final distribution dates, resulting in a loss of all or part of the premium if any has been paid. The yield characteristics of mortgage-backed
securities differ from those of other debt securities. Among the differences are that interest and principal payments are made more frequently on mortgage-backed securities, usually monthly, and principal may be repaid at any time. These factors may
reduce the expected yield. 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.
Commercial mortgage-backed securities (CMBS) are a
specific type of mortgage-backed security collateralized by a pool of mortgages on commercial real estate.
CMO residuals are mortgage securities issued by
agencies or instrumentalities of the U.S. Government or by private originators of, or investors in, mortgage loans, including savings and loan associations, homebuilders, mortgage banks, commercial banks, investment banks and special purpose
entities of the foregoing. The cash flow generated by the mortgage assets underlying a series of CMOs is applied first to make required payments of principal and interest on the CMOs and second to pay the related administrative expenses and any
management fee of the issuer. The residual in a CMO structure generally represents the interest in any excess cash flow remaining after making the foregoing payments. Each payment of such excess cash flow to a holder of the related CMO residual
represents income and/or a return of capital. The amount of residual cash flow resulting from a CMO will depend on, among other things, the characteristics of the mortgage assets, the coupon rate of each class of CMO, prevailing interest rates, the
amount of administrative expenses and the pre-payment experience on the mortgage assets. In particular, the yield to maturity on CMO residuals is extremely sensitive to pre-payments on the related underlying mortgage assets, in the same manner as an
interest-only (“IO”) class of stripped mortgage-backed securities. In addition, if a series of a CMO includes a class that bears interest at an adjustable rate, the yield to maturity on the related CMO residual will also be extremely
sensitive to changes in the level of the index upon which interest rate adjustments are based. As described below with respect to stripped mortgage-backed securities, in certain circumstances an ETF may fail to recoup fully its initial investment in
a CMO residual. CMO residuals are generally purchased and sold by institutional investors through several investment banking firms acting as brokers or dealers. Transactions in CMO residuals are generally completed only after careful review of the
characteristics of the securities in question. In addition, CMO residuals may, or pursuant to an exemption therefrom, may not have been registered under the 1933 Act. CMO residuals, whether or not registered under the 1933 Act, may be subject to
certain restrictions on transferability, and may be deemed “illiquid” and subject to a Fund’s limitations on investment in illiquid securities.
Mortgage pass-through securities are interests in
pools of mortgage-related securities that differ from other forms of debt securities, which normally provide for periodic payment of interest in fixed amounts with principal payments at maturity or specified call dates. Instead, these securities
provide a monthly payment which consists of both interest and principal payments. In effect, these payments are a “pass-through” of the monthly payments made by the individual borrowers on their residential or commercial mortgage loans,
net of any fees paid to the issuer or guarantor of such securities. Additional payments are caused by repayments of principal resulting from the sale of the underlying property, refinancing or foreclosure, net of fees or costs which may be incurred.
Some mortgage-related securities (such as securities issued by the GNMA) are described as “modified pass-through.” These securities entitle the holder to receive all interest and principal payments owed on the mortgage pool, net of
certain fees, at the scheduled payment dates regardless of whether or not the mortgagor actually makes the payment.
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.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with mortgage- and asset-backed securities include: Credit Risk, Interest Rate Risk, Issuer Risk, Liquidity Risk, Mortgage-Backed and Other Asset-Backed Securities Risk, Prepayment and
Extension Risk and Reinvestment Risk.
Municipal
Securities
Municipal securities include debt obligations
issued by governmental entities, including states, political subdivisions, agencies, instrumentalities, and authorities, as well as U.S. territories (such as Guam and Puerto Rico) and their political subdivisions, agencies, instrumentalities, and
authorities, 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.
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Municipal securities may include municipal bonds,
municipal notes and municipal leases, which are described below. 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 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
Types of Investments – Variable- and Floating-Rate Obligations, Types of Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities
and
Types of Investments – Private Placement and Other Restricted Securities
for more information.
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. See
Types of Investments – Commercial Paper
for more information.
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.
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.
Municipal lease obligations are participations in
privately arranged loans to state or local government borrowers and may take the form of a lease, an installment purchase, or a conditional sales contract. They are issued by state and local governments and authorities to acquire land, equipment,
and facilities. An investor may purchase these obligations directly, or it may purchase participation interests in such obligations. In general, municipal lease obligations are unrated, in which case they will be determined by a Fund’s
portfolio manager 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.
Municipal leases may be subject to greater risks
than general obligation or revenue bonds. State constitutions and statutes set forth requirements that states or municipalities must meet in order to issue municipal obligations. Municipal leases may contain a covenant by the state or municipality
to budget for and make payments due under the obligation. Certain municipal leases may, however, provide that the issuer is not obligated to make payments on the obligation in future years unless funds have been appropriated for this purpose each
year.
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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.
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 municipal bond market is characterized by a large number of different issuers, many having smaller sized bond issues, and a wide choice of different maturities
within each issue. For these reasons, most municipal bonds do not trade on a daily basis and many trade only rarely. Because many of these bonds trade infrequently, the spread between the bid and offer may be wider and the time needed to develop a
bid or an offer may be longer than for other security markets. See Appendix A for a discussion of securities ratings. (See
Types of Investments – Debt Obligations
.)
Standby Commitments.
Standby commitments are securities under which a purchaser, usually a bank or broker-dealer, agrees to purchase, for a fee, an amount of a Fund’s municipal obligations. The amount payable by a
bank or broker-dealer to purchase securities subject to a standby commitment typically will be substantially the same as the value of the underlying municipal securities. A Fund may pay for standby commitments either separately in cash or by paying
a higher price for portfolio securities that are acquired subject to such a commitment.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with standby commitments include: Counterparty Risk, Market Risk and Municipal Securities Risk.
Taxable Municipal Obligations.
Interest or other investment return is subject to federal income tax for certain types of municipal obligations for a variety of reasons. These municipal obligations do not qualify for the federal
income tax exemption because (a) they did not receive necessary authorization for tax-exempt treatment from state or local government authorities, (b) they exceed certain regulatory limitations on the cost of issuance for tax-exempt financing or (c)
they finance public or private activities that do not qualify for the federal income tax exemption. These non-qualifying activities might include, for example, certain types of multi-family housing, certain professional and local sports facilities,
refinancing of certain municipal debt, and borrowing to replenish a municipality’s underfunded pension plan.
For more information about the key risks associated
with investments in municipal securities of particular states, see Appendix C. See Appendix A for a discussion of securities ratings. (See
Types of Investments – Debt Obligations
.)
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with municipal securities include: Credit Risk, Inflation Risk, Interest Rate Risk, Market Risk, Municipal Securities Risk and Municipal Securities Risk/Health Care Sector Risk.
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
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and step-coupon securities and may be privately placed or publicly
offered. See
Types of Investments – Variable- and Floating-Rate Obligations, Types of Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities
and
Types of Investments – Private Placement and Other Restricted Securities
for more information.
Loan participations also are a type of participation
interest. Loans, loan participations, and interests in securitized loan pools are interests in amounts owed by a corporate, governmental, or other borrower to a lender or consortium of lenders (typically banks, insurance companies, investment banks,
government agencies, or international agencies).
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with loan participations include: Confidential Information Access Risk, Credit Risk and Interest Rate Risk.
Partnership Securities
The Fund may invest in securities issued by publicly traded
partnerships or master limited partnerships or limited liability companies (together referred to as “PTPs/MLPs”). These entities are limited partnerships or limited liability companies that may be publicly traded on stock exchanges or
markets such as the NYSE, the NYSE Alternext US LLC (“NYSE Alternext”) (formerly the American Stock Exchange) and NASDAQ. PTPs/MLPs often own businesses or properties relating to energy, natural resources or real estate, or may be
involved in the film industry or research and development activities. Generally PTPs/MLPs are operated under the supervision of one or more managing partners or members. Limited partners, unit holders, or members (such as a fund that invests in a
partnership) are not involved in the day-to-day management of the company. Limited partners, unit holders, or members are allocated income and capital gains associated with the partnership project in accordance with the terms of the partnership or
limited liability company agreement.
At times
PTPs/MLPs may potentially offer relatively high yields compared to common stocks. Because PTPs/MLPs are generally treated as partnerships or similar limited liability “pass-through” entities for tax purposes, they do not ordinarily pay
income taxes, but pass their earnings on to unit holders (except in the case of some publicly traded firms that may be taxed as corporations). For tax purposes, unit holders may initially be deemed to receive only a portion of the distributions
attributed to them because certain other portions may be attributed to the repayment of initial investments and may thereby lower the cost basis of the units or shares owned by unit holders. As a result, unit holders may effectively defer taxation
on the receipt of some distributions until they sell their units. These tax consequences may differ for different types of entities.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with partnership securities include: Interest Rate Risk, Issuer Risk, Liquidity Risk and Market Risk.
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. The price of a preferred stock is generally determined by earnings, type of products or services, projected growth rates, experience of management, liquidity, and general market conditions of the markets on
which the stock trades. See
Types of 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. An APS is distinguished from standard preferred stock because its dividends change from time to time. Shares typically are
bought and sold at face values generally ranging from $100,000 to $500,000 per share. Holders of APS may not be able to sell their shares if an auction fails, such as when there are more shares of APS for sale at an auction than there are purchase
bids.
Although one or more of the other risks
described in this SAI may also apply, the risks typically associated with preferred stock include: Convertible Securities Risk, Issuer Risk, Liquidity Risk and Market Risk.
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 generally 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
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resale. Asset-backed securities, common stock, convertible
securities, corporate debt securities, foreign securities, high-yield 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.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with private placement and other restricted securities include: Issuer Risk, Liquidity Risk, Market Risk and Confidential Information Access Risk.
Real Estate Investment Trusts
Real estate investment trusts (REITs) are pooled investment
vehicles that manage a portfolio of real estate or real estate related loans to earn profits for their shareholders. REITs are generally classified as equity REITs, mortgage REITs or a combination of equity and mortgage REITs. Equity REITs invest
the majority of their assets directly in real property, such as shopping centers, nursing homes, office buildings, apartment complexes, and hotels, and derive income primarily from the collection of rents. Equity REITs can also realize capital gains
by selling properties that have appreciated in value. Mortgage REITs invest the majority of their assets in real estate mortgages and derive income from the collection of interest payments. REITs can be subject to extreme volatility due to
fluctuations in the demand for real estate, changes in interest rates, and adverse economic conditions.
Partnership units of real estate and other types of
companies sometimes are organized as master limited partnerships in which ownership interests are publicly traded.
Similar to investment companies, REITs are not taxed
on income distributed to shareholders provided they comply with certain requirements under the Code. The failure of a REIT to continue to qualify as a REIT for tax purposes can materially affect its value. A Fund will indirectly bear its
proportionate share of any expenses paid by a REIT in which it invests. REITs often do not provide complete tax information until after the calendar year-end. Consequently, because of the delay, it may be necessary for a Fund investing in REITs to
request permission to extend the deadline for issuance of Forms 1099-DIV beyond January 31. In the alternative, amended Forms 1099-DIV may be sent.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with REITs include: Interest Rate Risk, Issuer Risk, Market Risk and Real Estate-Related Investment Risk.
Repurchase Agreements
Repurchase agreements are agreements under which a Fund acquires a
security for a relatively short period of time (usually within seven days) subject to the obligation of a seller to repurchase and a Fund to resell such security at a fixed time and price (representing the Fund’s cost plus interest). The
repurchase agreement specifies the yield during the purchaser’s holding period. Repurchase agreements also may be viewed as loans made by a Fund that are collateralized by the securities subject to repurchase, which may consist of a variety of
security types. 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.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with repurchase agreements include: Counterparty Risk, Credit Risk, Issuer Risk, Market Risk and Repurchase Agreements Risk.
Reverse Repurchase Agreements
Reverse repurchase agreements are agreements under which a Fund
temporarily transfers possession of a portfolio instrument to another party, such as a bank or broker-dealer, in return for cash. At the same time, the Fund agrees to repurchase the instrument at an agreed-upon time (normally within 7 days) and
price which reflects an interest payment. A Fund generally retains the right to interest and principal payments on the security. Reverse repurchase agreements also may be viewed as borrowings made by a Fund.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with reverse repurchase agreements include: Credit Risk, Interest Rate Risk, Issuer Risk, Leverage Risk, Market Risk and Reverse Repurchase Agreements Risk.
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Short Sales
A Fund may sometimes sell securities short when it owns an equal
amount of the 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.
Short sales
“against the box” entail many of the same risks and considerations described below regarding short sales not “against the box.” However, when a Fund sells short “against the box” it typically limits the amount of
its effective leverage. A Fund’s decision to make a short sale “against the box” may be a technique to hedge against market risks when a Fund’s portfolio manager 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, contracts or instruments that it does not own in hopes of purchasing the same security, contract or instrument
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, commodity futures contract or other instrument. 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 of forward commitments and derivatives do not involve borrowing a security. These types of short sales may include futures, options, contracts for
differences, forward contracts on financial instruments and options such as contracts, credit-linked instruments, and swap contracts.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with short sales include: Leverage Risk, Market Risk and Short Selling Risk.
Sovereign Debt
Sovereign debt obligations are issued or guaranteed by foreign
governments or their agencies. It may be in the form of conventional securities or other types of debt instruments such as loans or loan participations. A sovereign debtor’s willingness or ability to repay principal and pay interest in a
timely manner may be affected by a variety of factors, including its cash flow situation, the extent of its reserves, the availability of sufficient foreign exchange on the date a payment is due, the relative size of the debt service burden to the
economy as a whole, the sovereign debtor’s policy toward international lenders, and the political constraints to which a sovereign debtor may be subject. (See also
Types of Investments –
Foreign Securities
.) In addition, there may be no legal recourse against a sovereign debtor in the event of a default.
Sovereign debt includes Brady Bonds, which are
securities issued under the framework of the Brady Plan, an initiative announced by former U.S. Treasury Secretary Nicholas F. Brady in 1989 as a mechanism for debtor nations to restructure their outstanding external commercial bank
indebtedness.
Although one or more of the
other risks described in this SAI may also apply, the risks typically associated with sovereign debt include: Credit Risk, Emerging Markets Securities Risk, Foreign Securities Risk, Issuer Risk and Market Risk.
Standby Commitments
See
Types of
Investments – Municipal Securities
above.
Stripped Securities
Stripped securities are the separate income or principal payments
of a debt security and 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
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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,
(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
Types of 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.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with stripped securities include: Credit Risk, Interest Rate Risk, Liquidity Risk, Prepayment and Extension Risk and Stripped Securities Risk
Trust-Preferred Securities
Trust-preferred securities, also known as trust-issued securities,
are securities that have characteristics of both debt and equity instruments and are typically treated by the Funds as debt investments.
Generally, trust-preferred securities are cumulative
preferred stocks issued by a trust that is created by a financial institution, such as a bank holding company. The financial institution typically creates the trust with the objective of increasing its capital by issuing subordinated debt to the
trust in return for cash proceeds that are reflected on the financial institutions balance sheet.
The primary asset owned by the trust is the
subordinated debt issued to the trust by the financial institution. The financial institution makes periodic interest payments on the debt as discussed further below. The financial institution will subsequently own the trust’s common
securities, which may typically represent a small percentage of the trust’s capital structure. The remainder of the trust’s capital structure typically consists of trust-preferred securities which are sold to investors. The trust uses
the sales proceeds to purchase the subordinated debt issued by the financial institution. The financial institution uses the proceeds from the subordinated debt sale to increase its capital while the trust receives periodic interest payments from
the financial institution for holding the subordinated debt.
The trust uses the interest received to make
dividend payments to the holders of the trust-preferred securities. The dividends are generally paid on a quarterly basis and are often higher than other dividends potentially available on the financial institution’s common stocks. The
interests of the holders of the trust-preferred securities are senior to those of common stockholders in the event that the financial institution is liquidated, although their interests are typically subordinated to those of other holders of other
debt issued by the institution.
The primary
benefit for the financial institution in using this particular structure is that the trust-preferred securities issued by the trust are treated by the financial institution as debt securities for tax purposes (as a consequence of which the expense
of paying interest on the securities is tax deductible), but are treated as more desirable equity securities for purposes of the calculation of capital requirements.
In certain instances, the structure involves more
than one financial institution and thus, more than one trust. In such a pooled offering, an additional separate trust may be created. This trust will issue securities to investors and use the proceeds to purchase the trust-preferred securities
issued by other trust subsidiaries of the participating financial institutions. In such a structure, the trust-preferred securities held by the investors are backed by other trust-preferred securities issued by the trust subsidiaries.
If a financial institution is financially unsound
and defaults on interest payments to the trust, the trust will not be able to make dividend payments to holders of the trust-preferred securities such as the Fund, as the trust typically has no business operations other than holding the subordinated
debt issued by the financial institution(s) and issuing the trust-preferred securities and common stock backed by the subordinated debt.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with trust-preferred securities include: Credit Risk, Interest Rate Risk, Liquidity Risk and Prepayment and Extension Risk.
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 agencies or instrumentalities established or sponsored by the U.S. Government. U.S. Treasury obligations and securities issued or guaranteed by various agencies
or instrumentalities 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
Types of Investments – Variable- and Floating-Rate Obligations
for more information.
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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, such securities are nonetheless subject to credit risk (
i.e.
, the risk
that the U.S. Government may be, or be perceived to be, unable or unwilling to honor its financial obligations, such as making payments). 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.
Government-sponsored entities issuing securities
include privately owned, publicly chartered entities created to reduce borrowing costs for certain sectors of the economy, such as farmers, homeowners, and students. They include the Federal Farm Credit Bank System, Farm Credit Financial Assistance
Corporation, Fannie Mae, Freddie Mac, Student Loan Marketing Association (SLMA), and Resolution Trust Corporation (RTC). Government-sponsored entities may issue discount notes (with maturities ranging from overnight to 360 days) and bonds. On Sept.
7, 2008, the Federal Housing Finance Agency (FHFA), an agency of the U.S. Government, placed Fannie Mae and Freddie Mac into conservatorship, a statutory process with the objective of returning the entities to normal business operations. FHFA will
act as the conservator to operate the enterprises until they are stabilized.
On August 5, 2011, S& P lowered its long-term
sovereign credit rating for the United States of America to “AA+” from “AAA”. Because a Fund may invest in U.S. Government obligations, the value of a Fund’s shares may be adversely affected by S&P’s downgrade
or any future downgrades of the U.S. Government’s credit rating. The long-term impact of the downgrade is uncertain. See Appendix A for a description of securities ratings.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with U.S. Government and related obligations include: Credit Risk, Inflation Risk, Interest Rate Risk, Prepayment and Extension Risk, Reinvestment Risk and U.S. Government Obligations
Risk.
Variable- and Floating-Rate
Obligations
Variable- and floating-rate obligations are debt
instruments that 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. Variable- or floating-rate securities frequently include a demand feature enabling the holder to sell the securities
to the issuer at par. In many cases, the demand feature can be exercised at any time. Some securities that do not have variable or floating interest rates may be accompanied by puts producing similar results and price characteristics. Variable-rate
demand notes include master demand notes that are obligations that permit the investor to invest fluctuating amounts, which may change daily without penalty, pursuant to direct arrangements between the investor (as lender), and the borrower. The
interest rates on these notes fluctuate. The issuer of such obligations normally has a corresponding right, after a given period, to prepay in its discretion the outstanding principal amount of the obligations plus accrued interest upon a specified
number of days’ notice to the holders of such obligations. Because these obligations are direct lending arrangements between the lender and borrower, it is not contemplated that such instruments generally will be traded. There generally is not
an established secondary market for these obligations. Accordingly, where these obligations are not secured by letters of credit or other credit support arrangements, the lender’s right to redeem is dependent on the ability of the borrower to
pay principal and interest on demand. Such obligations frequently are not rated by credit rating agencies and may involve heightened risk of default by the issuer. Asset-backed securities, bank obligations, convertible securities, corporate debt
securities, foreign securities, high-yield 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.
Most floating rate loans are acquired directly from
the agent bank or from another holder of the loan by assignment. Most such loans are secured, and most impose restrictive covenants on the borrower. These loans are typically made by a syndicate of banks and institutional investors, represented by
an agent bank which has negotiated and structured the loan and which is responsible generally for collecting interest, principal, and other amounts from the borrower on its own behalf and on behalf of the other lending institutions in the syndicate,
and for enforcing its rights and the rights of the syndicate against the borrower. Each of the lending institutions, including the agent bank, lends to the borrower a portion of the total amount of the loan, and retains the corresponding interest in
the loan. Floating rate loans may include delayed draw term loans and prefunded or synthetic letters of credit.
A Fund’s ability to receive payments of
principal and interest and other amounts in connection with loans held by it will depend primarily on the financial condition of the borrower. The failure by the Fund to receive scheduled interest or principal payments on a loan would adversely
affect the income of the Fund and would likely reduce the value of its assets, which would be reflected
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in a reduction in the Fund’s NAV. Banks and other lending
institutions generally perform a credit analysis of the borrower before originating a loan or purchasing an assignment in a loan. In selecting the loans in which the Fund will invest, however, the Investment Manager will not rely on that credit
analysis of the agent bank, but will perform its own investment analysis of the borrowers. The Investment Manager’s analysis may include consideration of the borrower’s financial strength and managerial experience, debt coverage,
additional borrowing requirements or debt maturity schedules, changing financial conditions, and responsiveness to changes in business conditions and interest rates. Investments in loans may be of any quality, including “distressed”
loans, and will be subject to the Fund’s credit quality policy.
Loans may be structured in different forms,
including assignments and participations. In an assignment, a Fund purchases an assignment of a portion of a lender’s interest in a loan. In this case, the Fund may be required generally to rely upon the assigning bank to demand payment and
enforce its rights against the borrower, but would otherwise be entitled to all of such bank’s rights in the loan.
The borrower of a loan may, either at its own
election or pursuant to terms of the loan documentation, prepay amounts of the loan from time to time. There is no assurance that a Fund will be able to reinvest the proceeds of any loan prepayment at the same interest rate or on the same terms as
those of the original loan.
Corporate loans in
which a Fund may purchase a loan assignment are made generally to finance internal growth, mergers, acquisitions, recapitalizations, stock repurchases, leveraged buy-outs, dividend payments to sponsors and other corporate activities. The highly
leveraged capital structure of certain borrowers may make such loans especially vulnerable to adverse changes in economic or market conditions. The Fund may hold investments in loans for a very short period of time when opportunities to resell the
investments that a Fund’s Portfolio Manager believes are attractive arise.
Certain of the loans acquired by a Fund may involve
revolving credit facilities under which a borrower may from time to time borrow and repay amounts up to the maximum amount of the facility. In such cases, the Fund would have an obligation to advance its portion of such additional borrowings upon
the terms specified in the loan assignment. To the extent that the Fund is committed to make additional loans under such an assignment, it will at all times designate cash or securities in an amount sufficient to meet such commitments.
Notwithstanding its intention in certain situations
to not receive material, non-public information with respect to its management of investments in floating rate loans, the Investment Manager may from time to time come into possession of material, non-public information about the issuers of loans
that may be held in a Fund’s portfolio. Possession of such information may in some instances occur despite the Investment Manager’s efforts to avoid such possession, but in other instances the Investment Manager may choose to receive
such information (for example, in connection with participation in a creditors’ committee with respect to a financially distressed issuer). As, and to the extent, required by applicable law, the Investment Manager’s ability to trade in
these loans for the account of the Fund could potentially be limited by its possession of such information. Such limitations on the Investment Manager’s ability to trade could have an adverse effect on the Fund by, for example, preventing the
Fund from selling a loan that is experiencing a material decline in value. In some instances, these trading restrictions could continue in effect for a substantial period of time.
In some instances, other accounts managed by the
Investment Manager may hold other securities issued by borrowers whose floating rate loans may be held in a Fund’s portfolio. These other securities may include, for example, debt securities that are subordinate to the floating rate loans held
in the Fund’s portfolio, convertible debt or common or preferred equity securities.
In certain circumstances, such as if the credit
quality of the issuer deteriorates, the interests of holders of these other securities may conflict with the interests of the holders of the issuer’s floating rate loans. In such cases, the Investment Manager may owe conflicting fiduciary
duties to the Fund and other client accounts. The Investment Manager will endeavor to carry out its obligations to all of its clients to the fullest extent possible, recognizing that in some cases certain clients may achieve a lower economic return,
as a result of these conflicting client interests, than if the Investment Manager’s client accounts collectively held only a single category of the issuer’s securities.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with variable- or floating-rate obligations include: Counterparty Risk, Credit Risk, Interest Rate Risk, Liquidity Risk and Prepayment and Extension Risk.
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 do not carry with them the right to dividends or
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voting rights and they do not represent any rights in the assets of
the issuer. Warrants may be considered to have more speculative characteristics than certain other types of investments. In addition, the value of a warrant does not necessarily change with the value of the underlying securities, and a warrant
ceases to have value if it is not exercised prior to its expiration date, if any.
The potential exercise price of warrants or rights
may exceed their market price, such as when there is no movement in the market price or the market price of the common stock declines.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with warrants and rights include: Convertible Securities Risk, Counterparty Risk, Credit Risk, Issuer Risk and Market Risk.
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 after the customary settlement period for that type of security. Normally, the settlement date occurs within 45 days
of the purchase although in some cases settlement may take longer. The investor does not pay for the securities or receive dividends or interest on them until the contractual settlement date. When engaging in when-issued, delayed delivery and
forward commitment transactions, a Fund typically will designate liquid assets 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, a Fund’s portfolio manager may
determine not to complete a transaction if he or she deems it appropriate to close out the transaction prior to its completion. In such cases, a Fund may realize short-term gains or losses.
To Be Announced Securities (“TBAs”).
As with other delayed delivery transactions, a seller agrees to issue a TBA security at a future date. However, the seller does not specify the particular securities to be delivered. Instead, the Fund
agrees to accept any security that meets specified terms. For example, in a TBA mortgage-backed security transaction, the Fund and the seller would agree upon the issuer, interest rate and terms of the underlying mortgages. The seller would not
identify the specific underlying mortgages until it issues the security. TBA mortgage-backed securities increase market risks because the underlying mortgages may be less favorable than anticipated by the Fund. See
Types of Investments
– Mortgage-Backed Securities
and
– Asset-Backed Securities
.
Although one or more of the other risks described in
this SAI may also apply, the risks typically associated with when-issued, delayed delivery and forward commitment transactions include: Counterparty Risk, Credit Risk and Market Risk.
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, high-yield 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 that gradually increases over time. 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.
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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 typically 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.
See Appendix A for a discussion of securities
ratings.
Although one or more of the other
risks described in this SAI may also apply, the risks typically associated with zero-coupon, step-coupon, and pay-in-kind securities include: Credit Risk, Interest Rate Risk and Zero-Coupon Bonds Risk.
Information Regarding Risks
The following is a summary of risks of investing in
the Funds and the risk characteristics associated with the various investment instruments available to the Funds for investment. A Fund’s risk profile is largely defined by the Fund’s primary portfolio holdings and principal investment
strategies (for the description of a Fund’s principal investment strategies and principal risks, please see that Fund’s prospectus). However, the Funds are allowed to use securities, instruments, strategies and other assets and
investments other than those described in the Fund’s principal investment strategies, subjecting the Fund to the risks associated with these securities, instruments, strategies and other assets and investments. One or more of the following
risks may be associated with investment in a Fund at any time:
Active Management Risk.
The Fund is actively managed and its performance therefore will reflect, in part, the ability of the portfolio managers to make investment decisions that will achieve the Fund’s investment objective. Due to its
active management, the Fund could underperform its benchmark index and/or other funds with similar investment objectives and/or strategies.
Activist Strategies Risk.
The Fund may purchase securities of a company that is the subject of a proxy contest or which activist investors are attempting to influence, in the expectation that new management or a change in business strategies
will cause the price of the company’s securities to increase. If the proxy contest, or the new management, is not successful, the market price of the company’s securities will typically fall.
In addition, where an acquisition or restructuring
transaction or proxy fight is opposed by the subject company’s management, the transaction often becomes the subject of litigation. Such litigation involves substantial uncertainties and may impose substantial cost and expense on the
Fund.
Allocation Risk.
For any Fund that uses an asset allocation strategy in pursuit of its investment objective, there is a risk that the Fund's allocation among asset classes, investments, managers, strategies and/or investment styles will
cause the Fund's shares to lose value or cause the Fund to underperform other funds with a similar investment objective and/or strategies, or that the investments themselves will not produce the returns expected.
Arbitrage Strategies Risk.
The Fund may purchase securities at prices only slightly below the anticipated value to be paid or exchanged for such securities in a merger, exchange offer or cash tender offer, and substantially above the prices at
which such securities traded immediately prior to announcement of the transaction. If there is a perception that the proposed transaction will not be consummated or will be delayed, the market price of the security may decline sharply, which would
result in a loss to the Fund. In addition, if the manager determines that the offer is likely to be increased, either by the original bidder or by another party, the Fund may purchase securities above the offer price; such purchases are subject to a
high degree of risk.
The consummation
of mergers and tender and exchange offers can be prevented or delayed by a variety of factors, including opposition by the management or shareholders of the target company, private litigation or litigation involving regulatory agencies, and approval
or non-action of regulatory agencies. The likelihood of occurrence of these and other factors, and their impact on an investment, can be very difficult to evaluate.
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 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, resulting in valuations that are volatile and sensitive to changes in interest rates.
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Bankruptcy Process Risk.
The Fund may purchase bankruptcy claims. There are a number of significant risks inherent in the bankruptcy process. The effect of a bankruptcy filing on a company may adversely and permanently affect the company by
causing it to lose its market position and key employees and otherwise become incapable of restoring itself as a viable business. Many events in a bankruptcy are the product of contested matters and adversarial proceedings and are beyond the control
of the creditors. The duration of a bankruptcy proceeding is difficult to predict and a creditor’s return on investment can be adversely affected by delays while the plan of reorganization is being negotiated, approved by the creditors,
confirmed by the bankruptcy court, and until it ultimately becomes effective. The administrative costs in connection with a bankruptcy proceeding are frequently high and are paid out of the debtor’s estate before any return to creditors.
Furthermore, bankruptcy law permits the classification of “substantially similar” claims in determining the classification of claims in a bankruptcy reorganization. Because the standard for classification is vague, there exists the risk
that the Fund’s influence with respect to the class of securities it owns can be impaired as a result of increases in the number and amount of claims in that class or by different classification and treatment of that class. Finally, amounts
previously paid to the Fund may be challenged as fraudulent conveyances or preferences as part of a bankruptcy proceeding.
Changing Distribution Level Risk.
The amount of the distributions paid by the Fund will vary and generally depends on the amount of interest income 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 income and/or dividends the Fund receives from its investments decline.
Commodity-related Investment Risk.
The value of commodities investments will generally be affected by overall market movements and factors specific to a particular industry or commodity, which may include demand for the commodity, weather, embargoes,
tariffs, and economic health, political, international, regulatory and other developments. Economic and other events (whether real or perceived) can reduce the demand for commodities, which may, in turn, reduce market prices and cause the value of
Fund shares to fall. The frequency and magnitude of such changes cannot be predicted. Exposure to commodities and commodities markets may subject the value of the Fund's investments to greater volatility than other types of investments. No, or
limited, active trading market may exist for certain commodities investments, which may impair the ability to sell or to realize the full value of such investments in the event of the need to liquidate such investments. In addition, adverse market
conditions may impair the liquidity of actively traded commodities investments. Certain types of commodities instruments are subject to the risk that the counterparty to the instrument may not perform or be unable to perform in accordance with the
terms of the instrument. The Fund may make commodity-related investments through, and may invest in one or more underlying funds that make commodity-related investments through, one or more wholly-owned subsidiaries organized outside the U.S. that
are generally not subject to U.S. laws (including securities laws) and their protections. However, any such subsidiary is wholly owned and controlled by the Fund and any underlying fund subsidiary is wholly-owned and controlled by the underlying
fund, making it unlikely that the subsidiary will take action contrary to the interests of the Fund or the underlying fund and their shareholders. Further, any such subsidiaries will be subject to the laws of a foreign jurisdiction, and can be
adversely affected by developments in that jurisdiction.
Concentration Risk.
To the extent that the Fund concentrates its investment in particular issuers, countries, geographic regions, industries or sectors, the Fund may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in
a wider variety of issuers, countries, geographic regions, industries, sectors or investments.
Confidential Information Access Risk.
In many instances, issuers of floating rate loans offer to furnish material, non-public information (Confidential Information) to prospective purchasers or holders of the issuer’s floating rate loans to help
potential investors assess the value of the loan. Portfolio managers may avoid the receipt of Confidential Information about the issuers of floating rate loans being considered for acquisition by the Fund, or held in the Fund. A decision not to
receive Confidential Information from these issuers may disadvantage the Fund as compared to other floating rate loan investors, and may adversely affect the price the Fund pays for the loans it purchases, or the price at which the Fund sells the
loans. Further, in situations when holders of floating rate loans are asked, for example, to grant consents, waivers or amendments, the ability to assess the desirability of such consents, waivers or amendments may be compromised. For these and
other reasons, it is possible that the decision not to receive Confidential Information could adversely affect the Fund’s performance.
Convertible Securities Risk.
Convertible securities are subject to the usual risks associated with debt securities, such as interest rate risk (the risk of losses attributable to changes in interest rates) and credit risk (the risk that the issuer
of a debt security will default or otherwise become unable, or be perceived to be unable or unwilling, to honor a financial obligation, such as making payments to the Fund when due). Convertible securities also react to changes in the value of the
common stock into which they convert, and are thus subject to market risk (the risk that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise). Because the value of a
convertible security can be influenced by both interest rates and the common stock's 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
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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.
Counterparty Risk.
The risk exists that a counterparty to a financial instrument held by the Fund or by a special purpose or structured vehicle in which the Fund invests may become insolvent or otherwise fail to perform its obligations due to financial difficulties,
including making payments to the Fund. The Fund may obtain no or limited recovery in a bankruptcy or other organizational proceedings, and any recovery may be significantly delayed. Transactions that the Fund enters into may involve counterparties
in the financial services sector and, as a result, events affecting the financial services sector may cause the Fund’s share value to fluctuate.
Credit Risk.
The value of loans or fixed-income securities, or other instruments or assets, may decline if the borrower or the issuer thereof defaults or otherwise becomes unable or unwilling, or is perceived to be unable or
unwilling, to honor its financial obligations, such as making payments to the Fund when due. Various factors could affect the actual or perceived willingness or ability of the borrower or the issuer to make timely interest or principal payments,
including changes in the financial condition of the borrower or the issuer or in general economic conditions. Fixed-income 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 fixed-income 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. Rating agencies assign credit ratings to certain loans and fixed-income securities to indicate their credit risk. Lower quality or unrated securities held by the Fund may present increased credit risk as
compared to higher-rated securities. Non-investment grade loans or fixed-income securities (commonly called “high-yield” or “junk”) may be subject to greater price fluctuations and are more likely to experience a default than
investment grade loans or securities and therefore may expose the Fund to increased credit risk. If the Fund purchases unrated loans or fixed-income securities, or if the ratings of securities held by the Fund are lowered after purchase, the Fund
will depend on analysis of credit risk more heavily than usual. If the issuer of a loan declares bankruptcy or is declared bankrupt, there may be a delay before the Fund can act on the collateral securing the loan, which may adversely affect the
Fund. Further, there is a risk that a court could take action with respect to a loan that is adverse to the holders of the loan. Such actions may include invalidating the loan, the lien on the collateral, the priority status of the loan, or ordering
the refund of interest previously paid by the borrower. Any such actions by a court could adversely affect the Fund’s performance. A default or expected default of a loan could also make it difficult for the Fund to sell the loan at a price
approximating the value previously placed on it. In order to enforce its rights in the event of a default, bankruptcy or similar situation, the Fund may be required to retain legal or similar counsel. This may increase the Fund’s operating
expenses and adversely affect its NAV. Loans that have a lower priority for repayment in an issuer’s capital structure may involve a higher degree of overall risk than more senior loans of the same borrower.
Cyber Security Risk.
With the increased use of technologies such as the Internet and the dependence on computer systems to perform necessary business functions, investment companies such as the Fund and its service providers may be prone to operational and information
security risks resulting from cyber-attacks. In general, cyber-attacks result from deliberate attacks but unintentional events may have effects similar to those caused by cyber-attacks. Cyber-attacks include, among other behaviors, stealing or
corrupting data maintained online or digitally, denial-of-service attacks on fund websites, the unauthorized release of confidential information and causing operational disruption. Successful cyber-attacks against, or security breakdowns of, a Fund
or its adviser, subadviser(s), distributor, custodians, transfer agent, Selling Agents and/or other third party service providers may adversely impact a Fund or its shareholders. For instance, cyber-attacks may interfere with the processing of
shareholder transactions, impact a Fund’s ability to calculate its NAV, cause the release of private shareholder information or confidential Fund information, impede trading, cause reputational damage, and subject the Fund to regulatory fines,
penalties or financial losses, reimbursement or other compensation costs, and/or additional compliance costs. The Fund may also incur substantial costs for cyber security risk management in order to prevent any cyber incidents in the future. The
Fund and its shareholders could be negatively impacted as a result. While the Fund or the Fund’s service providers have established business continuity plans and systems designed to prevent such cyber-attacks, there are inherent limitations in
such plans and systems including the possibility that certain risks have not been identified. Similar types of cyber security risks are also present for issuers of securities or other instruments in which the Fund invests, which could result in
material adverse consequences for such issuers, and may cause the Fund’s investment therein to lose value.
Depositary Receipts Risk.
Depositary receipts are receipts issued by a bank or trust company reflecting ownership of underlying securities issued by foreign companies. Some foreign securities are traded in the form of American Depositary
Receipts (ADRs). Depositary receipts involve risks similar to the risks associated with investments in foreign securities, including those associated with the particular country, which may be related to the particular political, regulatory,
economic, social and other conditions or events occurring in the country and fluctuations in its currency, as well as market risk tied to the underlying foreign company. In addition, ADR holders may have limited voting rights, may not have the same
rights afforded
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typical company stockholders in the event of a corporate action
such as an acquisition, merger or rights offering and may experience difficulty in receiving company stockholder communications. A potential conflict of interest exists to the extent that the Fund invests in ADRs for which the Fund's custodian
serves as depository bank.
Derivatives Risk.
Derivatives are financial instruments whose value depends on, or is derived from, the value of other underlying assets. Losses involving derivative instruments may be substantial, because a relatively small movement in
the price of an underlying security, instrument, commodity, currency or index may result in a substantial loss for the Fund. In addition to the potential for increased losses, the use of derivative instruments may lead to increased volatility for
the Fund. Derivative investments will typically increase the Fund’s exposure to principal risks to which it is otherwise exposed, and may expose the Fund to additional risks. Depending on the type and purpose of the Fund’s derivative
investments, these risks may include: correlation risk (there may be an imperfect correlation between the hedge and the opposite position, which is related to hedging risk), counterparty risk (the counterparty to the instrument may not perform or be
able to perform in accordance with the terms of the instrument), leverage risk (losses from the derivative instrument may be greater than the amount invested in the derivative instrument), hedging risk (the risk that a hedging strategy may not
eliminate the risk that it is intended to offset, and may offset gains), and/or liquidity risk (it may not be possible for the Fund to liquidate the instrument at an advantageous time or price), each of which may result in significant losses for the
Fund.
Derivatives Risk/Commodity-Linked
Futures Contracts Risk.
The loss that may be incurred by the Fund in entering into futures contracts is potentially unlimited and may exceed the amount of the premium. Futures markets are highly volatile and the use
of futures by the Fund may increase the volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally required in futures trading, a relatively small price movement in a futures contract may result in
substantial losses to the Fund. Futures contracts may be illiquid. The liquidity of the futures market depends on participants entering into offsetting transactions rather than making or taking delivery. To the extent participants decide to make or
take delivery, liquidity in the futures market could be reduced. Furthermore, exchanges may limit fluctuations in futures contract prices during a trading session by imposing a maximum permissible price movement on each futures contract. The Fund
may be disadvantaged if it is prohibited from executing a trade outside the daily permissible price movement. Moreover, to the extent the Fund engages in futures contracts on foreign exchanges, such exchanges may not provide the same protection as
U.S. exchanges.
Derivatives
Risk/Commodity-Linked Structured Notes Risk.
The use of commodity-linked structured notes is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary
portfolio securities transactions. The Fund’s investments in commodity-linked structured notes involve substantial risks, including risk of loss of interest and principal, lack of a secondary (
i.e.
, liquid) market, and risk of greater volatility than investments in traditional equity and debt markets.
If payment of interest on a commodity-linked
structured note is linked to the value of a particular commodity, commodity index or other economic variable, the Fund might receive lower interest payments (or not receive any of the interest due) on its investments if there is a loss of value of
the underlying investment. Further, to the extent that the amount of principal to be repaid upon maturity is linked to the value of a particular commodity, commodity index or other economic variable, the Fund might not receive a portion (or any) of
the principal at maturity of the investment or upon earlier exchange. At any time, the risk of loss associated with a particular structured note in the Fund’s portfolio may be significantly higher than the value of the note.
A liquid secondary market may not exist for the
commodity-linked structured notes held in the Fund’s portfolio, which may make it difficult for the notes to be sold at a price acceptable to the portfolio managers or to accurately value them. Investment in commodity-linked structured notes
also subjects the Fund to counterparty risk (the risk that the counterparty to the instrument will not perform or be able to perform in accordance with the terms of the instrument) and hedging risk (the risk that a hedging strategy may not eliminate
the risk that it is intended to offset, and may offset gains), each of which may result in significant losses for the Fund.
The value of the commodity-linked structured notes
may fluctuate significantly because the values of the underlying investments to which they are linked are themselves volatile. Additionally, the particular terms of a commodity-linked structured note may create economic leverage by requiring payment
by the issuer of an amount that is a multiple of the price increase or decrease of the underlying commodity, commodity index, or other economic variable. Economic leverage will increase the volatility of the value of these commodity-linked notes as
they may increase or decrease in value more quickly than the underlying commodity, commodity index or other economic variable.
Derivatives Risk/Commodity-Linked Swaps Risk.
The use of commodity-linked swaps is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. Commodity-linked swaps
could result in losses if the underlying asset or reference does not perform as anticipated. The value of swaps, like many other derivatives, may move in unexpected ways and may result in losses for the Fund. Such transactions can have the potential
for unlimited losses. Such risk is heightened in the case of short swap transactions. Swaps can involve greater risks than direct investment in the underlying asset, because swaps may be leveraged (creating leverage risk) and are subject to
counterparty risk (the risk that the counterparty to the instrument will not perform or be able to perform in accordance with the
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terms of the instrument), hedging risk (the risk that a hedging
strategy may not eliminate the risk that it is intended to offset, and may offset gains), pricing risk (swaps may be difficult to value) and liquidity risk (the risk that it may not be possible to liquidate a swap position at an advantageous time or
price), each of which may result in significant losses for the Fund.
Derivatives Risk/Contracts for Difference Risk.
Contracts for differences are swap arrangements in which the parties agree that their return (or loss) will be based on the relative performance of two different groups or baskets of securities or other instruments.
Often, one or both baskets will be an established securities index. The Fund’s return will be based on changes in value of theoretical long futures positions in the securities comprising one basket (with an aggregate face value equal to the
notional amount of the contract for differences) and theoretical short futures positions in the securities comprising the other basket. The Fund also may use actual long and short futures positions and achieve similar market exposure by netting the
payment obligations of the two contracts. If the short basket outperforms the long basket, the Fund will realize a loss – even in circumstances when the securities in both the long and short baskets appreciate in value.
Derivatives Risk/Credit Default Swap Indexes Risk.
A credit default swap (CDS) is an agreement between two parties in which one party agrees to make one or more payments to the second party, while the second party assumes the risk of certain defaults, generally a
failure to pay on a referenced debt obligation or the bankruptcy of the obligation’s issuer. As such, a CDS generally enables an investor to buy or sell protection against a credit event. A credit default index (CDX) is an index of CDS. Credit
default swap indexes (CDSX) are swap agreements that are intended to track the performance of a CDX. CDSX allow an investor, such as the Fund, to manage credit risk or to take a position on a basket of debt obligations more efficiently than
transacting in single name CDS. If a credit event occurs in one of the reference issuers, the protection is paid out through the delivery of the defaulted bond by the buyer of protection in return for payment of the notional value of the defaulted
bond by the seller of protection or through a cash settlement between the two parties. The reference issuer is then removed from the index. CDSX are subject to the risk that the Fund’s counterparty will default on its obligations. If such a
default were to occur, any contractual remedies that the Fund may have may be subject to bankruptcy and insolvency laws, which could delay or limit the Fund's recovery. Thus, if the counterparty under a CDSX defaults on its obligation to make
payments thereunder, as a result of its bankruptcy or otherwise, the Fund may lose such payments altogether, or collect only a portion thereof, which collection could involve costs or delays. The Fund’s return from investment in CDSX may not
match the return of the referenced index. Further, investment in CDSX could result in losses if the referenced index does not perform as expected. Unexpected changes in the composition of the index may also affect performance of CDSX. If a
referenced index has a dramatic intraday move that causes a material decline in the Fund’s net assets, the terms of the Fund’s CDSX may permit the counterparty to immediately close out the transaction. In that event, the Fund may be
unable to enter into another CDSX or otherwise achieve desired exposure, even if the referenced index reverses all or a portion of its intraday move.
Derivatives Risk/Credit Default Swaps Risk.
The use of credit default swaps is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. A credit default swap
enables an investor to buy or sell protection against a credit event, such as an issuer’s failure to make timely payments of interest or principal, bankruptcy or restructuring. A credit default swap may be embedded within a structured note or
other derivative instrument. The value of swaps, like many other derivatives, may move in unexpected ways and may result in losses for the Fund. Swaps can involve greater risks than direct investment in the underlying securities, because swaps,
among other factors, may be leveraged (creating leverage risk, the risk that losses from the derivative instrument may be greater than the amount invested in the derivative instrument) and subject the Fund to counterparty risk (the risk that the
counterparty to the instrument will not perform or be unable to perform in accordance with the terms of the instrument), hedging risk (the risk that a hedging strategy may not eliminate the risk that it is intended to offset, and may offset gains),
pricing risk (the risk that swaps may be difficult to value) and liquidity risk (it may not be possible for the Fund to liquidate a swap position at an advantageous time or price), each of which may result in significant losses for the Fund. If the
Fund is selling credit protection, there is a risk that a credit event will occur and that the Fund will have to pay the counterparty. If the Fund is buying credit protection, there is a risk that no credit event will occur.
Derivatives Risk/Equity-Linked
Notes Risk.
An equity-linked note (ELN) is a debt instrument whose value is based on the value of a single equity security, basket of equity securities or an index of equity securities (each, an Underlying Equity).
An ELN typically provides interest income, thereby offering a yield advantage over investing directly in an Underlying Equity. The Fund may purchase ELNs that trade on a securities exchange or those that trade on the over-the-counter markets,
including securities offered and sold under Rule 144A of the Securities Act of 1933, as amended. The Fund may also purchase an ELN in a privately negotiated transaction with the issuer of the ELN (or its broker-dealer affiliate). The Fund's
investment in ELNs has the potential to lead to significant losses because ELNs are subject to the market and volatility risks associated with their Underlying Equity, and to additional risks not typically associated with investments in listed
equity securities, such as liquidity risk, credit risk of the issuer and concentration risk. The liquidity of unlisted ELNs is normally determined by the willingness of the issuer to make a market in the ELN. While the Fund will seek to purchase
ELNs only from issuers that it believes to be willing to, and capable of, repurchasing the ELN at a reasonable price, there can be no assurance that the Fund will be able to sell any ELN at such a price or at all. This may impair the Fund’s
ability to enter into other transactions at a time when doing so
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might be advantageous. In
addition, because ELNs often take the form of unsecured notes of the issuer, the Fund would be subject to the risk that the issuer may default on its obligations under the ELN, thereby subjecting the Fund to the further risk of being too
concentrated in the securities (including ELNs) of that issuer. The Fund may or may not hold an ELN until its maturity.
Derivatives Risk/Exchange-Traded Notes Risk.
Because exchange-traded notes (ETNs) are unsecured, unsubordinated debt securities, an investment in an ETN exposes the Fund to the risk that an ETN’s issuer may be unable to pay, which means that the Fund is
subject to issuer credit risk, including that the value of the ETN may drop due to a downgrade in the issuer’s credit rating, despite the underlying benchmark or strategy remaining unchanged. ETNs do not typically offer principal protection,
so the Fund may lose some or all of its investment. The returns of ETNs are usually linked to the performance of a market benchmark or strategy, less investor fees and expenses. The Fund will bear its proportionate share of the fees and expenses of
the ETN, which may cause the Fund’s returns to be lower. The return on ETNs will typically be lower than the total return on a direct investment in the components of the underlying index or strategy because of the ETN’s investor fees and
expenses. The value of an ETN may also be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in the underlying market, changes in the applicable interest rates, and economic, legal, political, or
geographic events that affect the referenced underlying benchmark or strategy.
Derivatives Risk/Forward Foreign Currency Contracts
Risk.
The use of these derivatives is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. These instruments
are a type of derivative contract, whereby the Fund may agree to buy or sell a country's or region’s currency at a specific price on a specific date in the future. These instruments may fall in value (sometimes dramatically) due to foreign
market downswings or foreign currency value fluctuations, subjecting the Fund to foreign currency risk (the risk that Fund performance may be negatively impacted by foreign currency strength or weakness relative to the U.S. dollar, particularly if
the Fund exposes a significant percentage of its assets to currencies other than the U.S. dollar). The effectiveness of any currency hedging strategy by a Fund may be reduced by the Fund’s inability to precisely match forward contract amounts
and the value of securities involved. Forward foreign currency contracts used for hedging may also limit any potential gain that might result from an increase or decrease in the value of the currency. Unanticipated changes in the currency markets
could result in reduced performance for the Fund or losses. At or prior to maturity of a forward contract, the Fund may enter into an offsetting contract and may incur a loss to the extent there has been movement in forward contract prices. When the
Fund converts its foreign currencies into U.S. dollars, it may incur currency conversion costs due to the spread between the prices at which it may buy and sell various currencies in the market. Investment in these instruments also subjects the
Fund, among other factors, to counterparty risk (the risk that the counterparty to the instrument will not perform or will be unable to perform in accordance with the terms of the instrument) and leverage risk (i.e., the risk that losses from the
derivative instrument may be greater than the amount invested in the derivative instruments). The Fund’s strategy of investing in these instruments may not be successful and the Fund may experience significant losses as a result.
Derivatives Risk/Forward Interest Rate Agreements
Risk.
Under forward interest rate agreements, the buyer locks in an interest rate at a future settlement date. If the interest rate on the settlement date exceeds the lock rate, the buyer pays the seller the
difference between the two rates (based on the notional value of the agreement). If the lock rate exceeds the interest rate on the settlement date, the seller pays the buyer the difference between the two rates (based on the notional value of the
agreement). The Fund may act as a buyer or a seller. Investment in these instruments subjects the Fund to risks, including counterparty risk (the risk that the counterparty to the instrument will not perform or be able to perform in accordance with
the terms of the instrument), hedging risk (the risk that a hedging strategy may not eliminate the risk that it is intended to offset, and may offset gains) and interest rate risk (the risk of losses attributable to changes in interest rates), each
of which may result in significant losses for the Fund.
Derivatives Risk/Futures Contracts Risk.
The use of futures contracts is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. A futures contract is a sales
contract between a buyer (holding the “long” position) and a seller (holding the “short” position) for an asset with delivery deferred until a future date. The buyer agrees to pay a fixed price at the agreed future date and
the seller agrees to deliver the asset. The seller hopes that the market price on the delivery date is less than the agreed upon price, while the buyer hopes for the contrary. The liquidity of the futures markets depends on participants entering
into offsetting transactions rather than making or taking delivery. To the extent participants decide to make or take delivery, liquidity in the futures market could be reduced. In addition, futures exchanges often impose a maximum permissible price
movement on each futures contract for each trading session. The Fund may be disadvantaged if it is prohibited from executing a trade outside the daily permissible price movement. Moreover, to the extent the Fund engages in futures contracts on
foreign exchanges, such exchanges may not provide the same protection as U.S. exchanges. The loss that the Fund may incur in entering into futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets
are highly volatile and the use of futures may increase the volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract
may result in substantial losses for the Fund. Investments in these instruments involve risks, including counterparty risk (the risk that the counterparty to the instrument may not perform or be
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able to perform in accordance with the terms of the instrument),
hedging risk (the risk that a hedging strategy may not eliminate the risk that it is intended to offset, and may offset gains) and pricing risk (the risk that the instrument may be difficult to value), each of which may result in significant losses
for the Fund.
Derivatives Risk/Inflation Rate
Swaps Risk.
An inflation rate swap is a derivative instrument used to transfer inflation risk from one party to another through an exchange of cash flows. In an inflation rate swap, one party pays a fixed rate on a
notional principal amount, while the other party pays a floating rate linked to an inflation index, such as the Consumer Price Index (CPI). Investments in inflation rate swaps subject the Fund (and, therefore, shareholders) to risks, including
hedging risk (the risk that a hedging strategy may not eliminate the risk that it is intended to offset, and may offset gains), counterparty risk (the risk that the counterparty to the instrument will not perform or be able to perform in accordance
with the terms of the instrument), and inflation risk (the risk that inflation rates may change drastically as a result of unexpected shifts in the global economy), each of which may result in significant losses for the Fund.
Derivatives Risk/Interest Rate Swaps Risk.
Interest rate swaps can be based on various measures of interest rates, including the London Interbank Offered Rate (commonly known as LIBOR), swap rates, treasury rates and other foreign interest rates. A swap
agreement can increase or decrease the volatility of the Fund's investments and its NAV. The value of swaps, like many other derivatives, may move in unexpected ways and may result in losses for the Fund. Swaps can involve greater risks than direct
investment in securities, because swaps may be leveraged, and are, among other factors, subject to counterparty risk (the risk that the counterparty to the instrument will not perform or be able to perform in accordance with the terms of the
instrument), hedging and correlation risk (the risk that a hedging strategy may not eliminate the risk that it is intended to offset, and may offset gains, including because of a lack of correlation between the swaps and the portfolio of bonds that
the swaps are designed to hedge or replace), pricing risk (swaps may be difficult to value), liquidity risk (it may not be possible to liquidate a swap position at an advantageous time or price) and interest rate risk (the risk of losses
attributable to changes in interest rates), each of which may result in significant losses for the Fund.
Derivatives Risk/Inverse Floaters Risk.
Inverse floaters (or inverse variable or floating rate securities) are a type of derivative, long-term fixed income obligation with a variable or floating interest rate that moves in the opposite direction of short-term
interest rates. As short-term interest rates go down, the holders of the inverse floaters receive more income and, as short-term interest rates go up, the holders of the inverse floaters receive less income. Variable rate securities provide for a
specified periodic adjustment in the interest rate, while floating rate securities have interest rates that change whenever there is a change in a designated benchmark rate or the issuer’s credit quality. While inverse floaters tend to provide
more income than similar term and credit quality fixed-rate bonds, they also exhibit greater volatility in price movement. There is a risk that the current interest rate on variable and floating rate securities may not accurately reflect current
market interest rates or adequately compensate the holder for the current creditworthiness of the issuer. Some variable or floating rate securities are structured with liquidity features and some may include market-dependent liquidity features that
may present greater liquidity risk. Other risks associated with transactions in inverse floaters include interest rate risk (the risk of losses attributable to changes in interest rates), counterparty risk (the risk that the issuer of a security may
or will default or otherwise become unable, or be perceived to be unable or unwilling, to honor a financial obligation, such as making payments when due) and hedging risk (the risk that a hedging strategy may not eliminate the risk that it is
intended to offset, and may offset gains), each of which may result in significant losses for the Fund.
Derivatives Risk/Options Risk.
The use of options is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If the Fund sells a put option, there
is a risk that the Fund may be required to buy the underlying asset at a disadvantageous price. If the Fund sells a call option, there is a risk that the Fund may be required to sell the underlying asset at a disadvantageous price, and if the call
option sold is not covered (for example, by owning the underlying asset), the Fund's losses are potentially unlimited. Options may be traded on a securities exchange or in the over-the-counter market. These transactions involve other risks,
including counterparty risk (the risk that the counterparty to the instrument will not perform or be able to perform in accordance with the terms of the instrument) and hedging risk (the risk that a hedging strategy may not eliminate the risk that
it is intended to offset, and may offset gains), each of which may result in significant losses for the Fund.
Derivatives Risk/Structured Investments Risk.
Structured instruments include debt instruments that are collateralized by the underlying cash flows of a pool of financial assets or receivables.
Structured investments may be
less liquid than other debt securities (or illiquid), and the price of structured investments may be more volatile. In some cases, depending on its terms, a structured investment may provide that the principal and/or interest payments may be
adjusted below zero. Structured investments also may involve significant credit risk and risk of default by the counterparty. The Fund’s use of structured instruments may not work as intended. If structured investments are used to reduce the
duration of the Fund’s portfolio, this may limit the Fund’s return when having a longer duration would be beneficial (for instance, when interest rates decline).
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Derivatives Risk/Swaps Risk.
The use of swaps is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. In a swap transaction, one party agrees
to pay the other party an amount equal to the return, based upon an agreed-upon notional value, of a defined underlying asset or a non-asset reference (such as an index) during a specified period of time. In return, the other party would make
periodic payments based on a fixed or variable interest rate or on the return from a different underlying asset or non-asset reference based upon an agreed-upon notional value. Swaps could result in Fund losses if the underlying asset or reference
does not perform as anticipated. The value of swaps, like many other derivatives, may move in unexpected ways and may result in losses for the Fund. Such transactions can have the potential for unlimited losses. Such risk is heightened in the case
of swap transactions involving short exposures. Swaps can involve greater risks than direct investment in the underlying asset, because swaps, among other factors, may be leveraged (creating leverage risk in that the Fund’s exposure and
potential losses are greater than the amount invested) and are subject to counterparty risk (the risk that the counterparty to the instrument will not perform or be able to perform in accordance with the terms of the instrument), hedging risk (the
risk that a hedging strategy may not eliminate the risk that it is intended to offset, and may offset gains), pricing risk (swaps may be difficult to value) and liquidity risk (it may not be possible to liquidate a swap position at an advantageous
time or price), each of which may result in significant losses for the Fund.
Derivatives Risk/Portfolio Swaps and Total Return
Swaps Risk.
The use of portfolio swaps or total return swaps is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities
transactions. In a swap transaction, one party agrees to pay the other party an amount equal to the total return of a defined underlying asset (such as an equity security or basket of such securities) or a non-asset reference (such as an index)
during a specified period of time. In return, the other party would make periodic payments based on a fixed or variable interest rate or on the total return from a different underlying asset or non-asset reference. Portfolio swaps and equity swaps
could result in losses if the underlying asset or reference does not perform as anticipated. The value of swaps, like many other derivatives, may move in unexpected ways and may result in losses for the Fund. Such transactions can have the potential
for unlimited losses. Such risk is heightened in the case of short swap transactions. Swaps can involve greater risks than direct investment in the underlying asset, because swaps, among other factors, may be leveraged (creating leverage risk) and
are subject to counterparty risk (the risk that the counterparty to the instrument will not perform or be able to perform in accordance with the terms of the instrument), hedging risk (the risk that a hedging strategy may not eliminate the risk that
it is intended to offset), pricing risk (swaps may be difficult to value) and liquidity risk ( it may not be possible to liquidate a swap position at an advantageous time or price), each of which may result in significant and unanticipated losses to
the Fund.
Derivatives Risk/Total Return
Swaps Risk.
The use of total return swaps is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. In a total
return swap transaction, one party agrees to pay the other party an amount equal to the total return of a defined underlying asset (such as an equity security or basket of such securities) or a non-asset reference (such as an index) during a
specified period of time. In return, the other party makes periodic payments based on a fixed or variable interest rate or on the total return from a different underlying asset or non-asset reference. Total return swaps could result in Fund losses
if the underlying asset or reference does not perform as anticipated. Such transactions can have the potential for unlimited losses. The value of swaps, like many other derivatives, may move in unexpected ways and may result in losses for the Fund.
Swaps can involve greater risks than direct investment in securities, because swaps, among other factors, may be leveraged (creating leverage risk in that the Fund’s exposure and potential losses are greater than the amount invested), and are
subject to counterparty risk (the risk that the counterparty to the instrument will not perform or be able to perform in accordance with the terms of the instrument), hedging risk (the risk that a hedging strategy may not eliminate the risk that it
is intended to offset, and may offset gains), pricing risk (swaps may be difficult to value) and liquidity risk (the risk that it may not be possible for the Fund to liquidate a swap position at an advantageous time or price), which may result in
significant losses for the Fund.
Derivatives Risk/Warrants Risk.
Warrants are securities giving the holder the right, but not the obligation, to buy the stock of an issuer at a given price (generally higher than the value of the stock at the time of issuance) during a specified
period or perpetually. Warrants may be acquired separately or in connection with the acquisition of securities. Warrants do not carry with them the right to dividends or voting rights and they do not represent any rights in the assets of the issuer.
In addition, the value of a warrant does not necessarily change with the value of the underlying securities, and a warrant ceases to have value if it is not exercised prior to its expiration date. Warrants 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. Investment in these instruments also subject the Fund to liquidity risk (the risk that it may not be
possible for the Fund to liquidate the instrument at an advantageous time or price), which may result in significant losses for the Fund.
Distressed Securities Risk.
The Fund may purchase distressed securities of business enterprises involved in workouts, liquidations, reorganizations, bankruptcies and similar situations. Since there is typically substantial uncertainty concerning
the outcome of transactions involving business enterprises in these situations, there is a high degree of risk of loss, including loss of the entire investment.
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In bankruptcy, there can be considerable delay in
reaching accord on a restructuring plan acceptable to a bankrupt company’s lenders, bondholders and other creditors and then obtaining the approval of the bankruptcy court. Such delays could result in substantial losses to the investments in
such company’s securities or obligations. Moreover, there is no assurance that a plan favorable to the class of securities held by the Fund will be adopted or that the subject company might not eventually be liquidated rather than
reorganized.
In liquidations (both in and out
of bankruptcy) and other forms of corporate reorganization, there exists the risk that the reorganization either will be unsuccessful, will be delayed or will result in a distribution of cash or a new security, the value of which will be less than
the purchase price of the security in respect of which such distribution is received. It may be difficult to obtain accurate information concerning a company in financial distress, with the result that the analysis and valuation are especially
difficult. The market for securities of such companies tends to be illiquid and sales may be possible only at substantial discounts.
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).
Emerging Market Securities Risk.
Securities issued by foreign governments or companies in emerging market countries, such as China, Russia and certain countries in Eastern Europe, the Middle East, Asia, Latin America or Africa, are more likely to have
greater exposure to the risks of investing in foreign securities that are described in
Foreign Securities Risk
. In addition, emerging market
countries are more likely to experience instability resulting, for example, from rapid changes or developments in social, political, economic or other conditions. Their economies are usually less mature and their securities markets are typically
less developed with more limited trading activity (
i.e.
, lower trading volumes and less liquidity) than more developed countries. Emerging market
securities tend to be more volatile than securities in more developed markets. Many emerging market countries are heavily dependent on international trade and have fewer trading partners, which makes them more sensitive to world commodity prices and
economic downturns in other countries. Some emerging market countries have a higher risk of currency devaluations, and some of these countries may experience periods of high inflation or rapid changes in inflation rates and may have hostile
relations with other countries.
Operational and Settlement Risks of Securities in
Emerging Markets.
In addition to having less developed securities markets, banks in emerging markets that are eligible foreign sub-custodians may be recently organized, lack extensive operating experience or lack
effective government oversight or regulation. In addition, there may be legal restrictions or limitations on the ability of the Fund to recover assets held in custody by a foreign sub-custodian in the event of the bankruptcy of the sub-custodian.
Because settlement systems may be less organized than in developed markets and because delivery versus payment settlement may not be possible or reliable, there may be a greater risk that settlement may be delayed and that cash or securities of the
Fund may be lost because of failures of or defects in the system, including fraud or corruption. Settlement systems in emerging markets also have a higher risk of failed trades.
Risks Related to Currencies and Corporate Actions in
Emerging Markets.
Risks related to currencies and corporate actions are also greater in emerging market countries than in developed countries. 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, or countries may have varying exchange rates. Some emerging market countries have a higher risk of currency devaluations,
and some of these countries may experience sustained periods of high inflation or rapid changes in inflation rates which can have negative effects on a country’s economy and securities markets. Corporate action procedures in emerging market
countries may be less reliable and have limited or no involvement by the depositories and central banks. Lack of standard practices and payment systems can lead to significant delays in payment.
Risks Related to Corporate and Securities Laws in
Emerging Markets.
Securities laws in emerging markets may be relatively new and unsettled and, consequently, there is a risk of rapid and unpredictable change in laws regarding foreign investment, securities
regulation, title to securities and shareholder rights. Accordingly, foreign investors may be adversely affected by new or amended laws and regulations. In addition, the systems of corporate governance to which issuers in certain emerging markets
are subject may be less advanced than the systems to which issuers located in more developed countries are subject, and therefore, shareholders of such issuers may not receive many of the protections available to shareholders of issuers located in
more developed countries. These risks may be heightened in China and Russia.
China Stock Connect Risk.
The risks noted here are in addition to the risks described under Emerging Market Securities Risk. A Fund may purchase shares in mainland China-based companies
that trade on Chinese stock exchanges such as the Shanghai Stock Exchange and the Shenzhen Stock Exchange (China A-Shares) through the Shanghai-Hong Kong Stock Connect (Stock Connect), a mutual market access program designed to, among other things,
enable foreign investment in the People’s Republic
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of China (PRC) via brokers in Hong Kong. There are significant
risks inherent in investing in China A-Shares through Stock Connect. The underdeveloped state of PRC’s investment and banking systems subjects the settlement, clearing, and registration of China A-Shares transactions to heightened risks. Stock
Connect can only operate when both PRC and Hong Kong markets are open for trading and when banking services are available in both markets on the corresponding settlement days. As such, if either or both markets are closed on a U.S. trading day, a
Fund may not be able to dispose of its China A-Shares in a timely manner, which could adversely affect the Fund’s performance. PRC regulations require that a fund that wishes to sell its China A-Shares pre-deliver the China A-Shares to a
broker. If the China A-Shares are not in the broker’s possession before the market opens on the day of sale, the sell order will be rejected. This requirement could also limit a fund’s ability to dispose of its China A-Shares purchased
through Stock Connect in a timely manner. Additionally, Stock Connect is subject to daily quota limitations on purchases of China A-Shares. Once the daily quota is reached, orders to purchase additional China A-Shares through Stock Connect will be
rejected. A Fund’s investment in China A-Shares may only be traded through Stock Connect and is not otherwise transferable. Stock Connect utilizes an omnibus clearing structure, and the Fund’s shares will be registered in its
custodian’s name on the Central Clearing and Settlement System. This may limit the ability of the Investment Manager (and/or any subadviser, as the case may be) to effectively manage a Fund, and may expose the Fund to the credit risk of its
custodian or to greater risk of expropriation. Investment in China A-Shares through Stock Connect may be available only through a single broker that is an affiliate of the Fund’s custodian, which may affect the quality of execution provided by
such broker. Stock Connect restrictions could also limit the ability of a Fund to sell its China A-Shares in a timely manner, or to sell them at all. Further, different fees, costs and taxes are imposed on foreign investors acquiring China A-Shares
acquired through Stock Connect, and these fees, costs and taxes may be higher than comparable fees, costs and taxes imposed on owners of other securities providing similar investment exposure.
EuroZone-Related Risk.
A number of countries in the European Union (EU) have experienced, and may continue to experience, severe economic and financial difficulties. Additional EU member countries may also fall subject to such difficulties.
These events could negatively affect the value and liquidity of the Fund’s investments in euro-denominated securities and derivatives contracts, securities of issuers located in the EU or with significant exposure to EU issuers or countries.
If the euro is dissolved entirely, the legal and contractual consequences for holders of euro-denominated obligations and derivative contracts would be determined by laws in effect at such time. Such investments may continue to be held, or
purchased, to the extent consistent with the Fund’s investment objective and permitted under applicable law. These potential developments, or market perceptions concerning these and related issues, could adversely affect the value of Fund
shares.
Certain countries in the EU
have had to accept assistance from supra-governmental agencies such as the International Monetary Fund, the European Stability Mechanism (the ESM) or other supra-governmental agencies. The European Central Bank has also been intervening to purchase
Eurozone debt in an attempt to stabilize markets and reduce borrowing costs.
There can be no assurance that these agencies will
continue to intervene or provide further assistance and markets may react adversely to any expected reduction in the financial support provided by these agencies. Responses to the financial problems by European governments, central banks and others
including austerity measures and reforms, may not work, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. In addition, one or more countries may abandon the euro and/or withdraw from
the EU. The impact of these actions, especially if they occur in a disorderly fashion, could be significant and far-reaching.
Event-Driven Trading Risk.
The Fund may seek to profit from the occurrence of specific corporate or other events. A delay in the timing of these events, or the failure of these events to occur at all, may have a significant negative effect on the
Fund’s performance.
Event-driven
investing requires the relevant manager to make predictions about (i) the likelihood that an event will occur and (ii) the impact such event will have on the value of a company’s securities. If the event fails to occur or it does not have the
effect foreseen, losses can result. For example, the adoption of new business strategies, a meaningful change in management or the sale of a division or other significant assets by a company may not be valued as highly by the market as the manager
had anticipated, resulting in losses. In addition, a company may announce a plan of restructuring which promises to enhance value and fail to implement it, resulting in losses to investors.
Exchange-Traded Fund (ETF) Risk.
An ETF’s share price may not track its specified market index (if any) and may trade below its net asset value. Certain ETFs use a “passive” investment strategy and do not take defensive positions in
volatile or declining markets. Other ETFs in which the Fund may invest are actively managed ETFs (
i.e.
, they do not track a particular benchmark),
which indirectly subjects the Fund to active management risk. An active secondary market in an ETF’s shares may not develop or be maintained and may be halted or interrupted due to actions by its listing exchange, unusual market conditions or
other reasons. There can be no assurance an ETF’s shares will continue to be listed on an active exchange. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses incurred through
ownership of the ETF.
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The Fund generally expects to purchase shares of
ETFs through broker-dealers in transactions on a securities exchange, and in such cases the Fund will pay customary brokerage commissions for each purchase and sale. Shares of an ETF may also be acquired by depositing a specified portfolio of the
ETF’s underlying securities, as well as a cash payment generally equal to accumulated dividends of the securities (net of expenses) up to the time of deposit, with the ETF’s custodian, in exchange for which the ETF will issue a quantity
of new shares sometimes referred to as a “creation unit”. Similarly, shares of an ETF purchased on an exchange may be accumulated until they represent a creation unit, and the creation unit may be redeemed in kind for a portfolio of the
underlying securities (based on the ETF’s net asset value) together with a cash payment generally equal to accumulated dividends as of the date of redemption. The Funds may redeem creation units for the underlying securities (and any
applicable cash), and may assemble a portfolio of the underlying securities (and any required cash) to purchase creation units. The Funds’ ability to redeem creation units may be limited by the 1940 Act, which provides that ETFs, the shares of
which are purchased in reliance on Section 12(d)(1)(F) of the 1940 Act, will not be obligated to redeem such shares in an amount exceeding one percent of their total outstanding securities during any period of less than 30 days.
Foreign Currency Risk.
The performance of the Fund may be materially affected positively or negatively by foreign currency strength or weakness relative to the U.S. dollar, particularly if the Fund invests a significant percentage of its
assets in foreign securities or other assets denominated in currencies other than the U.S. dollar. Currency rates in foreign countries may fluctuate significantly over short or long periods of time for a number of reasons, including changes in
interest rates, imposition of currency controls and economic or political developments in the U.S. or abroad. The Fund may also incur currency conversion costs when converting foreign currencies into U.S. dollars and vice versa.
Foreign Currency-related Tax Risk.
As a regulated investment company (RIC), the Fund must derive at least 90% of its gross income for each taxable year from sources treated as “qualifying income” under the Internal Revenue Code of 1986, as
amended. The Fund may gain exposure to local currency markets through forward currency contracts. Although foreign currency gains currently constitute “qualifying income,” the Treasury Department has the authority to issue regulations
excluding from the definition of “qualifying income” a RIC’s foreign currency gains not “directly related” to its “principal business” of investing in stock or securities (or options and futures with respect
thereto). Such regulations might treat gains from some of the Fund’s foreign currency-denominated positions as not qualifying income and there is a remote possibility that such regulations might be applied retroactively, in which case, the
Fund might not qualify as a RIC for one or more years. In the event the Treasury Department issues such regulations, the Fund’s Board may authorize a significant change in investment strategy or the Fund’s liquidation.
Foreign Securities Risk.
Investments in or exposure to foreign securities involve certain risks not associated with investments in or exposure to securities of U.S. companies. For example, foreign markets can be extremely volatile. The
performance of the Fund may be negatively impacted by fluctuations in a foreign currency’s strength or weakness relative to the U.S. dollar. Foreign securities may also be less liquid than securities of U.S. companies so that the Fund may, at
times, be unable to sell foreign securities at desirable times or prices. Brokerage commissions, custodial costs 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 on the Fund’s income, capital gains or proceeds from the
disposition of foreign securities, which could reduce the Fund’s return on such securities. Other risks include: possible delays in the settlement of transactions or in the payment of income; generally less publicly available information about
foreign companies; the impact of economic, political, social, diplomatic or other conditions or events; possible seizure, expropriation or nationalization of a company or its assets or the assets of a particular investor or category of investors;
possible imposition of currency exchange controls; accounting, auditing and financial reporting standards that may be less comprehensive and stringent than those applicable to domestic companies; the imposition of economic and other sanctions
against a particular foreign country, its nationals or industries or businesses within the country; and the generally less stringent standard of care to which local agents may be held in the local markets. In addition, it may be difficult to obtain
reliable information about the securities and business operations of certain foreign issuers. Governments or trade groups may compel local agents to hold securities in designated depositories that are not subject to independent evaluation. The less
developed a country’s securities market is, the greater the level of risks. The risks posed by sanctions against a particular foreign country, its nationals or industries or businesses within the country may be heightened to the extent the
Fund invests significantly in the affected country or region or in issuers from the affected country that depend on global markets.
Operational and Settlement Risks of Foreign
Securities.
The Fund’s foreign securities are generally held outside the United States in the primary market for the securities in the custody of certain eligible foreign banks and trust companies
(“foreign sub-custodians”), as permitted under the Investment Company Act of 1940 (the 1940 Act). Settlement practices for foreign securities may differ from those in the United States. Some countries have limited governmental oversight
and regulation of industry practices, stock exchanges, depositories, registrars, brokers and listed companies, which increases the risk of corruption and fraud and the possibility of losses to the Fund. In particular, under certain circumstances,
foreign securities may settle on a delayed delivery basis, meaning that the Fund may be required to make payment for securities before the Fund has actually
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received delivery of the securities or deliver securities prior to
the receipt of payment. Typically, in these cases, the Fund will receive evidence of ownership in accordance with the generally accepted settlement practices in the local market entitling the Fund to delivery or payment at a future date, but there
is a risk that the security will not be delivered to the Fund or that payment will not be received, although the Fund and its foreign sub-custodians take reasonable precautions to mitigate this risk. Losses can also result from lost, stolen or
counterfeit securities; defaults by brokers and banks; failures or defects of the settlement system; or poor and improper record keeping by registrars and issuers.
Share Blocking.
Share blocking refers to a practice in certain foreign markets under which an issuer’s securities are blocked from trading at the custodian or sub-custodian level for a specified number of days before and, in certain instances, after a
shareholder meeting where a vote of shareholders takes place. The blocking period can last up to several weeks. Share blocking may prevent the Fund from buying or selling securities during this period, because during the time shares are blocked,
trades in such securities will not settle. It may be difficult or impossible to lift blocking restrictions, with the particular requirements varying widely by country. As a consequence of these restrictions, the Investment Manager, on behalf of the
Fund, may abstain from voting proxies in markets that require share blocking.
Forward Commitments on Mortgage-Backed Securities
(including Dollar Rolls) Risk.
When purchasing mortgage-backed securities in the “to be announced” (TBA) market (MBS TBAs), the seller agrees to deliver mortgage-backed securities for an agreed upon
price on an agreed upon date, but may make no guarantee as to the specific securities to be delivered. In lieu of taking delivery of mortgage-backed securities, the Fund could enter into dollar rolls, which 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). MBS TBAs and dollar rolls are subject to counterparty risk (the risk that the counterparty to the instrument will not perform
or be able to perform in accordance with the terms of the instrument).
Frontier Market
Risk.
Frontier market countries generally have smaller economies and even less developed capital markets than typical emerging market countries (which themselves have increased investment risk relative to more
developed market countries) and, as a result, the Fund’s exposure to risks associated with investing in emerging market countries are magnified when the Fund invests in frontier market countries. The increased risks include: the potential for
extreme price volatility and illiquidity in frontier market countries; government ownership or control of parts of the private sector and of certain companies; trade barriers, exchange controls, managed adjustments in relative currency values and
other protectionist measures imposed or negotiated by the countries with which frontier market countries trade; and the relatively new and unsettled securities laws in many frontier market countries. Securities issued by foreign governments or
companies in frontier market countries are even more likely than emerging markets securities to have greater exposure to the risks of investing in foreign securities that are described in
Foreign Securities Risk
.
Fund-of-Funds Risk.
Determinations regarding asset classes or underlying funds and the Fund’s allocations thereto may not successfully achieve the Fund’s investment objective, in whole or in part. The selected underlying
funds’ performance may be lower than the performance of the asset class they were selected to represent or may be lower than the performance of alternative underlying funds that could have been selected to represent the asset class. The Fund
also is exposed to the same risks as the underlying funds in direct proportion to the allocation of its assets among the underlying funds. Therefore, to the extent that the Fund invests significantly in a particular underlying fund, the Fund’s
performance would be significantly impacted by the performance of such underlying fund. Generally, by investing in a combination of underlying funds, the Fund has exposure to the risks of many areas of the market. By concentrating its investments in
relatively few underlying funds, the Fund may have more concentrated market exposures, subjecting the Fund to greater risk of loss should those markets decline or fail to rise. The ability of the Fund to realize its investment objective will depend,
in large part, on the extent to which the underlying funds realize their investment objectives. There is no guarantee that the underlying funds will achieve their respective investment objectives. The performance of underlying funds could be
adversely affected if other entities that invest in the same underlying funds make relatively large investments or redemptions in such underlying funds. The Fund, and its shareholders, indirectly bear a portion of the expenses of any funds in which
the Fund invests. Because the expenses and costs of each underlying fund are shared by its investors, redemptions by other investors in an underlying fund could result in decreased economies of scale and increased operating expenses for such fund.
These transactions might also result in higher brokerage, tax or other costs for an underlying fund. This risk may be particularly important when one investor owns a substantial portion of an underlying fund. The Investment Manager may have
potential conflicts of interest in selecting affiliated funds over unaffiliated funds for investment by the Fund, and may also face potential conflicts of interest in selecting affiliated funds, because the fees the Investment Manager receives from
some underlying funds may be higher than the fees paid by other underlying funds.
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Geographic Concentration Risk.
The Fund may be particularly susceptible to economic, political, regulatory or other events or conditions affecting issuers and countries within the specific geographic regions in which the Fund invests. Currency
devaluations could occur in countries that have not yet experienced currency devaluation to date, or could continue to occur in countries that have already experienced such devaluations. As a result, the Fund’s NAV may be more volatile than
the NAV of a more geographically diversified fund.
Growth Securities Risk.
Growth securities typically trade at a higher multiple of earnings than other types of equity securities. Accordingly, the market values of growth securities may never reach their expected market value and may decline
in price. In addition, growth securities, at times, may not perform as well as value securities or the stock market in general, and may be out of favor with investors for varying periods of time.
Hedging Transactions Risk.
The Fund may invest in securities and utilize financial instruments for a variety of hedging purposes. Hedging transactions may limit the opportunity for gain if the value of the portfolio position should increase.
There can be no assurance that the Fund will engage in hedging transactions at any given time, even under volatile market conditions, or that any hedging transactions the Fund engages in will be successful. Moreover, it may not be possible for the
Fund to enter into a hedging transaction at a price sufficient to protect its assets. The Fund may not anticipate a particular risk so as to hedge against it.
Hedging against a decline in the value of a
portfolio position does not eliminate fluctuations in the values of portfolio positions or prevent losses if the values of such positions decline, but establishes other positions designed to gain from those same developments, thus moderating the
decline in the portfolio positions’ value. Such hedging transactions also limit the opportunity for gain if the value of the portfolio position should increase. Moreover, it may not be possible for the Fund to hedge against an exchange rate,
interest rate or security price fluctuation that is so generally anticipated that the Fund is not able to enter into a hedging transaction at a price sufficient to protect its assets from the decline in value of the portfolio positions anticipated
as a result of such fluctuations.
The Fund is
not required to attempt to hedge portfolio positions and, for various reasons, may determine not to do so. Furthermore, the Fund may not anticipate a particular risk so as to hedge against it. While the Fund may enter into hedging transactions to
seek to reduce risk, such transactions may result in a poorer overall performance for the Fund than if the Fund had not engaged in any such hedging transaction. In addition, the degree of correlation between price movements of the instruments used
in a hedging strategy and price movements in the portfolio position being hedged may vary. For a variety of reasons, the Fund may not seek to establish a perfect correlation between such hedging instruments and the portfolio holdings being hedged.
Such imperfect correlation may prevent the Fund from achieving the intended hedge or expose the Fund to risk of loss. The successful utilization of hedging and risk management transactions requires skills complementary to those needed in the
selection of the Fund’s portfolio holdings. Moreover, it should be noted that a portfolio will always be exposed to certain risks that cannot be hedged, such as credit risk (relating both to particular securities and counterparties), liquidity
risk and widening risk.
High-Yield Securities
Risk.
Securities rated below investment grade (commonly called “high-yield” or “junk” bonds) and unrated securities of comparable quality tend to be more sensitive to credit risk than
higher-rated securities and may experience greater price fluctuations in response to perceived changes in the ability of the issuing entity or obligor to pay interest and principal when due than to changes in interest rates. These investments are
generally more likely to experience a default than higher-rated securities. High-yield securities are considered to be predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal. These securities
typically pay a premium — a higher interest rate or yield — because of the increased risk of loss, including default. High-yield securities may require a greater degree of judgment to establish a price, may be difficult to sell at the
time and price the Fund desires, may carry high transaction costs, and also are generally less liquid than higher-rated securities. The securities ratings provided by third party rating agencies 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. In adverse economic and other circumstances, issuers of lower-rated securities are more likely to have
difficulty making principal and interest payments than issuers of higher-rated securities.
Highly Leveraged Transactions Risk.
The loans or other securities in which the Fund invests may consist of transactions involving refinancings, recapitalizations, mergers and acquisitions and other financings for general corporate purposes. The
Fund’s investments also may include senior obligations of a borrower issued in connection with a restructuring pursuant to Chapter 11 of the U.S. Bankruptcy Code (commonly known as “debtor-in-possession” financings), provided that
such senior obligations are determined by the Fund’s portfolio managers to be a suitable investment for the Fund. In such highly leveraged transactions, the borrower assumes large amounts of debt in order to have the financial resources to
attempt to achieve its business objectives. Such business objectives may include but are not limited to: management’s taking over control of a company (leveraged buy-out); reorganizing the assets and liabilities of a company (leveraged
recapitalization); or acquiring another company. Loans or securities that are part of highly leveraged transactions involve a greater risk (including default and bankruptcy) than other investments.
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Impairment of Collateral Risk.
The value of collateral, if any, securing a loan can decline, and may be insufficient to meet the borrower’s obligations or difficult or costly to liquidate. In addition, the Fund’s access to collateral may
be limited by bankruptcy or other insolvency laws. Further, certain floating rate and other loans may not be fully collateralized and may decline in value.
Inflation Risk.
Inflation risk is the uncertainty over the future real value (after inflation) of an investment. Inflation rates may change frequently and drastically as a result of various factors, including unexpected shifts in
the domestic or global economy, and the Fund’s investments may not keep pace with inflation, which may result in losses to Fund investors.
Inflation-Protected Securities Risk.
Inflation-protected debt securities tend to react to changes in real interest rates. Real interest rates can be described as nominal interest rates minus the expected impact of inflation. In general, the price of an
inflation-protected debt security falls when real interest rates rise, and rises when real interest rates fall. Interest payments on inflation-protected debt securities will vary as the principal and/or interest is adjusted for inflation and may be
more volatile than interest paid on ordinary bonds. In periods of deflation, the Fund may have no income at all from such investments. Income earned by a shareholder depends on the amount of principal invested, and that principal will not grow with
inflation unless the shareholder reinvests the portion of Fund distributions that comes from inflation adjustments. A Fund’s investment in certain inflation-protected debt securities may generate taxable income in excess of the interest they
pay to the Fund, which may cause the Fund to sell investments to obtain cash to make income distributions to shareholders, including at times when it may not be advantageous to do so.
IPO Risk.
IPOs are
subject to many of the same risks as investing in companies with smaller market capitalizations. To the extent the Fund determines to invest in IPOs, it may not be able to invest to the extent desired, because, for example, only a small portion (if
any) of the securities being offered in an IPO are available to the Fund. The investment performance of the Fund during periods when it is unable to invest significantly or at all in IPOs may be lower than during periods when the Fund is able to do
so. In addition, as the Fund increases in size, the impact of IPOs on the Fund’s performance will generally decrease. IPOs sold within 12 months of purchase may result in increased short-term capital gains, which will be taxable to the
Fund’s shareholders as ordinary income.
Interest Rate Risk.
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of
debt securities 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 will generally affect the value of the Fund's shares. In general, the longer the maturity or duration of
a debt security, the greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest rates may
negatively impact the Fund’s performance. Actions by governments and central banking authorities can result in increases in interest rates. Such actions may negatively affect the value of fixed-income securities held by the Fund, resulting in
a negative impact on the Fund's performance and NAV. Securities with floating coupon rates are typically less sensitive to interest rate changes, but these securities may decline in value if their coupon rates do not rise as much as, or keep pace
with, yields on such types of securities. Because rates on certain floating rate loans and other debt securities reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause
fluctuations in the Fund’s NAV.
Many economies around the world, including the
United States, are experiencing historically low interest rate levels; however, interest rates may soon begin to rise, especially to the extent that economies begin to appear more stable and demonstrate signs of growth. Any interest rate increases
could cause the value of a Fund’s investments in debt securities to decrease. Rising interest rates may prompt redemptions from a Fund, which may force the Fund to sell investments at a time when it is not advantageous to do so, which could
result in losses.
Investing in Other
Funds Risk.
The Fund’s investment in other funds (affiliated and/or unaffiliated funds, including exchange-traded funds (ETFs)) subjects the Fund to the investment performance (positive or negative) and risks
of the underlying funds in direct proportion to the Fund’s investment therein. In addition, investments in ETFs have unique characteristics, including, but not limited to, the expense structure and additional expenses associated with investing
in ETFs. The performance of the underlying funds could be adversely affected if other investors in the same underlying funds make relatively large investments or redemptions in such underlying funds. The Fund, and its shareholders, indirectly bear a
portion of the expenses of any funds in which the Fund invests. Because the expenses and costs of a fund are shared by its investors, redemptions by other investors in the underlying funds could result in decreased economies of scale and increased
operating expenses for such fund. These transactions might also result in higher brokerage, tax or other costs for the underlying funds. This risk may be particularly important when one investor owns a substantial portion of the underlying funds.
The Investment Manager may have potential conflicts of interest in selecting affiliated underlying funds for investment by the Fund because the fees paid to it by some underlying funds are higher than the fees paid by other underlying funds, as well
as a potential conflict in selecting affiliated funds over unaffiliated funds. Also, to the extent that the Fund is constrained/restricted from investing (or investing further) in a particular underlying fund for one or more reasons (e.g.,
underlying fund capacity constraints or regulatory restrictions) or if the Fund chooses to sell its investment in an underlying fund because of poor investment performance or for other reasons, the Fund
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may have to invest in one or more other underlying funds, including
less desirable funds – from a strategy or investment performance standpoint – which could have a negative impact on Fund performance. In addition, Fund performance could be negatively impacted if one or more appropriate alternate
underlying funds are not identified or available for investment timely or at all.
Issuer Risk.
An
issuer in which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may be caused by poor management
decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or factors.
Leverage Risk.
Leverage occurs when the Fund increases its assets available for investment using borrowings, short sales, derivatives, or similar instruments or techniques. If the Fund uses leverage, through purchasing particular instruments such as derivatives,
the Fund has the risk of capital losses that exceed the net assets of the Fund. Because short sales involve borrowing securities and then selling them, the Fund’s short sales effectively leverage the Fund’s assets. The Fund’s
assets that are used as collateral to secure the Fund’s obligations to return the securities sold short may decrease in value while the short positions are outstanding, which may force the Fund to use its other assets to increase the
collateral. Leverage can create an interest expense that may lower the Fund's overall returns. Leverage presents the opportunity for increased net income and capital gains, but may also exaggerate the Fund’s volatility and risk of loss. There
can be no guarantee that a leveraging strategy will be successful.
Liquidity Risk.
Liquidity risk is the risk associated with a lack of marketability of investments which may make it difficult to sell the investments at a desirable time or price. Decreases in the number of financial
institutions,
including banks and broker-dealers willing to make markets (matching up sellers and buyers) in the Fund’s investments or in their capacity or willingness to trade such investments may
increase the Fund’s exposure to this risk. The debt market has experienced considerable growth, and financial institutions making markets in instruments purchased and sold by the Fund (e.g., bond dealers) have experienced increased regulation
over their businesses, and the impact of that growth and regulation on the ability and willingness of financial institutions to engage in trading or “making a market” in such instruments remains unsettled. As a result, the Fund, when
seeking to sell its portfolio investments, could find that selling is more difficult than anticipated, especially during times of higher market volatility. Market participants attempting to sell the same or similar instrument at the same time as the
Fund could exacerbate the Fund’s exposure to liquidity risk. The Fund may have to accept a lower selling price for the holding, sell other investments that it might otherwise prefer to hold, or forego another, more appealing investment
opportunity. Certain securities that were liquid when purchased by the Fund may later become illiquid, particularly in times of overall economic distress. Changing regulatory, market or other conditions or environments (for example, the interest
rate or credit environments) may also adversely affect the liquidity and the price of the Fund's investments. Certain types of investments,
such as structured notes and non-investment grade fixed
income
securities, as an example,
may be especially subject to liquidity risk. Judgment also plays a larger role in valuing illiquid investments as compared to valuing
liquid investments. Price volatility may be higher for illiquid or less liquid investments as a result of, for example, the relatively less frequent pricing of such securities (as compared to liquid or more liquid investments). Generally, the less
liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. Liquidity of the market and other factors can lead to an increase in Fund redemptions, which may negatively impact
Fund performance and NAV, including, for example, if the Fund is forced to sell securities in a down market.
Governments and their regulatory agencies and
self-regulatory organizations may take actions that affect the regulation of the instruments in which the Fund invests, or the issuers of such instruments, in ways that are unforeseeable. Legislation or regulation may also change the way in which
the Fund or the Investment Manager or any Fund subadviser, as the case may be, are regulated or supervised. Such legislation or regulation could affect or preclude a Fund’s ability to achieve its investment objective.
Governments and their regulatory agencies and
self-regulatory organizations may also acquire distressed assets from financial institutions and acquire ownership interests in those institutions. The implications of government ownership and disposition of these assets are unclear, and such a
program may have positive or negative effects on the liquidity, valuation and performance of a Fund’s portfolio holdings. Furthermore, volatile financial markets can expose the Funds to greater market and liquidity risk and potential
difficulty in valuing portfolio instruments held by the Funds.
While the Investment Manager and any subadvisers can
endeavor to take various preventative measures to address liquidity risk, including conducting periodic portfolio risk analysis/management and stress-testing, such measures may not be successful and may not have fully accounted for the specific
circumstances that ultimately impact a Fund and its holdings.
Listed Private Equity Fund Investment Risk.
Private equity funds include financial institutions or vehicles whose principal business is to invest in and lend capital to privately held companies. The Fund is subject to the underlying risks that affect private
equity funds in which it invests, which may include increased liquidity risk, valuation risk, sector risk and credit risk. Limited or
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incomplete information about the companies in which private equity
funds invest, and relatively concentrated investment portfolios of private equity funds, may expose the Fund to greater volatility and risk of loss. Fund investment in private equity funds subjects Fund shareholders indirectly to the fees and
expenses incurred by private equity funds.
Loan Assignment/Loan Participation
Risk.
If a bank loan is acquired through an assignment, the Fund may not be able to unilaterally enforce all rights and remedies under the loan and with regard to any associated collateral. If a bank loan is
acquired through a participation, the Fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement against the borrower, and the Fund may not benefit from the collateral supporting the debt obligation
in which it has purchased the participation. As a result, the Fund will be exposed to the credit risk of both the borrower and the institution selling the participation.
Macro Strategy Risk.
The profitability of any macro program depends primarily on the ability of its manager to predict derivative contract price movements to implement investment theses regarding macroeconomic trends. Price movements for commodity interests are
influenced by, among other things: changes in interest rates; governmental, agricultural, trade, fiscal, monetary and exchange control programs and policies; weather and climate conditions; natural disasters, such as hurricanes; changing supply and
demand relationships; changes in balances of payments and trade; U.S. and international rates of inflation and deflation; currency devaluations and revaluations; U.S. and international political and economic events; and changes in philosophies and
emotions of market participants. The manager’s trading methods may not take all of these factors into account.
The global macro programs to which the Fund’s
investments are exposed typically use derivative financial instruments that are actively traded using a variety of strategies and investment techniques that involve significant risks. The derivative financial instruments traded include commodities,
currencies, futures, options and forward contracts and other derivative instruments that have inherent leverage and price volatility that result in greater risk than instruments used by typical mutual funds, and the systematic programs used to trade
them may rely on proprietary investment strategies that are not fully disclosed, which may in turn result in risks that are not anticipated.
Market Risk.
Market
risk refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. Security values may fall or fail to rise because of a variety of actual or
perceived factors affecting an issuer (e.g., an unfavorable earnings report), the industry or sector in which it operates, or the market as a whole, which may reduce the value of an investment in the Fund. Accordingly, an investment in the Fund
could lose money over short or long periods. The market values of the securities the Fund holds 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. Although equity securities generally tend to have greater price volatility than debt securities, under certain market conditions, debt securities may have comparable or greater price volatility. In addition, stock prices may be sensitive to
rising interest rates, as the cost of capital rises and borrowing costs increase.
Master Limited Partnership Risk.
Investments in securities (units) of master limited partnerships involve risks that differ from an investment in common stock. Holders of these units have more limited rights to vote on matters affecting the
partnership. These units may be subject to cash flow and dilution risks. There are also certain tax risks associated with such an investment. In particular, the Fund’s investment in master limited partnerships can be limited by the
Fund’s intention to qualify as a regulated investment company for U.S. federal income tax purposes, and can limit the Fund’s ability to so qualify. In addition, conflicts of interest may exist between common unit holders, subordinated
unit holders and the general partner of a master limited partnership, including a conflict arising as a result of incentive distribution payments. In addition, there are risks related to the general partner’s right to require unit holders to
sell their common units at an undesirable time or price.
Mid-Cap Company Securities Risk.
Securities of mid-capitalization companies (mid-cap companies) can, in certain circumstances, have more risk than securities of larger capitalization companies (larger companies). For example, mid-cap companies may be
more vulnerable to market downturns and adverse business or economic events than larger companies because they may have more limited financial resources and business operations. Mid-cap companies are also more likely than larger companies to have
more limited product lines and operating histories and to depend on smaller management teams. Securities of mid-cap companies may trade less frequently and in smaller volumes and may fluctuate more sharply in value than securities of larger
companies. When the Fund takes significant positions in mid-cap companies with limited trading volumes, the liquidation of those positions, particularly in a distressed market, could be difficult and result in Fund investment losses. In addition,
some mid-cap companies may not be widely followed by the investment community, which can lower the demand for their stocks.
Model and Technology Risk.
Investment strategies or programs that are fundamentally dependent on proprietary or licensed technology, such as, among other things, hardware, software, model-based strategies, data gathering systems, order execution,
and trade allocation systems, and/or risk management systems may not be successful on an ongoing basis or could contain errors, omissions, imperfections, or malfunctions. Any such errors, imperfections or limitations in a model could affect
the
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ability of the manager to implement strategies. Despite testing,
monitoring and independent safeguards, these errors may result in, among other things, execution and allocation failures and failures to properly gather and organize data — all of which may have a negative effect on the Fund.
Such errors are often extremely difficult to detect
and some may go undetected for long periods of time and some may never be detected. The adverse impact caused by these errors can compound over time. A manager (and/or the licensor of the models or technology) may detect certain errors that it
chooses, in its sole discretion, not to address or fix. By necessity, models make simplifying assumptions that limit their efficacy. Models that appear to explain prior market data can fail to predict future market events. Moreover, an increasing
number of market participants may rely on models that are similar to those used by a manager (or an affiliate of a manager), which may result in a substantial number of market participants taking the same action with respect to an investment. Should
one or more of these other market participants begin to divest themselves of one or more portfolio investments, the Fund could suffer losses.
Money Market Fund Investment Risk.
An investment in a money market fund is not a bank deposit and is not insured or guaranteed by any bank, the FDIC or any other government agency. Although money market funds seek to preserve the value of investments at
$1.00 per share, it is possible for the Fund to lose money by investing in money market funds. In addition to the fees and expenses that the Fund directly bears, the Fund indirectly bears the fees and expenses of any money market funds in which it
invests, including affiliated money market funds. To the extent these fees and expenses, along with the fees and expenses of any other funds in which the Fund may invest, are expected to equal or exceed 0.01% of the Fund’s average daily net
assets, they will be reflected in the Annual Fund Operating Expenses set forth in the table under “Fees and Expenses of the Fund.” By investing in a money market fund, the Fund will be exposed to the investment risks of the money market
fund in direct proportion to such investment. The money market fund may not achieve its investment objective. The Fund, through its investment in the money market fund, may not achieve its investment objective. To the extent the Fund invests in
instruments such as derivatives, the Fund may hold investments, which may be significant, in money market fund shares to cover its obligations resulting from the Fund’s investments in derivatives. Money market funds and the securities they
invest in are subject to comprehensive regulations. The enactment of new legislation or regulations, as well as changes in interpretation and enforcement of current laws, may affect the manner of operation, performance and/or yield of money market
funds.
Mortgage- and Other Asset-Backed
Securities Risk.
The value of any mortgage-backed and other asset-backed securities held by the Fund 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 or other assets; 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. Other types of asset-backed securities typically represent interests in, or are backed by, pools of receivables such as credit, automobile, student and home equity loans. Mortgage- and other
asset-backed securities can have a fixed or an adjustable rate. Mortgage- and other asset-backed securities are subject to prepayment risk, which is the possibility that the underlying mortgage or other asset 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- and other 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 mortgage- and other asset-backed securities, making them more volatile and more sensitive to changes in
interest rates. 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.
Multi-Strategy Risk.
The multi-strategy approach employed by the Fund involves special risks, which include the risk that investment decisions, at the Fund or the underlying fund level, may conflict with each other; for example, at any
particular time, one manager may be purchasing shares of an issuer whose shares are being sold by another manager. Consequently, the Fund could indirectly incur transaction costs without accomplishing any net investment result. Also, managers may
use proprietary or licensed investment strategies that are based on considerations and factors that are not fully disclosed to the Fund or other investors.
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Moreover, consistent with the Fund’s
investment objectives, these proprietary or licensed investment strategies, which may include quantitative mathematical models or systems, may be changed or refined over time. A manager (or the licensor of the strategies used by the manager) may
make certain changes to the strategies the manager has previously used, may not use such strategies at all (or the manager’s license may be revoked), or may use additional strategies, where such changes or discretionary decisions, and the
reasons for such changes or decisions, are also not disclosed to the Fund or other investors. These strategies may involve risks under some market conditions that are not anticipated by the Investment Manager or the Fund.
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, and include obligations of the governments of the U.S. territories, commonwealths and possessions such as Puerto Rico, the Virgin Islands, Guam and the Northern Mariana Islands to the extent such obligations are exempt from state and
federal income taxes. Municipal securities can be significantly affected by political and legislative changes at the state or federal level. 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 generally 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 Internal Revenue Service (IRS) will
agree with this opinion or that U.S. federal income tax law will not change. In the event the IRS determines that the issuer does not comply with relevant tax requirements or U.S. federal income tax law changes, 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. The amount of publicly available information for municipal issuers is generally less than for corporate issuers.
Certain of the municipalities or territories in
which the Fund may invest have recently experienced significant financial difficulties. A credit rating downgrade relating to, default by, or insolvency or bankruptcy of, one or several municipal security issuers of a state, territory, commonwealth
or possession in which the Fund invests could affect the market values and marketability of many or all municipal obligations of such state, territory, commonwealth or possession.
The Fund’s investments in municipal securities
may include securities of issuers in the health care sector, which subjects the Fund’s investments to the risks associated with that sector, including the risk of regulatory action or policy changes by numerous governmental agencies and
bodies, including federal, state, and local governmental agencies, as well as requirements imposed by private entities, such as insurance companies. A major source of revenue for the health care industry is payments from the Medicare and Medicaid
programs. As a result, the industry is sensitive to legislative changes and reductions in governmental spending for such programs. Numerous other factors may affect the industry, such as general and local economic conditions, demand for services,
expenses (including, among others, malpractice insurance premiums) and competition among health care providers. Additional factors also may adversely affect health care facility operations, such as adoption of legislation proposing a national health
insurance program, other state or local health care reform measures, medical and technological advances that alter the need for or cost of health services or the way in which such services are delivered, changes in medical coverage that alter the
traditional fee-for-service revenue stream, and efforts by employers, insurers, and governmental agencies to reduce the costs of health insurance and health care services.
Opportunistic Investing Risk.
Undervalued securities involve the risk that they may never reach their expected full market value, either because the market fails to recognize the security's intrinsic worth or the expected value was misgauged.
Undervalued securities also may decline in price even though the Investment Manager believes they are already undervalued. Turnaround companies may never improve their fundamentals, may take much longer than expected to improve, or may improve much
less than expected. Development stage companies could fail to develop and deplete their assets, resulting in large percentage losses.
Preferred Stock
Risk.
Preferred stock is a type of stock that generally pays dividends at a specified rate and that has preference over common stock in the payment of dividends and the liquidation of assets. Preferred stock does
not ordinarily carry voting rights. The price of a preferred stock is generally determined by earnings, type of products or services, projected growth rates,
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experience of management, liquidity, and general market conditions
of the markets on which the stock trades. The most significant risks associated with investments in preferred stock include issuer risk, market risk and interest rate risk (
i.e.
, the risk of losses
attributable to changes in interest rates).
Prepayment and Extension Risk.
Prepayment risk is the risk that a loan, bond or other security or investment might be called or otherwise converted, prepaid or redeemed before maturity, and extension risk is the risk that the investment might not be
called as expected. In the case of prepayment risk, if the investment is converted, prepaid or redeemed before maturity, particularly during a time of declining interest rates or spreads, the portfolio managers may not be able to invest the proceeds
in other investments providing as high a level of income, resulting in a reduced yield to the Fund. Conversely, in the case of extension risk, as interest rates rise or spreads widen, the likelihood of prepayment decreases and the maturity of the
investment may extend the life of the investment beyond the prepayment time. If the Fund's investments are locked in at a lower interest rate for a longer period of time, the portfolio managers may be unable to capitalize on securities with higher
interest rates or wider spreads.
Quantitative Model Risk.
The Fund may use quantitative methods to select investments. Securities or other investments selected using quantitative methods may perform differently from the market as a whole or from their expected performance for
many reasons, including factors used in building the quantitative analytical framework, the weights placed on each factor, and changing sources of market returns, among others. Any errors or imperfections in the Fund portfolio manager’s
quantitative analyses or models, or in the data on which they are based, could adversely affect the portfolio manager’s effective use of such analyses or models, which in turn could adversely affect the Fund’s performance. It is not
possible or practicable for a manager to factor all relevant, available data into quantitative model forecasts and/or trading decisions. Quantitative managers will use their discretion to determine what data to gather with respect to an investment
strategy and what data the models will take into account to produce forecasts that may have an impact on ultimate trading decisions. Shareholders should be aware that there is no guarantee that a quantitative manager will use any specific data or
type of data in making trading decisions on behalf of the Fund, nor is there any guarantee that the data actually utilized in generating forecasts or making trading decisions on behalf of the Fund will be the most accurate data available or free
from errors. There can be no assurance that these methodologies will enable the Fund to achieve its objective.
Real Estate-Related Investment Risk.
Investments in real estate investment trusts (REITs) and in securities of other companies (wherever organized) principally engaged in the real estate industry subject the Fund to, among other things, risks similar to
those of direct investments in real estate and the real estate industry in general. These include risks related to general and local economic conditions, possible lack of availability of financing and changes in interest rates or property values.
REITs are entities that either own properties or make construction or mortgage loans, and also may include operating or finance companies. The value of interests in a REIT may be affected by, among other factors, changes in the value of the
underlying properties owned by the REIT, changes in the prospect for earnings and/or cash flow growth of the REIT itself, defaults by borrowers or tenants, market saturation, decreases in market rates for rents, and other economic, political, or
regulatory matters affecting the real estate industry, including REITs. REITs and similar non-U.S. entities depend upon specialized management skills, may have limited financial resources, may have less trading volume in their securities, and may be
subject to more abrupt or erratic price movements than the overall securities markets. REITs are also subject to the risk of failing to qualify for favorable tax treatment under the Internal Revenue Code of 1986, as amended. Some REITs (especially
mortgage REITs) are affected by risks similar to those associated with investments in debt securities including changes in interest rates and the quality of credit extended.
Redemption Risk.
The
Fund may need to sell portfolio securities to meet redemption requests. The Fund could experience a loss when selling portfolio securities to meet redemption requests if there is (i) significant redemption activity by shareholders, including, for
example, when a single investor or few large investors make a significant redemption of Fund shares, (ii) a disruption in the normal operation of the markets in which the Fund buys and sells portfolio securities or (iii) the inability of the Fund to
sell portfolio securities because such securities are illiquid. In such events, the Fund could be forced to sell portfolio securities at unfavorable prices in an effort to generate sufficient cash to pay redeeming shareholders. The Fund may suspend
redemptions or the payment of redemption proceeds when permitted by applicable regulations.
Regulatory Risk — Alternative Investments.
Legal, tax, and regulatory developments may adversely affect the Fund and its investments. The regulatory environment for the Fund and certain of its investments is evolving, and changes in the regulation of investment
funds, their managers, and their trading activities and capital markets, or a regulator’s disagreement with the Fund’s or other’s interpretation of the application of certain regulations, may adversely affect the ability of the
Fund to pursue its investment strategy, its ability to obtain leverage and financing, and the value of investments held by the Fund. There has been an increase in governmental, as well as self-regulatory, scrutiny of the investment industry in
general and the alternative investment industry in particular. It is impossible to predict what, if any, changes in regulations may occur, but any regulation that restricts
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the ability of the Fund or any underlying funds or other
investments to trade in securities or other instruments or the ability of the Fund or underlying funds to employ, or brokers and other counterparties to extend, credit in their trading (as well as other regulatory changes that result) could have a
material adverse impact on the Fund’s performance.
Shareholders should understand that the Fund’s
business is dynamic and is expected to change over time. Therefore, the Fund and its underlying investments may be subject to new or additional regulatory constraints in the future. Such regulations may have a significant impact on shareholders or
the operations of the Fund, including, without limitation, restricting the types of investments the Fund may make, preventing the Fund from exercising its voting rights with regard to certain financial instruments, requiring the Fund to disclose the
identity of its investors or otherwise. To the extent the Fund or its underlying investments are subject to such regulation, such regulations may have a detrimental effect on one or more shareholders. Prospective investors are encouraged to consult
their own advisors regarding an investment in the Fund.
Regulatory Risk — Money Market Funds.
Money market funds and the securities they invest in are subject to comprehensive regulations. The enactment of new legislation or regulations, as well as changes in interpretation and enforcement of current laws, may
affect the manner of operation, performance and/or yield of money market funds. For example, in July 2014, the SEC adopted amendments to money market regulation designed to address, among other things, systemic risks associated with money market
funds and to enhance transparency for money market fund investors. These rules provide for liquidity fees or redemption gates for non-government money market funds if portfolio liquidity drops below specified levels and will require institutional
prime money market funds to price shares with a floating net asset value. These rule changes may impact the future operations, performance and/or yields of the Columbia money market funds and other money market funds. Non-governmental money market
funds will be required to restrict beneficial owners to natural persons if they want to maintain a stable net asset value. Because government money market funds will not be required to float their net asset value or impose liquidity fees or
redemption gates, money market funds may decide to change investment strategies to qualify as government money market funds. Money market funds are required to comply with the liquidity fees, redemption gates and floating net asset value rules by
October 2016 and most of the other rules by April 2016.
Reinvestment Risk.
Reinvestment risk is the risk that the Fund will not be able to reinvest income or principal at the same return it is currently earning.
Repurchase Agreements Risk.
Repurchase agreements are agreements in which the seller of a security to the Fund agrees to repurchase that security from the Fund 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 Fund's income and the value of your investment in the Fund to decline.
Reverse Repurchase Agreements Risk.
Reverse repurchase agreements are agreements in which a Fund sells a security to a counterparty, such as a bank or broker-dealer, in return for cash and agrees to repurchase that security at a mutually agreed upon price
and time. Reverse repurchase agreements carry the risk that the market value of the security sold by the Fund may decline below the price at which the Fund must repurchase the security. Reverse repurchase agreements also may be viewed as a form of
borrowing, and borrowed assets used for investment creates leverage risk. Leverage can create an interest expense that may lower the Fund's overall returns. Leverage presents the opportunity for increased net income and capital gains, but may also
exaggerate the Fund’s volatility and risk of loss. There can be no guarantee that this strategy will be successful.
Rule 144A Securities Risk.
The Fund may invest significantly in privately placed “Rule 144A” securities that are determined to be liquid in accordance with procedures adopted by the Fund’s Board. However, an insufficient number
of qualified institutional buyers interested in purchasing Rule 144A securities at a particular time could affect adversely the marketability of such securities and the Fund might be unable to dispose of such securities promptly or at reasonable
prices. Accordingly, even if determined to be liquid, the Fund’s holdings of Rule 144A securities may increase the level of Fund illiquidity if eligible buyers become uninterested in buying them at a particular time. The Fund may also have to
bear the expense of registering the securities for resale and the risk of substantial delays in effecting the registration. Additionally, the purchase price and subsequent valuation of restricted and illiquid securities normally reflect a discount,
which may be significant, from the market price of comparable securities for which a more liquid market exists. Issuers of Rule 144A securities are required to furnish information to potential investors upon request. However, the required disclosure
is much less extensive than that required of public companies and is not publicly available since it is not filed with the SEC. Further, issuers of Rule 144A securities can require recipients of the information (such as the Fund) to agree
contractually to keep the information confidential, which could also adversely affect the Fund’s ability to dispose of the security.
Sector Risk.
At
times, the Fund may have a significant portion of its assets invested in securities of companies conducting business in a related group of industries within an economic sector. Companies in the same economic sector may be similarly affected by
economic, regulatory, political or market events or conditions, which may make the Fund more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly. Generally, the more broadly the Fund invests, the more
it spreads risk and potentially reduces the risks of loss and volatility.
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Sector Risk — Consumer Discretionary Sector
Investments.
To the extent a Fund concentrates its investments in companies in the consumer discretionary sector, it may be more susceptible to the particular risks that may affect companies in that sector than if
it were invested in a wider variety of companies in unrelated sectors. Companies in the consumer discretionary sector are subject to certain risks, including fluctuations in the performance of the overall domestic and international economy, interest
rate changes, increased competition and consumer confidence. Performance of such companies may be affected by factors including reduced disposable household income, reduced consumer spending, changing demographics and consumer tastes.
Sector Risk — Energy Sector Investments.
To the extent a Fund concentrates its investments in companies in the energy sector, it may be more susceptible to the particular risks that may affect companies in that sector than if it were invested in a wider
variety of companies in unrelated sectors. Companies in the energy sector are subject to certain risks, including legislative or regulatory changes, adverse market conditions and increased competition. Performance of such companies may be affected
by factors including, among others, fluctuations in energy prices and supply and demand of energy fuels, energy conservation, the success of exploration projects, events occurring in nature and local and international politics. In addition, rising
interest rates and high inflation may affect the demand for certain natural resources and, therefore, the performance of companies in the energy sector.
Sector Risk — Financial Services Sector
Investments.
To the extent a Fund concentrates its investments in companies in the financial services sector, it may be more susceptible to the particular risks that may affect companies in that sector than if it
were invested in a wider variety of companies in unrelated sectors. Companies in the financial services sector are subject to certain risks, including the risk of regulatory change, decreased liquidity in credit markets and unstable interest rates.
Such companies may have concentrated portfolios, such as a high level of loans to real estate developers, which makes them vulnerable to economic conditions that affect that industry. Performance of such companies may be affected by competitive
pressures and exposure to investments or agreements that, under certain circumstances, may lead to losses (
e.g.
, subprime loans). Companies in the
financial services sector are subject to extensive governmental regulation that may limit the amount and types of loans and other financial commitments they can make, and interest rates and fees that they may charge. In addition, profitability of
such companies is largely dependent upon the availability and the cost of capital.
Sector Risk — Health Care Sector Investments.
To the extent a Fund concentrates its investments in companies in the health care sector, it may be more susceptible to the particular risks that may affect companies in that sector than if it were invested in a wider
variety of companies in unrelated sectors. Companies in the health care sector are subject to certain risks, including restrictions on government reimbursement for medical expenses, government approval of medical products and services, competitive
pricing pressures, and the rising cost of medical products and services (especially for companies dependent upon a relatively limited number of products or services). Performance of such companies may be affected by factors including, government
regulation, obtaining and protecting patents (or the failure to do so), product liability and other similar litigation as well as product obsolescence.
Sector Risk — Industrials Sector Investments.
To the extent a Fund concentrates its investments in companies in the industrials sector, it may be more susceptible to the particular risks that may affect companies in that sector than if it were invested in a wider
variety of companies in unrelated sectors. Companies in the industrials sector are subject to certain risks, including changes in supply and demand for their specific product or service and for industrial sector products in general, including
decline in demand for such products due to rapid technological developments and frequent new product introduction. Performance of such companies may be affected by factors including government regulation, world events and economic conditions and
risks for environmental damage and product liability claims.
Sector Risk — Technology and Technology-Related
Sector Investment Risk.
To the extent a Fund concentrates its investments in companies in technology and technology related sectors, it may be more susceptible to the particular risks that may affect companies in
those sectors, as well as other technology-related sectors (collectively, the technology sectors) than if it were invested in a wider variety of companies in unrelated sectors. Companies in the technology sectors are subject to certain risks,
including the risk that new services, equipment or technologies will not be accepted by consumers and businesses or will become rapidly obsolete. Performance of such companies may be affected by factors including obtaining and protecting patents (or
the failure to do so) and significant competitive pressures, including aggressive pricing of their products or services, new market entrants, competition for market share and short product cycles due to an accelerated rate of technological
developments. Such competitive pressures may lead to limited earnings and/or falling profit margins. As a result, the value of their securities may fall or fail to rise. In addition, many technology sector companies have limited operating histories
and prices of these companies’ securities historically have been more volatile than other securities, especially over the short term.
Short Positions
Risk.
A Fund that establishes short positions introduces more risk to the Fund than a fund that only takes long positions (where the Fund owns the instrument or other asset) because the maximum sustainable loss on
an instrument or other asset purchased (held long) is limited to the amount paid for the instrument or other asset plus the transaction costs, whereas there is no maximum price of the shorted instrument or other asset when purchased in the open
market. Therefore, in theory, short positions have unlimited risk. The Fund’s use of short positions in effect “leverages” the Fund. Leverage potentially
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exposes the Fund to greater risks of loss due to unanticipated
market movements, which may magnify losses and increase the volatility of returns. To the extent the Fund takes a short position in a derivative instrument or other asset, this involves the risk of a potentially unlimited increase in the value of
the underlying instrument or other asset.
Small-
and Mid-Cap Company Securities Risk.
Securities of small- and mid-capitalization companies (small- and mid-cap companies) can, in certain circumstances, have a higher potential for gains than securities of larger,
more established companies (larger companies) but may also have more risk. For example, small- and mid-cap companies may be more vulnerable to market downturns and adverse business or economic events than larger companies because they may have more
limited financial resources and business operations. Small- and mid-cap companies are also more likely than larger companies to have more limited product lines and operating histories and to depend on smaller management teams. Securities of small-
and mid-cap companies may trade less frequently and in smaller volumes and may be less liquid and fluctuate more sharply in value than securities of larger companies. When the Fund takes significant positions in small- and mid-cap companies with
limited trading volumes, the liquidation of those positions, particularly in a distressed market, could be prolonged and result in losses to the Fund. In addition, some small- and mid-cap companies may not be widely followed by the investment
community, which can lower the demand for their stocks.
Sovereign Debt Risk.
A sovereign debtor’s willingness or ability to repay principal and pay interest in a timely manner may be affected by a variety of factors, including its cash flow situation, the extent of its reserves, the availability of sufficient foreign
exchange on the date a payment is due, the relative size of the debt service burden to the economy as a whole, the sovereign debtor’s policy toward international lenders, and the political constraints to which a sovereign debtor may be
subject.
With respect to sovereign debt
of emerging market issuers, investors should be aware that certain emerging market countries are among the largest debtors to commercial banks and foreign governments. At times, certain emerging market countries have declared moratoria on the
payment of principal and interest on external debt. Certain emerging market countries have experienced difficulty in servicing their sovereign debt on a timely basis and that has led to defaults and the restructuring of certain indebtedness to the
detriment of debtholders. Sovereign debt risk is increased for emerging market issuers.
Special Situations Risk.
Securities of companies that are involved in an initial public offering or a major corporate event, such as a business consolidation or restructuring, may be exposed to heightened risk because of the high degree of
uncertainty that can be associated with such events. Securities issued in initial public offerings often are issued by companies that are in the early stages of development, have a history of little or no revenues and may operate at a loss following
the offering. It is possible that there will be no active trading market for the securities after the offering, and that the market price of the securities may be subject to significant and unpredictable fluctuations. Initial public offerings are
subject to many of the same risks as investing in companies with smaller market capitalizations. To the extent the Fund determines to invest in initial public offerings, it may not be able to invest to the extent desired, because, for example, only
a small portion (if any) of the securities being offered in an initial public offering are available to the Fund. The investment performance of the Fund during periods when it is unable to invest significantly or at all in initial public offerings
may be lower than during periods when the Fund is able to do so. Securities purchased in initial public offerings which are sold within 12 months after purchase may result in increased short-term capital gains, which will be taxable to the
Fund’s shareholders as ordinary income. Certain “special situation” investments are investments in securities or other instruments that are determined to be illiquid or lacking a readily ascertainable fair value. Certain special
situation investments prevent ownership interests therein from being withdrawn until the special situation investment, or a portion thereof, is realized or deemed realized, which may negatively impact Fund performance. Investing in special
situations may have a magnified effect on the performance of funds with small amounts of assets.
Stripped Securities Risk.
Stripped securities are the separate income or principal components of debt securities. These securities are particularly sensitive to changes in interest rates, and therefore subject to greater fluctuations in price
than typical interest bearing debt securities. For example, stripped mortgage-backed securities have greater interest rate risk than mortgage-backed securities with like maturities, and stripped treasury securities have greater interest rate risk
than traditional government securities with identical credit ratings.
Systems and Technology Risk.
The Investment Manager and, as the case may be, any Fund subadvisers, use various technology in managing the Fund, consistent with its investment objective and strategy described in the Fund’s prospectus. For
example, proprietary and third-party data and systems may be utilized to support decision making for the Fund. Data imprecision, software or other technology malfunctions, programming inaccuracies and similar circumstances may impair the performance
of these systems, which may negatively affect Fund performance.
Trade Claims Risk.
The Fund may also purchase trade claims against companies, including companies in bankruptcy or reorganization proceedings, which include claims of suppliers for goods delivered and not paid, claims for unpaid services rendered, claims for contract
rejection damages and claims related to litigation. An investment in trade claims is very speculative and carries a high degree of risk. Trade claims may be illiquid instruments that generally do not pay interest and there can be no guarantee that
the debtor will ever be able to satisfy the obligation on the trade claim. Trade claims are typically unsecured and
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may be subordinated to other unsecured obligations of a debtor, and
generally are subject to defenses of the debtor with respect to the underlying transaction giving rise to the trade claim. The markets in trade claims are not regulated by U.S. federal securities laws or the SEC.
U.S. Government Obligations Risk.
While U.S. Treasury obligations are backed by the “full faith and credit” of the U.S. Government, such securities are nonetheless subject to credit risk (
i.e.
, the risk that the U.S. Government may be, or may be perceived to be, unable or unwilling to honor its financial obligations, such as making payments).
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.
Valuation Risk.
The
sales price the Fund (or an underlying fund or other investment vehicle) could receive for any particular investment may differ from the Fund’s (or an underlying fund’s or other investment vehicle’s) valuation of the investment,
particularly for securities that trade in thin or volatile markets or that are valued using a fair value methodology that produces an estimate of the fair value of the security/instrument, which may prove to be inaccurate. Investors who purchase or
redeem Fund shares on days when the Fund is holding securities or other instruments (or holding shares of underlying funds or other investment vehicles that have fair-valued securities or other instruments in their portfolios) may receive fewer or
more shares or lower or higher redemption proceeds than they would have received if the Fund (or underlying fund or other investment vehicle) had not fair-valued the security or instrument or had used a different valuation methodology. The value of
foreign securities, certain fixed income securities and currencies, as applicable, may be materially affected by events after the close of the market on which they are valued, but before the Fund determines its net asset value.
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 affects the
amounts distributed to its shareholders, which may cause the Fund to sell investments to obtain cash to make income distributions to shareholders, including at times when it may not be advantageous to do so.
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Borrowings
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.
Lending of Portfolio Securities
To generate additional income, a Fund may lend up to
33%, or such lower percentage specified by the Fund or Adviser, of the value of its total assets (including securities out on loan) to broker-dealers, banks or other institutional borrowers of securities. JPMorgan serves as lending agent (the
Lending Agent) to the Funds pursuant to a securities lending agreement (the Securities Lending Agreement) approved by the Board. Under the Securities Lending Agreement, the Lending Agent loans Fund securities to approved borrowers pursuant to
borrower agreements in exchange for collateral at least equal in value to the loaned securities, marked to market daily. Collateral may consist of cash, securities issued by the U.S. Government or its agencies or instrumentalities (collectively,
“U.S. Government securities”) or such other collateral as may be approved by the Board. For loans secured by cash, the Fund retains the interest earned on cash collateral, but the Fund is required to pay the borrower a rebate for the use
of the cash collateral. For loans secured by U.S. Government securities, the borrower pays a borrower fee to the Lending Agent on behalf of the Fund.
If the market value of the loaned securities goes
up, the Fund will require additional collateral from the borrower. If the market value of the loaned securities goes down, the borrower may request that some collateral be returned. During the existence of the loan, the Fund will receive from the
borrower amounts equivalent to any dividends, interest or other distributions on the loaned securities, as well as interest on such amounts.
Loans are subject to termination by a Fund or a
borrower at any time. A Fund may choose to terminate a loan in order to vote in a proxy solicitation, as described in this SAI under
Investment Management and Other Services – Proxy Voting
Policies and Procedures – General.
Securities lending involves counterparty risk,
including the risk that a borrower may not provide sufficient or any collateral when required or may not return the loaned securities, timely or at all. Counterparty risk also includes a potential loss of rights in the collateral if the borrower or
the Lending Agent defaults or fails financially. This risk is increased if a Fund’s loans are concentrated with a single borrower or limited number of borrowers. There are no limits on the number of borrowers a Fund may use and a Fund may lend
securities to only one or a small group of borrowers. Funds participating in securities lending also bear the risk of loss in connection with investments of cash collateral received from the borrowers. Cash collateral is invested in accordance with
investment guidelines contained in the Securities Lending Agreement and approved by the Board. Some or all of the cash collateral received in connection with the securities lending program may be invested in one or more pooled investment vehicles,
including, among other vehicles, money market funds managed by the Lending Agent (or its affiliates). The Lending Agent shares in any income resulting from the investment of such cash collateral, and an affiliate of the Lending Agent may receive
asset-based fees for the management of such pooled investment vehicles, which may create a conflict of interest between the Lending Agent (or its affiliates) and the Fund with respect to the management of such cash collateral. To the extent that the
value or return of a Fund’s investments of the cash collateral declines below the amount owed to a borrower, a Fund may incur losses that exceed the amount it earned on lending the security. The Lending Agent will indemnify a fund from losses
resulting from a borrower’s failure to return a loaned security when due, but such indemnification does not extend to losses associated with declines in the value of cash collateral investments. The Investment Manager is not responsible for
any loss incurred by the Funds in connection with the securities lending program.
The Funds currently do not participate in the
securities lending program, but the Board may determine to renew participation in the future.
Statement
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INVESTMENT MANAGEMENT AND OTHER SERVICES
The Investment Manager and Subadvisers
Columbia Management Investment Advisers, LLC,
located at 225 Franklin Street, Boston, MA 02110, is the investment adviser of the Funds and also serves as the investment adviser and administrator of other funds in the Columbia Fund Family. The Investment Manager is a wholly-owned subsidiary of
Ameriprise Financial, which is located at 1099 Ameriprise Financial Center, Minneapolis, MN 55474. Ameriprise Financial is a holding company, which primarily conducts business through its subsidiaries to provide financial planning, products and
services that are designed to be utilized as solutions for clients’ cash and liquidity, asset accumulation, income, protection and estate and wealth transfer needs.
The Investment Manager and its investment advisory
affiliates (Participating Affiliates) around the world may coordinate in providing services to their clients. Such coordination may include functional leadership of the business (the “Global” business). From time to time the Investment
Manager (or any affiliated investment subadviser to the Funds, as the case may be) may engage its Participating Affiliates to provide a variety of services such as investment research, investment monitoring, trading,
and discretionary investment management (including portfolio management) to certain accounts managed by the Investment Manager, including the Funds. These Participating Affiliates will provide services to the Investment Manager (or any
affiliated investment subadviser to the Funds as the case may be) either pursuant to sub-advisory agreements, personnel-sharing agreements or similar inter-company arrangements and the Funds will pay no additional fees and expenses as a result of
any such arrangements. These Participating Affiliates, like the Investment Manager, are direct or indirect subsidiaries of Ameriprise and are registered with the appropriate respective regulators in their home jurisdictions and, where required, the
SEC and the CFTC in the United States.
Pursuant to some of these arrangements, certain
employees of these Participating Affiliates may serve as “associated persons” of the Investment Manager and, in this capacity, subject to the oversight and supervision of the Investment Manager and consistent with the investment
objectives, policies and limitations set forth in the Funds' prospectuses and this SAI may provide such services to the Funds on behalf of the Investment Manager.
After the close of business on December 13, 2013,
International Value Fund converted into a stand-alone fund that invests directly in individual portfolio securities rather than investing in the Master Portfolio. Prior to this date, International Value Fund did not pay investment management fees
because advisory services are provided to the Master Portfolio, which is subject to an investment management fee. Upon conversion, International Value Fund became subject to the same investment management fee as the Master Portfolio.
Services Provided
Under the Investment Management Services Agreement, the Investment
Manager has contracted to furnish each Fund with investment research and advice. For these services, unless otherwise noted, each Fund pays a monthly fee to the Investment Manager based on the average of the daily closing value of the total net
assets of a Fund for such month. Under the Investment Management Services Agreement, any liability of the Investment Manager to the Trusts, a Fund and/or its shareholders is limited to situations involving the Investment Manager’s own willful
misfeasance, bad faith, negligence in the performance of its duties or reckless disregard of its obligations and duties. 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 losses suffered by a Fund or its shareholders or creditors.
The Investment Management Services Agreement may be
terminated with respect to a Fund at any time on 60 days’ written notice by the Investment Manager or by the Board or by a vote of a majority of the outstanding voting securities of a Fund. The Investment Management Services Agreement will
automatically terminate upon any assignment thereof, will continue in effect for two years from its initial effective date and thereafter will continue from year to year with respect to a Fund only so long as such continuance is approved at least
annually (i) by the Board or by a vote of a majority of the outstanding voting securities of a 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 Investment Manager or
the Trusts, cast in person at a meeting called for the purpose of voting on such approval.
The Investment Manager pays all compensation of the
Trustees and officers of the Trusts who are employees of the Investment Manager or its affiliates. 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 does not have a duty to pay any Fund operating expenses incurred in the organization and operation of a 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 Investment Manager, at its own expense, provides
office space, facilities and supplies, equipment and personnel for the performance of its functions under each Fund’s Investment Management Services Agreement.
Statement
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Management Fee Rates Paid by the Funds
Each Fund, unless otherwise noted, pays the Investment Manager an
annual fee for its investment management 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 prospectus. The fee is calculated as a percentage of the average daily net assets of each Fund and is paid monthly. The Investment Manager and/or its affiliates may from time to time waive fees and/or reimburse a
Fund’s expenses. See the Funds’ prospectuses for more information.
Investment Management Fee Rates.
The Investment Manager receives a monthly investment advisory fee based on each Fund’s average daily net assets at the following annual rates. Income Builder Fund does not pay the Investment
Manager a direct fee for these services.
Investment Management Services Agreement Fee Schedule
Fund
|
Assets
(billions)
|
Annual
rate at
each asset level
|
Absolute
Return Currency and Income Fund
|
First
$1.0
|
0.890%
|
|
Next
$1.0
|
0.865%
|
|
Next
$1.0
|
0.840%
|
|
Next
$3.0
|
0.815%
|
|
Next
$1.5
|
0.790%
|
|
Next
$1.5
|
0.775%
|
|
Next
$1.0
|
0.770%
|
|
Next
$5.0
|
0.760%
|
|
Next
$5.0
|
0.750%
|
|
Next
$4.0
|
0.740%
|
|
Next
$26.0
|
0.720%
|
|
Over
$50.0
|
0.700%
|
AMT-Free
CA Intermediate Muni Bond Fund
AMT-Free GA Intermediate Muni Bond Fund
AMT-Free MD Intermediate Muni Bond Fund
AMT-Free NC Intermediate Muni Bond Fund
AMT-Free SC Intermediate Muni Bond Fund
AMT-Free VA Intermediate Muni Bond
Fund
|
First
$0.5
|
0.400%
|
Next
$0.5
|
0.350%
|
Next
$0.5
|
0.320%
|
Next
$1.5
|
0.290%
|
Next
$3.0
|
0.280%
|
Over
$6.0
|
0.270%
|
AMT-Free
Tax-Exempt Bond Fund
|
First
$1.0
|
0.410%
|
|
Next
$1.0
|
0.385%
|
|
Next
$1.0
|
0.360%
|
|
Next
$3.0
|
0.335%
|
|
Next
$1.5
|
0.310%
|
|
Next
$2.5
|
0.300%
|
|
Next
$5.0
|
0.290%
|
|
Next
$9.0
|
0.280%
|
|
Next
$26.0
|
0.260%
|
|
Over
$50.0
|
0.250%
|
AP
- Multi-Manager Value Fund
|
First
$0.5
|
0.660%
|
|
Next
$0.5
|
0.615%
|
|
Next
$0.5
|
0.570%
|
|
Next
$1.5
|
0.520%
|
|
Next
$3.0
|
0.510%
|
|
Over
$6.0
|
0.490%
|
Asia
Pacific ex-Japan Fund
|
First
$0.25
|
0.800%
|
|
Next
$0.25
|
0.775%
|
|
Next
$0.25
|
0.750%
|
|
Next
$0.25
|
0.725%
|
|
Next
$0.5
|
0.700%
|
|
Next
$1.5
|
0.650%
|
|
Next
$3.0
|
0.640%
|
|
Next
$14.0
|
0.620%
|
|
Next
$4.0
|
0.610%
|
|
Next
$26.0
|
0.600%
|
|
Over
$50.0
|
0.570%
|
Statement
of Additional Information – June 1, 2015
|
82
|
Fund
|
Assets
(billions)
|
Annual
rate at
each asset level
|
Commodity
Strategy Fund
|
First
$0.5
|
0.550%
|
|
Next
$0.5
|
0.505%
|
|
Next
$2.0
|
0.480%
|
|
Next
$3.0
|
0.460%
|
|
Over
$6.0
|
0.440%
|
Convertible
Securities Fund
Mid Cap Value Fund
Small/Mid Cap Value Fund
|
First
$0.5
|
0.760%
|
Next
$0.5
|
0.715%
|
Next
$0.5
|
0.670%
|
|
Over
$1.5
|
0.620%
|
Diversified
Equity Income Fund
Dividend Opportunity Fund
Global Opportunities Fund
(a)
|
First
$0.5
|
0.660%
|
Next
$0.5
|
0.615%
|
Next
$0.5
|
0.570%
|
Next
$1.5
|
0.520%
|
Next
$3.0
|
0.510%
|
|
Over
$6.0
|
0.490%
|
Emerging
Markets Bond Fund
|
First
$0.5
|
0.530%
|
|
Next
$0.5
|
0.525%
|
|
Next
$1.0
|
0.515%
|
|
Next
$1.0
|
0.495%
|
|
Next
$3.0
|
0.480%
|
|
Next
$1.5
|
0.455%
|
|
Next
$1.5
|
0.440%
|
|
Next
$1.0
|
0.431%
|
|
Next
$5.0
|
0.419%
|
|
Next
$5.0
|
0.409%
|
|
Next
$4.0
|
0.393%
|
|
Next
$26.0
|
0.374%
|
|
Over
$50.0
|
0.353%
|
European
Equity Fund
|
First
$0.25
|
0.800%
|
|
Next
$0.25
|
0.775%
|
|
Next
$0.25
|
0.750%
|
|
Next
$0.25
|
0.725%
|
|
Next
$0.5
|
0.700%
|
|
Next
$1.5
|
0.650%
|
|
Next
$3.0
|
0.640%
|
|
Next
$14.0
|
0.620%
|
|
Next
$4.0
|
0.610%
|
|
Next
$26.0
|
0.600%
|
|
Over
$50.0
|
0.570%
|
Flexible
Capital Income Fund
|
First
$0.5
|
0.590%
|
|
Next
$0.5
|
0.575%
|
|
Next
$2.0
|
0.560%
|
|
Next
$3.0
|
0.530%
|
|
Over
$6.0
|
0.500%
|
Floating
Rate Fund
High Yield Bond Fund
|
First
$0.25
|
0.590%
|
Next
$0.25
|
0.575%
|
|
Next
$0.25
|
0.570%
|
|
Next
$0.25
|
0.560%
|
|
Next
$1.0
|
0.550%
|
|
Next
$1.0
|
0.540%
|
|
Next
$3.0
|
0.515%
|
|
Next
$1.5
|
0.490%
|
|
Next
$1.5
|
0.475%
|
|
Next
$1.0
|
0.450%
|
|
Next
$5.0
|
0.435%
|
|
Next
$5.0
|
0.425%
|
|
Next
$4.0
|
0.400%
|
|
Next
$26.0
|
0.385%
|
|
Over
$50.0
|
0.360%
|
Statement
of Additional Information – June 1, 2015
|
83
|
Fund
|
Assets
(billions)
|
Annual
rate at
each asset level
|
Global
Bond Fund
|
First
$1.0
|
0.570%
|
|
Next
$1.0
|
0.525%
|
|
Next
$1.0
|
0.520%
|
|
Next
$3.0
|
0.515%
|
|
Next
$1.5
|
0.510%
|
|
Next
$4.5
|
0.500%
|
|
Next
$8.0
|
0.490%
|
|
Next
$30.0
|
0.480%
|
|
Over
$50.0
|
0.470%
|
Global
Equity Value Fund
|
First
$0.5
|
0.660%
|
|
Next
$0.5
|
0.615%
|
|
Next
$0.5
|
0.570%
|
|
Next
$1.5
|
0.520%
|
|
Next
$3.0
|
0.510%
|
|
Over
$6.0
|
0.490%
|
Global
Infrastructure Fund
|
First
$1.0
|
0.650%
|
|
Next
$1.0
|
0.600%
|
|
Next
$4.0
|
0.550%
|
|
Over
$6.0
|
0.500%
|
Income
Opportunities Fund
|
First
$0.25
|
0.590%
|
|
Next
$0.25
|
0.575%
|
|
Next
$0.25
|
0.570%
|
|
Next
$0.25
|
0.560%
|
|
Next
$1.0
|
0.550%
|
|
Next
$1.0
|
0.540%
|
|
Next
$3.0
|
0.515%
|
|
Next
$1.5
|
0.490%
|
|
Next
$1.5
|
0.475%
|
|
Next
$1.0
|
0.450%
|
|
Next
$5.0
|
0.435%
|
|
Next
$5.0
|
0.425%
|
|
Next
$4.0
|
0.400%
|
|
Next
$26.0
|
0.385%
|
|
Over
$50.0
|
0.360%
|
Inflation
Protected Securities Fund
|
First
$1.0
|
0.440%
|
|
Next
$1.0
|
0.415%
|
|
Next
$1.0
|
0.390%
|
|
Next
$3.0
|
0.365%
|
|
Next
$1.5
|
0.340%
|
|
Next
$1.5
|
0.325%
|
|
Next
$1.0
|
0.320%
|
|
Next
$5.0
|
0.310%
|
|
Next
$5.0
|
0.300%
|
|
Next
$4.0
|
0.290%
|
|
Next
$26.0
|
0.270%
|
|
Over
$50.0
|
0.250%
|
International
Opportunities Fund
International Value Fund
Marsico Global Fund
Overseas Value Fund
Select International Equity Fund
|
First
$0.5
|
0.790%
|
Next
$0.5
|
0.745%
|
Next
$0.5
|
0.700%
|
Next
$1.5
|
0.650%
|
Next
$3.0
|
0.640%
|
|
Over
$6.0
|
0.620%
|
Large
Cap Enhanced Core Fund
|
First
$0.5
|
0.690%
|
|
Next
$0.5
|
0.645%
|
|
Next
$0.5
|
0.600%
|
|
Next
$1.5
|
0.550%
|
|
Next
$3.0
|
0.540%
|
|
Over
$6.0
|
0.520%
|
Large
Cap Index Fund
Mid Cap Index Fund
Small Cap Index Fund
|
All
assets
|
0.100%
|
Statement
of Additional Information – June 1, 2015
|
84
|
Fund
|
Assets
(billions)
|
Annual
rate at
each asset level
|
Large
Core Quantitative Fund
Large Growth Quantitative Fund
Large Value Quantitative Fund
|
First
$0.5
|
0.690%
|
Next
$0.5
|
0.645%
|
Next
$0.5
|
0.600%
|
|
Next
$1.5
|
0.550%
|
|
Next
$3.0
|
0.540%
|
|
Over
$6.0
|
0.520%
|
Limited
Duration Credit Fund
Short Term Bond Fund
Short Term Municipal Bond Fund
|
First
$1.0
|
0.360%
|
Next
$1.0
|
0.355%
|
Next
$1.0
|
0.350%
|
|
Next
$3.0
|
0.345%
|
|
Next
$1.5
|
0.330%
|
|
Next
$1.5
|
0.315%
|
|
Next
$1.0
|
0.310%
|
|
Next
$5.0
|
0.300%
|
|
Next
$5.0
|
0.290%
|
|
Next
$4.0
|
0.280%
|
|
Next
$26.0
|
0.260%
|
|
Over
$50.0
|
0.240%
|
Marsico
21st Century Fund
Marsico Flexible Capital Fund
Marsico Focused Equities Fund
Marsico Growth Fund
Select Large Cap Equity Fund
|
First
$0.5
|
0.710%
|
Next
$0.5
|
0.665%
|
Next
$0.5
|
0.620%
|
Next
$1.5
|
0.570%
|
Next
$3.0
|
0.560%
|
|
Over
$6.0
|
0.540%
|
MN
Tax-Exempt Fund
|
First
$0.5
|
0.400%
|
|
Next
$0.5
|
0.350%
|
|
Next
$2.0
|
0.320%
|
|
Next
$3.0
|
0.290%
|
|
Next
$1.5
|
0.280%
|
|
Over
$7.5
|
0.270%
|
Money
Market Fund
|
First
$1.0
|
0.330%
|
|
Next
$0.5
|
0.313%
|
|
Next
$0.5
|
0.295%
|
|
Next
$0.5
|
0.278%
|
|
Next
$2.5
|
0.260%
|
|
Next
$1.0
|
0.240%
|
|
Next
$1.5
|
0.220%
|
|
Next
$1.5
|
0.215%
|
|
Next
$1.0
|
0.190%
|
|
Next
$5.0
|
0.180%
|
|
Next
$5.0
|
0.170%
|
|
Next
$4.0
|
0.160%
|
|
Over
$24.0
|
0.150%
|
Mortgage
Opportunities Fund
|
First
$1.0
|
0.570%
|
|
Next
$1.0
|
0.560%
|
|
Next
$1.0
|
0.550%
|
|
Next
$3.0
|
0.535%
|
|
Next
$1.5
|
0.520%
|
|
Next
$1.5
|
0.505%
|
|
Next
$1.0
|
0.495%
|
|
Over
$10.0
|
0.485%
|
Multi-Advisor
Small Cap Value Fund
|
First
$0.25
|
0.970%
|
|
Next
$0.25
|
0.945%
|
|
Next
$0.25
|
0.920%
|
|
Next
$0.25
|
0.895%
|
|
Over
$1.0
|
0.870%
|
Statement
of Additional Information – June 1, 2015
|
85
|
Fund
|
Assets
(billions)
|
Annual
rate at
each asset level
|
Select
Global Equity Fund
|
First
$0.25
|
0.800%
|
|
Next
$0.25
|
0.775%
|
|
Next
$0.25
|
0.750%
|
|
Next
$0.25
|
0.725%
|
|
Next
$0.5
|
0.700%
|
|
Next
$1.5
|
0.650%
|
|
Next
$3.0
|
0.640%
|
|
Next
$14.0
|
0.620%
|
|
Next
$4.0
|
0.610%
|
|
Next
$26.0
|
0.600%
|
|
Over
$50.0
|
0.570%
|
Select
Large-Cap Value Fund
|
First
$0.5
|
0.710%
|
|
Next
$0.5
|
0.660%
|
|
Next
$2.0
|
0.565%
|
|
Next
$3.0
|
0.560%
|
|
Over
$6.0
|
0.540%
|
Select
Smaller-Cap Value Fund
|
First
$0.5
|
0.790%
|
Small
Cap Value Fund II
|
Next
$0.5
|
0.745%
|
|
Over
$1.0
|
0.700%
|
Seligman
Communications and Information Fund
(b)
Seligman Global Technology Fund
(b)
|
First
$3.0
|
0.855%
|
Next
$1.0
|
0.825%
|
|
Next
$2.0
|
0.775%
|
|
Over
$6.0
|
0.725%
|
U.S.
Government Mortgage Fund
|
First
$1.0
|
0.430%
|
|
Next
$1.0
|
0.420%
|
|
Next
$4.0
|
0.400%
|
|
Next
$1.5
|
0.380%
|
|
Next
$1.5
|
0.365%
|
|
Next
$3.0
|
0.360%
|
|
Next
$8.0
|
0.350%
|
|
Next
$4.0
|
0.340%
|
|
Next
$26.0
|
0.320%
|
|
Over
$50.0
|
0.300%
|
(a)
|
This fee applies to assets
invested in securities, other than underlying funds (including any exchange-traded funds (ETFs)) that pay an investment management services fee to Columbia Management, including other funds advised by the Investment Manager that do not pay an
investment management services fee, derivatives and individual securities. The Fund does not pay an investment management services fee on assets that are invested in underlying funds, including any ETFs, that pay an investment management services
fee to Columbia Management.
|
(b)
|
Effective June 1, 2013, the
management fee schedule changed resulting in a fee rate decrease for certain asset levels.
|
The Investment Manager has
implemented a schedule for the Capital Allocation Portfolios’ and LifeGoal Growth Portfolio’s investment advisory fees whereby each of the Funds pays (i) 0.00% on assets invested in Columbia proprietary funds (excluding any proprietary
fund that does not pay an investment advisory fee to the Investment Manager), (ii) 0.10% on assets invested in non-exchange-traded third-party advised mutual funds and (iii) 0.55% on assets invested in securities, other than third-party advised
mutual funds, and in Columbia proprietary funds that do not pay an advisory fee (including ETFs, derivatives and individual securities).
Under the Investment Management Services Agreement,
a Fund also pays taxes, brokerage commissions and nonadvisory expenses, which include custodian fees and charges; fidelity bond premiums; certain legal fees; registration fees for shares; consultants’ fees; compensation of Board members,
officers and employees not employed by the Investment Manager or its affiliates; corporate filing fees; organizational expenses; expenses incurred in connection with lending securities; interest and fee expense related to a Fund’s
participation in inverse floater structures; and expenses properly payable by a Fund, approved by the Board.
Management Fees Paid.
The table below shows the total management fees paid by each Fund for the last three fiscal periods. The table is organized by fiscal year end. For amounts waived or reimbursed by the Investment
Manager, see
Expense Limitations
.
Statement
of Additional Information – June 1, 2015
|
86
|
Management Fees
|
Management
Fees
|
|
2015
|
2014
|
2013
|
For
Funds with fiscal period ending January 31
|
Capital
Allocation Aggressive Portfolio
|
$426,438
|
$140,922
(a)
|
$0
|
Capital
Allocation Conservative Portfolio
|
196,172
|
90,965
(a)
|
0
|
Capital
Allocation Moderate Aggressive Portfolio
|
1,471,771
|
635,791
|
363,620
|
Capital
Allocation Moderate Conservative Portfolio
|
367,285
|
143,455
|
72,183
|
Capital
Allocation Moderate Portfolio
|
843,399
|
262,273
(a)
|
0
|
LifeGoal
Growth Portfolio
|
1,655
|
930
|
976
|
|
2014
|
2013
|
2012
|
For
Funds with fiscal period ending February 28/29
|
Convertible
Securities Fund
|
4,920,665
|
4,029,231
|
3,779,233
|
Global
Equity Value Fund
|
7,096,328
|
3,883,146
|
4,027,256
(b)
|
International
Opportunities Fund
|
1,990,750
|
3,412,658
|
6,822,834
|
International
Value Fund
(c)
|
463,672
|
9,074,397
|
11,852,353
|
Large
Cap Enhanced Core Fund
|
1,486,208
|
1,466,253
|
1,790,035
|
Large
Cap Index Fund
|
2,824,934
|
2,516,462
|
3,361,680
|
Marsico
21st Century Fund
|
7,285,317
|
9,238,502
|
17,887,734
|
Marsico
Focused Equities Fund
|
8,815,272
|
12,456,659
|
16,803,385
|
Marsico
Global Fund
|
252,327
|
98,982
|
67,749
|
Marsico
Growth Fund
|
13,233,867
|
17,356,927
|
21,081,118
|
Mid
Cap Index Fund
|
3,214,924
|
2,425,603
|
2,746,586
|
Mid
Cap Value Fund
|
25,236,516
|
24,254,448
|
27,755,883
|
Overseas
Value Fund
|
2,394,086
|
230,197
|
256,950
|
Select
International Equity Fund
|
6,937,792
|
8,742,256
|
13,957,643
|
Select
Large Cap Equity Fund
|
4,073,334
|
5,618,096
|
8,114,264
|
Small
Cap Index Fund
|
2,436,410
|
1,875,113
|
2,072,518
|
Small
Cap Value Fund II
|
12,247,710
|
11,200,318
|
12,634,977
|
For
Funds with fiscal period ending March 31
|
Short
Term Bond Fund
|
9,710,525
|
9,818,536
|
10,005,702
|
For
Funds with fiscal period ending April 30
|
AMT-Free
CA Intermediate Muni Bond Fund
|
1,163,315
|
1,185,451
|
1,087,866
(d)
|
AMT-Free
GA Intermediate Muni Bond Fund
|
337,994
|
414,216
|
444,441
(d)
|
AMT-Free
MD Intermediate Muni Bond Fund
|
423,881
|
567,167
|
578,224
(d)
|
AMT-Free
NC Intermediate Muni Bond Fund
|
705,293
|
878,335
|
896,929
(d)
|
AMT-Free
SC Intermediate Muni Bond Fund
|
527,856
|
673,220
|
695,499
(d)
|
AMT-Free
VA Intermediate Muni Bond Fund
|
1,104,819
|
1,426,979
|
1,464,725
(d)
|
Global
Infrastructure Fund
|
3,794,627
|
4,323,624
|
5,828,719
|
Short
Term Municipal Bond Fund
|
7,085,231
|
7,690,029
|
7,630,467
(d)
|
For
Funds with fiscal period ending May 31
|
AP
– Multi-Manager Value Fund
|
7,259,435
|
4,305,942
|
395,908
(e)
|
Commodity
Strategy Fund
|
329,377
|
327,809
|
74,158
(f)
|
Diversified
Equity Income Fund
|
16,132,596
|
16,946,253
|
13,796,950
(g)
|
Dividend
Opportunity Fund
|
32,346,334
|
26,498,467
|
16,009,390
(h)
|
Statement
of Additional Information – June 1, 2015
|
87
|
|
Management
Fees
|
|
2014
|
2013
|
2012
|
Flexible
Capital Income Fund
|
$1,167,007
|
$599,809
|
$218,848
(f)
|
High
Yield Bond Fund
|
10,875,206
|
9,967,625
|
9,145,657
|
Mortgage
Opportunities Fund
|
43,165
(i)
|
N/A
|
N/A
|
Multi-Advisor
Small Cap Value Fund
|
3,651,282
|
3,169,653
|
3,484,297
|
Select
Large-Cap Value Fund
|
4,879,253
|
3,455,207
|
1,551,906
(j)
|
Select
Smaller-Cap Value Fund
|
3,684,668
|
2,970,310
|
1,331,671
(j)
|
Seligman
Communications and Information Fund
|
28,396,766
|
29,194,759
|
13,901,752
(j)
|
Small/Mid
Cap Value Fund
|
11,588,133
|
11,261,420
|
8,196,564
(g)
|
U.S.
Government Mortgage Fund
|
8,269,387
|
10,141,134
|
5,437,912
|
For
Funds with fiscal period ending July 31
|
AMT-Free
Tax-Exempt Bond Fund
|
2,283,062
|
2,651,030
|
1,702,411
(k)
|
Floating
Rate Fund
|
6,369,286
|
3,709,607
|
2,840,938
|
Global
Opportunities Fund
|
5,142,134
|
5,239,774
|
4,748,491
(l)
|
Income
Opportunities Fund
|
17,488,842
|
16,225,334
|
12,015,544
|
Inflation
Protected Securities Fund
|
1,192,132
|
1,657,541
|
2,240,623
|
Large
Core Quantitative Fund
|
22,537,250
|
20,595,326
|
20,202,631
|
Large
Growth Quantitative Fund
|
3,631,799
|
3,701,363
|
3,294,337
(l)
|
Large
Value Quantitative Fund
|
4,021,684
|
1,941,728
|
1,545,185
(l)
|
Limited
Duration Credit Fund
|
3,924,329
|
3,918,794
|
3,453,200
|
MN
Tax-Exempt Fund
|
1,690,284
|
1,873,492
|
1,561,158
(m)
|
Money
Market Fund
|
5,912,176
|
6,082,604
|
6,732,351
|
For
Funds with fiscal period ending August 31
|
Marsico
Flexible Capital Fund
|
1,484,023
|
1,115,261
|
1,514,125
|
For
Funds with fiscal period ending October 31
|
Absolute
Return Currency and Income Fund
|
481,124
|
836,749
|
989,546
|
Asia
Pacific ex-Japan Fund
|
5,197,521
|
3,835,643
|
3,339,296
|
Emerging
Markets Bond Fund
|
4,022,583
|
4,260,710
|
2,907,586
|
European
Equity Fund
|
4,572,257
|
3,078,576
|
2,713,806
|
Global
Bond Fund
|
843,306
|
1,206,698
|
1,518,028
|
Select
Global Equity Fund
|
3,159,681
|
2,996,496
|
3,158,337
|
Seligman
Global Technology Fund
|
4,017,147
|
3,556,109
|
4,028,897
|
(a)
|
The Fund began paying an
advisory fee effective March 1, 2013.
|
(b)
|
The Fund changed its fiscal
year end in 2012 from March 31 to February 28/29. For the fiscal year ended 2012, the information shown is for the period from April 1, 2011 to February 29, 2012.
|
(c)
|
The Fund's advisory fees were
paid at the Master Portfolio level until December 14, 2013, at which time International Value Fund pays the Fees; amounts shown are for the Master Portfolio, which included one additional feeder fund.
|
(d)
|
The Funds changed their fiscal
year end in 2012 from March 31 to April 30. For the fiscal year ended 2012, the information shown is for the 13-month period from April 1, 2011 to April 30, 2012. For the fiscal year ended March 31, 2012, the Funds paid management fees as follows:
AMT-Free CA Intermediate Muni Bond Fund paid $993,751; AMT-Free GA Intermediate Muni Bond Fund paid $409,366; AMT-Free MD Intermediate Muni Bond Fund paid $531,638; AMT-Free NC Intermediate Muni Bond Fund paid $822,262; AMT-Free SC Intermediate Muni
Bond Fund paid $637,516; Short Term Municipal Bond Fund paid $6,944,073; and AMT-Free VA Intermediate Muni Bond Fund paid $1,340,595. For the fiscal period from April 1, 2012 to April 30, 2012, the Funds paid management fees as follows: AMT-Free CA
Intermediate Muni Bond Fund paid $94,115; AMT-Free GA Intermediate Muni Bond Fund paid $35,075; AMT-Free MD Intermediate Muni Bond Fund paid $46,586; AMT-Free NC Intermediate Muni Bond Fund paid $74,667; AMT-Free SC Intermediate Muni Bond Fund paid
$57,983; Short Term Municipal Bond Fund paid $686,394; and AMT-Free VA Intermediate Muni Bond Fund paid $124,130.
|
(e)
|
For the period from April 20,
2012 (commencement of operations) to May 31, 2012.
|
(f)
|
For the period from July 28,
2011 (commencement of operations) to May 31, 2012.
|
(g)
|
Diversified Equity Income Fund
and Small/Mid Cap Value Fund changed their fiscal year end in 2012 from September 30 to May 31. For the fiscal year ended 2012, the information shown is for the period from October 1, 2011 to May 31, 2012. For the fiscal year from October 1, 2010 to
September 30, 2011, the management fees paid were $27,693,306 and $16,135,473 respectively.
|
Statement
of Additional Information – June 1, 2015
|
88
|
(h)
|
The Fund changed its fiscal
year end in 2012 from June 30 to May 31. For the fiscal year ended 2012, the information shown is for the period from July 1, 2011 to May 31, 2012. For the fiscal year from July 1, 2010 to June 30, 2011, the management fees paid were $11,101,095.
|
(i)
|
For the period from April 30,
2014 (commencement of operations) to May 31, 2014.
|
(j)
|
Select Large-Cap Value Fund,
Select Smaller-Cap Value Fund and Seligman Communications and Information Fund changed their fiscal year end in 2012 from December 31 to May 31. For the fiscal year ended 2012, the information shown is for the period from January 1, 2012 to May 31,
2012. For the fiscal year from January 1, 2011 to December 31, 2011, the management fees paid were $3,478,140, $3,665,260 and $32,882,730, respectively.
|
(k)
|
The Fund changed its fiscal
year end in 2012 from November 30 to July 31. For the fiscal year ended 2012, the information shown is for the period from December 1, 2011 to July 31, 2012. For the fiscal year from December 1, 2010 to November 30, 2011, the management fees paid
were $2,421,470.
|
(l)
|
Global Opportunities Fund,
Large Growth Quantitative Fund and Large Value Quantitative Fund changed fiscal year end in 2012 from September 30 to July 31. For the fiscal year ended 2012, the information shown is for the period from October 1, 2011 to July 31, 2012. For the
fiscal year from October 1, 2010 to September 30, 2011, the management fees paid were $5,489,365, $4,402,170 and $2,292,007, respectively.
|
(m)
|
The Fund changed its fiscal
year end in 2012 from August 31 to July 31. For the fiscal year ended 2012, the information shown is for the period from September 1, 2011 to July 31, 2012. For the fiscal year from September 1, 2010 to August 31, 2011, the management fees paid were
$1,445,485.
|
Manager
of Managers Exemption
The SEC has issued an order that
permits the Investment Manager, 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.
For Seligman Communications and Information Fund and
Marsico Growth Fund, if the Funds were to seek to rely on the order, holders of a majority of their outstanding voting securities would need to approve operating the Fund in this manner. There is no assurance shareholder approval, if sought, will be
received, and no changes will be made without shareholder approval until that time.
The Investment Manager 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 Investment Manager does not consider any other relationship it or its affiliates may have with a subadviser, and the Investment Manager discloses to the Board the nature of any
material relationships it has with a subadviser or its affiliates.
Subadvisory Agreements
The assets of certain Funds are managed by subadvisers that have
been selected by the Investment Manager, subject to the review and approval of the Board. The Investment Manager has recommended the subadvisers to the Board based upon its assessment of the skills of the subadvisers in managing other assets in
accordance with objectives and investment strategies substantially similar to those of the applicable Fund. Short-term investment performance is not the only factor in selecting or terminating a subadviser, and the Investment Manager does not expect
to make frequent changes of subadvisers. Subadvisers affiliated with the Investment Manager must be approved by shareholders.
The Investment Manager allocates the assets of a
Fund with multiple subadvisers among the subadvisers. Each subadviser has discretion, subject to oversight by the Board and the Investment Manager, to purchase and sell portfolio assets, consistent with the Fund’s investment objectives,
policies, and restrictions. Generally, the services that a subadviser provides to the Fund are limited to asset management and related recordkeeping services.
The Investment Manager has entered into a
subadvisory agreement with each subadviser under which the subadviser provides investment advisory assistance and day-to-day management of some or all of the Fund’s portfolio, as well as investment research and statistical information. A
subadviser may also serve as a discretionary or non-discretionary investment adviser to management or advisory accounts that are unrelated in any manner to the Investment Manager or its affiliates.
The following table shows the subadvisory fee
schedules for fees paid by the Investment Manager to subadvisers for Funds that have subadvisers. The table is organized by fiscal year end.
Statement
of Additional Information – June 1, 2015
|
89
|
Subadvisers and Subadvisory Agreement Fee Schedules
Fund
|
Subadviser
|
Parent
Company/Other
Information
|
Fee
Schedule
|
For
Funds with fiscal period ending February 28/29
|
Marsico
21st Century Fund
Marsico Focused Equities Fund
Marsico Global Fund
Marsico Growth Fund
|
Marsico
Capital(since inception)
|
A
|
0.35%
on the first $1.5 billion declining to 0.23% as assets increase
(a)
|
Select
International Equity Fund
|
Threadneedle
(effective April 11, 2011)
|
B
|
0.35%
on the first $150 million declining to 0.20% as assets increase
|
For
Funds with fiscal period ending May 31
|
AP
- Multi-Manager Value Fund
|
DFA
(effective December 11, 2013)
|
F
|
0.20%
on the first $100 million, reducing to 0.10% as assets increase
|
Commodity
Strategy Fund
|
Threadneedle
(effective July 28, 2011)
|
B
|
0.25%
on all assets
|
Multi-Advisor
Small Cap Value Fund
|
Barrow
Hanley
(effective March 12, 2004)
|
C
|
1.00%
on the first $10 million, reducing to 0.30% as assets increase
(b)
|
Donald
Smith
(effective March 12, 2004)
|
D
|
0.60%
on the first $175 million, reducing to 0.55% as assets increase
(b)
|
MetWest
Capital
(effective April 24, 2006)
|
E
|
0.50%
on all assets
|
SBH
(effective August 20, 2014)
|
G
|
0.55%
on the first $10 million, reducing to 0.40% as assets increase.
|
For
Funds with fiscal period ending August 31
|
Marsico
Flexible Capital Fund
|
Marsico
Capital
(effective September 22, 2010)
|
A
|
0.35%
on the first $1.5 billion declining to 0.23% as assets increase
(a)
|
For
Funds with fiscal period ending October 31
|
Asia
Pacific ex-Japan Fund
|
Threadneedle
(effective July 15, 2009)
|
B
|
0.45%
on all assets
|
European
Equity Fund
|
Threadneedle
(effective July 9, 2004)
|
B
|
0.35%
on all assets
|
Select
Global Equity Fund
|
Threadneedle
(effective July 9, 2004)
|
B
|
0.35%
on all as assets
|
(a)
|
The fee is calculated based on
the combined net assets of Columbia Funds, or portions thereof, managed by Marsico Capital. This fee schedule became effective on January 23, 2013. Prior to January 23, 2013, the Investment Manager paid Marsico Capital, with respect to Marsico
Flexible Capital Fund, a fee rate of 0.45% on all assets and, with respect to the other Funds, (i) a subadvisory fee for certain Columbia U.S. equity funds, or portions thereof, managed by Marsico Capital (U.S. Funds) at a rate equal to 0.45% on the
first $18 billion of aggregate assets of U.S. Funds declining to 0.35% as assets increase; and (ii) a subadvisory fee for certain Columbia international funds, or portions thereof, managed by Marsico Capital (International Funds) at a rate equal to
0.45% on the first $6 billion of aggregate assets of International Funds declining to 0.35% as assets increase.
|
(b)
|
The fee is calculated based on
the combined net assets of Columbia Funds subject to the subadviser’s investment management.
|
A – Marsico Capital, located at 1200 17th
Street, Suite 1600, Denver, CO 80202, was organized in September 1997 as a Delaware limited liability company and provides investment management services to mutual funds and private accounts. Marsico Capital is an indirect subsidiary of Marsico
Holdings, LLC, a Delaware limited liability company.
B – Threadneedle is a direct subsidiary of
Threadneedle Asset Management Holdings Limited and an affiliate of the Investment Manager, and an indirect wholly-owned subsidiary of Ameriprise Financial. Threadneedle and Threadneedle Asset Management Holdings Limited are located at Cannon Place,
78 Cannon Street, London EC4N 6AG, United Kingdom.
Statement
of Additional Information – June 1, 2015
|
90
|
C – Barrow Hanley, located at 2200 Ross
Avenue, 31
st
Floor, Dallas, TX 75201-2761, is an indirect subsidiary of OM Asset Management plc (“OMAM”), a public company listed on the New York Stock Exchange. OMAM, in turn, is
indirectly majority owned by Old Mutual plc, a public company listed on the London Stock Exchange.
D – Donald Smith, located at 152 West 57th
Street 22nd Floor, New York, NY 10019, is an employee-owned registered investment adviser.
E – MetWest Capital, located at 610 Newport
Center Drive, Suite 1000, Newport Beach, CA 92660, is a subsidiary of Wells Fargo & Company and operates within its asset management division.
F – Dimensional Fund Advisors LP, located at
6300 Bee Cave Road, Building One, Austin, Texas 78746, is controlled and operated by its general partner, Dimensional Holdings Inc., a Delaware corporation.
G – SBH, located at 540 West Madison Street,
Suite 1900, Chicago, Illinois 60661-2551, is majority owned by Thomas Bravo LLC, a private equity firm, with approximately 55% ownership. The remaining approximately 45% is employee-owned.
The following table shows the subadvisory fees paid
by the Investment Manager to subadvisers in the last three fiscal periods or, if shorter, since the Fund’s commencement of operations. The table is organized by fiscal year end.
|
|
Subadvisory
Fees Paid
|
Fund
|
Subadviser
|
2014
|
2013
|
2012
|
For
Funds with fiscal period ending February 28/29
|
International
Opportunities Fund
|
Former
subadviser: Marsico Capital (through May 1, 2015)
|
$719,355
|
$1,849,457
|
$3,832,528
|
International
Value Fund
(a)
|
Former
subadviser: Brandes (through May 31, 2013)
|
767,958
(b)
|
4,076,922
|
7,434,592
|
Marsico
21st Century Fund
|
Marisco
Capital
|
3,065,837
|
5,710,125
|
12,283,168
|
Marsico
Focused Equities Fund
|
Marisco
Capital
|
3,772,906
|
7,950,365
|
11,473,054
|
Marsico
Global Fund
|
Marisco
Capital
|
92,472
|
52,606
|
38,150
|
Marsico
Growth Fund
|
Marisco
Capital
|
5,952,687
|
11,526,461
|
14,719,569
|
Select
International Equity Fund
|
Former
subadviser: Marsico Capital (through May 31, 2013)
|
200,979
(c)
|
988,073
|
2,142,491
|
Threadneedle
|
1,617,462
|
1,458,495
|
2,534,039
|
For
Funds with fiscal period ending May 31
|
AP
– Multi-Manager Value Fund
|
DFA
|
343,068
(d)
|
N/A
|
N/A
|
Commodity
Strategy Fund
|
Threadneedle
|
149,993
|
148,955
|
33,640
(e)
|
Multi-Advisor
Small Cap Value Fund
|
Barrow
Hanley
|
438,607
|
384,371
|
435,194
|
Donald
Smith
|
526,029
|
469,825
|
564,151
|
Former
subadviser:
Turner Investments, L.P.
(from February 19, 2010 to
August 19, 2014)
|
359,734
|
319,910
|
306,122
|
MetWest
Capital
|
487,077
|
420,786
|
470,167
|
SBH
(f)
|
N/A
|
N/A
|
N/A
|
For
Funds with fiscal period ending August 31
|
Marsico
Flexible Capital Fund
|
Marsico
Capital
|
612,241
|
495,165
|
763,971
|
For
Funds with fiscal period ending October 31
|
Asia
Pacific ex-Japan Fund
|
Threadneedle
|
3,005,644
|
2,195,943
|
1,915,462
|
European
Equity Fund
|
Threadneedle
|
2,046,253
|
1,363,057
|
1,199,249
|
Select
Global Equity Fund
|
Threadneedle
|
1,398,229
|
1,325,253
|
1,399,110
|
(a)
|
Because this Fund's
subadvisory fees were paid at the Master Portfolio's level, amounts shown are for the Master Portfolio.
|
(b)
|
For the period from March 1,
2013 to May 31, 2013.
|
(c)
|
For the period from March 1,
2013 to May 20, 2013.
|
(d)
|
For the period from December
11, 2013 to May 31, 2014.
|
(e)
|
For the period from July 28,
2011 (commencement of operations) to May 31, 2012.
|
(f)
|
The subadviser began managing
the Fund after the most recently completed last fiscal year end; therefore there are no fees to report.
|
Portfolio Managers.
The following table provides information about the portfolio managers of each Fund (other than Money Market Fund) as of the end of the applicable Fund’s most recent fiscal period, unless
otherwise noted. The table is organized by fiscal year end.
Statement
of Additional Information – June 1, 2015
|
91
|
|
|
Other
Accounts Managed (excluding the fund)
|
Ownership
of Fund
Shares
|
Potential
Conflicts
of Interest
|
Structure
of
Compensation
|
Fund
|
Portfolio
Manager
|
Number
and Type
of Account
*
|
Approximate
Total Net
Assets
|
Performance-
Based
Accounts
**
|
For
Funds with fiscal period ending January 31
|
Capital
Allocation
Aggressive Portfolio
|
Jeffrey
Knight
|
24
RICs
1 PIV
3 other accounts
|
$66.08
billion
$10.51 million
$1.72 million
|
None
|
None
|
(1)
|
(11)
|
Anwiti
Bahuguna
|
9
RICs
21 PIVs
18 other accounts
|
$6.62
billion
$1.97 billion
$131.57 million
|
None
|
None
|
Marie
Schofield
|
6
RICs
4 other accounts
|
$5.88
billion
$0.22 million
|
None
|
None
|
Beth
Vanney
|
7
RICs
1 PIV
4 other accounts
|
$6.13
billion
$10.51 million
$0.45 million
|
None
|
None
|
Toby
Nangle
|
6
RICs
5 PIVs
1 other account
|
$5.98
billion
$201.91 million
$363.50 million
|
3
PIVs
($85.4 M)
|
None
(c)
|
(8)
|
(12)
|
Capital
Allocation
Conservative Portfolio
|
Jeffrey
Knight
|
24
RICs
1 PIV
3 other accounts
|
$66.44
billion
$10.51 million
$1.72 million
|
None
|
None
|
(1)
|
(11)
|
Anwiti
Bahuguna
|
9
RICs
21 PIVs
18 other accounts
|
$6.98
billion
$1.97 billion
$131.57 million
|
None
|
None
|
Marie
Schofield
|
6
RICs
4 other accounts
|
$6.24
billion
$0.22 million
|
None
|
None
|
Beth
Vanney
|
7
RICs
1 PIV
4 other accounts
|
$6.49
billion
$10.51 million
$0.45 million
|
None
|
None
|
Toby
Nangle
|
6
RICs
5 PIVs
1 other account
|
$6.34
billion
$201.91 million
$363.50 million
|
3
PIVs
($85.4 M)
|
None
(c)
|
(8)
|
(12)
|
Capital
Allocation
Moderate Portfolio
|
Jeffrey
Knight
|
24
RICs
1 PIV
3 other accounts
|
$65.07
billion
$10.51 million
$1.72 million
|
None
|
None
|
(1)
|
(11)
|
Anwiti
Bahuguna
|
9
RICs
21 PIVs
18 other accounts
|
$5.61
billion
$1.97 billion
$131.57 million
|
None
|
None
|
Marie
Schofield
|
6
RICs
4 other accounts
|
$4.87
billion
$0.22 million
|
None
|
None
|
Beth
Vanney
|
7
RICs
1 PIV
4 other accounts
|
$5.12
billion
$10.51 million
$0.45 million
|
None
|
None
|
Toby
Nangle
|
6
RICs
5 PIVs
1 other account
|
$4.97
billion
$201.91 million
$363.50 million
|
3
PIVs
($85.4 M)
|
None
(c)
|
(8)
|
(12)
|
Statement
of Additional Information – June 1, 2015
|
92
|
|
|
Other
Accounts Managed (excluding the fund)
|
Ownership
of Fund
Shares
|
Potential
Conflicts
of Interest
|
Structure
of
Compensation
|
Fund
|
Portfolio
Manager
|
Number
and Type
of Account
*
|
Approximate
Total Net
Assets
|
Performance-
Based
Accounts
**
|
Capital
Allocation
Moderate Aggressive
Portfolio
|
Jeffrey
Knight
|
24
RICs
1 PIV
3 other accounts
|
$64.42
billion
$10.51 million
$1.72 million
|
None
|
None
|
(1)
|
(11)
|
Anwiti
Bahuguna
|
9
RICs
21 PIVs
18 other accounts
|
$4.96
billion
$1.97 billion
$131.57 million
|
None
|
None
|
Marie
Schofield
|
6
RICs
4 other accounts
|
$4.22
billion
$0.22 million
|
None
|
None
|
Beth
Vanney
|
7
RICs
1 PIV
4 other accounts
|
$4.47
billion
$10.51 million
$0.45 million
|
None
|
None
|
Toby
Nangle
|
6
RICs
5 PIVs
1 other account
|
$4.32
billion
$201.91 million
$363.50 million
|
3
PIVs
($85.4 M)
|
None
(c)
|
(8)
|
(12)
|
Capital
Allocation
Moderate Conservative
Portfolio
|
Jeffrey
Knight
|
24
RICs
1 PIV
3 other accounts
|
$66.06
billion
$10.51 million
$1.72 million
|
None
|
None
|
(1)
|
(11)
|
Anwiti
Bahuguna
|
9
RICs
21 PIVs
18 other accounts
|
$6.60
billion
$1.97 billion
$131.57 million
|
None
|
$1-
$10,000
(b)
|
Marie
Schofield
|
6
RICs
4 other accounts
|
$5.86
billion
$0.22 million
|
None
|
$10,001-
$50,000
(b)
|
Beth
Vanney
|
7
RICs
1 PIV
4 other accounts
|
$6.11
billion
$10.51 million
$0.45 million
|
None
|
None
|
Toby
Nangle
|
6
RICs
5 PIVs
1 other account
|
$5.96
billion
$201.91 million
$363.50 million
|
3
PIVs
($85.4 M)
|
None
(c)
|
(8)
|
(12)
|
Income
Builder Fund
|
Colin
Lundgren
|
2
RICs
53 other accounts
|
$2.94
billion
$25.54 million
|
None
|
Over
$1,000,000
(a)
$100,001-
$500,000
(b)
|
(4)
|
(11)
|
Gene
Tannuzzo
|
5
RICs
63 other accounts
|
$3.82
billion
$1.31 billion
|
None
|
$100,001-
$500,000
(a)
$10,001-
$50,000
(b)
|
LifeGoal
Growth Portfolio
|
Robert
McConnaughey
|
2
RICs
6 other accounts
|
$36.70
million
$3.40 million
|
None
|
$50,001-
$100,000
(b)
|
(1)
|
(11)
|
Mark
Burgess
|
3
PIVs
12 other accounts
|
$3.02
billion
$28,079.30
|
None
|
None
(c)
|
(8)
|
(12)
|
For
Funds with fiscal period ending February 28/29
|
Convertible
Securities
Fund
|
David
L. King
|
9
RICs
12 other accounts
|
$9.92
billion
$60.23 million
|
None
|
Over
$1,000,000
(a)
$100,001-
$500,000
(b)
|
(2)
|
(11)
|
Yan
Jin
|
6
RICs
4 other accounts
|
$1.06
billion
$0.94 million
|
None
|
$10,001-
$50,000
(a)
$1-$10,000
(b)
|
Statement
of Additional Information – June 1, 2015
|
93
|
|
|
Other
Accounts Managed (excluding the fund)
|
Ownership
of Fund
Shares
|
Potential
Conflicts
of Interest
|
Structure
of
Compensation
|
Fund
|
Portfolio
Manager
|
Number
and Type
of Account
*
|
Approximate
Total Net
Assets
|
Performance-
Based
Accounts
**
|
Global
Equity
Value Fund
|
Steven
Schroll
|
5
RICs
1 PIV
376 other accounts
|
$11.37
billion
$6.19 million
$592.44 million
|
None
|
$50,001-
$100,000
(a)
$100,001-
$500,000
(b)
|
(2)
|
(11)
|
Paul
Stocking
|
5
RICs
1 PIV
381 other accounts
|
$11.37
billion
$6.19 million
$602.37 million
|
None
|
$100,001-
$500,000
(a)
|
Dean
Ramos
|
5
RICs
1 PIV
376 other accounts
|
$11.37
billion
$6.19 million
$589.82 million
|
None
|
None
|
International
Opportunities Fund
|
Simon
Haines
(l)
|
1
RIC
1 other account
|
$345.26
million
$338.30 million
|
None
|
None
(c)
|
(8)
|
(12)
|
William
Davies
(l)
|
2
RICs
1 PIV
2 other accounts
|
$695.86
million
$1.29 billion
$676.90 million
|
None
|
David
Dudding
(l)
|
1
RIC
3 PIVs
1 other account
|
$42.50
million
$3.56 billion
$1.05 billion
|
2
PIVs ($48 M)
|
International
Value
Fund
|
Daisuke
Nomoto
|
4
RICs
3 other accounts
|
$1.14
billion
$0.6 million
|
None
|
None
|
(2)
|
(11)
|
Fred
Copper
|
5
RICs
1 PIV
7 other accounts
|
$2.30
billion
$207.54 million
$51.87 million
|
None
|
None
|
Large
Cap
Enhanced Core
Fund
|
Brian
M. Condon
|
9
RICs
4 PIVs
30 other accounts
|
$8.46
billion
$204.07 million
$4.41 billion
|
1
PIV
($0.01 M)
|
$10,001-
$50,000
(a)
|
(2)
|
(11)
|
Peter
Albanese
(h)
|
2
other accounts
|
$0.45
million
|
None
|
None
|
Large
Cap
Index
Fund
|
Christopher
Lo
(j)
|
162
other accounts
|
$647.2
million
|
None
|
$100,001-
$500,000
(a)
$50,001-
$100,000
(b)
|
(2)
|
(11)
|
Vadim
Shteyn
|
3
RICs
1 PIV
7 other accounts
|
$6.88
billion
$354.41 million
$643.24 million
|
None
|
Marsico
21st Century
Fund
|
Marsico
Capital:
Brandon Geisler
|
2 RICs
1 other account
(d)
|
$474.80 million
$69.0 million
|
None
|
None
|
(9)
|
(14)
|
Marsico
Focused
Equities Fund
|
Marsico
Capital:
Thomas F. Marsico
|
18 RICs
9 PIVs
42 other accounts
(e)
|
$7.08 billion
$1.30 billion
$3.90 billion
|
None
|
None
|
(9)
|
(14)
|
Coralie
Witter
|
11
RICs
8 PIVs
36 other accounts
(e)
|
$6.01
billion
$1.26 billion
$3.81 billion
|
Marsico
Global
Fund
|
Marsico
Capital:
Thomas F. Marsico
|
18 RICs
9 PIVs
42 other accounts
(e)
|
$8.19 billion
$1.30 billion
$3.90 billion
|
None
|
None
|
(9)
|
(14)
|
Statement
of Additional Information – June 1, 2015
|
94
|
|
|
Other
Accounts Managed (excluding the fund)
|
Ownership
of Fund
Shares
|
Potential
Conflicts
of Interest
|
Structure
of
Compensation
|
Fund
|
Portfolio
Manager
|
Number
and Type
of Account
*
|
Approximate
Total Net
Assets
|
Performance-
Based
Accounts
**
|
Marsico
Growth
Fund
|
Marsico
Capital:
Thomas F. Marsico
|
18 RICs
9 PIVs
42 other accounts
(e)
|
$6.11 billion
$1.30 billion
$3.90 billion
|
None
|
None
|
(9)
|
(14)
|
Coralie
Witter
|
11
RICs
8 PIVs
36 other accounts
(e)
|
$5.04
billion
$1.26 billion
$3.81 billion
|
Kevin
Boone
(k)
|
None
|
None
|
Mid
Cap Index
Fund
|
Christopher
Lo
(j)
|
162
other accounts
|
$647.2
million
|
None
|
$1-
$10,000
(b)
|
(2)
|
(11)
|
Vadim
Shteyn
|
3
RICs
1 PIV
7 other accounts
|
$6.29
billion
$354.41 million
$643.24 million
|
None
|
Mid
Cap Value
Fund
|
David
Hoffman
|
2
RICs
1 PIV
14 other accounts
|
$2.30
billion
$334.96 million
$119.56 million
|
None
|
$100,001-
$500,000
(a)
$10,001-
$50,000
(b)
|
(2)
|
(11)
|
Jonas
Patrikson
(f)
|
6
other accounts
|
$0.64
million
|
None
|
None
|
Diane
Sobin
|
1
RIC
4 PIVs
12 other accounts
|
$638.33
million
$1.17 billion
$5.94 billion
|
2
other
accounts
($368 M)
|
None
(c)
|
(8)
|
(12)
|
Overseas
Value
Fund
|
Fred
Copper
|
5
RICs
1 PIV
7 other accounts
|
$1.94
billion
$207.54 million
$51.87 million
|
None
|
None
|
(2)
|
(11)
|
Daisuke
Nomoto
|
4
RICs
3 other accounts
|
$784.48
million
$0.56 million
|
None
|
$10,001-
$50,000
(b)
|
Select
International Equity
Fund
|
Threadneedle:
Simon Haines
(l)
|
1 RIC
1 other account
|
$345.26 million
$338.30 million
|
None
|
None
(c)
|
(8)
|
(12)
|
William
Davies
(l)
|
2
RICs
1 PIV
2 other accounts
|
$695.86
million
$1.29 billion
$676.90 million
|
None
|
David
Dudding
(l)
|
1
RIC
3 PIVs
1 other account
|
$42.5
million
$3.56 billion
$1.05 billion
|
2
PIVs ($48 M)
|
Select
Large
Cap Equity
Fund
|
Peter
Santoro
|
1
RIC
1 PIV
13 other accounts
|
$487.96
million
$100.99 million
$265.30 million
|
None
|
$100,001-
$500,000
(a)
$100,001-
$500,000
(b)
|
(2)
|
(11)
|
Melda
Mergen
(i)
|
11
RICs
4 other accounts
|
$21.71
billion
$1.15 million
|
None
|
$1-
$10,000
(a)
|
Small
Cap
Index Fund
|
Christopher
Lo
(j)
|
162
other accounts
|
$647.2
million
|
None
|
None
|
(2)
|
(11)
|
Vadim
Shteyn
|
3
RICs
1 PIV
7 other accounts
|
$7.20
billion
$354.41 million
$643.24 million
|
None
|
Small
Cap
Value Fund II
|
Christian
K.
Stadlinger
|
3
RICs
13 other accounts
|
$2.04
billion
$48.34 million
|
None
|
$50,001-
$100,000
(a)
$10,001-
$50,000
(b)
|
(2)
|
(11)
|
Jarl
Ginsberg
|
3
RICs
14 other accounts
|
$2.04
billion
$46.91 million
|
None
|
$100,000-
$500,000
(a)
|
Statement
of Additional Information – June 1, 2015
|
95
|
|
|
Other
Accounts Managed (excluding the fund)
|
Ownership
of Fund
Shares
|
Potential
Conflicts
of Interest
|
Structure
of
Compensation
|
Fund
|
Portfolio
Manager
|
Number
and Type
of Account
*
|
Approximate
Total Net
Assets
|
Performance-
Based
Accounts
**
|
For
funds with fiscal period ending March 31
|
Short
Term
Bond Fund
|
Leonard
Aplet
|
6
RICs
17 PIVs
73 other accounts
|
$13.31
billion
$2.56 billion
$8.81 billion
|
None
|
Over
$1,000,000
(a)
$50,001-
$100,000
(b)
|
(2)
|
(11)
|
Gregory
Liechty
|
2
RICs
12 PIVs
48 other accounts
|
$894.88
million
$4.03 billion
$6.61 billion
|
None
|
$10,001-
$50,000
(b)
|
Ronald
Stahl
|
2
RICs
12 PIVs
47 other accounts
|
$894.88
million
$4.03 billion
$7.07 billion
|
None
|
$1-
$10,000
(b)
|
For
Funds with fiscal period ending April 30
|
AMT-Free
CA
Intermediate
Muni Bond Fund
|
Brian
McGreevy
|
11
RICs
6 other accounts
|
$3.91
billion
$371.85 million
|
None
|
None
|
(2)
|
(11)
|
Paul
Fuchs
|
4
RICs
4 PIVs
4 other accounts
|
$2.62
billion
$848.08 million
$0.48 million
|
None
|
None
|
AMT-Free
GA
Intermediate
Muni Bond Fund
|
Brian
McGreevy
|
11
RICs
6 other accounts
|
$4.14
billion
$371.85 million
|
None
|
None
|
(2)
|
(11)
|
AMT-Free
MD
Intermediate
Muni Bond Fund
|
Brian
McGreevy
|
11
RICs
6 other accounts
|
$4.13
billion
$371.85 million
|
None
|
None
|
(2)
|
(11)
|
AMT-Free
NC
Intermediate
Muni Bond Fund
|
Brian
McGreevy
|
11
RICs
6 other accounts
|
$4.05
billion
$371.85 million
|
None
|
None
|
(2)
|
(11)
|
AMT-Free
SC
Intermediate
Muni Bond Fund
|
Brian
McGreevy
|
11
RICs
6 other accounts
|
$4.09
billion
$371.85 million
|
None
|
None
|
(2)
|
(11)
|
AMT-Free
VA
Intermediate
Muni Bond Fund
|
Brian
McGreevy
|
11
RICs
6 other accounts
|
$3.99
billion
$371.85 million
|
None
|
None
|
(2)
|
(11)
|
Global
Infrastructure
Fund
|
Pete
Santoro
|
1
RIC
1 PIV
13 other accounts
|
$529.75
million
$79.15 million
$265.45 million
|
None
|
$100,001-
$500,000
(b)
|
(2)
|
(11)
|
Craig
Leopold
|
1
RIC
1 PIV
14 other accounts
|
$529.75
million
$79.15 million
$267.0 million
|
None
|
Tom
West
|
2
RICs
12 other accounts
|
$465.74
million
$6.92 million
|
$100,001-
$500,000
(a)
|
Kirk
Moore
|
3
other accounts
|
$2.32
million
|
$50,001-
$100,000
(b)
|
Short
Term
Municipal Bond
Fund
|
Catherine
Stienstra
|
4
RICs
3 PIVs
4 other accounts
|
$1.62
billion
$1.35 billion
$18.01 million
|
None
|
None
|
(2)
|
(11)
|
Anders
Myhran
(n)
|
3
PIVs
3 other accounts
|
$1.66
billion
$17.60 million
|
$1-
$10,000
(b)
|
Statement
of Additional Information – June 1, 2015
|
96
|
|
|
Other
Accounts Managed (excluding the fund)
|
Ownership
of Fund
Shares
|
Potential
Conflicts
of Interest
|
Structure
of
Compensation
|
Fund
|
Portfolio
Manager
|
Number
and Type
of Account
*
|
Approximate
Total Net
Assets
|
Performance-
Based
Accounts
**
|
For
Funds with fiscal period ending May 31
|
AP
- Multi-Manager
Value Fund
|
Columbia
Management:
Steve Schroll
|
5 RICs
1 PIV
10 other accounts
|
$11.83 billion
$6.54 million
$72.16 million
|
None
|
None
|
(2)
|
(11)
|
Paul
Stocking
|
5
RICs
1 PIV
372 other accounts
|
$11.83
billion
$6.54 million
$82.41 million
|
Dean
Ramos
|
5
RICs
1 PIV
10 other accounts
|
$11.83
billion
$6.54 million
$69.73 million
|
DFA:
Joseph Chi
|
106 RICs
19 PIVs
70 other accounts
|
$217.52 billion
$10.48 billion
$19.10 billion
|
1 PIV
($228.6 M);
2 other
accounts
($1.7 B)
|
None
|
(10)
|
(15)
|
Jed
Fogdall
|
Henry
Gray
|
95
RICs
15 PIVs
70 other accounts
|
Bhanu
Singh
|
29
RICs
10 PIVs
41 other accounts
|
$96.50
billion
$7.51 billion
$5.24 billion
|
1
PIV ($228.6 M)
|
Commodity
Strategy Fund
|
Threadneedle:
David Donora
|
1 RIC
3 PIVs
|
$125.60 million
$1.02 billion
|
3 PIVs
(1.02 B)
|
None
(c)
|
(8)
|
(12)
|
Nicolas
Robin
|
Diversified
Equity
Income Fund
|
Hugh
H. Mullin
|
1
PIV
5 other accounts
|
$10.000
$2.88 million
|
None
|
$10,001
–
$50,000
(b)
|
(2)
|
(11)
|
Russell
Bloomfield
|
1
PIV
10 other accounts
|
$10.000
$1.02 million
|
$50,001
–
$100,000
(b)
|
Dividend
Opportunity Fund
|
Steve
Schroll
|
5
RICs
1 PIV
10 other accounts
|
$6.70
billion
$6.54 million
$72.16 million
|
None
|
$100,001
–
$500,000
(a)
$100,001 –
$500,000
(b)
|
(2)
|
(11)
|
Paul
Stocking
|
5
RICs
1 PIV
372 other accounts
|
$6.70
billion
$6.54 million
$82.41 million
|
$100,001
–
$500,000
(a)
$100,001 –
$500,000
(b)
|
Dean
Ramos
|
5
RICs
1 PIV
10 other accounts
|
$6.70
billion
$6.54 million
$69.73 million
|
$50,001-
$100,000
(b)
|
Flexible
Capital
Income Fund
|
David
King
|
9
RICs
12 other accounts
|
$11.68
billion
$63.00 million
|
None
|
Over
$1,000,000
(a)
$100,001 –
$500,000
(b)
|
(2)
|
(11)
|
Yan
Jin
|
6
RICs
4 other accounts
|
$2.61
billion
$1.13 million
|
$50,001-
$100,000
(a)
$1-$10,000
(b)
|
High
Yield Bond
Fund
|
Jennifer
Ponce
de Leon
|
1
RIC
30 PIVs
33 other accounts
|
$593.52
million
$32.27 billion
$6.09 billion
|
None
|
$100,001
–
$500,000
(b)
|
(2)
|
(11)
|
Brian
Lavin
|
12
RICs
3 PIVs
5 other accounts
|
$18.74
billion
$97.43 million
$3.55 million
|
None
|
Statement
of Additional Information – June 1, 2015
|
97
|
|
|
Other
Accounts Managed (excluding the fund)
|
Ownership
of Fund
Shares
|
Potential
Conflicts
of Interest
|
Structure
of
Compensation
|
Fund
|
Portfolio
Manager
|
Number
and Type
of Account
*
|
Approximate
Total Net
Assets
|
Performance-
Based
Accounts
**
|
Mortgage
Opportunities Fund
|
Jason
Callan
|
3
RICs
2 PIVs
4 other accounts
|
$3.79
billion
$41.41 million
$1.86 million
|
None
|
None
|
(2)
|
(11)
|
Tom
Heuer
|
2
RICs
6 other accounts
|
$3.78
billion
$1.26 million
|
Multi-Advisor
Small
Cap Value Fund
|
Donald
Smith:
Donald G. Smith
|
2 RICs
1 PIV
41 other accounts
|
$2.27 billion
$80.0 million
$3.66 billion
|
1 RIC
($2.23 B);
1 other
account
($138 M)
|
None
|
(5)
|
(16)
|
Richard
L.
Greenberg
|
Barrow
Hanley:
James S. McClure
|
5 RICs
19 other accounts
|
$1.75 billion
$1.24 billion
|
None
|
None
|
(6)
|
(17)
|
John
P. Harloe
|
MetWest
Capital:
Samir Sikka
|
4 RICs
1 PIV
20 Other accounts
|
$624.30 million
$67.30 million
$1.59 billion
|
2 other
accounts
($482 M)
|
None
|
(7)
|
(18)
|
SBH:
Mark Dickherber
(g)
|
1 RIC
1 PIV
72 other accounts
|
$26.80 million
$28.00 million
$1.12 billion
|
None
|
None
|
(3)
|
(19)
|
Shaun
Nicholson
(g)
|
Select
Large-Cap
Value Fund
|
Richard
Rosen
|
4
RICs
1 PIV
909 other accounts
|
$1.61
billion
$53.25 million
$2.77 billion
|
None
|
$100,001-
$500,000
(b)
|
(2)
|
(11)
|
Kari
Montanus
|
4
RICs
1 PIV
903 other accounts
|
$1.61
billion
$53.25 million
$2.76 billion
|
$10,001-
$50,000
(b)
|
Select
Smaller-Cap
Value Fund
|
Richard
Rosen
|
4
RICs
1 PIV
909 other accounts
|
$2.02
billion
$53.25 million
$2.77 billion
|
None
|
$50,001-
$100,000
(b)
|
(2)
|
(11)
|
Kari
Montanus
|
4
RICs
1 PIV
903 other accounts
|
$2.02
billion
$53.25 million
$2.76 billion
|
$10,001-
$50,000
(b)
|
Seligman
Communications
and Information
Fund
|
Paul
Wick
|
4
RICs
2 PIVs
4 other accounts
|
$876.46
million
$141.41 million
$4.50 million
|
None
|
Over
$1,000,000
(a)
|
(2)
|
(20)
|
Sanjay
Devgan
|
3
RICs
1 PIV
2 other accounts
|
$622.16
million
$22.70 million
$338,570.42
|
None
|
Ajay
Diwan
|
4
RICs
1 PIV
5 other accounts
|
$876.46
million
$22.70 million
$1.35 million
|
Shekhar
Pramanick
|
3
RICs
1 PIV
5 other accounts
|
$622.16
million
$22.70 million
$2.31 million
|
Statement
of Additional Information – June 1, 2015
|
98
|
|
|
Other
Accounts Managed (excluding the fund)
|
Ownership
of Fund
Shares
|
Potential
Conflicts
of Interest
|
Structure
of
Compensation
|
Fund
|
Portfolio
Manager
|
Number
and Type
of Account
*
|
Approximate
Total Net
Assets
|
Performance-
Based
Accounts
**
|
Small/Mid
Cap
Value Fund
|
Jarl
Ginsberg
|
3
RICs
13 other accounts
|
$2.20
billion
$46.23 million
|
None
|
$100,001
–
$500,000
(b)
|
(2)
|
(11)
|
Christian
Stadlinger
|
3
RICs
13 other accounts
|
$2.20
billion
$56.82 million
|
$100,001
–
$500,000
(a)
|
David
Hoffman
|
2
RICs
1 PIV
7 other accounts
|
$4.57
billion
$352.66 million
$110.26 million
|
$10,001
–
$50,000
(b)
|
U.S.
Government
Mortgage Fund
|
Jason
J. Callan
|
3
RICs
2 PIVs
4 other accounts
|
$2.03
billion
$41.41 million
$1.86 million
|
None
|
$100,001
–
$500,000
(b)
|
(2)
|
(11)
|
Tom
Heuer
|
2
RIC
6 other accounts
|
$2.01
billion
$1.26 million
|
$10,001
–
$50,000
(a)
$100,001 –
$500,000
(b)
|
For
Funds with fiscal period ending July 31
|
AMT-Free
Tax-Exempt
Bond Fund
|
Catherine
Stienstra
|
4
RICs
3 PIVs
4 other accounts
|
$3.17
billion
$1.44 billion
$18.03 million
|
None
|
$100,001
–
$500,000
(a)
$100,001 –
$500,000
(b)
|
(2)
|
(11)
|
Floating
Rate
Fund
|
Lynn
Hopton
|
20
PIVs
8 other accounts
|
$23.72
billion
$8.95 million
|
None
|
None
|
(2)
|
(21)
|
Yvonne
Stevens
|
20
PIVs
11 other accounts
|
$23.72
billion
$10.94 million
|
Steve
Staver
|
2
other accounts
|
$901,888.80
|
Ronald
Launsbach
|
7
other accounts
|
$1.69
million
|
Global
Opportunities
Fund
|
Anwiti
Bahuguna
|
9
RICs
21 PIVs
19 other accounts
|
$6.66
billion
$1.89 billion
$140.46 million
|
None
|
$10,001
–
$50,000
(b)
|
(2)
|
(11)
|
Fred
Copper
|
4
RICs
1 PIV
7 other accounts
|
$1.67
billion
$176.43 million
$52.85 million
|
None
|
Jeffrey
Knight
|
22
RICs
1 PIV
3 other accounts
|
$65.25
billion
$10.24 million
$1.71 million
|
$100,001
–
$500,000
(b)
|
Orhan
Imer
|
12
RICs
2 PIVs
4 other accounts
|
$6.54
billion
$1.67 billion
$478,707.38
|
$10,001
–
$50,000
(b)
|
Toby
Nangle
|
9
RICs
14 PIVs
1 Other Account
|
$7.59
billion
$373.34 million
$43.8 million
|
3
PIVs ($363.1 M)
|
None
(c)
|
(8)
|
(12)
|
Income
Opportunities Fund
|
Brian
Lavin
|
12
RICs
3 PIV
5 other accounts
|
$24.71
billion
$97.04million
$3.84 million
|
None
|
$100,001
–
$500,000
(a)
$100,001 –
$500,000
(b)
|
(2)
|
(11)
|
Inflation
Protected
Securities Fund
|
Orhan
Imer
|
12
RICs
2 PIVs
4 other accounts
|
$7.07
billion
$1.67 billion
$478,707.38
|
None
|
None
|
(2)
|
(11)
|
Large
Core
Quantitative Fund
|
Brian
M. Condon
|
11
RICs
3 PIVs
24 other accounts
|
$5.96
billion
$185.30 million
$4.58 billion
|
None
|
$100,001
–
$500,000
(b)
|
(2)
|
(11)
|
Peter
Albanese
(h)
|
2
other accounts
|
$0.45
million
|
None
|
None
|
Statement
of Additional Information – June 1, 2015
|
99
|
|
|
Other
Accounts Managed (excluding the fund)
|
Ownership
of Fund
Shares
|
Potential
Conflicts
of Interest
|
Structure
of
Compensation
|
Fund
|
Portfolio
Manager
|
Number
and Type
of Account
*
|
Approximate
Total Net
Assets
|
Performance-
Based
Accounts
**
|
Large
Growth
Quantitative Fund
|
Brian
M. Condon
|
11
RICs
3 PIVs
24 other accounts
|
$9.33
billion
$185.30 million
$4.58 billion
|
None
|
$50,001
–
$100,000
(b)
|
(2)
|
(11)
|
Peter
Albanese
(h)
|
2
other accounts
|
$0.45
million
|
None
|
None
|
Large
Value
Quantitative Fund
|
Brian
M. Condon
|
11
RICs
3 PIVs
24 other accounts
|
$9.08
billion
$185.30 million
$4.58 billion
|
None
|
$1
–
$10,000
(a)
$100,001 –
$500,000
(b)
|
(2)
|
(11)
|
Peter
Albanese
(h)
|
2
other accounts
|
$0.45
million
|
None
|
None
|
Limited
Duration
Credit Fund
|
Tom
Murphy
|
8
RICs
29 PIVs
37 other accounts
|
$4.09
billion
$31.80 billion
$4.17 billion
|
None
|
Over
$1,000,000
(a)
$500,001 –
$1,000,000
(b)
|
(2)
|
(11)
|
Timothy
J. Doubek
|
6
RICs
32 other accounts
|
$4.09
billion
$2.72 billion
|
$100,001
–
$500,000
(a)
$50,001 –
$100,000
(b)
|
Royce
Wilson
|
1
RIC
2 other accounts
|
$2.67
billion
$324,418.24
|
$10,001
–
$50,000
(a)
$50,001 –
$100,000
(b)
|
MN
Tax-Exempt
Fund
|
Catherine
Stienstra
|
4
RICs
3 PIVs
4 other accounts
|
$3.30
billion
$1.44 billion
$18.03 million
|
None
|
$100,001
–
$500,000
(a)
|
(2)
|
(11)
|
For
Funds with fiscal period ending August 31
|
Marsico
Flexible
Capital Fund
|
Marsico
Capital:
Munish Malhotra
|
6 RICs
3 other accounts
|
$1.39 billion
$135.3 million
|
None
|
None
|
(9)
|
(14)
|
Jordan
Laycob
|
1
RIC
|
$846.3
million
|
None
|
None
|
For
Funds with fiscal period ending October 31
|
Absolute
Return
Currency and
Income Fund
|
Nicholas
Pifer
|
9
RICs
7 other
accounts
|
$4.56
million
$3.75 million
|
None
|
$10,001–
$50,000
(b)
|
(2)
|
(11)
|
Asia
Pacific
ex-Japan Fund
|
Threadneedle:
Vanessa
Donegan
|
4 PIVs
1 other account
|
$1.41 billion
$1.52 billion
|
None
|
None
(c)
|
(8)
|
(12)
|
George
Gosden
|
1
PIV
2 other accounts
|
$27.8
million
$1.11 billion
|
Emerging
Markets
Bond Fund
|
Jim
Carlen
|
3
RICs
4 PIVs
8 other accounts
|
$389.74
million
$12.08 billion
$197.03 million
|
None
|
$100,001–
$500,000
(a)
$50,001 –
$100,000
(b)
|
(2)
|
(11)
|
Henry
Stipp
|
2
RICs
4 PIVs
3 other accounts
|
$343.41
million
$693.80 million
$387.01 million
|
3
PIVs
($325.4 M)
|
None
(c)
|
(8)
|
(12)
|
European
Equity
Fund
|
Threadneedle:
Dan Ison
|
1 RIC
2 PIVs
3 other accounts
|
$401.6 million
$345.3 million
$4.66 billion
|
1
PIV
($116.8 M)
|
None
(c)
|
(8)
|
(12)
|
Ann
Steele
|
1
PIV
4 other accounts
|
$428.6
million
$2.90 billion
|
None
|
Statement
of Additional Information – June 1, 2015
|
100
|
|
|
Other
Accounts Managed (excluding the fund)
|
Ownership
of Fund
Shares
|
Potential
Conflicts
of Interest
|
Structure
of
Compensation
|
Fund
|
Portfolio
Manager
|
Number
and Type
of Account
*
|
Approximate
Total Net
Assets
|
Performance-
Based
Accounts
**
|
Global
Bond
Fund
|
Gene
Tannuzzo
|
6
RICs
61 other accounts
|
$6.14
billion
$1.28 billion
|
None
|
None
|
(2)
|
(11)
|
Jim
Cielinski
|
3
RICs
4 PIVs
14 other accounts
|
$912.75
million
$943.70 million
$3.74 billion
|
None
|
None
(c)
|
(8)
|
(12)
|
Matthew
Cobon
|
3
RICs
2 PIVs
1 other account
|
$912.75
million
$451.30 million
$47.70 million
|
2
PIVs
($451.3 M)
|
None
(c)
|
Select
Global Equity
Fund
|
Threadneedle:
David Dudding
(m)
|
3 PIVs
1 other account
|
$3.33 billion
$1.01 billion
|
2
PIVs (48.5 M)
|
None
(c)
|
(8)
|
(12)
|
Pauline
Grange
|
1
PIV
|
$57.8
million
|
None
|
Seligman
Global
Technology Fund
|
Paul
Wick
|
4
RICs
2 PIVs
4 other
accounts
|
$4.08
billion
$158.22 million
$5.64 million
|
None
|
None
|
(2)
|
(20)
|
Ajay
Diwan
|
4
RICs
1 PIV
5 other accounts
|
$4.08
billion
$22.59 million
$1.37 million
|
None
|
Shekhar
Pramanick
|
3
RICs
1 PIV
5 other accounts
|
$3.81
billion
$22.59 million
$2.33 million
|
None
|
Sanjay
Devgan
|
3
RICs
1 PIV
2 other accounts
|
$3.81
billion
$22.59 million
$357,495
|
None
|
Rahul
Narang
|
4
RICs
8 other accounts
|
$1.26
billion
$64.54 million
|
None
|
(2)
|
(11)
|
*
|
RIC refers to a Registered
Investment Company; PIV refers to a Pooled Investment Vehicle.
|
**
|
Number and type of accounts
for which the advisory fee paid is based in part or wholly on performance and the aggregate net assets in those accounts.
|
(a)
|
Excludes any notional
investments.
|
(b)
|
Notional investments through a
deferred compensation account.
|
(c)
|
The Fund is available for sale
only in the U.S. The portfolio managers do not reside in the U.S. and therefore do not hold any shares of the Fund.
|
(d)
|
The ‘other account’
is a wrap fee platform which includes approximately 206 underlying clients for total assets of approximately $69 million.
|
(e)
|
One of the ‘other
accounts’ is a wrap fee platform which includes approximately 2,394 underlying clients for total assets of approximately$887 million and two of the ‘other accounts’ represent model portfolios for total assets of approximately $1.26
billion, which also have a number of underlying client accounts.
|
(f)
|
The portfolio manager began
managing the Fund after its last fiscal year end; reporting information is provided as of April 30, 2014.
|
(g)
|
The portfolio manager began
managing the Fund after its last fiscal year end; reporting information is provided as of August 31, 2014.
|
(h)
|
The portfolio manager began
managing the Fund after its last fiscal year end; reporting information is provided as of July 31, 2014.
|
(i)
|
The portfolio manager began
managing the Fund after its last fiscal year end; reporting information is provided as of September 30, 2014. The reporting information includes information for funds that, effective October 31, 2014, the portfolio manager is no longer managing.
|
(j)
|
The portfolio manager began
managing the Fund after its last fiscal year end; reporting information is provided as of October 31, 2014.
|
(k)
|
The portfolio manager began
managing the Fund after its last fiscal year end; reporting information is provided as of December 31, 2014.
|
(l)
|
The portfolio manager began
managing the Fund after its last fiscal year end; reporting information is provided as of January 31, 2015.
|
(m)
|
The portfolio manager began
managing the Fund after its last fiscal year end; reporting information is provided as of November 30, 2014.
|
(n)
|
The portfolio manager began
managing the Fund after its last fiscal year end; reporting information is provided as of February 28, 2015.
|
Potential Conflicts of Interest
(1)
|
Columbia Management:
Management of funds-of-funds differs from that of the other Funds. The portfolio management process is set forth generally below and in more detail in the Funds’ prospectus.
|
|
Portfolio
managers of the fund-of-funds may be involved in determining each funds-of-fund’s allocation among the three main asset classes (equity, fixed income and cash) and the allocation among investment categories within each asset class, as well as
each funds-of-fund’s allocation among the underlying funds.
|
Statement
of Additional Information – June 1, 2015
|
101
|
■
|
Because of the
structure of the funds-of-funds, the potential conflicts of interest for the portfolio managers may be different than the potential conflicts of interest for portfolio managers who manage other Funds.
|
■
|
The
Investment Manager and its affiliates may receive higher compensation as a result of allocations to underlying funds with higher fees.
|
In addition to the accounts
above, portfolio managers may manage accounts in a personal capacity that may include holdings that are similar to, or the same as, those of the Fund. The Investment Manager has in place a Code of Ethics that is designed to address conflicts and
that, among other things, imposes restrictions on the ability of the portfolio managers and other “investment access persons” to invest in securities that may be recommended or traded in the Fund and other client accounts.
To the extent a fund-of-funds
invest in securities and instruments other than other Funds, the portfolio manager is subject to the potential conflicts of interest described in (2) below.
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 Investment Manager’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 Investment Manager and its
affiliates.
(2)
|
Columbia Management:
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 Investment Manager 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 Investment Manager’s Code of Ethics and
certain limited exceptions, the Investment Manager’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 Investment Manager’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. In addition, although the Investment Manager has
entered into a personnel sharing arrangement with Threadneedle, the Investment Manager and Threadneedle maintain separate trading operations for their clients. By maintaining separate trading operations in this manner, the Funds may forego certain
opportunities including the aggregation of trades across certain accounts managed by Threadneedle. This could result in the Funds competing in the market with one or more accounts managed by Threadneedle for similar trades. In addition, it is
possible that the separate trading desks of the Investment Manager and Threadneedle may be on opposite sides of a trade execution for a Fund at the same time.
|
|
“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 Investment Manager and the Funds have adopted compliance procedures that provide that any transactions between a
Fund and another account managed by the Investment Manager are to be made at a current market price, consistent with applicable laws and regulations.
|
Statement
of Additional Information – June 1, 2015
|
102
|
|
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.
|
|
To the extent a
Fund invests in underlying Funds, a portfolio manager will be subject to the potential conflicts of interest described in (1) above.
|
|
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 Investment Manager’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 Investment
Manager and its affiliates.
|
(3)
|
SBH:
The Code of Ethics and the Compliance Manual detail the requirements that each employee must disclose all potential conflicts of interest to the Chief Compliance Officer. Where warranted issuers (securities) may be
placed on a watchlist to prevent any real or perceived conflict.
|
(4)
|
Columbia Management:
Management of the Income Builder Fund-of-Funds differs from that of the other funds. The portfolio management process is set forth generally below and in more detail in the Fund’s prospectus.
|
|
The Investment
Manager uses quantitative models combined with qualitative factors to determine the Funds’ allocations to the underlying funds. Using these methodologies, a group of the Investment Manager’s investment professionals allocates the
Fund’s assets within and across different asset classes in an effort to achieve the Fund’s objective of providing a high level of current income and growth of capital. The Fund will typically be rebalanced monthly in an effort to
maximize the level of income and capital growth, incorporating various measures of relative value subject to constraints that set minimum or maximum exposure within asset classes, as set forth in the prospectus. Within the equity and fixed income
asset classes, the Investment Manager establishes allocations for the Funds, seeking to achieve each Fund’s objective by investing in defined investment categories. The target allocation range constraints are intended, in part, to promote
diversification within the asset classes.
|
|
Because
of the structure of funds-of-funds, the potential conflicts of interest for the portfolio managers may be different than the potential conflicts of interest for portfolio managers who manage other funds. These potential conflicts of interest
include:
|
■
|
In certain cases,
the portfolio managers of the underlying funds are the same as the portfolio managers of the Income Builder Fund-of-Funds, and could influence the allocation of fund-of-funds assets to or away from the underlying funds that they manage.
|
■
|
The
Investment Manager and its affiliates may receive higher compensation as a result of allocations to underlying funds with higher fees.
|
The Investment Manager
monitors the performance of the underlying funds and may, from time to time, recommend to the Board of Trustees of the funds a change in portfolio management or fund strategy or the closure or merger of an underlying fund. In addition, the
Investment Manager may believe that certain funds may benefit from additional assets or could be harmed by redemptions. All of these factors may also influence decisions in connection with the allocation of funds-of-funds assets to or away from
certain underlying funds.
In addition to the accounts
above, portfolio managers may manage accounts in a personal capacity that may include holdings that are similar to, or the same as, those of the Fund. The Investment Manager has in place a Code of Ethics that is designed to address conflicts and
that, among other things, imposes restrictions on the ability of the portfolio managers and other “investment access persons” to invest in securities that may be recommended or traded in the Fund and other client accounts.
(5)
|
Donald Smith:
Donald Smith & Co., Inc. is very sensitive to conflicts of interest that could possibly arise in its capacity of serving as an investment adviser. It remains committed to resolving any and all conflicts in the best
interest of its clients.
|
|
Donald
Smith & Co., Inc. is an independent investment advisor with no parent or subsidiary organizations. Additionally, it has no brokerage or investment banking activities.
|
Statement
of Additional Information – June 1, 2015
|
103
|
|
Clients include
mutual funds, public and corporate pension plans, endowments and foundations, and other separate accounts. Donald Smith & Co., Inc. has put in place systems, policies and procedures, which have been designed to maintain fairness in portfolio
management across all clients. Potential conflicts between funds or with other types of accounts are managed via allocation policies and procedures, internal review processes, and direct oversight by Donald G. Smith, President.
|
(6)
|
Barrow Hanley:
Actual or potential conflicts of interest may arise when a portfolio manager has management responsibilities to more than one account (including the Fund). Barrow Hanley manages potential conflicts between funds or with
other types of accounts through allocation policies and procedures, internal review processes and oversight by directors and independent third parties to ensure that no client, regardless of type or fee structure, is intentionally favored at the
expense of another. Allocation policies are designed to address potential conflicts in situations where two or more funds or accounts participate in investment decisions involving the same securities.
|
(7)
|
MetWest Capital:
MetWest Capital portfolio managers face inherent conflicts of interest in their day-to-day management of funds and other accounts because the funds may have different investment objectives, strategies and risk profiles
than the other accounts managed by the portfolio managers. For instance, to the extent that the portfolio managers manage accounts with different investment strategies than the funds, they may from time to time be inclined to purchase securities,
including initial public offerings, for one account but not for a fund. Additionally, some of the accounts managed by the portfolio managers may have different fee structures, including performance fees, which are or have the potential to be higher
or lower, in some cases significantly higher or lower, than the fees paid by the funds. The differences in fee structures may provide an incentive to the portfolio managers to allocate more favorable trades to the higher-paying accounts.
|
|
To minimize the
effects of these inherent conflicts of interest, MetWest Capital has adopted and implemented policies and procedures, including brokerage and trade allocation policies and procedures, that it believes address the potential conflicts associated with
managing portfolios for multiple clients and ensure that all clients are treated fairly and equitably. Additionally, MetWest Capital minimizes inherent conflicts of interest by assigning the portfolio managers to accounts having similar objectives.
Accordingly, security block purchases are allocated to all accounts with similar objectives in proportionate weightings. Furthermore, MetWest Capital has adopted a Code of Ethics under Rule 17j-1 of the Investment Company Act and Rule 204A-1 under
the Investment Advisers Act of 1940 to address potential conflicts associated with managing the funds and any personal accounts the portfolio managers may maintain.
|
|
The
portfolio managers often provide investment management for separate accounts advised in the same or similar investment style as that provided to mutual funds. While management of multiple accounts could potentially lead to conflicts of interest
over various issues such as trade allocation, fee disparities and research acquisition, MetWest Capital has implemented policies and procedures for the express purpose of ensuring that clients are treated fairly and that potential conflicts of
interest are minimized.
|
(8)
|
Threadneedle:
Threadneedle portfolio managers may manage one or more mutual funds as well as other types of accounts, including proprietary accounts, separate accounts for institutions, and other pooled investment vehicles. Portfolio
managers make investment decisions for an account or portfolio based on its investment objectives and policies, and other relevant investment considerations. A portfolio manager may manage a separate account or other pooled investment vehicle whose
fees may be materially greater than the management fees paid by the Fund and may include a performance-based fee. Management of multiple funds and accounts may create potential conflicts of interest relating to the allocation of investment
opportunities, and the aggregation and allocation of trades. In addition, a portfolio manager’s responsibilities at Threadneedle include working as a securities analyst. This dual role may give rise to conflicts with respect to making
investment decisions for accounts that he/she manages versus communicating his/her analyses to other portfolio managers concerning securities that he/she follows as an analyst.
|
|
Threadneedle
has a fiduciary responsibility to all of the clients for which it manages accounts. Threadneedle seeks to provide best execution of all securities transactions and to aggregate securities transactions and then allocate securities to client accounts
in a fair and timely manner. Threadneedle has developed policies and procedures, including brokerage and trade allocation policies and procedures, designed to mitigate and manage the potential conflicts of interest that may arise from the management
of multiple types of accounts for multiple clients.
|
(9)
|
Marsico Capital:
A portfolio manager may manage accounts for other clients. These accounts may include registered investment companies, other types of pooled accounts
(
e.g.
, collective investment funds), and separate accounts (
i.e.
, accounts managed on behalf of individuals or public or private institutions). Portfolio managers of Marsico Capital make investment decisions for each account based on the investment objectives and policies and other
relevant investment considerations applicable to that account. The management of multiple accounts may result in a portfolio manager devoting unequal time and attention to the management of each account. Although Marsico Capital does not track the
time a portfolio manager spends on a single portfolio, it does assess whether a portfolio manager has adequate time and resources to effectively manage all of the accounts for which he is responsible. Marsico Capital seeks to manage competing
interests for
|
Statement
of Additional Information – June 1, 2015
|
104
|
|
the time and
attention of portfolio managers by having portfolio managers focus on a particular investment discipline or complementary investment disciplines. Accounts within a particular investment discipline may often be managed by using generally similar
investment strategies, subject to factors including particular account restrictions and objectives, account opening dates, cash flows, and other considerations. Even where multiple accounts are managed by the same portfolio manager within the same
investment discipline, however, Marsico Capital may take action with respect to one account that may differ from the timing or nature of action taken with respect to another account because of different client-specific objectives or restrictions or
for other reasons such as different cash flows. Accordingly, the performance of each account managed by a portfolio manager will vary.
|
|
Potential
conflicts of interest may also arise when allocating and/or aggregating trades. Marsico Capital often aggregates into a single trade order several individual contemporaneous client trade orders in a single security. Under Marsico Capital’s
trade management policy and procedures, when trades are aggregated on behalf of more than one account, such transactions will be allocated to participating client accounts in a fair and equitable manner. With respect to initial public offerings and
other syndicated or limited offerings, it is Marsico Capital’s policy to seek to ensure that over the long term, accounts with the same or similar investment objectives or strategies will receive an equitable opportunity to participate
meaningfully in such offerings and will not be unfairly disadvantaged. To deal with these situations, Marsico Capital has adopted policies and procedures for allocating transactions across multiple accounts. Marsico Capital’s policies also
seek to ensure that portfolio managers do not systematically allocate other types of trades in a manner that would be more beneficial to one account than another. Marsico Capital’s compliance department monitors transactions made on behalf of
multiple clients to seek to ensure adherence to its policies.
|
|
Marsico
Capital has adopted and implemented policies and procedures, including brokerage and trade allocation policies and procedures, that seek to minimize potential conflicts of interest that may arise because Marsico Capital advises multiple accounts.
In addition, Marsico Capital monitors a variety of areas, including compliance with account investment guidelines and/or restrictions and compliance with the policies and procedures of Marsico Capital, including Marsico Capital’s Code of
Ethics.
|
(10)
|
DFA:
Actual or apparent conflicts of interest may arise when a portfolio manager has the primary day-to-day responsibilities with respect to a mutual fund, such as the Variable Portfolio – DFA International Value Fund
(“Fund”), and other accounts. Other accounts include registered mutual funds (including proprietary mutual funds advised by DFA or its affiliates), other unregistered pooled investment vehicles, and other accounts managed for
organizations and individuals (“Accounts”). An Account may have similar investment objectives to the Fund, or may purchase, sell or hold securities that are eligible to be purchased, sold or held by a fund. Actual or apparent conflicts
of interest include:
|
■
|
Time Management.
The management of the Fund and other Accounts may result in a portfolio manager devoting unequal time and attention to the management of the fund and/or Accounts. DFA seeks to manage such competing interests for the
time and attention of portfolio managers by having portfolio managers focus on a particular investment discipline. Most Accounts managed by a portfolio manager within an investment discipline are managed using the same investment approach.
|
■
|
Investment
Opportunities.
It is possible that at times identical securities will be held by the Fund and one or more Accounts. However, positions in the same security may vary and the length of time that the Fund may hold
investments in the same security may likewise vary. If a portfolio manager identifies a limited investment opportunity that may be suitable for the Fund and one or more Accounts, the Fund 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. To address these situations, DFA has adopted procedures for allocating portfolio transactions across multiple Accounts.
|
■
|
Broker Selection.
With respect to securities transactions for the Fund, DFA determines which broker to use to execute each order, consistent with its duty to seek best execution of the transaction. However, with respect to certain
Accounts (such as separate accounts), DFA may be limited by the client with respect to the selection of brokers or may be instructed to direct trades through a particular broker. In these cases, DFA or its affiliates may place separate,
non-simultaneous, transactions for the Fund and another Account that may temporarily affect the market price of the security or the execution of the transaction, or both, to the detriment of the Fund or the Account.
|
■
|
Performance-Based
Fees.
For some Accounts, DFA may be compensated based on the profitability of the Account, such as by a performance-based management fee. These incentive compensation structures may create a conflict of interest
for DFA with regard to Accounts where DFA is paid based on a percentage of assets because the portfolio manager may have an incentive to allocate securities preferentially to the Accounts where DFA might share in investment gains.
|
Statement
of Additional Information – June 1, 2015
|
105
|
■
|
Investment in an
Account.
A portfolio manager or his/her relatives may invest in an Account that he or she manages and a conflict may arise where he or she may therefore have an incentive to treat the Account in which the portfolio
manager or his/her relatives invest preferentially as compared to other Accounts for which he or she has portfolio management responsibilities.
|
DFA has adopted certain
compliance procedures that are reasonably designed to address these types of conflicts. However, there is no guarantee that such procedures will detect each and every situation in which a conflict arises.
Structure of Compensation
(11)
|
Columbia Management:
Direct compensation is typically comprised of a base salary, and an annual incentive award that is paid either in the form of a cash bonus if the size of the award is under a specified threshold, or, if the size of the
award is over a specified threshold, the award is paid in a combination of a cash bonus, an equity incentive award, and deferred compensation. Equity incentive awards are made in the form of Ameriprise Financial restricted stock, or for more senior
employees both Ameriprise Financial restricted stock and stock options. The investment return credited on deferred compensation is based on the performance of specified Columbia Funds, in most cases including the Columbia Funds the portfolio manager
manages.
|
|
Base salary is
typically determined based on market data relevant to the employee’s position, as well as other factors including internal equity. Base salaries are reviewed annually, and increases are typically given as promotional increases, internal equity
adjustments, or market adjustments.
|
|
Annual incentive
awards are variable and are based on (1) an evaluation of the employee’s investment performance and (2) the results of a peer and/or management review of the employee, which takes into account skills and attributes such as team participation,
investment process, communication, and professionalism. Scorecards are used to measure performance of Columbia Funds and other accounts managed by the employee versus benchmarks and peer groups. Performance versus benchmark and peer group is
generally weighted for the rolling one, three, and five year periods. One year performance is weighted 10%, three year performance is weighted 60%, and five year performance is weighted 30%. Relative asset size is a key determinant for fund
weighting on a scorecard. Typically, weighting would be proportional to actual assets. Consideration may also be given to performance in managing client assets in sectors and industries assigned to the employee as part of his/her investment team
responsibilities, where applicable. For leaders who also have group management responsibilities, another factor in their evaluation is an assessment of the group’s overall investment performance.
|
|
Equity incentive
awards are designed to align participants’ interests with those of the shareholders of Ameriprise Financial. Equity incentive awards vest over multiple years, so they help retain employees.
|
|
Deferred
compensation awards are designed to align participants’ interests with the investors in the Columbia Funds and other accounts they manage. The value of the deferral account is based on the performance of Columbia Funds. Employees have the
option of selecting from various Columbia Funds for their deferral account, however portfolio managers must allocate a minimum of 25% of their incentive awarded through the deferral program to the Columbia Fund(s) they manage. Deferrals vest over
multiple years, so they help retain employees.
|
|
In addition to the
annual incentive award described above, top performing portfolio managers may also receive additional equity awards with extended vesting terms.
|
|
Exceptions to this
general approach to bonuses exist for certain teams and individuals. Funding for the bonus pool is determined by management and depends on, among other factors, the levels of compensation generally in the investment management industry taking into
account investment performance (based on market compensation data) and both Ameriprise Financial and Columbia Management profitability for the year, which is largely determined by assets under management.
|
|
For
all employees the benefit programs generally are the same, and are competitive within the Financial Services Industry. Employees participate in a wide variety of plans, including options in Medical, Dental, Vision, Health Care and Dependent
Spending Accounts, Life Insurance, Long Term Disability Insurance, 401(k), and a cash balance pension plan.
|
(12)
|
Threadneedle:
To align the interests of its investment staff with those of Threadneedle’s clients, the remuneration plan for senior individuals comprises basic salary and an annual profit share scheme (linked to individual
performance and the profitability of the company) delivered partly as a cash incentive, and partly as a deferred long-term incentive which Threadneedle believes encourages longevity of service, split equally between Restricted Stock Units in
Ameriprise Financial and reinvestment into a suite of Threadneedle’s own funds. Investment performance is a major factor within that performance appraisal, judged relative to each fund’s targets on a 1- and 3-year basis, with a bias
towards 3-year
|
Statement
of Additional Information – June 1, 2015
|
106
|
|
performance in
order to incentivize delivery of longer-term performance. Threadneedle Fund Deferral program, through which the deferral is notionally invested in a number of Threadneedle funds, vesting in three equal parts over three years, provides a strong tie
for Threadneedle’s investment professionals to client interests.
|
|
The split between
each component within the remuneration package varies between investment professionals and will be dependent upon performance and the type of funds they manage.
|
|
Incentives
are devised to reward:
|
■
|
investment
performance and Threadneedle client requirements, in particular the alignment with Threadneedle clients through a mandatory deferral into Threadneedle’s own products; and
|
■
|
team
cooperation and values.
|
The split of the incentive
pool focuses on the:
■
|
performance of the
individual’s own funds and research recommendations;
|
■
|
performance of all
portfolios in the individual’s team;
|
■
|
overall
contribution to the wider thinking and success of the investment team, for example, idea generation, interaction with colleagues and commitment to assist with the sales effort; and
|
■
|
Threadneedle
performance.
|
Consideration of the
individual’s overall performance is designed to incentivise fund managers to think beyond personal portfolio performance and reflects contributions made in:
■
|
inter-team
discussions, including asset allocation, global sector themes and weekly investment meetings;
|
■
|
intra-team
discussions, stock research and investment insights; and
|
■
|
a
fund manager’s demonstration of Threadneedle values, as part of Threadneedle’s team-based investment philosophy.
|
It is important to appreciate
that for individuals to maximize their rating and hence their incentive remuneration they need to contribute in all areas. Importance is placed not only on producing strong fund performance but also contributing effectively to the team and the wider
Investment department and on the Manager’s demonstration of Threadneedle’s corporate values. This structure is closely aligned with Threadneedle’s investment principles of sharing ideas and effective communication.
Investment professionals are
formally reviewed once a year, and the performance year runs from January to December. However, Threadneedle also takes into consideration longer-term performance (rolling three and five years) together with a manager’s contribution to the
investment dialogue and desk success and their control of and adherence to Threadneedle’s risk controls.
(13)
|
Columbia Management:
The compensation of specified portfolio managers consists of (i) a base salary, (ii) an annual cash bonus, and (iii) long-term incentive awards in the form of Ameriprise Financial stock options, restricted stock, and a
long-term incentive awards paid in Ameriprise shares that are based on the performance of Ameriprise Financial over rolling three-year periods.
|
|
The annual cash
bonus is based on management’s assessment of the employee’s performance relative to individual and business unit goals and objectives which may be based, in part, on achieving certain investment performance goals and retaining and
attracting assets under management.
|
|
For
all employees the benefit programs generally are the same, and are competitive within the Financial Services Industry. Employees participate in a wide variety of plans, including options in Medical, Dental, Vision, Health Care and Dependent
Spending Accounts, Life Insurance, Long Term Disability Insurance, 401(k), and a cash balance pension plan.
|
(14)
|
Marsico Capital:
The compensation package for portfolio managers of Marsico Capital includes a competitive base salary reevaluated periodically, and may also include periodic cash bonuses. Bonuses are typically based on two primary
factors: (1) Marsico Capital’s overall profitability for the period, and (2) individual achievements and contributions benefitting the firm and/or clients. Base salaries also may be adjusted upward (or downward) based on similar factors. No
other special employee incentive arrangements are currently in place or being planned.
|
|
Portfolio
manager compensation generally takes into account, among other factors, the overall performance of accounts for which the portfolio manager provides investment advisory services. In receiving compensation such as bonuses, portfolio managers do not
receive special consideration based solely on the performance of particular accounts, and do not receive compensation from accounts charging performance-based fees.
|
Statement
of Additional Information – June 1, 2015
|
107
|
|
In addition to
salary and bonus, Marsico Capital’s portfolio managers may participate in other Marsico Capital benefits such as health insurance and retirement plans on the same basis as other Marsico Capital employees. Marsico Capital’s portfolio
managers also may be offered the opportunity to acquire equity interests in the firm’s parent company.
|
|
As
a general matter, Marsico Capital does not tie portfolio manager compensation to specific levels of performance relative to fixed benchmarks (
e.g.
, S&P 500 Index). Although performance is a relevant
consideration, comparisons with fixed benchmarks may not always be useful. Relevant benchmarks vary depending on specific investment styles and client guidelines or restrictions, and comparisons to benchmark performance may at times reveal more
about market sentiment than about a portfolio manager’s performance or abilities. To encourage a long-term horizon for managing client assets and concurrently minimizing potential conflicts of interest and portfolio risks, Marsico Capital
evaluates a portfolio manager’s performance over periods longer than the immediate compensation period, and may consider a variety of measures in determining compensation, such as the performance of unaffiliated mutual funds or other
portfolios having similar strategies as well as other measurements. Other factors that may be significant in determining portfolio manager compensation include, without limitation, the effectiveness of the manager’s leadership within Marsico
Capital’s investment management team, contributions to Marsico Capital’s overall performance, discrete securities analysis, idea generation, ability and willingness to support and train other analysts, and other considerations.
|
(15)
|
DFA:
Portfolio managers receive a base salary and bonus. Compensation of a portfolio manager is determined at the discretion of DFA and is based on a portfolio manager’s experience, responsibilities, the perception of
the quality of his or her work efforts and other subjective factors. The compensation of portfolio managers is not directly based upon the performance of the mutual funds or other accounts that the portfolio managers manage. DFA reviews the
compensation of each portfolio manager annually and may make modifications in compensation as it deems necessary to reflect changes in the market. Each portfolio manager’s compensation consists of the following:
|
■
|
Base salary.
Each portfolio manager is paid a base salary. DFA considers the factors described above to determine each portfolio manager’s base salary.
|
■
|
Semi-Annual
Bonus.
Each portfolio manager may receive a semi-annual bonus. The amount of the bonus paid to each portfolio manager is based upon the factors described above.
|
Portfolio managers may be
awarded the right to purchase restricted shares of the stock of DFA as determined from time to time by the Board of Directors of DFA or its delegees. Portfolio managers also participate in benefit and retirement plans and other programs available
generally to all employees.
In addition, portfolio
managers may be given the option of participating in DFA’s Long Term Incentive Plan. The level of participation for eligible employees may be dependent on overall level of compensation, among other considerations. Participation in this program
is not based on or related to the performance of any individual strategies or any particular client accounts.
(16)
|
Donald Smith:
All employees at Donald Smith & Co., Inc. are compensated on incentive plans. The compensation for portfolio managers, analysts and traders at Donald Smith consists of a base salary, a partnership interest in the
firm’s profits, and possibly an additional, discretionary bonus. This discretionary bonus can exceed 100% of the base salary if performance for clients exceeds established benchmarks. The current benchmark utilized is the Russell 2000 Value
Index. Additional distribution of firm ownership is a strong motivation for continued employment at Donald Smith & Co., Inc. Administrative personnel are also given a bonus as a function of their contribution and the profitability of the
firm.
|
(17)
|
Barrow Hanley:
In addition to base salary, all portfolio managers and analysts at Barrow Hanley share in a bonus pool that is distributed semi-annually. Portfolio managers and analysts are rated on their value added to the
team-oriented investment process. Overall compensation applies with respect to all accounts managed and compensation does not differ with respect to distinct accounts managed by a portfolio manager. Compensation is not tied to a published or private
benchmark. It is important to understand that contributions to the overall investment process may include not recommending securities in an analyst’s sector if there are no compelling opportunities in the industries covered by that
analyst.
|
|
The
compensation of portfolio managers is not directly tied to fund performance or growth in assets for any fund or other account managed by a portfolio manager and portfolio managers are not compensated for bringing in new business. Of course, growth
in assets from the appreciation of existing assets and/or growth in new assets will increase revenues and profit. The consistent, long-term growth in assets at any investment firm is to a great extent, dependent upon the success of the portfolio
management team. The compensation of the portfolio management team at Barrow Hanley will increase over time, if and when assets continue to grow through competitive performance. Lastly, many of our key investment personnel have a longer-term
incentive compensation plan in the form of an equity interest in Barrow, Hanley, Mewhinney & Strauss, LLC.
|
Statement
of Additional Information – June 1, 2015
|
108
|
(18)
|
MetWest Capital:
Compensation for investment professionals consists of a base salary and revenue-sharing bonus. A material portion of each professional’s annual compensation is in the form of a bonus tied to MetWest
Capital’s Pelican Value Equity team revenues, results relative to clients’ benchmarks, overall client satisfaction and individual contribution.
|
|
MetWest
Capital’s compensation system is not determined on an account-specific basis. Rather, bonuses are tied to overall MetWest Capital’s Pelican Value Equity team revenues and composite performance relative to the benchmark. To reinforce
long-term focus, performance is measured over longer time periods (typically three to five years). Portfolio Managers and Analysts are encouraged to maintain a long-term focus and are not compensated for the number of their recommendations that are
purchased in the portfolio. Rather, their bonuses are tied to overall strategy performance.
|
|
Long-term
retention agreements have been put in place for eligible members of MetWest Capital’s investment team. These agreements augment those incentive opportunities already in place.
|
(19)
|
SBH:
Members of the Small Cap team are paid a salary that is competitive with industry standards and an incentive bonus based on a combination of individual and strategy performance. Marketers and client service personnel
receive base salary and commission.
|
(20)
|
Columbia Management:
Portfolio manager compensation is typically comprised of (i) a base salary and (ii) an annual cash bonus. The annual cash bonus, and in some instances the base salary, are paid from a team bonus pool that is based on
fees and performance of the accounts managed by the portfolio management team, which might include mutual funds, wrap accounts, institutional portfolios and hedge funds.
|
|
The percentage of
management fees on mutual funds and long-only institutional portfolios that fund the bonus pool is based on the short term (typically one-year) and long-term (typically three-year and five-year) performance of those accounts in relation to the
relevant peer group universe.
|
|
A fixed percentage
of management fees on hedge funds and separately managed accounts that follow a hedge fund mandate fund the bonus pool.
|
|
The percentage of
performance fees on hedge funds and separately managed accounts that follow a hedge fund mandate that fund the bonus pool is based on the absolute level of each hedge fund’s current year investment return.
|
|
For
all employees the benefit programs generally are the same, and are competitive within the Financial Services Industry. Employees participate in a wide variety of plans, including options in Medical, Dental, Vision, Health Care and Dependent
Spending Accounts, Life Insurance, Long Term Disability Insurance, 401(k), and a cash balance pension plan.
|
(21)
|
Columbia Management:
Portfolio manager compensation is typically comprised of (i) a base salary, and (ii) an annual cash bonus. The annual cash bonus is paid from team bonus pools. Funding for two of the bonus pools is based upon a
percentage of profits or revenue generated by the institutional portfolios they manage. The portfolio managers may also be paid from a separate bonus pool based upon the performance of the mutual fund(s) they manage. Funding for this bonus pool is
determined by a percentage of the aggregate assets under management in the mutual fund(s) they manage, and by the one, three and five year performance of the mutual fund(s) in relation to the relevant peer group universe.
|
|
Senior management
of Columbia Management has the discretion to increase or decrease the size of the bonus pool related to mutual funds 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. Senior management of Columbia Management does not have discretion over the size of the bonus pool related to institutional portfolios.
|
|
For
all employees the benefit programs generally are the same, and are competitive within the Financial Services Industry. Employees participate in a wide variety of plans, including options in Medical, Dental, Vision, Health Care and Dependent
Spending Accounts, Life Insurance, Long Term Disability Insurance, 401(k), and a cash balance pension plan.
|
The Administrator
Columbia Management Investment Advisers, LLC (which
is also the Investment Manager) 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 necessary for, or appropriate to, the business and effective operation of each 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 Paid by the Funds
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 table below.
Statement
of Additional Information – June 1, 2015
|
109
|
Administrative Services Agreement Fee Schedule
Funds
|
Asset
Levels
(in Millions)
|
Applicable
Fee Rate
|
Absolute
Return Currency and Income Fund; Asia Pacific ex-Japan Fund; Commodity Strategy Fund; European Equity Fund; Global Bond Fund; International Opportunities Fund
(b)
; International Value Fund
(a)
; Marsico Global Fund
(b)
; Mortgage Opportunities Fund, Multi-Advisor Small Cap Value Fund; Overseas Value Fund; Select Global Equity
Fund; Select International Equity Fund; Select Smaller-Cap Value Fund; Small Cap Value Fund II
|
$0-$500
|
0.080%
|
>$500-$1,000
|
0.075%
|
>$1,000-$3,000
|
0.070%
|
>$3,000-$12,000
|
0.060%
|
>$12,000
|
0.050%
|
AMT-Free
Tax-Exempt Bond Fund; Emerging Markets Bond Fund; Floating Rate Fund; High Yield Bond Fund; Income Opportunities Fund; Inflation Protected Securities Fund; Limited Duration Credit Fund; Short Term Bond Fund; Short Term Municipal Bond Fund; U.S.
Government Mortgage Fund
|
$0-$500
|
0.070%
|
>$500-$1,000
|
0.065%
|
>$1,000-$3,000
|
0.060%
|
>$3,000-$12,000
|
0.050%
|
>$12,000
|
0.040%
|
AP
- Multi-Manager Value Fund; Diversified Equity Income Fund; Dividend Opportunity Fund; Global Equity Value Fund; Global Infrastructure Fund; Global Opportunities Fund
(c)
; Large Cap Enhanced
Core Fund; Large Core Quantitative Fund; Large Growth Quantitative Fund; Large Value Quantitative Fund; Marsico 21st Century Fund
(b)
; Marsico Flexible Capital Fund; Marsico Focused Equities
Fund
(b)
; Marsico Growth Fund
(b)
; Mid Cap Value Fund; Money Market Fund; Select Large Cap Equity Fund; Select Large-Cap Value Fund;
Seligman Communications and Information Fund; Seligman Global Technology Fund; Small/Mid Cap Value Fund
|
$0-$500
|
0.060%
|
>$500-$1,000
|
0.055%
|
>$1,000-$3,000
|
0.050%
|
>$3,000-$12,000
|
0.040%
|
>$12,000
|
0.030%
|
Flexible
Capital Income Fund
|
$0-$500
|
0.060%
|
>$500-$1,000
|
0.055%
|
>$1,000-$3,000
|
0.050%
|
>$3,000
|
0.040%
|
Capital
Allocation Portfolios; Income Builder Fund; LifeGoal Growth Portfolio
|
All
Assets
|
0.020%
|
Convertible
Securities Fund
|
$0-$500
|
0.060%
|
>$500-$1,000
|
0.055%
|
>$1,000
|
0.050%
|
Large
Cap Index Fund; Mid Cap Index Fund; Small Cap Index Fund
|
All
Assets
|
0.100%
|
AMT-Free
CA Intermediate Muni Bond Fund; AMT-Free GA Intermediate Muni Bond Fund; AMT-Free MD Intermediate Muni Bond Fund; MN Tax-Exempt Fund; AMT-Free NC Intermediate Muni Bond Fund; AMT-Free SC Intermediate Muni Bond Fund; AMT-Free VA Intermediate Muni
Bond Fund
|
$0-$250
|
0.070%
|
>$250-$1,000
|
0.065%
|
>$1,000-$3,000
|
0.060%
|
>$3,000-$12,000
|
0.050%
|
>$12,000
|
0.040%
|
(a)
|
This administration fee
schedule became effective on December 14, 2013. Prior to December 14, 2013, International Value Fund paid an administration fee of 0.020% on all assets, and the Master Portfolio paid an administration fee of 0.060% on the first $500 million of
assets, reducing to 0.030% as assets increase. Prior to June 1, 2013, International Value Fund paid an administration fee of 0.17% and the Master Portfolio paid an administration fee of 0.050%.
|
(b)
|
Prior to January 23, 2013,
International Opportunities Fund, Marsico 21st Century Fund, Marsico Focused Equities Fund, Marsico Global Fund and Marsico Growth Fund paid an annual administrative services fee of 0.22% on all assets.
|
(c)
|
This fee applies to assets
invested in securities, other than underlying mutual funds (including any exchange-traded funds (ETFs)) that pay an administrative services fee to Columbia Management, including other funds administered by the Investment Manager that do not pay an
administrative fee, derivatives and individual securities. The Fund does not pay an administrative services fee on assets that are invested in underlying funds, including any ETFs, that pay an administrative services fee to Columbia Management.
|
The Administrator, from
the administration fee it receives from Large Cap Index Fund and Small Cap Index Fund, pays all operating expenses of the Fund, with the exception of brokerage fees and commissions, interest, fees and expenses of Trustees who are not officers,
directors or employees of the Investment Manager or its affiliates, distribution (Rule 12b-1) and/or shareholder servicing fees and any extraordinary non-recurring expenses that may arise, including litigation expenses.
The fee is calculated for each calendar day on the
basis of net assets as of the close of the preceding day. Fees paid in each of the last three fiscal periods are shown in the table below. As described in
Other Services Provided – Pricing and
Bookkeeping Services
, State Street was paid for certain services prior to August 8, 2011 with respect to series of CFST. The figures in the table below for periods before such date are net fees paid to the Administrator after deduction for
these pricing and bookkeeping fees. The table is organized by fiscal year end.
Statement
of Additional Information – June 1, 2015
|
110
|
Administrative Fees
|
Administrative
services fees paid in:
|
|
2015
|
2014
|
2013
|
For
Funds with fiscal period ending January 31
|
Capital
Allocation Aggressive Portfolio
|
$133,066
|
$121,626
|
$111,051
|
Capital
Allocation Conservative Portfolio
|
62,651
|
69,740
|
65,589
|
Capital
Allocation Moderate Aggressive Portfolio
|
473,854
|
433,518
|
213,998
|
Capital
Allocation Moderate Conservative Portfolio
|
138,522
|
128,628
|
25,851
|
Capital
Allocation Moderate Portfolio
|
338,662
|
324,687
|
298,998
|
Income
Builder Fund
|
266,133
|
222,085
|
172,633
|
LifeGoal
Growth Portfolio
|
165,097
|
157,611
|
150,091
|
|
2014
|
2013
|
2012
|
For
Funds with fiscal period ending February 28/29
|
Convertible
Securities Fund
|
386,205
|
317,615
|
468,787
|
Global
Equity Value Fund
|
637,659
|
352,140
|
370,489
(a)
|
International
Opportunities Fund
|
201,595
|
885,760
|
1,825,542
|
International
Value Fund
(b)
|
358,512
|
1,734,302
|
2,258,470
|
Large
Cap Enhanced Core Fund
|
155,643
|
168,003
|
298,190
|
Large
Cap Index Fund
|
2,824,934
|
2,516,462
|
3,361,680
|
Marsico
21st Century Fund
|
608,088
|
2,715,082
|
5,963,877
|
Marsico
Focused Equities Fund
|
733,158
|
3,771,874
|
5,553,522
|
Marsico
Global Fund
|
25,552
|
24,657
|
4,675
|
Marsico
Growth Fund
|
1,110,866
|
5,475,810
|
7,140,171
|
Mid
Cap Index Fund
|
3,214,924
|
2,425,603
|
2,688,253
|
Mid
Cap Value Fund
|
1,911,227
|
1,847,219
|
3,145,380
|
Overseas
Value Fund
|
242,402
|
23,311
|
9,224
|
Select
International Equity Fund
|
700,784
|
882,560
|
1,516,047
|
Select
Large Cap Equity Fund
|
343,281
|
470,848
|
630,042
|
Small
Cap Index Fund
|
2,436,410
|
1,875,113
|
2,072,518
|
Small
Cap Value Fund II
|
1,232,271
|
1,127,515
|
1,896,297
|
For
Funds with fiscal period ending March 31
|
Short
Term Bond Fund
|
1,714,352
|
1,732,091
|
1,741,167
|
For
Funds with fiscal period ending April 30
|
AMT-Free
CA Intermediate Muni Bond Fund
|
201,539
|
205,113
|
221,560
(c)
|
AMT-Free
GA Intermediate Muni Bond Fund
|
59,149
|
72,488
|
92,510
(c)
|
AMT-Free
MD Intermediate Muni Bond Fund
|
74,179
|
99,254
|
120,430
(c)
|
AMT-Free
NC Intermediate Muni Bond Fund
|
123,426
|
153,709
|
188,745
(c)
|
AMT-Free
SC Intermediate Muni Bond Fund
|
92,375
|
117,813
|
145,980
(c)
|
AMT-Free
VA Intermediate Muni Bond Fund
|
191,743
|
244,361
|
306,327
(c)
|
Global
Infrastructure Fund
|
345,541
|
390,799
|
505,738
|
Short
Term Municipal Bond Fund
|
1,264,155
|
1,367,486
|
1,839,118
(c)
|
For
Funds with fiscal period ending May 31
|
AP
– Multi-Manager Value Fund
|
654,474
|
389,955
|
35,913
(d)
|
Commodity
Strategy Fund
|
47,910
|
47,681
|
10,787
(e)
|
Diversified
Equity Income Fund
|
1,488,857
|
1,565,210
|
1,241,940
(f)
|
Statement
of Additional Information – June 1, 2015
|
111
|
|
Administrative
services fees paid in:
|
|
2014
|
2013
|
2012
|
Dividend
Opportunity Fund
|
$2,777,270
|
$2,317,635
|
$1,436,783
(g)
|
Flexible
Capital Income Fund
|
118,679
|
60,988
|
22,256
(e)
|
High
Yield Bond Fund
|
1,235,345
|
1,136,506
|
1,044,473
|
Mortgage
Opportunities Fund
|
6,058
(h)
|
N/A
|
N/A
|
Multi-Advisor
Small Cap Value Fund
|
303,827
|
263,048
|
288,940
|
Select
Large-Cap Value Fund
|
410,760
|
291,937
|
131,059
(i)
|
Select
Smaller-Cap Value Fund
|
373,131
|
300,791
|
134,853
(i)
|
Seligman
Communications and Information Fund
|
1,707,269
|
1,746,336
|
812,545
(i)
|
Small/Mid
Cap Value Fund
|
894,822
|
868,332
|
634,373
(f)
|
U.S.
Government Mortgage Fund
|
1,243,886
|
1,521,599
|
836,349
|
For
Funds with fiscal period ending July 31
|
AMT-Free
Tax-Exempt Bond Fund
|
386,949
|
445,257
|
286,567
(j)
|
Floating
Rate Fund
|
743,819
|
441,027
|
341,054
|
Global
Opportunities Fund
|
464,744
|
473,470
|
428,730
(k)
|
Income
Opportunities Fund
|
1,957,561
|
1,820,985
|
1,362,239
|
Inflation
Protected Securities Fund
|
189,657
|
263,695
|
355,911
|
Large
Core Quantitative Fund
|
1,916,648
|
1,772,519
|
1,707,529
|
Large
Growth Quantitative Fund
|
315,368
|
321,329
|
285,760
(k)
|
Large
Value Quantitative Fund
|
348,109
|
168,846
|
134,364
(k)
|
Limited
Duration Credit Fund
|
729,816
|
728,804
|
648,545
|
MN
Tax-Exempt Fund
|
287,171
|
316,928
|
265,141
(l)
|
Money
Market Fund
|
1,002,488
|
1,031,373
|
1,145,263
|
For
Funds with fiscal period ending August 31
|
Marsico
Flexible Capital Fund
|
125,410
|
86,382
|
102,076
|
For
Funds with fiscal period ending October 31
|
Absolute
Return Currency and Income Fund
|
43,247
|
75,213
|
88,948
|
Asia
Pacific ex-Japan Fund
|
526,126
|
388,921
|
338,241
|
Emerging
Markets Bond Fund
|
519,939
|
549,411
|
381,281
|
European
Equity Fund
|
463,460
|
311,340
|
273,680
|
Global
Bond Fund
|
118,359
|
169,361
|
213,057
|
Select
Global Equity Fund
|
319,709
|
302,867
|
319,567
|
Seligman
Global Technology Fund
|
281,879
|
249,552
|
282,500
|
(a)
|
The Fund changed its fiscal
year end in 2012 from March 31 to February 28/29. For the fiscal year ended 2012, the information shown is for the period from April 1, 2011 to February 29, 2012.
|
(b)
|
The administration fees were
paid prior to December 14, 2013 at both the Master Portfolio-and Feeder Fund-levels; amounts shown above include only the portion paid at the Feeder Fund-level.
|
(c)
|
The Funds changed their fiscal
year end in 2012 from March 31 to April 30. For the fiscal year ended 2012, the information shown is for the 13-month period from April 1, 2011 to April 30, 2012. For the fiscal year ended March 31, 2012, the Funds paid administration fees as
follows: AMT-Free CA Intermediate Muni Bond Fund paid $205,208; AMT-Free GA Intermediate Muni Bond Fund paid $86,372; AMT-Free MD Intermediate Muni Bond Fund paid $112,277; AMT-Free NC Intermediate Muni Bond Fund paid $175,678; AMT-Free SC
Intermediate Muni Bond Fund paid $135,833; Short Term Municipal Bond Fund paid $1,717,276; and AMT-Free VA Intermediate Muni Bond Fund paid $285,097. For the fiscal period from April 1, 2012 to April 30, 2012, the Funds paid administration fees as
follows: AMT-Free CA Intermediate Muni Bond Fund paid $16,352; AMT-Free GA Intermediate Muni Bond Fund paid $6,138; AMT-Free MD Intermediate Muni Bond Fund paid $8,153; AMT-Free NC Intermediate Muni Bond Fund paid $13,067; AMT-Free SC Intermediate
Muni Bond Fund paid $10,147; Short Term Municipal Bond Fund paid $121,842; and AMT-Free VA Intermediate Muni Bond Fund paid $21,230.
|
(d)
|
For the period from April 20,
2012 (commencement of operations) to May 31, 2012.
|
(e)
|
For the period from July 28,
2011 (commencement of operations) to May 31, 2012.
|
(f)
|
Diversified Equity Income Fund
and Small/Mid Cap Value Fund changed their fiscal year end in 2012 from September 30 to May 31. For the fiscal year ended 2012, the information shown is for the period from October 1, 2011 to May 31, 2012. For the fiscal year from October 1, 2010 to
September 30, 2011, the administrative services fees paid were $2,237,285 and $1,178,639 respectively.
|
Statement
of Additional Information – June 1, 2015
|
112
|
(g)
|
The Fund changed its fiscal
year end in 2012 from June 30 to May 31. For the fiscal year ended 2012, the information shown is for the period from July 1, 2011 to May 31, 2012. For the fiscal year from July 1, 2010 to June 30, 2011, the administrative services fees paid were
$911,737.
|
(h)
|
For the period from April 30,
2014 (commencement of operations) to May 31, 2014.
|
(i)
|
Select Large-Cap Value Fund,
Select Smaller-Cap Value Fund and Seligman Communications and Information Fund changed their fiscal year end in 2012 from December 31 to May 31. For the fiscal year ended 2012, the information shown is for the period from January 1, 2012 to May 31,
2012. For the fiscal year from January 1, 2011 to December 31, 2011, the administrative services fees paid were $291,123, $359,260 and $1,924,770, respectively.
|
(j)
|
The Fund changed its fiscal
year end in 2012 from November 30 to July 31. For the fiscal year ended 2012, the information shown is for the period from December 1, 2011 to July 31, 2012. For the fiscal year from December 1, 2010 to November 30, 2011, the administrative services
fees paid were $408,892.
|
(k)
|
Global Opportunities Fund,
Large Growth Quantitative Fund and Large Value Quantitative Fund changed fiscal year end in 2012 from September 30 to July 31. For the fiscal year ended 2012, the information shown is for the period from October 1, 2011 to July 31, 2012. For the
fiscal year from October 1, 2010 to September 30, 2011, the administrative services fees paid were $737,125, $410,431 and $195,904, respectively.
|
(l)
|
The Fund changed its fiscal
year end in 2012 from August 31 to July 31. For the fiscal year ended 2012, the information shown is for the period from September 1, 2011 to July 31, 2012. For the fiscal year from September 1, 2010 to August 31, 2011, the administrative services
fees paid were $248,745.
|
The
Distributor
Columbia Management Investment
Distributors, Inc. (the Distributor), 225 Franklin Street, Boston, MA 02110, an indirect wholly-owned subsidiary of Ameriprise Financial and an affiliate of the Investment Manager, 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 reasonable efforts to find purchasers for the shares of the Funds.
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 Trusts or the Transfer Agent, or their designated agents. Additionally, the Distributor has agreed to use reasonable 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
as it deems reasonable and 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 Trusts
pursuant to Rule 12b-1 under the 1940 Act. See
Investment Management and Other Services – Distribution and/or Servicing Plans
for more information about the share classes for which the
Trusts has adopted a Distribution Plan.
See
Investment Management 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 Investment Manager and its affiliates.
The Distribution Agreement became effective with
respect to each 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 each Fund at any time without penalty by the Trusts (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 Paid by the Funds
The Distributor and the Previous Distributor each received
commissions and other compensation for its services as reflected in the following charts, which show amounts paid to the Distributor and the Previous Distributor, as well as amounts the Distributor and the Previous Distributor retained, after paying
commissions, for the three most recently completed fiscal years.
Statement
of Additional Information – June 1, 2015
|
113
|
Sales Charges Paid to, and Retained by, Distributor
|
Sales
Charges Paid to Distributor
|
Amount
Retained by Distributor
After Paying Commissions
|
Fund
|
2015
|
2014
|
2013
|
2015
|
2014
|
2013
|
For
Funds with fiscal period ending January 31
|
Capital
Allocation Aggressive Portfolio
|
$1,251,527
|
$1,269,205
|
$1,179,422
|
$174,839
|
$178,765
|
$163,689
|
Capital
Allocation Conservative Portfolio
|
232,662
|
325,677
|
452,383
|
33,800
|
49,250
|
70,230
|
Capital
Allocation Moderate Aggressive Portfolio
|
2,774,382
|
2,593,126
|
504,862
|
389,403
|
361,669
|
64,900
|
Capital
Allocation Moderate Conservative Portfolio
|
633,768
|
717,987
|
107,544
|
88,324
|
100,785
|
14,341
|
Capital
Allocation Moderate Portfolio
|
2,394,670
|
2,608,927
|
2,849,144
|
337,660
|
367,543
|
400,801
|
Income
Builder Fund
|
1,813,825
|
2,362,519
|
1,583,948
|
269,884
|
360,279
|
241,261
|
LifeGoal
Growth Portfolio
|
760,289
|
824,671
|
917,200
|
106,507
|
114,629
|
123,076
|
|
2014
|
2013
|
2012
|
2014
|
2013
|
2012
|
For
Funds with fiscal period ending February 28/29
|
Convertible
Securities Fund
|
245,133
|
59,849
|
177,690
|
34,761
|
7,826
|
24,702
|
Global
Equity Value Fund
|
232,934
|
146,966
|
135,386
(a)
|
32,164
|
20,274
|
19,263
(a)
|
International
Opportunities Fund
|
20,494
|
27,190
|
41,286
|
2,563
|
2,659
|
2,942
|
International
Value Fund
|
61,829
|
67,408
|
87,336
|
8,545
|
9,328
|
11,617
|
Large
Cap Enhanced Core Fund
|
0
|
0
|
0
|
0
|
0
|
0
|
Large
Cap Index Fund
|
0
|
289
|
212
|
0
|
0
|
0
|
Marsico
21st Century Fund
|
182,982
|
305,214
|
502,878
|
20,212
|
22,336
|
44,191
|
Marsico
Focused Equities Fund
|
233,542
|
203,572
|
195,703
|
32,143
|
25,057
|
23,780
|
Marsico
Global Fund
|
77,832
|
42,683
|
37,199
|
11,062
|
6,132
|
5,395
|
Marsico
Growth Fund
|
244,434
|
236,184
|
258,774
|
33,086
|
29,675
|
31,531
|
Mid
Cap Index Fund
|
0
|
0
|
0
|
0
|
0
|
0
|
Mid
Cap Value Fund
|
266,769
|
175,442
|
223,040
|
36,677
|
21,486
|
25,312
|
Overseas
Value Fund
|
108,431
|
0
|
0
|
15,303
|
0
|
0
|
Select
International Equity Fund
|
85,904
|
91,719
|
113,730
|
11,856
|
12,794
|
14,938
|
Select
Large Cap Equity Fund
|
44,943
|
43,543
|
25,633
|
5,837
|
6,072
|
3,371
|
Small
Cap Index Fund
|
1,721
|
2,669
|
6,291
|
0
|
0
|
0
|
Small
Cap Value Fund II
|
3,511
|
7,407
|
8,258
|
458
|
428
|
442
|
For
Funds with fiscal period ending March 31
|
Short
Term Bond Fund
|
112,580
|
176,680
|
150,382
|
25,042
|
35,020
|
32,975
|
For
Funds with fiscal period ending April 30
|
AMT-Free
CA Intermediate Muni Bond Fund
|
62,171
|
58,551
|
38,657
(b)
|
8,824
|
7,900
|
5,743
(b)
|
AMT-Free
GA Intermediate Muni Bond Fund
|
7,774
|
18,069
|
15,963
(b)
|
915
|
2,400
|
2,378
(b)
|
AMT-Free
MD Intermediate Muni Bond Fund
|
5,688
|
20,855
|
31,404
(b)
|
702
|
2,823
|
4,101
(b)
|
AMT-Free
NC Intermediate Muni Bond Fund
|
23,471
|
31,198
|
51,004
(b)
|
2,625
|
4,507
|
6,977
(b)
|
AMT-Free
SC Intermediate Muni Bond Fund
|
35,555
|
102,192
|
63,596
(b)
|
4,727
|
14,363
|
8,250
(b)
|
AMT-Free
VA Intermediate Muni Bond Fund
|
13,357
|
23,369
|
35,795
(b)
|
1,665
|
3,356
|
4,797
(b)
|
Global
Infrastructure Fund
|
266,567
|
192,177
|
817,596
|
36,715
|
26,036
|
108,949
|
Short
Term Municipal Bond Fund
|
44,450
|
48,724
|
38,726
(b)
|
6,331
|
6,477
|
9,462
(b)
|
For
Funds with fiscal period ending May 31
|
AP
– Multi-Manager Value Fund
|
0
|
0
|
0
(c)
|
0
|
0
|
0
(c)
|
Commodity
Strategy Fund
|
4,927
|
10,829
|
0
(d)
|
700
|
1,611
|
0
(d)
|
Diversified
Equity Income Fund
|
1,362,341
|
1,333,200
|
985,710
(e)
|
191,022
|
184,526
|
131,309
(e)
|
Dividend
Opportunity Fund
|
4,164,771
|
4,479,371
|
3,377,748
(f)
|
584,271
|
633,597
|
476,323
(f)
|
Flexible
Capital Income Fund
|
636,096
|
17,374
|
11,959
(d)
|
90,166
|
2,507
|
1,638
(d)
|
Statement
of Additional Information – June 1, 2015
|
114
|
|
Sales
Charges Paid to Distributor
|
Amount
Retained by Distributor
After Paying Commissions
|
|
2014
|
2013
|
2012
|
2014
|
2013
|
2012
|
High
Yield Bond Fund
|
$890,213
|
$1,204,924
|
$973,589
|
$137,786
|
$185,026
|
$144,186
|
Mortgage
Opportunities Fund
|
0
(g)
|
N/A
|
N/A
|
0
(g)
|
N/A
|
N/A
|
Multi-Advisor
Small Cap Value Fund
|
177,273
|
132,857
|
177,139
|
25,045
|
18,637
|
23,723
|
Select
Large-Cap Value Fund
|
480,587
|
103,537
|
42,518
(h)
|
66,488
|
14,265
|
5,557
(h)
|
Select
Smaller-Cap Value Fund
|
211,623
|
101,880
|
52,720
(h)
|
29,656
|
13,888
|
7,194
(h)
|
Seligman
Communications and Information Fund
|
755,972
|
1,225,388
|
1,110,624
(h)
|
99,144
|
159,833
|
148,424
(h)
|
Small/Mid
Cap Value Fund
|
447,309
|
349,017
|
266,582
(e)
|
63,337
|
48,388
|
35,277
(e)
|
U.S.
Government Mortgage Fund
|
295,618
|
919,054
|
522,439
|
38,884
|
129,362
|
77,882
|
For
Funds with fiscal period ending July 31
|
AMT-Free
Tax-Exempt Bond Fund
|
284,174
|
553,197
|
344,970
(i)
|
40,583
|
81,614
|
51,025
(i)
|
Floating
Rate Fund
|
712,818
|
608,203
|
272,294
|
100,867
|
88,974
|
37,088
|
Global
Opportunities Fund
|
550,066
|
662,066
|
637,364
(j)
|
77,655
|
92,310
|
87,695
(j)
|
Income
Opportunities Fund
|
394,249
|
849,522
|
1,121,899
|
54,872
|
125,206
|
167,180
|
Inflation
Protected Securities Fund
|
60,697
|
114,383
|
248,000
|
8,904
|
16,099
|
37,296
|
Large
Core Quantitative Fund
|
1,414,908
|
1,316,521
|
1,304,280
|
197,475
|
183,151
|
171,146
|
Large
Growth Quantitative Fund
|
60,744
|
55,040
|
51,584
(j)
|
8,501
|
8,055
|
7,211
(j)
|
Large
Value Quantitative Fund
|
85,224
|
35,127
|
11,416
(j)
|
12,031
|
5,012
|
1,422
(j)
|
Limited
Duration Credit Fund
|
339,388
|
535,048
|
582,376
|
45,559
|
76,033
|
81,611
|
Minnesota
Tax-Exempt Fund
|
372,153
|
628,019
|
512,917
(k)
|
53,187
|
85,803
|
73,620
(k)
|
Money
Market Fund
|
18,434
|
12,458
|
50,522
|
N/A
|
N/A
|
N/A
|
For
Funds with fiscal period ending August 31
|
Marsico
Flexible Capital Fund
|
181,085
|
103,713
|
59,425
|
25,348
|
14,161
|
7,736
|
For
Funds with fiscal period ending October 31
|
Absolute
Return Currency and Income Fund
|
2,864
|
14,779
|
9,253
|
332
|
951
|
1,257
|
Asia
Pacific ex-Japan Fund
|
735
|
2,206
|
518
|
103
|
255
|
63
|
Emerging
Markets Bond Fund
|
270,936
|
673,523
|
614,265
|
38,369
|
102,103
|
96,104
|
European
Equity Fund
|
586,471
|
324,565
|
54,053
|
82,976
|
46,750
|
7,445
|
Global
Bond Fund
|
57,856
|
146,679
|
178,419
|
8,362
|
21,614
|
26,728
|
Select
Global Equity Fund
|
182,484
|
167,567
|
169,550
|
25,921
|
23,731
|
23,243
|
Seligman
Global Technology Fund
|
201,212
|
166,638
|
271,011
|
27,933
|
22,533
|
36,780
|
(a)
|
The Fund changed its fiscal
year end in 2012 from March 31 to February 28/29. For the fiscal year ended 2012, the information shown is for the period from April 1, 2011 to February 29, 2012.
|
(b)
|
The Funds changed their fiscal
year end in 2012 from March 31 to April 30. For the fiscal year ended 2012, the information shown is for the 13-month period from April 1, 2011 to April 30, 2012. For the fiscal year ended March 31, 2012, the Funds paid sales charges as follows:
AMT-Free CA Intermediate Muni Bond Fund paid $38,331; AMT-Free GA Intermediate Muni Bond Fund paid $15,958; AMT-Free MD Intermediate Muni Bond Fund paid $31,062; AMT-Free NC Intermediate Muni Bond Fund paid $46,642; AMT-Free SC Intermediate Muni
Bond Fund paid $57,264; Short Term Municipal Bond Fund paid $35,161; and AMT-Free VA Intermediate Muni Bond Fund paid $35,555. For the fiscal period from April 1, 2012 to April 30, 2012, the Funds paid sales charges as follows: AMT-Free CA
Intermediate Muni Bond Fund paid $326; AMT-Free GA Intermediate Muni Bond Fund paid $5; AMT-Free MD Intermediate Muni Bond Fund paid $342; AMT-Free NC Intermediate Muni Bond Fund paid $4,362; AMT-Free SC Intermediate Muni Bond Fund paid $6,332;
Short Term Municipal Bond Fund paid $3,565; and AMT-Free VA Intermediate Muni Bond Fund paid $240.
|
(c)
|
For the period from April 20,
2012 (commencement of operations) to May 31, 2012.
|
(d)
|
For the period from July 28,
2011 (commencement of operations) to May 31, 2012.
|
(e)
|
The Fund changed its fiscal
year end in 2012 from September 30 to May 31. For the fiscal year ended 2012, the information shown is for the period from October 1, 2011 to May 31, 2012.
|
(f)
|
The Fund changed its fiscal
year end in 2012 from June 30 to May 31. For the fiscal year ended 2012, the information shown is for the period from July 1, 2011 to May 31, 2012.
|
(g)
|
For the period from April 30,
2014 (commencement of operations) to May 31, 2014.
|
(h)
|
The Fund changed its fiscal
year end in 2012 from December 31 to May 31. For the fiscal year ended 2012, the information shown is for the period from January 1, 2012 to May 31, 2012.
|
(i)
|
The Fund changed its fiscal
year end in 2012 from November 30 to July 31. For the fiscal year ended 2012, the information shown is for the period from December 1, 2011 to July 31, 2012.
|
Statement
of Additional Information – June 1, 2015
|
115
|
(j)
|
The Fund changed its fiscal
year end in 2012 from September 30 to July 31. For the fiscal year ended 2012, the information shown is for the period from October 1, 2011 to July 31, 2012.
|
(k)
|
The Fund changed its fiscal
year end in 2012 from August 31 to July 31. For the fiscal year ended 2012, the information shown is for the period from September 1, 2011 to July 31, 2012.
|
Part of the sales charge may be paid to selling
dealers who have agreements with the Distributor. The Distributor will retain the balance of the sales charge. At times the entire sales charge may be paid to selling dealers. See the prospectus for amounts retained by Selling Agents as a percentage
of the offering price.
Distribution and/or Servicing
Plans
The Trustees have adopted distribution
and/or shareholder servicing plans for certain share classes. See the cover of this SAI for the share classes offered by the Funds.
The table below shows the annual distribution and/or
services fees (payable monthly and calculated based on an annual percentage of average daily net assets) and the combined amount of such fees applicable to each share class. The Trust is not aware as to what amount, if any, of the distribution and
service fees paid to the 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
Fee
|
Service
Fee
|
Combined
Total
|
Class
A (Series of CFST)
|
—
|
—
|
0.25%
(a)
|
Class
A (Series of CFST II)
|
up
to 0.25%
|
up
to 0.25%
|
0.25%
(b)
|
Class
B
|
0.75%
(c)
|
0.25%
|
1.00%
(d)
|
Class
C
|
0.75%
(c)
|
0.25%
|
1.00%
(b)
|
Class
I
|
None
|
None
|
None
|
Class
K
|
None
|
None
(e)
|
None
|
Class
R (Series of CFST)
|
0.50%
|
—
(f)
|
0.50%
|
Class
R (Series of CFST II)
|
up
to 0.50%
(b)
|
up
to 0.25%
|
0.50%
(f)
|
Class
R4
|
None
|
None
|
None
|
Class
R5
|
None
|
None
|
None
|
Class
T
|
None
|
0.50%
(g)
|
0.50%
(g)
|
Class
W
|
up
to 0.25%
|
up
to 0.25%
|
0.25%
(b)
|
Class
Y
|
None
|
None
|
None
|
Class
Z
|
None
|
None
|
None
|
(a)
|
Series of CFST pay a combined
distribution and service fee pursuant to their combined shareholder servicing and distribution plan for Class A shares.
|
(b)
|
Fee amounts noted apply to all
Funds other than Money Market Fund, which, for each of Class A and Class W shares, pays distribution and service fees of 0.10%, and for Class C shares pays distribution fees of 0.75%. The Distributor has currently agreed not to be reimbursed by the
Fund for 0.25% of the 0.50% fee for Class R shares of Columbia Money Market Fund. The Distributor has voluntarily agreed to waive the 12b-1 fees it receives from Class A, Class C, Class R and Class W shares of Money Market Fund. Compensation paid to
selling agents may be suspended to the extent of the Distributor’s waiver of the 12b-1 fees on these specific share classes of these Funds.
|
(c)
|
For Short Term Bond Fund, the
Distributor has voluntarily agreed to waive a portion of the distribution fee for Class B and Class C shares so that the distribution fee does not exceed 0.30% and 0.60%, respectively, annually.
|
(d)
|
Fee amounts noted apply to all
Funds other than Money Market Fund, which pays distribution fees of up to 0.75% and service fees of up to 0.10% for a combined total of 0.85%. The Distributor has currently agreed not to be reimbursed by the Fund for 0.10% of the 0.85% fee for Class
B shares of Money Market Fund. Class B shares are closed to new and existing investors.
|
(e)
|
Under a Plan Administration
Services Agreement, the Funds’ Class K shares pay for plan administration services, including services such as implementation and conversion services, account set-up and maintenance, reconciliation and account recordkeeping, education services
and administration to various plan types, including 529 plans, retirement plans and health savings accounts. Shareholder services fees for Class K shares are not paid pursuant to a Rule 12b-1 plan.
|
(f)
|
Class R shares of series of
CFST pay a distribution fee pursuant to a Fund’s distribution (Rule 12b-1) plan for Class R shares and do not have a shareholder service plan for Class R shares. Series of CFST II have a distribution and shareholder service plan for Class R
shares pursuant to which the maximum fee under the plan reimbursed for distribution expenses is equal on an annual basis to 0.50% of the average daily net assets attributable to Class R shares of the Funds, of which amount, up to 0.25% may be
reimbursed for shareholder service expense.
|
(g)
|
The shareholder servicing fees
for Class T shares are up to 0.50% of average daily net assets attributable to Class T shares for equity Funds and 0.40% for fixed income Funds. In general, the Funds currently limit such fees to a maximum of 0.25% for equity Funds and 0.15% for
fixed income Funds. See
Class T Shares Shareholder Service Fees
below for more information.
|
If you maintain shares of the Fund directly with the
Fund, without working directly with a financial advisor or Selling Agent, distribution and service fees are retained by the Distributor as payment or reimbursement for incurring certain distribution and shareholder service related expenses.
Statement
of Additional Information – June 1, 2015
|
116
|
Over time, these distribution and/or shareholder
service fees will reduce the return on your investment and may cost you more than paying other types of sales charges. The Fund will pay these fees to the Distributor and/or to eligible Selling 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 Agent may also charge you other additional fees for providing services to your account, which may be different from those described
here.
Plans for Series of CFST.
The shareholder servicing plans permit the Funds to compensate or reimburse servicing agents for the shareholder services they have provided. The Distribution Plans 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 may be paid to affiliates of the Distributor and Ameriprise
Financial.
Under the shareholder
servicing plan, the Board must review, at least quarterly, a written report of the amounts paid under the servicing agreements and the purposes for which those expenditures were made. The initial term of the shareholder servicing plan is one year
and it will continue in effect from year to year provided that its continuance is specifically approved at least annually by a majority of the Board, including a majority of the Independent Trustees who have no direct or indirect financial interest
in the operation of the shareholder servicing plan or in any agreement related to it. Any material amendment to the shareholder servicing plan must be approved in the same manner. The shareholder servicing plan is terminable at any time with respect
to the Funds by a vote of a majority of the Independent Trustees.
The Trustees believe the Distribution Plans could be
a significant factor in the growth and retention of a Fund’s assets resulting in more advantageous expense ratios and increased investment flexibility which could benefit each class of Fund shareholders. The Distribution Plans will continue in
effect from year to year so long as continuance is specifically approved at least annually by a vote of the Trustees, including the Independent Trustees. The Distribution Plans may not be amended to increase the fee materially without approval by
vote of a majority of the outstanding voting securities of the relevant class of shares, and all material amendments of the Distribution Plans must be approved by the Trustees in the manner provided in the foregoing sentence. The Distribution Plans
may be terminated at any time by vote of a majority of the Independent Trustees or by vote of a majority of the outstanding voting securities of the relevant class of shares.
Class T Shares Shareholder Service Fees
The Funds that offer Class T shares have adopted a shareholder
services plan that permits them to pay for certain services provided to Class T shareholders by their Selling Agents. Equity Funds may pay shareholder servicing fees up to an aggregate annual rate of 0.50% of the Fund’s average daily net
assets attributable to Class T shares (comprised of up to 0.25% for shareholder liaison services and up to 0.25% for administrative support services). Fixed income Funds may pay shareholder servicing fees up to an aggregate annual rate of 0.40% of
the Fund’s average daily net assets attributable to Class T shares (comprised of an annual rate of up to 0.20% for shareholder liaison services and up to 0.20% for administrative support services). These fees are currently limited to an
aggregate annual rate of not more than 0.25% for equity Funds and not more than 0.15% for fixed income Funds. With respect to those Funds that declare dividends on a daily basis, the shareholder servicing fee shall be waived by the selling and/or
servicing agents to the extent necessary to prevent net investment income from falling below 0.00% on a daily basis. The Funds consider “administrative support services” to include, without limitation, (i) aggregating and processing
purchase and redemption orders, (ii) providing beneficial owners with statements showing their positions in the Funds, (iii) processing dividend payments, (iv) providing sub-accounting services for Fund shares held beneficially, (v) forwarding
shareholder communications, such as proxies, shareholder reports, dividend and tax notices, and updating prospectuses to beneficial owners, (vi) receiving, tabulating and transmitting proxies executed by the beneficial owners, (vii) sub-transfer
agent services for beneficial owners of Fund shares and (viii) other similar services.
Plans for Series of CFST II
.
The distribution and/or shareholder service fees for Class A, Class B, Class C, Class R and Class W shares, as applicable, are to reimburse the Distributor for
certain expenses it incurs in connection with distributing the Fund’s shares or directly or indirectly providing services to Fund shareholders. These payments or expenses include providing distribution and/or shareholder service fees to
Selling Agents that sell shares of the Fund or provide services to Fund shareholders. The Distributor may retain these fees otherwise payable to Selling Agents if the amounts due are below an amount determined by the Distributor in its discretion.
The maximum fee for services under the plan for series of CFST II is the lesser of the amount of expenses eligible for reimbursement (including any unreimbursed expenses) and the rate set forth in the table above. If a share class of a series of
CFST II has no distribution or shareholder servicing expenses eligible for reimbursement, the share class will not pay a distribution or service fee, as applicable. Class B shares of Columbia Seligman Communications and Information Fund and Columbia
Global Infrastructure Fund have suspended distribution payments but may initiate such payments in the event Class B shares have expenses eligible for reimbursement in the future.
Statement
of Additional Information – June 1, 2015
|
117
|
For the Series of CFST II for Class A, Class B and
Class W shares, the Distributor begins to pay these fees immediately after purchase. For Class C shares, the Distributor pays these fees in advance for the first 12 months. Selling and/or servicing agents also receive distribution fees up to 0.75%
of the average daily net assets of Class C shares sold and held through them, which the Distributor begins to pay 12 months after purchase. For Class B shares, and, for the first 12 months following the sale of Class C shares, the Distributor
retains the distribution fee of up to 0.75% in order to finance the payment of sales commissions to Selling Agents and to pay for other distribution related expenses. Selling Agents may compensate their financial advisors with the shareholder
service and distribution fees paid to them by the Distributor.
Prior to October 27, 2012, Class R4 shares were
subject to a distribution fee of 0.25% and a service fee that is not paid pursuant to a 12b-1 plan of 0.25%.
Fees Paid
For its most recent fiscal period, each Fund paid distribution
and/or service fees as shown in the following table. The table is organized by fiscal year end.
12b-1 Fees
Fund
|
Class
A
|
Class
B
|
Class
C
|
Class
R
|
Class
T
|
Class
W
|
For
Funds with fiscal period ending January 31
|
Capital
Allocation Aggressive Portfolio
|
$1,444,845
|
$271,760
|
$575,575
|
$4,222
|
N/A
|
N/A
|
Capital
Allocation Conservative Portfolio
|
631,389
|
99,181
|
473,131
|
960
|
N/A
|
N/A
|
Capital
Allocation Moderate Aggressive Portfolio
|
4,609,457
|
769,492
|
2,108,150
|
24,137
|
$270,449
|
N/A
|
Capital
Allocation Moderate Conservative Portfolio
|
1,382,528
|
220,159
|
885,333
|
10,854
|
N/A
|
N/A
|
Capital
Allocation Moderate Portfolio
|
3,635,852
|
597,081
|
1,743,652
|
7,288
|
N/A
|
N/A
|
Income
Builder Fund
|
2,573,924
|
236,021
|
2,212,651
|
6,056
|
N/A
|
$15
(a)
|
LifeGoal
Growth Portfolio
|
1,578,093
|
363,580
|
998,435
|
13,455
|
N/A
|
N/A
|
For
Funds with fiscal period ending February 28/29
|
Convertible
Securities Fund
|
633,451
|
10,175
|
221,110
|
10,961
|
N/A
|
69,467
|
Global
Equity Value Fund
|
2,439,859
|
176,551
|
261,412
|
4,242
|
N/A
|
44
|
International
Opportunities Fund
|
222,032
|
46,221
|
168,210
|
4,914
|
N/A
|
N/A
|
International
Value Fund
|
316,556
|
4,936
|
263,924
|
705
|
N/A
|
N/A
|
Large
Cap Enhanced Core Fund
|
51,515
|
N/A
|
N/A
|
11,231
|
N/A
|
N/A
|
Large
Cap Index Fund
|
1,638,462
|
2,793
|
N/A
|
N/A
|
N/A
|
N/A
|
Marsico
21st Century Fund
|
1,346,311
|
511,226
|
2,479,702
|
116,088
|
N/A
|
N/A
|
Marsico
Focused Equities Fund
|
1,824,136
|
126,428
|
2,350,314
|
N/A
|
N/A
|
N/A
|
Marsico
Global Fund
|
44,502
|
N/A
|
38,963
|
10,046
|
N/A
|
N/A
|
Marsico
Growth Fund
|
1,535,948
|
143,375
|
2,941,305
|
103,894
|
N/A
|
9
|
Mid
Cap Index Fund
|
1,934,445
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Mid
Cap Value Fund
|
2,617,048
|
158,182
|
1,228,029
|
306,478
|
N/A
|
165,640
|
Overseas
Value Fund
|
497,620
|
106,498
|
43,496
|
N/A
|
N/A
|
111,857
|
Select
International Equity Fund
|
772,378
|
52,583
|
124,358
|
8,936
|
N/A
|
707,844
|
Select
Large Cap Equity Fund
|
318,576
|
6,074
|
37,698
|
N/A
|
N/A
|
8
|
Small
Cap Index Fund
|
2,246,900
|
108,151
|
N/A
|
N/A
|
N/A
|
N/A
|
Small
Cap Value Fund II
|
698,787
|
20,298
|
166,356
|
84,119
|
N/A
|
N/A
|
For
Funds with fiscal period ending March 31
|
Short
Term Bond Fund
|
1,307,443
|
47,810
|
555,273
|
21,853
|
N/A
|
23,669
|
For
Funds with fiscal period ending April 30
|
AMT-Free
CA Intermediate Muni Bond Fund
|
74,210
|
202
|
90,675
|
N/A
|
N/A
|
N/A
|
AMT-Free
GA Intermediate Muni Bond Fund
|
42,773
|
2,094
|
38,881
|
N/A
|
N/A
|
N/A
|
AMT-Free
MD Intermediate Muni Bond Fund
|
54,662
|
995
|
25,789
|
N/A
|
N/A
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
118
|
Fund
|
Class
A
|
Class
B
|
Class
C
|
Class
R
|
Class
T
|
Class
W
|
AMT-Free
NC Intermediate Muni Bond Fund
|
$75,372
|
$1,142
|
$72,913
|
N/A
|
N/A
|
N/A
|
AMT-Free
SC Intermediate Muni Bond Fund
|
56,893
|
719
|
139,820
|
N/A
|
N/A
|
N/A
|
AMT-Free
VA Intermediate Muni Bond Fund
|
123,529
|
234
|
44,975
|
N/A
|
N/A
|
N/A
|
Global
Infrastructure Fund
|
767,269
|
66,490
|
377,425
|
$2,033
|
N/A
|
N/A
|
Short
Term Municipal Bond Fund
|
438,472
|
1,378
|
261,673
|
N/A
|
N/A
|
N/A
|
For
Funds with fiscal period ending May 31
|
AP
– Multi-Manager Value Fund
|
2,914,115
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Commodity
Strategy Fund
|
8,828
|
N/A
|
1,603
|
617
|
N/A
|
$5
|
Diversified
Equity Income Fund
|
6,078,457
|
855,100
|
649,068
|
42,575
|
N/A
|
11
|
Dividend
Opportunity Fund
|
9,765,592
|
450,489
|
3,827,663
|
118,099
|
N/A
|
73,627
|
Flexible
Capital Income Fund
|
185,338
|
N/A
|
161,120
|
583
|
N/A
|
4,740
|
High
Yield Bond Fund
|
3,349,876
|
195,954
|
800,866
|
82,374
|
N/A
|
162,065
|
Mortgage
Opportunities Fund
(b)
|
2
|
N/A
|
9
|
N/A
|
N/A
|
2
|
Multi-Advisor
Small Cap Value Fund
|
736,272
|
100,961
|
114,260
|
36,250
|
N/A
|
N/A
|
Select
Large-Cap Value Fund
|
892,645
|
23,791
|
639,092
|
85,987
|
N/A
|
46,780
|
Select
Smaller-Cap Value Fund
|
920,261
|
69,411
|
417,073
|
58,919
|
N/A
|
N/A
|
Seligman
Communications and Information Fund
|
6,021,530
|
79,660
|
6,405,793
|
208,751
|
N/A
|
N/A
|
Small/Mid
Cap Value Fund
|
2,399,503
|
306,477
|
344,480
|
64,614
|
N/A
|
13
|
U.S.
Government Mortgage Fund
|
1,506,370
|
40,077
|
512,433
|
N/A
|
N/A
|
17,411
|
For
Funds with fiscal period ending July 31
|
AMT-Free
Tax-Exempt Bond Fund
|
1,343,829
|
14,261
|
127,127
|
N/A
|
N/A
|
N/A
|
Floating
Rate Fund
|
1,788,376
|
83,986
|
1,246,233
|
7,641
|
N/A
|
10
|
Global
Opportunities Fund
|
1,931,916
|
307,241
|
341,237
|
21
|
N/A
|
1
|
Income
Opportunities Fund
|
3,745,989
|
142,295
|
1,168,511
|
5,194
|
N/A
|
29,425
|
Inflation
Protected Securities Fund
|
271,625
|
21,994
|
124,570
|
27,028
|
N/A
|
139,856
|
Large
Core Quantitative Fund
|
8,053,716
|
702,346
|
333,780
|
21,007
|
N/A
|
297,052
|
Large
Growth Quantitative Fund
|
609,803
|
9,229
|
33,391
|
448
|
N/A
|
178,771
|
Large
Value Quantitative Fund
|
61,436
|
7,117
|
54,134
|
283
|
$248,482
|
504,338
|
Limited
Duration Credit Fund
|
1,584,267
|
41,327
|
838,813
|
N/A
|
N/A
|
174,416
|
MN
Tax-Exempt Fund
|
949,047
|
9,474
|
392,288
|
N/A
|
N/A
|
N/A
|
Money
Market Fund
|
0
|
59,208
|
0
|
0
|
N/A
|
0
|
For
Funds with fiscal period ending August 31
|
Marsico
Flexible Capital Fund
|
241,138
|
N/A
|
239,693
|
3,769
|
N/A
|
N/A
|
For
Funds with fiscal period ending October 31
|
Absolute
Return Currency and Income Fund
|
36,885
|
1,087
|
16,389
|
N/A
|
N/A
|
250
|
Asia
Pacific ex-Japan Fund
|
2,054
|
N/A
|
2,499
|
1,569
|
N/A
|
N/A
|
Emerging
Markets Bond Fund
|
507,858
|
14,980
|
547,345
|
35,429
|
N/A
|
151,915
|
European
Equity Fund
|
416,629
|
18,228
|
262,079
|
N/A
|
N/A
|
7
|
Global
Bond Fund
|
342,768
|
21,417
|
52,519
|
94
|
N/A
|
254
|
Select
Global Equity Fund
|
911,784
|
76,325
|
174,597
|
671
|
N/A
|
7
|
Seligman
Global Technology Fund
|
904,541
|
54,063
|
745,616
|
37,731
|
N/A
|
N/A
|
(a)
|
For the period from June 25,
2014 (commencement of operations) to January 31, 2015.
|
(b)
|
For the period from April 30,
2014 (commencement of operations) to May 31, 2014.
|
Statement
of Additional Information – June 1, 2015
|
119
|
For Series of CFST II Funds with Class B and Class C
shares:
The
following table provides the amount of distribution expenses, as a dollar amount and as a percentage of net assets, incurred by the Distributor and not yet reimbursed (“unreimbursed expense”) for Class B and Class C shares of series of
CFST II. These amounts are based on the most recent information available as of December 31, 2014 and may be recovered from future payments under the distribution plan or CDSC. To the extent the unreimbursed expense has been fully recovered, the
distribution fee is reduced.
Unreimbursed
Distribution Expenses
Fund
|
Class
B
|
Percentage
of Class B
net assets
|
Class
C
|
Percentage
of Class C
net assets
|
Absolute
Return Currency and Income Fund
|
$28,000
|
56.59%
|
$21,000
|
1.12%
|
AMT-Free
Tax-Exempt Bond Fund
|
247,000
|
28.81%
|
78,000
|
0.45%
|
Asia
Pacific ex-Japan Fund
|
N/A
|
N/A
|
2,000
|
0.66%
|
Capital
Allocation Aggressive Portfolio
|
1,456,000
|
6.24%
|
179,000
|
0.29%
|
Capital
Allocation Conservative Portfolio
|
1,657,000
|
20.41%
|
178,000
|
0.38%
|
Capital
Allocation Moderate Portfolio
|
5,367,000
|
10.62%
|
1,339,000
|
0.74%
|
Commodity
Strategy Fund
|
N/A
|
N/A
|
1,000
|
0.59%
|
Diversified
Equity Income Fund
|
7,973,000
|
14.49%
|
622,000
|
0.86%
|
Dividend
Opportunity Fund
|
3,331,000
|
10.53%
|
1,058,000
|
0.22%
|
Emerging
Markets Bond Fund
|
127,000
|
13.17%
|
301,000
|
0.66%
|
European
Equity Fund
|
213,000
|
15.56%
|
160,000
|
0.66%
|
Flexible
Capital Income Fund
|
N/A
|
N/A
|
617,000
|
0.46%
|
Floating
Rate Fund
|
1,166,000
|
24.01%
|
550,000
|
0.50%
|
Global
Bond Fund
|
566,000
|
38.08%
|
58,000
|
1.46%
|
Global
Equity Value Fund
|
1,582,000
|
14.82%
|
47,000
|
0.16%
|
Global
Infrastructure Fund
|
0
|
0.00%
|
0
|
0.00%
|
Global
Opportunities Fund
|
3,419,000
|
16.72%
|
324,000
|
1.03%
|
High
Yield Bond Fund
|
2,538,000
|
22.46%
|
7,220,000
|
8.74%
|
Income
Builder Fund
|
4,531,000
|
22.78%
|
704,000
|
0.30%
|
Income
Opportunities Fund
|
1,851,000
|
19.25%
|
1,021,000
|
0.94%
|
Inflation
Protected Securities Fund
|
466,000
|
45.02%
|
147,000
|
1.22%
|
Large
Core Quantitative Fund
|
5,994,000
|
10.67%
|
1,250,000
|
2.83%
|
Large
Growth Quantitative Fund
|
106,000
|
13.85%
|
42,000
|
0.65%
|
Large
Value Quantitative Fund
|
34,000
|
5.76%
|
49,000
|
0.41%
|
Limited
Duration Credit Fund
|
615,000
|
26.78%
|
508,000
|
0.66%
|
Marsico
Flexible Capital Fund
|
N/A
|
N/A
|
14,000
|
0.05%
|
MN
Tax-Exempt Fund
|
106,000
|
16.55%
|
218,000
|
0.48%
|
Money
Market Fund
|
3,660,000
|
80.89%
|
1,300,000
|
4.97%
|
Multi-Advisor
Small Cap Value Fund
|
959,000
|
15.38%
|
110,000
|
1.01%
|
Select
Global Equity Fund
|
746,000
|
13.95%
|
1,334,000
|
8.23%
|
Select
Large-Cap Value Fund
|
39,000
|
1.90%
|
2,889,000
|
3.06%
|
Select
Smaller-Cap Value Fund
|
632,000
|
13.57%
|
2,476,000
|
5.87%
|
Seligman
Communications and Information Fund
|
0
|
0.00%
|
18,329,000
|
2.49%
|
Seligman
Global Technology Fund
|
152,000
|
3.23%
|
4,303,000
|
5.17%
|
Small/Mid
Cap Value Fund
|
1,710,000
|
9.79%
|
326,000
|
0.94%
|
U.S.
Government Mortgage Fund
|
725,000
|
34.81%
|
164,000
|
0.45%
|
Statement
of Additional Information – June 1, 2015
|
120
|
Other Services Provided
The Transfer Agent
Columbia Management Investment Services Corp. is the transfer agent
for the Funds. The Transfer Agent is located at 225 Franklin Street, Boston, MA 02110. Under a Transfer Agency Agreement, the Transfer Agent provides transfer agency, dividend disbursing agency and shareholder servicing agency services to the Funds.
Class I shares and Class Y shares do not pay transfer agency fees. For all other share classes, the Funds pay the Transfer Agent an annual fee payable monthly that varies by account type. For accounts established directly with the Fund (other than
certain networked or omnibus accounts), the annual transfer agency fee is $34.25 per account; for certain accounts that are established or maintained directly with the Fund pursuant to the networking system of the NSCC and certain other similar
“networked” accounts, the annual transfer agency fee is $11.00 per account; and for other omnibus accounts, the transfer agency fee is paid at an annual rate of 0.014% of the value of such accounts. Prior to November 1, 2014, the Funds
paid an annual transfer agency fee of $19.25 per account, payable monthly for all share classes except for Class I shares and Class Y shares; prior to July 1, 2013, the Funds paid an annual transfer agency fee of $21.00 per account, payable monthly;
and prior to July 1, 2012, the Funds paid an annual transfer agency fee of $12.08 per account, payable monthly.
In addition to the per-account fee, the Funds pay
the Transfer Agent (a) a fee with respect to Class A, Class B, Class C, Class R, Class R4 (beginning November 1, 2012), Class T, Class W and Class Z at the annual rate of 0.20% of the average aggregate value of shares maintained in omnibus accounts
(other than omnibus accounts for which American Enterprise Investment Services, Inc. is the broker of record or accounts where the beneficial owner is a customer of Ameriprise Financial Services, Inc., for which the transfer agent is reimbursed $16
annually, calculated monthly based on the total number of positions in which accounts at the end of such month) or (b) a fee with respect to Class K and Class R5 shares of 0.05% of the average aggregate value of shares maintained in omnibus
accounts, provided that total transfer agency fees for Class K and Class R5 shares, including reimbursements, shall not exceed 0.05%. (Neither Class I shares nor Class Y shares are subject to these fees relating to omnibus accounts.) Prior to
November 1, 2012, the fee described above for Class A, Class B, Class C, Class R, Class T, Class W and Class Z on the aggregate value of shares maintained in omnibus accounts (other than accounts for which American Enterprise Investment Services,
Inc. was broker) was up to 0.20%. Prior to November 1, 2012, Class R4 shares were subject to a lower transfer agency fee equal to (i) an annual fee of $21 per account and (ii) up to 0.05% of the average aggregate value of shares maintained in
omnibus accounts.
The Funds also pay certain
reimbursable out-of-pocket expenses of 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. Transfer agency costs for each Fund are calculated
separately for each of (i) Class K and Class R5 shares and (ii) all other share classes (except Class I and Class Y shares, which pay no transfer agency fees).
The fees paid to the Transfer Agent may be changed
by the Board without shareholder approval.
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.
Plan Administration Services
The Funds that offer Class K shares have a Plan Administration
Services Agreement with the Transfer Agent. Under the agreement, the Funds pay for plan administration services, including services such as implementation and conversion services, account set-up and maintenance, reconciliation and account
recordkeeping, education services and administration to various plan types, including 529 plans, retirement plans and Health Savings Accounts (HSAs). The fee for services is equal on an annual basis to 0.25% of the average daily net assets of each
Fund attributable to Class K shares. Prior to October 27, 2012, Class R4 shares were also subject to the Plan Administration Services Agreement and related fee.
The Custodian
The Funds' securities and cash are held pursuant to a custodian
agreement with JPMorgan, 1 Chase Manhattan Plaza, 19th Floor, New York, NY 10005. JPMorgan is responsible for safeguarding the Funds' cash and securities, receiving and delivering securities and collecting the Funds' interest and dividends. The
custodian is permitted to deposit some or all of its securities in central depository systems as allowed by federal law. For its services, each Fund pays its custodian a maintenance charge and a charge per transaction in addition to reimbursing the
custodian’s out-of-pocket expenses.
As
part of this arrangement, securities purchased outside the United States are maintained in the custody of various foreign branches of JPMorgan or in other financial institutions as permitted by law and by the Funds' custodian agreement.
Statement
of Additional Information – June 1, 2015
|
121
|
Pricing and Bookkeeping Services (with Respect to CFST
Series Only)
Prior to August 8, 2011, State Street provided
certain pricing and bookkeeping services to the Funds. The Administrator was responsible for overseeing the performance of these services and for certain other services.
Services Provided
Effective December 15, 2006, CFST entered into a Financial
Reporting Services Agreement with State Street and the Previous Adviser (the Financial Reporting Services Agreement) pursuant to which State Street provided financial reporting services to the Funds. Also effective December 15, 2006, CFST 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 provided 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, each Fund (except the Capital Allocation Portfolios that are series of CFST, LifeGoal Growth Portfolio, Large Cap Index Fund and Small Cap Index Fund) paid 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 a Fund during any year did not exceed $140,000 annually (exclusive of out-of-pocket expenses and charges). Each Fund (except the
Capital Allocation Portfolios that are series of CFST, LifeGoal Growth Portfolio, Large Cap Index Fund and Small Cap Index Fund) also reimbursed State Street for certain out-of-pocket expenses and charges. The State Street Agreements were terminated
on August 8, 2011.
The Capital Allocation
Portfolios that are series of CFST did not pay any separate fees for services rendered under the State Street Agreements and the fees for pricing and bookkeeping services incurred by the them were paid as part of the management fee. Under the
Administrative Services Agreement, fees for pricing and bookkeeping services incurred by Large Cap Index Fund and Small Cap Index Fund are paid by the Administrator.
Pricing and Bookkeeping Fees Paid by the Funds
The following table shows net pricing and bookkeeping fees paid for
the three most recently completed fiscal years.
|
Pricing
and Bookkeeping Fees
|
Fund
|
2014
|
2013
|
2012
|
For
Funds with fiscal period ending February 28/29
|
Convertible
Securities Fund
|
N/A
|
N/A
|
$40,806
|
International
Opportunities Fund
|
N/A
|
N/A
|
54,903
|
International
Value Fund
(a)
|
N/A
|
N/A
|
16,344
|
Large
Cap Enhanced Core Fund
|
N/A
|
N/A
|
30,316
|
Large
Cap Index Fund
|
N/A
|
N/A
|
N/A
|
Marsico
21st Century Fund
|
N/A
|
N/A
|
59,721
|
Marsico
Focused Equities Fund
|
N/A
|
N/A
|
57,903
|
Marsico
Global Fund
|
N/A
|
N/A
|
18,087
|
Marsico
Growth Fund
|
N/A
|
N/A
|
59,396
|
Mid
Cap Index Fund
|
N/A
|
N/A
|
60,484
|
Mid
Cap Value Fund
|
N/A
|
N/A
|
9,536
|
Overseas
Value Fund
|
N/A
|
N/A
|
17,395
|
Select
International Equity Fund
|
N/A
|
N/A
|
10,528
|
Select
Large Cap Equity Fund
|
N/A
|
N/A
|
48,189
|
Small
Cap Index Fund
|
N/A
|
N/A
|
N/A
|
Small
Cap Value Fund II
|
N/A
|
N/A
|
59,231
|
For
Funds with fiscal period ending March 31
|
Short
Term Bond Fund
|
N/A
|
N/A
|
27,398
|
For
Funds with fiscal period ending April 30
|
AMT-Free
CA Intermediate Muni Bond Fund
|
N/A
|
N/A
|
10,948
|
AMT-Free
GA Intermediate Muni Bond Fund
|
N/A
|
N/A
|
7,583
|
AMT-Free
MD Intermediate Muni Bond Fund
|
N/A
|
N/A
|
8,201
|
Statement
of Additional Information – June 1, 2015
|
122
|
|
Pricing
and Bookkeeping Fees
|
Fund
|
2014
|
2013
|
2012
|
AMT-Free
NC Intermediate Muni Bond Fund
|
N/A
|
N/A
|
$9,953
|
AMT-Free
SC Intermediate Muni Bond Fund
|
N/A
|
N/A
|
8,707
|
AMT-Free
VA Intermediate Muni Bond Fund
|
N/A
|
N/A
|
12,533
|
Short
Term Municipal Bond Fund
|
N/A
|
N/A
|
29,401
|
(a)
|
The Pricing and Bookkeeping
Fees were paid at both the Master Portfolio- and Feeder Fund-levels; amounts shown above include only the portion paid at the Feeder Fund-level.
|
Statement
of Additional Information – June 1, 2015
|
123
|
Independent Registered Public Accounting Firm
PricewaterhouseCoopers
LLP, which is located at 225 South Sixth Street, Minneapolis, MN 55402, is the Funds' independent registered public accounting firm. The financial statements for series of CFST II for the fiscal year ended August 31, 2012 or later, and for the
series of CFST for the last five fiscal periods contained in each Fund’s Annual Report were audited by PricewaterhouseCoopers LLP. The financial statements for the series of CFST II for fiscal periods ended on or before July 31, 2012 were
audited by the Funds’ former independent registered public accounting firm. The Board has selected PricewaterhouseCoopers LLP as the independent registered public accounting firm to audit the Funds' books and review their tax returns for their
respective fiscal years.
The
Report of Independent Registered Public Accounting Firm
and the audited financial statements are included in the annual report to shareholders of each Fund, and are incorporated herein by reference. No other parts
of the annual or semi-annual reports to shareholders are incorporated by reference herein. The audited 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
Kramer Levin Naftalis & Frankel LLP serves as counsel to the
Independent Trustees of the Trusts. Its address is 1177 Avenue of the Americas, New York, NY 10036. Goodwin Procter LLP serves as legal counsel to the Trusts. Its address is 901 New York Avenue N.W., Washington, DC, 20001.
Board Services Corporation
The Funds have an agreement with Board Services located at 901 S.
Marquette Avenue, Suite 2810, Minneapolis, MN 55402. This agreement sets forth the terms of Board Services’ responsibility to serve as an agent of the Funds for purposes of administering the payment of compensation to each Independent Trustee,
to provide office space for use by the Funds and their Board, and to provide any other services to the Board or the Independent Trustees, as may be reasonably requested.
Expense Limitations
The Investment Manager and certain of its affiliates
have agreed to waive fees and/or reimburse certain expenses, subject to certain exclusions, so that certain Funds’ net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges
from the Fund’s custodian, do not exceed specified rates for specified time periods, also as described in a Fund’s prospectus.
The tables below show the expenses reimbursed and
fees waived by Investment Manager and its affiliates for the last three fiscal periods. The table is organized by fiscal year end.
Expenses Reimbursed
|
Amounts
Reimbursed
|
|
2015
|
2014
|
2013
|
For
Funds with fiscal period ending January 31
|
Capital
Allocation Aggressive Portfolio
|
$0
|
$2
|
$42,247
|
Capital
Allocation Conservative Portfolio
|
0
|
0
|
0
|
Capital
Allocation Moderate Aggressive Portfolio
|
0
|
0
|
0
|
Capital
Allocation Moderate Conservative Portfolio
|
0
|
0
|
172,293
|
Capital
Allocation Moderate Portfolio
|
0
|
0
|
0
|
Income
Builder Fund
|
0
|
0
|
17,281
|
LifeGoal
Growth Portfolio
|
0
|
0
|
376,520
|
|
2014
|
2013
|
2012
|
For
Funds with fiscal period ending February 28/29
|
Convertible
Securities Fund
|
1,386,820
|
1,123,957
|
661,525
|
Global
Equity Value Fund
|
46,438
|
586,764
|
589,659
(a)
|
International
Opportunities Fund
|
0
|
0
|
100
|
International
Value Fund
(b)
|
274,239
|
1,437,231
|
1,523,364
|
Large
Cap Enhanced Core Fund
|
639,263
|
620,644
|
375,082
|
Statement
of Additional Information – June 1, 2015
|
124
|
|
Amounts
Reimbursed
|
|
2014
|
2013
|
2012
|
Large
Cap Index Fund
|
$90,356
|
$345,458
|
$0
|
Marsico
21st Century Fund
|
0
|
131,463
|
0
|
Marsico
Focused Equities Fund
|
0
|
1,025,662
|
0
|
Marsico
Global Fund
|
90,302
|
78,204
|
166,867
|
Marsico
Growth Fund
|
0
|
2,313,639
|
1,653,534
|
Mid
Cap Index Fund
|
6,337,793
|
5,049,926
|
5,810,057
|
Mid
Cap Value Fund
|
0
|
4
|
94,391
|
Overseas
Value Fund
|
783,102
|
76,755
|
295,200
|
Select
International Equity Fund
|
0
|
68,963
|
590,729
|
Select
Large Cap Equity Fund
|
278,009
|
284,624
|
446,143
|
Small
Cap Index Fund
|
80,248
|
67,196
|
61,413
|
Small
Cap Value Fund II
|
0
|
355,517
|
887,545
|
For
Funds with fiscal period ending March 31
|
Short
Term Bond Fund
|
2,030,139
|
2,911,218
|
3,769,340
|
For
Funds with fiscal period ending April 30
|
AMT-Free
CA Intermediate Muni Bond Fund
|
651,807
|
683,493
|
663,551
(c)
|
AMT-Free
GA Intermediate Muni Bond Fund
|
221,483
|
226,902
|
263,629
(c)
|
AMT-Free
MD Intermediate Muni Bond Fund
|
244,382
|
282,544
|
322,443
(c)
|
AMT-Free
NC Intermediate Muni Bond Fund
|
321,351
|
370,983
|
437,416
(c)
|
AMT-Free
SC Intermediate Muni Bond Fund
|
265,033
|
283,518
|
404,669
(c)
|
AMT-Free
VA Intermediate Muni Bond Fund
|
431,935
|
523,516
|
661,234
(c)
|
Global
Infrastructure Fund
|
0
|
0
|
0
|
Short
Term Municipal Bond Fund
|
3,155,193
|
3,478,062
|
3,448,466
(c)
|
For
Funds with fiscal period ending May 31
|
AP
– Multi-Manager Value Fund
|
1,386,107
|
1,092,172
|
183,427
(d)
|
Commodity
Strategy Fund
|
104,298
|
149,155
|
123,362
(e)
|
Diversified
Equity Income Fund
|
156,136
|
1,515,231
|
0
(f)
|
Dividend
Opportunity Fund
|
0
|
0
|
0
(g)
|
Flexible
Capital Income Fund
|
227,197
|
209,792
|
165,728
(e)
|
High
Yield Bond Fund
|
0
|
115,435
|
624,232
|
Mortgage
Opportunities Fund
|
42,035
(h)
|
N/A
|
N/A
|
Multi-Advisor
Small Cap Value Fund
|
842,083
|
896,928
|
630,115
|
Select
Large-Cap Value Fund
|
402,411
|
369,622
|
176,832
(i)
|
Select
Smaller-Cap Value Fund
|
52,609
|
428,854
|
108,261
(i)
|
Seligman
Communications and Information Fund
|
0
|
0
|
0
(i)
|
Small/Mid
Cap Value Fund
|
59,768
|
990,435
|
774,166
(f)
|
U.S.
Government Mortgage Fund
|
1,244,781
|
1,366,274
|
534,787
|
For
Funds with fiscal period ending July 31
|
AMT-Free
Tax-Exempt Bond Fund
|
191,952
|
195,063
|
172,079
(j)
|
Floating
Rate Fund
|
97,497
|
72,956
|
133,698
|
Global
Opportunities Fund
|
0
|
385,551
|
413,206
(k)
|
Income
Opportunities Fund
|
1,157,436
|
695,144
|
1,347,472
|
Inflation
Protected Securities Fund
|
729,928
|
755,565
|
1,012,016
|
Statement
of Additional Information – June 1, 2015
|
125
|
|
Amounts
Reimbursed
|
|
2014
|
2013
|
2012
|
Large
Core Quantitative Fund
|
$0
|
$640,310
|
$2,906,992
|
Large
Growth Quantitative Fund
|
1,070
|
137,896
|
406,292
(k)
|
Large
Value Quantitative Fund
|
146,833
|
410,400
|
510,906
(k)
|
Limited
Duration Credit Fund
|
288,780
|
90,524
|
274,803
|
MN
Tax-Exempt Fund
|
0
|
52,762
|
186,446
(l)
|
Money
Market Fund
|
12,790,488
|
12,993,538
|
12,365,143
|
For
Funds with fiscal period ending August 31
|
Marsico
Flexible Capital Fund
|
113
|
56,396
|
2,865
|
For
Funds with fiscal period ending October 31
|
Absolute
Return Currency and Income Fund
|
42,771
|
135,327
|
253,058
|
Asia
Pacific ex-Japan Fund
|
0
|
0
|
0
|
Emerging
Markets Bond Fund
|
0
|
0
|
0
|
European
Equity Fund
|
0
|
0
|
25,194
|
Global
Bond Fund
|
412,555
|
497,635
|
483,448
|
Select
Global Equity Fund
|
1
|
240,279
|
578,988
|
Seligman
Global Technology Fund
|
0
|
210,904
|
442,372
|
(a)
|
The Fund changed its fiscal
year end in 2012 from March 31 to February 28/29. For the fiscal year ended 2012, the information shown is for the period from April 1, 2011 to February 29, 2012.
|
(b)
|
The expenses were reimbursed
prior to December 14, 2013 at both the Master Portfolio- and Feeder Fund-levels; amounts shown above only include the portion paid at the Feeder Fund-level.
|
(c)
|
The Funds changed their fiscal
year end in 2012 from March 31 to April 30. For the fiscal year ended 2012, the information shown is for the 13-month period from April 1, 2011 to April 30, 2012. For the fiscal year ended March 31, 2012, the Funds’ expenses were reimbursed as
follows: AMT-Free CA Intermediate Muni Bond Fund was reimbursed $600,402; AMT-Free GA Intermediate Muni Bond Fund was reimbursed $244,283; AMT-Free MD Intermediate Muni Bond Fund was reimbursed $293,304; AMT-Free NC Intermediate Muni Bond Fund was
reimbursed $405,635; AMT-Free SC Intermediate Muni Bond Fund was reimbursed $377,522; Short Term Municipal Bond Fund was reimbursed $3,133,665; and AMT-Free VA Intermediate Muni Bond Fund was reimbursed $616,163. For the fiscal period from April 1,
2012 to April 30, 2012, the Funds’ expenses were reimbursed as follows: AMT-Free CA Intermediate Muni Bond Fund was reimbursed $63,149; AMT-Free GA Intermediate Muni Bond Fund was reimbursed $19,346; AMT-Free MD Intermediate Muni Bond Fund was
reimbursed $29,139; AMT-Free NC Intermediate Muni Bond Fund was reimbursed $31,781; AMT-Free SC Intermediate Muni Bond Fund was reimbursed $27,147; Short Term Municipal Bond Fund was reimbursed $314,801; and AMT-Free VA Intermediate Muni Bond Fund
was reimbursed $45,071.
|
(d)
|
For the period from April 20,
2012 (commencement of operations) to May 31, 2012.
|
(e)
|
For the period from July 28,
2011 (commencement of operations) to May 31, 2012.
|
(f)
|
The Fund changed its fiscal
year end in 2012 from September 30 to May 31. For the fiscal year ended 2012, the information shown is for the period from October 1, 2011 to May 31, 2012.
|
(g)
|
The Fund changed its fiscal
year end in 2012 from June 30 to May 31. For the fiscal year ended 2012, the information shown is for the period from July 1, 2011 to May 31, 2012.
|
(h)
|
For the period from April 30,
2014 (commencement of operations) to May 31, 2014.
|
(i)
|
The Fund changed its fiscal
year end in 2012 from December 31 to May 31. For the fiscal year ended 2012, the information shown is for the period from January 1, 2012 to May 31, 2012.
|
(j)
|
The Fund changed its fiscal
year end in 2012 from November 30 to July 31. For the fiscal year ended 2012, the information shown is for the period from December 1, 2011 to July 31, 2012.
|
(k)
|
The Fund changed its fiscal
year end in 2012 from September 30 to July 31. For the fiscal year ended 2012, the information shown is for the period from October 1, 2011 to July 31, 2012.
|
(l)
|
The Fund changed its fiscal
year end in 2012 from August 31 to July 31. For the fiscal year ended 2012, the information shown is for the period from September 1, 2011 to July 31, 2012.
|
Statement
of Additional Information – June 1, 2015
|
126
|
Fees Waived
If a Fund is not shown, there were no fees waived
for the relevant fiscal periods.
|
Fees
Waived
|
|
2015
|
2014
|
2013
|
For
Funds with fiscal period ending January 31
|
Capital
Allocation Moderate Aggressive Portfolio
|
$25,362
|
N/A
|
N/A
|
|
2014
|
2013
|
2012
|
For
Funds with fiscal period ending February 28/29
|
Large
Cap Enhanced Core Fund
|
303,692
|
$465,755
|
$393,128
|
For
Funds with fiscal period ending March 31
|
Short
Term Bond Fund
|
475,404
|
542,582
|
573,941
|
For
Funds with fiscal period ending April 30
|
Global
Infrastructure Fund
|
60,494
|
N/A
|
N/A
|
For
Funds with fiscal period ending May 31
|
High
Yield Bond Fund
|
141,329
|
15,861
|
N/A
|
Seligman
Communications and Information Fund
|
238,977
|
120,922
|
N/A
(a)
|
For
Funds with fiscal period ending July 31
|
Income
Opportunities Fund
|
62,997
|
204,334
|
249,875
|
(a)
|
The Fund changed its fiscal
year end in 2012 from December 31 to May 31. For the fiscal year ended 2012, the information shown is for the period from January 1, 2012 to May 31, 2012.
|
Other Roles and Relationships of Ameriprise Financial and Its
Affiliates —
Certain Conflicts of Interest
As described above in the
Investment Management and Other Services
section of this SAI, and in the
More Information About the Fund – Primary Service Providers
section of each
Fund's prospectus, the Investment Manager, 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
Investment Manager and other Ameriprise Financial affiliates for the services they provide to the Funds is based, in some manner, on the size of the Funds' assets under management. As the size of the Funds' assets under management grows, so does the
amount of compensation paid to the Investment Manager and other Ameriprise Financial affiliates for providing services to the Funds. 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 Investment Manager’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 Investment Manager’s
business, assets under management, affiliates and potential conflicts of interest. Parts 1A and 2 of the Investment Manager’s Form ADV are 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 Funds 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 Funds. 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 fund-related activities of
the Investment Manager, 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 Funds. The following describes certain actual and potential conflicts of interest
that may be presented.
Statement
of Additional Information – June 1, 2015
|
127
|
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 Investment Manager, Ameriprise Financial 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 Investment Manager and Ameriprise Financial’s other investment adviser affiliates (including, for example, Columbia Wanger Asset Management, LLC) will give investment advice to and make
investment decisions for 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.
A variety of other actual and potential conflicts of
interest may arise from the advisory relationships of the Investment Manager, Ameriprise Financial and other Ameriprise Financial affiliates with other clients and customers. Advice given to the Funds and/or investment decisions made for the Funds
by the Investment Manager or other Ameriprise Financial affiliates may differ from, or may conflict with, advice given to and/or investment decisions made by the Investment Manager, Ameriprise Financial and other Ameriprise Financial affiliates for
other advised/managed funds and accounts. As a result, the performance of the Funds may differ from the performance of other funds or accounts advised/managed by the Investment Manager, Ameriprise Financial or other Ameriprise Financial affiliates.
Similarly, a position taken by Ameriprise Financial and its affiliates, including the Investment Manager, on behalf of other funds or accounts may be contrary to a position taken on behalf of the Funds. Moreover, Ameriprise Financial and its
affiliates, including the Investment Manager, 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 Funds are invested. For
example, the Funds 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 Funds 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 Investment Manager, Ameriprise Financial or other Ameriprise Financial affiliates also may have a negative effect on the value, price or investment strategies of the Funds. 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 Funds and causes the Funds 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 Investment Manager, Ameriprise Financial and other Ameriprise Financial affiliates, including the other Columbia Funds, may have the same or very similar investment
objective and strategies as the Funds. In this situation, the allocation of, and competition for, investment opportunities among the Funds and other funds and/or accounts advised/managed by the Investment Manager, Ameriprise Financial or other
Ameriprise Financial affiliates may create conflicts of interest especially where, for example, limited investment availability is involved. The Investment Manager has adopted policies and procedures designed to address the allocation of investment
opportunities among the Funds and other funds and accounts advised by the Investment Manager, Ameriprise Financial and other affiliates of Ameriprise Financial. For more information, see
Investment
Management and Other Services – The Investment Manager and Subadvisers – Portfolio Managers – Potential Conflicts of Interest
.
Sharing of Information among Advised/Managed
Accounts
Ameriprise Financial and its affiliates, including
the Investment Manager, 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 Investment Manager, 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 Investment Manager 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
Management and Other Services – The Investment Manager and Subadvisers – Portfolio Managers – Potential Conflicts of Interest
.
Statement
of Additional Information – June 1, 2015
|
128
|
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 Investment Manager 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, including
the Investment Manager, Distributor and Transfer Agent, 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 Investment Manager, 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 Investment Manager, 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 Investment Manager 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
The Investment Manager 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 Investment Manager and/or its affiliates, including Ameriprise
Financial and its affiliates. Although the Investment Manager 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
Investment Manager’s proxy voting decisions with respect to a Fund’s portfolio securities may or may not benefit other advised/managed funds and accounts, and/or clients, of Ameriprise Financial and its affiliates. For more information
about the Funds' proxy voting policies and procedures, see
Investment Management 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 the Funds. 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
Investment Manager and the Distributor have each adopted a Code of Ethics that addresses such personal investment activities. For more information, see
Investment Management and Other Services
– Codes of Ethics
.
Affiliate
Transactions
Subject to applicable legal and regulatory
requirements, a Fund may enter into transactions in which Ameriprise Financial and/or its affiliates, or companies that are deemed to be affiliates of a Fund because of, among other factors, their or their affiliates’ ownership or control of
shares of the Fund, may have an interest that potentially conflicts with the interests of the Fund. For example, an affiliate of Ameriprise Financial may sell securities to a Fund from an offering in which it is an underwriter or that it owns as a
dealer, subject to applicable legal and regulatory requirements. Applicable legal and regulatory requirements also may prevent a Fund from engaging in transactions with an affiliate of the Fund, which may include Ameriprise Financial and its
affiliates, or from participating in an investment opportunity in which an affiliate of a Fund participates.
Certain Investment Limitations
Regulatory and other restrictions may limit a Fund’s
investment activities in various ways. For example, certain securities may be subject to ownership limitations due to regulatory limits on investments in certain industries (such as, for example, banking and insurance) and markets (such as emerging
or international markets), or certain transactions (such as those involving certain derivatives or other instruments) or mechanisms imposed by certain issuers (such as, among others, poison pills). Certain of these restrictions may impose limits on
the aggregate amount of investments that may be made by affiliated investors in the
Statement
of Additional Information – June 1, 2015
|
129
|
aggregate or in individual issuers. In these circumstances, the
Investment Manager may be prevented from acquiring securities for a Fund (that it might otherwise prefer to acquire) if the acquisition would cause the Fund and its affiliated investors to exceed an applicable limit. These types of regulatory and
other applicable limits are complex and vary significantly in different contexts including, among others, from country to country, industry to industry and issuer to issuer. The Investment Manager has policies and procedures designed to monitor and
interpret these limits. Nonetheless, given the complexity of these limits, the Investment Manager and/or its affiliates may inadvertently breach these limits, and a Fund may therefore be required to sell securities that it might otherwise prefer to
hold in order to comply with such limits. In addition, aggregate ownership limitations could cause performance dispersion among funds and accounts managed by the Investment Manager with similar investment objectives and strategies and portfolio
management teams. For example, if further purchases in an issuer are restricted due to regulatory or other reasons, a portfolio manager would not be able to acquire securities or other assets of an issuer for a new Fund that may already be held by
other funds and accounts with the same/similar investment objectives and strategies that are managed by the same portfolio management team. The Investment Manager may also choose to limit purchases in an issuer to a certain threshold for risk
management purposes. If the holdings of the Investment Manager’s affiliates are included in that limitation, a Fund may be more limited in its ability to purchase a particular security or other asset than if the holdings of the Investment
Manager’s affiliates had been excluded from the limitation. At certain times, a Fund may be restricted in its investment activities because of relationships that an affiliate of the Fund, which may include Ameriprise Financial and its
affiliates, may have with the issuers of securities. This could happen, for example, if a Fund desired to buy a security issued by a company for which Ameriprise Financial or an affiliate serves as underwriter. In any of these scenarios, a
Fund’s inability to participate (or participate further) in a particular investment, despite a portfolio manager’s desire to so participate, may negatively impact Fund performance. The internal policies and procedures of Ameriprise
Financial and its affiliates covering these types of restrictions and addressing similar issues also may at times restrict a Fund’s investment activities. See also
About Fund 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 Investment Manager 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 Investment Manager.
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.
Ameriprise Financial and its affiliates, including
the Investment Manager, may, subject to applicable legal and regulatory requirements, 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, if any. 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 Investment Manager 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
Other Practices – Additional Shareholder Servicing
Payments
and
–
Additional Selling Agent Payments
for more information.
Statement
of Additional Information – June 1, 2015
|
130
|
Codes of Ethics
The Funds, the Investment Manager, the subadvisers
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
General.
The Funds have delegated to the Investment Manager the responsibility to vote proxies relating to portfolio securities held by the Funds, including Funds managed by subadvisers.
The Investment Manager votes proxies relating to
portfolio securities in accordance with a proxy voting policy and pre-determined proxy voting guidelines adopted by the Board. The Funds endeavor to vote all proxies of which they become aware prior to the vote deadline; provided, however, that in
certain circumstances the Funds may refrain from voting securities. For instance, the Funds may refrain from voting foreign securities if the costs of voting outweigh the expected benefits of voting and typically will not vote securities if voting
would impose trading restrictions.
Board
Oversight and Retention of Proxy Voting Authority.
The Board may, in its discretion, vote proxies for the Funds. For instance, the Board may determine to vote on matters that may present a material
conflict of interest to the Investment Manager.
The Board reviews on an annual basis, or more
frequently as determined appropriate, the Investment Manager’s administration of the proxy voting process and its adherence to the approved guidelines.
Voting Guidelines.
The Investment Manager and Board will generally vote in accordance with pre-determined voting guidelines adopted by the Board. The voting guidelines indicate whether to vote for, against or abstain
from particular proposals, or whether the matter should be considered on a case-by-case basis. A committee within the Investment Manager (the Proxy Voting Committee), which is composed of representatives of the Investment Manager’s equity
investments, equity research, compliance, legal and operations functions, may determine to vote differently from the guidelines on particular proposals in the event it determines that doing so is in the clients’ best economic interests. The
Board may also determine to vote differently from the guidelines on particular proposals in the event it determines that doing so is appropriate and in the Funds’ interests. The Investment Manager and the Board may also consider the voting
recommendations of analysts, portfolio managers, subadvisers and information obtained from outside resources, including one or more third party research providers. When proposals are not covered by the voting guidelines or a voting determination
must be made on a case-by-case basis, a portfolio manager, subadviser or analyst will make the voting determination based on his or her determination of the clients’ best economic interests. In addition, the Proxy Voting Committee or Board may
determine proxy votes when proposals require special consideration.
On an annual basis, or more frequently as determined
necessary, the Board reviews recommendations to revise the existing guidelines or add new guidelines. Recommendations are based on, among other things, industry trends and the frequency that similar proposals appear on company ballots.
Addressing Conflicts of Interest.
If the Investment Manager is subject to a potential material conflict of interest with respect to a proxy vote, the Board will vote the proxy by administering the guidelines or determining the vote on
a case-by-case basis. If the Board determines that its members may be subject to a potential material conflict of interest with respect to a proxy vote, the member is asked to recuse himself or herself from the determination.
Voting Proxies of Affiliated Underlying Funds.
Certain Funds may invest in shares of other Columbia Funds (referred to in this context as “underlying funds”) and may own substantial portions of these underlying funds. If such Funds are
in a master-feeder structure, the feeder Fund will either seek instructions from its shareholders with regard to the voting of proxies with respect to the master fund’s shares and vote such proxies in accordance with such instructions or vote
the shares held by it in the same proportion as the vote of all other master fund shareholders. With respect to Funds that hold shares of underlying funds other than in a master-feeder structure, the proxy policy of the Funds is, in general, to
ensure that direct public shareholders of underlying funds control the outcome of any shareholder vote. To help manage this potential conflict of interest, the policy of the Funds is to vote proxies of the underlying funds in the same proportion as
the vote of the direct public shareholders; provided, however, that if there are no direct public shareholders of an underlying fund or if direct public shareholders represent only a minority interest in an underlying fund, the Fund may cast votes
in accordance with instructions from the independent members of the Board.
Statement
of Additional Information – June 1, 2015
|
131
|
Proxy Voting Agents.
The Investment Manager has retained Institutional Shareholder Services Inc., a third party vendor, as its proxy voting administrator to implement the Funds’ proxy voting process and to provide
recordkeeping and vote disclosure services. The Investment Manager has retained both Institutional Shareholder Services Inc. and Glass-Lewis & Co. to provide proxy research services.
Additional Information.
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.columbiathreadneedle.com/us and (ii) on the SEC’s website at www.sec.gov. For a copy of the voting guidelines
in effect on the date of this SAI, see Appendix B to this SAI.
Organization and Management of Wholly-Owned Subsidiaries
Commodity Strategy Fund (for purposes of this
section, referred to as a “Fund”) may invest a portion of its assets, within the limitations of Subchapter M and Section 817(h) of the Code, as applicable, in one or more of its wholly-owned subsidiaries (previously defined collectively
as the “Subsidiary”). The Subsidiary is a limited liability company organized under the laws of the Cayman Islands, whose registered office is located at P.O. Box 309, Ugland House, Grand Cayman Islands.
The Subsidiary is overseen by its own board of
directors and is not registered under the 1940 Act. The Fund, as the sole shareholder of the Subsidiary, does not have all of the protections offered by the 1940 Act to shareholders of investment companies registered under the 1940 Act. However, the
Fund’s Board maintains oversight responsibility for investment activities of the Subsidiary generally as if the Subsidiary’s investments were held directly by the Fund. The Investment Manager and the Fund’s subadvisers are
responsible for the Subsidiary’s day-to-day business pursuant to their separate agreements with, or in respect of, the Subsidiary. The following individuals serve as a director of the Subsidiary:
Name,
address, year of birth
|
Position
held with Subsidiary
and length of service
|
Principal
occupation during past five years
|
Anthony
P. Haugen
807 Ameriprise
Financial Center,
Minneapolis, MN 55474-2405
Born 1964
|
Director
since
November 2013
|
Vice
President – Finance, Ameriprise Financial, Inc.
since June 2004
|
Amy
K. Johnson
5228 Ameriprise
Financial Center
Minneapolis, MN 55474-2405
Born 1965
|
Director
since
November 2013
|
See
Fund Governance – Fund Officers
.
|
Christopher
O. Petersen
5228 Ameriprise
Financial Center
Minneapolis, MN 55474-2405
Born 1970
|
Director
since
January 2015
|
See
Fund Governance – Fund Officers
.
|
The Subsidiary has entered into
separate contracts for the provision of advisory, administrative and custody services with the same service providers who provide those services to the Fund. Threadneedle selects the Subsidiary’s investments pursuant to an addendum to the
subadvisory agreement with the Investment Manager. The Subsidiary has also entered into arrangements with PricewaterhouseCoopers LLP to serve as the Subsidiary’s independent registered public accounting firm. Financial statements prior to
August 31, 2012 were audited by the Subsidiary’s former independent registered public accounting firm. Each Subsidiary will bear the fees and expenses incurred in connection with the services that it receives pursuant to those agreements and
arrangements. The Fund expects that the expenses borne by the Subsidiary will not be material in relation of the value of the Fund’s assets.
For purposes of adhering to the Fund’s
compliance policies and procedures, the Investment Manager will treat the assets of the Subsidiary generally as if the assets were held directly by the Fund. The Chief Compliance Officer makes periodic reports to the Fund’s Board regarding the
management and operations of the Subsidiary.
The financial information of the Subsidiary is
consolidated into the Fund’s financial statements, as contained within the Fund’s annual and semiannual reports provided to shareholders.
Please refer to the section titled “
Taxation – The Subsidiary
” for information about certain tax considerations relating to the Fund’s investment in the Subsidiary.
Statement
of Additional Information – June 1, 2015
|
132
|
Changes in U.S. laws and/or the laws of the Cayman
Islands could prevent the Fund and/or the Subsidiary from operating as described in the Fund’s prospectus and this SAI, and could negatively affect the Fund and its shareholders. For example, Cayman Islands laws currently do not impose certain
taxes on the Subsidiary, including any income, corporate or capital gains tax, estate duty, inheritance tax, gift tax or withholding tax. If Cayman Islands laws were changed to require the Subsidiary to pay Cayman Islands taxes, the investment
returns of the Fund would likely decrease.
By
investing in the Subsidiary, the Fund is indirectly exposed to the risks associated with the Subsidiary’s investments. The derivatives and other investments held by the Subsidiary are subject to the same risks that would apply to similar
investments if held directly by the Fund. The Subsidiary is subject to the same principal risk that the Fund is subject to (which are described in the Fund’s prospectus). There can be no assurance that the investment objective of the
Subsidiary will be achieved. The Subsidiary is not registered under the 1940 Act and, except as otherwise noted, is not subject to the investor protections of the 1940 Act. However, the Fund wholly owns and controls the Subsidiary, and the Fund and
the Subsidiary are both managed by the Investment Manager, making it unlikely that the Subsidiary will take action contrary to the interests of the Fund and its shareholders. The Fund’s Board has oversight responsibility for the investment
activities of the Fund, including its investment in the Subsidiary, and the Fund’s role as sole shareholder of the Subsidiary. In managing the Subsidiary’s investment portfolio, the Investment Manager will manage the Subsidiary’s
portfolio in accordance with the Fund’s investment policies and restrictions. Changes in the laws of the United States and/or the Cayman Islands, under which the Fund and the Subsidiary, respectively, are organized, could result in the
inability of the Fund and/or the Subsidiary to operate as described in the applicable prospectus and this SAI and could adversely affect the Fund and its shareholders. For example, the Cayman Islands laws currently do not impose any income,
corporate or capital gains tax, estate duty, inheritance tax, gift tax or withholding tax on the Subsidiary. If Cayman Islands law were changed and the Subsidiary was required to pay Cayman Islands taxes, the investment returns of the Fund would
likely decrease.
Statement
of Additional Information – June 1, 2015
|
133
|
FUND GOVERNANCE
Board of Trustees and Officers
Shareholders elect the Board that oversees the
Funds' operations. The Board appoints officers who are responsible for day-to-day business decisions based on policies set by the Board. The following table provides basic biographical information about the Funds' Trustees as of the date of this
SAI, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, members may serve through the end of the calendar year in which he or she
reaches either the mandatory retirement age established by the Board or the fifteenth anniversary of the first Board meeting they attended as a member of the Board.
Trustees
Independent Trustees
Name,
address,
year of birth
|
Position
held
with Funds and
length of service
|
Principal
occupation(s)
during past
five years
and other relevant
professional experience
|
Number
of funds
in the
Fund
Family
overseen
by Board
member
|
Other
present or past
directorships/trusteeships
(within past 5 years)
|
Committee
memberships
|
Kathleen
Blatz
901 S. Marquette Ave.
Minneapolis, MN 55402
1954
|
Board
member since 1/06 for RiverSource Funds and since 6/11 for Nations Funds
|
Attorney,
specializing in arbitration and mediation; Chief Justice, Minnesota Supreme Court, 1998-2006; Associate Justice, Minnesota Supreme Court, 1996-1998; Fourth Judicial District Court Judge, Hennepin County, 1994-1996; Attorney in private practice and
public service, 1984-1993; State Representative, Minnesota House of Representatives, 1979-1993, which included service on the Tax and Financial Institutions and Insurance Committees
|
127
|
Trustee,
BlueCross BlueShield of Minnesota (Chair of the Business Development Committee) since 2009; Chair of the Robina Foundation since August 2013
|
Board
Governance, Compliance, Contracts, Executive, Investment Review
|
Edward
J. Boudreau, Jr.
901 S. Marquette Ave.
Minneapolis, MN 55402
1944
|
Board
member since 6/11 for RiverSource Funds and since 1/05 for Nations Funds
|
Managing
Director, E.J. Boudreau & Associates (consulting) since 2000; FINRA Industry Arbitrator, 2002 – present; Chairman and Chief Executive Officer, John Hancock Funds (asset management), Chairman and Interested Trustee for open-end and
closed-end funds offered by John Hancock, 1989-2000; John Hancock Life Insurance Company, including SVP and Treasurer and SVP Information Technology, 1968-1988
|
125
|
Former
Trustee, BofA Funds Series Trust (11 funds), 2005-2011; Trustee, Boston Museum of Science (Chair of Finance Committee), 1985-2013
|
Audit,
Compliance, Executive, Investment Review
|
Statement
of Additional Information – June 1, 2015
|
134
|
Name,
address,
year of birth
|
Position
held
with Funds and
length of service
|
Principal
occupation(s)
during past
five years
and other relevant
professional experience
|
Number
of funds
in the
Fund
Family
overseen
by Board
member
|
Other
present or past
directorships/trusteeships
(within past 5 years)
|
Committee
memberships
|
Pamela
G. Carlton
901 S. Marquette Ave.
Minneapolis, MN 55402
1954
|
Board
member since 7/07 for RiverSource Funds and since 6/11 for Nations Funds
|
President,
Springboard- Partners in Cross Cultural Leadership (consulting company) since 2003; Managing Director of US Equity Research, JP Morgan Chase, 1999-2003; Director of US Equity Research, Chase Asset Management, 1996- 1999; Co-Director Latin America
Research, 1993-1996, COO Global Research, 1992-1996, Co-Director of US Research, 1991-1992, Investment Banker, Morgan Stanley, 1982-1991
|
127
|
None
|
Audit,
Investment Review
|
William
P. Carmichael
901 S. Marquette Ave.
Minneapolis, MN 55402
1943
|
Chair
of the Board since 1/14, Board member since 6/11 for RiverSource Funds and since 2003 for Nations Funds
|
Retired;
Co-founder, The Succession Fund (provides exit strategies to owners of privately held companies), 1998-2007; Adjunct Professor of Finance, Kelley School of Business, Indiana University, 1993-2007; Senior Vice President, Sara Lee Corporation,
1991-1993; Senior Vice President and Chief Financial Officer, Beatrice Foods Company, 1984-1990; Vice President, Esmark, Inc., 1973-1984; Associate, Price Waterhouse, 1968-1972
|
127
|
Director,
Cobra Electronics Corporation (electronic equipment manufacturer), 1994-August 2014; The Finish Line (athletic shoes and apparel) since July 2003; Director, International Textile Corp. since 2012; former Director, McMoRan Exploration Company (oil
and gas exploration and development) 2010-2013; former Trustee, BofA Funds Series Trust (11 funds) 2009-2011; Director, Spectrum Brands, Inc. (consumer products), 2002-2009; Director, Simmons Company (bedding), 2004-2010
|
Board
Governance, Compliance, Contracts, Executive, Investment Review
|
Patricia
M. Flynn
901 S. Marquette Ave.
Minneapolis, MN 55402
1950
|
Board
member since 11/04 for RiverSource Funds and since 6/11 for Nations Funds
|
Trustee
Professor of Economics and Management, Bentley University since 1976 (also teaches and conducts research on corporate governance); Dean, McCallum Graduate School of Business, Bentley University, 1992-2002
|
127
|
Trustee,
MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010
|
Audit,
Compliance, Investment Review
|
Statement
of Additional Information – June 1, 2015
|
135
|
Name,
address,
year of birth
|
Position
held
with Funds and
length of service
|
Principal
occupation(s)
during past
five years
and other relevant
professional experience
|
Number
of funds
in the
Fund
Family
overseen
by Board
member
|
Other
present or past
directorships/trusteeships
(within past 5 years)
|
Committee
memberships
|
William
A. Hawkins
901 S. Marquette Ave.
Minneapolis, MN 55402
1942
|
Board
member since 6/11 for RiverSource Funds and since 1/05 for Nations Funds
|
Managing
Director, Overton Partners (financial consulting), since August 2010; President and Chief Executive Officer, California General Bank, N.A., January 2008-August 2010; Operation Hope, COO, 2004-2007; IndyMac Bancorp, President, CBG, 1999-2003;
American General Bank, President, 1997-1999; Griffin Financial Services, CEO, 1981-1997; The Griffin Funds, CEO, 1992-1998
|
127
|
Trustee,
BofA Funds Series Trust (11 funds)
|
Audit,
Executive, Compliance, Investment Review
|
R.
Glenn Hilliard
901 S. Marquette Ave.
Minneapolis, MN 55402
1943
|
Board
member since 6/11 for RiverSource Funds and since 1/05 for Nations Funds
|
Chairman
and Chief Executive Officer, Hilliard Group LLC (investing and consulting) since April 2003; Non-Executive Director & Chairman, CNO Financial Group, Inc. (insurance), September 2003-May 2011
|
125
|
Chairman,
BofA Funds Series Trust (11 funds); former Director, CNO Financial Group, Inc. (insurance) 2003-2011
|
Board
Governance, Contracts, Investment Review
|
Catherine
James Paglia
901 S. Marquette Ave.
Minneapolis, MN 55402
1952
|
Board
member since 11/04 for RiverSource Funds and since 6/11 for Nations Funds
|
Director,
Enterprise Asset Management, Inc. (private real estate and asset management company) since September 1998; Managing Director and Partner, Interlaken Capital, Inc., 1989-1997; Managing Director, Morgan Stanley, 1982-1989; Vice President, Investment
Banking, 1980-1982, Associate, Investment Banking, 1976-1980, Dean Witter Reynolds, Inc.
|
127
|
Director,
Valmont Industries, Inc. (irrigation systems manufacturer) since 2012; Trustee, Carleton College (on the Investment Committee); Trustee, Carnegie Endowment for International Peace (on the Investment Committee)
|
Board
Governance, Contracts, Executive, Investment Review
|
Leroy
C. Richie
901 S. Marquette Ave.
Minneapolis, MN 55402
1941
|
Board
member since 2000 for Seligman Funds, since 11/08 for RiverSource Funds and since 6/11 for Nations Funds
|
Counsel,
Lewis & Munday, P.C. (law firm) since 2004; Vice President and General Counsel, Automotive Legal Affairs, Chrysler Corporation, 1993-1997
|
127
|
Lead
Outside Director, Digital Ally, Inc. (digital imaging) since September 2005; Director, Infinity, Inc. (oil and gas exploration and production) since 1994; Director, OGE Energy Corp. (energy and energy services), 2007-2014
|
Contracts,
Compliance, Investment Review
|
Statement
of Additional Information – June 1, 2015
|
136
|
Name,
address,
year of birth
|
Position
held
with Funds and
length of service
|
Principal
occupation(s)
during past
five years
and other relevant
professional experience
|
Number
of funds
in the
Fund
Family
overseen
by Board
member
|
Other
present or past
directorships/trusteeships
(within past 5 years)
|
Committee
memberships
|
Minor
M. Shaw
901 S. Marquette Ave.
Minneapolis, MN 55402
1947
|
Board
member since 6/11 for RiverSource Funds and since 2003 for Nations Funds
|
President,
Micco LLC (private investments) since 2011; President, Micco Corp. (family investment business), 1998-2011
|
125
|
Director,
Piedmont Natural Gas; Director, BlueCross BlueShield of South Carolina since April 2008; Chair of the Duke Endowment; Director, National Association of Corporate Directors, Carolinas Chapter, since 2013; Chair of Greenville – Spartanburg
Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011
|
Board
Governance, Contracts, Investment Review
|
Alison
Taunton-Rigby
901 S. Marquette Ave.
Minneapolis, MN 55402
1944
|
Board
member since 11/02 for RiverSource Funds and since 6/11 for Nations Funds
|
Managing
Director, Forester Biotech (consulting) since 2001; Chief Executive Officer and Director, RiboNovix, Inc., (biotechnology) 2003-2010; President and Chief Executive Officer of CMT Inc., 2001-2003; Aquila Biopharmaceuticals Inc., 1996-2000; Cambridge
Biotech Corporation, 1995-1996, Mitotix Inc., 1993-1994
|
127
|
Director,
Healthways, Inc. (health and well-being solutions) since 2005; Director, ICI Mutual Insurance Company, since 2011; Director, Abt Associates (government contractor) since 2001; Director, Boston Children’s Hospital since 2002
|
Board
Governance, Audit, Investment Review
|
Interested Trustee Not Affiliated with Investment
Manager*
Name,
address,
year of birth
|
Position
held
with funds and
length of service
|
Principal
occupation
during past five years
|
Number
of
funds in the
Fund Family
overseen by
Board member
|
Other
present or past
directorships/trusteeships
(within past 5 years)
|
Committee
memberships
|
Anthony
M. Santomero
901 S. Marquette Ave.
Minneapolis, MN 55402
1946
|
Board
member since 6/11 for RiverSource Funds and since 1/08 for Nations Funds
|
Richard
K. Mellon Professor Emeritus of Finance, The Wharton School, University of Pennsylvania, since 2002; Senior Advisor, McKinsey & Company (consulting), 2006-2008; President, Federal Reserve Bank of Philadelphia, 2000-2006, Professor of Finance,
The Wharton School, University of Pennsylvania, 1972-2002
|
125
|
Director,
Renaissance Reinsurance Ltd. since May 2008; Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Citigroup Inc. since 2009; Director, Citibank, N.A. since 2009; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011
|
Compliance,
Executive, Investment Review
|
*
|
Dr. Santomero is not an
affiliated person of the Investment Manager or Ameriprise Financial. However, he is currently deemed by the Funds to be 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., companies that may directly or through subsidiaries and affiliates engage from time-to-time in brokerage execution, principal transactions and lending relationships with the Funds or accounts advised/managed by the Investment
Manager.
|
Statement
of Additional Information – June 1, 2015
|
137
|
Interested Trustee Affiliated with Investment
Manager*
Name,
address,
year of birth
|
Position
held
with funds and
length of service
|
Principal
occupation
during past five years
|
Number
of
funds in the
Fund Family
overseen by
Board member
|
Other
present or past
directorships/trusteeships
(within past 5 years)
|
Committee
memberships
|
William
F. Truscott
53600 Ameriprise
Financial Center
Minneapolis, MN 55474
1960
|
Board
member since 11/01 for RiverSource Funds and since 6/11 for Nations Funds; Senior Vice President since 2002 for RiverSource Funds and since 5/10 for Nations Funds
|
Chairman
of the Board and President, Columbia Management Investment Advisers, LLC since May 2010 and February 2012, respectively (previously President and Chief Investment Officer, 2001 - April 2010); Chief Executive Officer, Global Asset Management,
Ameriprise Financial, Inc. since September 2012 (previously Chief Executive Officer, U.S. Asset Management & President, Annuities, May 2010 - September 2012 and President – U.S. Asset Management and Chief Investment Officer, 2005 - April
2010); Director and Chief Executive Officer, Columbia Management Investment Distributors, Inc. since May 2010 and February 2012, respectively (previously Chairman of the Board and Chief Executive Officer, 2006 - April 2010); Chairman of the Board
and Chief Executive Officer, RiverSource Distributors, Inc. since 2006; Director, Threadneedle Asset Management Holdings, SARL since 2014; President and Chief Executive Officer, Ameriprise Certificate Company, 2006 - August 2012.
|
186
|
Former
Director, Ameriprise Certificate Company, 2006 - January 2013
|
None
|
*
|
Interested person (as defined
under the 1940 Act) by reason of being an officer, director, security holder and/or employee of the Investment Manager or Ameriprise Financial.
|
The Officers
The Board has appointed officers who are responsible
for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. The following table provides basic information about the Officers or the Trust as of the date of this SAI, including principal
occupations during the past five years, although their specific titles may have varied over the period. In addition to Mr. Truscott, who is Senior Vice President, the Funds' other officers are:
Statement
of Additional Information – June 1, 2015
|
138
|
Fund Officers
Name,
Address
and Year of Birth
|
Position
and Year
First Appointed to
Position for any Fund in the
Columbia Funds Complex
or a Predecessor Thereof
|
Principal
Occupation(s) During Past Five Years
|
Christopher
O. Petersen
5228 Ameriprise Financial Center
Minneapolis, MN 55474
Born 1970
|
President
and Principal Executive Officer (2015)
|
Vice
President and Lead Chief Counsel, Ameriprise Financial, Inc. since January 2015 (previously, Vice President and Chief Counsel January 2010 – December 2014; and Vice President and Group Counsel or Counsel 2004 - January 2010); officer of
Columbia Funds and affiliated funds since 2007.
|
Michael
G. Clarke
225 Franklin Street
Boston, MA 02110
Born 1969
|
Treasurer
(2011) and Chief Financial Officer (2009)
|
Vice
President – Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; Managing Director of Fund Administration, Columbia Management Advisors, LLC, September 2004 - April 2010; senior officer of Columbia Funds
and affiliated funds since 2002.
|
Paul
B. Goucher
100 Park Avenue
New York, NY 10017
Born 1968
|
Senior
Vice President (2011), Chief Legal Officer (2015) and Assistant Secretary (2008)
|
Vice
President and Lead Chief Counsel, Ameriprise Financial, Inc. since November 2008 and January 2013, respectively (previously Chief Counsel, January 2010 - January 2013 and Group Counsel, November 2008 - January 2010).
|
Thomas
P. McGuire
225 Franklin Street
Boston, MA 02110
Born 1972
|
Vice
President and Chief Compliance Officer (2012)
|
Vice
President – Asset Management Compliance, Ameriprise Financial, Inc., since May 2010; Chief Compliance Officer, Ameriprise Certificate Company since September 2010; Compliance Executive, Bank of America, 2005 - April 2010.
|
Colin
Moore
225 Franklin Street
Boston, MA 02110
Born 1958
|
Senior
Vice President (2010)
|
Executive
Vice President and Global Chief Investment Officer, Ameriprise Financial, Inc., since July 2013; Director and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since May 2010; Manager, Managing Director and Chief
Investment Officer, Columbia Management Advisors, LLC, 2007 - April 2010.
|
Michael
E. DeFao
225 Franklin Street
Boston, MA 02110
Born 1968
|
Vice
President (2011) and Assistant Secretary (2010)
|
Vice
President and Chief Counsel, Ameriprise Financial, Inc. since May 2010; Associate General Counsel, Bank of America, 2005 - April 2010.
|
Joseph
F. DiMaria
225 Franklin Street
Boston, MA 02110
Born 1968
|
Vice
President (2011), Assistant Treasurer (2012) and Chief Accounting Officer (2008)
|
Vice
President – Mutual Fund Treasurer, Columbia Management Investment Advisers, LLC since May 2010; Director of Fund Administration, Columbia Management Advisors, LLC, 2006 - April 2010.
|
Amy
Johnson
5228 Ameriprise Financial Center
Minneapolis, MN 55474
Born 1965
|
Vice
President (2006)
|
Managing
Director and Chief Operating Officer, Columbia Management Investment Advisers, LLC since May 2010 (previously Chief Administrative Officer, 2009 - April 2010, and Vice President – Asset Management and Trust Company Services, 2006 - 2009).
|
Lyn
Kephart-Strong
5228 Ameriprise Financial Center
Minneapolis, MN 55474
Born 1960
|
Vice
President (2015)
|
President,
Columbia Management Investment Services Corp. since October 2014; Vice President & Resolution Officer, Ameriprise Trust Company since August 2009; President, RiverSource Service Corporation 2004-2010.
|
Ryan
C. Larrenaga
225 Franklin Street
Boston, MA 02110
Born 1970
|
Vice
President and Secretary (2015)
|
Vice
President and Group Counsel, Ameriprise Financial, Inc. since August 2011 (previously, Counsel from May 2010 to August 2011); Assistant General Counsel, Bank of America, 2005 - April 2010; officer of Columbia Funds and affiliated funds since 2005.
|
Responsibilities of Board
with respect to Fund management
The Board is chaired by an
Independent Trustee who has significant additional responsibilities compared to the other Board members, including, among other things: setting the agenda for Board meetings, communicating and meeting regularly with Board members between Board and
committee meetings on Fund-related matters with the Funds' Chief Compliance Officer (“CCO”), counsel to the Independent Trustees, and representatives of the Funds' service providers and overseeing Board Services.
Statement
of Additional Information – June 1, 2015
|
139
|
The Board initially approves an Investment
Management Services Agreement and other contracts with the Investment Manager and its affiliates, and other service providers. Once the contracts are approved, the Board monitors the level and quality of services including commitments of service
providers to achieve expected levels of investment performance and shareholder services. Annually, the Board evaluates the services received under the contracts by reviewing, among other things, reports covering investment performance, shareholder
services, marketing, and the Investment Manager’s profitability in order to determine whether to continue existing contracts or negotiate new contracts. The Investment Manager 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’s oversight of the Investment Manager and other service providers in the operation of the Funds includes oversight with respect to various risk
management functions. The Funds 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 Investment
Manager, 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 Investment Manager, the subadvisers and other service providers has its own,
independent interest in risk management, and its policies and methods of carrying out risk management functions will depend, in part, on its analysis of the risks, functions and business models.
Risk oversight forms part of the Board’s
general oversight of the Funds and is addressed as part of various Board and Committee activities. As part of its regular oversight of the trusts, the Board, directly or through a committee, interacts with and reviews reports from, among others, the
Investment Manager, subadvisers, the independent registered public accounting firm for the Funds, and internal auditors for the Investment Manager or its affiliates, as appropriate, regarding risks faced by the Funds and relevant risk functions. The
Board also meets periodically with the Funds' CCO, 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, with
the assistance of the Investment Review Committee, reviews investment policies 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 various investment risks. As part of the Board’s periodic review of the Funds' advisory, subadvisory and other service provider agreements, as applicable, the Board may consider risk management aspects of their operations
and the functions for which they are responsible. In addition, the Board oversees processes that are in place to assure compliance with applicable rules, regulations and investment policies and addresses possible conflicts of interest.
The Board recognizes that not all
risks that may affect the Funds can be identified in advance; that it may not be practical or cost-effective to eliminate or mitigate certain risks; that it may be necessary to bear certain risks (such as various investment-related risks) in seeking
to achieve the Funds’ investment objectives; and that the processes and controls employed to address certain risks may be limited in their effectiveness. As a result of the foregoing and other factors, the Board’s risk management
oversight is subject to substantial limitations.
Committees of the Board
The Board has organized the following standing committees to
facilitate its work: Board Governance Committee, Compliance Committee, Contracts Committee, Executive Committee, Investment Review Committee and Audit Committee. These Committees are comprised solely of Independent Trustees (for these purposes,
persons who are not affiliated persons of the Investment Manager or Ameriprise Financial). The table above describing each Trustee also includes their respective committee memberships. The duties of these committees are described below.
Mr. Carmichael, as Chair of the Board, acts as a
point of contact between the Independent Trustees and the Investment Manager between Board meetings in respect of general matters.
Board Governance Committee.
Recommends to the Board the size, structure and composition of the Board and its committees; the compensation to be paid to members of the Board; and a process
for evaluating the Board’s performance. The committee also reviews candidates for Board membership, including candidates recommended by shareholders. The committee also makes recommendations to the Board regarding responsibilities and duties
of the Board, oversees proxy voting and supports the work of the Board Chair in relation to furthering the interests of the Funds and other funds in the Columbia Family of Funds overseen by the Board and their shareholders on external
matters.
To be considered as a
candidate for Trustee, recommendations must include a curriculum vitae and be mailed to the Chair of the Board, Columbia Family of Funds, 901 Marquette Avenue South, Suite 2810, Minneapolis, MN 55402-3268. To be timely for consideration by the
committee, the submission, including all required information, must be submitted in writing not less than 120 days before the date of the proxy statement for the previous year’s annual meeting of shareholders, if such a meeting is held. The
committee will consider only one candidate submitted by such a shareholder or group for nomination for election at a meeting of shareholders. The committee will not consider self-nominated candidates or candidates nominated by members of a
candidate’s family, including such candidate’s spouse, children, parents, uncles, aunts, grandparents, nieces and nephews.
Statement
of Additional Information – June 1, 2015
|
140
|
The committee will consider and evaluate candidates
submitted by the nominating shareholder or group on the basis of the same criteria as those used to consider and evaluate candidates submitted from other sources. The committee may take into account a wide variety of factors in considering trustee
candidates, including (but not limited to): (i) the candidate’s knowledge in matters relating to the investment company industry; (ii) any experience possessed by the candidate as a director or senior officer of other public or private
companies; (iii) the candidate’s educational background; (iv) the candidate’s reputation for high ethical standards and personal and professional integrity; (v) any specific financial, technical or other expertise possessed by the
candidate, and the extent to which such expertise would complement the Board’s existing mix of skills and qualifications; (vi) the candidate’s perceived ability to contribute to the ongoing functions of the Board, including the
candidate’s ability and commitment to attend meetings regularly, work collaboratively with other members of the Board and carry out his or her duties in the best interests of the Funds; (vii) the candidate’s ability to qualify as an
independent trustee; and (viii) such other criteria as the committee determines to be relevant in light of the existing composition of the Board and any anticipated vacancies or other factors.
Members of the committee (and/or the Board) also
meet personally with each nominee to evaluate the candidate’s ability to work effectively with other members of the Board, while also exercising independent judgment. Although the Board does not have a formal diversity policy, the Board
endeavors to comprise itself of members with a broad mix of professional and personal backgrounds. Thus, the committee and the Board accorded particular weight to the individual professional background of each Independent Trustee.
The Board believes that the Funds are well-served by
a Board, the membership of which consists of persons that represent a broad mix of professional and personal backgrounds. In considering nominations, the Committee takes the following matrix into account in assessing how a candidate’s
professional background (which is reflected in the biographical information included in the “Trustees” table above) would fit into the mix of experiences represented by the then-current Board.
|
|
Professional
Background
|
Name
|
Geographic
|
For
Profit;
CIO/CFO;
CEO/COO
|
Non-Profit;
Government;
CEO/Chairman
|
Investment
|
Legal;
Regulatory
|
Political
|
Academic
|
Audit
Committee;
Financial
Expert
|
Blatz
|
MN
|
|
X
|
|
X
|
X
|
|
|
Boudreau
|
MA
|
X
|
|
X
|
X
|
|
|
X
|
Carlton
|
NY
|
|
|
X
|
X
|
|
|
X
|
Carmichael
|
FL
|
X
|
X
|
X
|
X
|
|
|
X
|
Flynn
|
MA
|
|
|
|
|
|
X
|
|
Hawkins
|
CA
|
X
|
|
X
|
|
|
|
X
|
Hilliard
|
GA
|
X
|
X
|
X
|
X
|
|
|
|
Paglia
|
NY
|
X
|
|
X
|
|
|
|
X
|
Richie
|
MI
|
X
|
X
|
|
X
|
|
|
|
Santomero
|
PA
|
|
X
|
X
|
X
|
|
X
|
X
|
Shaw
|
SC
|
X
|
X
|
X
|
|
|
|
|
Taunton-Rigby
|
MA
|
X
|
|
X
|
|
|
|
X
|
With respect to the Board
membership of Mr. Truscott on the Board, who is not an Independent Trustee, the committee and the Board have concluded that having a senior member of the Investment Manager serve on the Board can facilitate increased access to information regarding
the Funds' Investment Manager for the Independent Trustees, which is the Funds' most significant service provider. With respect to the trusteeship of Dr. Santomero on the Board, the committee and the Board have concluded that, despite his lack of
technical independence of the Funds under the 1940 Act (arising from his board service to Citigroup, Inc. and Citibank N.A.), he could serve with “substantive independence” primarily since he has no financial interest or relationship
with the Investment Manager or Ameriprise Financial. The committee and the Board also took into account Dr. Santomero’s broad array of experiences from management consulting to academia to public service, which can complement well the mix of
experiences represented by the other Board members.
Compliance Committee.
Supports the Funds' maintenance of a strong compliance program by providing a forum for Independent Trustees to consider compliance matters impacting the Funds or their key service providers;
developing and implementing, in coordination with the CCO, a process for the review and consideration of compliance reports that are provided to the Board; and providing a designated forum for the Funds' CCO to meet with Independent Trustees on a
regular basis to discuss compliance matters.
Statement
of Additional Information – June 1, 2015
|
141
|
Contracts Committee.
Reviews and oversees the contractual relationships with service providers. Receives and analyzes reports covering the level and quality of services provided under contracts with the Funds and advises
the Board regarding actions taken on these contracts during the annual review process. Reviews and considers, on behalf of all Trustees, the Funds' investment advisory, subadvisory (if any), administrative services and principal underwriting
contracts to assists the Trustees in fulfilling their responsibilities relating to the Board’s evaluation and consideration of these arrangements.
Executive Committee.
Acts, as needed, for the Board between meetings of the Board.
Investment Review Committee.
Reviews and oversees the management of the Funds' assets. Considers investment management policies and strategies; investment performance; risk management techniques; and securities trading practices
and reports areas of concern to the Board.
Audit Committee.
Oversees the accounting and financial reporting processes of the Funds and internal controls over financial reporting. Oversees the quality and integrity of the Funds' financial statements and
independent audits as well as the Funds' compliance with legal and regulatory requirements relating to the Funds' accounting and financial reporting, internal controls over financial reporting and independent audits. The committee also makes
recommendations regarding the selection of the Funds' independent registered public accounting firm (
i.e.
, independent auditors) and reviews and
evaluates the qualifications, independence and performance of the auditor. The committee oversees the Funds' risks by, among other things, meeting with the Funds' internal auditors, establishing procedures for the confidential, anonymous submission
by employees of concerns about accounting or audit matters, and overseeing the Funds' Disclosure Controls and Procedures. This committee acts as a liaison between the independent auditors and the full Board and must prepare an audit committee
report.
The table below shows the
number of times each committee met during each Fund’s most recent fiscal period. The Table is organized by fiscal year end.
Committee Meetings
Fiscal
Period
|
Audit
Committee
|
Compliance
Committee
|
Contracts
Committee
|
Executive
Committee
|
Governance
Committee
|
Investment
Review
Committee
|
For
Funds with fiscal period
ending January 31
|
5
|
5
|
6
|
0
|
6
|
6
|
For
Funds with fiscal period
ending February 28/29
|
6
|
5
|
6
|
3
|
6
|
6
|
For
Funds with fiscal period
ending March 31
|
6
|
5
|
6
|
3
|
7
|
6
|
For
Funds with fiscal period
ending April 30
|
6
|
5
|
6
|
2
|
7
|
6
|
For
Funds with fiscal period
ending May 31
|
6
|
5
|
6
|
1
|
7
|
6
|
For
Funds with fiscal period
ending July 31
|
6
|
5
|
6
|
1
|
6
|
6
|
For
Funds with fiscal period
ending August 31
|
6
|
5
|
6
|
1
|
5
|
6
|
For
Funds with fiscal period
ending October 31
|
5
|
5
|
6
|
1
|
5
|
6
|
Beneficial Equity
Ownership
The tables below show, 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 all Funds in the Columbia Funds Complex overseen by the Trustee, including notional amounts through the Deferred
Compensation Plan, where noted, 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. The information is provided as of December 31, 2014.
The tables only include ownership of Columbia Funds
overseen by the Trustees; the Trustees and Officers may own shares of other Columbia Funds they do not oversee. The tables do not include ownership of Columbia Funds overseen by other boards of trustees/directors.
Statement
of Additional Information – June 1, 2015
|
142
|
Independent Trustee Ownership
|
Blatz
|
Boudreau
|
Carlton
|
Carmichael
|
Flynn
|
Hawkins
|
Hilliard
|
Paglia
|
Richie
|
Shaw
|
Taunton-
Rigby
|
Absolute
Return Currency and Income Fund
|
A
|
A
|
A
|
E
(a)
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
AMT-Free
CA Intermediate Muni Bond Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
AMT-Free
GA Intermediate Muni Bond Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
AMT-Free
MD Intermediate Muni Bond Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
AMT-Free
NC Intermediate Muni Bond Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
AMT-Free
SC Intermediate Muni Bond Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
AMT-Free
Tax-Exempt Bond Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
AMT-Free
VA Intermediate Muni Bond Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
AP
- Multi-Manager Value Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Asia
Pacific ex-Japan Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Capital
Allocation Aggressive Portfolio
|
A
|
C
(a)
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Capital
Allocation Conservative Portfolio
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Capital
Allocation Moderate Aggressive Portfolio
|
A
|
C
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Capital
Allocation Moderate Conservative Portfolio
|
A
|
E
(a)
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Capital
Allocation Moderate Portfolio
|
A
|
D
(a)
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Commodity
Strategy Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Convertible
Securities Fund
|
A
|
C
(a)
|
B
|
A
|
A
|
A
|
A
|
A
|
A
|
C
(b)
|
A
|
Diversified
Equity Income Fund
|
A
|
A
|
A
|
A
|
A
|
C
|
A
|
A
|
A
|
A
|
A
|
Dividend
Opportunity Fund
|
E
|
A
|
C
|
A
|
A
|
A
|
A
|
A
|
A
|
E
(a)
|
E
|
Emerging
Markets Bond Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
C
(b)
|
A
|
European
Equity Fund
|
A
|
A
|
C
(a)
|
A
|
A
|
A
|
A
|
A
|
A
|
D
(b)
|
A
|
Flexible
Capital Income Fund
|
A
|
A
|
A
|
E
(a)
|
A
|
A
|
A
|
E
(a)
|
A
|
A
|
A
|
Floating
Rate Fund
|
A
|
A
|
A
|
A
|
E
(a)
|
A
|
A
|
A
|
A
|
A
|
A
|
Global
Bond Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Global
Equity Value Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Global
Infrastructure Fund
|
C
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Global
Opportunities Fund
|
A
|
A
|
C
(a)
|
E
(a)
|
C
|
A
|
A
|
A
|
A
|
A
|
A
|
High
Yield Bond Fund
|
A
|
A
|
C
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Income
Builder Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
E
|
Income
Opportunities Fund
|
A
|
A
|
C
|
A
|
A
|
C
|
A
|
A
|
A
|
C
(b)
|
A
|
Inflation
Protected Securities Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
International
Opportunities Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
International
Value Fund
|
A
|
A
|
A
|
E
|
A
|
E
(a)
|
A
|
A
|
A
|
A
|
A
|
Large
Cap Enhanced Core Fund
|
A
|
C
(a)
|
D
|
A
|
E
(a)
|
A
|
A
|
A
|
A
|
A
|
A
|
Large
Cap Index Fund
|
A
|
A
|
A
|
A
|
E
(a)
|
A
|
A
|
A
|
E
|
C
(b)
|
E
(a)
|
Large
Core Quantitative Fund
|
A
|
A
|
E
(a)
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Statement
of Additional Information – June 1, 2015
|
143
|
|
Blatz
|
Boudreau
|
Carlton
|
Carmichael
|
Flynn
|
Hawkins
|
Hilliard
|
Paglia
|
Richie
|
Shaw
|
Taunton-
Rigby
|
Large
Growth Quantitative Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Large
Value Quantitative Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
LifeGoal
Growth Portfolio
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Limited
Duration Credit Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Marsico
21st Century Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Marsico
Flexible Cap Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Marsico
Focused Equities Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
E
(a)
|
A
|
A
|
E
(a)
|
A
|
Marsico
Global Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Marsico
Growth Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Mid
Cap Index Fund
|
A
|
A
|
A
|
E
(a)
|
A
|
E
(a)
|
A
|
A
|
A
|
E
(a)
|
E
(a)
|
Mid
Cap Value Fund
|
A
|
A
|
C
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
MN
Tax-Exempt Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Money
Market Fund
|
A
|
B
(a)
|
C
(a)
|
B
(a)
|
C
(a)
|
B
(a)
|
B
(a)
|
C
(a)
|
A
|
C
(a)
|
C
(a)
|
Multi-Advisor
Small Cap Value Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
D
|
Overseas
Value Fund
|
A
|
A
|
C
(a)
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Select
Global Equity Fund
|
E
|
A
|
C
(a)
|
A
|
A
|
A
|
D
(a)
|
A
|
A
|
A
|
A
|
Select
International Equity Fund
|
E
|
A
|
C
(a)
|
A
|
C
(a)
|
A
|
A
|
A
|
A
|
A
|
A
|
Select
Large Cap Equity Fund
|
A
|
D
(a)
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Select
Large-Cap Value Fund
|
A
|
A
|
E
(a)
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Select
Smaller-Cap Value Fund
|
A
|
A
|
A
|
A
|
E
(a)
|
A
|
A
|
E
(a)
|
A
|
A
|
A
|
Seligman
Communications and Information Fund
|
D
|
A
|
A
|
A
|
D
(a)
|
A
|
A
|
A
|
A
|
A
|
A
|
Seligman
Global Technology Fund
|
B
|
C
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Short
Term Bond Fund
|
A
|
E
(a)
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Short
Term Municipal Bond Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Small
Cap Index Fund
|
A
|
A
|
A
|
E
(a)
|
E
(a)
|
A
|
A
|
A
|
A
|
E
(a)
|
E
(a)
|
Small
Cap Value Fund II
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
Small/Mid
Cap Value Fund
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
E
|
U.S.
Government Mortgage Fund
|
C
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
A
|
C
(b)
|
A
|
Aggregate
Dollar Range of Equity Securities in all Funds in the Columbia Funds Complex Overseen by the Trustee
|
E
|
E
(a)
|
E
(a)
|
E
(a)
|
E
(a)
|
E
(a)
|
E
(a)
|
E
(a)
|
E
|
E
(a)
|
E
(a)
|
(a)
|
Includes the value of
compensation payable under a Deferred Compensation Plan that is determined as if the amounts deferred had been invested, as of the date of deferral, in shares of one or more funds in the Columbia Funds Family overseen by the Trustee as specified by
the Trustee.
|
(b)
|
Ms. Shaw invests in a Section
529 Plan managed by the Investment Manager that allocates assets to various mutual funds, including Columbia Funds. The amount shown in the table includes the value of her interest in this plan determined as if her investment in the plan were
invested directly in the Columbia Fund pursuant to the plan’s target allocations.
|
Statement
of Additional Information – June 1, 2015
|
144
|
Interested Trustee Ownership
|
Santomero
|
Truscott
|
Absolute
Return Currency and Income Fund
|
A
|
A
|
AMT-Free
CA Intermediate Muni Bond Fund
|
A
|
A
|
AMT-Free
GA Intermediate Muni Bond Fund
|
A
|
A
|
AMT-Free
MD Intermediate Muni Bond Fund
|
A
|
A
|
AMT-Free
NC Intermediate Muni Bond Fund
|
A
|
A
|
AMT-Free
SC Intermediate Muni Bond Fund
|
A
|
A
|
AMT-Free
Tax-Exempt Bond Fund
|
A
|
A
|
AMT-Free
VA Intermediate Muni Bond Fund
|
A
|
A
|
AP
- Multi-Manager Value Fund
|
A
|
A
|
Asia
Pacific ex-Japan Fund
|
A
|
E
(b)
|
Capital
Allocation Aggressive Portfolio
|
A
|
A
|
Capital
Allocation Conservative Portfolio
|
A
|
A
|
Capital
Allocation Moderate Aggressive Portfolio
|
A
|
A
|
Capital
Allocation Moderate Conservative Portfolio
|
A
|
A
|
Capital
Allocation Moderate Portfolio
|
A
|
A
|
Commodity
Strategy Fund
|
A
|
E
|
Convertible
Securities Fund
|
A
|
E
|
Diversified
Equity Income Fund
|
A
|
A
|
Dividend
Opportunity Fund
|
A
|
E
|
Emerging
Markets Bond Fund
|
A
|
B
|
European
Equity Fund
|
A
|
E
|
Flexible
Capital Income Fund
|
A
|
E
|
Floating
Rate Fund
|
A
|
E
|
Global
Bond Fund
|
A
|
A
|
Global
Equity Value Fund
|
A
|
A
|
Global
Infrastructure Fund
|
A
|
A
|
Global
Opportunities Fund
|
A
|
E
|
High
Yield Bond Fund
|
A
|
C
|
Income
Builder Fund
|
A
|
A
|
Income
Opportunities Fund
|
A
|
E
(b)
|
Inflation
Protected Securities Fund
|
A
|
B
|
International
Opportunities Fund
|
A
|
A
|
International
Value Fund
|
A
|
A
|
Large
Cap Enhanced Core Fund
|
A
|
A
|
Large
Cap Index Fund
|
A
|
E
|
Large
Core Quantitative Fund
|
A
|
D
|
Large
Growth Quantitative Fund
|
A
|
D
|
Large
Value Quantitative Fund
|
A
|
E
|
LifeGoal
Growth Portfolio
|
A
|
A
|
Limited
Duration Credit Fund
|
E
(a)
|
E
|
Marsico
21st Century Fund
|
A
|
A
|
Marsico
Flexible Cap Fund
|
A
|
A
|
Marsico
Focused Equities Fund
|
A
|
A
|
Statement
of Additional Information – June 1, 2015
|
145
|
|
Santomero
|
Truscott
|
Marsico
Focused Equities Fund
|
A
|
A
|
Marsico
Global Fund
|
A
|
A
|
Marsico
Growth Fund
|
A
|
A
|
Mid
Cap Index Fund
|
A
|
A
|
Mid
Cap Value Fund
|
A
|
A
|
MN
Tax-Exempt Fund
|
A
|
A
|
Money
Market Fund
|
B
(a)
|
A
|
Multi-Advisor
Small Cap Value Fund
|
A
|
A
|
Overseas
Value Fund
|
A
|
E
|
Select
Global Equity Fund
|
A
|
D
|
Select
International Equity Fund
|
A
|
D
|
Select
Large-Cap Value Fund
|
A
|
E
|
Select
Smaller-Cap Value Fund
|
A
|
E
|
Seligman
Communications and Information Fund
|
A
|
D
|
Seligman
Global Technology Fund
|
A
|
D
|
Short
Term Bond Fund
|
E
(a)
|
A
|
Short
Term Municipal Bond Fund
|
A
|
A
|
Small
Cap Index Fund
|
A
|
C
|
Small
Cap Value Fund II
|
A
|
A
|
Small/Mid
Cap Value Fund
|
A
|
E
|
U.S.
Government Mortgage Fund
|
A
|
A
|
Aggregate
Dollar Range of Equity Securities in all Funds in the
Columbia Funds Family Overseen by the Trustee
|
E
(a)
|
E
(b)
|
(a)
|
Includes the value of
compensation payable under a Deferred Compensation Plan that is determined as if the amounts deferred had been invested, as of the date of deferral, in shares of one or more funds in the Columbia Funds Family overseen by the Trustee as specified by
the Trustee.
|
(b)
|
Includes notional investments
through a deferred compensation account. Mr. Truscott’s deferred compensation plan is separate from that of the Independent Trustees (for these purposes, persons who are not affiliated persons of the Investment Manager or Ameriprise
Financial).
|
Compensation
Total compensation.
The following table shows the total compensation paid to Independent Trustees (for these purposes, persons who are not affiliated persons of the Investment Manager or Ameriprise Financial) for their
services from all the Funds in the Columbia Funds Complex overseen by the Trustee for the fiscal year ended January 31, 2015.
Mr. Truscott is not compensated for his services on
the Board.
Trustees
(a)
|
Total
Cash Compensation
from the Columbia
Funds
Complex
Paid to Trustee
(b)
|
Amount
Deferred
from Total
Compensation
(c)
|
Kathleen
Blatz
|
$280,833
|
$0
|
Edward
Boudreau
|
$280,833
|
$96,750
|
Pamela
Carlton
|
$275,833
|
$4,625
|
William
Carmichael
|
$396,250
|
$90,521
|
Patricia
Flynn
|
$275,833
|
$275,833
|
William
Hawkins
|
$280,833
|
$84,250
|
R.
Glenn Hilliard
|
$270,833
|
$0
|
Stephen
Lewis
(d)
|
$265,000
|
$185,500
|
Statement
of Additional Information – June 1, 2015
|
146
|
Trustees
(a)
|
Total
Cash Compensation
from the Columbia
Funds
Complex
Paid to Trustee
(b)
|
Amount
Deferred
from Total
Compensation
(c)
|
Catherine
Paglia
|
$295,833
|
$147,917
|
Leroy
Richie
|
$278,333
|
$0
|
Anthony
Santomero
|
$275,833
|
$24,500
|
Minor
Shaw
|
$270,833
|
$135,417
|
Alison
Taunton-Rigby
|
$275,833
|
$275,833
|
(a)
|
Trustee compensation is paid
by the Funds and is comprised of a combination of a base fee and meeting fees, with the exception of the Chair of the Board, who receives a base annual compensation. Payment of compensation is administered by a company providing limited
administrative services to the Funds and to the Board.
|
(b)
|
Includes any portion of cash
compensation Trustees elected to defer during the fiscal period.
|
(c)
|
The Trustees may elect to defer
a portion of the total cash compensation payable. Additional information regarding the Deferred Compensation Plan is described below.
|
(d)
|
Mr. Lewis served as Trustee
until December 31, 2014.
|
In addition to the above compensation, 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.
Trustees did not accrue any pension or retirement
benefits as part of Fund expenses, nor will they receive any annual benefits upon retirement.
Deferred Compensation
Plan
.
The Independent Trustees may elect to defer payment of up to 100% of the compensation they receive in accordance with a Deferred Compensation
Plan (the Deferred Plan). Under the Deferred Plan, a Board member may elect to have his or her deferred compensation treated as if they had been invested in shares of one or more Fund and the amount paid to the Board member under the Deferred Plan
will be determined based on the performance of such investments. Distributions may be taken in a lump sum or over a period of years. The Deferred Plan will remain unfunded for federal income tax purposes under the Code. It is anticipated that
deferral of Board member compensation in accordance with the Deferred Plan will have, at most, a negligible impact on Fund assets and liabilities.
The Independent Trustees have a policy that each
Trustee invests in shares of one or more of the Funds (including the Closed-End Funds) overseen by the Trustee (including shares held in the Deferred Compensation Plan) in an aggregate amount that is at least equal to the annual total compensation
received by the Trustee from the Columbia Fund Complex. All Independent Trustees meet this standard.
Compensation from each Fund
.
The following table shows the compensation paid to Independent Trustees from each Fund during its last fiscal period, as well as the amount deferred from each
Fund, which is included in the total.
Fund
|
Aggregate
Compensation from Fund
Independent Trustees
|
Blatz
|
Boudreau
|
Carlton
|
Carmichael
|
Flynn
|
Hawkins
|
Hilliard
|
Lewis
(a)
|
Paglia
|
Richie
|
Santomero
|
Shaw
|
Taunton-Rigby
|
For
Funds with fiscal period ending January 31
|
Capital
Allocation Aggressive Portfolio
|
$1,299
|
$1,347
|
$1,275
|
$1,853
|
$1,275
|
$1,347
|
$1,299
|
$1,223
|
$1,371
|
$1,287
|
$1,323
|
$1,299
|
$1,275
|
Amount
Deferred
|
$0
|
$464
|
$22
|
$423
|
$1,275
|
$404
|
$0
|
$856
|
$686
|
$0
|
$117
|
$650
|
$1,275
|
Capital
Allocation Conservative Portfolio
|
$1,030
|
$1,064
|
$1,010
|
$1,469
|
$1,010
|
$1,064
|
$1,030
|
$973
|
$1,084
|
$1,021
|
$1,046
|
$1,030
|
$1,010
|
Amount
Deferred
|
$0
|
$367
|
$17
|
$337
|
$1,010
|
$319
|
$0
|
$681
|
$542
|
$0
|
$94
|
$515
|
$1,010
|
Capital
Allocation Moderate Aggressive Portfolio
|
$2,852
|
$2,957
|
$2,799
|
$4,068
|
$2,799
|
$2,957
|
$2,852
|
$2,688
|
$3,010
|
$2,826
|
$2,905
|
$2,852
|
$2,799
|
Amount
Deferred
|
$0
|
$1,019
|
$48
|
$930
|
$2,799
|
$887
|
$0
|
$1,881
|
$1,505
|
$0
|
$258
|
$1,426
|
$2,799
|
Capital
Allocation Moderate Conservative Portfolio
|
$1,327
|
$1,376
|
$1,303
|
$1,893
|
$1,303
|
$1,376
|
$1,327
|
$1,251
|
$1,401
|
$1,315
|
$1,352
|
$1,327
|
$1,303
|
Amount
Deferred
|
$0
|
$474
|
$22
|
$433
|
$1,303
|
$413
|
$0
|
$876
|
$700
|
$0
|
$120
|
$664
|
$1,303
|
Capital
Allocation Moderate Portfolio
|
$2,236
|
$2,319
|
$2,195
|
$3,189
|
$2,195
|
$2,319
|
$2,236
|
$2,107
|
$2,360
|
$2,215
|
$2,278
|
$2,236
|
$2,195
|
Amount
Deferred
|
$0
|
$799
|
$38
|
$729
|
$2,195
|
$696
|
$0
|
$1,475
|
$1,180
|
$0
|
$202
|
$1,118
|
$2,195
|
Income
Builder Fund
|
$1,898
|
$1,968
|
$1,863
|
$2,703
|
$1,863
|
$1,968
|
$1,898
|
$1,784
|
$2,003
|
$1,880
|
$1,933
|
$1,898
|
$1,863
|
Amount
Deferred
|
$0
|
$678
|
$33
|
$617
|
$1,863
|
$591
|
$0
|
$1,249
|
$1,002
|
$0
|
$171
|
$949
|
$1,863
|
LifeGoal
Growth Portfolio
|
$1,446
|
$1,500
|
$1,419
|
$2,063
|
$1,419
|
$1,500
|
$1,446
|
$1,363
|
$1,526
|
$1,433
|
$1,473
|
$1,446
|
$1,419
|
Amount
Deferred
|
$0
|
$517
|
$25
|
$472
|
$1,419
|
$450
|
$0
|
$954
|
$763
|
$0
|
$131
|
$723
|
$1,419
|
Statement
of Additional Information – June 1, 2015
|
147
|
Fund
|
Aggregate
Compensation from Fund
Independent Trustees
|
Blatz
|
Boudreau
|
Carlton
|
Carmichael
|
Flynn
|
Hawkins
|
Hilliard
|
Lewis
(a)
|
Paglia
|
Richie
|
Santomero
|
Shaw
|
Taunton-Rigby
|
For
Funds with fiscal period ending February 28/29
|
Convertible
Securities Fund
|
$1,417
|
$1,445
|
$1,376
|
$1,530
|
$1,376
|
$1,459
|
$1,417
|
$2,009
|
$1,487
|
$1,403
|
$1,376
|
$1,417
|
$1,445
|
Amount
Deferred
|
$0
|
$506
|
$459
|
$82
|
$1,376
|
$434
|
$0
|
$1,442
|
$743
|
$0
|
$597
|
$708
|
$1,202
|
Global
Equity Value Fund
|
$1,900
|
$1,960
|
$1,857
|
$2,073
|
$1,857
|
$1,975
|
$1,900
|
$2,687
|
$2,003
|
$1,886
|
$1,857
|
$1,900
|
$1,960
|
Amount
Deferred
|
$0
|
$686
|
$620
|
$109
|
$1,857
|
$588
|
$0
|
$1,928
|
$1,002
|
$0
|
$806
|
$950
|
$1,630
|
International
Opportunities Fund
|
$954
|
$973
|
$920
|
$1,022
|
$920
|
$985
|
$954
|
$1,385
|
$1,007
|
$942
|
$920
|
$954
|
$973
|
Amount
Deferred
|
$0
|
$341
|
$310
|
$52
|
$920
|
$292
|
$0
|
$995
|
$504
|
$0
|
$401
|
$477
|
$808
|
International
Value Fund
|
$184
|
$184
|
$184
|
$239
|
$184
|
$184
|
$184
|
$227
|
$184
|
$184
|
$184
|
$184
|
$184
|
Amount
Deferred
|
$0
|
$65
|
$23
|
$45
|
$184
|
$55
|
$0
|
$161
|
$92
|
$0
|
$41
|
$92
|
$173
|
Large
Cap Enhanced Core Fund
|
$1,015
|
$1,037
|
$985
|
$1,090
|
$985
|
$1,047
|
$1,015
|
$1,447
|
$1,067
|
$1,005
|
$985
|
$1,015
|
$1,037
|
Amount
Deferred
|
$0
|
$363
|
$332
|
$55
|
$985
|
$311
|
$0
|
$1,039
|
$534
|
$0
|
$430
|
$508
|
$860
|
Large
Cap Index Fund
|
$3,809
|
$3,870
|
$3,690
|
$4,073
|
$3,690
|
$3,909
|
$3,809
|
$5,409
|
$3,988
|
$3,769
|
$3,690
|
$3,809
|
$3,870
|
Amount
Deferred
|
$0
|
$1,354
|
$1,243
|
$208
|
$3,690
|
$1,161
|
$0
|
$3,883
|
$1,994
|
$0
|
$1,612
|
$1,904
|
$3,213
|
Marsico
21st Century Fund
|
$1,994
|
$2,025
|
$1,932
|
$2,122
|
$1,932
|
$2,045
|
$1,994
|
$2,816
|
$2,086
|
$1,973
|
$1,932
|
$1,994
|
$2,025
|
Amount
Deferred
|
$0
|
$709
|
$659
|
$102
|
$1,932
|
$607
|
$0
|
$2,022
|
$1,043
|
$0
|
$852
|
$997
|
$1,677
|
Marsico
Focused Equities Fund
|
$2,285
|
$2,326
|
$2,203
|
$2,415
|
$2,203
|
$2,353
|
$2,285
|
$3,285
|
$2,408
|
$2,258
|
$2,203
|
$2,285
|
$2,326
|
Amount
Deferred
|
$0
|
$814
|
$767
|
$102
|
$2,203
|
$698
|
$0
|
$2,360
|
$1,204
|
$0
|
$987
|
$1,143
|
$1,918
|
Marsico
Global Fund
|
$748
|
$769
|
$729
|
$813
|
$729
|
$775
|
$748
|
$1,064
|
$788
|
$742
|
$729
|
$748
|
$769
|
Amount
Deferred
|
$0
|
$269
|
$242
|
$44
|
$729
|
$231
|
$0
|
$764
|
$394
|
$0
|
$315
|
$374
|
$639
|
Marsico
Growth Fund
|
$3,084
|
$3,126
|
$2,978
|
$3,267
|
$2,978
|
$3,161
|
$3,084
|
$4,399
|
$3,232
|
$3,049
|
$2,978
|
$3,084
|
$3,126
|
Amount
Deferred
|
$0
|
$1,094
|
$1,020
|
$153
|
$2,978
|
$938
|
$0
|
$3,159
|
$1,616
|
$0
|
$1,318
|
$1,542
|
$2,587
|
Mid
Cap Index Fund
|
$4,172
|
$4,239
|
$4,049
|
$4,472
|
$4,049
|
$4,280
|
$4,172
|
$5,917
|
$4,361
|
$4,131
|
$4,049
|
$4,172
|
$4,239
|
Amount
Deferred
|
$0
|
$1,484
|
$1,358
|
$234
|
$4,049
|
$1,272
|
$0
|
$4,247
|
$2,181
|
$0
|
$1,763
|
$2,086
|
$3,522
|
Mid
Cap Value Fund
|
$5,044
|
$5,116
|
$4,876
|
$5,342
|
$4,876
|
$5,172
|
$5,044
|
$7,198
|
$5,285
|
$4,988
|
$4,876
|
$5,044
|
$5,116
|
Amount
Deferred
|
$0
|
$1,791
|
$1,675
|
$246
|
$4,876
|
$1,535
|
$0
|
$5,168
|
$2,642
|
$0
|
$2,162
|
$2,522
|
$4,231
|
Overseas
Value Fund
|
$985
|
$1,016
|
$965
|
$1,087
|
$965
|
$1,023
|
$985
|
$1,393
|
$1,037
|
$978
|
$965
|
$985
|
$1,016
|
Amount
Deferred
|
$0
|
$356
|
$313
|
$65
|
$965
|
$305
|
$0
|
$999
|
$518
|
$0
|
$410
|
$492
|
$850
|
Select
International Equity Fund
|
$1,759
|
$1,790
|
$1,703
|
$1,871
|
$1,703
|
$1,808
|
$1,759
|
$2,513
|
$1,846
|
$1,740
|
$1,703
|
$1,759
|
$1,790
|
Amount
Deferred
|
$0
|
$626
|
$584
|
$87
|
$1,703
|
$537
|
$0
|
$1,804
|
$923
|
$0
|
$754
|
$880
|
$1,480
|
Select
Large Cap Equity Fund
|
$1,397
|
$1,420
|
$1,350
|
$1,486
|
$1,350
|
$1,435
|
$1,397
|
$1,994
|
$1,466
|
$1,381
|
$1,350
|
$1,397
|
$1,420
|
Amount
Deferred
|
$0
|
$497
|
$461
|
$71
|
$1,350
|
$426
|
$0
|
$1,432
|
$733
|
$0
|
$596
|
$698
|
$1,176
|
Small
Cap Index Fund
|
$3,342
|
$3,399
|
$3,244
|
$3,588
|
$3,244
|
$3,431
|
$3,342
|
$4,730
|
$3,497
|
$3,310
|
$3,244
|
$3,342
|
$3,399
|
Amount
Deferred
|
$0
|
$1,190
|
$1,084
|
$191
|
$3,244
|
$1,020
|
$0
|
$3,395
|
$1,748
|
$0
|
$1,408
|
$1,671
|
$2,826
|
Small
Cap Value Fund II
|
$2,533
|
$2,576
|
$2,455
|
$2,710
|
$2,455
|
$2,602
|
$2,533
|
$3,597
|
$2,653
|
$2,507
|
$2,455
|
$2,533
|
$2,576
|
Amount
Deferred
|
$0
|
$902
|
$827
|
$138
|
$2,455
|
$773
|
$0
|
$2,582
|
$1,327
|
$0
|
$1,073
|
$1,266
|
$2,138
|
For
Funds with fiscal period ending March 31
|
Short
Term Bond Fund
|
$3,697
|
$3,853
|
$3,668
|
$4,217
|
$3,668
|
$3,853
|
$3,697
|
$5,116
|
$3,882
|
$3,697
|
$3,668
|
$3,697
|
$3,853
|
Amount
Deferred
|
$0
|
$1,349
|
$1,164
|
$280
|
$3,668
|
$1,156
|
$0
|
$3,668
|
$1,941
|
$0
|
$1,531
|
$1,848
|
$3,234
|
For
Funds with fiscal period ending April 30
|
AMT-Free
CA Intermediate Muni Bond Fund
|
$1,019
|
$1,065
|
$1,010
|
$1,183
|
$1,010
|
$1,065
|
$1,019
|
$1,395
|
$1,074
|
$1,019
|
$1,010
|
$1,019
|
$1,065
|
Amount
Deferred
|
$0
|
$373
|
$270
|
$114
|
$1,010
|
$320
|
$0
|
$998
|
$537
|
$0
|
$371
|
$510
|
$919
|
AMT-Free
GA Intermediate Muni Bond Fund
|
$807
|
$843
|
$799
|
$938
|
$799
|
$843
|
$807
|
$1,101
|
$850
|
$807
|
$799
|
$807
|
$843
|
Amount
Deferred
|
$0
|
$295
|
$211
|
$92
|
$799
|
$253
|
$0
|
$787
|
$425
|
$0
|
$291
|
$403
|
$729
|
AMT-Free
MD Intermediate Muni Bond Fund
|
$832
|
$870
|
$824
|
$966
|
$824
|
$870
|
$832
|
$1,138
|
$877
|
$832
|
$824
|
$832
|
$870
|
Amount
Deferred
|
$0
|
$304
|
$220
|
$93
|
$824
|
$261
|
$0
|
$814
|
$439
|
$0
|
$302
|
$416
|
$751
|
AMT-Free
NC Intermediate Muni Bond Fund
|
$904
|
$946
|
$896
|
$1,049
|
$896
|
$946
|
$904
|
$1,239
|
$953
|
$904
|
$896
|
$904
|
$946
|
Amount
Deferred
|
$0
|
$331
|
$240
|
$100
|
$896
|
$284
|
$0
|
$886
|
$477
|
$0
|
$329
|
$452
|
$816
|
AMT-Free
SC Intermediate Muni Bond Fund
|
$858
|
$897
|
$851
|
$997
|
$851
|
$897
|
$858
|
$1,174
|
$905
|
$858
|
$851
|
$858
|
$897
|
Amount
Deferred
|
$0
|
$314
|
$227
|
$96
|
$851
|
$269
|
$0
|
$839
|
$452
|
$0
|
$312
|
$429
|
$775
|
AMT-Free
VA Intermediate Muni Bond Fund
|
$1,013
|
$1,061
|
$1,005
|
$1,174
|
$1,005
|
$1,061
|
$1,013
|
$1,395
|
$1,069
|
$1,013
|
$1,005
|
$1,013
|
$1,061
|
Amount
Deferred
|
$0
|
$371
|
$273
|
$109
|
$1,005
|
$318
|
$0
|
$998
|
$535
|
$0
|
$374
|
$507
|
$913
|
Statement
of Additional Information – June 1, 2015
|
148
|
Fund
|
Aggregate
Compensation from Fund
Independent Trustees
|
Blatz
|
Boudreau
|
Carlton
|
Carmichael
|
Flynn
|
Hawkins
|
Hilliard
|
Lewis
(a)
|
Paglia
|
Richie
|
Santomero
|
Shaw
|
Taunton-Rigby
|
Global
Infrastructure Fund
|
$1,335
|
$1,399
|
$1,325
|
$1,539
|
$1,325
|
$1,399
|
$1,335
|
$1,850
|
$1,410
|
$1,335
|
$1,325
|
$1,335
|
$1,399
|
Amount
Deferred
|
$0
|
$490
|
$371
|
$134
|
$1,325
|
$420
|
$0
|
$1,324
|
$705
|
$0
|
$503
|
$668
|
$1,199
|
Short
Term Municipal Bond Fund
|
$2,758
|
$2,879
|
$2,735
|
$3,192
|
$2,735
|
$2,879
|
$2,758
|
$3,793
|
$2,903
|
$2,758
|
$2,735
|
$2,758
|
$2,879
|
Amount
Deferred
|
$0
|
$1,008
|
$738
|
$301
|
$2,735
|
$864
|
$0
|
$2,713
|
$1,451
|
$0
|
$1,011
|
$1,379
|
$2,481
|
For
Funds with fiscal period ending May 31
|
AP
- Multi-Manager Value Fund
|
$1,781
|
$1,839
|
$1,761
|
$2,216
|
$1,761
|
$1,839
|
$1,781
|
$2,230
|
$1,859
|
$1,781
|
$1,761
|
$1,781
|
$1,839
|
Amount
Deferred
|
$0
|
$644
|
$382
|
$296
|
$1,761
|
$552
|
$0
|
$1,589
|
$930
|
$0
|
$558
|
$890
|
$1,632
|
Commodity
Strategy Fund
|
$781
|
$817
|
$774
|
$956
|
$774
|
$817
|
$781
|
$1,008
|
$824
|
$781
|
$774
|
$781
|
$817
|
Amount
Deferred
|
$0
|
$286
|
$188
|
$111
|
$774
|
$245
|
$0
|
$720
|
$412
|
$0
|
$266
|
$390
|
$715
|
Diversified
Equity Income Fund
|
$3,592
|
$3,759
|
$3,563
|
$4,360
|
$3,563
|
$3,759
|
$3,592
|
$4,637
|
$3,789
|
$3,592
|
$3,563
|
$3,592
|
$3,759
|
Amount
Deferred
|
$0
|
$1,316
|
$898
|
$480
|
$3,563
|
$1,128
|
$0
|
$3,312
|
$1,894
|
$0
|
$1,254
|
$1,796
|
$3,271
|
Dividend
Opportunity Fund
|
$6,719
|
$7,006
|
$6,663
|
$8,156
|
$6,663
|
$7,006
|
$6,719
|
$8,639
|
$7,062
|
$6,719
|
$6,663
|
$6,719
|
$7,006
|
Amount
Deferred
|
$0
|
$2,452
|
$1,662
|
$914
|
$6,663
|
$2,102
|
$0
|
$6,169
|
$3,531
|
$0
|
$2,328
|
$3,359
|
$6,107
|
Flexible
Capital Income Fund
|
$891
|
$928
|
$883
|
$1,099
|
$883
|
$928
|
$891
|
$1,139
|
$937
|
$891
|
$883
|
$891
|
$928
|
Amount
Deferred
|
$0
|
$325
|
$205
|
$135
|
$883
|
$279
|
$0
|
$812
|
$468
|
$0
|
$294
|
$446
|
$817
|
High
Yield Bond Fund
|
$2,677
|
$2,792
|
$2,653
|
$3,258
|
$2,653
|
$2,792
|
$2,677
|
$3,431
|
$2,815
|
$2,677
|
$2,653
|
$2,677
|
$2,792
|
Amount
Deferred
|
$0
|
$977
|
$655
|
$371
|
$2,653
|
$838
|
$0
|
$2,450
|
$1,408
|
$0
|
$920
|
$1,338
|
$2,437
|
Mortgage
Opportunities Fund
(b)
|
$38
|
$38
|
$38
|
$82
|
$38
|
$38
|
$38
|
$38
|
$38
|
$38
|
$38
|
$38
|
$38
|
Amount
Deferred
|
$0
|
$13
|
$0
|
$21
|
$38
|
$12
|
$0
|
$27
|
$19
|
$0
|
$4
|
$19
|
$38
|
Multi-Advisor
Small Cap Value Fund
|
$1,094
|
$1,142
|
$1,084
|
$1,338
|
$1,084
|
$1,142
|
$1,094
|
$1,406
|
$1,152
|
$1,094
|
$1,084
|
$1,094
|
$1,142
|
Amount
Deferred
|
$0
|
$400
|
$262
|
$156
|
$1,084
|
$343
|
$0
|
$1,004
|
$576
|
$0
|
$371
|
$547
|
$999
|
Select
Large-Cap Value Fund
|
$1,384
|
$1,440
|
$1,371
|
$1,703
|
$1,371
|
$1,440
|
$1,384
|
$1,764
|
$1,453
|
$1,384
|
$1,371
|
$1,384
|
$1,440
|
Amount
Deferred
|
$0
|
$504
|
$320
|
$208
|
$1,371
|
$432
|
$0
|
$1,259
|
$726
|
$0
|
$457
|
$692
|
$1,266
|
Select
Smaller-Cap Value Fund
|
$1,175
|
$1,226
|
$1,165
|
$1,438
|
$1,165
|
$1,226
|
$1,175
|
$1,508
|
$1,236
|
$1,175
|
$1,165
|
$1,175
|
$1,226
|
Amount
Deferred
|
$0
|
$429
|
$280
|
$170
|
$1,165
|
$368
|
$0
|
$1,076
|
$618
|
$0
|
$396
|
$588
|
$1,073
|
Seligman
Communications and Information Fund
|
$4,050
|
$4,226
|
$4,015
|
$4,934
|
$4,015
|
$4,226
|
$4,050
|
$5,199
|
$4,261
|
$4,050
|
$4,015
|
$4,050
|
$4,226
|
Amount
Deferred
|
$0
|
$1,479
|
$988
|
$563
|
$4,015
|
$1,268
|
$0
|
$3,712
|
$2,131
|
$0
|
$1,390
|
$2,025
|
$3,689
|
Small/Mid
Cap Value Fund
|
$2,380
|
$2,486
|
$2,360
|
$2,889
|
$2,360
|
$2,486
|
$2,380
|
$3,068
|
$2,506
|
$2,380
|
$2,360
|
$2,380
|
$2,486
|
Amount
Deferred
|
$0
|
$870
|
$589
|
$323
|
$2,360
|
$746
|
$0
|
$2,191
|
$1,253
|
$0
|
$825
|
$1,190
|
$2,167
|
U.S.
Government Mortgage Fund
|
$2,764
|
$2,909
|
$2,743
|
$3,336
|
$2,743
|
$2,909
|
$2,764
|
$3,599
|
$2,930
|
$2,764
|
$2,743
|
$2,764
|
$2,909
|
Amount
Deferred
|
$0
|
$1,018
|
$722
|
$341
|
$2,743
|
$873
|
$0
|
$2,572
|
$1,465
|
$0
|
$996
|
$1,382
|
$2,515
|
For
Funds with fiscal period ending July 31
|
AMT-Free
Tax-Exempt Bond Fund
|
$18,612
|
$1,299
|
$1,232
|
$1,519
|
$1,232
|
$1,299
|
$1,243
|
$1,584
|
$1,310
|
$1,243
|
$1,299
|
$1,243
|
$1,232
|
Amount
Deferred
|
$0
|
$455
|
$209
|
$249
|
$1,232
|
$390
|
$0
|
$1,125
|
$655
|
$0
|
$339
|
$622
|
$1,128
|
Floating
Rate Fund
|
$10,762
|
$1,829
|
$1,735
|
$2,152
|
$1,735
|
$1,829
|
$1,752
|
$2,207
|
$1,845
|
$1,752
|
$1,829
|
$1,752
|
$1,735
|
Amount
Deferred
|
$0
|
$640
|
$282
|
$362
|
$1,735
|
$549
|
$0
|
$1,566
|
$923
|
$0
|
$465
|
$876
|
$1,594
|
Global
Opportunities Fund
|
$9,100
|
$1,577
|
$1,497
|
$1,846
|
$1,497
|
$1,577
|
$1,511
|
$1,921
|
$1,591
|
$1,511
|
$1,577
|
$1,511
|
$1,497
|
Amount
Deferred
|
$0
|
$552
|
$253
|
$303
|
$1,497
|
$473
|
$0
|
$1,364
|
$795
|
$0
|
$411
|
$755
|
$1,371
|
Income
Opportunities Fund
|
$23,348
|
$3,861
|
$3,674
|
$4,527
|
$3,674
|
$3,861
|
$3,707
|
$4,710
|
$3,895
|
$3,707
|
$3,861
|
$3,707
|
$3,674
|
Amount
Deferred
|
$0
|
$1,352
|
$627
|
$740
|
$3,674
|
$1,158
|
$0
|
$3,345
|
$1,947
|
$0
|
$1,013
|
$1,854
|
$3,361
|
Inflation
Protected Securities Fund
|
$17,203
|
$1,016
|
$963
|
$1,186
|
$963
|
$1,016
|
$972
|
$1,238
|
$1,024
|
$972
|
$1,016
|
$972
|
$963
|
Amount
Deferred
|
$0
|
$355
|
$164
|
$194
|
$963
|
$305
|
$0
|
$879
|
$512
|
$0
|
$265
|
$486
|
$881
|
Large
Core Quantitative Fund
|
$24,810
|
$4,525
|
$4,288
|
$5,298
|
$4,288
|
$4,525
|
$4,327
|
$5,493
|
$4,564
|
$4,327
|
$4,525
|
$4,327
|
$4,288
|
Amount
Deferred
|
$0
|
$1,584
|
$713
|
$879
|
$4,288
|
$1,358
|
$0
|
$3,899
|
$2,282
|
$0
|
$1,166
|
$2,163
|
$3,931
|
Large
Growth Quantitative Fund
|
$12,564
|
$1,261
|
$1,194
|
$1,480
|
$1,194
|
$1,261
|
$1,205
|
$1,526
|
$1,272
|
$1,205
|
$1,261
|
$1,205
|
$1,194
|
Amount
Deferred
|
$0
|
$441
|
$194
|
$249
|
$1,194
|
$378
|
$0
|
$1,083
|
$636
|
$0
|
$320
|
$603
|
$1,097
|
Large
Value Quantitative Fund
|
$12,265
|
$1,298
|
$1,218
|
$1,541
|
$1,218
|
$1,298
|
$1,231
|
$1,537
|
$1,310
|
$1,231
|
$1,298
|
$1,231
|
$1,218
|
Amount
Deferred
|
$0
|
$454
|
$173
|
$277
|
$1,218
|
$389
|
$0
|
$1,089
|
$655
|
$0
|
$302
|
$615
|
$1,132
|
Limited
Duration Credit Fund
|
$25,343
|
$1,820
|
$1,723
|
$2,127
|
$1,723
|
$1,820
|
$1,739
|
$2,211
|
$1,835
|
$1,739
|
$1,820
|
$1,739
|
$1,723
|
Amount
Deferred
|
$0
|
$637
|
$287
|
$352
|
$1,723
|
$546
|
$0
|
$1,570
|
$918
|
$0
|
$469
|
$869
|
$1,580
|
Statement
of Additional Information – June 1, 2015
|
149
|
Fund
|
Aggregate
Compensation from Fund
Independent Trustees
|
Blatz
|
Boudreau
|
Carlton
|
Carmichael
|
Flynn
|
Hawkins
|
Hilliard
|
Lewis
(a)
|
Paglia
|
Richie
|
Santomero
|
Shaw
|
Taunton-Rigby
|
MN
Tax-Exempt Fund
|
$17,881
|
$1,165
|
$1,105
|
$1,363
|
$1,105
|
$1,165
|
$1,115
|
$1,420
|
$1,175
|
$1,115
|
$1,165
|
$1,115
|
$1,105
|
Amount
Deferred
|
$0
|
$408
|
$187
|
$224
|
$1,105
|
$350
|
$0
|
$1,008
|
$588
|
$0
|
$303
|
$558
|
$1,012
|
Money
Market Fund
|
$2,481
|
$2,585
|
$2,459
|
$3,024
|
$2,459
|
$2,585
|
$2,481
|
$3,162
|
$2,608
|
$2,481
|
$2,585
|
$2,481
|
$2,459
|
Amount
Deferred
|
$0
|
$905
|
$424
|
$491
|
$2,459
|
$776
|
$0
|
$2,246
|
$1,304
|
$0
|
$682
|
$1,241
|
$2,247
|
For
Funds with fiscal period ending August 31
|
Columbia
Marsico Flexible Capital Fund
|
$908
|
$949
|
$900
|
$1,169
|
$900
|
$949
|
$908
|
$1,087
|
$958
|
$908
|
$949
|
$908
|
$900
|
Amount
Deferred
|
$0
|
$332
|
$129
|
$212
|
$900
|
$285
|
$0
|
$770
|
$479
|
$0
|
$224
|
$454
|
$835
|
For
Funds with fiscal period ending October 31
|
Absolute
Return Currency and Income Fund
|
$757
|
$791
|
$750
|
$1,039
|
$750
|
$791
|
$757
|
$841
|
$797
|
$757
|
$791
|
$757
|
$750
|
Amount
Deferred
|
$0
|
$277
|
$64
|
$220
|
$750
|
$237
|
$0
|
$593
|
$399
|
$0
|
$143
|
$378
|
$718
|
Asia
Pacific ex-Japan Fund
|
$1,296
|
$1,356
|
$1,285
|
$1,793
|
$1,285
|
$1,356
|
$1,296
|
$1,439
|
$1,368
|
$1,296
|
$1,356
|
$1,296
|
$1,285
|
Amount
Deferred
|
$0
|
$475
|
$104
|
$383
|
$1,285
|
$407
|
$0
|
$1,014
|
$684
|
$0
|
$240
|
$648
|
$1,233
|
Emerging
Markets Bond Fund
|
$1,406
|
$1,471
|
$1,393
|
$1,937
|
$1,393
|
$1,471
|
$1,406
|
$1,562
|
$1,484
|
$1,406
|
$1,471
|
$1,406
|
$1,393
|
Amount
Deferred
|
$0
|
$515
|
$115
|
$412
|
$1,393
|
$441
|
$0
|
$1,101
|
$742
|
$0
|
$262
|
$703
|
$1,336
|
European
Equity Fund
|
$1,224
|
$1,283
|
$1,212
|
$1,698
|
$1,212
|
$1,283
|
$1,224
|
$1,358
|
$1,295
|
$1,224
|
$1,283
|
$1,224
|
$1,212
|
Amount
Deferred
|
$0
|
$449
|
$92
|
$367
|
$1,212
|
$385
|
$0
|
$957
|
$647
|
$0
|
$220
|
$612
|
$1,166
|
Global
Bond Fund
|
$842
|
$880
|
$834
|
$1,158
|
$834
|
$880
|
$842
|
$935
|
$888
|
$842
|
$880
|
$842
|
$834
|
Amount
Deferred
|
$0
|
$308
|
$70
|
$246
|
$834
|
$264
|
$0
|
$659
|
$444
|
$0
|
$158
|
$421
|
$800
|
Select
Global Equity Fund
|
$1,069
|
$1,118
|
$1,059
|
$1,474
|
$1,059
|
$1,118
|
$1,069
|
$1,187
|
$1,128
|
$1,069
|
$1,118
|
$1,069
|
$1,059
|
Amount
Deferred
|
$0
|
$391
|
$86
|
$314
|
$1,059
|
$335
|
$0
|
$836
|
$564
|
$0
|
$198
|
$535
|
$1,016
|
Seligman
Global Technology Fund
|
$1,126
|
$1,178
|
$1,116
|
$1,556
|
$1,116
|
$1,178
|
$1,126
|
$1,250
|
$1,188
|
$1,126
|
$1,178
|
$1,126
|
$1,116
|
Amount
Deferred
|
$0
|
$412
|
$90
|
$333
|
$1,116
|
$353
|
$0
|
$880
|
$594
|
$0
|
$207
|
$563
|
$1,071
|
(a)
|
Mr. Lewis served as Trustee
until December 31, 2014.
|
(b)
|
For the period from April 30,
2014 (commencement of operations) to May 31, 2014.
|
Statement
of Additional Information – June 1, 2015
|
150
|
BROKERAGE ALLOCATION AND RELATED PRACTICES
General Brokerage Policy, Brokerage Transactions and Broker
Selection
Subject to policies established by
the Board, as well as the terms of the Investment Management Services Agreement and Sub-Advisory Agreement, as applicable, the Investment Manager (and/or the investment subadviser(s) who makes the day-to-day investment decisions for a Fund) is
responsible for decisions to buy and sell securities for a 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 Investment Manager effects security transactions for the Fund consistent with its duty to seek the best execution of client (including the Funds) orders under the circumstances of the particular transaction. 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 and by the policies and procedures of the
Investment Manager and/or any investment subadvisers.
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.
The Investment Manager effects security transactions
for the Funds consistent with its duty to seek the best execution of client (including the Funds) orders under the circumstances of the particular transaction. In seeking such execution, the Investment Manager 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 Investment Manager’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
Investment Manager and to the Board with respect to the performance, investment activities and fees and expenses of other funds. Such information may be communicated electronically, orally or in written form.
Broker-dealers may, from time to time, arrange
meetings with management of companies and the provide access to consultants who supply research information. The outside research is useful to the Investment Manager since, in certain instances, the broker-dealers utilized by the Investment Manager
may follow a different universe of securities issuers and other matters than those that the Investment Manager’s staff follow. In addition, this research provides the Investment Manager with a different perspective on investment matters, even
if the securities research obtained relates to issuers followed by the Investment Manager.
Research services that are provided to the
Investment Manager by broker-dealers are available for the benefit of all accounts managed or advised by the Investment Manager. 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. Broker-dealer research typically supplements rather than replaces the Investment Manager’s own research, tending to improve the quality of its investment advice. However, to the
extent that the Investment Manager would have bought any such research services had such services not been provided by broker-dealers, the expenses of such services to the Investment Manager could be considered to have been reduced accordingly.
Certain research services furnished by broker-dealers may be useful to the clients of the Investment Manager other than the Funds. Conversely, any research services received by the Investment Manager through the placement of transactions of other
clients may be of value to the Investment Manager in fulfilling its obligations to the Funds. The Investment Manager is of the opinion that this material is beneficial in supplementing its research and analysis; and, therefore, it may benefit the
Funds by improving the quality of the Investment Manager’s investment advice. The advisory fees paid by the Funds are not reduced because the Investment Manager receives such services.
Under Section 28(e) of the 1934 Act, the Investment
Manager 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 Investment Manager 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
Statement
of Additional Information – June 1, 2015
|
151
|
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 Investment Manager’s clients, including the Funds.
The Investment Manager does not consider sales of
shares of the Funds as a factor in the selection of broker-dealers through which to execute securities transactions on behalf of 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 Investment Manager, 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.
The Investment Manager or a subadviser, if
applicable, may use step-out transactions. A “step-out” is an arrangement in which the Investment Manager or subadviser executes a trade through one broker-dealer but instructs that broker-dealer to step-out all or a part of the trade to
another broker-dealer. The second broker-dealer will clear and settle, and receive commissions for, the stepped-out portion. The Investment Manager or subadviser may receive research products and services in connection with step-out
transactions.
Use of Fund commissions may
create potential conflicts of interest between the Investment Manager or subadviser and a Fund. However, the Investment Manager and each subadviser has policies and procedures in place intended to mitigate these conflicts and ensure that the use of
fund commissions falls within the “safe harbor” of Section 28(e) of the 1934 Act. Some products and services may be used for both investment decision-making and non-investment decision-making purposes (“mixed use” items). The
Investment Manager and each subadviser, to the extent it has mixed use items, has procedures in place to assure that fund commissions pay only for the investment decision-making portion of a mixed-use item.
Some broker-dealers with whom the Investment
Manager’s Fixed Income Department executes trades provide the Fixed Income Department with proprietary research products and services, though the Fixed Income Department does not put in place any client commission arrangements with such
broker-dealers. However, such research may be considered by the Fixed Income Department when determining which broker-dealers to include on its approved broker-dealer list. It is the Investment Manager’s policy not to execute a fixed income
trade with a broker-dealer at a lower bid/higher offer than that provided by another broker-dealer in consideration of the value of research products and services received by the Fixed Income Department.
In certain instances, there may be securities that
are suitable for a Fund as well as for one or more of the other clients of the Investment Manager. Investment decisions for the Funds and for the Investment Manager’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 Funds.
The Investment Manager operates several separate
trading desks in different geographic locations in the United States. The trading desks support different portfolio management teams managing a variety of accounts and products. Nevertheless, the equity desks are functionally and operationally
integrated so as to operate as one virtual desk. The fixed income desks, however, function and operate separately but can provide support to each other to assure the continuation of services if necessary. By operating the fixed income trading desks
in this manner, the Funds may forego certain opportunities including the aggregation of trades across accounts that trade on different trading desks, which could result in one trading desk competing with another in the market for similar trades. In
addition, it is possible that the separate fixed income trading desks may be on opposite sides of a trade at the same time. While the trading desks operate in several locations, the desks do have linkages in oversight and reporting lines and are
generally conducted under similar policies and procedures. In addition, certain fixed income portfolio managers currently have the authority to execute trades themselves.
As the Investment Manager seeks to enhance its
investment capabilities and services to its clients, including the Funds, the Investment Manager may engage certain of its non-U.S. investment advisory affiliates (“Advisory Affiliates”) around the world to provide a variety of services.
For example, the Investment Manager may engage Advisory Affiliates and their personnel to provide (jointly or in coordination with the Investment Manager) services relating to client relations, investment monitoring, account administration, trading
and discretionary investment management (including portfolio management and risk
Statement
of Additional Information – June 1, 2015
|
152
|
management) to certain accounts the Investment Manager manages,
including the Funds, other pooled vehicles and separately managed accounts. In some circumstances, an Advisory Affiliate may delegate responsibility for providing those services to another Advisory Affiliate. In addition, the Investment Manager may
provide certain similar services to its Advisory Affiliates for accounts they manage.
The Investment Manager believes that harnessing the
collective expertise of the firm and its Advisory Affiliates will benefit its clients. In this regard, the Investment Manager has certain portfolio management and client servicing teams at both the firm and at Advisory Affiliates (through
subadvisory or other intercompany arrangements) operating jointly to provide a better client experience. These joint teams use expanded and shared capabilities that the Investment Manager and its Advisory Affiliates provide, including the sharing of
research and other information by investment personnel (
e.g.
, portfolio managers and analysts) across the firm and at its Advisory Affiliates relating to economic perspectives, market analysis and equity and
fixed income securities analysis.
Advisory
Affiliates may provide certain advisory and trading-related services to certain of the Investment Manager’s accounts, including the Funds. The Investment Manager may also provide similar services to certain accounts of Advisory Affiliates. The
Investment Manager believes that local trading in certain local markets will benefit its clients, including the Funds. However, such services may result in potential conflicts of interest to such accounts.
The Investment Manager has portfolio management
teams in its multiple geographic locations that may share research information regarding leveraged loans. The Investment Manager operates separate and independent trading desks in these locations for the purpose of purchasing and selling leveraged
loans. As a result, the Investment Manager does not aggregate orders in leveraged loans across portfolio management teams. For example, funds and other client accounts being managed by these portfolio management teams may purchase and sell the same
leveraged loan in the secondary market on the same day at different times and at different prices. There is also the potential for a particular account or group of accounts, including a Fund, to forego an opportunity or to receive a different
allocation (either larger or smaller) than might otherwise be obtained if the Investment Manager were to aggregate trades in leveraged loans across the portfolio management teams. Although the Investment Manager does not aggregate orders in
leveraged loans across its portfolio management teams in the multiple geographic locations, it operates in this structure subject to its duty to seek best execution.
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 Investment
Manager, in its sole discretion, believes such practice to be otherwise in such Fund’s interests.
The Funds will not execute portfolio transactions
through, or buy or sell portfolio securities from or to, the Distributor, the Investment Manager, 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 Investment Manager 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, such Fund does so in conformity with Rule 17e-1 under the
1940 Act and the procedures that such Fund has adopted pursuant to the rule. In this regard, for each transaction, the Board will determine that the transaction is effected in accordance with the Funds’ Rule 17e-1 procedures, which require:
(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 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, a Fund may buy securities from a
member of an underwriting syndicate in which an affiliate of Ameriprise Financial is a member. The Funds have adopted procedures pursuant to Rule 10f-3 under the 1940 Act, and intend to comply with the requirements of Rule 10f-3, in connection with
any purchases of securities that may be subject to Rule 10f-3.
Given the breadth of the Investment Manager’s
investment management activities, investment decisions for the Funds are not always made independently from those other investment companies and accounts advised or managed by the Investment Manager. To the extent permitted by law, when a purchase
or sale of the same security is made at substantially the same time on behalf of one or more of the Funds and another investment portfolio, investment company or account, the Investment Manager may aggregate the securities to be sold or bought for
the Funds with those to be sold or bought for other investment portfolios,
Statement
of Additional Information – June 1, 2015
|
153
|
investment companies or accounts in executing transactions, and
such transactions will be averaged as to price and available investments allocated as to amount in a manner which the Investment Manager believes to be equitable to the Funds and such other 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. Further, in some cases, the Funds will implement their portfolio changes before similar
changes are made for ETFs or other accounts advised or managed by the Investment Manager.
See
Investment
Management 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 charts reflect the amounts of
brokerage commissions paid by the Funds for the 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
The following chart reflects the aggregate amount of
brokerage commissions paid by the Funds for the three most recently completed fiscal years. Differences, year to year, in the amount of brokerage commissions paid by a Fund were primarily the result of increased market volatility as well as
shareholder purchase and redemption activity in the Fund. The table is organized by fiscal year end.
Total Brokerage Commissions
|
Total
Brokerage Commissions
|
Fund
|
2015
|
2014
|
2013
|
For
Funds with fiscal period ending January 31
|
Capital
Allocation Aggressive Portfolio
|
$15,275
|
$23,981
|
$2,601
|
Capital
Allocation Conservative Portfolio
|
10,514
|
7,619
|
3,434
|
Capital
Allocation Moderate Aggressive Portfolio
|
126,734
|
128,295
|
7,398
|
Capital
Allocation Moderate Conservative Portfolio
|
29,332
|
29,097
|
1,520
|
Capital
Allocation Moderate Portfolio
|
73,686
|
49,261
|
12,772
|
Income
Builder Fund
|
0
|
0
|
0
|
LifeGoal
Growth Portfolio
|
0
|
0
|
0
|
Fund
|
2014
|
2013
|
2012
|
For
Funds with fiscal period ending February 28/29
|
Convertible
Securities Fund
|
73,168
|
67,317
|
68,442
|
Global
Equity Value Fund
|
1,076,394
|
428,626
|
197,812
(a)
|
International
Opportunities Fund
|
741,637
|
841,381
|
1,858,519
|
International
Value Fund
(b)
|
1,006,612
|
781,245
|
701,889
|
Large
Cap Enhanced Core Fund
|
86,352
|
124,984
|
80,466
|
Large
Cap Index Fund
|
22,212
|
42,941
|
51,814
|
Marsico
21st Century Fund
|
1,140,014
|
1,303,523
|
9,239,773
|
Marsico
Focused Equities Fund
|
1,105,991
|
1,375,426
|
2,807,946
|
Marsico
Global Fund
|
75,119
|
20,543
|
23,863
|
Marsico
Growth Fund
|
1,992,355
|
3,082,928
|
2,787,085
|
Mid
Cap Index Fund
|
186,412
|
92,408
|
85,741
|
Mid
Cap Value Fund
|
2,825,497
|
3,282,641
|
4,535,398
|
Overseas
Value Fund
|
725,680
|
46,885
|
96,027
|
Select
International Equity Fund
|
3,786,564
|
3,415,590
|
3,260,492
|
Select
Large Cap Equity Fund
|
1,223,814
|
1,634,499
|
4,010,902
|
Statement
of Additional Information – June 1, 2015
|
154
|
|
Total
Brokerage Commissions
|
Fund
|
2014
|
2013
|
2012
|
Small
Cap Index Fund
|
$117,229
|
$81,216
|
$81,083
|
Small
Cap Value Fund II
|
1,900,817
|
2,555,711
|
2,738,707
|
For
Funds with fiscal period ending March 31
|
Short
Term Bond Fund
|
19,065
|
49,235
|
22,101
|
For
Funds with fiscal period ending April 30
|
AMT-Free
CA Intermediate Muni Bond Fund
|
0
|
0
|
0
(c)
|
AMT-Free
GA Intermediate Municipal Bond Fund
|
0
|
0
|
0
(c)
|
AMT-Free
MD Intermediate Muni Bond Fund
|
0
|
0
|
0
(c)
|
AMT-Free
NC Intermediate Muni Bond Fund
|
0
|
0
|
0
(c)
|
AMT-Free
SC Intermediate Muni Bond Fund
|
0
|
0
|
0
(c)
|
AMT-Free
VA Intermediate Muni Bond Fund
|
0
|
0
|
0
(c)
|
Global
Infrastructure Fund
|
963,149
|
560,938
|
532,746
|
Short
Term Municipal Bond Fund
|
0
|
0
|
0
(c)
|
For
Funds with fiscal period ending May 31
|
AP
– Multi-Manager Value Fund
|
1,483,445
|
486,313
|
13,137
(d)
|
Commodity
Strategy Fund
|
0
|
0
|
0
(e)
|
Diversified
Equity Income Fund
|
2,617,037
|
2,173,281
|
2,126,944
(f)
|
Dividend
Opportunity Fund
|
4,891,708
|
4,483,217
|
2,275,856
(g)
|
Flexible
Capital Income Fund
|
119,064
|
0
|
30,081
(e)
|
High
Yield Bond Fund
|
1,571
|
2,367
|
1,511
|
Mortgage
Opportunities Fund
|
0
(h)
|
N/A
|
N/A
|
Multi-Advisor
Small Cap Value Fund
|
516,580
|
455,357
|
581,919
|
Select
Large-Cap Value Fund
|
205,143
|
226,081
|
249,073
(i)
|
Select
Smaller-Cap Value Fund
|
346,290
|
131,763
|
148,704
(i)
|
Seligman
Communications and Information Fund
|
3,165,386
|
5,124,242
|
5,967,910
(i)
|
Small/Mid
Cap Value Fund
|
3,773,751
|
1,696,261
|
1,393,564
(f)
|
U.S.
Government Mortgage Fund
|
86,591
|
142,442
|
70,649
|
For
Funds with fiscal period ending July 31
|
AMT-Free
Tax-Exempt Bond Fund
|
0
|
0
|
0
(j)
|
Floating
Rate Fund
|
33,087
|
0
|
1,000
|
Global
Opportunities Fund
|
1,628,742
|
10,312
|
615,788
(k)
|
Income
Opportunities Fund
|
8,271
|
0
|
0
|
Inflation
Protected Securities Fund
|
32,547
|
26,718
|
15,357
|
Large
Core Quantitative Fund
|
1,973,260
|
1,232,331
|
89,797
|
Large
Growth Quantitative Fund
|
246,044
|
196,926
|
213,935
(k)
|
Large
Value Quantitative Fund
|
377,759
|
134,359
|
89,873
(k)
|
Limited
Duration Credit Fund
|
22,382
|
70,962
|
41,979
|
MN
Tax-Exempt Fund
|
0
|
0
|
0
(l)
|
Money
Market Fund
|
0
|
0
|
0
|
For
Funds with fiscal period ending August 31
|
Marsico
Flexible Capital Fund
|
316,884
|
231,954
|
324,649
|
For
Funds with fiscal period ending October 31
|
Absolute
Return Currency and Income Fund
|
0
|
0
|
0
|
Statement
of Additional Information – June 1, 2015
|
155
|
|
Total
Brokerage Commissions
|
Fund
|
2014
|
2013
|
2012
|
Asia
Pacific ex-Japan Fund
|
$1,074,549
|
$893,911
|
$622,494
|
Emerging
Markets Bond Fund
|
6,239
|
0
|
207
|
European
Equity Fund
|
834,231
|
604,819
|
747,555
|
Global
Bond Fund
|
33,637
|
15,503
|
15,758
|
Select
Global Equity Fund
|
581,437
|
457,459
|
499,796
|
Seligman
Global Technology Fund
|
749,468
|
745,143
|
944,043
|
(a)
|
The Fund changed its fiscal
year end in 2012 from March 31 to February 28/29. For the fiscal year ended 2012, the information shown is for the period from April 1, 2011 to February 29, 2012.
|
(b)
|
Because the Fund's brokerage
commissions were paid at the Master Portfolio level for these time periods, amounts shown are for the Master Portfolio.
|
(c)
|
The Funds changed their fiscal
year end in 2012 from March 31 to April 30. For the fiscal year ended 2012, the information shown is for the 13-month period from April 1, 2011 to April 30, 2012.
|
(d)
|
For the period from April 20,
2012 (commencement of operations) to May 31, 2012.
|
(e)
|
For the period from July 28,
2011 (commencement of operations) to May 31, 2012.
|
(f)
|
The Fund changed its fiscal
year end in 2012 from September 30 to May 31. For the fiscal year ended 2012, the information shown is for the period from October 1, 2011 to May 31, 2012.
|
(g)
|
The Fund changed its fiscal
year end in 2012 from June 30 to May 31. For the fiscal year ended 2012, the information shown is for the period from July 1, 2011 to May 31, 2012.
|
(h)
|
For the period from April 30,
2014 (commencement of operations) to May 31, 2014.
|
(i)
|
The Fund changed its fiscal
year end in 2012 from December 31 to May 31. For the fiscal year ended 2012, the information shown is for the period from January 1, 2012 to May 31, 2012.
|
(j)
|
The Fund changed its fiscal
year end in 2012 from November 30 to July 31. For the fiscal year ended 2012, the information shown is for the period from December 1, 2011 to July 31, 2012.
|
(k)
|
The Fund changed its fiscal
year end in 2012 from September 30 to July 31. For the fiscal year ended 2012, the information shown is for the period from October 1, 2011 to July 31, 2012.
|
(l)
|
The Fund changed its fiscal
year end in 2012 from August 31 to July 31. For the fiscal year ended 2012, the information shown is for the period from September 1, 2011 to July 31, 2012.
|
Brokerage Commissions Paid to Brokers Affiliated with
the Investment Manager
Affiliates of the Investment Manager
may engage in brokerage and other securities transactions on behalf of a Fund according to procedures adopted by the Board and to the extent consistent with applicable provisions of the federal securities laws. Subject to approval by the Board, the
same conditions apply to transactions with broker-dealer affiliates of any Fund subadviser. The Investment Manager will use an affiliate only
if
(i) the Investment Manager determines that the Fund will receive
prices and executions at least as favorable as those offered by qualified independent brokers performing similar brokerage and other services for the Fund and (ii) the affiliate charges the Fund commission rates consistent with those the affiliate
charges comparable unaffiliated customers in similar transactions and if such use is consistent with terms of the Investment Management Services Agreement.
No brokerage commissions were paid by the Funds in
the last three fiscal periods to brokers affiliated with the Funds' Investment Manager or any subadvisers, unless otherwise shown in the following table. The table is organized by fiscal year end.
|
Broker
|
Nature
of
Affiliation
|
Aggregate
dollar
amount of
commissions
paid to
broker
|
Percent
of
aggregate
brokerage
commissions
|
Percent
of
aggregate
dollar
amount of
transactions
involving
payment of
commissions
|
Aggregate
dollar
amount of
commissions
paid to
broker
|
Aggregate
dollar
amount of
commissions
paid to
broker
|
Fund
|
2014
|
2013
|
2012
|
For
Funds with fiscal period ending February 28/29
|
Convertible
Securities Fund
|
Merrill
Lynch Pierce Fenner Smith (MLPFS)
|
(1)
|
$1,380
|
2%
|
5%
|
$0
|
$0
|
For
Funds with fiscal period ending May 31
|
Flexible
Capital Income Fund
|
MLPFS
|
(1)
|
$1,695
|
1%
|
10%
|
$0
|
$0
|
Statement
of Additional Information – June 1, 2015
|
156
|
|
Broker
|
Nature
of
Affiliation
|
Aggregate
dollar
amount of
commissions
paid to
broker
|
Percent
of
aggregate
brokerage
commissions
|
Percent
of
aggregate
dollar
amount of
transactions
involving
payment of
commissions
|
Aggregate
dollar
amount of
commissions
paid to
broker
|
Aggregate
dollar
amount of
commissions
paid to
broker
|
Fund
|
2014
|
2013
|
2012
|
For
Funds with fiscal period ending July 31
|
Global
Opportunities Fund
|
MLPFS
|
(1)
|
$47
|
0%
|
3%
|
$0
|
$0
|
(1)
|
Prior to May 1, 2010, MLPFS
(as of January 1, 2009) and other broker-dealers affiliated with BANA were affiliated broker-dealers of the Fund by virtue of being under common control with the Previous Adviser. The affiliation created by this relationship ended on May 1, 2010,
when the investment advisory agreement with the Previous Adviser was terminated and the Fund entered into a new investment management services agreement with the Investment Manager. However, BANA, on behalf of its fiduciary accounts, continues to
have investments in certain of the Columbia Funds. The amounts shown include any brokerage commissions paid to MLPFS after May 1, 2010.
|
Directed Brokerage
The Funds or the Investment Manager, 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 Investment Manager.
Reported numbers include third party soft dollar
commissions and portfolio manager directed commissions directed for research. The Investment Manager also receives proprietary research from brokers, but these amounts have not been included in the table.
During each Fund’s most recent applicable
fiscal year (or period), the Funds directed certain brokerage transactions and paid related commissions in the amounts as follows:
Brokerage Directed for Research
|
Brokerage
directed for research
|
Fund
|
Amount
of Transactions
|
Amount
of Commissions Imputed or Paid
|
For
Funds with fiscal period ending January 31
|
Capital
Allocation Aggressive Portfolio
|
$0
(a)
|
$0
(a)
|
Capital
Allocation Conservative Portfolio
|
0
(a)
|
0
(a)
|
Capital
Allocation Moderate Aggressive Portfolio
|
0
(a)
|
0
(a)
|
Capital
Allocation Moderate Conservative Portfolio
|
0
(a)
|
0
(a)
|
Capital
Allocation Moderate Portfolio
|
0
(a)
|
0
(a)
|
Income
Builder Fund
|
0
(a)
|
0
(a)
|
LifeGoal
Growth Portfolio
|
0
(a)
|
0
(a)
|
For
Funds with fiscal period ending February 28/29
|
Convertible
Securities Fund
|
15,836,431
|
11,083
|
Global
Equity Value Fund
|
647,457,148
|
434,072
|
International
Opportunities Fund
|
561,691,551
|
364,999
|
International
Value Fund
|
101,288,961
|
59,139
|
Large
Cap Enhanced Core Fund
|
13,202,654
|
14,739
|
Large
Cap Index Fund
|
0
|
0
|
Marsico
21st Century Fund
|
1,478,711,984
|
422,384
|
Marsico
Focused Equities Fund
|
2,048,217,136
|
422,401
|
Marsico
Global Fund
|
72,414,478
|
29,980
|
Marsico
Growth Fund
|
2,409,959,491
|
595,243
|
Mid
Cap Index Fund
|
0
|
0
|
Statement
of Additional Information – June 1, 2015
|
157
|
|
Brokerage
directed for research
|
Fund
|
Amount
of Transactions
|
Amount
of Commissions Imputed or Paid
|
Mid
Cap Value Fund
|
$1,130,272,370
|
$949,345
|
Overseas
Value Fund
|
41,144,226
|
47,639
|
Select
International Equity Fund
|
559,220,705
|
782,287
|
Select
Large Cap Equity Fund
|
1,621,992,778
|
876,949
|
Small
Cap Index Fund
|
0
|
0
|
Small
Cap Value Fund II
|
320,186,445
|
491,350
|
For
Funds with fiscal period ending March 31
|
Short
Term Bond Fund
|
0
|
0
|
For
Funds with fiscal period ending April 30
|
AMT-Free
CA Intermediate Muni Bond Fund
|
0
|
0
|
AMT-Free
GA Intermediate Municipal Bond Fund
|
0
|
0
|
AMT-Free
MD Intermediate Muni Bond Fund
|
0
|
0
|
AMT-Free
NC Intermediate Muni Bond Fund
|
0
|
0
|
AMT-Free
SC Intermediate Muni Bond Fund
|
0
|
0
|
AMT-Free
VA Intermediate Muni Bond Fund
|
0
|
0
|
Global
Infrastructure Fund
|
345,514,680
|
295,761
|
Short
Term Municipal Bond Fund
|
0
|
0
|
For
Funds with fiscal period ending May 31
|
AP
– Multi-Manager Value Fund
|
873,174,561
|
610,175
|
Commodity
Strategy Fund
|
0
|
0
|
Diversified
Equity Income Fund
|
1,574,660,202
|
1,067,194
|
Dividend
Opportunity Fund
|
2,284,753,350
|
1,702,107
|
Flexible
Capital Income Fund
|
41,225,146
|
27,575
|
High
Yield Bond Fund
|
0
|
0
|
Mortgage
Opportunities Fund
|
0
(b)
|
0
(b)
|
Multi-Advisor
Small Cap Value Fund
|
23,045,721
|
25,441
|
Select
Large-Cap Value Fund
|
79,390,261
|
54,499
|
Select
Smaller-Cap Value Fund
|
6,209,953
|
13,096
|
Seligman
Communications and Information Fund
|
220,115,924
|
229,680
|
Small/Mid
Cap Value Fund
|
1,741,115,677
|
1,793,428
|
U.S.
Government Mortgage Fund
|
0
|
0
|
For
Funds with fiscal period ending July 31
|
AMT-Free
Tax-Exempt Bond Fund
|
0
|
0
|
Floating
Rate Fund
|
3,404,098
|
1,400
|
Global
Opportunities Fund
|
222,670,292
|
166,865
|
Income
Opportunities Fund
|
0
|
0
|
Inflation
Protected Securities Fund
|
0
|
0
|
Large
Core Quantitative Fund
|
1,782,913,965
|
832,698
|
Large
Growth Quantitative Fund
|
260,524,751
|
138,550
|
Large
Value Quantitative Fund
|
130,308,164
|
93,045
|
Limited
Duration Credit Fund
|
0
|
0
|
MN
Tax-Exempt Fund
|
0
|
0
|
Statement
of Additional Information – June 1, 2015
|
158
|
|
Brokerage
directed for research
|
Fund
|
Amount
of Transactions
|
Amount
of Commissions Imputed or Paid
|
Money
Market Fund
|
$0
|
$0
|
For
Funds with fiscal period ending August 31
|
Marsico
Flexible Capital Fund
|
262,052,256
|
115,405
|
For
Funds with fiscal period ending October 31
|
Absolute
Return Currency and Income Fund
|
0
|
0
|
Asia
Pacific ex-Japan Fund
|
416,756,207
|
940,326
|
Emerging
Markets Bond Fund
|
0
|
0
|
European
Equity Fund
|
403,091,777
|
566,567
|
Global
Bond Fund
|
0
|
0
|
Select
Global Equity Fund
|
292,929,252
|
432,312
|
Seligman
Global Technology Fund
|
34,942,786
|
29,009
|
(a)
|
The underlying funds may have
directed transactions to firms in exchange for research services.
|
(b)
|
For the period from April 30,
2014 (commencement of operations) to May 31, 2014.
|
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 Investment Manager uses to transact brokerage for the Funds.
As of each Fund’s most recent applicable
fiscal year (or period) end, the Funds owned securities of their “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 Brokers or Dealers
Fund
|
Issuer
|
Value
of securities owned
at end of fiscal period
|
For
Funds with fiscal period ending January 31, 2015
|
Capital
Allocation Aggressive Portfolio
|
None
|
N/A
|
Capital
Allocation Conservative Portfolio
|
None
|
N/A
|
Capital
Allocation Moderate Aggressive Portfolio
|
None
|
N/A
|
Capital
Allocation Moderate Conservative Portfolio
|
None
|
N/A
|
Capital
Allocation Moderate Portfolio
|
None
|
N/A
|
Income
Builder Fund
|
None
|
N/A
|
LifeGoal
Growth Portfolio
|
None
|
N/A
|
For
Funds with fiscal period ending February 28/29, 2014
|
Convertible
Securities Fund
|
None
|
N/A
|
Global
Equity Value Fund
|
Citigroup,
Inc.
|
$29,629,481
|
The
Goldman Sachs Group, Inc.
|
$21,378,339
|
JPMorgan
Chase & Co.
|
$34,925,492
|
Morgan
Stanley
|
$13,405,115
|
PNC
Financial Services Group, Inc.
|
$4,465,515
|
International
Opportunities Fund
|
None
|
N/A
|
International
Value Fund
|
None
|
N/A
|
Large
Cap Enhanced Core Fund
|
Citigroup,
Inc.
|
$578,697
|
JPMorgan
Chase & Co.
|
$3,039,870
|
Statement
of Additional Information – June 1, 2015
|
159
|
Fund
|
Issuer
|
Value
of securities owned
at end of fiscal period
|
Large
Cap Index Fund
|
Ameriprise
Financial, Inc.
|
$3,966,255
|
Citigroup,
Inc.
|
$27,604,868
|
E*TRADE
Financial Corp.
|
$1,207,515
|
Franklin
Resources, Inc.
|
$4,024,369
|
The
Goldman Sachs Group, Inc.
|
$13,131,407
|
JPMorgan
Chase & Co.
|
$39,977,529
|
Legg
Mason, Inc. (subsidiary)
|
$913,639
|
Morgan
Stanley
|
$7,986,440
|
PNC
Financial Services Group, Inc.
|
$8,144,061
|
The
Charles Schwab Corp.
|
$5,756,514
|
Marsico
21st Century Fund
|
Morgan
Stanley
|
$21,089,191
|
Marsico
Focused Equities Fund
|
None
|
N/A
|
Marsico
Global Fund
|
None
|
N/A
|
Marsico
Growth Fund
|
Citigroup,
Inc.
|
$41,426,778
|
Mid
Cap Index Fund
|
Affiliated
Managers Group, Inc.
|
$23,236,774
|
Eaton
Vance Corp.
|
$10,712,580
|
Primerica,
Inc.
|
$5,732,254
|
Raymond
James Financial, Inc. (subsidiary)
|
$15,176,678
|
Mid
Cap Value Fund
|
TD
Ameritrade Holding Corp.
|
$58,874,409
|
Raymond
James Financial, Inc. (subsidiary)
|
$72,337,629
|
Overseas
Value Fund
|
None
|
N/A
|
Select
International Equity Fund
|
None
|
N/A
|
Select
Large Cap Equity Fund
|
Citigroup,
Inc.
|
$14,388,158
|
JPMorgan
Chase & Co.
|
$16,402,854
|
Small
Cap Index Fund
|
Investment
Technology Group, Inc.
|
$2,514,465
|
Piper
Jaffray Companies
|
$2,672,717
|
Stifel
Financial Corp.
|
$11,371,602
|
Small
Cap Value Fund II
|
None
|
N/A
|
For
Funds with fiscal period ending March 31, 2014
|
Short
Term Bond Fund
|
Bear
Stearns Commercial Mortgage Securities Trust
|
$18,619,119
|
Citigroup
Inc.
|
$15,724,197
|
Citigroup
Commercial Mortgage Trust
|
$12,599,172
|
Citigroup
Mortgage Loan Trust, Inc.
|
$2,163,048
|
Credit
Suisse Mortgage Capital Certificates
|
$7,490,806
|
Credit
Suisse First Boston Mortgage Securities Corp.
|
$14,898,550
|
GS
Mortgage Securities Trust
|
$13,172,304
|
GS
Mortgage Securities Corp II
|
$4,899,214
|
The
Goldman Sachs Group, Inc.
|
$15,185,560
|
JPMorgan
Chase & Co.
|
$17,915,207
|
JPMorgan
Chase Commercial Mortgage Securities Trust
|
$56,864,701
|
JPMorgan
Resecuritization Trust
|
$16,119,673
|
LB-UBS
Commercial Mortgage Trust
|
$470,412
|
Merrill
Lynch Mortgage Trust
|
$5,703,740
|
Morgan
Stanley
|
$11,217,208
|
Morgan
Stanley Capital 1, Inc.
|
$9,118,690
|
PNC
Bank NA
|
$9,133,725
|
Statement
of Additional Information – June 1, 2015
|
160
|
Fund
|
Issuer
|
Value
of securities owned
at end of fiscal period
|
For
Funds with fiscal period ending April 30, 2014
|
AMT-Free
CA Intermediate Muni Bond Fund
|
None
|
N/A
|
AMT-Free
GA Intermediate Muni Bond Fund
|
None
|
N/A
|
AMT-Free
MD Intermediate Muni Bond Fund
|
None
|
N/A
|
AMT-Free
NC Intermediate Muni Bond Fund
|
None
|
N/A
|
AMT-Free
SC Intermediate Muni Bond Fund
|
None
|
N/A
|
AMT-Free
VA Intermediate Muni Bond Fund
|
None
|
N/A
|
Global
Infrastrucure Fund
|
None
|
N/A
|
Short
Term Municipal Bond Fund
|
None
|
N/A
|
For
Funds with fiscal period ending May 31, 2014
|
AP
– Multi-Manager Value Fund
|
Citigroup,
Inc.
|
$6,760,839
|
E*TRADE
Financial Corp.
|
$693,985
|
Goldman,
Sachs & Co.
|
$10,759,305
|
The
Goldman Sachs Group, Inc.
|
$26,033,654
|
Goldman,
Sachs International
|
$5,419,558
|
JPMorgan
Chase & Co.
|
$42,783,954
|
JPMorgan
Chase Bank
|
$10,365,622
|
Legg
Mason, Inc. (subsidiary)
|
$494,163
|
Morgan
Stanley
|
$1,894,063
|
PNC
Financial Services Group, Inc. (The)
|
$3,805,600
|
Commodity
Strategy Fund
|
None
|
N/A
|
Diversified
Equity Income Fund
|
Citigroup,
Inc.
|
$59,093,785
|
The
Goldman Sachs Group, Inc.
|
$28,279,658
|
JPMorgan
Chase & Co.
|
$75,901,174
|
Morgan
Stanley
|
$36,702,477
|
PNC
Financial Services Group, Inc. (The)
|
$33,270,563
|
Dividend
Opportunity Fund
|
Goldman,
Sachs & Co.
|
$61,086,729
|
The
Goldman Sachs Group, Inc.
|
$118,272,283
|
Goldman,
Sachs International
|
$30,768,484
|
JPMorgan
Chase & Co.
|
$126,380,906
|
JPMorgan
Chase Bank NA
|
$60,448,011
|
Flexible
Capital Income Fund
|
JPMorgan
Chase & Co.
|
$3,475,348
|
High
Yield Bond Fund
|
E*TRADE
Financial Corp.
|
$7,675,443
|
Nuveen
Investments, Inc.
|
$14,857,954
|
Mortgage
Opportunities Fund
|
Credit
Suisse Mortgage Capital Certificates
|
$2,008,684
|
Credit
Suisse Securities (USA) LLC
|
$8,345,000
|
GS
Mortgage Securities Trust
|
$5,280,740
|
JPMorgan
Chase Commercial Mortgage Securities Trust
|
$3,168,951
|
Morgan
Stanley Re-Remic Trust
|
$7,586,700
|
Multi-Advisor
Small Cap Value Fund
|
None
|
N/A
|
Select
Large-Cap Value Fund
|
Citigroup,
Inc.
|
$30,920,500
|
JPMorgan
Chase & Co.
|
$30,007,800
|
Morgan
Stanley
|
$29,625,600
|
Select
Smaller-Cap Value Fund
|
None
|
N/A
|
Seligman
Communications and Information Fund
|
None
|
N/A
|
Small/Mid
Cap Value Fund
|
Affiliated
Managers Group, Inc.
|
$12,636,200
|
Statement
of Additional Information – June 1, 2015
|
161
|
Fund
|
Issuer
|
Value
of securities owned
at end of fiscal period
|
U.S.
Government Mortgage Fund
|
Citigroup
Mortgage Loan Trust, Inc.
|
$36,700,685
|
Credit
Suisse Mortgage Capital Certificates
|
$59,758,158
|
GS
Mortgage Securities Trust
|
$13,941,154
|
JPMorgan
Chase Commercial Mortgage Securities Trust
|
$2,112,634
|
Merrill
Lynch Mortgage Trust
|
$7,840
|
Banc
of America Merrill Lynch Commercial Mortgage, Inc.
|
$6,970,960
|
Morgan
Stanley Re-Remic Trust
|
$4,675,607
|
Morgan
Stanley Resecuritization Trust
|
$5,736,016
|
For
Funds with fiscal period ending July 31, 2014
|
AMT-Free
Tax-Exempt Bond Fund
|
None
|
N/A
|
Floating
Rate Fund
|
Nuveen
Investments, Inc.
|
$7,093,599
|
Global
Opportunities Fund
|
Citigroup,
Inc.
|
$4,082,322
|
Citigroup
Mortgage Loan Trust, Inc.
|
$175,037
|
Credit
Suisse Mortgage Capital Certificates
|
$402,400
|
E*TRADE
Financial Corp.
|
$117,937
|
Arlington
Asset Investment Corp.
|
$138,224
|
Investment
Technology Group, Inc.
|
$38,409
|
JPMorgan
Chase & Co.
|
$5,617,865
|
JPMorgan
Chase Commercial Mortgage Securities Trust
|
$19,526
|
Morgan
Stanley Resecuritization Trust
|
$64,753
|
Income
Opportunities Fund
|
E*TRADE
Financial Corp.
|
$7,932,625
|
Inflation
Protected Securities Fund
|
The
Goldman Sachs Group, Inc.
|
$248,814
|
Large
Core Quantitative Fund
|
Citigroup,
Inc.
|
$97,042,331
|
The
Goldman Sachs Group, Inc.
|
$41,938,262
|
Large
Growth Quantitative Fund
|
None
|
N/A
|
Large
Value Quantitative Fund
|
Citigroup,
Inc.
|
$19,182,502
|
The
Goldman Sachs Group, Inc.
|
$14,330,923
|
JPMorgan
Chase & Co.
|
$5,547,854
|
Limited
Duration Credit Fund
|
Citigroup,
Inc.
|
$12,697,209
|
The
Goldman Sachs Group, Inc.
|
$5,075,968
|
Minnesota
Tax-Exempt Fund
|
None
|
N/A
|
Money
Market Fund
|
None
|
N/A
|
For
Funds with fiscal period ending August 31, 2014
|
Marsico
Flexible Capital Fund
|
Citigroup,
Inc.
|
$4,413,234
|
For
Funds with fiscal period ending October 31, 2014
|
Absolute
Return Currency and Income Fund
|
None
|
N/A
|
Asia
Pacific ex-Japan Fund
|
None
|
N/A
|
Emerging
Markets Bond Fund
|
None
|
N/A
|
European
Equity Fund
|
None
|
N/A
|
Global
Bond Fund
|
E*TRADE
Financial Corp.
|
$41,584
|
Select
Global Equity Fund
|
JPMorgan
Chase & Co.
|
$7,184,359
|
Seligman
Global Technology Fund
|
None
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
162
|
OTHER PRACTICES
Performance Disclosure
Effective beginning with performance reporting for
the December 31, 2011 year end, in presenting performance information for newer share classes, if any, of a Fund, the Fund typically includes, for periods prior to the offering of such share classes, the performance of the Fund’s oldest share
class (except as otherwise disclosed), adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable, based on the expense ratios of those share classes for the Fund’s most recently completed fiscal
year for which data was available at December 31, 2011 or, for Funds and classes first offered after January 1, 2011, the expected expense differential at the time the newer share class is first offered. Actual expense differentials across classes
will vary over time. The performance of the Fund’s newer share classes would have been substantially similar to the performance of the Fund’s oldest share class because all share classes of a Fund are invested in the same portfolio of
securities, and would have differed only to the extent that the classes do not have the same sales charges and/or expenses (and any differences in expenses between share classes may change over time).
Prior to December 31, 2011, in presenting
performance information for a newer share class of a Fund, series of CFST would typically include, for periods prior to the offering of such newer share class, the performance of an older share class, the class-related operating expense structure of
which was most similar to that of the newer share class, and for periods prior to the initial offering of such older share class, would include the performance of successively older share classes with successively less similar expense structures.
Such performance information was not restated to reflect any differences in expenses between share classes and if such differences had been reflected, the performance shown might have been lower. Because, prior to December 31, 2011, series of CFST
used a different methodology for presenting performance information for a newer share class, such performance information published before December 31, 2011 may differ from corresponding performance information published after December 31,
2011.
Portfolio Turnover
A change in the securities held by a Fund is known
as “portfolio turnover.” High portfolio turnover 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 a Fund’s performance. For each Fund’s portfolio
turnover rate, see the
Fees and Expenses of the Fund — Portfolio Turnover
section in the prospectuses for that Fund.
In any particular year, market conditions may result
in greater rates than are presently anticipated. The rate of a Fund’s turnover may vary significantly from time to time depending on, among other factors, economic, market and other conditions.
See below for an explanation of any significant
variation in a Fund’s portfolio turnover rates over the two most recently completed fiscal years:
The high portfolio turnover rate for U.S. Government
Mortgage Fund for each of the last two fiscal year ends can be attributed to the inclusion of mortgage dollar rolls.
Disclosure of Portfolio Holdings Information
The Board and the Investment Manager believe that
the investment ideas of the Investment Manager and any subadviser with respect to portfolio management of a Fund should seek to benefit the Fund and its shareholders, and do not want to afford speculators an opportunity to profit by anticipating
Fund trading strategies. However, the Board also believes that selective disclosure of a Fund’s portfolio holdings can, under appropriate circumstances, be made for purposes beneficial to the Fund and its shareholders or for other purposes
under conditions that are designed to protect the interests of the Fund and its shareholders.
The Board has therefore adopted policies and
procedures relating to disclosure of the Funds’ portfolio securities. These policies and procedures are intended to protect the confidentiality of Fund portfolio holdings information and generally prohibit the release of such information until
such information is made available to the general public, unless such persons have been authorized to receive such information on a selective basis, as described below. It is the policy of the Fund not to provide or permit others to provide
portfolio holdings on a selective basis, and the Investment Manager does not intend to selectively disclose portfolio holdings or expect that such holdings information will be selectively disclosed, except where necessary for the Fund’s
operation or where there are other legitimate business purposes for doing so and, in any case, where conditions are met that are designed to protect the interests of the Funds and their shareholders.
Statement
of Additional Information – June 1, 2015
|
163
|
Although the Investment Manager seeks to limit the
selective disclosure of portfolio holdings information and such selective disclosure is monitored under the Fund’s compliance program for conformity with the policies and procedures, there can be no assurance that these policies will protect
the Fund from the potential misuse of holdings information by individuals or firms in possession of that information. Under no circumstances may the Investment Manager, its affiliates or any employee thereof receive any consideration or compensation
for disclosing such holdings information.
Public
Disclosures
The Funds’ portfolio
holdings are currently disclosed to the public through filings with the SEC and postings on the Funds’ website. The information is available on the Funds’ website as described below.
■
|
For equity,
alternative and flexible funds (other than the equity funds identified below) and funds-of-funds (equity and fixed income), a complete list of Fund portfolio holdings as of month-end is posted approximately, but no earlier than, 15 calendar days
after such month-end.
|
■
|
For Funds that are
subadvised by Marsico Capital, Columbia Small Cap Growth Fund I and Columbia Variable Portfolio – Small Company Growth Fund, a complete list of Fund portfolio holdings as of month-end is posted approximately, but no earlier than, 30 calendar
days after such month-end.
|
■
|
For fixed-income
Funds (other than money market funds), a complete list of Fund portfolio holdings as of calendar quarter-end is posted approximately, but no earlier than, 30 calendar days after such quarter-end.
|
■
|
For money market
Funds, a complete list of Fund portfolio holdings as of month-end is posted no later than five business days after such month-end. Such month-end holdings are continuously available on the website for at least six months, together with a link to an
SEC webpage where a user of the website may obtain access to the Fund’s most recent 12 months of publicly available filings on Form N-MFP. Money market Fund portfolio holdings information posted on the website, at minimum, includes with
respect to each holding, the name of the issuer, the category of investment (
e.g.
, Treasury debt, government agency debt, asset backed commercial paper, structured investment vehicle note), the CUSIP number
(if any), the principal amount, the maturity date (as determined under Rule 2a-7 for purposes of calculating weighted average maturity), the final maturity date (if different from the maturity date previously described), coupon or yield and the
amortized cost value. The money market Funds will also disclose on the website the overall weighted average maturity and weighted average life maturity of a holding.
|
Portfolio holdings of Funds owned solely by the
Investment Manager or its affiliates are not disclosed on the website. A complete schedule of each Fund’s portfolio holdings is available semiannually and annually in shareholder reports filed on Form N-CSR and, after the first and third
fiscal quarters, in regulatory filings on Form N-Q. These shareholder reports and regulatory filings are filed with the SEC in accordance with federal securities laws. Shareholders may obtain each Fund’s Form N-CSR and N-Q filings on the
SEC’s website at www.sec.gov. In addition, each 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.
In addition, the Investment Manager makes publicly
available information regarding certain Fund’s largest five to fifteen holdings, as a percentage of the market value of the Funds’ portfolios as of a month-end. This holdings information is made publicly available through the website
columbiathreadneedle.com/us, approximately 15 calendar days following the month-end. The scope of the information that is made available on the Funds’ websites pursuant to the Funds’ policies may change from time to time without prior
notice. This information may not be available on the website for all Funds included in this SAI.
The Investment Manager may also disclose more
current portfolio holdings information as of specified dates on the Funds’ website.
The Funds, the Investment Manager 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 when the information is disclosed publicly on the funds’ website or no earlier than the time a fund files such information in a publicly available SEC filing required to include such information.
Other Disclosures
The Funds’ policies and procedures provide
that no disclosures of the Funds’ portfolio holdings may be made prior to the portfolio holdings information being made available to the general public unless (i) the Funds have a legitimate business purpose for making such disclosure, (ii)
the Funds or their authorized agents authorize 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.
Statement
of Additional Information – June 1, 2015
|
164
|
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
Investment Manager; (ii) any conflicts of interest between the interests of Fund shareholders, on the one hand, and those of the Investment Manager, the Funds’ Distributor or any affiliated person of a Fund, the Investment Manager or
Distributor on the other; and (iii) any prior disclosure to a third party, although subject to a confidentiality agreement, would not make conduct lawful that is otherwise unlawful.
Fund complete portfolio holdings may be disclosed
between and among the following persons (collectively, Affiliates and Agents) for legitimate business purposes within the scope of their official duties and responsibilities, subject to Fund policies and procedures designed to prevent the misuse of
inside information, by agreement, or under applicable laws, rules, and regulations: (1) persons who are subject to the Code of Ethics or policies and procedures designed to prevent the misuse of inside information; (2) an investment adviser,
distributor, administrator, transfer agent, or custodian to the Fund; (3) an accounting firm, an auditing firm, or outside legal counsel retained by the Investment Manager or its affiliates, or the Fund; (4) an investment adviser to whom complete
portfolio holdings are disclosed for due diligence purposes when the adviser is in merger or acquisition talks with a the Investment Manager or its parent company; and (5) a newly hired subadviser to whom complete portfolio holdings are disclosed
prior to the time it commences its duties.
The
frequency with which complete portfolio holdings may be disclosed between and among Affiliates and Agents, and the length of the lag, if any, between the date of the information and the date on which the information is disclosed between and among
the Affiliates and Agents, is determined by such Affiliates and Agents based on the facts and circumstances, including, without limitation, the nature of the portfolio holdings information to be disclosed, the risk of harm to the Funds and their
shareholders, and the legitimate business purposes served by such disclosure. The frequency of disclosure between and among Affiliates and Agents varies and may be as frequent as daily, with no lag. Any disclosure of Fund complete portfolio holdings
to any Affiliates and Agents as previously described may also include a list of the other investment positions that make up the Fund, such as cash investments and derivatives.
The Funds also disclose portfolio holdings
information as required by federal, state or international securities laws, and may disclose portfolio holdings information in response to requests by governmental authorities, or in connection with litigation or potential litigation, a
restructuring of a holding, where such disclosure is necessary to participate or explore participation in a restructuring of the holding (
e.g.
, as part of a bondholder group), or to the issuer of a holding,
pursuant to a request of the issuer or any other party who is duly authorized by the issuer.
In certain limited situations, the Funds may provide
portfolio holdings to an institutional client (or its custodian or other agent) when the client is effecting a redemption in-kind from a Fund and the Investment Manager believes that such disclosure will not be harmful to the Fund. In these
situations, the Investment Manager makes it clear through non-disclosure agreements or other means that the recipient must ensure that the confidential information is used only as necessary to effect the redemption-in-kind and will maintain the
information in a manner designed to protect against unauthorized access or misuse.
The Board has adopted policies to ensure that the
Fund’s portfolio holdings information is only disclosed in accordance with these policies. Before any selective disclosure of portfolio holdings information is permitted, the person seeking to disclose such holdings information must submit a
written request to the Portfolio Holdings Committee (“PHC”). The PHC, which is chaired by the Funds’ Chief Compliance Officer, is comprised of members from the Investment Manager’s legal department and compliance department,
and the Funds’ President. The PHC is authorized by the Board to perform an initial review of requests for disclosure of holdings information to evaluate whether there is a legitimate business purpose for selective disclosure, whether selective
disclosure is in the best interests of a Fund and its shareholders, to consider any potential conflicts of interest between the Fund, the Investment Manager, and its affiliates, and to safeguard against improper use of holdings information. Factors
considered in this analysis are whether the recipient has agreed to or has a duty to keep the holdings information confidential and whether risks have been mitigated such that the recipient has agreed or has a duty to use the holdings information
only as necessary to effectuate the purpose for which selective disclosure may be authorized. Before portfolio holdings may be selectively disclosed, requests approved by the PHC must also be authorized by the Funds’ President, Chief
Compliance Officer or General Counsel/Chief Legal Officer or their respective designees. On at least an annual basis, the PHC reviews the approved recipients of selective disclosure and may require a resubmission of the request, in order to
re-authorize certain ongoing arrangements. These procedures are intended to be reasonably designed to protect the confidentiality of Fund holdings information and to prohibit their release to individual investors, institutional investors,
intermediaries that distribute the Fund’s shares, and other parties, until such holdings information is made public or unless such persons have been authorized to receive such holdings information on a selective basis, as set forth
above.
Statement
of Additional Information – June 1, 2015
|
165
|
Ongoing Portfolio Holdings Disclosure Arrangements:
The 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 in accordance with the policy. No compensation or consideration is received in exchange for this information. In addition to the
daily information provided to a Fund’s custodians, subcustodians, Administrator, Investment Manager and subadvisers, the following disclosure arrangements are in place:
Identity
of Recipient
|
|
Conditions/restrictions
on use of information
|
|
Frequency
of
Disclosure
|
Recipients
under arrangements with the Funds or Investment Manager:
|
|
|
Barclays
Capital
|
|
Used
for analytics including risk and attribution assessment.
|
|
Daily
|
BlackRock
/ Aladdin
|
|
Used
for fixed income trading and decision support.
|
|
Daily
|
Bloomberg
|
|
Used
for portfolio analytics, statistical analysis and independent research.
|
|
Daily
|
Boston
Investors Communications Group, LLC (BICG)
|
|
Used
for writing services that require disclosing portfolio holdings in advance of their dissemination to the general public.
|
|
Monthly
|
Capital
Markets Services (“CMS”) Group
|
|
Used
for intraday post-trade information when equity exposures (either via futures or options trades) are modified beyond certain limits for CVP – Managed Volatility Funds.
|
|
As
Needed
|
Catapult
|
|
Used
to provide Edgar filing and typesetting services, as well as printing of prospectuses, factsheets, annual and semi-annual reports.
|
|
As
Needed
|
Cenveo,
Inc.
|
|
Used
for printing of prospectuses, factsheets, annual and semi-annual reports.
|
|
As
Needed
|
Citigroup
|
|
Used
for mortgage decision support.
|
|
Daily
|
Cogent
Commission Management
|
|
Used
to facilitate the evaluation of commission rates and to provide flexible commission reporting.
|
|
Daily
|
Equifax
|
|
Used
to ensure that Columbia does not violate the Office of Foreign Assets Control (OFAC) sanction requirements.
|
|
Daily
|
Ernst
& Young, LLP
|
|
Used
to analyze PFIC investments.
|
|
Monthly
|
FactSet
Research Systems, Inc.
|
|
Used
for provision of quantitative analytics, charting and fundamental data and for portfolio analytics.
|
|
Daily
|
Fiserv
(Frontier & GIM)
|
|
Used
for accounting and reconciliation of positions.
|
|
Daily
|
Fundtech
Financial Messaging
|
|
Used
to send trade messages via SWIFT, to custodians.
|
|
Daily
|
Harte-Hanks
|
|
Used
for printing of prospectuses, factsheets, annual and semi-annual reports.
|
|
As
Needed
|
Index
Universe
|
|
Used
to cover product and marketing developments related to index funds, ETFs, index derivatives, and other sophisticated investment strategies.
|
|
Monthly
|
Institutional
Shareholder Services Inc. (“ISS”)
|
|
Used
for proxy voting administration and research on proxy matters.
|
|
Daily
|
Statement
of Additional Information – June 1, 2015
|
166
|
Identity
of Recipient
|
|
Conditions/restrictions
on use of information
|
|
Frequency
of
Disclosure
|
Intex
Solutions Inc.
|
|
Used
to provide mortgage analytics.
|
|
Periodic
|
Investment
Technology Group, Inc.
|
|
Used
to evaluate and assess trading activity, execution and practices.
|
|
Quarterly
|
Investor
Tools
|
|
Used
for municipal bond analytics, research and decision support.
|
|
As
Needed
|
JDP
Marketing Services
|
|
Used
to write or edit Columbia Fund shareholder reports, quarterly fund commentaries, and communications, including shareholder letters and management’s discussion of Columbia Fund performance.
|
|
Monthly,
as needed
|
Kynex
|
|
Used
to provide portfolio attribution reports for the Columbia Convertible Securities Fund.
|
|
Daily
|
Lipper
/ Thomson Reuters
|
|
Used
for statistical analysis.
|
|
Monthly
|
Malaspina
Communications
|
|
Used
to facilitate writing management’s discussion of Columbia Fund performance for Columbia Fund shareholder reports and periodic marketing communications.
|
|
Monthly
|
Markit
/ Wall Street Office
|
|
Used
for an asset database for analytics and investor reporting.
|
|
As
Needed
|
Merrill
Corporation
|
|
Used
to provide Edgar filing and typesetting services, as well as printing of prospectuses, factsheets, annual and semi-annual reports.
|
|
As
Needed
|
MoneyMate
|
|
Used
to report returns and analytics to client facing materials.
|
|
Monthly
|
Morningstar
|
|
Used
for independent research and ranking of funds, and to fulfill role as investment consultant for fund-of-funds product. Used also for statistical analysis.
|
|
Monthly,
Quarterly or As Needed
|
MSCI
Inc./ Barra Aegis
|
|
Used
for risk analysis and reporting.
|
|
Daily
|
MSCI
Inc./ BarraOne
|
|
Used
as a hosted portfolio management platform designed for research, reporting, strategy development, portfolio construction, and performance and risk attribution.
|
|
Daily
|
Print
Craft
|
|
Used
to assemble kits and mailing that include the fact sheets.
|
|
As
Needed
|
R.R.
Donnelley & Sons Company
|
|
Used
to provide Edgar filing and typesetting services, and printing of prospectuses, factsheets, annual and semi-annual reports.
|
|
As
Needed
|
SEI
Investment Company
|
|
Used
for model portfolios for wrap accounts.
|
|
Daily
|
StoneRiver
RegEd, Inc.
|
|
Used
to review external and certain internal communications prior to dissemination.
|
|
Daily
|
SunGard
Investment Systems LLC / Invest One
|
|
Used
as portfolio accounting system.
|
|
Daily
|
Sustainalytics
US Inc.
|
|
Used
to support the investment process for Columbia U.S. Social Bond Fund.
|
|
At
least Monthly
|
Statement
of Additional Information – June 1, 2015
|
167
|
Identity
of Recipient
|
|
Conditions/restrictions
on use of information
|
|
Frequency
of
Disclosure
|
Threadneedle
Investments
|
|
Used
by portfolio managers and research analysts in supporting certain management strategies, and by shared support partners (legal, operations, compliance, risk, etc.) to provide Fund maintenance and development.
|
|
As
Needed
|
Universal
Wilde
|
|
Used
to provide printing and mailing services for prospectuses, annual and semi-annual reports, and supplements.
|
|
As
Needed
|
Wilshire
Associates, Inc.
|
|
Used
to provide daily performance attribution reporting based on daily holdings to the investment and investment analytics teams.
|
|
Daily
|
Wolters
Kluwer / Gainskeeper tax product
|
|
Used
to perform tax calculations specific to wash sales.
|
|
Monthly
|
Wolters
Kluwer / Straddles
|
|
Used
to analyze tax straddles (diminution of risk).
|
|
Monthly
|
Identity
of Recipient
|
|
Conditions/restrictions
on use of information
|
|
Frequency
of
Disclosure
|
Recipients
under arrangements with subadvisers:
|
|
|
Advent
Software Inc.
|
|
Used
by certain subadvisers for portfolio accounting.
|
|
Quarterly
|
Bloomberg
|
|
Used
by certain subadvisers for analytical information and research reports.
|
|
Daily
|
FactSet
Research Systems, Inc.
|
|
Used
by certain subadvisers for analytical information and research, and for portfolio characteristics data, attribution and research reports.
|
|
Daily
|
JPMorgan
Chase Bank NA
|
|
Used
by certain subadvisers to perform valuation and pricing to support fund manager activities.
|
|
Daily
|
Tamale
(Advent Software Inc.)
|
|
Used
by certain subadvisers for research management.
|
|
Daily
|
In addition, portfolio
holdings information may be provided from time to time to the Funds’ counsel, counsel to the independent trustees and the Funds’ independent auditors in connection with the services they provide to the Funds or the trustees. Portfolio
holdings information may also be provided to affiliates of the Investment Manager to monitor risks and various holdings limitations that must be aggregated with affiliated funds and accounts, among other purposes. The Investment Manager and the
subadvisers use a variety of broker-dealers and other agents to effect securities transactions on behalf of the Funds. These broker-dealers may become aware of the Funds’ intentions, transactions and positions in performing their
functions.
Additional Shareholder Servicing Payments
The Funds, along with the Transfer Agent, the
Distributor and the Investment Manager, may pay significant amounts to Selling Agents, 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 Selling Agents may vary. A number of factors may be considered in determining payments to a Selling Agent, including, without limitation, the nature of the services provided to shareholders or retirement plan
participants that invest in the Funds 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 vary by Selling Agent but generally are not expected, with certain limited exceptions, to exceed 0.40% of the
average aggregate value of each Fund’s shares on an annual basis.
Statement
of Additional Information – June 1, 2015
|
168
|
The Board has authorized each Fund to pay up to
0.20% 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 Selling Agent for the provision of such additional shareholder services. The
Funds’ Transfer Agent, Distributor and/or their affiliates will pay, from its or their own resources, amounts in excess of the amount paid by the Funds to Selling Agents in connection with the provision of these additional shareholder services
and other services.
The Funds also may make
additional payments to Selling Agents 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 Selling Agents 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 Selling Agent’s system or other similar services.
As of April 2015, the Distributor and/or other
Ameriprise Financial affiliates had agreed to make shareholder servicing payments with respect to the Funds to the Selling Agents or their affiliates shown below.
Recipients of Shareholder Servicing Payments with Respect to the
Funds from the Transfer Agent and/or other Ameriprise Financial Affiliates
■
|
ADP Broker-Dealer,
Inc.
|
■
|
American
Enterprise Investment Services*
|
■
|
American United
Life Insurance Co.
|
■
|
Ameriprise
Financial Services, Inc.*
|
■
|
AXA Equitable Life
Insurance
|
■
|
Benefit Plan
Administrators
|
■
|
Charles Schwab
& Co., Inc.
|
■
|
Charles Schwab
Trust Co.
|
■
|
Davenport &
Company City National Bank
|
■
|
Daily Access
Concepts, Inc.
|
■
|
Digital Retirement
Solutions
|
■
|
Edward D. Jones
& Co., LP
|
■
|
Fidelity Brokerage
Services, Inc.
|
■
|
Fidelity
Investments Institutional Operations Co.
|
■
|
First Mercantile
Trust Co.
|
■
|
Guardian Insurance
and Annuity Company Inc.
|
■
|
Genworth Life and
Annuity Insurance Company
|
■
|
Genworth Life
Insurance Co. of New York
|
■
|
Hartford Life
Insurance Company
|
■
|
ICMA Retirement
Corporation
|
■
|
Janney Montgomery
Scott, Inc.
|
■
|
John Hancock Life
Insurance Company (USA)
|
■
|
John Hancock Life
Insurance Company of New York
|
■
|
JP Morgan
Retirement Plan Services LLC
|
■
|
Lincoln Life &
Annuity Company of New York
|
■
|
Lincoln National
Life Insurance Company
|
■
|
Lincoln Retirement
Services
|
■
|
LPL Financial
Corporation
|
■
|
BMO Harris Bank
(f/k/a Marshall & Illsley Trust Company)
|
■
|
Massachusetts
Mutual Life Insurance Company
|
■
|
Mercer HR
Services, LLC
|
■
|
Merrill Lynch,
Pierce, Fenner & Smith Incorporated
|
■
|
Mid Atlantic
Capital Corporation
|
■
|
Minnesota Life
Insurance Co.
|
■
|
Morgan Stanley
Smith Barney
|
■
|
MSCS Financial
Services Division of Broadridge Business Process Outsourcing LLC
|
■
|
National Financial
Services
|
■
|
Nationwide
Investment Services
|
■
|
Newport Retirement
Services, Inc.
|
■
|
New York State
Deferred Compensation Plan
|
■
|
NYLife
Distributors LLC
|
■
|
Oppenheimer &
Co., Inc.
|
■
|
Plan
Administrators, Inc.
|
■
|
Principal Life
Insurance Company of America
|
■
|
Prudential
Insurance Company of America
|
■
|
Prudential
Retirement Insurance & Annuity Company
|
■
|
Raymond James
& Associates
|
■
|
Robert W. Baird
& Co., Inc.
|
■
|
Sammons Retirement
Solutions
|
■
|
SEI Private Trust
Company
|
■
|
Standard Insurance
Company
|
■
|
TD Ameritrade
Clearing, Inc.
|
■
|
TD Ameritrade
Trust Company
|
■
|
The Retirement
Plan Company
|
■
|
Teachers Insurance
and Annuity Association of America
|
■
|
Transamerica
Advisors Life Insurance Company
|
■
|
Transamerica
Financial Life Insurance Company
|
■
|
T. Rowe Price
Group, Inc.
|
■
|
UBS Financial
Services, Inc.
|
■
|
Unified Trust
Company, N.A.
|
■
|
Upromise
Investments, Inc.
|
■
|
VALIC Retirement
Services Company
|
Statement
of Additional Information – June 1, 2015
|
169
|
■
|
Voya Retirement
Insurance and Annuity Company
|
■
|
Voya Institutional
Plan Services, LLP
|
■
|
Voya Investments
Distributors, LLC
|
■
|
Wells Fargo
Advisors, LLC
|
■
|
Wilmington Trust
Retirement & Institutional Services Company
|
*
|
Ameriprise Financial affiliate
|
The Transfer
Agent and/or other Ameriprise Financial affiliates may enter into similar arrangements with other Selling Agents from time to time. Therefore, the preceding list is subject to change at any time without notice.
Additional Selling Agent Payments
Selling Agents 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
Other Practices — Additional Shareholder Servicing Payments.
The Distributor and other Ameriprise
Financial affiliates may pay additional compensation to selected Selling Agents, including other Ameriprise Financial affiliates, under the categories described below. These categories are not mutually exclusive, and a single Selling Agent may
receive payments under all categories. A Selling Agent also may receive payments described above under
Other Practices — Additional Shareholder Servicing Payments
. These payments may
create an incentive for a Selling Agent or its representatives to recommend or offer shares of a Fund to its customers. The amount of payments made to Selling Agents 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 of relationship with the Selling Agent, the size of the customer/shareholder base of the Selling Agent, the manner in which
customers of the Selling Agent make investments in the Funds, the nature and scope of marketing support or services provided by the Selling Agent (as described more fully below) and the costs incurred by the Selling Agent 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 Selling Agents, 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
in the Fund’s
prospectuses.
Marketing/Sales Support
Payments
The Distributor, the
Investment Manager and their affiliates may make payments, from their own resources, to certain Selling Agents, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the 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, systems infrastructure support and data analytics. These payments are generally based upon one or more of the following factors: average net assets of the Funds distributed by the Distributor attributable to that Selling Agent, gross
sales of the Columbia Funds distributed by the Distributor attributable to that Selling Agent, reimbursement of ticket charges (fees that a Selling Agent firm charges its representatives for effecting transactions in Fund shares) or a negotiated
lump sum payment.
While the
financial arrangements may vary for each Selling Agent, the marketing support payments to each Selling Agent generally are expected to be between 0.05% and 0.40% on an annual basis for payments based on average net assets of the Funds attributable
to the Selling Agent, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Funds attributable to the Selling Agent. The Distributor and other Ameriprise Financial affiliates may make payments in
materially larger amounts or on a basis materially different from those described above when dealing with certain Selling Agents. Such increased payments may enable the Selling Agents to offset credits that they may provide to their customers.
As of April 2015, the Distributor, the
Investment Manager or their affiliates had agreed to make marketing support payments with respect to the Funds to the Selling Agents or their affiliates shown below.
Recipients of Marketing Support Payments with Respect
to the Funds from the Distributor and/or other Ameriprise Financial Affiliates
■
|
Ameriprise
Financial Services, Inc.*
|
■
|
Cetera Financial
Group, Inc.
|
■
|
Citigroup Global
Markets Inc./Citibank
|
Statement
of Additional Information – June 1, 2015
|
170
|
■
|
Commonwealth
Financial Network
|
■
|
J.J.B. Hilliard,
W.L. Lyons, Inc.
|
■
|
Lincoln Financial
Advisors Corp.
|
■
|
Linsco/Private
Ledger Corp.
|
■
|
Merrill Lynch,
Pierce, Fenner & Smith Incorporated
|
■
|
Morgan Stanley
Smith Barney
|
■
|
Northwestern
Mutual Investment Services, LLC
|
■
|
Oppenheimer &
Co., Inc.
|
■
|
Raymond James
& Associates, Inc.
|
■
|
Raymond James
Financial Services, Inc.
|
■
|
Securities
America, Inc.
|
■
|
UBS Financial
Services Inc.
|
■
|
US Bancorp
Investments, Inc.
|
■
|
Wells Fargo
Advisors, LLC
|
■
|
Wells Fargo
Advisors Financial Network, LLC
|
■
|
Vanguard Marketing
Corp
|
*
|
Ameriprise Financial affiliate
|
The
Distributor, the Investment Manager and their affiliates may enter into similar arrangements with other Selling Agents 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 Selling Agents 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 Selling Agents that enable the Distributor to participate in and/or present at Selling Agent-sponsored conferences or seminars, sales or
training programs for invited registered representatives and other Selling Agent employees, financial intermediary entertainment and other 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 Selling Agent 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 Selling Agent
provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a Selling Agent 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 Management and Other Services — Other Roles and Relationships of Ameriprise Financial and its Affiliates — Certain Conflicts
of Interest
for more information.
Statement
of Additional Information – June 1, 2015
|
171
|
CAPITAL STOCK AND OTHER SECURITIES
Description of the Trusts' Shares
The Trusts may 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. Most of the Funds are authorized to issue multiple classes of shares. Such classes are designated as Class A, Class B, Class C, Class I, Class K, Class R, Class R4, Class R5, Class T, Class W, Class
Y and Class Z. A Fund offers only those classes of shares listed on the cover of its prospectuses. 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.
Subject to certain limited exceptions discussed in
each Fund’s prospectuses and in this SAI, a Fund may no longer be accepting new investments from current shareholders or prospective investors in general or with respect to one or more classes of shares. The Funds, however, may at any time and
without notice, accept new investments in general or with respect to one or more previously closed classes of shares.
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 or the relevant class. The Funds or any class of shares of 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 and classes will continue indefinitely.
Shareholder Liability
CFST.
The Trust is organized under
Delaware law. The Trust Instrument of the Trust disclaims liability of the shareholders or the officers of the Trust for acts or obligations of the Trust which are binding only on the assets and property of the Trust. The Trust Instrument provides
for indemnification out of a Fund’s property for all loss and expense of a Fund’s shareholders being held personally liable solely by reason of his or her being or having been a shareholder and not because of his or her acts or omissions
or for some other reason. The risk of a Trust shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which a Fund itself would not be able to meet the Trust’s obligations and this risk should be
considered remote.
CFST II.
The Trust is organized as a business trust under Massachusetts law. Under Massachusetts law, shareholders could, under certain circumstances, be held personally liable for the obligations of the Trust.
However, the Trust’s Declaration of Trust disclaims any shareholder liability for acts or obligations of the Funds and the Trust and requires that notice of such disclaimer be given in each agreement, obligation, or instrument entered into or
executed by a Fund or the Trustees. The Declaration of Trust provides for indemnification out of Fund property for all loss and expense of any shareholder held personally liable for the obligations of a Fund. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to circumstances (which are considered remote) in which a Fund would be unable to meet its obligations and the disclaimer was inoperative. The risk of a Fund incurring financial
loss on account of another series of the Trust also is believed to be remote, because it would be limited to circumstances in which the disclaimer was inoperative and the other series of the Trust was unable to meet its obligations.
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 (in the case of CFST) or Massachusetts business trust law (in the case of CFST II). Each whole share (or fractional share) outstanding on the record date shall be entitled to (for CFST) one vote as
to any matter on which it is entitled to vote, and each fractional share shall be entitled to a proportionate fractional vote; and (for CFST II) a number of votes on any matter on which it is entitled to vote equal to the net asset value of the
share (or fractional share) in U.S. dollars determined at the close of business on the record date (for example, a share having a net asset value of $10.50 would be entitled to 10.5 votes).
Statement
of Additional Information – June 1, 2015
|
172
|
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; (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 is voted on by holders of that class of shares. Subject to the foregoing, all shares of a 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, if shareholder approval is required under exemptive relief, 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. Special
meetings may be called for certain purposes.
Previously, CFST had voluntarily undertaken to
adhere to certain governance measures contemplated by an SEC settlement order with respect to CFST’s prior investment adviser in 2005. Over the past several years, the SEC has adopted many rules under the 1940 Act and the Investment Advisers
Act of 1940 to strengthen fund governance and compliance oversight of funds and their investment advisers.
Accordingly, although CFST
may continue to follow certain
governance practices noted in the 2005 settlement order, it will do so as the Board deems appropriate and not pursuant to any voluntary undertakings. In this regard, the Board has determined that it is unnecessary to commit to holding a meeting of
shareholders to elect trustees at least every five years. Instead, the Board will convene meetings of shareholders to elect trustees as required by the 1940 Act or as deemed appropriate by the Board.
Liquidation Rights
In the event of the liquidation or dissolution of the Trust or a
Fund, all shares have equal rights and shareholders of a Fund are entitled to a proportionate share of the assets of the Fund that are available for distribution and to a distribution of any general assets not attributable to a particular Fund 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
Conversion features and exchange privileges, if applicable, are
described in the Funds’ prospectuses and Appendix S to this SAI.
Redemptions
Each Fund’s dividend, distribution and redemption policies
can be found in its prospectuses. 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 its Trust.
Statement
of Additional Information – June 1, 2015
|
173
|
Purchase, Redemption and Pricing of Shares
Purchase and Redemption
An investor may buy, sell and transfer 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.
Purchases of shares of the Funds may be effected on
days on which the NYSE is open for business (a “Business Day”). The Trust and the Distributor reserve the right to reject any purchase order. The issuance of shares is recorded on the books of the Trust, and share certificates are not
issued. Purchase orders for shares in the Funds that are received by the Distributor or by the Transfer Agent before the close of regular trading hours on the NYSE (currently 4:00 p.m., Eastern time) on any Business Day are priced according to the
net asset value determined on that day but are not executed until 4:00 p.m., Eastern time, on the Business Day on which immediately available funds in payment of the purchase price are received by the Fund’s Custodian.
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.
Should a Fund stop selling shares, the Board may
make a deduction from the value of the assets held by the Fund to cover the cost of future liquidations of the assets so as to distribute these costs fairly among all shareholders.
The Trusts 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 Trusts have 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. Although redemptions in excess of this limitation would normally be paid in cash, the Fund reserves the right to make these payments in whole or in part in securities
or other assets in case of an emergency, or if the payment of a redemption in cash would be detrimental to the existing shareholders of the Fund as determined by the Board. In these circumstances, the securities distributed would be valued as set
forth in this SAI. Should a Fund distribute securities, a shareholder may incur brokerage fees or other transaction costs in converting the securities to cash.
The timing and magnitude of cash inflows from
investors buying Fund shares could prevent a Fund from always being fully invested. Conversely, the timing and magnitude of cash outflows to investors redeeming Fund shares could require large ready reserves of uninvested cash to meet shareholder
redemptions. Either situation could adversely impact a Fund’s performance.
Potential Adverse Effects of Large Investors
Each Fund may from time to time sell to one or more investors,
including other funds advised by the Investment Manager or third parties, a substantial amount of its shares, and may thereafter be required to satisfy redemption requests by such investors. Such sales and redemptions may be very substantial
relative to the size of the Fund. While it is not possible to predict the overall effect of such sales and redemptions over time, such transactions may adversely affect the Fund’s performance to the extent that the Fund is required to invest
cash received in connection with a sale or to sell portfolio securities to facilitate a redemption at, in either case, a time when the Fund otherwise would not invest or sell. Such transactions also may increase a Fund’s transaction costs,
which would detract from Fund performance.
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
Statement
of Additional Information – June 1, 2015
|
174
|
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.
Pay-out Plans
You can use any of several pay-out plans to redeem your investment
in regular installments. If you redeem shares, you may be subject to a contingent deferred sales charge as discussed in the prospectus. While the plans differ on how the pay-out is figured, they all are based on the redemption of your investment.
Net investment income dividends and any capital gain distributions will automatically be reinvested, unless you elect to receive them in cash. If you redeem an IRA or a qualified retirement account, certain restrictions, federal tax penalties, and
special federal income tax reporting requirements may apply. You should consult your tax advisor about this complex area of the tax law.
Applications for a systematic investment in a class
of a Fund subject to a sales charge normally will not be accepted while a pay-out plan for any of those Funds is in effect. Occasional investments, however, may be accepted.
To start any of these plans, please consult your
financial intermediary. Your authorization must be received at least five days before the date you want your payments to begin. Payments will be made on a monthly, bimonthly, quarterly, semiannual, or annual basis. Your choice is effective until you
change or cancel it.
Offering Price
The share price of each Fund is based on each
Fund’s net asset value (NAV) 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 Funds do not value their shares on days that the NYSE is closed.
For Funds Other than Money Market Funds.
The value of each Fund’s portfolio securities is determined in accordance with the Trust’s valuation procedures, which are approved by the Board. Except as described below under “Fair
Valuation of Portfolio Securities,” the Fund’s portfolio securities are typically valued using the following methodologies:
Equity Securities.
Equity securities (including common stocks, preferred stocks, convertible securities, warrants and ETFs) listed on an exchange are valued at the closing price on their primary exchange (which, in the case of foreign securities, may be a foreign
exchange) or, if a closing price is not readily available, at the mean of the closing bid and asked prices. Over-the-counter equity securities not listed on any national exchange but included in the NASDAQ National Market System are valued at the
NASDAQ Official Closing Price or, if the official closing price is not readily available, at the mean between the closing bid and asked prices. Equity securities and ETFs that are not listed on any national exchange and are not included in the
NASDAQ National Market System are valued at the mean between the closing bid and asked prices. Shares of other open-end investment companies (other than ETFs) are valued at the latest net asset value reported by those companies as of the valuation
time.
Fixed Income Securities.
Debt securities with remaining maturities of 60 days or less are valued at their amortized cost value if such value is approximately the same as market value or at market value (based on market-based prices); or, if
market value is not available, fair value. Amortized cost is determined by systematically increasing the carrying value of a security if acquired at a discount, or reducing the carrying value if acquired at a premium, so that the carrying value is
equal to maturity value on the maturity date. The value of debt securities with remaining maturities in excess of 60 days is the market price, which may be obtained from a pricing service or, if a market-based price is not available from a pricing
service, a bid quote from a broker-dealer. Short-term variable rate demand notes are typically valued at their par value. Other debt securities are typically valued using an evaluated bid provided by a pricing service. If pricing information is
unavailable from a pricing service or is not believed to be reflective of market value, then a bid quote from a broker-dealer may be used to value the securities. Newly issued debt securities may be valued at purchase price for up to two days
following purchase or at fair value if the purchase price is not believed to be reflective of market value.
Futures, Options and Other Derivatives.
Futures and options on futures are valued based on the settle price at the close of regular trading on their principal exchange or, in the absence of transactions, they are valued at the mean of the closing bid and asked
prices closest to the last reported sale price. Listed options are valued at the mean of the closing bid and asked prices. If market quotations are not readily available, futures and options are valued using quotations from broker-dealers.
Customized derivative products are valued at a price provided by a pricing service or, if such a price is unavailable, a broker quote or at a price derived from an internal valuation model.
Repurchase and Reverse Repurchase Agreements.
Repurchase and reverse repurchase agreements are generally valued at a price equal to the amount of cash invested in the repurchase agreement, or borrowed in the reverse repurchase agreement, respectively, at the time of
valuation.
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of Additional Information – June 1, 2015
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175
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Bank Loans.
Bank
loans purchased in the primary market are typically valued at acquisition cost for up to two days, and are then valued using a market quotation from a pricing service or quote from a broker-dealer, or if such quotes are unavailable, fair value. For
bank loans trading in the secondary market, prices are obtained from a pricing service and are based upon the average of one or more indicative bids from broker-dealers.
Private Placement Securities.
Private placement securities requiring fair valuation are typically valued utilizing prices from broker-dealers or using internal analysis and any issuer-provided financial information.
Foreign Currencies.
Foreign currencies, securities denominated in foreign currencies and payables/receivables denominated in foreign currencies are valued in U.S. dollars utilizing spot exchange rates at the close of regular trading on the NYSE. Forward foreign
currency contracts are valued in U.S. dollars utilizing the applicable forward currency exchange rate as of the close of regular trading on the NYSE.
For Money Market Funds.
In accordance with Rule 2a-7 under the 1940 Act, the securities in the portfolio of a money market fund are generally valued at amortized cost if such value is approximately the same as market value or
at market value (based on market-based prices); or, if market value is not available, fair value. The amortized cost method of valuation is an approximation of market value determined by systematically increasing the carrying value of a security if
acquired at a discount, or reducing the carrying value if acquired at a premium, so that the carrying value is equal to maturity value on the maturity date. Amortized cost does not take into consideration unrealized capital gains or
losses.
The Board has established
procedures designed to stabilize the Fund’s price per share for purposes of sales and redemptions at $1.00, to the extent that it is reasonably possible to do so. These procedures include review of the Fund’s securities by the Board, at
intervals deemed appropriate by it, to determine whether the Fund’s net asset value per share computed by using available market quotations deviates from a share value of $1.00 as computed using the amortized cost method. Deviations are
reported to the Board periodically and, if any such deviation exceeds 0.5%, the Board must determine what action, if any, needs to be taken. If the Board determines that a deviation exists that may result in a material dilution or other unfair
results for shareholders or investors, the Board must cause the Fund to undertake such remedial action as the Board deems appropriate to eliminate or reduce to the extent reasonably practicable such dilution or unfair results.
Such action may include withholding dividends,
calculating net asset value per share for purposes of sales and redemptions using available market quotations, making redemptions in kind, and/or selling securities before maturity in order to realize capital gains or losses or to shorten average
portfolio maturity.
While the amortized cost
method provides certainty and consistency in portfolio valuation, it may result in valuations of securities that are either somewhat higher or lower than the prices at which the securities could be sold. This means that during times of declining
interest rates the yield on the Fund’s shares may be higher than if valuations of securities were made based on actual market prices and estimates of market prices. Accordingly, if using the amortized cost method were to result in a lower
portfolio value, a prospective investor in the Fund would be able to obtain a somewhat higher yield than the investor would receive if portfolio valuations were based on actual market values. Existing shareholders, on the other hand, would receive a
somewhat lower yield than they would otherwise receive. The opposite would happen during a period of rising interest rates.
Fair Valuation of Portfolio Securities.
In the event that (i) market quotations or valuations from other sources are not readily available, such as when trading is halted or securities are not actively
traded; (ii) market quotations or valuations from other sources are not reflective of market value (i.e., such prices or values are deemed unreliable in the judgment of the Investment Manager); or (iii) a significant event has been recognized in
relation to a security or class of securities that is not reflected in market quotations or valuations from other sources, such as when an event impacting a foreign security occurs after the closing of the security’s foreign exchange but
before the closing of the NYSE, a fair value for each such security is determined in accordance with valuation procedures approved by the Board. The fair value of a security is likely to be different from the quoted or published price and fair value
determinations often require significant judgment.
In general, any relevant factors may be taken into
account in determining fair value, including but not limited to the following, among others: 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, exchanges, or among dealers; changes in interest rates; observations from financial institutions; government 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; the relative size of the position in the portfolio; internal models; and other relevant information.
With respect to securities traded on foreign
markets, relevant factors may include, but not be limited to, the following: the value of foreign securities traded on other foreign markets; ADR and/or GDR trading; closed-end fund trading; foreign currency exchange activity and prices; and the
trading of financial products that are tied to baskets of foreign securities, such as certain exchange-traded index funds. A systematic independent fair value pricing service assists in the fair valuation process for foreign
Statement
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|
securities in order to adjust for possible changes in value that
may occur between the close of the foreign exchange and the time at which a Fund’s NAV is determined. Although the use of this service is intended to decrease opportunities for time zone arbitrage transactions, there can be no assurance that
it will successfully decrease arbitrage opportunities.
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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 U.S. 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, variable annuity contracts or
variable life insurance contracts), 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 Trusts have 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 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 a 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 under the Code, 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 (generally, 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, and (y) that derives less than 90% of its gross income from the qualifying income described in clause (i) above) will be treated as qualifying income. In general, such entities
will be treated as partnerships for federal income tax purposes if they meet the passive income requirement under Code section 7704(c)(2). Certain of a Fund’s investments in master limited partnerships (MLPs) and ETFs, if any, 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.
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) other 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 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.
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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 and certain commodity-linked ETFs.
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. 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 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 or net capital gain retained by a Fund will be subject to
tax at regular corporate rates.
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 mailed within 60 days of the close of the Fund’s
taxable year 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, including in
connection with determining the amount available to support a Capital Gain Dividend (as defined below), its taxable income, and its earnings and profits, a regulated investment company generally may elect to treat part or all of any post-October
capital loss (defined as any net capital loss attributable to the portion of the taxable year after October 31 or, if there is no such loss, the net long-term capital loss or net short-term capital loss attributable to such portion of the taxable
year) or late-year ordinary loss (generally, the sum of its (i) net ordinary loss from the sale, exchange or other taxable disposition of property, attributable to the portion of the taxable year after October 31, if any, and its (ii) other net
ordinary loss attributable to the portion of the taxable year after December 31) as if incurred in the succeeding taxable year.
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 in January of the following calendar year, however, the Fund and its shareholders will be treated as if the Fund paid the distribution on December
31 of the earlier year.
If a Fund were to fail
to meet the income, diversification or distribution tests described above, the Fund could in some cases cure such failure including by paying a fund-level tax or interest, making additional distributions, or disposing of certain assets. If the Fund
were ineligible to or otherwise did not cure such failure for any year, or were otherwise to fail to qualify and be eligible for treatment as a regulated investment company accorded special tax treatment under the Code, it would be taxed in the same
manner as an ordinary corporation without any deduction for its distributions to shareholders. In this case, 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 would 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 98.2% of its capital gain net income (adjusted for net ordinary losses) for the 1-year period ending on October 31 of that year (or November 30 or
December 31 of that year if the Fund is permitted to elect and so elects), 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, ordinary gains and losses from the sale, exchange, or other taxable disposition of property that would be properly taken into account after October 31 of a calendar year (or November 30 or
December 31 if the Fund is permitted to elect and so elects) are generally
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treated as arising on January 1 of the following calendar year. For
purposes of the excise tax, 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, a 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 Carryovers
Capital losses in excess of capital gains (“net capital
losses”) are not permitted to be deducted against a Fund’s net investment income. Instead, potentially subject to certain limitations, a Fund is able to carry forward a net capital loss from any taxable year to offset its capital gains,
if any, realized during a subsequent taxable year.
If a Fund incurs or has incurred net capital losses
in taxable years beginning after December 22, 2010 (“post-2010 losses”), those losses will be carried forward to one or more subsequent taxable years without expiration; any such carryover losses will retain their character as short-term
or long-term. If a Fund incurred net capital losses in a taxable year beginning on or before December 22, 2010 (“pre-2011 losses”), the Fund is permitted to carry such losses forward for eight taxable years; in the year to which they are
carried over, such losses are treated as short-term capital losses that first offset short-term capital gains, and then offset any long-term capital gains. The Fund must use any post-2010 losses, which will not expire, before it uses any pre-2011
losses. This increases the likelihood that pre-2011 losses will expire unused at the conclusion of the eight-year carryover period.
Capital gains that are offset by carried forward
capital losses 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 capital gains so offset. The Funds cannot carry back or
carry forward any net operating losses (defined as deductions and ordinary losses in excess of ordinary income).
The total capital loss carryovers below include
post-October losses, if applicable.
Capital Loss
Carryovers
Fund
|
Total
Capital Loss
Carryovers
|
Amount
Expiring in
|
|
Amount
not Expiring
|
2015
|
2016
|
2017
|
2018
|
2019
|
|
Short-term
|
Long-term
|
For
Funds with fiscal period ending January 31
|
Capital
Allocation Aggressive Portfolio
|
$7,841
|
$0
|
$0
|
$0
|
$7,841
|
$0
|
|
$0
|
$0
|
Capital
Allocation Moderate Aggressive Portfolio
|
$388,505
|
$0
|
$388,505
|
$0
|
$0
|
$0
|
|
$0
|
$0
|
For
Funds with fiscal period ending February 28/29
|
Global
Equity Value Fund
|
$106,018,598
|
$0
|
$0
|
$106,018,598
|
$0
|
$0
|
|
$0
|
$0
|
International
Opportunities Fund
|
$600,050,480
|
$0
|
$0
|
$179,501,886
|
$420,548,594
|
$0
|
|
$0
|
$0
|
International
Value Fund
|
$557,925,902
|
$0
|
$0
|
$0
|
$185,725,377
|
$68,376,538
|
|
$0
|
$303,823,987
|
Large
Cap Enhanced Core Fund
|
$43,738,973
|
$0
|
$0
|
$0
|
$43,738,973
|
$0
|
|
$0
|
$0
|
Large
Cap Index Fund
|
$189,279
|
$0
|
$0
|
$189,279
|
$0
|
$0
|
|
$0
|
$0
|
Marsico
21st Century Fund
|
$1,619,054,350
|
$0
|
$0
|
$92,071,658
|
$1,526,982,692
|
$0
|
|
$0
|
$0
|
Overseas
Value Fund
|
$331,224,128
|
$0
|
$0
|
$321,278,593
|
$2,959,273
|
$0
|
|
$6,867,446
|
$118,816
|
Select
International Equity Fund
|
$833,427,115
|
$0
|
$0
|
$281,271,418
|
$552,155,697
|
$0
|
|
$0
|
$0
|
For
Funds with fiscal period ending March 31
|
Short
Term Bond Fund
|
$35,825,864
|
$12,691,619
|
$4,489,585
|
$18,644,660
|
$0
|
$0
|
|
$0
|
$0
|
For
Funds with fiscal period ending April 30
|
AMT-Free
CA Intermediate Muni Bond Fund
|
$2,378,768
|
$0
|
$0
|
$10,109
|
$0
|
$0
|
|
$2,323,351
|
$45,308
|
AMT-Free
GA Intermediate Muni Bond Fund
|
$203,228
|
$0
|
$0
|
$0
|
$0
|
$0
|
|
$203,228
|
$0
|
AMT-Free
MD Intermediate Muni Bond Fund
|
$2,323,976
|
$0
|
$511
|
$2,323,465
|
$0
|
$0
|
|
$0
|
$0
|
AMT-Free
NC Intermediate Muni Bond Fund
|
$3,081,754
|
$0
|
$0
|
$2,649,648
|
$0
|
$0
|
|
$432,106
|
$0
|
AMT-Free
SC Intermediate Muni Bond Fund
|
$30,659
|
$0
|
$0
|
$0
|
$0
|
$0
|
|
$30,659
|
$0
|
AMT-Free
VA Intermediate Muni Bond Fund
|
$263,997
|
$0
|
$0
|
$0
|
$0
|
$0
|
|
$263,997
|
$0
|
Short
Term Municipal Bond Fund
|
$2,624,181
|
$1,181,270
|
$0
|
$0
|
$602,849
|
$0
|
|
$0
|
$840,062
|
Statement
of Additional Information – June 1, 2015
|
180
|
Fund
|
Total
Capital Loss
Carryovers
|
Amount
Expiring in
|
Amount
not Expiring
|
2015
|
2016
|
2017
|
2018
|
2019
|
Short-term
|
Long-term
|
For
Funds with fiscal period ending May 31
|
High
Yield Bond Fund
|
$187,227,865
|
$0
|
$14,236,782
|
$117,858,836
|
$55,132,247
|
$0
|
$0
|
$0
|
Select
Smaller-Cap Value Fund
|
$35,054,358
|
$0
|
$17,541,329
|
$17,513,029
|
$0
|
$0
|
$0
|
$0
|
Small/Mid
Cap Value Fund
|
$11,249,565
|
$0
|
$0
|
$1,305,027
|
$9,944,538
|
$0
|
$0
|
$0
|
U.S.
Government Mortgage Fund
|
$38,912,096
|
$0
|
$0
|
$0
|
$0
|
$0
|
$38,912,096
|
$0
|
For
Funds with fiscal period ending July 31
|
AMT-Free
Tax-Exempt Bond Fund
|
$4,522,642
|
$0
|
$0
|
$4,522,642
|
$0
|
$0
|
$0
|
$0
|
Floating
Rate Fund
|
$63,991,706
|
$0
|
$0
|
$28,593,376
|
$35,398,330
|
$0
|
$0
|
$0
|
Global
Opportunities Fund
|
$193,144,425
|
$0
|
$0
|
$0
|
$171,936,403
|
$21,208,022
|
$0
|
$0
|
Income
Opportunities Fund
|
$4,878,942
|
$0
|
$0
|
$4,878,942
|
$0
|
$0
|
$0
|
$0
|
Inflation
Protected Securities Fund
|
$5,438,432
|
$0
|
$0
|
$0
|
$0
|
$0
|
$5,438,432
|
$0
|
Large
Core Quantitative Fund
|
$873,117,804
|
$0
|
$0
|
$269,496,887
|
$585,041,377
|
$18,579,540
|
$0
|
$0
|
Large
Value Quantitative Fund
|
$31,323,681
|
$0
|
$0
|
$31,323,681
|
$0
|
$0
|
$0
|
$0
|
MN
Tax-Exempt Fund
|
$847,158
|
$0
|
$0
|
$0
|
$0
|
$0
|
$827,470
|
$19,688
|
For
Funds with fiscal period ending October 31
|
Absolute
Return Currency and Income Fund
|
$1,978,293
|
$0
|
$0
|
$0
|
$0
|
$0
|
$785,233
|
$1,193,060
|
Asia
Pacific ex-Japan Fund
|
$32,457,477
|
$0
|
$0
|
$0
|
$0
|
$0
|
$25,807,474
|
$6,650,003
|
European
Equity Fund
|
$4,368,227
|
$0
|
$0
|
$4,368,227
|
$0
|
$0
|
$0
|
$0
|
Select
Global Equity Fund
|
$61,966,241
|
$0
|
$1,476,532
|
$53,446,454
|
$0
|
$7,043,255
|
$0
|
$0
|
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.
Investment through Master Portfolios
Prior to its conversion to a stand-alone fund after the close of
business on December 13, 2013, International Value Fund sought to continue to qualify as a regulated investment company by investing its assets through the Master Portfolio. The Master Portfolio will be treated as a non-publicly traded partnership
for U.S. federal income tax purposes rather than as a regulated investment company or a corporation under the Code. Under the rules applicable to a non-publicly traded partnership, a proportionate share of any interest, dividends, gains and losses
of the Master Portfolio will be deemed to have been realized by (
i.e.
, “passed through” to) its investors, including the corresponding Fund, regardless of whether any amounts are actually
distributed by the Master Portfolio. Each investor in the Master Portfolio will be treated as having realized such share, as determined in accordance with the governing instruments of the particular Master Portfolio, the Code and U.S. Treasury
Regulations, in determining such investor’s U.S. federal income tax liability. Therefore, to the extent the Master Portfolio were to accrue but not distribute any income or gains, the corresponding Fund would be deemed to have realized its
proportionate share of such income or gains without receipt of any corresponding distribution. However, the Master Portfolio will seek to minimize recognition by its investors (such as a corresponding Fund) of income and gains without a
corresponding distribution. Furthermore, the Master Portfolio intends to manage its assets, income and distributions in such a way that an investor in the Master Portfolio will be able to continue to qualify as a regulated investment company by
investing its assets through the Master Portfolio.
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.
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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, and depending on market conditions and the credit quality of the bond, might not ever receive cash for such discount. OID on tax-exempt bonds
is generally not subject to U.S. federal income tax (but may be subject to the U.S. federal alternative minimum tax or "AMT," as that term is defined below).
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 include 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, and depending on market conditions and the credit quality of the bond, might not ever be received. 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: (1) whether a Fund should recognize market discount on a debt obligation and, if so, (2) the amount of market discount the Fund should recognize, (3) when a Fund may cease to accrue interest, OID or market discount, (4) when and to
what extent deductions may be taken for bad debts or worthless securities and (5) 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, in order to seek to ensure that it distributes sufficient income to preserve its eligibility for treatment as a regulated investment company and does not become subject to U.S. federal income or excise
tax.
Very generally, when a Fund purchases a
bond at a price that exceeds the redemption price at maturity – that is, at a premium – the premium is amortizable over the remaining term of the bond. In the case of a taxable bond, if a Fund makes an election applicable to all such
bonds it purchases, which election is irrevocable without consent of the IRS, the Fund reduces the current interest taxable income from the bond by the amortized premium and reduces its tax basis in the bond by the amount of such offset; upon the
disposition or maturity of such bonds acquired on or after January 4, 2013, a Fund is permitted to deduct any remaining premium allocable to a prior period. In the case of a tax-exempt bond, tax rules require a Fund to reduce its tax basis and the
tax-exempt interest available for exempt-interest dividends to shareholders by the amount of the amortized premium.
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, unless the option is subject to section 1256 of the Code, described below. 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 granted 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 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 entirely ordinary income or loss
as
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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 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 U.S. 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 carryover 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 U.S. 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 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 a 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
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consequences may apply to repurchase and other derivative
transactions. Similarly, to the extent that a 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 for treatment 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 and certain commodity-linked investments, 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 or commodity-linked transactions.
Certain of the Funds employ a multi-manager approach
in which the Investment Manager and one or more investment subadvisers each provide day-to-day portfolio management for a portion (or “sleeve”) of the Fund’s assets. Due to this multi-manager approach, certain of these Funds’
investments may be more likely to be subject to one or more special tax rules (including, but not limited to, wash sale, constructive sale, short sale, and straddle rules) that may affect the timing, character and/or amount of a Fund’s
distributions to shareholders.
Any investment
by a Fund in equity securities of a REIT 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 equity securities of a REIT or another regulated investment company 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 a 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 U.S. 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, a regulated investment company 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, in later periods, if a Fund does not
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dispose of the MLP, the Fund will likely realize taxable income in
excess of cash flow received by the Fund from the MLP), 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.
As noted above, certain of the ETFs and MLPs in
which a Fund may invest qualify as qualified publicly traded partnerships. In such cases, the net income derived from such investments will constitute qualifying income for purposes of the 90% gross income requirement described earlier for
qualification as a regulated investment company. If, however, such a vehicle were to fail to qualify as a qualified publicly traded partnership in a particular year, a Fund’s investment in that vehicle would be treated as an investment in a
publicly traded partnership subject to taxation as a corporation, which would reduce the amount of income available for distribution by the vehicle to the Fund, and could adversely affect the Fund’s qualification for the asset diversification
test, and thus could adversely affect the Fund’s ability to qualify as a regulated investment company for a particular year. In addition, as described above, the diversification requirement for regulated investment company qualification will
limit a Fund’s investments in one or more vehicles that are qualified publicly traded partnerships to 25% of the Fund’s total assets as of the end of each quarter of the Fund’s taxable year.
“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 certain interest, dividends, rents and royalties, or capital gains) or at least 50% of
their assets on average produce or are held for the production of 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 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, 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.
A U.S. person, including a
Fund, who owns (directly or indirectly) 10% or more of the total combined voting power of all classes of stock of a foreign corporation is a “U.S. Shareholder” for purposes of the controlled foreign corporation (“CFC”)
provisions of the Code. Generally, a CFC is a foreign corporation that is owned (directly, indirectly, or constructively) more than 50% (measured by voting power or value) by U.S. Shareholders. The wholly-owned subsidiaries of Commodity Strategy
Fund are expected to be CFCs in which the Fund owning the Subsidiary will be a U.S. Shareholder. As a U.S. Shareholder, such a Fund is required to include in gross income for U.S. federal income tax purposes all of a CFC’s “subpart F
income,” whether or not such income is actually distributed by the CFC. Subpart F income generally includes net gains from the disposition of stocks or securities, receipts with respect to securities loans, net gains from transactions
(including futures, forward, and similar transactions) in commodities, and net payments received with respect to equity swaps and similar derivatives. Subpart F income is treated as ordinary income, regardless of the character of the CFC’s
underlying income. Net losses incurred by a CFC during a tax year do not flow through to the Fund and thus will not be available to offset income or capital gain generated from the Fund’s other investments. In addition, net losses incurred by
a CFC during a tax year generally cannot be carried forward by the CFC to offset gains realized by it in subsequent taxable years. To the extent the Fund recognizes subpart F income in excess of actual cash distributions from a CFC, the Fund may be
required to sell assets (including when it is not advantageous to do so) to generate the cash necessary to distribute as dividends to its shareholders all of its income and gains and therefore to eliminate any tax liability at the Fund level.
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In addition, if any income earned by a Subsidiary
were treated as “effectively connected” with the conduct of a trade or business in the United States (“effectively connected income” or “ECI”), such income would be subject to both a so-called “branch
profits tax” of 30% and a federal income tax at the rates applicable to U.S. corporations, at the entity level. If, for U.S. federal income tax purposes, a Subsidiary were to earn ECI in connection with its direct investment activities, a
portion or all of the Subsidiary’s income would be subject to these U.S. taxes. The Fund expects that, in general, the activities of the Subsidiary will be conducted in such a manner that it will not be treated as engaged in a U.S. trade or
business, but there can be no assurance that the entity will not recognize any effectively connected income. The imposition of U.S. taxes on ECI could significantly reduce shareholders’ returns on their investments in the Fund. The Fund does
not expect that income from any Subsidiary will be eligible to be treated as qualified dividend income. In addition, the Fund does not expect that distributions from any Subsidiary will be eligible for the dividends-received deduction.
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 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. 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 and qualified dividend income, each 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 reported 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 report Capital Gain Dividends, if any, in written statements furnished to its shareholders.
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 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 incurs a sales charge in acquiring
Fund shares and sells or exchanges those 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
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disposition, but generally will be treated as having been incurred
in the new purchase. This sales charge basis deferral rule shall apply only when a shareholder makes such new acquisition of Fund shares or shares of a different regulated investment company during the period beginning on the date the original Fund
shares are disposed of and ending on January 31 of the calendar year following the calendar year the original Fund shares are disposed of. 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 (including through the reinvestment of dividends) 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 Fund shares are sold at a loss after being held for six months or less, the loss will generally be
disallowed to the extent of any exempt-interest dividends (defined below) received on those shares. However, this loss disallowance does not apply with respect to redemptions of Fund shares with a holding period beginning after December 22, 2010 if
such Fund declares substantially all of its net tax-exempt income as exempt-interest dividends on a daily basis, and pays such dividends on at least a monthly basis (as would typically be the case for tax-exempt money market funds).
Cost Basis Reporting
Each Fund generally is required to report to shareholders and the
IRS gross proceeds on the sale, redemption or exchange of Fund shares. In addition, for shares purchased, including shares purchased through dividend reinvestment, on or after January 1, 2012 the Funds (or the shareholder’s Selling Agent, if
Fund shares are held through a Selling Agent) generally are required to provide the shareholders and the IRS, upon the sale, redemption or exchange of Fund shares, with cost basis information about those shares as well as information about whether
any gain or loss is short- or long-term and whether any loss is disallowed under the “wash sale” rules. This reporting is not required for Fund shares held in a retirement or other tax-advantaged account. With respect to Fund shares in
accounts held directly with a Fund, each Fund will calculate and report cost basis using the Fund’s default method of average cost, unless the shareholder instructs the Fund to use a different calculation method. A Fund will not report cost
basis for shares whose cost basis is uncertain or unknown to the Fund. Please visit the Columbia Funds’ website at www.columbiathreadneedle.com/us or contact the Funds at 800.345.6611 for more information regarding average cost basis reporting
and other available methods for cost basis reporting and how to select or change a particular method or to choose specific shares to sell, redeem or exchange. If a shareholder retains Fund shares through a Selling Agent, he or she should contact
their Selling Agent to learn about the Fund’s cost basis reporting default method and the reporting elections available to his or her account. The Funds do not recommend any particular method of determining cost basis. The shareholder should
consult a tax advisor to determine which available cost basis method is best. When completing U.S. federal and state income tax returns, shareholders should carefully review the cost basis and other information provided and make any additional
basis, holding period or other adjustments that may be required.
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. In some cases, a Fund may also be eligible to pass through to its shareholders the foreign taxes paid by underlying funds (as defined below) in which it invests that themselves elected to pass through such taxes to their shareholders,
see
Special Tax Considerations Pertaining to Funds-of-Funds
below.
Certain Funds may qualify for and make the election; however, even if a Fund qualifies for the election for any
year, it may determine not to make the election for such year. If a Fund does not so qualify or qualifies but does not so elect, then shareholders will not be entitled to claim a credit or deduction with respect to foreign taxes paid by or withheld
from payments to the Fund. A Fund will notify its shareholders in written statements if it has elected for the foreign taxes paid by it to “pass through” for that year.
In general, if a Fund makes the election, the Fund
itself will not be permitted to claim a credit or deduction for foreign taxes paid in that year, and the Fund’s dividends-paid deduction will be increased by the amount of foreign taxes paid that year. Fund shareholders generally shall include
their proportionate share of the foreign taxes paid by the Fund in their gross income and treat that amount as paid by them for the purpose of the foreign tax credit or deduction, provided that any applicable holding period and other requirements
have been met. If a shareholder claims a credit for foreign taxes paid, in general, the credit will be subject to certain limits. A deduction for foreign taxes paid may be claimed only by shareholders that itemize their deductions.
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Shareholders that are not subject to U.S. federal income tax, and
those who invest in the Fund through tax-exempt accounts (including those who invest through IRAs or other tax-advantaged retirement plans), generally will receive no benefit from any tax credit or deduction passed through by the Fund.
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. Certain of the Funds intend to so qualify and are 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 (each such qualifying Fund, a “Tax-Exempt Fund”). In some cases, a Fund may also be eligible to pass through to its
shareholders the tax-exempt character of any exempt-interest dividends it receives from underlying funds (as defined below) in which it invests, see
Special Tax Considerations Pertaining to
Funds-of-Funds
below.
Distributions by
a Tax-Exempt Fund, other than those attributable to interest on the Tax-Exempt Fund’s tax-exempt obligations and properly reported as exempt-interest dividends, will be taxable to shareholders as ordinary income or long-term capital gain or,
in some cases, could constitute a return of capital to shareholders. See
Taxation of Distributions
above. Each Tax-Exempt Fund will notify its shareholders in written statements of the portion
of the distributions for the taxable year that constitutes exempt-interest dividends. The percentage of a shareholder’s income reported as tax-exempt for any particular distribution may be substantially different from the percentage of the
Tax-Exempt Fund’s income that was tax-exempt during the period covered by the distribution. The deductibility of interest paid or accrued on indebtedness incurred by a shareholder to purchase or carry shares of a 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 a Tax-Exempt Fund’s exempt-interest dividends received by the shareholder to all of the Tax-Exempt 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 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 ; however, each
state-specific Tax-Exempt Fund generally invests at least 80% of its net assets in municipal bonds that pay interest that is exempt not only from U.S. federal income tax, but also from the applicable state’s personal income tax (but not
necessarily local taxes or taxes of other states).
You should consult your tax advisor to discuss the
tax consequences of your investment in a Tax-Exempt Fund. 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 Tax-Exempt Fund invests in certain private activity bonds, its shareholders will be required to report that portion of the Tax-Exempt 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 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 a Tax-Exempt Fund. In addition, exempt-interest
dividends paid by a Tax-Exempt Fund to a corporate shareholder are, with very limited exceptions, 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. 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 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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Special Tax Considerations Pertaining to
Funds-of-Funds
Certain Funds (each such fund, a
Fund-of-Funds) invest their assets primarily in shares of other mutual funds, ETFs or other companies that are regulated investment companies (collectively, underlying funds). Consequently, their income and gains will normally consist primarily of
distributions from underlying funds and gains and losses on the disposition of shares of underlying funds. To the extent that an underlying fund realizes net losses on its investments for a given taxable year, a Fund-of-Funds will not be able to
benefit from those losses until (i) the underlying fund realizes gains that it can reduce by those losses, or (ii) the Fund-of-Funds recognizes its share of those losses (so as to offset distributions of net income or capital gains from other
underlying funds) when it disposes of shares of the underlying fund. Moreover, even when a Fund-of-Funds does make such a disposition, a portion of its loss may be recognized as a long-term capital loss, which will not be treated as favorably for
U.S. federal income tax purposes as a short-term capital loss or an ordinary deduction. In particular, a Fund-of-Funds will not be able to offset any capital losses from its dispositions of underlying fund shares against its ordinary income
(including distributions of any net short-term capital gains realized by an underlying fund).
In addition, in certain circumstances, the
“wash sale” rules may apply to sales of underlying fund shares by a Fund-of-Funds. As discussed above, a wash sale occurs if shares of an underlying fund are sold by a Fund-of-Funds at a loss and the Fund-of-Funds acquires additional
shares of that same underlying fund within the period beginning 30 days before and ending 30 days after the date of the sale. The wash-sale rules could defer losses of a Fund-of-Funds on sales of underlying fund shares (to the extent such sales are
wash sales) for extended (and, in certain cases, potentially indefinite) periods of time.
As a result of the foregoing rules, and certain
other special rules, it is possible that the amounts of net investment income and net capital gain that a Fund-of-Funds will be required to distribute to shareholders will be greater than such amounts would have been had the Fund-of-Funds invested
directly in the securities held by the underlying funds, rather than investing in shares of the underlying funds. For similar reasons, the character of distributions from a Fund-of-Funds (
e.g.,
long-term
capital gain, exempt interest, eligibility for dividends-received deduction) will not necessarily be the same as it would have been had the Fund-of-Funds invested directly in the securities held by the underlying funds.
Depending on the percentage ownership of a
Fund-of-Funds in an underlying fund before and after a redemption of underlying fund shares, the redemption of shares by the Fund-of-Funds of such underlying fund may cause the Fund-of-Funds to be treated as receiving a dividend in the full amount
of the redemption proceeds instead of receiving a capital gain or loss on the redemption of shares of the underlying fund. This could be the case where a Fund-of-Funds holds a significant interest in an underlying fund that is not “publicly
offered” (as defined in the Code) and redeems only a small portion of such interest. Dividend treatment of a redemption by a Fund-of-Funds would affect the amount and character of income required to be distributed by both the Fund-of-Funds and
the underlying fund for the year in which the redemption occurred. It is possible that such a dividend would qualify as “qualified dividend income”; otherwise, it would be taxable as ordinary income and could cause shareholders of a
Fund-of-Funds to recognize higher amounts of ordinary income than if the shareholders had held shares of the underlying fund directly.
If a Fund-of-Funds receives dividends from an
underlying fund, and the underlying fund reports such dividends as “qualified dividend income,” as discussed below, then the Fund-of-Funds is permitted, in turn, to report a portion of its distributions as “qualified dividend
income,” provided the Fund-of-Funds meets the holding period and other requirements with respect to shares of the underlying fund. If a Fund-of-Funds receives dividends from an underlying fund, and the underlying fund reports such dividends as
eligible for the dividends-received deduction, then the Fund-of-Funds is permitted, in turn, to report a portion of its distributions as eligible for the dividends-received deduction, provided the Fund-of-Funds meets the holding period and other
requirements with respect to shares of the underlying fund.
If a Fund-of-Funds is a “qualified
fund-of-funds” (a regulated investment company that invests at least 50% of its total assets in other regulated investment companies at the close of each quarter of its taxable year), it will be able to distribute exempt-interest dividends and
thereby pass through to its shareholders the tax-exempt character of any interest received on tax-exempt obligations in which it directly invests or any exempt-interest dividends it receives from underlying funds in which it invests. For further
considerations pertaining to exempt-interest dividends, see
Special Tax Considerations Pertaining to Tax-Exempt Funds
above.
Further, if a Fund-of-Funds is a qualified
fund-of-funds, it will be able to elect to pass through to its shareholders any foreign income and other similar taxes paid by the Fund-of-Funds or paid by an underlying fund in which the Fund-of-Funds invests that itself elected to pass such taxes
through to shareholders, so that shareholders of the Fund-of-Funds will be eligible to claim a tax credit or deduction for such taxes, subject to applicable limitations. However, even if a Fund-of-Funds qualifies to make the election for any year,
it may determine not to do so. For further considerations pertaining to foreign taxes paid by a Fund, see
Foreign Taxes
above.
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U.S. Federal Income Tax Rates
The maximum stated U.S. federal income tax rate applicable to
individuals generally is 39.6% for ordinary income and 20% for net long-term capital gain (in each case, not including the 3.8% net investment income tax described below) .
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 gross income is attributable to qualified dividend income, then only the portion of the Fund’s distributions that is attributable to qualified dividend income and reported as such in a timely manner will be so treated in the hands
of individual shareholders who meet the aforementioned holding period requirements. Qualified dividend income is taxable to individual shareholders at tax rates applicable to long-term capital gain. 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 currently 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.
The Code generally imposes a 3.8% net investment
income tax on certain high-income individuals, trusts and estates. For individuals, the 3.8% tax applies to the lesser of (1) the amount (if any) by which the taxpayer’s modified adjusted gross income exceeds certain threshold amounts or (2)
the taxpayer’s “net investment income.” For this purpose, “net investment income” generally includes, among other things, (i) distributions paid by a Fund of net investment income and capital gains (other than
exempt-interest dividends) as described above, and (ii) any net gain recognized on the sale, redemption, exchange or other taxable disposition of Fund shares. Certain details of the implementation of the tax remain subject to future guidance.
Shareholders are advised to consult their tax advisors regarding the possible implications of this additional tax on their investment in a Fund.
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 reported as exempt-interest dividends (defined above). 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.
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. For information regarding eligibility for the dividends-received deduction of dividend income derived by an underlying fund in which a Fund-of-Funds invests, see
Special Tax Considerations Pertaining to Funds-of-Funds
above. 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 above) 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, 2015, distributions made to foreign shareholders and properly reported 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 dividends 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 for a distribution to qualify as an interest-related dividend, the Fund is required to report it as such in a written
notice furnished to its shareholders. 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 (if otherwise applicable) 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 and distributions properly reported as Capital Gain Dividends 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 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. With respect to taxable years of a Fund beginning before January 1, 2015, a distribution to a foreign shareholder attributable to the Fund’s net short-term
capital gain in excess of its net long-term capital loss and reported as such by the Fund in a written statement, furnished to its shareholders (“short-term capital gain dividends”) is generally not subject to U.S. federal income or
withholding tax unless clause (i), (ii) or (iii) above applies to such distributions.
The exemption from withholding for interest-related
and short-term capital gain dividends has expired for distributions with respect to taxable years of a Fund beginning on or after January 1, 2015. It is currently unclear whether Congress will extend this exemption for distributions with respect to
taxable years of a Fund beginning on or after January 1, 2015, or what the terms of such an extension would be, including whether such extension would have retroactive effect. Even if permitted to do so, each Fund provides no assurance that it would
report any distributions as interest-related dividends or short-term capital gain dividends.
In the case of shares held through an intermediary,
even if a Fund reports a payment as exempt from U.S. federal withholding tax (e.g., as a short-term capital gain or interest-related dividend), no assurance can be made that the intermediary will respect such classification, and an intermediary may
withhold in spite of such reporting by a Fund. Foreign shareholders should contact their intermediaries regarding the application of these rules to their accounts. Special rules apply to distributions to foreign
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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, prior to January 1, 2015, 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, under a special “look-through” rule, amounts that are attributable directly or indirectly to distributions received by the Fund from a lower-tier REIT that the Fund is required to treat as USRPI
gain in its hands 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, any such amounts treated as USRPI gains 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 whether the Fund
otherwise reported such distribution as a short-term capital gain dividend 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, 2015, the special
“look-through” rule discussed above for distributions by the Fund to foreign shareholders also applied to distributions attributable to (i) gains realized by on the disposition of USRPIs by the Fund and (ii) distributions received by the
Fund from a lower-tier RIC that the Fund was required to treat as USRPI gain in its hands. It is currently unclear whether Congress will extend these former “look-through” provisions to distributions made on or after January 1, 2015, and
what the terms of any such extension would be, including whether any such extension would have retroactive effect.
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, 2015, 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. The exemption from withholding for redemptions has expired and such withholding is required without regard to whether the Fund or
any regulated investment company in which it invests is domestically controlled. It is currently unclear whether Congress will extend this exemption for redemptions made on or after January 1, 2015, and what the terms of any such extension would be,
including whether any such extension would have retroactive effect.
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, W-8BEN-E or substitute form). Foreign shareholders should consult their tax advisors 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
Each 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.
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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 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 U.S. 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 IRS 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 with their tax advisors
to determine the applicability of these regulations in light of their individual circumstances.
Shareholder Reporting Obligations With Respect to
Foreign Bank and Financial Accounts
Shareholders that are
U.S. persons and own, directly or indirectly, more than 50% of a Fund could be required to report annually their “financial interest” in the Fund’s “foreign financial accounts,” if any, on FinCEN Form 114, Report of
Foreign Bank and Financial Accounts (FBAR). Shareholders should consult a tax advisor, and persons investing in the Fund through an intermediary should contact their intermediary, regarding the applicability to them of this reporting
requirement.
Other Reporting and Withholding
Requirements
Sections 1471-1474 of the Code, and the U.S.
Treasury Regulations and IRS guidance issued thereunder (collectively, “FATCA”), generally require a Fund to obtain information sufficient to identify the status of each of its shareholders under FATCA or under an applicable
intergovernmental agreement (“IGA”) between the United States and a foreign government, as described more fully below. If a shareholder fails to provide the requested information or otherwise fails to comply with FATCA or an IGA, the
Fund may be required to withhold under FATCA at a rate of 30% with respect to that shareholder on ordinary dividends it pays after June 30, 2014 (or, in certain cases, after later dates), and 30% of certain Capital Gain Dividends and gross proceeds
of the sale, redemption or exchange of Fund shares it pays after December 31, 2016. If a payment by a Fund is subject to FATCA withholding, the Fund is required to withhold even if such payment would otherwise be exempt from withholding under the
rules applicable to foreign shareholders described above (
e.g.,
Capital Gain Dividends and short-term capital gain and interest-related dividends).
Payments to a shareholder will generally not be
subject to FATCA withholding, provided the shareholder provides a Fund with such certifications, waivers or other documentation or information as the Fund requires, including, to the extent required, with regard to such shareholder’s direct
and indirect owners, to establish the shareholder’s FATCA status and otherwise to comply with these rules. In order to avoid withholding, a shareholder that is a “foreign financial institution” (“FFI”) must either (i)
become a “participating FFI” by entering into a valid U.S. tax compliance agreement with the IRS, (ii) qualify for an exception from the requirement to enter into such an agreement, for example by becoming a “deemed-compliant
FFI,” or (iii) be covered by an applicable IGA between the United States and a non-U.S. government to implement FATCA and improve international tax compliance. In any of these cases, the investing FFI generally will be required to provide its
Fund with appropriate identifiers, certifications or documentation concerning its status.
A Fund may disclose the information that it receives
from (or concerning) its shareholders to the IRS, non-U.S. taxing authorities or other parties as necessary to comply with applicable IGAs or other applicable law or regulation.
Each prospective investor is urged to consult its
tax adviser regarding the applicability of FATCA and any other reporting requirements with respect to the prospective investor’s own situation, including investments through an intermediary.
Statement
of Additional Information – June 1, 2015
|
193
|
Special Tax Considerations Pertaining to State
Tax-Exempt Funds
The following summaries of certain tax
considerations relating to the state tax-exempt funds set forth below are only intended as general overviews of these tax considerations. They are not intended as detailed explanations of any state’s income tax treatment of any state
tax-exempt fund or its shareholders. You should consult your own tax advisor regarding the consequences of your investment in a state tax-exempt fund.
AMT-Free California Intermediate Muni 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. Territory obligations. The AMT-Free
California Intermediate Muni 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 California state individual income or federal income tax law.
Interest on indebtedness incurred or continued by a
shareholder in a taxable year to purchase or carry shares of the AMT-Free California Intermediate Muni 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.
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.
AMT-Free Georgia Intermediate Muni 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 obligations issued by the U.S. Government or an authority, commission, instrumentality, possession, or territory thereof 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. 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.
AMT-Free Maryland Intermediate Muni Bond Fund.
The portion of the AMT-Free Maryland Intermediate Muni 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 U.S. Government or an authority, commission, instrumentality, possession, or territory thereof and distributions attributable to gains from the disposition thereof 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 AMT-Free Maryland Intermediate Muni Bond
Fund’s distributions that constitutes income 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 are not tax-exempt obligations of the state of Maryland, a political subdivision or authority of the state of Maryland, or of any other entity authorized under Maryland law to issue
obligations the interest on which is excluded from gross income under section 103 of the Internal Revenue Code. Accordingly, up to 50% of any distributions from the AMT-Free Maryland Intermediate Muni 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 AMT-Free Maryland Intermediate Muni Bond Fund will not be subject to the Maryland personal property tax.
AMT-Free North Carolina Intermediate Muni Bond Fund.
The portion of the AMT-Free North Carolina Intermediate Muni 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
exempt from
Statement
of Additional Information – June 1, 2015
|
194
|
North Carolina individual and corporate income taxes. Although
capital gain distributions generally are subject to tax in North Carolina, individual shareholders of the AMT-Free North Carolina Intermediate Muni 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.
AMT-Free South Carolina Intermediate Muni Bond Fund.
The portion of the AMT-Free South Carolina Intermediate Muni 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 individual and corporate 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.
AMT-Free Virginia Intermediate Muni Bond Fund.
The portion of the AMT-Free Virginia Intermediate Muni Bond Fund’s distributions attributable to interest on (i) obligations of Virginia or any political subdivisions or instrumentality of
Virginia, and (ii) obligations of the United States and any authority, commission or instrumentality of the United States, that are, in each case, backed by the full faith and credit of the borrowing government, will be exempt from Virginia
individual and corporate income tax. Furthermore, any of the AMT-Free Virginia Intermediate Muni 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.
Minnesota Tax-Exempt
Fund.
The portion of the Minnesota Tax-Exempt Fund’s exempt-interest distributions attributable to interest received by the Fund on tax-exempt obligations of the State of Minnesota, its
political or governmental subdivisions, municipalities, governmental agencies or instrumentalities will be exempt from Minnesota personal income tax for shareholders of the Fund who are individuals, estates or trusts so long as the portion of the
exempt-interest distributions from Minnesota that are paid equals or exceeds 95% of all exempt-interest dividends paid by the Fund. In addition, distributions with respect to interest derived from obligations of any authority, commission, or
instrumentality of the United States will not be subject to the Minnesota personal income tax for shareholders who are individuals, estates or trusts. Distributions of income not attributable to distributions described in the preceding sentence or
capital gains may be subject to Minnesota personal income taxes. In addition, distributions to a corporation will generally be subject to the Minnesota income tax.
Distributions
Net investment income dividends (other than qualified dividend
income) received and distributions from the excess of net short-term capital gains over net long-term capital losses should be treated as ordinary income for federal income tax purposes. Corporate shareholders are generally entitled to a deduction
equal to 70% of that portion of a fund’s dividend that is attributable to dividends the fund received from domestic (U.S.) securities. If there is debt-financed portfolio stock, that is, bank financing is used to purchase long securities, the
70% dividends received deduction would be reduced by the average amount of portfolio indebtedness divided by the average adjusted basis in the stock. This does not impact the qualified dividend income available to individual shareholders. For the
most recent fiscal period, net investment income dividends qualified for the corporate deduction are shown in the following table.
Only certain dividends will be QDI eligible for the
20% maximum tax rate. QDI is dividends earned from domestic corporations and qualified foreign corporations. Qualified foreign corporations are corporations incorporated in a U.S. possession, corporations whose stock is readily tradable on an
established U.S. securities market (ADRs), and certain other corporations eligible for relief under an income tax treaty with the U.S. that includes an exchange of information agreement. PFICs are excluded from this treatment. Holding periods for
shares must also be met to be eligible for QDI treatment (more than 60 days for common stock and more than 90 days for certain preferred’s dividends).
Dividends declared in October, November or December,
payable to shareholders of record on a specified date in such a month and paid in the following January will be treated as having been paid by a Fund and received by each shareholder in December. Under this rule, therefore, shareholders may be taxed
in one year on dividends or distributions actually received in January of the following year.
The QDI for individuals for the most recent fiscal
period is shown in the table below. The table is organized by fiscal year end.
Statement
of Additional Information – June 1, 2015
|
195
|
Corporate Deduction and Qualified Dividend Income
Fund
|
Percent
of dividends
qualifying for
corporate deduction
|
Qualified
dividend
income for individuals
|
For
Funds with fiscal period ending January 31
|
Capital
Allocation Aggressive Portfolio
|
31.75%
|
51.13%
|
Capital
Allocation Conservative Portfolio
|
10.45
|
17.58
|
Capital
Allocation Moderate Aggressive Portfolio
|
28.71
|
47.08
|
Capital
Allocation Moderate Conservative Portfolio
|
15.46
|
26.18
|
Capital
Allocation Moderate Portfolio
|
21.62
|
35.84
|
Income
Builder Fund
|
20.59
|
32.13
|
LifeGoal
Growth Portfolio
|
56.75
|
77.85
|
For
Funds with fiscal period ending February 28/29
|
Convertible
Securities Fund
|
22.16
|
22.71
|
Global
Equity Value Fund
|
100.00
|
100.00
|
International
Opportunities Fund
|
0.90
|
31.57
|
International
Value Fund
|
0.15
|
100.00
|
Large
Cap Enhanced Core Fund
|
100.00
|
100.00
|
Large
Cap Index Fund
|
100.00
|
100.00
|
Marsico
21st Century Fund
|
0.00
|
0.00
|
Marsico
Focused Equities Fund
|
20.71
|
23.96
|
Marsico
Global Fund
|
16.37
|
36.71
|
Marsico
Growth Fund
|
18.29
|
21.24
|
Mid
Cap Index Fund
|
70.55
|
70.42
|
Mid
Cap Value Fund
|
35.56
|
38.09
|
Overseas
Value Fund
|
1.62
|
100.00
|
Select
International Equity Fund
|
0.00
|
0.00
|
Select
Large Cap Equity Fund
|
16.24
|
17.82
|
Small
Cap Index Fund
|
57.95
|
57.93
|
Small
Cap Value Fund II
|
100.00
|
100.00
|
For
Funds with fiscal period ending March 31
|
Short
Term Bond Fund
|
0.00
|
0.00
|
For
Funds with fiscal period ending April 30
|
AMT-Free
CA Intermediate Muni Bond Fund
|
0.00
|
0.00
|
AMT-Free
GA Intermediate Muni Bond Fund
|
0.00
|
0.00
|
AMT-Free
MD Intermediate Muni Bond Fund
|
0.00
|
0.00
|
AMT-Free
NC Intermediate Muni Bond Fund
|
0.00
|
0.00
|
AMT-Free
SC Intermediate Muni Bond Fund
|
0.00
|
0.00
|
AMT-Free
VA Intermediate Muni Bond Fund
|
0.00
|
0.00
|
Global
Infrastructure Fund
|
62.15
|
75.38
|
Short
Term Municipal Bond Fund
|
0.00
|
0.00
|
For
Funds with fiscal period ending May 31
|
AP
- Multi-Manager Value Fund
|
52.59
|
61.63
|
Commodity
Strategy Fund
|
0.00
|
0.00
|
Diversified
Equity Income Fund
|
100.00
|
100.00
|
Dividend
Opportunity Fund
|
62.44
|
81.84
|
Statement
of Additional Information – June 1, 2015
|
196
|
Fund
|
Percent
of dividends
qualifying for
corporate deduction
|
Qualified
dividend
income for individuals
|
Flexible
Capital Income Fund
|
37.73%
|
40.21%
|
High
Yield Bond Fund
|
0.00
|
0.00
|
Mortgage
Opportunities Fund
|
0.00
(a)
|
0.00
(a)
|
Multi-Advisor
Small Cap Value Fund
|
34.39
|
35.73
|
Select
Large-Cap Value Fund
|
100.00
|
100.00
|
Select
Smaller-Cap Value Fund
|
0.00
|
0.00
|
Seligman
Communications and Information Fund
|
0.00
|
0.00
|
Small/Mid
Cap Value Fund
|
100.00
|
100.00
|
U.S.
Government Mortgage Fund
|
0.00
|
0.00
|
For
Funds with fiscal period ending July 31
|
AMT-Free
Tax-Exempt Bond Fund
|
0.00
|
0.00
|
Floating
Rate Fund
|
0.00
|
0.92
|
Global
Opportunities Fund
|
48.21
|
55.74
|
Income
Opportunities Fund
|
0.00
|
0.00
|
Inflation
Protected Securities Fund
|
0.00
|
0.00
|
Large
Core Quantitative Fund
|
100.00
|
100.00
|
Large
Growth Quantitative Fund
|
25.77
|
30.85
|
Large
Value Quantitative Fund
|
50.88
|
51.13
|
Limited
Duration Credit Fund
|
0.00
|
0.00
|
MN
Tax-Exempt Fund
|
0.00
|
0.00
|
Money
Market Fund
|
0.00
|
0.00
|
For
Funds with fiscal period ending August 31
|
Marsico
Flexible Capital Fund
|
13.50
|
18.01
|
For
Funds with fiscal period ending October 31
|
Absolute
Return Currency and Income Fund
|
0.00
|
0.00
|
Asia
Pacific ex-Japan Fund
|
0.16
|
97.02
|
Emerging
Markets Bond Fund
|
0.00
|
0.00
|
European
Equity Fund
|
0.00
|
100.00
|
Global
Bond Fund
|
0.00
|
0.00
|
Select
Global Equity Fund
|
100.00
|
100.00
|
Seligman
Global Technology Fund
|
0.00
|
0.00
|
(a)
|
For the period from April 30,
2014 (commencement of operations) to May 31, 2014.
|
The Subsidiary
Commodity Strategy Fund (for purposes of this section, the
“Fund”) intends to invest a portion of its assets in one or more of its wholly-owned subsidiaries (previously defined collectively as the “Subsidiary”), which will be classified as a corporation for U.S. federal tax purposes.
Foreign corporations, such as the Subsidiary, will generally not be subject to U.S. federal income tax unless it is deemed to be engaged in a United States trade or business. The Subsidiary intends to conduct its activities in a manner that is
expected to meet the requirements of a safe harbor under Section 864(b)(2) of the Code under which the Subsidiary may engage in trading in stocks or securities or certain commodities for its own account without being deemed to be engaged in a United
States trade or business. However, if certain of the Subsidiary’s activities were deemed not to be of the type described in the safe harbor, the activities of the Subsidiary may constitute a United States trade or business.
Even if the Subsidiary is not engaged in a United
States trade or business, it may be subject to a U.S. withholding tax at a rate of 30% on all or a portion of its United States source gross income that is not effectively connected with a United States trade or business.
Statement
of Additional Information – June 1, 2015
|
197
|
The Subsidiary will be treated as a CFC. The Fund
will be treated as a “U.S. Shareholder” of the Subsidiary. As a result, the Fund will be required to include in its gross income all of the Subsidiary’s “subpart F income”. It is expected that all of the
Subsidiary’s income will be “subpart F income”. “Subpart F income” is generally treated as ordinary income. If a net loss is realized by the Subsidiary, such loss is not generally available to offset the income of the
Fund. The recognition by the Fund of the Subsidiary’s “subpart F income” will increase the Fund’s tax basis in the Subsidiary. Distributions by the Subsidiary to the Fund will not be taxable to the extent of its previously
undistributed “subpart F income”, and will reduce the Fund’s tax basis in the subsidiary.
Statement
of Additional Information – June 1, 2015
|
198
|
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Management Ownership
As of April 30, 2015, the Trustees
and Officers of the Trusts, as a group, beneficially owned less than 1% of each class of shares of each Fund, except as set forth in the table below:
Fund
|
Class
|
Percentage
of Class
Beneficially Owned
|
Commodity
Strategy Fund
|
Class
A
|
27.54%
|
Commodity
Strategy Fund
|
Class
Z
|
30.09%
|
Principal
Shareholders and Control Persons
The tables below identify
the names, address and ownership percentage of each person who owns of record or is known by the Trusts to own beneficially 5% or more of any class of a Fund’s outstanding shares (Principal Holders) or 25% or more of a Fund’s outstanding
shares (Control Persons). A shareholder who beneficially owns more than 25% of a Fund’s shares is presumed to “control” the Fund, as that term is defined in the 1940 Act, and may have a significant impact on matters submitted to a
shareholder vote. A shareholder who beneficially owns more than 50% of a Fund’s outstanding shares may be able to approve proposals, or prevent approval of proposals, without regard to votes by other Fund shareholders. Additional information
about Control Persons, if any, is provided following the tables. The information provided for each Fund is as of a date no more than 30 days prior to the date of filing a post-effective amendment to the applicable Trust’s registration
statement with respect to such Fund.
Funds with
Fiscal Period Ending January 31:
Except as otherwise indicated, the
information below is as of April 30, 2015:
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
Capital
Allocation Aggressive Portfolio
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
A
|
38.47%
|
38.98%
|
B
|
32.10%
|
C
|
47.31%
|
|
ASCENSUS
TRUST COMPANY FBO
MAGUIRE/MAGUIRE INC 401 K PS PLA
PO BOX 10758
FARGO ND 58106-0758
|
R
|
13.36%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Y
|
100.00%
|
N/A
(a)
|
|
GREAT
WEST TRUST CO
TRST FBO EMPLOYEE BENEFITS CLIENTS
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
K
|
95.18%
|
N/A
|
R5
|
90.96%
|
|
HANNAH
F HOWE
204 E 83RD ST APT 4
NEW YORK NY 10028-2899
|
Z
|
5.50%
|
N/A
|
|
HELEN
E HOWE
84 SHOREFRONT PARK
NORWALK CT 06854-3753
|
Z
|
5.60%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Z
|
5.34%
|
N/A
|
|
MG
TRUST COMPANY CUST. FBO
LIFETIME CARE
717 17TH ST STE 1300
DENVER CO 80202-3304
|
R
|
21.77%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
199
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Z
|
12.72%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
R4
|
97.14%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Z
|
11.24%
|
N/A
|
|
RAYMOND
JAMES
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
C
|
5.80%
|
N/A
|
Z
|
27.90%
|
|
TD
AMERITRADE TRUST COMPANY
PO BOX 17748
DENVER CO 80217-0748
|
R
|
5.48%
|
N/A
|
|
TD
AMERITRADE TRUST COMPANY
PO BOX 17748
DENVER CO 80217-0748
|
R
|
5.22%
|
N/A
|
|
TD
AMERITRADE TRUST COMPANY
PO BOX 17748
DENVER CO 80217-0748
|
R
|
15.98%
|
N/A
|
|
TD
AMERITRADE TRUST COMPANY
PO BOX 17748
DENVER CO 80217-0748
|
R
|
15.81%
|
N/A
|
|
TD
AMERITRADE TRUST COMPANY
PO BOX 17748
DENVER CO 80217-0748
|
R
|
18.58%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Z
|
8.94%
|
N/A
|
Capital
Allocation Conservative Portfolio
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
A
|
46.29%
|
47.44%
|
B
|
63.26%
|
C
|
54.37%
|
|
ASCENSUS
TRUST COMPANY FBO
MAGUIRE/MAGUIRE INC 401 K PS PLA
PO BOX 10758
FARGO ND 58106-0758
|
R
|
35.80%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Y
|
100.00%
|
N/A
(a)
|
|
DEBORAH
ALEYNE LAPEYRE BARBARA
TOMMIE USDIN FBO
MULBERRY TECHNOLOGIES INC 401 K
17 W JEFFERSON ST STE 207
ROCKVILLE MD 20850-4227
|
K
|
95.18%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
C
|
5.41%
|
N/A
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Z
|
11.34%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
200
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
MATRIX
TRUST COMPANY CUST. FBO
BANK OF AMERICA, N.A.
717 17TH ST STE 1300
DENVER CO 80202-3304
|
Z
|
18.59%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Z
|
25.32%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
R4
|
98.70%
|
N/A
|
R5
|
96.10%
|
|
STATE
STREET CORPORATION
FBO ADP ACCESS
1 LINCOLN ST
BOSTON MA 02111-2901
|
Z
|
12.25%
|
N/A
|
|
TD
AMERITRADE TRUST COMPANY
PO BOX 17748
DENVER CO 80217-0748
|
R
|
16.81%
|
N/A
|
|
TD
AMERITRADE TRUST COMPANY
PO BOX 17748
DENVER CO 80217-0748
|
R
|
8.20%
|
N/A
|
|
TD
AMERITRADE TRUST COMPANY
PO BOX 17748
DENVER CO 80217-0748
|
R
|
31.51%
|
N/A
|
Capital
Allocation Moderate Aggressive Portfolio
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
A
|
29.84%
|
27.55%
|
B
|
32.43%
|
C
|
36.49%
|
|
ASCENSUS
TRUST CO FBO
BROWN & JONES REPORTING 401K PLAN
PO BOX 10758
FARGO ND 58106-0758
|
R
|
12.63%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
ATTENTION MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
K
|
96.68%
|
N/A
|
R5
|
20.07%
|
Z
|
5.31%
|
|
CHARLES
SCHWAB BANK CUST
WOODRIDGE CLINIC SC PS & 401K PLAN
2423 E LINCOLN DR
PHOENIX AZ 85016-1215
|
R
|
13.27%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Y
|
100.00%
|
N/A
(a)
|
|
DONALD
BLASLAND FBO
PW LABORATORIES INC 401K PSP
805 S WHEATLEY ST STE 600
RIDGELAND MS 39157-5005
|
R
|
13.39%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
A
|
13.94%
|
N/A
|
B
|
14.74%
|
C
|
17.22%
|
T
|
20.94%
|
Z
|
35.32%
|
|
MG
TRUST CO CUST FBO
ALBERT FREI & SONS INC 401K PLAN
717 17TH ST STE 1300
DENVER CO 80202-3304
|
R
|
6.60%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
201
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
MG
TRUST COMPANY CUST. FBO
LIFETIME CARE
717 17TH ST STE 1300
DENVER CO 80202-3304
|
R
|
21.02%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
499 WASHINGTON BLVD
JERSEY CITY NJ 07310-2010
|
R4
|
97.29%
|
N/A
|
|
SEI
PRIVATE TRUST COMPANY
C/O JOHNSON TRUST COMPANY
1 FREEDOM VALLEY DR
OAKS PA 19456-9989
|
R5
|
79.10%
|
N/A
|
Capital
Allocation Moderate Conservative Portfolio
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
A
|
46.35%
|
45.65%
|
B
|
51.69%
|
C
|
55.73%
|
|
ASCENSUS
TRUST COMPANY
PO BOX 10758
FARGO ND 58106-0758
|
R
|
5.90%
|
N/A
|
|
ASCENSUS
TRUST COMPANY FBO
MCCALLIN DIVERSIFIED INDUSTRIES 401
PO BOX 10758
FARGO ND 58106-0758
|
R
|
6.72%
|
N/A
|
|
ASCENSUS
TRUST COMPANY FBO
PREMIER RETIREMENT PLAN
PO BOX 10758
FARGO ND 58106-0758
|
Y
|
67.03%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
K
|
81.13%
|
N/A
(a)
|
Y
|
32.97%
|
|
COUNSEL
TRUST DBA MATC FBO
CONSUMER HEALTH ADVISERS INC
401(K) PROFIT SHARING PLAN & TRUST
1251 WATERFRONT PL STE 525
PITTSBURGH PA 15222-4228
|
K
|
18.87%
|
N/A
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Z
|
14.16%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
A
|
7.68%
|
N/A
|
B
|
8.73%
|
C
|
8.34%
|
R
|
30.56%
|
Z
|
56.36%
|
|
MG
TRUST CO CUST FBO
MIRAMAR LABS 401K PROFIT-SHARING
717 17TH ST STE 1300
DENVER CO 80202-3304
|
R
|
6.48%
|
N/A
|
|
MG
TRUST COMPANY CUST. FBO
CHERNIN ENTERTAINMENT, LLC EMPLOYEE
717 17TH ST STE 1300
DENVER CO 80202-3304
|
R
|
13.10%
|
N/A
|
|
MG
TRUST COMPANY TRUSTEE
HOGAN & ASSOCIATES CONSTRUCTION 401
717 17TH ST STE 1300
DENVER CO 80202-3304
|
R4
|
48.12%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
499 WASHINGTON BLVD
JERSEY CITY NJ 07310-2010
|
R4
|
47.43%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
202
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
SEI
PRIVATE TRUST COMPANY CUST
C/O JOHNSON BANK
ONE FREEDOM VALLEY DRIVE
OAKS PA 19456-9989
|
R5
|
96.95%
|
N/A
|
Capital
Allocation Moderate Portfolio
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
A
|
48.18%
|
49.37%
|
B
|
52.39%
|
C
|
59.06%
|
|
ASCENSUS
TRUST COMPANY FBO
MAGUIRE/MAGUIRE INC 401 K PS PLA
PO BOX 10758
FARGO ND 58106-0758
|
R
|
7.73%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCT FBO
CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
K
|
61.82%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
R4
|
8.36%
|
N/A
(a)
|
Y
|
100.00%
|
|
DEBORAH
ALEYNE LAPEYRE BARBARA
TOMMIE USDIN FBO
MULBERRY TECHNOLOGIES INC 401 K
PROFIT SHARING PLAN & TRUST
17 W JEFFERSON ST STE 207
ROCKVILLE MD 20850-4227
|
K
|
32.50%
|
N/A
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Z
|
6.96%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Z
|
30.37%
|
N/A
|
|
MG
TRUST COMPANY CUST. FBO
LIFETIME CARE
717 17TH ST STE 1300
DENVER CO 80202-3304
|
R
|
33.35%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Z
|
27.95%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
R4
|
91.64%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
R5
|
96.90%
|
N/A
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Z
|
8.08%
|
N/A
|
|
TD
AMERITRADE TRUST COMPANY
PO BOX 17748
DENVER CO 80217-0748
|
R
|
12.33%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
203
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
TD
AMERITRADE TRUST COMPANY
PO BOX 17748
DENVER CO 80217-0748
|
R
|
24.80%
|
N/A
|
|
TD
AMERITRADE TRUST COMPANY
PO BOX 17748
DENVER CO 80217-0748
|
R
|
8.26%
|
N/A
|
Income
Builder Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
A
|
61.28%
|
58.35%
|
B
|
74.56%
|
C
|
58.09%
|
|
ASCENSUS
TRUST COMPANY
PO BOX 10758
FARGO ND 58106-0758
|
R
|
23.06%
|
N/A
|
|
ASCENSUS
TRUST COMPANY FBO
DOUGHERTY AND DOUGHERTY, P.C. PS PL
PO BOX 10758
FARGO ND 58106-0758
|
R
|
14.80%
|
N/A
|
|
ASCENSUS
TRUST COMPANY FBO
LA MONTANITA 401(K) SAVINGS PLAN
PO BOX 10758
FARGO ND 58106-0758
|
R
|
9.09%
|
N/A
|
|
ASCENSUS
TRUST COMPANY FBO
PLATINUM BANK 401 K PLAN
PO BOX 10758
FARGO ND 58106-0758
|
R
|
6.46%
|
N/A
|
|
ASCENSUS
TRUST COMPANY FBO
SOUTHERN EYE ASSOCIATES LTD 401K
PO BOX 10758
FARGO ND 58106-0758
|
R
|
7.20%
|
N/A
|
|
BENEFIT
TRUST PRIME PLAN SOLUTION
MORROW FAMILY DAYCARE INC 401K
330 W 9TH ST
KANSAS CITY MO 64105-1514
|
R
|
6.83%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
K
|
100.00%
|
N/A
(a)
|
W
|
100.00%
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Z
|
18.77%
|
N/A
|
|
GREAT-WEST
TRUST COMPANY LLC TTEE F
EMPLOYEE BENEFITS CLIENTS 401K
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
R5
|
13.22%
|
N/A
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Z
|
16.27%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Z
|
16.67%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Z
|
16.10%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
204
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
R5
|
14.15%
|
N/A
|
R4
|
32.40%
|
|
PAI
TRUST COMPANY INC
DR BENJAMIN S HANSON III 401 K
1300 ENTERPRISE DR
DE PERE WI 54115-4934
|
R
|
9.05%
|
N/A
|
|
PAI
TRUST COMPANY, INC.
SOCAL PACIFIC CONSTRUCTION CORP.
1300 ENTERPRISE DR
DE PERE WI 54115-4934
|
R
|
12.97%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
R4
|
65.21%
|
N/A
|
R5
|
29.83%
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Z
|
13.71%
|
N/A
|
|
TD
AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
PO BOX 2226
OMAHA NE 68103-2226
|
R5
|
35.04%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Z
|
9.72%
|
N/A
|
LifeGoal
Growth Portfolio
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
A
|
23.54%
|
N/A
|
B
|
17.19%
|
C
|
16.53%
|
|
ASCENSUS
TRUST CO FBO
BROWN & JONES REPORTING 401K PLAN
PO BOX 10758
FARGO ND 58106-0758
|
R
|
18.18%
|
N/A
|
|
ASCENSUS
TRUST CO FBO
RIVERFRONT STEEL 401K PLAN
PO BOX 10758
FARGO ND 58106-0758
|
R
|
12.14%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCT FBO
CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
K
|
97.20%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
R4
|
5.43%
|
N/A
(a)
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
B
|
5.27%
|
N/A
|
C
|
6.58%
|
Z
|
7.14%
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
C
|
5.55%
|
N/A
|
Z
|
6.07%
|
Statement
of Additional Information – June 1, 2015
|
205
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
MATRIX
TRUST COMPANY FBO
LCM ARCHITECTS LLC RET PLAN
PO BOX 52129
PHOENIX AZ 85072-2129
|
R
|
20.50%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
A
|
20.72%
|
N/A
|
B
|
22.31%
|
C
|
26.73%
|
Z
|
71.53%
|
|
MG
TRUST CO CUST FBO
ALBERT FREI & SONS INC 401K PLAN
717 17TH ST STE 1300
DENVER CO 80202-3304
|
R
|
13.61%
|
N/A
|
|
MG
TRUST CO CUST FBO
MIRAMAR LABS 401K PROFIT-SHARING
717 17TH ST STE 1300
DENVER CO 80202-3304
|
R
|
13.58%
|
N/A
|
|
MG
TRUST COMPANY CUST. FBO
LORTON STONE, LLC RETIREMENT PLAN &
717 17TH ST STE 1300
DENVER CO 80202-3304
|
R
|
10.46%
|
N/A
|
|
MID
ATLANTIC TRUST COMPANY FBO
TITAN ENGINEERING AND CONSTRUCTION
1251 WATERFRONT PL STE 525
PITTSBURGH PA 15222-4228
|
R4
|
5.20%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
C
|
5.11%
|
N/A
|
R4
|
17.79%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
R4
|
71.58%
|
N/A
|
|
SEI
PRIVATE TRUST CO
C/O JOHNSON TRUST COMPANY
ATTN MUTUAL FUNDS ADMIN
1 FREEDOM VALLEY DR
OAKS PA 19456-9989
|
R5
|
99.23%
|
N/A
|
Funds with Fiscal
Period Ending February 28/29:
Except as otherwise indicated,
the information below is as of May 31, 2014:
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
Convertible
Securities Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
24.16%
|
N/A
|
Class
B
|
47.37%
|
Class
C
|
15.82%
|
Class
W
|
98.70%
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY
FBO CUSTOMERS
ATTN MUTUAL FUND DEPT
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
15.74%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
B
|
6.20%
|
N/A
|
Class
C
|
8.84%
|
Statement
of Additional Information – June 1, 2015
|
206
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
16.07%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
11.43%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA INCOME BUILDER FUND
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
27.17%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA LIFEGOAL GROWTH
PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
36.67%
|
N/A
|
|
MERRILL
LYNCH PIERCE FENNER & SMITH
FOR THE SOLE BENEFIT OF IT CUSTOMER
4800 DEER LAKE DR E
JACKSONVILLE FL 32246-6484
|
Class
Z
|
23.41%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DR E FL 3
JACKSONVILLE FL 32246-6484
|
Class
R
|
81.20%
|
N/A
|
Class
A
|
31.26%
|
Class
B
|
30.46%
|
Class
C
|
39.01%
|
|
MG
TRUST COMPANY CUST
FBO CMC PENSION PROFESSIONALS
717 17TH ST
STE 1300
DENVER CO 80202-3304
|
Class
R4
|
13.97%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
C
|
5.69%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
8.86%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
499 WASHINGTON BLVD
JERSEY CITY NJ 07310-2010
|
Class
R4
|
39.36%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
A
|
11.36%
|
N/A
|
Class
C
|
6.67%
|
Class
R4
|
46.49%
|
Class
R5
|
5.09%
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
7.45%
|
N/A
|
|
TD
AMERITRADE TRUST COMPANY
ATTN HOUSE
PO BOX 17748
DENVER CO 80217-0748
|
Class
R5
|
73.51%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
207
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
C
|
6.82%
|
N/A
|
Global
Equity Value Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
6.07%
|
N/A
|
Class
B
|
7.68%
|
Class
C
|
6.41%
|
Class
W
|
79.74%
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCT
FBO CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
Z
|
14.05%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN AKSHAY RAJPUT
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
Class
R5
|
17.45%
|
Class
W
|
20.26%
|
Class
Y
|
99.47%
|
|
COMMUNITY
BANK NA AS CUST
FBO SIMED 1165(E) RETIREMENT PLAN
6 RHOADS DR
STE 7
UTICA NY 13502-6317
|
Class
R
|
41.24%
|
N/A
|
|
DCGT
AS TTEE AND/OR CUST
FBO PLIC VARIOUS RETIREMENT PLANS
OMNIBUS
ATTN NPIO TRADE DESK
711 HIGH ST
DES MOINES IA 50392-0001
|
Class
R
|
27.76%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
Z
|
5.29%
|
N/A
|
|
GREAT
WEST TRUST CO
TRST FBO EMPLOYEE BENEFITS CLIENTS
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
K
|
5.20%
|
N/A
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
C
|
5.03%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
Z
|
21.91%
|
N/A
|
|
MG
TRUST COMPANY CUST.
FBO PEPOSE VISION INSTITUTE PC EMP
717 17TH ST
STE 1300
DENVER CO 80202-3304
|
Class
K
|
6.02%
|
N/A
|
|
MID
ATLANTIC TRUST CO
FBO GEORGE ELLIOTT INC 401K PSP
& TRUST
1251 WATERFRONT PL
STE 525
PITTSBURGH PA 15222-4228
|
Class
R
|
8.92%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
208
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
MLP
FENNER & SMITH INC
FBO SOLE BENEFIT OF ITS CUSTOMERS
4800 DEER LAKE DR EAST
JACKSONVILLE FL 32246-6484
|
Class
A
|
7.41%
|
N/A
|
Class
B
|
5.41%
|
Class
C
|
14.52%
|
|
MLPF&S
FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTN FUND ADMINISTRATION
4800 DEER LAKE DRIVE EAST 3RD FL
JACKSONVILLE FL 32246-6484
|
Class
R
|
5.27%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
C
|
5.62%
|
N/A
|
Class
R4
|
16.36%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
75.32%
|
N/A
|
|
TD
AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
PO BOX 2226
OMAHA NE 68103-2226
|
Class
R5
|
82.55%
|
N/A
|
|
WELLS
FARGO BANK
FBO 1525 W W T HARRIS BLVD
CHARLOTTE NC 28262-8522
|
Class
K
|
88.57%
|
N/A
|
Class
R4
|
7.31%
|
Global
Opportunities Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
16.83%
|
N/A
|
Class
B
|
37.36%
|
Class
C
|
40.99%
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCT
FBO CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
K
|
86.74%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN AKSHAY RAJPUT
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
R
|
100.00%
|
N/A
(a)
|
Class
R4
|
100.00%
|
Class
R5
|
100.00%
|
|
DONNA
C KNIGHT & JEFFREY L KNIGHT
TTEES DONNA C KNIGHT LIVING TRUST
15 SYLVAN LN
WESTON MA 02493-1027
|
Class
Z
|
49.29%
|
N/A
|
|
FIRST
CLEARING LLC
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
K
|
13.26%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
Z
|
22.75%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
Z
|
8.38%
|
N/A
|
|
STATE
STREET BK & TR IRA
JEFFREY L KNIGHT
15 SYLVAN LN
WESTON MA 02493-1027
|
Class
Z
|
7.06%
|
N/A
|
International
Opportunities Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
11.42%
|
N/A
|
Class
B
|
22.05%
|
Class
C
|
7.21%
|
Statement
of Additional Information – June 1, 2015
|
209
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
CAPTITAL
BANK & TRUST COPMANY
TTEE ANDRE PROST INC 401K PSP
& TRUST
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R
|
19.05%
|
N/A
|
|
CAPTITAL
BANK & TRUST COPMANY
TTEE HMT MARKETING INC 401K
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R
|
8.95%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCT
FBO CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
B
|
6.04%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN AKSHAY RAJPUT
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
B
|
14.96%
|
N/A
|
Class
C
|
10.22%
|
|
HARTFORD
SECURITIES DISTRIBUTION
COMPANY INC
ATTN UIT OPERATIONS/PRG
PO BOX 2999
HARTFORD CT 06104-2999
|
Class
R
|
27.53%
|
N/A
|
|
JP
MORGAN CHASE AS TTEE
FBO CITIZENS PENSION PLAN MASTER TRUST
ATTN WILLAM B CANNA
3 METROTECH CENTER FL #6
BROOKLYN NY 11201-8401
|
Class
Z
|
43.63%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
A
|
9.81%
|
N/A
|
Class
B
|
20.33%
|
Class
C
|
22.49%
|
Class
Z
|
18.50%
|
|
MID
ATLANTIC TRUST COMPANY
FBO FEIRICH/MAGER/GREEN/RYAN 401(K)
PROFIT SHARING PLAN & TRUST
1251 WATERFRONT PL
STE 525
PITTSBURGH PA 15222-4228
|
Class
R
|
6.54%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
B
|
6.38%
|
N/A
|
Class
C
|
13.02%
|
Class
Z
|
9.12%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
5.22%
|
N/A
|
Class
B
|
6.31%
|
Class
C
|
14.49%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
B
|
7.08%
|
N/A
|
Class
C
|
6.67%
|
Class
R4
|
81.11%
|
|
T
SCHNIEDERMAN & D SPINAK TTEES
FBO RETINA CENTER NORTHWEST 401K
C/O FASCORE LLC
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R
|
6.30%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
210
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
TD
AMERITRADE TRUST COMPANY
PO BOX 17748
DENVER CO 80217-0748
|
Class
R4
|
14.80%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
C
|
5.54%
|
N/A
|
International
Value Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
9.51%
|
N/A
|
Class
B
|
30.95%
|
|
CALIFORNIA
ADMIN INSUR SERV INC TTE
CALIFORNIA ADMIN INSUR SERV INC 401
C/O FASCORE LLC
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R
|
22.79%
|
N/A
|
|
CDS
ADMINISTRATIVE SERVICES LLC TTE
CONWAY DEUTH & SCHMIESING PLLP 401K
C/O FASCORE LLC
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R
|
12.66%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCOUNT
FOR BENEFIT OF CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY STREET
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
52.89%
|
N/A
|
Class
A
|
5.40%
|
Class
Z
|
10.62%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN AKSHAY RAJPUT
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
|
EDWARD
D JONES & CO
FOR THE BENEFIT OF CUSTOMERS
12555 MANCHESTER RD
SAINT LOUIS MO 63131-3729
|
Class
B
|
17.05%
|
N/A
|
|
FIIOC
FBO
AIRTRAN AIRWAYS INC
100 MAGELLAN WAY (KW1C)
COVINGTON KY 41015-1987
|
Class
Z
|
9.29%
|
N/A
|
|
FIIOC
FBO
STEFFEN BOOKBINDERS INC
RETIREMENT SAVINGS PLAN
100 MAGELLAN WAY (KW1C)
COVINGTON KY 41015-1987
|
Class
R
|
31.09%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
B
|
21.23%
|
N/A
|
Class
C
|
11.68%
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
Z
|
6.63%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
A
|
23.43%
|
N/A
|
Class
B
|
12.19%
|
Class
C
|
31.90%
|
Class
Z
|
13.14%
|
|
MG
TRUST COMPANY CUST.
FBO BLANKET PROPERTIES LLC EMPLOYEES SA
717 17TH ST
STE 1300
DENVER CO 80202-3304
|
Class
R
|
13.52%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
211
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
C
|
8.64%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
7.84%
|
N/A
|
Class
Z
|
26.94%
|
|
PAI
TRUST COMPANY INC
POPLAR BLUFF REHABILITATION 401 K
1300 ENTERPRISE DR
DE PERE WI 54115-4934
|
Class
R
|
10.42%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
94.41%
|
N/A
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
12.35%
|
N/A
|
|
RELIANCE
TRUST COMPANY
FBO STAPLE COTTON
PO BOX 48529
ATLANTA GA 30362-1529
|
Class
R5
|
44.39%
|
N/A
|
|
TD
AMERITRADE TRUST CO
ATTN HOUSE
PO BOX 17748
DENVER CO 80217-0748
|
Class
Z
|
5.65%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
A
|
6.05%
|
N/A
|
Class
C
|
8.32%
|
|
WELLS
FARGO BANK NA
FBO JAMES RIV CL
PO BOX 1533
MINNEAPOLIS MN 55480-1533
|
Class
Z
|
6.20%
|
N/A
|
|
WELLS
FARGO BANK NA
FBO RT HAWORTH INC MANAGEMENT PLAN
PO BOX 1533
MINNEAPOLIS MN 55480-1533
|
Class
Z
|
7.26%
|
N/A
|
Large
Cap Enhanced Core Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
16.30%
|
N/A
|
|
COLUMBIA
THERMOSTAT FUND
227 W MONROE ST
STE 3000
CHICAGO IL 60606-5018
|
Class
I
|
99.99%
|
N/A
|
|
JOANNE
HALE WENDY HALE
FBO MCCREA-HALE INSURANCE AGENCY
401 K PLAN
805 S WHEATLEY ST
STE 600
RIDGELAND MS 39157-5005
|
Class
R
|
9.10%
|
N/A
|
|
KURT
HARRINGTON
FBO ARLINGTON ASSET INVESTMENT COR
401(K) PROFIT SHARING PLAN & TRUST
1001 19TH ST N
STE 1900
ARLINGTON VA 22209-1720
|
Class
R
|
7.27%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
212
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
A
|
22.10%
|
72.83%
|
Class
R
|
8.33%
|
Class
Y
|
99.93%
|
Class
Z
|
91.25%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
19.18%
|
N/A
|
Class
R
|
18.10%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
A
|
16.82%
|
N/A
|
|
ROBERT
E. BEACH, MARTHA BEACH
FBO ROBERT E. BEACH ARCHITECTS, LLC
401(K) PLAN
805 S. WHEATLEY STREET,
SUITE 600
RIDGELAND MS 39157-5005
|
Class
R
|
7.02%
|
N/A
|
|
STATE
STREET BANK CUST
FBO ADP ACCESS
1 LINCOLN ST
BOSTON MA 02111-2901
|
Class
R
|
27.72%
|
N/A
|
Large
Cap Index Fund
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCT
FBO CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
B
|
43.55%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN AKSHAY RAJPUT
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
|
EDWARD
D JONES & CO
FOR THE BENEFIT OF CUSTOMERS
12555 MANCHESTER RD
SAINT LOUIS MO 63131-3729
|
Class
B
|
9.50%
|
N/A
|
|
GREAT
WEST TRUST CO
FBO EMPLOYEE BENEFITS CLIENTS
401(K) PLAN
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
A
|
7.94%
|
N/A
|
|
GREAT-WEST
TRUST COMPANY LLC TTEE F
EMPLOYEE BENEFITS CLIENTS 401K
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R5
|
14.83%
|
N/A
|
|
JPMORGAN
CHASE AS TRUSTEE
FBO CULLEN AND DYKMAN SAVINGS PLAN I
11500 OUTLOOK ST
OVERLAND PARK KS 66211-1804
|
Class
R5
|
7.20%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DR E FL 3
JACKSONVILLE FL 32246-6484
|
Class
B
|
7.17%
|
N/A
|
Class
R5
|
7.38%
|
Class
Z
|
20.81%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
6.35%
|
N/A
|
Class
B
|
7.98%
|
Class
Z
|
8.19%
|
Statement
of Additional Information – June 1, 2015
|
213
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
NEW
YORK LIFE TRUST COMPANY
690 CANTON ST
STE 100
WESTWOOD MA 02090-2344
|
Class
A
|
8.29%
|
N/A
|
Class
R5
|
13.97%
|
|
PIMS/PRUDENTIAL
RETIREMENT
AS NOMINEE FOR THE TTEE/CUST PL 111
FAURECIA USA HOLDINGS INC
900 N SQUIRREL RD
STE 175
AUBURN HILLS MI 48326-2789
|
Class
R5
|
8.58%
|
N/A
|
|
STATE
STREET BANK & TRUST CO
ESTHER T KREMER
SEP IRA
1148 5TH AVENUE
APT 5B
NEW YORK NY 10128-0807
|
Class
B
|
6.58%
|
N/A
|
|
STATE
STREET BK & TR ROTH IRA
MATTHEW A MCDONALD
572 S 1200 E
MAPLETON UT 84664-4720
|
Class
B
|
7.10%
|
N/A
|
|
TAYNIK
& CO
C/O INVESTORS BANK & TRUST CO
200 CLARENDON ST FL 17 # FPG90
BOSTON MA 02116-5097
|
Class
R5
|
27.41%
|
N/A
|
Marsico
21st Century Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
28.16%
|
N/A
|
Class
B
|
17.64%
|
Class
C
|
5.32%
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCOUNT
FOR BENEFIT OF CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY STREET
SAN FRANCISCO CA 94104-4151
|
Class
Z
|
6.44%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN AKSHAY RAJPUT
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
R5
|
100.00%
|
N/A
(a)
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
B
|
17.70%
|
N/A
|
Class
C
|
9.21%
|
Class
Z
|
12.10%
|
|
HARTFORD
LIFE INS. CO.
SEPARATE ACCOUNT
ATTN UIT OPERATIONS
PO BOX 2999
HARTFORD CT 06104-2999
|
Class
R
|
22.08%
|
N/A
|
|
HARTFORD
SECURITIES DISTRIBUTION
COMPANY INC
ATTN UIT OPERATIONS/PRG
PO BOX 2999
HARTFORD CT 06104-2999
|
Class
R
|
17.75%
|
N/A
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
Z
|
22.06%
|
N/A
|
Class
C
|
7.95%
|
|
MERRILL
LYNCH PIERCE FENNER & SMITH
FOR THE SOLE BENEFIT OF IT CUSTOMER
4800 DEER LAKE DR E
JACKSONVILLE FL 32246-6484
|
Class
Z
|
20.93%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
214
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
A
|
11.36%
|
N/A
|
Class
B
|
18.76%
|
Class
C
|
24.99%
|
Class
R
|
6.50%
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
B
|
9.51%
|
N/A
|
Class
C
|
17.48%
|
Class
Z
|
11.99%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
10.85%
|
N/A
|
Class
B
|
7.19%
|
Class
C
|
5.45%
|
Class
R4
|
55.44%
|
Class
Z
|
9.86%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
A
|
5.86%
|
N/A
|
Class
B
|
11.03%
|
Class
C
|
5.65%
|
Class
R4
|
43.96%
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
A
|
13.58%
|
N/A
|
Class
C
|
8.46%
|
Marsico
Flexible Capital Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
74.69%
|
41.94%
|
Class
C
|
55.45%
|
|
CHARLES
SCHWAB & CO INC
CUST FOR THE EXCLUSIVE BENEFIT
ATTENTION MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
A
|
6.72%
|
29.42%
|
Class
R5
|
81.05%
|
Class
Z
|
64.06%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN AKSHAY RAJPUT
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
|
ENVIROSERVICES
& TRAINING CENTR TTE
ENVIROSERVICES & TRAINING CENTER 40
C/O FASCORE LLC
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R
|
23.64%
|
N/A
|
|
ERNEST
Y CHOU & MELBA J CHOU TTEE F
CHOU CHEMICAL COMPANY PSP 401K
C/O FASCORE LLC
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R
|
42.85%
|
N/A
|
|
FIIOC
FBO MGP INGREDIENTS NON-UNION 401(K) &
PROFIT SHARING PLAN
100 MAGELLAN WAY # KW1C
COVINGTON KY 41015-1987
|
Class
R5
|
13.78%
|
N/A
|
|
FRONTIER
TRUST COMPANY
FBO
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
19.39%
|
N/A
|
|
FRONTIER
TRUST COMPANY
FBO SPRING DESIGN PARTNERS INC PROFIT
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
6.60%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
215
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
A
|
5.10%
|
N/A
|
Class
Z
|
23.64%
|
Class
C
|
5.28%
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
9.04%
|
N/A
|
Class
Z
|
7.92%
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
A
|
6.03%
|
N/A
|
Class
C
|
13.38%
|
Marsico
Focused Equities Fund
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCOUNT
FOR BENEFIT OF CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY STREET
SAN FRANCISCO CA 94104-4151
|
Class
Z
|
12.19%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN AKSHAY RAJPUT
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
|
FIIOC
FBO
AIRTRAN AIRWAYS INC 401(K) PLAN
100 MAGELLAN WAY (KW1C)
COVINGTON KY 41015-1987
|
Class
R4
|
55.46%
|
N/A
|
|
FIIOC
FBO
AIRTRAN AIRWAYS INC
100 MAGELLAN WAY (KW1C)
COVINGTON KY 41015-1987
|
Class
Z
|
13.29%
|
N/A
|
|
FIIOC
FBO
AIRTRAN AIRWAYS TECHNICAL
OPERATIONS RETIREMENT SAVINGS
100 MAGELLAN WAY (KW1C)
COVINGTON KY 41015-1987
|
Class
R4
|
11.95%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
B
|
10.40%
|
N/A
|
Class
C
|
5.21%
|
Class
Z
|
9.38%
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
A
|
6.99%
|
N/A
|
|
MERRILL
LYNCH PIERCE FENNER & SMITH
FOR THE SOLE BENEFIT OF IT CUSTOMER
4800 DEER LAKE DR E
JACKSONVILLE FL 32246-6484
|
Class
Z
|
28.18%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
A
|
30.37%
|
28.69%
|
Class
B
|
52.96%
|
Class
C
|
52.37%
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
C
|
11.92%
|
N/A
|
Class
Z
|
8.17%
|
Statement
of Additional Information – June 1, 2015
|
216
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
ATTN MUTUAL FUNDS DEPT 5TH FL
499 WASHINGTON BLVD
JERSEY CITY NJ 07310-2010
|
Class
R5
|
99.96%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
6.95%
|
N/A
|
Class
R4
|
24.70%
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
HOUSE ACCT FIRM
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
A
|
9.81%
|
N/A
|
Class
C
|
11.10%
|
Class
Z
|
5.33%
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
A
|
5.17%
|
N/A
|
Class
C
|
6.14%
|
Marsico
Global Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
47.90%
|
28.35%
|
Class
C
|
23.75%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN AKSHAY RAJPUT
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
A
|
6.62%
|
N/A
(a)
|
Class
C
|
20.53%
|
Class
R
|
76.13%
|
Class
R5
|
100.00%
|
Class
Z
|
17.82%
|
|
COYLE
MASCHERI SHUE TTEE
FBO CHAPMAN COYLE CHAPMAN & ASSOC AIA
C/O FASCORE LLC
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R
|
16.75%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
C
|
5.97%
|
N/A
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
ATTN MUTUAL FUND OPERATIONS
PO BOX 509046
SAN DIEGO CA 92150-9046
|
Class
Z
|
8.54%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
A
|
6.54%
|
N/A
|
Class
C
|
9.49%
|
Class
Z
|
13.48%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
ATTN MUTUAL FUNDS DEPT 5TH FL
499 WASHINGTON BLVD
JERSEY CITY NJ 07310-2010
|
Class
R4
|
99.78%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
18.29%
|
N/A
|
Class
Z
|
17.41%
|
Statement
of Additional Information – June 1, 2015
|
217
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
HOUSE ACCT FIRM
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
25.77%
|
N/A
|
Class
Z
|
37.71%
|
Marsico
Growth Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
13.40%
|
N/A
|
Class
B
|
8.25%
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCOUNT
FOR BENEFIT OF CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY STREET
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
96.68%
|
N/A
|
Class
Z
|
7.74%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN AKSHAY RAJPUT
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
Class
W
|
100.00%
|
|
HARTFORD
LIFE INS. CO.
SEPARATE ACCOUNT
ATTN UIT OPERATIONS
PO BOX 2999
HARTFORD CT 06104-2999
|
Class
R
|
55.61%
|
N/A
|
|
HARTFORD
SECURITIES DISTRIBUTION
COMPANY INC
ATTN UIT OPERATIONS/PRG
PO BOX 2999
HARTFORD CT 06104-2999
|
Class
R
|
11.40%
|
N/A
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
A
|
5.42%
|
29.76%
|
Class
Z
|
52.66%
|
Class
B
|
6.31%
|
Class
C
|
11.30%
|
|
MERRILL
LYNCH PIERCE FENNER & SMITH
FOR THE SOLE BENEFIT OF IT CUSTOMER
4800 DEER LAKE DR E
JACKSONVILLE FL 32246-6484
|
Class
Z
|
12.02%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
A
|
16.75%
|
N/A
|
Class
B
|
43.30%
|
Class
C
|
47.65%
|
Class
R
|
6.64%
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
A
|
20.96%
|
N/A
|
Class
B
|
11.20%
|
Class
C
|
14.08%
|
Class
Z
|
9.09%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
Z
|
5.23%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
B
|
8.45%
|
N/A
|
Class
R4
|
92.80%
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
A
|
13.16%
|
N/A
|
Class
C
|
5.28%
|
Statement
of Additional Information – June 1, 2015
|
218
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
Mid
Cap Index Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
5.34%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCOUNT
FOR BENEFIT OF CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY STREET
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
15.78%
|
N/A
|
Class
Z
|
11.03%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN AKSHAY RAJPUT
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
|
JP
MORGAN CHASE BANK TTEE/CUST
FBO THE RETIREMENT PLANS FOR WHICH
TIAA-CREF ACTS AS RECORD KEEPER
4 NEW YORK PLZ LBBY A
NEW YORK NY 10004-2413
|
Class
Z
|
5.41%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
A
|
7.63%
|
N/A
|
Class
Z
|
35.82%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
5.72%
|
N/A
|
Class
R5
|
5.59%
|
Class
Z
|
7.82%
|
|
NEW
YORK LIFE TRUST COMPANY
690 CANTON ST
STE 100
WESTWOOD MA 02090-2344
|
Class
A
|
5.43%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R5
|
5.01%
|
N/A
|
|
STANDARD
INSURANCE COMPANY
1100 SW 6TH AVE
ATTN: SEP ACCT P11D
PORTLAND OR 97204-1093
|
Class
R5
|
44.88%
|
N/A
|
|
TAYNIK
& CO
C/O INVESTORS BANK & TRUST CO
200 CLARENDON ST FL 17
BOSTON MA 02116-5097
|
Class
A
|
9.77%
|
N/A
|
Mid
Cap Value Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
5.80%
|
N/A
|
Class
B
|
11.96%
|
Class
W
|
99.46%
|
|
CAPITAL
BANK & TRUST COMPANY TTEE F
SMITHGROUP RA 401K
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R5
|
13.12%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
CUST A/C FOR THE EXCLUSIVE BENEFIT
ATTENTION MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
K
|
47.52%
|
N/A
|
Class
R5
|
21.63%
|
Class
Z
|
6.95%
|
|
CITY
NATIONAL BANK
FBO C&D ZODIAC 401K SAVING PLAN
555 S FLOWER ST FL 10
LOS ANGELES CA 90071-2300
|
Class
Y
|
21.38%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
219
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
CITY
NATIONAL BANK
FBO CNC PSP POOLED ACCOUNT
ATTN MUTUAL FUNDS/TRUST OPS
555 S FLOWER ST FL 10
LOS ANGELES CA 90071-2300
|
Class
Y
|
56.40%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN AKSHAY RAJPUT
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
K
|
52.48%
|
N/A
(a)
|
|
DCGT
AS TTEE AND /OR CUST
FBO PLIC VARIOUS RETIREMENT PLANS
OMNIBUS
ATTN NPIO TRADE DESK
711 HIGH ST
DES MOINES IA 50392-0001
|
Class
R
|
6.46%
|
N/A
|
|
EDWARD
D JONES & CO
FOR THE BENEFIT OF CUSTOMERS
12555 MANCHESTER RD
SAINT LOUIS MO 63131-3729
|
Class
Z
|
38.97%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
B
|
16.28%
|
N/A
|
Class
C
|
11.85%
|
|
FRONTIER
TRUST COMPANY FBO
HERITAGE VALLEY HEALTH SYSTEM 401(K
PO BOX 10758
FARGO ND 58106-0758
|
Class
R5
|
9.05%
|
N/A
|
|
FRONTIER
TRUST COMPANY FBO
HERITAGE VALLEY HEALTH SYSTEM 403(B
PO BOX 10758
FARGO ND 58106-0758
|
Class
R5
|
34.17%
|
N/A
|
|
GREAT
WEST LIFE & ANNUITY
C/O FASCORE LLC
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R
|
5.12%
|
N/A
|
|
HARTFORD
LIFE INS. CO.
SEPARATE ACCOUNT
ATTN UIT OPERATIONS
PO BOX 2999
HARTFORD CT 06104-2999
|
Class
R
|
24.68%
|
N/A
|
|
HARTFORD
SECURITIES DISTRIBUTION
COMPANY INC
ATTN UIT OPERATIONS/PRG
PO BOX 2999
HARTFORD CT 06104-2999
|
Class
R
|
12.31%
|
N/A
|
|
ING
LIFE INSURANCE & ANNUITY CO
ING FUND OPERATIONS
1 ORANGE WAY
WINDSOR CT 06095-4773
|
Class
A
|
5.71%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
15.97%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
50.21%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
220
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE CONSERVATIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
8.31%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
22.17%
|
N/A
|
|
JPMORGAN
CHASE AS TRUSTEE
FBO THE ESI 401 K PLAN
11500 OUTLOOK ST
OVERLAND PARK KS 66211-1804
|
Class
Y
|
10.96%
|
N/A
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
C
|
6.96%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DR E FL 3
JACKSONVILLE FL 32246-6484
|
Class
B
|
9.19%
|
N/A
|
Class
A
|
5.59%
|
Class
C
|
20.76%
|
Class
Z
|
17.38%
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
B
|
7.67%
|
N/A
|
Class
C
|
11.39%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
499 WASHINGTON BLVD
ATTN MUTUAL FUNDS DEPARTMENT 4TH FL
JERSEY CITY NJ 07310-2010
|
Class
R4
|
78.06%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
13.04%
|
N/A
|
Class
B
|
7.57%
|
Class
C
|
6.25%
|
Class
R5
|
5.24%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
A
|
5.68%
|
N/A
|
Class
B
|
13.14%
|
Class
C
|
6.39%
|
Class
R4
|
6.14%
|
|
PIMS/PRUDENTIAL
RETIREMENT
AS NOMINEE FOR THE TTEE/CUST PL 007
ELECTRO-MECHANICAL CORPORATION
1 GOODSON ST
BRISTOL VA 24201-4510
|
Class
R4
|
7.55%
|
N/A
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
6.11%
|
N/A
|
|
RBC
CAPITAL MARKETS, LLC
MUTUAL FUND OMNIBUS PROCESSING
OMNIBUS
ATTN MUTUAL FUND OPS MANAGER
510 MARQUETTE AVE S
MINNEAPOLIS MN 55402-1110
|
Class
C
|
6.20%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
C
|
5.47%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
221
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
WELLS
FARGO BANK
FBO DWYER INSTRUMENTS INC 401K PSP
1525 WEST WT HARRIS BLVD
CHARLOTTE NC 28288-1076
|
Class
R5
|
9.34%
|
N/A
|
Overseas
Value Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
20.76%
|
42.55%
|
Class
B
|
27.61%
|
Class
C
|
23.09%
|
Class
W
|
100.00%
|
|
CHARLES
SCHWAB & CO INC
CUST FOR THE EXCLUSIVE BENEFIT
ATTENTION MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
K
|
62.17%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN AKSHAY RAJPUT
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
N/A
|
N/A
|
34.00%
(a)
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
K
|
36.34%
|
N/A
|
Class
Z
|
74.58%
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
14.61%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
44.12%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE CONSERVATIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
10.46%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
26.93%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
Z
|
6.72%
|
N/A
|
Select
International Equity Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
9.62%
|
N/A
|
Class
B
|
18.34%
|
Class
C
|
5.75%
|
Class
W
|
100.00%
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCT
FBO CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
K
|
71.19%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN AKSHAY RAJPUT
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
Class
R4
|
41.84%
|
Class
R5
|
5.49%
|
Statement
of Additional Information – June 1, 2015
|
222
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
K
|
22.03%
|
N/A
|
Class
C
|
9.99%
|
|
FRONTIER
TRUST COMPANY
FBO EFK MOEN 401(K) PLAN
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
20.09%
|
N/A
|
|
FRONTIER
TRUST COMPANY
FBO FINANCIAL NETWORK AUDIT, LLC 401(K)
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
9.31%
|
N/A
|
|
FRONTIER
TRUST COMPANY
FBO HOSPICE ADVANTAGE 401 K PLAN 2086
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
20.35%
|
N/A
|
|
FRONTIER
TRUST COMPANY
FBO NORDAAS AMERICAN HOMES OF MN LAKE
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
5.89%
|
N/A
|
|
FRONTIER
TRUST COMPANY
FBO RGS 401(K) PLAN 209878
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
8.88%
|
N/A
|
|
FRONTIER
TRUST CO FBO
RHEUMATOLOGY CONSULTANTS WNY PC 40
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
9.29%
|
N/A
|
|
MERRILL
LYNCH PIERCE FENNER & SMITH
FOR THE SOLE BENEFIT OF IT CUSTOMER
4800 DEER LAKE DR E
JACKSONVILLE FL 32246-6484
|
Class
Z
|
67.43%
|
25.85%
|
Class
A
|
5.70%
|
Class
C
|
10.83%
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
R
|
6.19%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
58.16%
|
N/A
|
|
STATE
STREET BANK AND TRUST CO CUST
FBO NUSCO NON UNION MEDICAL TRUST
56 PROSPECT ST
HARTFORD CT 06103-2818
|
Class
Y
|
99.98%
|
N/A
|
|
TD
AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
PO BOX 2226
OMAHA NE 68103-2226
|
Class
R5
|
92.83%
|
N/A
|
Select
Large Cap Equity Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
B
|
37.77%
|
N/A
|
Class
C
|
20.93%
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCOUNT
FOR BENEFIT OF CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY STREET
SAN FRANCISCO CA 94104-4151
|
Class
Z
|
12.82%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN AKSHAY RAJPUT
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
W
|
100.00%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
223
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
B
|
5.96%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
18.22%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
31.32%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
17.99%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA LIFEGOAL GROWTH
PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
26.93%
|
N/A
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
B
|
6.61%
|
N/A
|
|
MERRILL
LYNCH PIERCE FENNER & SMITH
FOR THE SOLE BENEFIT OF IT CUSTOMER
4800 DEER LAKE DR E
JACKSONVILLE FL 32246-6484
|
Class
Z
|
59.10%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
A
|
75.44%
|
N/A
|
Class
B
|
38.40%
|
Class
C
|
27.19%
|
|
MORGAN
STANLEY & CO
HARBORSIDE FINANCIAL CENTER
PLAZA II, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
C
|
25.80%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R5
|
13.24%
|
N/A
|
|
TD
AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
PO BOX 2226
OMAHA NE 68103-2226
|
Class
R5
|
83.48%
|
N/A
|
Small
Cap Index Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
7.53%
|
N/A
|
Class
B
|
9.83%
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY
FBO CUSTOMERS
ATTN MUTUAL FUND DEPT
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
6.48%
|
N/A
|
Class
Z
|
6.42%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN AKSHAY RAJPUT
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
Statement
of Additional Information – June 1, 2015
|
224
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
GREAT-WEST
TRUST CO LLC
FBO PUTNAM
FBO RECORDKEEPING FOR VARIOUS BENEF
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R5
|
9.06%
|
N/A
|
|
GREAT-WEST
TRUST COMPANY LLC TTEE F
EMPLOYEE BENEFITS CLIENTS 401K
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R5
|
10.20%
|
N/A
|
|
MERRILL
LYNCH PIERCE FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
4800 DEER LAKE DR E
JACKSONVILLE FL 32246-6484
|
Class
Z
|
36.10%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
A
|
6.59%
|
N/A
|
Class
R5
|
6.37%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
R5
|
12.14%
|
N/A
|
Class
Z
|
10.06%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R5
|
13.76%
|
N/A
|
|
VRSCO
FBO AIGFSB CUST TTEE
FBO CITY OF SAN DIEGO 457B
2929 ALLEN PKWY
STE A6-20
HOUSTON TX 77019-7117
|
Class
R5
|
5.69%
|
N/A
|
|
WELLS
FARGO BANK
FBO 1525 W W T HARRIS BLVD
CHARLOTTE NC 28262-8522
|
Class
K
|
82.75%
|
N/A
|
Small
Cap Value Fund II
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
B
|
20.00%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY
FBO CUSTOMERS
ATTN MUTUAL FUND DEPT
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
69.68%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN AKSHAY RAJPUT
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
|
DCGT
AS TTEE AND /OR CUST
FBO PLIC VARIOUS RETIREMENT PLANS
OMNIBUS
ATTN NPIO TRADE DESK
711 HIGH ST
DES MOINES IA 50392-0001
|
Class
R
|
19.59%
|
N/A
|
Class
A
|
5.45%
|
Class
R4
|
10.09%
|
|
EDWARD
D JONES & CO
FOR THE BENEFIT OF CUSTOMERS
12555 MANCHESTER RD
SAINT LOUIS MO 63131-3729
|
Class
Z
|
20.14%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
225
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
FIFTH
THIRD BANK TRUSTEE
FBO VARIOUS FASCORP RECORDKEPT PLANS
C/O FASCORP
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R
|
6.80%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
B
|
20.37%
|
N/A
|
Class
C
|
11.52%
|
|
GREAT-WEST
TRUST CO LLC
FBO PUTNAM
FBO RECORDKEEPING FOR VARIOUS BENEF
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R4
|
78.68%
|
N/A
|
|
GREAT-WEST
TRUST CO LLC
FBO PUTNAM
FBO RECORDKEEPING FOR VARIOUS BENEF
OMNIPUTNAM
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
Y
|
44.15%
|
N/A
|
|
HARTFORD
LIFE INS. CO.
SEPARATE ACCOUNT
ATTN UIT OPERATIONS
PO BOX 2999
HARTFORD CT 06104-2999
|
Class
R
|
24.03%
|
N/A
|
|
HARTFORD
SECURITIES DISTRIBUTION
COMPANY INC
ATTN UIT OPERATIONS/PRG
PO BOX 2999
HARTFORD CT 06104-2999
|
Class
R
|
16.25%
|
N/A
|
|
ING
NATIONAL TRUST AS TRUSTEE OR
CUSTODIAN FOR CORE 12 RETIREMENT
PLANS
30 BRAINTREE HILL OFFICE PARK
BRAINTREE MA 02184-8747
|
Class
Y
|
8.97%
|
N/A
|
|
JP
MORGAN CHASE BANK TTEE
FBO TIAA-CREF RETIREMENT PLAN PROGRAM
3 METROTECH CENTER 5TH FLOOR
BROOKLYN NY 11201-8401
|
Class
Y
|
7.09%
|
N/A
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
C
|
6.05%
|
N/A
|
|
MERCER
TRUST CO TTEE
FBO PEOPLES UNITED BANK 401K EMPLOYEE
SAVINGS PLAN
ATTN DC PLAN ADMIN MS N-1-G
1 INVESTORS WAY
NORWOOD MA 02062-1599
|
Class
Y
|
7.03%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
A
|
8.20%
|
N/A
|
Class
B
|
8.87%
|
Class
C
|
19.36%
|
Class
Y
|
12.82%
|
Class
Z
|
16.26%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
7.95%
|
N/A
|
Class
B
|
11.24%
|
Class
C
|
7.55%
|
Class
R5
|
9.12%
|
Class
Y
|
17.56%
|
Class
Z
|
29.16%
|
Statement
of Additional Information – June 1, 2015
|
226
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
B
|
9.00%
|
N/A
|
Class
C
|
5.22%
|
Class
R4
|
10.63%
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
19.18%
|
N/A
|
|
RBC
CAPITAL MARKETS, LLC
MUTUAL FUND OMNIBUS PROCESSING
OMNIBUS
ATTN MUTUAL FUND OPS MANAGER
510 MARQUETTE AVE S
MINNEAPOLIS MN 55402-1110
|
Class
C
|
7.59%
|
N/A
|
|
SUPPLEMENTAL
INCOME TRUST FUND
PO BOX 8338
BOSTON MA 02266-8338
|
Class
A
|
16.74%
|
N/A
|
|
TD
AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
PO BOX 2226
OMAHA NE 68103-2226
|
Class
R5
|
16.80%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
B
|
6.72%
|
N/A
|
Funds with Fiscal
Period Ending March 31:
Except as otherwise indicated, the
information below is as of June 30, 2014:
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
Short
Term Bond Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
21.89%
|
N/A
|
Class
B
|
14.19%
|
Class
C
|
7.84%
|
Class
W
|
99.86%
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY
FBO CUSTOMERS
ATTN MUTUAL FUND DEPT
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
77.96%
|
N/A
|
|
CLISE
PROPERTIES INC
1700 7TH AVE
STE 1800
SEATTLE WA 98101-1312
|
Class
Y
|
37.38%
|
N/A
|
|
COLUMBIA
THERMOSTAT FUND
C/O PAULA RYAN
227 W MONROE ST
STE 3000
CHICAGO IL 60606-5018
|
Class
I
|
100.00%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
C
|
10.20%
|
N/A
|
|
FRONTIER
TRUST COMPANY
FBO ANDREINI BROS INC EMPLOYEES PS PLAN
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
10.61%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
227
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
FRONTIER
TRUST COMPANY
FBO S B I 401 K PLAN 133534
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
6.35%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DR E FL 3
JACKSONVILLE FL 32246-6484
|
Class
A
|
9.21%
|
47.62%
|
Class
B
|
21.27%
|
Class
C
|
29.46%
|
Class
Z
|
77.58%
|
Class
R
|
62.84%
|
Class
Y
|
62.46%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
R4
|
89.47%
|
N/A
|
Class
R5
|
21.40%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
7.76%
|
N/A
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
11.27%
|
N/A
|
|
WELLS
FARGO BANK
FBO 1525 W W T HARRIS BLVD
CHARLOTTE NC 28262-8522
|
Class
K
|
98.10%
|
N/A
|
Funds with Fiscal
Period Ending April 30:
Except as otherwise indicated, the
information below is as of July 31, 2014:
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
AMT-Free
CA Intermediate Muni Bond Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
47.54%
|
N/A
|
Class
C
|
7.66%
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY A/C
FBO CUSTOMERS
ATTN MUTUAL FUND DEPT
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
95.41%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
B
|
38.03%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
A
|
11.27%
|
N/A
|
Class
C
|
21.88%
|
Class
Z
|
8.11%
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DR E FL 3
JACKSONVILLE FL 32246-6484
|
Class
A
|
9.78%
|
73.25%
|
Class
C
|
45.35%
|
Class
Z
|
82.95%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
R4
|
94.24%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
228
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
A
|
12.02%
|
N/A
|
|
PERSHING
LLC
PO BOX 2052
JERSEY CITY NJ 07303-2052
|
Class
B
|
61.93%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
A
|
5.66%
|
N/A
|
Class
C
|
13.06%
|
AMT-Free
GA Intermediate Muni Bond Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
8.06%
|
N/A
|
Class
C
|
8.72%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
R4
|
6.05%
|
N/A
(a)
|
|
EDWARD
D JONES & CO
FOR THE BENEFIT OF CUSTOMERS
12555 MANCHESTER RD
SAINT LOUIS MO 63131-3729
|
Class
B
|
38.88%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
A
|
11.84%
|
N/A
|
Class
B
|
25.53%
|
Class
C
|
34.54%
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
A
|
15.38%
|
N/A
|
Class
C
|
6.64%
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DR E FL 3
JACKSONVILLE FL 32246-6484
|
Class
A
|
36.78%
|
74.65%
|
Class
B
|
35.59%
|
Class
C
|
19.64%
|
Class
Z
|
90.16%
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
A
|
8.48%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
5.38%
|
N/A
|
Class
C
|
9.49%
|
Class
R4
|
40.11%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
53.84%
|
N/A
|
|
STIFEL
NICOLAUS & CO INC
EXCLUSIVE BENEFIT OF CUSTOMERS
501 N BROADWAY
SAINT LOUIS MO 63102-2188
|
Class
C
|
6.34%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
C
|
5.80%
|
N/A
|
AMT-Free
MD Intermediate Muni Bond Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
6.35%
|
N/A
|
Class
B
|
31.84%
|
Statement
of Additional Information – June 1, 2015
|
229
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
R4
|
100.00%
|
N/A
(a)
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
A
|
10.91%
|
N/A
|
Class
C
|
7.02%
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DR E FL 3
JACKSONVILLE FL 32246-6484
|
Class
A
|
66.80%
|
82.48%
|
Class
B
|
28.99%
|
Class
C
|
14.26%
|
Class
Z
|
90.58%
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
B
|
39.18%
|
N/A
|
Class
C
|
14.85%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
C
|
19.44%
|
N/A
|
|
RBC
CAPITAL MARKETS, LLC
MUTUAL FUND OMNIBUS PROCESSING
OMNIBUS
ATTN MUTUAL FUND OPS MANAGER
510 MARQUETTE AVE S
MINNEAPOLIS MN 55402-1110
|
Class
C
|
7.69%
|
N/A
|
|
THOMAS
MULE &
BRENDA D MULE JT WROS
8402 BAYBERRY RD
PARKVILLE MD 21234-4909
|
Class
C
|
7.71%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
C
|
9.80%
|
N/A
|
AMT-Free
NC Intermediate Muni Bond Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
11.45%
|
N/A
|
|
EDWARD
D JONES & CO
FOR THE BENEFIT OF CUSTOMERS
12555 MANCHESTER RD
SAINT LOUIS MO 63131-3729
|
Class
A
|
7.37%
|
N/A
|
Class
C
|
6.44%
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
A
|
16.52%
|
N/A
|
Class
B
|
80.63%
|
Class
C
|
32.66%
|
Class
Z
|
8.76%
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DR E FL 3
JACKSONVILLE FL 32246-6484
|
Class
A
|
21.11%
|
71.11%
|
Class
B
|
19.37%
|
Class
C
|
14.51%
|
Class
Z
|
85.33%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
6.36%
|
N/A
|
Class
C
|
16.80%
|
Class
R4
|
20.70%
|
Statement
of Additional Information – June 1, 2015
|
230
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
A
|
16.26%
|
N/A
|
Class
R4
|
54.02%
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
A
|
5.10%
|
N/A
|
|
SEI
PRIVATE TRUST CO
C/O FRANKLIN STREET ID 701
ATTN MUTUAL FUNDS ADMIN
1 FREEDOM VALLEY DR
OAKS PA 19456-9989
|
Class
R4
|
24.83%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
A
|
7.27%
|
N/A
|
Class
C
|
5.31%
|
AMT-Free
SC Intermediate Muni Bond Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
16.94%
|
N/A
|
|
EDWARD
D JONES & CO
FOR THE BENEFIT OF CUSTOMERS
12555 MANCHESTER RD
SAINT LOUIS MO 63131-3729
|
Class
A
|
13.75%
|
N/A
|
Class
C
|
6.81%
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
A
|
6.28%
|
N/A
|
Class
B
|
62.52%
|
Class
C
|
12.71%
|
Class
Z
|
5.12%
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
A
|
5.19%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DR E FL 3
JACKSONVILLE FL 32246-6484
|
Class
A
|
20.73%
|
63.06%
|
Class
B
|
35.99%
|
Class
C
|
32.14%
|
Class
Z
|
80.50%
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
A
|
5.19%
|
N/A
|
Class
C
|
13.33%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
R4
|
6.84%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
91.81%
|
N/A
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
A
|
8.49%
|
N/A
|
Class
C
|
18.70%
|
AMT-Free
VA Intermediate Muni Bond Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
23.70%
|
N/A
|
Class
C
|
13.28%
|
Statement
of Additional Information – June 1, 2015
|
231
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
A
|
10.28%
|
N/A
|
Class
B
|
61.73%
|
Class
C
|
12.33%
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
B
|
34.56%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DR E FL 3
JACKSONVILLE FL 32246-6484
|
Class
A
|
42.11%
|
78.69%
|
Class
C
|
31.89%
|
Class
Z
|
90.01%
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
C
|
5.65%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
C
|
5.26%
|
N/A
|
Class
R4
|
97.54%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
C
|
17.06%
|
N/A
|
Global
Infrastructure Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
92.36%
|
71.39%
|
Class
B
|
92.59%
|
Class
C
|
76.12%
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCT
FBO CUSTOMERS
ATTENTION MUTUAL FUND
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
K
|
97.66%
|
N/A
|
|
EASON
HORTICULTURAL RESRCS INC TTEE
EASON HORTICULTURAL RESOURCES INC 4
C/O FASCORE LLC
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R
|
9.35%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
C
|
5.96%
|
N/A
|
Class
Z
|
6.35%
|
|
FRONTIER
TRUST COMPANY
FBO BRIAN P. SOMMER 401(K) PROFIT SHARI
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
21.86%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA LIFEGOAL GROWTH
PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
99.99%
|
N/A
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
Z
|
79.25%
|
N/A
|
Class
C
|
6.83%
|
Statement
of Additional Information – June 1, 2015
|
232
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
MLPF&S
FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTN FUND ADMINISTRATION
4800 DEER LAKE DRIVE EAST 3RD FL
JACKSONVILLE FL 32246-6484
|
Class
R
|
39.77%
|
N/A
|
|
MG
TRUST COMPANY CUST
FBO EYE ASSOCIATES OF OKLAHOMA PLLC MO
717 17TH ST
STE 1300
DENVER CO 80202-3304
|
Class
R
|
6.60%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
R4
|
40.49%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
56.67%
|
N/A
|
Class
R5
|
18.62%
|
|
TD
AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
PO BOX 2226
OMAHA NE 68103-2226
|
Class
R5
|
77.42%
|
N/A
|
Short
Term Municipal Bond Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
20.88%
|
N/A
|
Class
B
|
5.30%
|
Class
C
|
7.09%
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY A/C
FBO CUSTOMERS
ATTN MUTUAL FUND DEPT
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
49.34%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
R4
|
12.54%
|
N/A
(a)
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
C
|
18.48%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DR E FL 3
JACKSONVILLE FL 32246-6484
|
Class
A
|
32.48%
|
86.24%
|
Class
C
|
42.91%
|
Class
Z
|
92.53%
|
Class
B
|
94.70%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
10.20%
|
N/A
|
Class
R4
|
55.26%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
32.19%
|
N/A
|
|
TD
AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
PO BOX 2226
OMAHA NE 68103-2226
|
Class
R5
|
49.74%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
A
|
12.97%
|
N/A
|
Class
C
|
7.05%
|
Statement
of Additional Information – June 1, 2015
|
233
|
Funds with Fiscal Period Ending May 31:
Except as otherwise indicated, the information below is as of
August 31, 2014:
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
AP
– Multi-Manager Value Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
100.00%
|
100%
|
Commodity
Strategy Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
82.34%
|
N/A
|
Class
C
|
23.27%
|
|
BANK
OF AMERICA
FBO IM COLIN MOORE
ATTN MFO
PO BOX 843869
DALLAS TX 75284-3869
|
Class
Z
|
35.66%
|
N/A
|
|
BROWN
BROTHERS HARRIMAN & CO AS
525 WASHINGTON BLVD
JERSEY CITY NJ 07310-1606
|
Class
Z
|
33.24%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCT
FBO CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
99.61%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
R4
|
5.85%
|
86.91
(a)
|
Class
W
|
100.00%
|
|
FRONTIER
TRUST COMPANY
FBO J J SUPPLY 401 K PLAN
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
23.57%
|
N/A
|
|
FRONTIER
TRUST COMPANY
FBO SPECTRUM EYE CARE INC 401 K PLAN
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
44.27%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
10.81%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
31.94%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA GLOBAL OPPORTUNITIES FUND
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
37.75%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA RISK ALLOCATION FUND
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
16.35%
|
N/A
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
C
|
7.56%
|
N/A
|
|
MG
TRUST COMPANY CUST
FBO DANA DENTAL ASSOCIATES
717 17TH ST
STE 1300
DENVER CO 80202-3304
|
Class
R
|
13.53%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
234
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
C
|
34.02%
|
N/A
|
|
PAI
TRUST COMPANY, INC
STUDIOPOLIS, INC. 401(K) P/S PLAN
1300 ENTERPRISE DR
DE PERE WI 54115-4934
|
Class
R
|
15.36%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
A
|
9.46%
|
N/A
|
Class
C
|
8.39%
|
Class
R4
|
94.15%
|
|
RONALD
G & EVELYN K DURSO REVOC TR
RONALD G DURSO & EVELYN K DURSO TTE
PO BOX 201
MARQUAND MO 63655-0201
|
Class
Z
|
5.62%
|
N/A
|
|
STATE
STREET BK & TR IRA
RONALD G DURSO
PO BOX 201
MARQUAND MO 63655-0201
|
Class
Z
|
11.66%
|
N/A
|
|
TD
AMERITRADE
FBO SAMUEL A MCDONOUGH
TD AMERITRADE CLEARING INC CUSTODIA
1713 S CRESCENT BLVD
YARDLEY PA 19067-3113
|
Class
C
|
15.94%
|
N/A
|
|
TD
AMERITRADE
FBO WILLIAM MICHAEL HARTMAN
12880 AIRPORT RD
ATLANTA MI 49709-9289
|
Class
C
|
5.76%
|
N/A
|
Convertible
Securities Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
24.65%
|
N/A
|
Class
B
|
51.16%
|
Class
C
|
16.28%
|
Class
W
|
98.35%
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY A/C
FBO CUSTOMERS
ATTN MUTUAL FUND DEPT
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
16.97%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
B
|
5.37%
|
N/A
|
Class
C
|
9.10%
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE CONSERVATIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
5.56%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
13.67%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA INCOME BUILDER FUND
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
34.32%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
235
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
JPMCB
NA CUST FOR
COLUMBIA LIFEGOAL GROWTH
PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
44.01%
|
N/A
|
|
MERRILL
LYNCH PIERCE FENNER & SMITH
FOR THE SOLE BENEFIT OF IT CUSTOMER
4800 DEER LAKE DR E
JACKSONVILLE FL 32246-6484
|
Class
R
|
83.65%
|
N/A
|
Class
A
|
27.15%
|
Class
B
|
27.58%
|
Class
C
|
35.75%
|
Class
Z
|
24.37%
|
|
MG
TRUST COMPANY CUST
FBO CMC PENSION PROFESSIONALS
717 17TH ST
STE 1300
DENVER CO 80202-3304
|
Class
R4
|
7.04%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
C
|
6.95%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
10.40%
|
N/A
|
Class
R4
|
61.17%
|
Class
R5
|
6.20%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
A
|
13.30%
|
N/A
|
Class
C
|
7.56%
|
Class
R4
|
28.54%
|
Class
R5
|
9.17%
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
7.64%
|
N/A
|
|
TD
AMERITRADE TRUST COMPANY
ATTN HOUSE
PO BOX 17748
DENVER CO 80217-0748
|
Class
R5
|
63.66%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
C
|
6.61%
|
N/A
|
Diversified
Equity Income Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
23.86%
|
N/A
|
Class
B
|
28.00%
|
Class
C
|
32.37%
|
|
AMERIPRISE
TRUST COMPANY AS TR
OF THE VENTUREDYNE LTD SAL DEF
INVEST PL
990 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0009
|
Class
R5
|
24.16%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
CUST FOR THE EXCLUSIVE BENEFIT
ATTENTION MUTUAL FUND
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
5.55%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
Class
W
|
100.00%
|
Statement
of Additional Information – June 1, 2015
|
236
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
FIIOC
FBO AMERICAN HOLDCO, INC. 401(K) PROFIT
SHARING PLAN
100 MAGELLAN WAY (KW1C)
COVINGTON KY 41015-1987
|
Class
Z
|
5.56%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
C
|
5.59%
|
N/A
|
Class
Z
|
12.55%
|
|
GREAT
WEST TRUST CO
TRST
FBO EMPLOYEE BENEFITS CLIENTS
8515 E ORCHARD RD
GREENWOOD VLG CO 80111-5002
|
Class
R4
|
22.78%
|
N/A
|
|
GREAT
WEST TRUST CO
FBO RETIREMENT PLANS
8515 E ORCHARD RD
GREENWOOD VLG CO 80111-5002
|
Class
R5
|
7.77%
|
N/A
|
|
HARTFORD
LIFE INSURANCE COMPANY
ATTN UIT OPERATIONS
PO BOX 2999
HARTFORD CT 06104-2999
|
Class
K
|
7.73%
|
N/A
|
Class
R
|
41.77%
|
Class
R4
|
12.98%
|
|
ING
LIFE INSURANCE AND ANNUITY CO
ONE ORANGE WAY
WINDSOR CT 06095-4773
|
Class
K
|
45.41%
|
N/A
|
Class
R
|
21.14%
|
Class
R4
|
12.03%
|
Class
Y
|
98.89%
|
|
ING
NATIONAL TRUST AS TRUSTEE OR
CUSTODIAN FOR MERCEDES-BENZ
INTERNATIONAL INC RETIREMENT AND
SAVINGS PLAN
30 BRAINTREE HILL PARK
BRAINTREE MA 02184-8747
|
Class
R5
|
48.02%
|
N/A
|
|
MASSACHUSETTS
MUTUAL LIFE INS CO
1295 STATE ST # M200-INVST
SPRINGFIELD MA 01111-0002
|
Class
K
|
5.12%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
Z
|
7.92%
|
N/A
|
|
MID
ATLANTIC TRUST COMPANY
FBO BELL STATE BANK & TRUST MASTER
ACCOUNT
1251 WATERFRONT PL
STE 525
PITTSBURGH PA 15222-4228
|
Class
Z
|
35.27%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
Z
|
15.01%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
R5
|
7.34%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
5.19%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
237
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
RELIANCE
TRUST CO CUST
FBO MASSMUTUAL OMNIBUS PE
PO BOX 48529
ATLANTA GA 30362-1529
|
Class
R
|
16.84%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
Z
|
12.99%
|
N/A
|
|
WELLS
FARGO BANK
FBO 1525 W W T HARRIS BLVD
CHARLOTTE NC 28262-8522
|
Class
K
|
9.28%
|
N/A
|
Class
R4
|
32.55%
|
|
WELLS
FARGO BANK NA
FBO GRESHAM, SMITH & PARTNER EE SVGS
1525 WEST WT HARRIS BLVD
CHARLOTTE NC 28288-1076
|
Class
K
|
12.69%
|
N/A
|
Dividend
Opportunity Fund
|
AMERICAN
ENTERPRISE INV SVCS
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
K
|
5.00%
|
27.71%
|
Class
A
|
40.47%
|
Class
B
|
30.09%
|
Class
C
|
24.86%
|
Class
W
|
98.66%
|
|
CHARLES
SCHWAB & CO INC
CUST FOR THE EXCLUSIVE BENEFIT
ATTENTION MUTUAL FUND
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
K
|
5.77%
|
N/A
|
Class
R4
|
10.98%
|
Class
R5
|
25.22%
|
Class
Z
|
15.70%
|
|
DCGT
AS TTEE AND/OR CUST
FBO PLIC VARIOUS RETIREMENT PLANS
OMNIBUS
ATTN NPIO TRADE DESK
711 HIGH ST
DES MOINES IA 50392-0001
|
Class
R
|
13.38%
|
N/A
|
|
FIIOC
FBO TEAM INC SALARY DEFERRAL
PLAN AND TRUST
100 MAGELLAN WAY # KW1C
COVINGTON KY 41015-1987
|
Class
R4
|
7.09%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
C
|
6.23%
|
N/A
|
Class
Z
|
9.22%
|
|
JPMCB
NA CUST FOR
COLUMBIA INCOME BUILDER FUND
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
67.57%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA LIFEGOAL GROWTH
PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
32.43%
|
N/A
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
Z
|
6.09%
|
N/A
|
|
MLP
FENNER & SMITH INC
FBO SOLE BENEFIT OF ITS CUSTOMERS
4800 DEER LAKE DR EAST
JACKSONVILLE FL 32246-6484
|
Class
C
|
10.41%
|
N/A
|
Class
R
|
15.02%
|
Class
Z
|
6.47%
|
Statement
of Additional Information – June 1, 2015
|
238
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
MID-ATLANTIC
TRUST COMPANY CUST
FBO HEARTLAND FINANCIAL RETIREMENT
PLAN
1251 WATERFRONT PL
STE 525
PITTSBURGH PA 15222-4228
|
Class
Y
|
22.17%
|
N/A
|
|
MINNESOTA
LIFE INS COMPANY
ATTN KENNETH MONTAGUE
400 ROBERT STREET NORTH
ST PAUL MN 55101-2099
|
Class
R5
|
17.50%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
C
|
6.35%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
11.98%
|
N/A
|
Class
C
|
5.42%
|
Class
R4
|
24.41%
|
Class
R5
|
17.44%
|
Class
Y
|
50.76%
|
Class
Z
|
9.01%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
34.53%
|
N/A
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
17.84%
|
N/A
|
Class
Z
|
7.35%
|
|
SAMMONS
FINANCIAL NETWORK LLC
4546 CORPORATE DR
STE 100
WEST DES MOINES IA 50266-5911
|
Class
R
|
15.35%
|
N/A
|
|
SEI
PRIVATE TRUST COMPANY
C/O BOSTON PRIVATE ID
1 FREEDOM VALLEY DR
OAKS PA 19456-9989
|
Class
R5
|
9.49%
|
N/A
|
|
TD
AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
PO BOX 2226
OMAHA NE 68103-2226
|
Class
R5
|
6.63%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
Z
|
6.13%
|
N/A
|
|
VRSCO
FBO AIGFSB CUST TTEE
FBO HAMILTON HEALTHCARE 401A ROTH IRA
ATTN CHRIS BAUMAN
2727-A ALLEN PARKWAY, 4-D1
HOUSTON TX 77019-2107
|
Class
K
|
7.09%
|
N/A
|
|
VRSCO
FBO AIGFSB CUST TTEE
FBO HAMILTON HEALTHCARE 403B
ROTH IRA
2929 ALLEN PKWY
STE A6-20
HOUSTON TX 77019-7117
|
Class
K
|
64.32%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
239
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
VRSCO
FBO AIGFSB CUSTODIAN TRUSTEE
FBO MASON GENERAL HOSPITAL
2929 ALLEN PKWY
STE A6-20
HOUSTON TX 77019-7117
|
Class
K
|
8.05%
|
N/A
|
Flexible
Capital Income Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
78.74%
|
45.49%
|
Class
C
|
41.96%
|
Class
W
|
83.13%
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCT
FBO CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
6.69%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
W
|
16.87%
|
N/A
(a)
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
Z
|
7.53%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
CONSERVATIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
8.08%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE CONSERVATIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
16.01%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
11.56%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA LIFEGOAL GROWTH
PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
64.34%
|
N/A
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
A
|
6.02%
|
N/A
|
Class
C
|
7.44%
|
Class
Z
|
22.31%
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DR E FL 3
JACKSONVILLE FL 32246-6484
|
Class
C
|
7.24%
|
N/A
|
Class
Z
|
20.06%
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
C
|
8.12%
|
N/A
|
Class
Z
|
21.77%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
C
|
5.99%
|
N/A
|
Class
R4
|
41.02%
|
Statement
of Additional Information – June 1, 2015
|
240
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
C
|
10.27%
|
N/A
|
Class
R
|
95.29%
|
Class
R4
|
30.23%
|
Class
R5
|
37.48%
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
10.88%
|
N/A
|
Class
Z
|
12.49%
|
|
SAXON
& CO
P O BOX 7780-1888
PHILADELPHIA PA 19182-0001
|
Class
R4
|
28.73%
|
N/A
|
|
TD
AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
PO BOX 2226
OMAHA NE 68103-2226
|
Class
R5
|
52.25%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
Z
|
9.60%
|
N/A
|
High
Yield Bond Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
22.47%
|
N/A
|
Class
B
|
31.17%
|
Class
C
|
23.71%
|
Class
W
|
99.99%
|
|
CAPINCO
C/O US BANK NA
PO BOX 1787
MILWAUKEE WI 53201-1787
|
Class
R5
|
5.55%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
CUST FOR THE EXCLUSIVE BENEFIT
ATTENTION MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
6.86%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
C
|
9.97%
|
N/A
|
|
ING
LIFE INSURANCE AND ANNUITY CO
ONE ORANGE WAY
WINDSOR CT 06095-4773
|
Class
R4
|
60.93%
|
N/A
|
Class
K
|
68.48%
|
Class
R
|
58.53%
|
Class
Y
|
70.67%
|
|
ING
NATIONAL TRUST
ONE ORANGE WAY
WINDSOR CT 06095-4773
|
Class
K
|
12.34%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
10.52%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA INCOME BUILDER FUND
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
84.95%
|
N/A
|
|
LINCOLN
RETIREMENT SERVICES COMPANY
FBO HEBREW SENIORLIFE EMPLOYEE
PO BOX 7876
FORT WAYNE IN 46801-7876
|
Class
Y
|
15.57%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
241
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
MASSACHUSETTS
MUTUAL LIFE INS CO
1295 STATE ST # M200-INVST
SPRINGFIELD MA 01111-0002
|
Class
K
|
15.72%
|
N/A
|
|
MLP
FENNER & SMITH INC
FBO SOLE BENEFIT OF ITS CUSTOMERS
4800 DEER LAKE DR EAST
JACKSONVILLE FL 32246-6484
|
Class
C
|
9.90%
|
N/A
|
Class
R
|
27.41%
|
Class
Z
|
50.68%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
R5
|
5.17%
|
N/A
|
Class
Y
|
8.85%
|
Class
Z
|
10.31%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
18.04%
|
N/A
|
|
TAYNIK
& CO
C/O STATE STREET BANK & TRUST
1200 CROWN COLONY DR FL 6
QUINCY MA 02169-0938
|
Class
R4
|
11.71%
|
N/A
|
|
TD
AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
PO BOX 2226
OMAHA NE 68103-2226
|
Class
R5
|
72.99%
|
N/A
|
Mortgage
Opportunities Fund
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY
FBO CUSTOMERS
ATTN MUTUAL FUND DEPT
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
A
|
21.64%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
C
|
100.00%
|
96.97%
(a)
|
Class
R4
|
100.00%
|
Class
R5
|
100.00%
|
Class
W
|
100.00%
|
Class
Z
|
49.44%
|
|
FUNK
DAIRY INC
3040 N 3800 E
HANSEN ID 83334-5246
|
Class
A
|
64.70%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
16.27%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA GLOBAL OPPORTUNITIES FUND
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
21.68%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA INCOME BUILDER FUND
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
59.19%
|
N/A
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
Z
|
38.48%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
7.26%
|
N/A
|
|
STATE
STREET BK & TR IRA
RANDOLPH C STEELE
125 LITTLE MEADOW RD
GUILFORD CT 06437-2025
|
Class
Z
|
12.08%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
242
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
Multi-Advisor
Small Cap Value Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
27.46%
|
N/A
|
Class
B
|
17.84%
|
Class
C
|
18.35%
|
|
BAZACO
CLEARY FOLEY GLASS LRSSO TTE
PCCS OF NOVA 401K PROFIT SHARING PL
C/O FASCORE LLC
8515 E ORCHARD RD
GREENWOOD VILLAGE CO 80111-5002
|
Class
R
|
9.35%
|
N/A
|
|
EQUITABLE
LIFE FOR SA NO65
ON BEHALF OF VARIOUS 401K
EXPEDITER PLANS
1290 AVENUE OF THE AMERICAS
NEW YORK NY 10104-0101
|
Class
R
|
51.37%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
Z
|
11.08%
|
N/A
|
|
FRONTIER
TRUST COMPANY
FBO SELECT ENGINEERING INC RETIREMENT
PO BOX 10758
FARGO ND 58106-0758
|
Class
R4
|
5.17%
|
N/A
|
|
HARTFORD
LIFE INSURANCE COMPANY
ATTN UIT OPERATIONS
PO BOX 2999
HARTFORD CT 06104-2999
|
Class
R
|
6.40%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
28.66%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
71.33%
|
N/A
|
|
JPMORGAN
CHASE BANK AS TRUSTEE
FBO ALLIANT ENERGY CORP 401K SVGS PLAN
C/O JPMORGAN RPS MGMT RPTG TEAM
11500 OUTLOOK ST
OVERLAND PARK KS 66211-1804
|
Class
R5
|
60.88%
|
N/A
|
|
MLPF&S
FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTN FUND ADMINISTRATION
4800 DEER LAKE DRIVE EAST 3RD FL
JACKSONVILLE FL 32246-6484
|
Class
R
|
12.34%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
Z
|
15.88%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
C
|
9.47%
|
N/A
|
Class
R4
|
47.02%
|
|
PIMS/PRUDENTIAL
RETIREMENT
AS NOMINEE FOR THE TTEE/CUST PL
ESECLENDING RETIREMENT SAVINGS
175 FEDERAL ST FL 11 FL 11
BOSTON MA 02110-2221
|
Class
K
|
32.26%
|
N/A
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
5.64%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
243
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
TAYNIK
& CO
C/O STATE STREET BANK & TRUST
1200 CROWN COLONY DR FL 6
QUINCY MA 02169-0938
|
Class
K
|
9.35%
|
N/A
|
|
TD
AMERITRADE TRUST CO
PO BOX 17748
DENVER CO 80217-0748
|
Class
R5
|
5.13%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
Z
|
40.14%
|
N/A
|
|
VRSCO
FBO AIGFSB CUST TTEE
FBO COMMONWEALTH OF MA 401A ROTH IRA
ATTN CHRIS BAUMAN
2727-A ALLEN PARKWAY, 4-D1
HOUSTON TX 77019-2107
|
Class
K
|
10.97%
|
N/A
|
|
VRSCO
FBO AIGFSB CUST TTEE
FBO FLOYD COUNTY SCHOOLS 403B
ROTH IRA
2929 ALLEN PKWY
STE A6-20
HOUSTON TX 77019-7117
|
Class
R4
|
8.51%
|
N/A
|
|
VRSCO
FBO AIGFSB CUST TTEE
FBO FLOYD COUNTY SCHOOLS 457B
ROTH IRA
2929 ALLEN PKWY
STE A6-20
HOUSTON TX 77019-7117
|
Class
R4
|
7.16%
|
N/A
|
|
VRSCO
FBO AIGFSB CUSTODIAN TRUSTEE
FBO FULTON COUNTY SCHOOLS
2929 ALLEN PKWY
STE A6-20
HOUSTON TX 77019-7117
|
Class
R4
|
6.31%
|
N/A
|
|
VRSCO
FBO AIGFSB CUST TTEE
FBO HARNETT HEALTH SYSTEM
ROTH IRA
2929 ALLEN PKWY
STE A6-20
HOUSTON TX 77019-7117
|
Class
K
|
5.64%
|
N/A
|
|
VRSCO
FBO AIGFSB CUSTODIAN TRUSTEE
FBO JEFFERSON REGIONAL MED CNTR
2929 ALLEN PKWY
STE A6-20
HOUSTON TX 77019-7117
|
Class
R5
|
9.01%
|
N/A
|
|
VRSCO
FBO AIGFSB CUST TTEE
FBO PULLMAN
REGIONAL HOSPITAL 401A ROTH IRA
ROTH IRA
2929 ALLEN PKWY
STE A6-20
HOUSTON TX 77019-7117
|
Class
K
|
9.27%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
244
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
VRSCO
FBO AIGFSB CUST TTEE
FBO PULLMAN REGIONAL HOSPITAL 457B
ROTH IRA
2929 ALLEN PKWY
STE A6-20
HOUSTON TX 77019-7117
|
Class
K
|
14.73%
|
N/A
|
|
VRSCO
FBO AIGFSB CUST TTEE
FBO UNIV OF NORTH TEXAS OPT RET PL 403B
ROTH IRA
2929 ALLEN PKWY
STE A6-20
HOUSTON TX 77019-7117
|
Class
R4
|
5.50%
|
N/A
|
|
WILMINGTON
TRUST RISC AS CUST
FBO ZINPRO CORP 401K PSP
PO BOX 52129
PHOENIX AZ 85072-2129
|
Class
Z
|
10.90%
|
N/A
|
Select
Large-Cap Value Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
24.73%
|
N/A
|
Class
B
|
18.32%
|
Class
W
|
99.99%
|
|
CHARLES
SCHWAB & CO INC
CUST FOR THE EXCLUSIVE BENEFIT
ATTENTION MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
A
|
6.38%
|
N/A
|
Class
K
|
83.99%
|
Class
R5
|
26.14%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
K
|
16.01%
|
N/A
(a)
|
|
COUNSEL
TRUST DBA MATC
FBO ALLIANCE DEFENSE FUND INC 401 K
PROFIT SHARING PLAN & TRUST
1251 WATERFRONT PL
STE 525
PITTSBURGH PA 15222-4228
|
Class
R
|
7.33%
|
N/A
|
|
FIIOC
FBO ILLINOIS CORN PROCESSING 401(K) &
PROFIT SHARING PLAN
100 MAGELLAN WAY # KW1C
COVINGTON KY 41015-1987
|
Class
R5
|
8.69%
|
N/A
|
|
FIIOC
FBO MGP INGREDIENTS NON-UNION
401 (K) PROFIT SHARING PLAN
100 MAGELLAN WAY # KW1C
COVINGTON KY 41015-1987
|
Class
R5
|
16.01%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
B
|
9.13%
|
N/A
|
Class
C
|
9.69%
|
Class
Z
|
5.89%
|
|
GREAT-WEST
TRUST COMPANY LLC TTEE F
EMPLOYEE BENEFITS CLIENTS 401K
8515 E ORCHARD RD
GREENWOOD VLG CO 80111-5002
|
Class
R5
|
8.78%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
17.71%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
245
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
53.33%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
26.71%
|
N/A
|
|
MLPF&S
FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTN FUND ADMINISTRATION
4800 DEER LAKE DRIVE EAST 3RD FL
JACKSONVILLE FL 32246-6484
|
Class
A
|
15.84%
|
N/A
|
Class
B
|
32.28%
|
Class
C
|
35.63%
|
Class
R
|
63.86%
|
Class
R4
|
51.09%
|
Class
Z
|
17.56%
|
|
MID
ATLANTIC TRUST COMPANY FBO
HOLZFASTER CECIL MCKNIGHT & MUES
401 K PLAN
1251 WATERFRONT PL
STE 525
PITTSBURGH PA 15222-4228
|
Class
R5
|
6.51%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
A
|
5.22%
|
N/A
|
Class
B
|
7.35%
|
Class
C
|
11.11%
|
Class
Z
|
60.36%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
9.15%
|
N/A
|
Class
R4
|
19.25%
|
Class
R5
|
9.11%
|
|
NEW
YORK LIFE TRUST COMPANY
ATTN WILLIAM G PERRET
169 LACKAWANNA AVE
PARSIPPANY NJ 07054-1007
|
Class
A
|
6.73%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
29.63%
|
N/A
|
Class
R5
|
10.29%
|
|
SEMAN
VIOLINS INC TTEE
FBO SEMAN VIOLINS INC 401K
C/O FASCORE LLC
8515 E ORCHARD RD
GREENWOOD VLG CO 80111-5002
|
Class
R5
|
5.90%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
C
|
6.89%
|
N/A
|
Class
Z
|
9.15%
|
Select
Smaller-Cap Value Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
13.49%
|
N/A
|
Class
B
|
9.03%
|
Class
C
|
5.52%
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCT
FBO CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
51.96%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
246
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
DCGT
AS TTEE AND/OR CUST
FBO PLIC VARIOUS RETIREMENT PLANS
OMNIBUS
ATTN NPIO TRADE DESK
711 HIGH ST
DES MOINES IA 50392-0001
|
Class
R
|
11.40%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
C
|
8.78%
|
N/A
|
Class
Z
|
22.90%
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
22.06%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
40.70%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
37.23%
|
N/A
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
Z
|
6.19%
|
N/A
|
|
MLPF&S
FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTN FUND ADMINISTRATION
4800 DEER LAKE DRIVE EAST 3RD FL
JACKSONVILLE FL 32246-6484
|
Class
R5
|
10.44%
|
N/A
|
Class
C
|
18.75%
|
Class
R
|
54.23%
|
Class
Z
|
9.86%
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
Z
|
9.21%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
C
|
5.12%
|
N/A
|
Class
R4
|
89.16%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
8.19%
|
N/A
|
Class
R5
|
13.10%
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
7.53%
|
N/A
|
|
RBC
CAPITAL MARKETS, LLC
MUTUAL FUND OMNIBUS PROCESSING
OMNIBUS
ATTN MUTUAL FUND OPS MANAGER
510 MARQUETTE AVE S
MINNEAPOLIS MN 55402-1110
|
Class
B
|
10.05%
|
N/A
|
Class
Z
|
12.22%
|
|
STATE
STREET CORPORATION
FBO ADP ACCESS
1 LINCOLN ST
BOSTON MA 02111-2901
|
Class
R5
|
8.61%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
247
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
T
ROWE PRICE TRUST CO TTEE
FBO RETIREMENT PLAN CLIENTS
PO BOX 17215
BALTIMORE MD 21297-1215
|
Class
Z
|
24.47%
|
N/A
|
|
TD
AMERITRADE TRUST COMPANY
PO BOX 17748
DENVER CO 80217-0748
|
Class
R5
|
8.48%
|
N/A
|
|
WELLS
FARGO BANK FBO
1525 W W T HARRIS BLVD
CHARLOTTE NC 28262-8522
|
Class
K
|
98.29%
|
N/A
|
Seligman
Communications and Information Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
7.18%
|
N/A
|
Class
B
|
9.63%
|
|
CHARLES
SCHWAB & CO INC
CUST A/C FOR THE EXCLUSIVE BENEFIT
ATTENTION MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
K
|
69.18%
|
N/A
|
Class
R5
|
24.75%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
Class
K
|
9.59%
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
A
|
8.01%
|
N/A
|
Class
B
|
9.56%
|
Class
C
|
11.59%
|
Class
Z
|
21.37%
|
|
GREAT-WEST
TRUST COMPANY LLC TTEE F
EMPLOYEE BENEFITS CLIENTS 401K
8515 E ORCHARD RD
GREENWOOD VILLAGE CO 80111-5002
|
Class
K
|
21.23%
|
N/A
|
|
HARTFORD
LIFE INSURANCE COMPANY
ATTN UIT OPERATIONS
PO BOX 2999
HARTFORD CT 06104-2999
|
Class
R
|
23.54%
|
N/A
|
|
MLPF&S
FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTN FUND ADMINISTRATION
4800 DEER LAKE DRIVE EAST 3RD FL
JACKSONVILLE FL 32246-6484
|
Class
A
|
8.73%
|
N/A
|
Class
B
|
20.23%
|
Class
C
|
17.23%
|
Class
R
|
15.12%
|
Class
R4
|
78.87%
|
Class
R5
|
20.82%
|
Class
Z
|
27.36%
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
A
|
7.25%
|
N/A
|
Class
B
|
10.43%
|
Class
C
|
11.73%
|
Class
Z
|
15.70%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
7.48%
|
N/A
|
Class
B
|
5.90%
|
Class
C
|
7.12%
|
Class
R5
|
20.14%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
A
|
5.95%
|
N/A
|
Class
B
|
8.61%
|
Class
C
|
5.88%
|
Class
R4
|
5.79%
|
|
PIMS/PRUDENTIAL
RETIREMENT
AS NOMINEE FOR THE TTEE/CUST PL
MIAMI CHILDREN'S HEALTH SYSTEM
3100 SW 62ND AVE
MIAMI FL 33155-3009
|
Class
R4
|
9.26%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
248
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
PIMS/PRUDENTIAL
RETIREMENT
AS NOMINEE FOR THE TTEE/CUST PL
POWER PROFIT SHARING 401 K PLAN
2041 S COBALT POINT WAY
MERIDIAN ID 83642-4443
|
Class
R5
|
6.78%
|
N/A
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
B
|
6.65%
|
N/A
|
Class
C
|
7.47%
|
|
STATE
STREET CORPORATION
FBO ADP ACCESS
1 LINCOLN ST
BOSTON MA 02111-2901
|
Class
R
|
33.26%
|
N/A
|
Class
R5
|
6.39%
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
C
|
8.03%
|
N/A
|
Class
Z
|
16.16%
|
Small/Mid
Cap Value Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
33.41%
|
N/A
|
Class
B
|
30.73%
|
Class
C
|
30.53%
|
|
CHARLES
SCHWAB & CO INC
CUST A/C FOR THE EXCLUSIVE BENEFIT
ATTENTION MUTUAL FUND
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
10.63%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
W
|
100.00%
|
N/A
(a)
|
|
DCGT
AS TTEE AND/OR CUST
FBO PLIC VARIOUS RETIREMENT PLANS
OMNIBUS
ATTN NPIO TRADE DESK
711 HIGH ST
DES MOINES IA 50392-0001
|
Class
K
|
8.19%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
C
|
10.83%
|
N/A
|
Class
Z
|
40.96%
|
|
HARTFORD
LIFE INSURANCE COMPANY
ATTN UIT OPERATIONS
PO BOX 2999
HARTFORD CT 06104-2999
|
Class
R
|
47.97%
|
N/A
|
Class
R4
|
15.69%
|
|
ING
LIFE INSURANCE AND ANNUITY CO
ONE ORANGE WAY B3N
WINDSOR CT 06095-4773
|
Class
K
|
29.11%
|
N/A
|
Class
R5
|
25.05%
|
Class
R
|
14.87%
|
|
ING
NATIONAL TRUST
ONE ORANGE WAY B3N
WINDSOR CT 06095-4773
|
Class
K
|
14.91%
|
N/A
|
Class
R5
|
11.10%
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
24.98%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
51.99%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
249
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
23.03%
|
N/A
|
|
MASSACHUSETTS
MUTUAL LIFE INS CO
1295 STATE ST # M200-INVST
SPRINGFIELD MA 01111-0002
|
Class
R
|
7.68%
|
N/A
|
|
MLP
FENNER & SMITH INC
FBO SOLE BENEFIT OF ITS CUSTOMERS
4800 DEER LAKE DR EAST
JACKSONVILLE FL 32246-6484
|
Class
R5
|
13.64%
|
N/A
|
Class
Z
|
21.26%
|
|
MINNESOTA
LIFE INS COMPANY
ATTN KENNETH MONTAGUE
400 ROBERT STREET NORTH
ST PAUL MN 55101-2099
|
Class
R5
|
8.97%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
Z
|
5.25%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
K
|
28.13%
|
N/A
|
Class
R5
|
13.87%
|
|
NEW
YORK LIFE TRUST COMPANY
690 CANTON ST
STE 100
WESTWOOD MA 02090-2344
|
Class
Y
|
99.96%
|
N/A
|
|
RELIANCE
TRUST COMPANY FBO
BBL COMPANIES
PO BOX 48529
ATLANTA GA 30362-1529
|
Class
Z
|
7.20%
|
N/A
|
|
STATE
STREET CORPORATION
FBO ADP ACCESS
1 LINCOLN ST
BOSTON MA 02111-2901
|
Class
R4
|
15.99%
|
N/A
|
|
TAYNIK
& CO
C/O STATE STREET BANK & TRUST
1200 CROWN COLONY DR FL 6
QUINCY MA 02169-0938
|
Class
R4
|
7.95%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
Z
|
7.63%
|
N/A
|
|
WELLS
FARGO BANK FBO
1525 W W T HARRIS BLVD
CHARLOTTE NC 28262-8522
|
Class
R5
|
6.73%
|
N/A
|
|
WELLS
FARGO BANK NA TRUSTEE
FBO STATE OF ALABAMA DCP
8515 E ORCHARD RD
GREENWOOD VILLAGE CO 80111-5002
|
Class
R4
|
31.90%
|
N/A
|
U.S.
Government Mortgage Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
10.58%
|
N/A
|
Class
B
|
19.82%
|
Class
C
|
14.28%
|
Class
W
|
99.83%
|
Statement
of Additional Information – June 1, 2015
|
250
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY
FBO CUSTOMERS
ATTN MUTUAL FUND DEPT
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
50.13%
|
N/A
|
Class
K
|
68.28%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
K
|
11.97%
|
33.67%
(a)
|
|
COLUMBIA
THERMOSTAT FUND
C/O PAULA RYAN
227 W MONROE ST
STE 3000
CHICAGO IL 60606-5018
|
Class
I
|
19.19%
|
N/A
|
|
COUNSEL
TRUST DBA MATC FBO
HARVARD MANAGEMENT SOLUTIONS
401(K) PROFIT SHARING PLAN & TRUST
1251 WATERFRONT PL
STE 525
PITTSBURGH PA 15222-4228
|
Class
K
|
19.75%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
A
|
5.78%
|
N/A
|
Class
C
|
8.25%
|
|
GREAT-WEST
TRUST COMPANY LLC TTEE F
EMPLOYEE BENEFITS CLIENTS 401K
8515 E ORCHARD RD
GREENWOOD VLG CO 80111-5002
|
Class
R4
|
5.62%
|
N/A
|
|
JPMCB
NA AS CUST FOR THE SC529 PLAN
COLUMBIA MODERATE 529 PORTFOLIO
14201 N DALLAS PARKWAY
FL 13
DALLAS TX 75254-2916
|
Class
Z
|
9.42%
|
N/A
|
|
JPMCB
NA AS CUST FOR THE SC529 PLAN
COLUMBIA MODERATE GROWTH
529 PORTFOLIO
14201 N DALLAS PARKWAY
FL 13
DALLAS TX 75254-2916
|
Class
Z
|
7.29%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
CONSERVATIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
6.92%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
21.69%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE CONSERVATIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
13.23%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
13.98%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
251
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
JPMCB
NA CUST FOR
COLUMBIA INCOME BUILDER FUND
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
22.07%
|
N/A
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
C
|
11.35%
|
N/A
|
Class
Z
|
20.01%
|
|
MLP
FENNER & SMITH INC
FBO SOLE BENEFIT OF ITS CUSTOMERS
4800 DEER LAKE DR EAST
JACKSONVILLE FL 32246-6484
|
Class
A
|
8.94%
|
N/A
|
Class
B
|
29.63%
|
Class
C
|
19.53%
|
Class
Z
|
41.34%
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
C
|
9.39%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
6.83%
|
N/A
|
Class
R4
|
29.03%
|
Class
R5
|
14.60%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
27.83%
|
N/A
|
Class
R5
|
5.19%
|
|
PIMS/PRUDENTIAL
RETIREMENT
AS NOMINEE FOR THE TTEE/CUST PL
OSI SYSTEMS, INC. 401(K)
12525 CHADRON AVE
HAWTHORNE CA 90250-4807
|
Class
R4
|
7.65%
|
N/A
|
|
STATE
STREET CORPORATION
FBO ADP ACCESS
1 LINCOLN ST
BOSTON MA 02111-2901
|
Class
R4
|
15.36%
|
N/A
|
|
SUNTRUST
BANK
FBO VARIOUS SUNTRUST OMNIBUS ACCOUNTS
8515 E ORCHARD RD
GREENWOOD VLG CO 80111-5002
|
Class
R5
|
9.33%
|
N/A
|
|
TAYNIK
& CO
C/O INVESTORS BANK & TRUST CO
200 CLARENDON ST FL 17
BOSTON MA 02116-5097
|
Class
R4
|
13.31%
|
N/A
|
|
WELLS
FARGO BANK
FBO FOREMOST 401K PSP & TRUST
1525 WEST WT HARRIS BLVD
CHARLOTTE NC 28288-1076
|
Class
R5
|
6.34%
|
N/A
|
Funds with Fiscal
Period Ending July 31:
Except as otherwise indicated, the
information below is as of October 31, 2014:
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
AMT-Free
Tax-Exempt Bond Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
11.21%
|
N/A
|
Class
B
|
18.75%
|
Class
C
|
31.19%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
R5
|
11.22%
|
N/A
(a)
|
Statement
of Additional Information – June 1, 2015
|
252
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
B
|
7.20%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
Z
|
50.75%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
Z
|
9.80%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
R4
|
12.57%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
85.05%
|
N/A
|
Class
R5
|
88.78%
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
C
|
8.23%
|
N/A
|
Class
Z
|
25.36%
|
Floating
Rate Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
46.23%
|
N/A
|
Class
B
|
34.98%
|
Class
C
|
28.26%
|
|
CBNA
AS CUSTODIAN FBO
FRINGE BENEFITS DESIGN RETIREMENT P
6 RHOADS DR STE 7
UTICA NY 13502-6317
|
Class
R
|
20.56%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
CUST A/C FOR THE EXCLUSIVE BENEFIT
ATTENTION MUTUAL FUND
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
8.51%
|
N/A
|
Class
R4
|
59.57%
|
Class
K
|
90.82%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
K
|
9.18%
|
N/A
(a)
|
Class
W
|
100.00%
|
|
COREPOINTE
INSURANCE COMPANY
401 S OLD WOODWARD AVE
BIRMINGHAM MI 48009-6612
|
Class
Z
|
14.66%
|
N/A
|
|
EMJAY
CORPORATION CUSTODIAN FBO
PLANS OF GREAT WEST FINANCIAL
8515 E ORCHARD RD 2T2
GREENWOOD VILLAGE CO 80111-5002
|
Class
R5
|
8.05%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA INCOME BUILDER FUND
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
95.22%
|
N/A
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
Z
|
7.53%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
253
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
C
|
10.49%
|
N/A
|
Class
R
|
28.31%
|
Class
Z
|
22.81%
|
|
MID
ATLANTIC TRUST COMPANY FBO
SCHAGRIN GAS CO
1251 WATERFRONT PL STE 525
PITTSBURGH PA 15222-4228
|
Class
R
|
25.08%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
C
|
10.54%
|
N/A
|
Class
Z
|
24.25%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
C
|
5.43%
|
N/A
|
Class
R4
|
8.76%
|
Class
R5
|
79.38%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
28.33%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
C
|
5.03%
|
N/A
|
Class
Z
|
13.87%
|
Global
Opportunities Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
16.84%
|
N/A
|
Class
B
|
37.78%
|
Class
C
|
40.64%
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCT FBO
CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
K
|
86.31%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
R
|
100.00%
|
N/A
(a)
|
Class
R4
|
100.00%
|
Class
R5
|
100.00%
|
Class
W
|
100.00%
|
|
DONNA
C KNIGHT & JEFFREY L KNIGHT
TTEES DONNA C KNIGHT LIVING TRUST
U/A 07/24/1998
15 SYLVAN LN
WESTON MA 02493-1027
|
Class
Z
|
51.59%
|
N/A
|
|
FIRST
CLEARING LLC
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
K
|
13.69%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
Z
|
20.26%
|
N/A
|
|
STATE
STREET BK & TR IRA
JEFFREY L KNIGHT
15 SYLVAN LN
WESTON MA 02493-1027
|
Class
Z
|
6.60%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
254
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
Z
|
5.29%
|
N/A
|
Income
Opportunities Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
72.04%
|
N/A
|
Class
B
|
26.42%
|
Class
C
|
35.85%
|
Class
W
|
99.92%
|
|
ASCENSUS
TRUST COMPANY FBO
DENNIS F MEYER INC 401 K
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
14.07%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY A/C FBO CUSTOMERS
ATTN MUTUAL FUND DEPT
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
37.45%
|
N/A
|
Class
K
|
8.02%
|
|
COLUMBIA
THERMOSTAT FUND
C/O PAULA RYAN
227 W MONROE ST STE 3000
CHICAGO IL 60606-5018
|
Class
I
|
38.86%
|
N/A
|
|
FIIOC
FBO
FATE THERAPEUTICS INC 401(K) PLAN
100 MAGELLAN WAY (KW1C)
COVINGTON KY 41015-1987
|
Class
R
|
9.60%
|
N/A
|
|
FIIOC
FBO
PAREX USA INC 401(K) PLAN
100 MAGELLAN WAY
COVINGTON KY 41015-1987
|
Class
R
|
5.02%
|
N/A
|
|
FIIOC
FBO
TOM BELL GROUP 401(K) RETIREMENT
PLAN
100 MAGELLAN WAY (KW1C)
COVINGTON KY 41015-1987
|
Class
R
|
12.73%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
B
|
8.85%
|
N/A
|
Class
C
|
6.28%
|
|
GREAT
WEST TRUST CO
TRST FBO EMPLOYEE BENEFITS CLIENTS
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
K
|
90.87%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
27.62%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
22.36%
|
N/A
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
C
|
5.31%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
255
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DR E FL 3
JACKSONVILLE FL 32246-6484
|
Class
B
|
16.31%
|
N/A
|
Class
C
|
9.43%
|
Class
Z
|
65.62%
|
Class
Y
|
98.80%
|
|
MG
TRUST COMPANY CUST FBO
THE ANDERSON COMPANY L L C 401 K
717 17TH ST STE 1300
DENVER CO 80202-3304
|
Class
R
|
7.61%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
B
|
5.64%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
C
|
7.54%
|
N/A
|
Class
R4
|
71.26%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
27.16%
|
N/A
|
|
SMC
CONSULTING ENGINEERS P C TTEE
SMC CONSULTING ENGINEERS P C 401 K
C/O FASCORE LLC
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R
|
32.83%
|
N/A
|
|
TD
AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
PO BOX 2226
OMAHA NE 68103-2226
|
Class
R5
|
61.92%
|
N/A
|
Inflation
Protected Securities Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
27.85%
|
N/A
|
Class
B
|
19.28%
|
Class
C
|
18.76%
|
Class
W
|
99.98%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
K
|
25.34%
|
33.24%
(a)
|
Class
R5
|
11.94%
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
C
|
5.84%
|
N/A
|
Class
Z
|
74.45%
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
CONSERVATIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
14.77%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
10.23%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE CONSERVATIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
16.68%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
256
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
17.32%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA INCOME BUILDER FUND
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
39.20%
|
N/A
|
|
MATRIX
TRUST COMPANY CUST. FBO
LAW OFFICES OF ROSEMARIE ARNOLD
717 17TH ST STE 1300
DENVER CO 80202-3304
|
Class
K
|
68.41%
|
N/A
|
|
MG
TRUST COMPANY CUST FBO
DIAMOND CARPETS INC EMPLOYEES SAV
717 17TH ST STE 1300
DENVER CO 80202-3304
|
Class
K
|
6.05%
|
N/A
|
|
MLP
FENNER & SMITH INC
FBO SOLE BENEFIT OF ITS CUSTOMERS
4800 DEER LAKE DR EAST
JACKSONVILLE FL 32246-6484
|
Class
C
|
38.32%
|
N/A
|
Class
R
|
79.32%
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
C
|
6.02%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
R5
|
35.03%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
B
|
6.11%
|
N/A
|
|
STATE
STREET CORPORATION
FBO ADP ACCESS
1 LINCOLN ST
BOSTON MA 02111-2901
|
Class
R5
|
51.93%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
Z
|
16.79%
|
N/A
|
Large
Core Quantitative Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
5.45%
|
N/A
|
Class
C
|
14.86%
|
Class
W
|
100.00%
|
|
ASCENSUS
TRUST CO FBO
RHEUMATOLOGY CONSULTANTS WNY PC 401
FRONTIER TRUST CO
PO BOX 10577
FARGO ND 58106-0577
|
Class
R
|
6.60%
|
N/A
|
|
ASCENSUS
TRUST COMPANY FBO
FINANCIAL NETWORK AUDIT, LLC 401(K)
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
11.83%
|
N/A
|
|
ASCENSUS
TRUST COMPANY FBO
HOSPICE ADVANTAGE 401(K) PLAN
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
15.74%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
257
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
Z
|
48.33%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
12.22%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
43.06%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE CONSERVATIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
8.35%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
21.76%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA LIFEGOAL GROWTH
PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
5.13%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA VP-ASSET ALLOCATION FUND
14201 N DALLAS PKWAY FL 13
DALLAS TX 75254-2916
|
Class
I
|
6.76%
|
N/A
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
Z
|
8.22%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
Z
|
17.00%
|
N/A
|
Class
C
|
5.94%
|
Class
R
|
41.46%
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
Z
|
9.44%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
R4
|
36.00%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
62.84%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
Z
|
5.19%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
258
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
VOYA
INSTITUTIONAL TRUST COMPANY
AS TRUSTEE OR CUSTODIAN FOR
MERCEDES-BENZ INTER
INC RET & SAVINGS PLAN
30 BRAINTREE HILL PARK
BRAINTREE MA 02184-8747
|
Class
R5
|
97.04%
|
N/A
|
|
WELLS
FARGO BANK FBO
1525 W W T HARRIS BLVD
CHARLOTTE NC 28262-8522
|
Class
K
|
75.44%
|
N/A
|
|
WELLS
FARGO BANK FBO
CRENLO RETIREMENT 401 K
1525 WEST WT HARRIS BLVD
CHARLOTTE NC 28288-1076
|
Class
K
|
17.76%
|
N/A
|
|
WELLS
FARGO BANK FBO
PALADIN BRANDS 401 K
1525 WEST WT HARRIS BLVD
CHARLOTTE NC 28288-1076
|
Class
K
|
5.66%
|
N/A
|
Large
Growth Quantitative Fund
|
AMERICAN
ENTERPRISE INV SVCS, INC
ATTN: MFIS CUSTOMER
2003 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0020
|
Class
B
|
5.49%
|
N/A
|
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
79.37%
|
N/A
|
Class
B
|
13.17%
|
Class
C
|
22.10%
|
Class
W
|
100.00%
|
|
ASCENSUS
TRUST COMPANY FBO
FLINCH & BRUNS FUNERAL HOME INC 40
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
87.26%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
K
|
100.00%
|
37.2%
(a)
|
Class
R
|
10.63%
|
Class
R5
|
8.73%
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
12.09%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
32.41%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE CONSERVATIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
8.96%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
25.75%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA LIFEGOAL GROWTH
PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
15.21%
|
N/A
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
Z
|
72.37%
|
N/A
|
Class
C
|
7.15%
|
Statement
of Additional Information – June 1, 2015
|
259
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
Z
|
10.83%
|
N/A
|
Class
C
|
27.14%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R5
|
91.27%
|
N/A
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
10.41%
|
N/A
|
Large
Value Quantitative Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
34.66%
|
N/A
|
Class
B
|
24.25%
|
Class
C
|
15.88%
|
Class
W
|
100.00%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
K
|
100.00%
|
46.96%
(a)
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
B
|
12.80%
|
N/A
|
|
JPMCB
NA AS CUSTO FOR THE SC529 PL
COLUMBIA AGGRESSIVE GROWTH 529 PORT
14201 DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
Z
|
9.85%
|
N/A
|
|
JPMCB
NA AS CUSTODIAN FOR THE SC529
PLAN COLUMBIA GROWTH 529 PORTFOLIO
14201 DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
Z
|
13.29%
|
N/A
|
|
JPMCB
NA AS CUSTODIAN FOR THE SC529
PLAN COLUMBIA MODERATE 529
PORTFOLIO
14201 DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
Z
|
9.24%
|
N/A
|
|
JPMCB
NA AS CUSTODIAN FOR THE SC529
PLAN COLUMBIA MODERATE GROWTH 529
PORTFOLIO
14201 DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
Z
|
8.97%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
14.84%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
45.34%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE CONSERVATIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
10.49%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
260
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
26.13%
|
N/A
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
A
|
7.36%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
B
|
10.51%
|
N/A
|
Class
T
|
13.71%
|
Class
Z
|
45.54%
|
Class
A
|
9.58%
|
Class
C
|
21.76%
|
Class
R
|
63.43%
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
C
|
5.43%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
B
|
10.37%
|
N/A
|
|
PAI
TRUST COMPANY INC
TERRELL HUNDLEY & CARROLL RIGHT OF
1300 ENTERPRISE DR
DE PERE WI 54115-4934
|
Class
R
|
35.92%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
A
|
5.13%
|
N/A
|
Class
B
|
5.95%
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
5.59%
|
N/A
|
|
SAXON
& CO
P O BOX 7780-1888
PHILADELPHIA PA 19182-0001
|
Class
A
|
5.80%
|
N/A
|
Limited
Duration Credit Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
60.27%
|
N/A
|
Class
B
|
28.91%
|
Class
C
|
40.68%
|
Class
W
|
99.99%
|
|
BAND
& CO C/O US BANK NA
1555 N RIVERCENTER DR STE 302
MILWAUKEE WI 53212-3958
|
Class
Z
|
11.08%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
CUST A/C FOR THE EXCLUSIVE BENEFIT
ATTENTION MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
96.17%
|
N/A
|
Class
K
|
91.48%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
K
|
8.52%
|
N/A
(a)
|
Class
Y
|
100.00%
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
C
|
6.96%
|
N/A
|
Class
Z
|
7.59%
|
Statement
of Additional Information – June 1, 2015
|
261
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
JPMCB
NA AS CUST FOR THE SC529 PLAN
COLUMBIA MODERATELY CONSERVATIVE
529 PORTFOLIO
14201 N DALLAS PARKWAY
FL 13
DALLAS TX 75254-2916
|
Class
Z
|
5.02%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
CONSERVATIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
22.53%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE CONSERVATIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
36.13%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
29.17%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA INCOME BUILDER FUND
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
10.09%
|
N/A
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
Z
|
5.94%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
C
|
8.95%
|
N/A
|
Class
Z
|
13.05%
|
|
MINNESOTA
LIFE INS COMPANY
ATTN KENNETH MONTAGUE
400 ROBERT STREET NORTH
ST PAUL MN 55101-2099
|
Class
R4
|
23.07%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
Z
|
16.73%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
R4
|
45.57%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
31.09%
|
N/A
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
Z
|
5.91%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
Z
|
15.25%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
262
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
MN
Tax-Exempt Fund
|
AMERICAN
ENTERPRISE INV SVCS, INC
ATTN: MFIS CUSTOMER
2003 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0020
|
Class
B
|
5.74%
|
N/A
|
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
18.80%
|
N/A
|
Class
B
|
39.53%
|
Class
C
|
41.04%
|
Class
Z
|
14.54%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
R5
|
100.00%
|
N/A
(a)
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
Z
|
6.62%
|
N/A
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
Z
|
13.08%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
Z
|
22.38%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
R4
|
12.64%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
84.42%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
Z
|
27.94%
|
N/A
|
Money
Market Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
B
|
5.90%
|
N/A
|
Class
C
|
6.71%
|
Class
W
|
88.31%
|
|
ASCENSUS
TRUST COMPANY FBO
ED FAGAN, INC. 401(K) PLAN
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
7.22%
|
N/A
|
|
ASCENSUS
TRUST COMPANY FBO
FEI INC 401 K PROFIT SHARING PLA
PO BOX 10758
FARGO ND 58106-0758
|
Class
C
|
5.70%
|
N/A
|
|
ASCENSUS
TRUST COMPANY FBO
HOSPICE ADVANTAGE 401(K) PLAN
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
7.73%
|
N/A
|
|
ASCENSUS
TRUST COMPANY FBO
MYTHICS, INC. 401(K) PS PLAN AND TR
PO BOX 10758
FARGO ND 58106-0758
|
Class
R5
|
84.11%
|
N/A
|
|
BANK
OF AMERICA NA
FBO CGSC CAPITAL, INC
PO BOX 843869
DALLAS TX 75284-3869
|
Class
Z
|
17.66%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
263
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
W
|
11.69%
|
N/A
(a)
|
|
COUNSEL
TRUST DBA MATC FBO
HOUSING PARTNERSHIP INC 401K PSP
& TRUST
1251 WATERFRONT PL STE 525
PITTSBURGH PA 15222-4228
|
Class
R5
|
5.18%
|
N/A
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
C
|
5.11%
|
N/A
|
|
JPMCB
NA AS CUSTODIAN FOR THE SC529
PLAN COLUMBIA LEGACY CAPITAL
PRESERVATION 529 PORTFOLIO
14201 DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
Z
|
16.08%
|
N/A
|
|
JPMCB
NA AS CUSTODIAN FOR THE SC529
PLAN FS LEGACY CAPITAL PRESERVATION
PORTFOLIO
14201 DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
Z
|
10.15%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA INCOME BUILDER FUND
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
98.49%
|
N/A
|
|
MG
TRUST COMPANY CUST FBO
BTECH INC 401 K PROFIT SHARING PLA
717 17TH ST STE 1300
DENVER CO 80202-3304
|
Class
R
|
7.05%
|
N/A
|
|
MLPF&S
4800 DEER LAKE DRIVE EAST, 3RD FL.
JACKSONVILLE FL 32246-6484
|
Class
B
|
9.48%
|
N/A
|
|
WELLS
FARGO BANK FBO
1525 W W T HARRIS BLVD
CHARLOTTE NC 28262-8522
|
Class
Z
|
14.82%
|
N/A
|
Funds with Fiscal
Period Ending August 31:
Except as otherwise indicated, the
information below is as of November 30, 2014:
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
Marsico
Flexible Capital Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
78.16%
|
40.94%
|
Class
C
|
58.17%
|
|
ASCENSUS
TRUST COMPANY FBO
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
25.07%
|
N/A
|
|
ASCENSUS
TRUST COMPANY FBO
SPRING DESIGN PARTNERS INC PROFIT
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
6.39%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
CUST A/C FOR THE EXCLUSIVE BENEFIT
ATTENTION MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
A
|
9.08%
|
29.97%
|
Class
R5
|
78.66%
|
Class
Z
|
58.73%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
Statement
of Additional Information – June 1, 2015
|
264
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
ERNEST
Y CHOU & MELBA J CHOU TTEE F
CHOU CHEMICAL COMPANY PSP 401K
C/O FASCORE LLC
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R
|
54.20%
|
N/A
|
|
FIIOC
FBO
MGP INGREDIENTS NON-UNION 401(K) &
PROFIT SHARING PLAN
100 MAGELLAN WAY # KW1C
COVINGTON KY 41015-1987
|
Class
R5
|
13.71%
|
N/A
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
Z
|
21.96%
|
N/A
|
|
LPL
FINANCIAL
FBO CUSTOMER ACCOUNTS
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
C
|
5.58%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
R4
|
94.22%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
5.62%
|
N/A
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
8.01%
|
N/A
|
Class
Z
|
6.97%
|
|
RBC
CAPITAL MARKETS, LLC
MUTUAL FUND OMNIBUS PROCESSING
OMNIBUS
ATTN MUTUAL FUND OPS MANAGER
510 MARQUETTE AVE S
MINNEAPOLIS MN 55402-1110
|
Class
Z
|
5.75%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
C
|
12.20%
|
N/A
|
Funds with Fiscal
Period Ending October 31:
Except as otherwise indicated, the
information below is as of January 31, 2015:
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
Absolute
Return Currency and Income Fund
|
AMERICAN
ENTERPRISE INV SVCS, INC
ATTN: MFIS CUSTOMER
2003 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0020
|
Class
B
|
43.50%
|
N/A
|
Class
C
|
10.36%
|
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
41.72%
|
N/A
|
Class
B
|
42.67%
|
Class
C
|
25.86%
|
Class
W
|
87.15%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
R4
|
67.59%
|
59.54%
(a)
|
Class
R5
|
100.00%
|
Class
W
|
12.85%
|
Class
Y
|
100.00%
|
Statement
of Additional Information – June 1, 2015
|
265
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
C
|
6.44%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
7.34%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
48.17%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE CONSERVATIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
9.07%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
33.36%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC
FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
Z
|
68.48%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
C
|
6.96%
|
N/A
|
Class
Z
|
10.20%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
C
|
8.35%
|
N/A
|
Class
R4
|
32.41%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
C
|
8.81%
|
N/A
|
|
STATE
STREET BANK & TRUST CUST
FBO DONA M RENDLEN IRA
1015 ANEMONE RD
FOUR SEASONS MO 65049-6620
|
Class
C
|
5.15%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
Z
|
6.18%
|
N/A
|
|
UMBSC
& CO
FBO FBO ISM NON TRADITIONAL FUND
PO BOX 419260
KANSAS CITY MO 64141-6260
|
Class
Z
|
9.35%
|
N/A
|
Asia
Pacific ex-Japan Fund
|
ACTION
FABRICATORS INC TTEE FBO
ACTION FABRICATORS INC PSP 401K
C/O FASCORE LLC
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R
|
38.86%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
266
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
ALAN
J PINNICK &
MARILYN K PINNICK JTTEN
712 PHAETON PL
INDIANAPOLIS IN 46227-2524
|
Class
C
|
7.06%
|
N/A
|
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
25.18%
|
N/A
|
|
CAPITAL
BANK & TRUST CO TTEE FBO
EVERETT GASKINS HANCOCK LLP 401K PS
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R
|
13.82%
|
N/A
|
|
COLUMBIA
MANAGEMENT ADVISORS INC
NOMINEE FOR VARIOUS COLUMBIA FUNDS
ATTN JANE HOWARD FBO: RLD
225 FRANKLIN ST FL 25
BOSTON MA 02110-2888
|
Class
Z
|
18.83%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
|
DEMETRIOS
ZIOZIS TTEE FBO
LINON HOME DECOR PRODUCTS INC 401K
C/O FASCORE LLC
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R
|
6.20%
|
N/A
|
|
KERRI
KOESSLER &
CHRISTOPHE KOESSLER JT WROS
1071 LONGFELLOW AVE
CAMPBELL CA 95008-7110
|
Class
C
|
6.35%
|
N/A
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
A
|
56.62%
|
N/A
|
|
MG
TRUST COMPANY CUST FBO
KUCHLER POLK SCHELL WEINER & RICHES
717 17TH ST STE 1300
DENVER CO 80202-3304
|
Class
R
|
19.56%
|
N/A
|
|
NALINI
S NAIK
5 KILBURN CT
CHERRY HILL NJ 08003-1965
|
Class
Z
|
6.86%
|
N/A
|
|
PAI
TRUST COMPANY, INC
STUDIOPOLIS, INC. 401(K) P/S PLAN
1300 ENTERPRISE DR
DE PERE WI 54115-4934
|
Class
R
|
5.05%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
A
|
6.98%
|
N/A
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
HOUSE ACCT FIRM
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
8.24%
|
N/A
|
Class
Z
|
23.94%
|
|
STATE
STREET BANK & TRUST CUST
FBO DEAN C GASSMAN IRA
53 MANCHESTER CT
CARMEL IN 46032-9508
|
Class
C
|
7.29%
|
N/A
|
|
STATE
STREET BK & TR IRA
FBO MARLENE WOOD
9700 ENCHANTO RD
ATASCADERO CA 93422-7111
|
Class
C
|
17.59%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
267
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
STATE
STREET BK & TR IRA
PATRICIA M DALY
426 GREAT FALLS ST
FALLS CHURCH VA 22046-2608
|
Class
Z
|
17.52%
|
N/A
|
|
STATE
STREET BK & TR IRA
RICHARD A HIGA
1913 JACK RABBIT WAY
LAS VEGAS NV 89128-2636
|
Class
C
|
5.24%
|
N/A
|
|
STATE
STREET BK & TR IRA
ROSEMARIE KATO
17218 ALFRED AVE
CERRITOS CA 90703-1112
|
Class
C
|
14.10%
|
N/A
|
|
STATE
STREET BK & TR IRA
YUKIKO KAWAHARA
567 N 17TH ST
SAN JOSE CA 95112-1735
|
Class
C
|
7.06%
|
N/A
|
|
STIFEL
NICOLAUS & CO INC
EXCLUSIVE BENEFIT OF CUSTOMERS
501 N BROADWAY
SAINT LOUIS MO 63102-2188
|
Class
Z
|
29.33%
|
N/A
|
|
WESTMEYER
DENTAL INC TTEE FBO
WESTMEYER DENTAL INC PSP 401K
C/O FASCORE LLC
8515 E ORCHARD RD # 2T2
GREENWOOD VLG CO 80111-5002
|
Class
R
|
15.63%
|
N/A
|
Emerging
Markets Bond Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
39.45%
|
N/A
|
Class
B
|
39.98%
|
Class
C
|
8.80%
|
Class
W
|
97.85%
|
|
CAPINCO
C/O US BANK NA
PO BOX 1787
MILWAUKEE WI 53201-1787
|
Class
Y
|
45.24%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY A/C FBO CUSTOMERS
ATTN MUTUAL FUND DEPT
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
R5
|
13.29%
|
N/A
|
Class
K
|
17.68%
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
K
|
46.84%
|
42.03%
(a)
|
|
COUNSEL
TRUST DBA MATC FBO
SAVINGS INCENTIVE & PS PLAN FOR
EE S OF THE HOBBY LOBBY GRP
1251 WATERFRONT PL STE 525
PITTSBURGH PA 15222-4228
|
Class
Y
|
14.80%
|
N/A
|
|
FIRST
CLEARING LLC
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
K
|
35.48%
|
N/A
|
Class
C
|
19.13%
|
Class
Z
|
22.67%
|
|
JPMCB
NA AS CUST FOR THE SC529 PLAN
COLUMBIA MODERATE GROWTH
529 PORTFOLIO
14201 N DALLAS PARKWAY
FL 13
DALLAS TX 75254-2916
|
Class
Z
|
5.78%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
11.36%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
268
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE CONSERVATIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
7.03%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
11.39%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA INCOME BUILDER FUND
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
66.51%
|
N/A
|
|
LPL
FINANCIAL
9785 TOWNE CENTRE DR
SAN DIEGO CA 92121-1968
|
Class
A
|
5.82%
|
N/A
|
|
MLP
FENNER & SMITH INC
FBO SOLE BENEFIT OF ITS CUSTOMERS
4800 DEER LAKE DR EAST
JACKSONVILLE FL 32246-6484
|
Class
B
|
5.61%
|
N/A
|
Class
C
|
12.20%
|
Class
R
|
22.36%
|
Class
Z
|
7.82%
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
C
|
16.91%
|
N/A
|
Class
Z
|
8.58%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
A
|
6.12%
|
N/A
|
Class
R4
|
90.41%
|
Class
R5
|
7.58%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
A
|
5.11%
|
N/A
|
Class
R5
|
59.37%
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
HOUSE ACCT
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
12.19%
|
N/A
|
Class
Z
|
8.42%
|
|
SAMMONS
FINANCIAL NETWORK LLC
4546 CORPORATE DR STE 100
WEST DES MOINES IA 50266-5911
|
Class
R
|
69.16%
|
N/A
|
|
TD
AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
PO BOX 2226
OMAHA NE 68103-2226
|
Class
R5
|
13.00%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
C
|
8.64%
|
N/A
|
Class
Z
|
8.49%
|
|
WILMINGTON
TRUST RISC AS TTEE FBO
VICTORY CAPITAL MANAGEMENT INC 401K
PO BOX 52129
PHOENIX AZ 85072-2129
|
Class
Y
|
35.70%
|
N/A
|
European
Equity Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
45.18%
|
N/A
|
Class
B
|
31.52%
|
Class
C
|
31.11%
|
Statement
of Additional Information – June 1, 2015
|
269
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCT FBO
CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
K
|
11.26%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
K
|
20.07%
|
62.78%
(a)
|
Class
W
|
100.00%
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
C
|
7.13%
|
N/A
|
|
JPMCB
NA AS CUST FOR THE SC529 PLAN
COLUMBIA MODERATE 529 PORTFOLIO
14201 N DALLAS PARKWAY
FL 13
DALLAS TX 75254-2916
|
Class
Z
|
16.19%
|
N/A
|
|
JPMCB
NA AS CUST FOR THE SC529 PLAN
COLUMBIA MODERATE GROWTH
529 PORTFOLIO
14201 N DALLAS PARKWAY
FL 13
DALLAS TX 75254-2916
|
Class
Z
|
20.26%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
14.02%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE AGGRESSIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
41.93%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE CONSERVATIVE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
8.34%
|
N/A
|
|
JPMCB
NA CUST FOR
COLUMBIA CAPITAL ALLOCATION
MODERATE PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
I
|
28.35%
|
N/A
|
|
JPMCB
NA CUST FOR SC529 PLAN
COLUMBIA AGGRESSIVE GROWTH
529 PORTFOLIO
14201N DALLAS PKWY FL 13
DALLAS TX 75254
|
Class
Z
|
19.18%
|
N/A
|
|
JPMCB
NA CUST FOR SC529 PLAN
COLUMBIA GROWTH 529 PORTFOLIO
14201 N DALLAS PKWY FL 13
DALLAS TX 75254-2916
|
Class
Z
|
22.07%
|
N/A
|
|
MG
TRUST COMPANY CUST. FBO
UROLOGIC SURGERY, P.C. 401(K) PROFI
717 17TH ST STE 1300
DENVER CO 80202-3304
|
Class
K
|
68.67%
|
N/A
|
|
MLP
FENNER & SMITH INC
FBO SOLE BENEFIT OF ITS CUSTOMERS
4800 DEER LAKE DR EAST
JACKSONVILLE FL 32246-6484
|
Class
C
|
11.34%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
270
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
C
|
16.87%
|
N/A
|
Class
Z
|
5.04%
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
R4
|
99.01%
|
N/A
|
Class
R5
|
8.98%
|
|
TD
AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
PO BOX 2226
OMAHA NE 68103-2226
|
Class
R5
|
84.18%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
C
|
12.42%
|
N/A
|
Global
Bond Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
24.87%
|
N/A
|
Class
B
|
38.22%
|
Class
C
|
27.34%
|
Class
W
|
87.85%
|
|
BAND
& CO C/O US BANK NA
1555 N RIVERCENTER DR STE 302
MILWAUKEE WI 53212-3958
|
Class
Z
|
13.11%
|
N/A
|
|
BENEFIT
TRUST TTEE
PETERS INSURANCE & REAL ESTATE 401K
330 W 9TH ST
KANSAS CITY MO 64105-1514
|
Class
R
|
24.83%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
SPECIAL CUSTODY ACCT FBO
CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
K
|
27.23%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
Class
R
|
29.67%
|
Class
W
|
12.15%
|
Class
Y
|
100.00%
|
|
FIRST
CLEARING LLC
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
K
|
5.28%
|
N/A
|
|
MID
ATLANTIC TRUST COMPANY FBO
TECVAR INC 401 K PROFIT SHARING
PLAN & TRUST
1251 WATERFRONT PL STE 525
PITTSBURGH PA 15222-4228
|
Class
R
|
41.33%
|
N/A
|
|
MLP
FENNER & SMITH INC
FBO SOLE BENEFIT OF ITS CUSTOMERS
4800 DEER LAKE DR EAST
JACKSONVILLE FL 32246-6484
|
Class
C
|
6.11%
|
N/A
|
|
NANCY
MANN FBO
MANNS JEWELERS INC 401(K) PROFIT
SHARING PLAN & TRUST
2945 MONROE AVE
ROCHESTER NY 14618-4601
|
Class
K
|
64.08%
|
N/A
|
|
NATIONAL
FINANCIAL SERVICES LLC
FOR THE EXCLUSIVE BENEFIT OF
OUR CUSTOMERS
499 WASHINGTON BLVD FL 5
JERSEY CITY NJ 07310-2010
|
Class
Z
|
13.92%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
Z
|
57.77%
|
N/A
|
Statement
of Additional Information – June 1, 2015
|
271
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
Select
Global Equity Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
13.58%
|
N/A
|
Class
B
|
23.98%
|
Class
C
|
12.64%
|
|
ASCENSUS
TRUST CO FBO
CACHE COMMODITIES INC 401K RETIRE
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
12.59%
|
N/A
|
|
ASCENSUS
TRUST COMPANY FBO
FINANCIAL NETWORK AUDIT, LLC 401(K)
PO BOX 10758
FARGO ND 58106-0758
|
Class
R
|
13.08%
|
N/A
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
Class
W
|
100.00%
|
|
FIRST
CLEARING LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
Z
|
11.28%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC
FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
C
|
14.15%
|
N/A
|
Class
R
|
41.61%
|
Class
Z
|
16.74%
|
|
MG
TRUST COMPANY CUST
FBO APPLIED RELIABILITY ENGINEERING
717 17TH ST STE 1300
DENVER CO 80202-3304
|
Class
R
|
30.80%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
C
|
6.86%
|
N/A
|
Class
Z
|
21.76%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
R5
|
98.01%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
Z
|
24.02%
|
N/A
|
|
WELLS
FARGO BANK FBO
1525 W W T HARRIS BLVD
CHARLOTTE NC 28262-8522
|
Class
K
|
99.57%
|
N/A
|
Seligman
Global Technology Fund
|
AMERICAN
ENTERPRISE INVESTMENT SVC
707 2ND AVE S
MINNEAPOLIS MN 55402-2405
|
Class
A
|
12.63%
|
N/A
|
Class
B
|
14.35%
|
|
ASCENSUS
TRUST COMPANY FBO
CHALET DENTAL CARE 401(K) PLAN
PO BOX 10758
FARGO ND 58106-0758
|
Class
K
|
28.59%
|
N/A
|
|
CHARLES
SCHWAB & CO INC
CUST A/C FOR THE EXCLUSIVE BENEFIT
ATTENTION MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4151
|
Class
K
|
57.20%
|
N/A
|
Class
R5
|
69.29%
|
Statement
of Additional Information – June 1, 2015
|
272
|
Fund
|
Shareholder
Name and Address
|
Share
Class
|
Percentage
of Class
|
Percentage
of Fund
(if greater than 25%)
|
|
COLUMBIA
MGMT INVESTMENT ADVSR LLC
ATTN KATRINA MACBAIN
50807 AMERIPRISE FINANCIAL CTR
MINNEAPOLIS MN 55474-0508
|
Class
I
|
100.00%
|
N/A
(a)
|
|
FIIOC
FBO
REV1 POWER SERVICES INC
401(K) PROFIT SHARING PLAN
100 MAGELLAN WAY # KW1C
COVINGTON KY 41015-1987
|
Class
R4
|
26.91%
|
N/A
|
|
FIRST
CLEARING LLC
2801 MARKET ST
SAINT LOUIS MO 63103-2523
|
Class
K
|
5.50%
|
N/A
|
Class
C
|
7.18%
|
Class
Z
|
12.79%
|
|
HARTFORD
LIFE INSURANCE COMPANY
ATTN UIT OPERATIONS
PO BOX 2999
HARTFORD CT 06104-2999
|
Class
R
|
48.24%
|
N/A
|
|
MERRILL
LYNCH, PIERCE, FENNER
& SMITH INC
FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTENTION SERVICE TEAM
4800 DEER LAKE DRIVE EAST 3RD FLOOR
JACKSONVILLE FL 32246-6484
|
Class
A
|
6.69%
|
N/A
|
Class
C
|
16.29%
|
Class
R
|
12.47%
|
Class
Z
|
34.81%
|
|
MID
ATLANTIC TRUST COMPANY FBO
LCM FX LLC 401 K PROFIT SHARING
PLAN & TRUST
1251 WATERFRONT PL STE 525
PITTSBURGH PA 15222-4228
|
Class
R4
|
12.70%
|
N/A
|
|
MORGAN
STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY NJ 07311
|
Class
C
|
9.78%
|
N/A
|
Class
Z
|
9.11%
|
|
NATIONAL
FINANCIAL SERVICES LLC
FEBO CUSTOMERS
MUTUAL FUNDS
200 LIBERTY STREET 1WFC
NEW YORK NY 10281-1003
|
Class
R4
|
14.27%
|
N/A
|
|
PATTERSON
& CO FBO
ISSI RETIREMENT PLAN
1525 WEST WT HARRIS BLVD
CHARLOTTE NC 28262-8522
|
Class
R5
|
14.43%
|
N/A
|
|
PERSHING
LLC
1 PERSHING PLZ
JERSEY CITY NJ 07399-0002
|
Class
A
|
9.42%
|
N/A
|
Class
C
|
6.45%
|
Class
R4
|
44.99%
|
|
RAYMOND
JAMES
FBO OMNIBUS FOR MUTUAL FUNDS
HOUSE ACCT FIRM
ATTN: COURTNEY WALLER
880 CARILLON PKWY
ST PETERSBURG FL 33716-1100
|
Class
C
|
6.74%
|
N/A
|
|
TD
AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
PO BOX 2226
OMAHA NE 68103-2226
|
Class
R5
|
14.64%
|
N/A
|
|
UBS
WM USA
OMNI ACCOUNT M/F
ATTN: DEPARTMENT MANAGER
1000 HARBOR BLVD
WEEHAWKEN NJ 07086-6761
|
Class
B
|
8.52%
|
N/A
|
Class
C
|
7.10%
|
Class
Z
|
34.21%
|
(a)
|
Combination of all share
classes of Columbia Management initial capital and/or affiliated funds-of-funds’ investments.
|
American Enterprise Investment Services Inc., a
Minnesota corporation, is a subsidiary of Ameriprise Financial, Inc.
Statement
of Additional Information – June 1, 2015
|
273
|
Bank of America, N.A., a national banking
association organized under the laws of the United States, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, a Delaware corporation, are subsidiaries of Bank of America Corporation.
Charles Schwab & Co., Inc., a California
corporation, is a subsidiary of The Charles Schwab Corporation.
The Investment Manager, a Minnesota limited
liability company, is a subsidiary of Ameriprise Financial, Inc. Other Columbia Funds managed by the Investment Manager may hold more than 25% of a Fund.
LPL Financial, a Delaware Corporation, is a
subsidiary of LPL Financial Holdings, Inc.
Statement
of Additional Information – June 1, 2015
|
274
|
INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In December 2005, without admitting or denying the
allegations, American Express Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc. (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, and have made regular reports to the
Funds’ Board.
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 quarterly (10-Q), annual (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.
Additionally, for Columbia Floating Rate Fund:
Columbia Floating Rate Fund (the Fund) is one of several defendants
to an adversary bankruptcy proceeding captioned
Official Committee of Unsecured Creditors of TOUSA, Inc., et al. v. Citicorp North America, Inc., et al.
(the Lawsuit), (In re TOUSA, Inc., et al.), pending in
the U.S. Bankruptcy Court, Southern District of Florida (the Bankruptcy Court). The Fund and several other defendants (together, the Senior Transeastern Defendants) were lenders to parties involved in a joint venture with TOUSA, Inc. (TOUSA) on a
$450 million Credit Agreement dated as of August 1, 2005 (the Credit Agreement). In 2006, the administrative agent under the Credit Agreement brought claims against TOUSA alleging that certain events of default had occurred under the Credit
Agreement thus triggering the guaranties (the Transeastern Litigation). On July 31, 2007, TOUSA and the Senior Transeastern Defendants reached a settlement in the Transeastern Litigation pursuant to which the Fund (as well as the other Senior
Transeastern Defendants) released its claims and was paid $1,052,271. To fund the settlement, TOUSA entered into a $500 million credit facility with new lenders secured by liens on the assets of certain of TOUSA’s subsidiaries. On January 29,
2008, TOUSA and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. In August 2008, the Committee of Unsecured Creditors of TOUSA (Committee) filed the Lawsuit, seeking as to the Fund and the
other Senior Transeastern Defendants a return of the money the Senior Transeastern Defendants received as part of the Transeastern Litigation settlement. The Lawsuit went to trial in July 2009, and the Bankruptcy Court ordered the Fund and the other
Senior Transeastern Defendants to disgorge the money they received in settlement of the Transeastern Litigation. The Senior Transeastern Defendants, including the Fund, appealed the Bankruptcy Court’s decision to the District Court for the
Southern District of Florida (the District Court). To stay execution of the judgment against the Fund pending appeal, the Fund deposited $1,327,620 with the Bankruptcy Court clerk of court. On February 11, 2011, the District Court entered an opinion
and order quashing the Bankruptcy Court’s decision as it relates to the liability of the Senior Transeastern Defendants and ordering that “[t]he Bankruptcy Court’s imposition of remedies as to the [Senior Transeastern Defendants]
is null and void.” On March 8, 2011, the Committee appealed the District Court’s order to the Eleventh Circuit Court of Appeals. On May 15, 2012, the Eleventh Circuit issued an order reversing the decision of the District Court. A
petition for rehearing by the entire panel of the Eleventh Circuit was filed and denied. The District Court will now review and decide several remaining appeal issues. An initial hearing is scheduled for November 20, 2014.
Statement
of Additional Information – June 1, 2015
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275
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APPENDIX A — DESCRIPTION OF RATINGS
The ratings of S&P, Moody’s and Fitch
represent their opinions as to quality. These ratings are not absolute standards of quality and are not recommendations to purchase, sell or hold a security. Issuers and issues are subject to risks that are not evaluated by the rating
agencies.
S&P’s Debt Ratings
Long-Term Issue Credit Ratings
An obligation rated ‘AAA’ has the highest rating
assigned by S&P. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong.
An obligation rated ‘AA’ differs from
the highest-rated obligations only to a small degree. The obligor’s capacity to meet its financial commitment on the obligation is very strong.
An obligation rated ‘A’ is somewhat more
susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor’s capacity to meet its financial commitment on the obligation is still strong. An
obligation rated ‘BBB’ exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the
obligation.
Obligations rated
‘BB’, ‘B’, ‘CCC’, ‘CC’, and ‘C’ are regarded as having significant speculative characteristics. ‘BB’ indicates the least degree of speculation and ‘C’ the highest.
While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.
An obligation rated ‘BB’ is less
vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor’s inadequate capacity to meet its
financial commitment on the obligation.
An
obligation rated ‘B’ is more vulnerable to nonpayment than obligations rated ‘BB’, but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor’s capacity or willingness to meet its financial commitment on the obligation.
An obligation rated ‘CCC’ is currently
vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the
obligor is not likely to have the capacity to meet its financial commitment on the obligation.
An obligation rated ‘CC’ is currently
highly vulnerable to nonpayment. The ‘CC’ rating is used when a default has not yet occurred, but S&P expects default to be a virtual certainty, regardless of the anticipated time to default.
An obligation rated 'C' is currently highly
vulnerable to nonpayment, and the obligation is expected to have lower relative seniority or lower ultimate recovery compared to obligations that are rated higher.
An obligation rated ‘D’ is in default or
in breach of an imputed promise. For non-hybrid capital instruments, the ‘D’ rating category is used when payments on an obligation are not made on the date due, unless S&P believes that such payments will be made within five
business days in the absence of a stated grace period or within the earlier of the stated grace period or 30 calendar days. The ‘D’ rating also will be used upon the filing of a bankruptcy petition or the taking of similar action and
where default on an obligation is a virtual certainty, for example due to automatic stay provisions. An obligation’s rating is lowered to ‘D’ if it is subject to a distressed exchange offer.
Short-Term Issue Credit Ratings
Short-term ratings are generally assigned to those obligations
considered short-term in the relevant market. In the U.S., for example, that means obligations with an original maturity of no more than 365 days – including commercial paper.
A short-term obligation rated ‘A-1’ is
rated in the highest category by S&P. The obligor’s capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the
obligor’s capacity to meet its financial commitment on these obligations is extremely strong.
A short-term obligation rated ‘A-2’ is
somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor’s capacity to meet its financial commitment on the obligation is
satisfactory.
A short-term obligation rated
‘A-3’ exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
Statement
of Additional Information – June 1, 2015
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A-1
|
A short-term obligation rated ‘B’ is
regarded as vulnerable and has significant speculative characteristics. The obligor currently has the capacity to meet its financial commitments; however, it faces major ongoing uncertainties which could lead to the obligor’s inadequate
capacity to meet its financial commitments.
A
short-term obligation rated ‘C’ is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation.
A short-term obligation rated ‘D’ is in
default or in breach of an imputed promise. For non-hybrid capital instruments, the ‘D’ rating category is used when payments on an obligation are not made on the date due, unless S&P believes that such payments will be made within
any stated grace period. However, any stated grace period longer than five business days will be treated as five business days. The ‘D’ rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action
and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. An obligation's rating is lowered to 'D' if it is subject to a distressed exchange offer.
Municipal Short-Term Note Ratings
SP-1
Strong capacity to pay
principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation.
SP-2
Satisfactory
capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes.
SP-3
Speculative
capacity to pay principal and interest.
Moody’s Long-Term Debt Ratings
Global Long-Term Rating Scale
Aaa
– Obligations rated Aaa
are judged to be of the highest quality, subject to the lowest level of credit risk.
Aa
–
Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.
A
–
Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.
Baa
–
Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.
Ba
–
Obligations rated Ba are judged to be speculative and are subject to substantial credit risk.
B
–
Obligations rated B are considered speculative and are subject to high credit risk.
Caa
–
Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk.
Ca
–
Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.
C
–
Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or interest.
Global Short-Term Rating Scale
Issuers (or supporting institutions) rated Prime-1 (P-1) have a
superior ability to repay short-term debt obligations.
Issuers (or supporting institutions) rated Prime-2
(P-2) have a strong ability to repay short-term debt obligations.
Issuers (or supporting institutions) rated Prime-3
(P-3) have an acceptable ability to repay short-term obligations.
Issuers (or supporting institutions) rated Not Prime
(NP) do not fall within any of the Prime rating categories.
US Municipal Short-Term Debt and Demand Obligation
Ratings
While the global short-term ‘prime’
rating scale is applied to U.S. municipal tax-exempt commercial paper, these programs are typically backed by external letters of credit or liquidity facilities and their short-term prime ratings usually map to the long-term rating of the enhancing
bank or financial institution and not to the municipality’s rating. Other short-term municipal obligations, which generally have different funding sources for repayment, are rated using two additional short-term rating scales (
i.e.
, the MIG and VMIG scales discussed below).
The Municipal Investment Grade (MIG) scale is used
to rate US municipal bond anticipation notes of up to three years maturity. Municipal notes rated on the MIG scale may be secured by either pledged revenues or proceeds of a take-out financing received prior to note maturity. MIG ratings expire at
the maturity of the obligation, and the issuer’s long-term rating is only one consideration in assigning the MIG rating. MIG ratings are divided into three levels — MIG 1 through MIG 3 — while speculative grade short-term
obligations are designated SG.
Statement
of Additional Information – June 1, 2015
|
A-2
|
The MIG 1 designation denotes superior credit
quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support, or demonstrated broad-based access to the market for refinancing.
The MIG 2 designation denotes strong credit quality.
Margins of protection are ample, although not as large as in the preceding group.
The MIG 3 designation denotes acceptable credit
quality. Liquidity and cash-flow protection may be narrow, and market access for refinancing is likely to be less well-established.
The SG designation denotes speculative-grade credit
quality. Debt instruments in this category may lack sufficient margins of protection.
In the case of variable rate demand obligations
(VRDOs), a two-component rating is assigned: a long or short-term debt rating and a demand obligation rating. The first element represents Moody’s evaluation of risk associated with scheduled principal and interest payments. The second element
represents Moody’s evaluation of risk associated with the ability to receive purchase price upon demand (“demand feature”). The second element uses a rating from a variation of the MIG scale called the Variable Municipal Investment
Grade (VMIG) scale. The rating transitions on the VMIG scale, as shown in the diagram below, differ from those on the Prime scale to reflect the risk that external liquidity support generally will terminate if the issuer’s long-term rating
drops below investment grade.
The VMIG 1
designation denotes superior credit quality. Excellent protection is afforded by the superior short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon
demand.
The VMIG 2 designation denotes strong
credit quality. Good protection is afforded by the strong short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.
The VMIG 3 designation denotes acceptable credit
quality. Adequate protection is afforded by the satisfactory short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.
The SG designation denotes speculative-grade credit
quality. Demand features rated in this category may be supported by a liquidity provider that does not have an investment grade short-term rating or may lack the structural and/or legal protections necessary to ensure the timely payment of purchase
price upon demand.
Fitch’s Ratings
Corporate Finance Obligations – Long-Term Rating
Scales
AAA:
Highest credit
quality.
‘AAA’ ratings denote the lowest expectation of credit risk. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by
foreseeable events.
AA:
Very high credit quality.
‘AA’ ratings denote expectations of very low credit risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly vulnerable
to foreseeable events.
A:
High credit quality.
‘A’ ratings denote expectations of low credit risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to
adverse business or economic conditions than is the case for higher ratings.
BBB:
Good credit
quality.
‘BBB’ ratings indicate that expectations of credit risk are currently low. The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this
capacity.
BB:
Speculative.
‘BB’ ratings indicate an elevated vulnerability to credit risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial
alternatives may be available to allow financial commitments to be met.
B:
Highly
speculative.
‘B’ ratings indicate that material credit risk is present.
CCC:
Substantial
credit risk.
‘CCC’ ratings indicate that substantial credit risk is present.
CC:
Very high levels
of credit risk.
‘CC’ ratings indicate very high levels of credit risk.
Statement
of Additional Information – June 1, 2015
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A-3
|
C:
Exceptionally
high levels of credit risk.
‘C’ indicates exceptionally high levels of credit risk.
Defaulted obligations typically are not assigned
‘RD’ or ‘D’ ratings, but are instead rated in the ‘B’ to ‘C’ rating categories, depending upon their recovery prospects and other relevant characteristics. This approach better aligns obligations that
have comparable overall expected loss but varying vulnerability to default and loss.
Short-Term Ratings Assigned to Issuers or Obligations
in Corporate, Public and Structured Finance
F1:
Highest short-term credit quality.
Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added “+” to denote any exceptionally strong credit
feature.
F2:
Good short-term credit quality.
Good intrinsic capacity for timely payment of financial commitments.
F3:
Fair short-term
credit quality.
The intrinsic capacity for timely payment of financial commitments is adequate.
B:
Speculative
short-term credit quality.
Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near term adverse changes in financial and economic conditions.
C:
High short-term
default risk.
Default is a real possibility.
RD:
Restricted
default.
Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations. Typically applicable to entity ratings only.
D:
Default.
Indicates a broad-based default event for an entity, or the default of a short-term obligation.
Statement
of Additional Information – June 1, 2015
|
A-4
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APPENDIX B — PROXY VOTING GUIDELINES
Effective February 1, 2015
Set forth on the following pages are guidelines (the
Guidelines) adopted and used by the Board or the Investment Manager in voting proxies for the Columbia Funds overseen by the Board. The Guidelines are organized by issue and present certain factors that may be considered in making proxy voting
determinations. In accordance with the Funds' Proxy Voting Policy, the Board has delegated proxy voting authority to the Investment Manager in most circumstances. The Investment Manager has engaged a third party firm to provide proxy research
services (the third party research provider) to assist it in this function. The Board or the Investment Manager may, in exercising its fiduciary discretion, determine to vote any proxy in a manner contrary to these Guidelines.
Directors, Boards, Committees
Elect Directors
In a routine election of directors, the Funds generally will vote
FOR the slate nominated by the nominating committee of independent directors, who are in the best position to know what qualifications are needed for each director to contribute to an effective board. The Funds generally will WITHHOLD support from a
nominee who fails to meet one or more of the following criteria:
■
|
Independence
— A nominee who is deemed an affiliate of the company by virtue of a material business, familial or other relationship with the company but is otherwise not an employee.
|
■
|
Attendance
— A nominee who failed to attend at least 75% of the board’s meetings.
|
■
|
Over Boarding
— A nominee who serves on more than four other public company boards or an employee director nominee who serves on more than two other public company boards.
|
■
|
Committee Membership
— A nominee who has been assigned to the audit, compensation, nominating, or governance committee if that nominee is not independent of management, or if the nominee does not meet the specific
independence and experience requirements for audit committees or the independence requirements for compensation committees.
|
■
|
Audit Committee
Chair
— A nominee who serves as audit committee chair where the committee failed to put forth shareholder proposals for ratification of auditors.
|
■
|
Board Independence
— A nominee of a company whose board as proposed to be constituted would have more than one-third of its members from management.
|
■
|
Interlocking
Directorship
— A nominee who is an executive officer of another company on whose board one of the company’s executive officers sits.
|
■
|
Poor
Governance
— A nominee involved with options backdating, financial restatements or material weakness in controls, approving egregious compensation, or who has consistently disregarded the
interests of shareholders.
|
The Funds will vote on a CASE-BY-CASE basis on any
director nominee who meets the aforementioned criteria but whose candidacy has otherwise been identified by the third party research provider as needing further consideration for any reason not identified above.
In the case of contested elections, the Funds will
vote on a CASE-BY-CASE basis, taking into consideration the above criteria and other factors such as the background of the proxy contest, the performance of the company, current board and management, and qualifications of nominees on both
slates.
Shareholder Nominations for
Director
The Funds will vote on a CASE-BY-CASE basis for
shareholder-nominated candidates for director, taking into account various factors including, but not limited to: company performance, the circumstances compelling the nomination by the shareholder, composition of the incumbent board, and the
criteria listed above used to evaluate nominees.
Shareholder Nominations for Director — Special
Criteria
The Funds generally will vote in accordance with
recommendations made by the third party research provider, which are typically based on the view that board nominating committees are responsible for establishing and implementing policies regarding the composition of the board and are therefore in
the best position to make determinations with respect to special nominating criteria.
Statement
of Additional Information – June 1, 2015
|
B-1
|
Director Independence and Committees
The Funds generally will vote FOR proposals that require all
members of a board’s key committees (audit, compensation, nominating or governance) be independent from management.
Independent Board Chair/Lead Director
The Funds generally will vote FOR proposals supporting an
independent board chair or lead director and FOR the separation of the board chair and CEO roles, as independent board leaders foster the effectiveness of the independent directors and ensure appropriate oversight of management.
Removal of Directors
The Funds generally will vote FOR proposals that amend governing
documents to grant or restore shareholder ability to remove directors with cause, and AGAINST proposals that provide directors may be removed only by supermajority vote. The Funds will vote on a CASE-BY-CASE basis on proposals calling for removal of
specific directors.
Board Vacancies
The Funds generally will vote in accordance with recommendations
made by the third party research provider in the case of vacancies filled by continuing directors, taking into account factors including whether the proposal is in connection with a proxy contest or takeover situation.
Cumulative Voting
In the absence of proxy access rights or majority voting, the Funds
generally will vote FOR the restoration or provision for cumulative voting and AGAINST its elimination.
Majority Voting
The Funds generally will vote FOR amendments to governing documents
that provide that nominees standing for election to the board must receive a majority of votes cast in order to be elected to the board.
Number of Directors
The Funds generally will vote FOR amendments to governing documents
that provide directors the authority to adjust the size of the board to adapt to needs that may arise.
Term Limits
The Funds generally will vote AGAINST proposals seeking to
establish a limit on director terms or mandatory retirement.
General Corporate Governance
Right to Call a Special Meeting
The Funds generally will vote in accordance with recommendations
made by the third party research provider, which typically recommends votes FOR adoption, considering factors such as proposed ownership threshold, company size, and shareholder ownership, but will not support proposals allowing for investors with
less than 10% ownership to call a special meeting.
Eliminate or Restrict Right to Call Special
Meeting
The Funds generally will vote AGAINST proposals to
eliminate the right of shareholders to call special meetings.
Lead Independent Director Right to Call Special
Meeting
The Funds generally will vote FOR 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.
Adjourn Meeting
The Funds will vote on a CASE-BY-CASE basis on adjournment
proposals and generally in the same direction as the primary proposal (
i.e.
, if supporting the primary proposal, favor adjournment; if not supporting the primary proposal, oppose adjournment).
Other Business
The Funds generally will vote AGAINST proposals seeking to give
management the authority to conduct or vote on other business at shareholder meetings on the grounds that shareholders not present at the meeting would be unfairly excluded from such deliberations.
Statement
of Additional Information – June 1, 2015
|
B-2
|
Eliminate or Restrict Action by Written Consent
The Funds generally will vote AGAINST proposals to eliminate the
right of shareholders to act by written consent since it may be appropriate to take such action in some instances.
Vote Unmarked Proxies
The Funds generally will vote FOR proposals prohibiting voting of
unmarked proxies in favor of management.
Proxy
Contest Advance Notice
The Funds generally will vote AGAINST
proposals to amend governing documents that require advance notice for shareholder proposals or director nominees beyond notice that allows for sufficient time for company response, SEC review, and analysis by other shareholders.
Minimum Stock Ownership
The Funds will vote on a CASE-BY-CASE basis on proposals regarding
minimum stock ownership levels.
Director and
Officer Indemnification
The Funds generally will vote FOR the
provision of a maximum dollar amount that can be obtained through the course of legal action from a director or officer who acts in good faith and does not benefit from a transaction.
Confidential Voting
The Funds generally will vote FOR actions that ensure all proxies,
ballots, and voting tabulations which identify shareholders be kept confidential, except where disclosure is mandated by law. The Funds support the proposal to minimize pressure on shareholders, particularly employee shareholders.
Miscellaneous Governing Document Amendments
The Funds generally will vote FOR bylaw or charter changes that are
of a housekeeping nature (
e.g.
, updates or corrections).
Change Company Name
The Funds generally will vote FOR routine business matters such as
changing the company’s name.
Approve
Minutes
The Funds generally will vote FOR routine procedural
matters such as approving the minutes of a prior meeting.
Change Date/Time/Location of Annual Meeting
The Funds will vote in accordance with the recommendation of the
third party research provider on proposals to change the date, time or location of the company’s annual meeting of shareholders.
Approve Annual, Financial and Statutory Reports
The Funds generally will vote FOR proposals to approve the annual
reports and accounts, financial and statutory reports, provided companies required to comply with U.S. securities laws have included the certifications required by the Sarbanes Oxley Act of 2002.
Compensation
Approve or Amend Omnibus Equity Compensation
Plan
The Funds generally will vote in accordance with
recommendations made by the third party research provider, which typically recommends votes FOR adoption or amendments to omnibus (general) equity compensation plans for employees or non-employee directors if they are reasonable and consistent with
industry and country standards, and AGAINST compensation plans that substantially dilute ownership interest in a company, provide participants with excessive awards, or have objectionable structural features.
Approve or Amend Stock Option Plan
The Funds generally will vote in accordance with recommendations
made by the third party research provider, which are typically based on factors including cost, size, and pattern of grants in comparison to peer groups, history of repricing, and grants to senior executives and non-employee directors.
Approve or Amend Employee Stock Purchase Plan
The Funds generally will vote in accordance with recommendations
made by the third party research provider, which are typically based on factors including the plan’s cost to shareholders, whether those costs are in line with the company’s peer’s plans, and whether the plan requires shareholder
approval within five years.
Statement
of Additional Information – June 1, 2015
|
B-3
|
Approve or Amend Performance-Based 162(m) Compensation
Plan
The Funds generally will vote in accordance with
recommendations made by the third party research provider, which are typically based on factors that consider the goal of the plan and in particular the linkage between potential payments to senior executives and the attainment of preset
performance-based metrics.
Approve or Amend
Restricted Stock Plan
The Funds generally will vote in
accordance with recommendations made by the third party research provider, which considers such factors as the balance of all equity grants and awards, the term and other restrictions in place for restricted stock.
Stock Option Repricing or Exchanges
The Funds generally will vote in accordance with recommendations
made by the third party research provider on matters relating to the repricing of stock options, which are typically based on factors such as whether the amending terms lead to a reduction in shareholder rights, allow the plan to be amended without
shareholder approval, or change the terms to the detriment of employee incentives such as excluding a certain class or group of employees. The Funds generally will vote FOR proposals to put stock option repricings to a shareholder vote.
Performance-Based Stock Options
The Funds will vote on a CASE-BY-CASE basis regarding proposals
urging that stock options be performance-based rather than tied to the vagaries of the stock market.
Ban Future Stock Option Grants
The Funds generally will vote AGAINST proposals seeking to ban or
eliminate stock options in equity compensation plans as such an action would preclude the company from offering a balanced compensation program.
Require Stock Retention Period
The Funds generally will vote FOR proposals requiring senior
executives to hold stock obtained by way of a stock option plan for a minimum of three years.
Require Approval of Extraordinary Benefits
The Funds generally will vote FOR proposals specifying that
companies disclose any extraordinary benefits paid or payable to current or retired senior executives and generally will vote AGAINST proposals requiring shareholder approval of any such extraordinary benefits.
Pay for Performance
The Funds will vote on a CASE-BY-CASE basis regarding proposals
seeking to align executive compensation with shareholders’ interests.
Say on Pay
The Funds generally will vote in accordance with recommendations
made by the third party research provider, taking into consideration the company’s pay for performance results and certain elements of the Compensation Discussion and Analysis disclosure.
Executive Severance Agreements
The Funds generally will vote in accordance with recommendations
made by the third party research provider on these proposals regarding approval of specific executive severance arrangements in the event of change in control of a company or due to other circumstances.
Approve or Amend Deferred Compensation Plans for
Directors
The Funds generally will vote FOR approval or
amendments to deferred compensation plans for non-employee directors, so that they may defer compensation earned until retirement.
Set Director Compensation
The Funds generally will vote AGAINST proposals that seek to limit
director compensation or mandate that compensation be paid solely in shares of stock.
Director Retirement Plans
The Funds generally will vote AGAINST the adoption or amendment of
director retirement plans on the basis that directors should be appropriately compensated while serving and should not view service on a board as a long-term continuing relationship with a company.
Statement
of Additional Information – June 1, 2015
|
B-4
|
Business Entity and Capitalization
Common or Preferred Stock — Increase in
Authorized Shares or Classes
The Funds will vote on a
CASE-BY-CASE basis regarding proposals to increase authorized shares of common stock or to add a class of common stock, taking into consideration the company’s capital goals that may include stock splits, stock dividends, or financing for
acquisitions or general operations. With respect to proposals seeking to increase authorized shares of preferred stock, to add a class of preferred stock, to authorize the directors to set the terms of the preferred stock or to amend the number of
votes per share of preferred stock, the Funds will vote on a CASE-BY-CASE basis on the grounds that such actions may be connected to a shareholder rights’ plan that the Funds also will consider on a CASE-BY-CASE basis.
Common or Preferred Stock – Decrease in
Authorized Shares or Classes
The Funds generally will vote
FOR proposals seeking to decrease authorized shares of common or preferred stock or the elimination of a class of common or preferred stock.
Common Stock — Change in Par Value
The Funds generally will vote FOR proposals to change the par value
of the common stock, provided that the changes do not cause a diminution in shareholder rights.
Authorize Share Repurchase Program
The Funds generally will vote FOR proposals to institute or renew
open market share repurchase plans in which all shareholders may participate on equal terms.
Stock Splits
The Funds generally will vote FOR stock split proposals on the
grounds that they intended to encourage stock ownership of a company.
Private Placements, Conversion of Securities, Issuance
of Warrants or Convertible Debentures
The Funds generally
will vote FOR the issuance of shares for private placements, the conversion of securities from one class to another, and the issuance of warrants or convertible debentures on the grounds that such issuances may be necessary and beneficial for the
financial health of the company and may be a low cost source of equity capital. The Funds generally will vote AGAINST any such issuance or related action if the proposal would in any way result in new equity holders having superior voting rights,
would result in warrants or debentures, when exercised, holding in excess of 20 percent of the currently outstanding voting rights, or if the proposal would in any way diminish the rights of existing shareholders.
Issuance of Equity or Equity-Linked Securities without
Subscription Rights (Preemptive Rights)
The Funds generally
will vote FOR proposals that seek shareholder approval of the issuance of equity, convertible bonds or other equity-linked debt instruments, or to issue shares to satisfy the exercise of such securities that are free of subscription (preemptive)
rights on the grounds that companies must retain the ability to issue such securities for purposes of raising capital. The Funds generally will vote AGAINST any proposal where dilution exceeds 20 percent of the company’s outstanding
capital.
Recapitalization
The Funds generally will vote FOR recapitalization plans that
combine two or more classes of stock into one class, or that authorize the company to issue new common or preferred stock for such plans. The Funds generally will vote AGAINST recapitalization plans that would result in the diminution of rights for
existing shareholders.
Merger Agreement
The Funds will vote on a CASE-BY-CASE basis on proposals seeking
approval of a merger or merger agreement and all proposals related to such primary proposals, taking into consideration the particular facts and circumstances of the proposed merger and its potential benefits to existing shareholders.
Going Private
The Funds will vote on a CASE-BY-CASE basis on proposals that allow
listed companies to de-list and terminate registration of their common stock, taking into consideration the cash-out value to shareholders, and weighing the value in continuing as a publicly traded entity.
Statement
of Additional Information – June 1, 2015
|
B-5
|
Reincorporation
The Funds will vote on a CASE-BY-CASE basis on reincorporation
proposals, taking into consideration 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. The Funds generally will vote AGAINST the proposal unless the long-term business reasons for doing so are valid. The Funds generally will vote FOR proposals to consider reincorporating in the
United States if a company left the country for the purpose of avoiding taxes.
Bundled Proposals
The Funds generally will vote in accordance with recommendations
made by the third party research provider on “bundled” or otherwise conditioned proposals, which are determined depending on the overall economic effects to shareholders.
Defense Mechanisms
Shareholder Rights’ Plan (Poison Pill)
The Funds will vote on a CASE-BY-CASE basis regarding management
proposals seeking ratification of a shareholder rights’ plan, including a net operating loss (NOL) shareholder rights’ plan, or stockholder proposals seeking modification or elimination of any existing shareholder rights’
plan.
Supermajority Voting
The Funds generally will vote FOR the elimination or material
diminution of provisions in company governing documents that require the affirmative vote of a supermajority of shareholders for approval of certain actions, and generally will vote AGAINST the adoption of any supermajority voting clause.
Control Share Acquisition Provisions
The Funds generally will vote FOR proposals to opt out of control
share acquisition statutes and generally will vote AGAINST proposals seeking approval of control share acquisition provisions in company governing documents on the grounds that such provisions may harm long-term share value by effectively
entrenching management. The ability to buy shares should not be constrained by requirements to secure approval of the purchase from other shareholders.
Anti-Greenmail
The Funds generally will vote FOR proposals to adopt anti-greenmail
governing document amendments or to otherwise restrict a company’s ability to make greenmail payments.
Classification of Board of Directors
The Funds generally will vote FOR proposals to declassify a board
and AGAINST proposals to classify a board, absent special circumstances that would indicate that shareholder interests are better served by voting to the contrary.
Auditors
Ratify or Appoint Auditors
The Funds generally will vote in accordance with recommendations
made by the third party research provider, which typically recommends votes FOR ratification or appointment except in situations where there are questions about the relative qualification of the auditors, conflicts of interest, auditor involvement
in significant financial restatements, option backdating, material weaknesses in controls, or situations where independence has been compromised.
Prohibit or Limit Auditor’s Non-Audit
Services
The Funds generally will vote in accordance with
recommendations made by the third party research provider, which typically recommends votes AGAINST these proposals since it may be necessary or appropriate for auditors to provide a service related to the business of a company and that service will
not compromise the auditors’ independence. In addition, Sarbanes-Oxley legislation spells out the types of services that need pre-approval or would compromise independence.
Indemnification of External Auditor
The Funds generally will vote AGAINST proposals to indemnify
external auditors on the grounds that indemnification agreements may limit pursuit of legitimate legal recourse against the audit firm.
Indemnification of Internal Auditor
The Funds generally will vote FOR the indemnification of internal
auditors, unless the costs associated with the approval are not disclosed.
Statement
of Additional Information – June 1, 2015
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B-6
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Social and Environmental
Disclose Environmental or Social Agenda
Proposals that seek disclosure, often in the form of a report, on
items such as military contracts or sales, environmental or conservation initiatives, business relationships with foreign countries, or animal welfare or other environmental and social issues, will be reviewed and, if after considering the proposal
the Investment Manager believes the matter may bear on the long-term value creation or sustainability of the company, a vote FOR or AGAINST may be cast, otherwise the Funds generally will ABSTAIN from voting.
Socially Responsible Investing
Proposals that seek to have a company take a position on social or
environmental issues will be reviewed and, if after considering the proposal the Investment Manager believes the matter may bear on the long-term value creation or sustainability of the company, a vote FOR or AGAINST may be cast, otherwise the Funds
generally will ABSTAIN from voting.
Prohibit or
Disclose Contributions and Lobbying Expenses
The Funds generally will vote in accordance with
recommendations made by the third party research provider, which typically considers the proposal in the context of the company’s current disclosures, Federal and state laws, and whether the proposal is in shareholders’ best
interests.
Disclose Prior Government
Service
Proposals seeking a company to furnish a list of
high-ranking employees who served in any governmental capacity over the last five years will be reviewed and, if after considering the proposal the Investment Manager believes the matter may bear on the long-term value creation or sustainability of
the company, a vote FOR or AGAINST may be cast, otherwise the Funds generally will ABSTAIN from voting.
Change in Operations or Products Manufactured or
Sold
Proposals seeking to change the way a company operates
(e.g., protect human rights, sexual orientation, stop selling tobacco products, move manufacturing operations to another country, etc.) will be reviewed and, if after considering the proposal the Investment Manager believes the matter may bear on
the long-term value creation or sustainability of the company, a vote FOR or AGAINST may be cast, otherwise the Funds generally will ABSTAIN from voting.
Foreign Issues
Foreign Issues — Directors, Boards,
Committees
Approve Discharge of Management
(Supervisory) Board
The Funds generally will vote in
accordance with recommendations made by the third party research provider, which typically recommends votes FOR approval of the board, based on factors including whether there is an unresolved investigation or whether the board has participated in
wrongdoing. This is a standard request in Germany and discharge is generally granted unless a shareholder states a specific reason for withholding discharge and intends to take legal action.
Announce Vacancies on Management (Supervisory)
Board
The Funds generally will vote FOR proposals requesting
shareholder approval to announce vacancies on the board, as is required under Dutch law.
Approve Director Fees
The Funds generally will vote in accordance with recommendations
made by the third party research provider on proposals seeking approval of director fees.
Foreign Issues — General Corporate
Governance
Digitalization of Certificates
The Funds generally will vote FOR proposals seeking shareholder
approval to amend a company’s articles of incorporation to eliminate references to share certificates and beneficial owners, and to make other related changes to bring the articles in line with recent regulatory changes for Japanese
companies.
Authorize Filing of Required
Documents and Other Formalities
The Funds generally will vote
FOR proposals requesting shareholders authorize the holder of a copy of the minutes of the general assembly to accomplish any formalities required by law, as is required in France.
Statement
of Additional Information – June 1, 2015
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B-7
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Propose Publications Media
The Funds generally will vote FOR proposals requesting shareholders
approve the designation of a newspaper as the medium to publish the company’s meeting notice, as is common in Chile and other countries.
Clarify Articles of Association or Incorporation
The Funds generally will vote FOR proposals seeking shareholder
approval of routine housekeeping of the company’s articles, including clarifying items and deleting obsolete items.
Update Articles of Association or Incorporation with
Proxy Results
The Funds generally will vote FOR proposals
requesting shareholders approve changes to the company’s articles of association or incorporation to reflect the results of a proxy vote by shareholders, which is a routine proposal in certain country’s proxies.
Conform Articles of Association or Incorporation to
Law or Stock Exchange
The Funds generally will vote FOR
proposals requesting shareholder approval to amend the articles of association or incorporation to conform to new requirements in local or national law or rules established by a stock exchange on which its stock is listed.
Authorize Board to Ratify and Execute Approved
Resolutions
The Funds generally will vote FOR proposals
requesting shareholder approval to authorize the board to ratify and execute any resolutions approved at the meeting.
Prepare and Approve List of Shareholders
The Funds generally will vote FOR proposals requesting shareholder
approval for the preparation and approval of the list of shareholders entitled to vote at the meeting, which is a routine formality in European countries.
Authorize Company to Engage in Transactions with
Related Parties
The Funds generally will vote FOR proposals
requesting shareholder approval for the company, its subsidiaries, and target associated companies to enter into certain transactions with persons who are considered “interested parties” as defined in Chapter 9A of the Listing Manual of
the Stock Exchange of Singapore (SES), as the SES related-party transaction rules are fairly comprehensive and provide shareholders with substantial protection against insider trading abuses.
Amend Articles to Lower Quorum Requirement for Special
Business
The Funds generally will vote on a CASE-BY-CASE
basis on proposals seeking to amend the articles to lower the quorum requirement to one-third for special business resolutions at a shareholder meeting, which is common when certain material transactions such as mergers or acquisitions are to be
considered by shareholders.
Change Date/Location
of Annual Meeting
The Funds will vote in accordance with the
recommendation of the third party research provider on proposals to change the date, time or location of the company’s annual meeting of shareholders.
Elect Chairman of the Meeting
The Funds generally will vote FOR proposals requesting shareholder
approval to elect the chairman of the meeting, which is a routine meeting formality in certain European countries.
Authorize New Product Lines
The Funds generally will vote FOR proposals requesting shareholder
approval to amend the company’s articles to allow the company to expand into new lines of business.
Approve Financial Statements, Directors’ Reports
and Auditors’ Reports
The Funds generally will vote FOR
proposals that request shareholder approval of the financial statements, directors’ reports, and auditors’ reports.
Foreign Issues — Compensation
Approve Retirement Bonuses for Directors/Statutory
Auditors
The Funds generally will ABSTAIN from voting on
proposals requesting shareholder approval for the payment of retirement bonuses to retiring directors and/or statutory auditors, which is a standard request in Japan, because information to justify the proposal is typically insufficient.
Statement
of Additional Information – June 1, 2015
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B-8
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Approve Payment to Deceased Director’s/Statutory
Auditor’s Family
The Funds generally will ABSTAIN from
voting on proposals requesting shareholder approval for the payment of a retirement bonus to the family of a deceased director or statutory auditor, which is a standard request in Japan, because information to justify the proposal is typically
insufficient.
Foreign Issues — Business
Entity, Capitalization
Set or Approve the
Dividend
The Funds generally will vote FOR proposals
requesting shareholders approve the dividend rate set by management.
Approve Allocation of Income and Dividends
The Funds generally will vote FOR proposals requesting shareholders
approve a board’s allocation of income for the current fiscal year, as well as the dividend rate.
Approve Scrip (Stock) Dividend Alternative
The Funds generally will vote FOR proposals requesting shareholders
authorize dividend payments in the form of either cash or shares at the discretion of each shareholder, provided the options are financially equal. The Funds generally will vote AGAINST proposals that do not allow for a cash option unless management
demonstrates that the cash option is harmful to shareholder value.
Authorize Issuance of Equity or Equity-Linked
Securities
The Funds generally will vote FOR proposals
requesting shareholder approval to permit the board to authorize the company to issue convertible bonds or other equity-linked debt instruments or to issue shares to satisfy the exercise of such securities.
Authorize Issuance of Bonds
The Funds generally will vote FOR proposals requesting shareholder
approval granting the authority to the board to issue bonds or subordinated bonds.
Authorize Capitalization of Reserves for Bonus Issue
or Increase in Par Value
The Funds generally will vote FOR
proposals requesting shareholder approval to increase authorized stock by capitalizing various reserves or retained earnings, which allows shareholders to receive either new shares or a boost in the par value of their shares at no cost.
Increase Issued Capital for Rights Issue
The Funds generally will vote FOR proposals requesting shareholder
approval to increase issued capital in order to offer a rights issue to current registered shareholders, which provides shareholders the option of purchasing additional shares of the company’s stock, often at a discount to market value, and
the company will use the proceeds from the issue to provide additional financing.
Board Authority to Repurchase Shares
The Funds generally will vote FOR proposals requesting that a board
be given the authority to repurchase shares of the company on the open market, with such authority continuing until the next annual meeting.
Authorize Reissuance of Repurchased Shares
The Funds generally will vote FOR proposals requesting shareholder
approval to reissue shares of the company’s stock that had been repurchased by the company at an earlier date.
Approve Payment of Corporate Income Tax
The Funds generally will vote FOR proposals seeking approval for
the use by a company of its reserves in order to pay corporate taxes, which is common practice in Europe.
Cancel Pre-Approved Capital Issuance Authority
The Funds generally will vote FOR proposals requesting shareholders
cancel a previously approved authority to issue capital, which may be necessary in Denmark as companies there do not have authorized but unissued capital that they may issue as needed like their counterparts in other countries.
Allotment of Unissued Shares
The Funds generally will vote FOR proposals requesting that
shareholders give the board the authority to allot or issue unissued shares.
Statement
of Additional Information – June 1, 2015
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B-9
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Authority to Allot Shares for Cash
The Funds generally will vote FOR proposals requesting that
shareholders give the board the ability to allot a set number of authorized but unissued shares for the purpose of employee share schemes and to allot equity securities for cash to persons other than existing shareholders up to a limited aggregate
nominal amount (a percentage of the issued share capital of the company).
Foreign Issues – Defense Mechanisms
Authorize Board to Use All Outstanding Capital
The Funds will vote on a CASE-BY-CASE basis on proposals requesting
shareholders authorize the board, for one year, to use all outstanding capital authorizations in the event that a hostile public tender or exchange offer is made for the company, which is a common anti-takeover measure in France similar to the way
U.S. companies use preferred stock.
Foreign
Issues — Auditors
Approve Special
Auditors’ Report
The Funds generally will vote FOR
proposals that present shareholders of French companies, as required by French law, with a special auditor’s report that confirms the presence or absence of any outstanding related party transactions. At a minimum, such transactions (with
directors or similar parties) must be previously authorized by the board. This part of the French commercial code provides shareholders with a mechanism to ensure an annual review of any outstanding related party transactions.
Appoint Statutory Auditor
The Funds generally will vote FOR proposals requesting shareholder
approval to appoint the internal statutory auditor, designated as independent internal auditor as required by the revised Japanese Commercial Code.
Foreign Issues — Social and Environmental
Authorize Company to Make EU Political Organization
Donations
The Funds generally will ABSTAIN from voting on
proposals that seek authorization for the company to make EU political organization donations and to incur EU political expenditures.
Statement
of Additional Information – June 1, 2015
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B-10
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APPENDIX C — DESCRIPTION OF STATE RISK FACTORS
The state tax-exempt and state municipal bond Funds
invest primarily in municipal securities issued by a single state and political sub-divisions of that state. Each state tax-exempt and state municipal bond Fund will be particularly affected by political and economic conditions and developments in
the state in which it invests. This exposure to factors affecting the state’s tax-exempt investments will be significantly greater than that of more geographically diversified funds, and may result in greater losses and volatility. Because of
the relatively small number of issuers of tax-exempt securities in a given state, the Fund may invest a higher percentage of assets in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. At
times, the Fund and other accounts managed by the Investment Manager may own all or most of the debt of a particular issuer. This concentration of ownership may make it more difficult to sell, or to determine the fair value of, these investments. In
addition, a Fund may focus on a segment of the tax-exempt debt market, such as revenue bonds for health care facilities, housing or airports. These investments may cause the value of a Fund’s shares to change more than the values of shares of
funds that invest more diversely. The yields on the securities in which the Funds invest generally are dependent on a variety of factors, including among others, the financial condition of the issuer or other obligor, the revenue source from which
the debt service is payable, general economic and monetary conditions, conditions in the relevant market, the size of a particular issue, the maturity of the obligation, and the rating of the issue. In addition to such factors, geographically
concentrated securities will be particularly sensitive to local conditions, including political and economic changes, adverse conditions to an industry significant to the area, and other further developments within a particular locality. Because
many tax-exempt bonds may be revenue or general obligations of local governments or authorities, ratings on tax-exempt bonds may be different from the ratings given to the general obligation bonds of a particular state.
Certain events may adversely affect investments
within a particular sector in a state. Examples include litigation, legislation or court decisions, concerns about pending or contemplated litigation, legislation or court decisions, or lower demand for the services or products provided by a sector.
Investing mostly in state-specific, tax-exempt investments makes the Funds more vulnerable to the relevant state’s economy and to factors affecting tax-exempt issuers in the state than would be true for more geographically diversified funds.
These risks include, among others:
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the inability or
perceived inability of a government authority to collect sufficient tax or other revenues to meet its payment obligations;
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natural disasters
and ecological or environmental concerns;
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the introduction
of constitutional or statutory limits on a tax-exempt issuer’s ability to raise revenues or increase taxes;
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the inability of
an issuer to pay interest on or to repay principal or securities in which the funds invest during recessionary periods; and
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economic
or demographic factors that may cause a decrease in tax or other revenues for a government authority or for private operators of publicly financed facilities.
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State Specific Information
The following discussion regarding certain economic,
financial and legal matters pertaining to the states, U.S. territories and possessions referenced below, and their political subdivisions is drawn from the documents indicated below and does not purport to be a complete description or a complete
listing of all relevant factors. More information about state specific risks may be available from other official state resources. The information has not been updated nor will it be updated during the year. The Funds have not independently verified
any of the information contained in such documents and are not expressing any opinion regarding the completeness or materiality of such information. The information is subject to change at any time. Any such change may adversely affect the financial
condition of the applicable state, U.S. territory or possession.
Estimates and projections, if any, contained in the
following summaries should not be construed as statements of fact; such estimates and projections 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. Discussions regarding the financial condition of a particular state or U.S. territory or possession may not be relevant to Municipal Obligations issued by political subdivisions of that state or U.S. territory or possession. Moreover, the
general economic conditions discussed may or may not affect issuers of the obligations of these states, U.S. territories or possessions.
Statement
of Additional Information – June 1, 2015
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California
The following information has been obtained from the
Official Statement, dated November 13, 2014, for the $1,206,210,000 State of California Various Purpose General Obligation Bonds (the “California 2014 Bonds”).
Current Economic Condition.
The State of California (“California”)
has the largest economy among the 50 states and one of the largest and most diverse in the world and has major components in high technology, trade, entertainment, agriculture, manufacturing, government, tourism, construction, and services. The
relative proportion of the various components of the California economy closely resembles the make-up of the national economy. The California economy is experiencing gradual and broadening growth. Continued growth in the high-technology sector,
international trade, and tourism are being supplemented by better residential construction and real estate conditions.
California is the most populous state in the nation,
nearly 50% larger than the second-ranked state according to the 2010 U.S. Census. The 2013 estimate of California’s population is 38.2 million, which is 12% of the total United States population. Personal income increased in 14 of the 16
quarters through the end of 2013, with decreases only in the fourth quarter of 2011 and the first quarter of 2013. The decrease in early 2013 was partially due to the expiration of the federal payroll tax holiday. These numbers also reflect the
revised methodology implemented by the U.S. Bureau of Economic Analysis for the national accounts. Although the reported levels of personal income have changed as a result of the revised methodology, these changes merely reflect more accurate
statistics about the underlying state of the economy. As such, the changes will not have any impact on revenue.
Using the new methodology, California’s
non-farm payroll jobs grew by 391,700, or by 32,600 jobs per month, between December 2012 and December 2013. By comparison, in 2012, employment grew by 465,800, or by 38,800 jobs per month. (The unemployment statistics were revised back to 1990
using the new methodology mentioned above, and the revised statistics are higher from 1990 to the present.) As of February 2014, the private sector had surpassed the pre-recession peak in payroll employment, but the declines in the government sector
meant that overall around 93% of total nonfarm payroll job losses have been recovered. The state unemployment rate reached a high of 12.4% in late 2010. The rate improved thereafter, falling to 7.4% in June 2014. In comparison, the national
unemployment rate was 6.1% in June 2014.
The
California economy is expected to continue making steady progress. Industry employment is forecast to expand 2.5% and 2.4% in 2015 and 2014, respectively, and 2.5% growth is projected for 2015. Personal income is projected to grow 5.7% in 2014, 5.3%
in 2015 and 5.4% in 2016.
State Budget.
During the recession that officially ended in 2009,
California experienced its most significant economic downturn since the Great Depression of the 1930s. As a result, state tax revenues declined precipitously, resulting in large budget gaps and occasional cash shortfalls in the period from 2008
through 2011. The state enacted and maintained significant spending reductions in the past three budgets and voters in 2012 approved Proposition 30 providing increased revenues through the next several fiscal years. As of the 2014-15
Governor’s Budget, California’s budget is projected to remain balanced within the projection period ending in fiscal year 2017-18.
The 2014-15 Budget, including the 2014 Budget Act,
was enacted on June 20, 2014. It includes a multi-year plan that is balanced, establishes a rainy day fund, addresses the California State Teachers’ Retirement System’s (“CALSTRS”) unfunded liabilities and pays down a
substantial portion of budgetary debt from past years. General Fund revenues and transfers for fiscal year 2014-15 are projected at $105.5 billion, an increase of $3.3 billion or 3.2 percent compared with revised estimates for fiscal year 2013-14.
General Fund expenditures for fiscal year 2014-2015 are projected at $108.0 billion, an increase of $7.3 billion or 7.2% compared with revised estimates for fiscal year 2013-2014.
California’s financial condition is subject to
a number of major risks and pressures, including the need to repay billions of dollars of obligations which were deferred to balance budgets during the economic downturn. In addition, California’s revenues (particularly the personal income
tax) can be volatile and correlate to overall economic conditions. There can be no assurances that California will not face fiscal stress and cash pressures again, or that other changes in the state or national economies will not materially
adversely affect California’s financial condition.
Real Estate and Housing.
After hitting a low of close to 200,000 units
(seasonally-adjusted and annualized) in the middle of 2007, sales of existing single- family homes have rebounded to above 400,000 units annually. The median price of existing, single-family homes sold in June 2014 was $457,160, an increase of
$120,100 from January 2013. However, this remains 23% below the pre-recession peak. California issued 83,000 residential building permits in 2013, 42.6% more than were issued in 2012 but still only 39% of the 213,000 permits issued in 2004. Despite
a large number of permits issued in April 2014, the average pace of permits issued in the first five months of 2014 was only 85,000 on an annualized basis. These remain mostly permits for multi-family structures.
Statement
of Additional Information – June 1, 2015
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The number of California homes going into foreclosure dropped to an
eight-year low in the fourth quarter of 2013 at 18,120. Foreclosures peaked in the first-quarter of 2009 at 135,431. The declining rate of foreclosure was likely due in part to the new state foreclosure laws (the “Homeowner Bill of
Rights”), which took effect at the beginning of calendar year 2013.
Long-Term Debt.
As of September 1, 2014, California had outstanding
obligations payable principally from the state’s General Fund or from lease payments paid from the operating budget of the respective leases, which operating budgets are primarily, but not exclusively, derived from the General Fund, consisting
of $75.2 billion principal amount of general obligation bonds and $11.2 billion of lease-revenue bonds. As of September 1, 2014, there was approximately $26.4 billion of authorized and unissued long-term voter- approved general obligation bonds
payable principally from the General Fund and approximately $4.1 billion of authorized and unissued lease revenue bonds.
Certain California state 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 are not payable from the General Fund, and conduit obligations payable
only from revenues paid by local governments or private users of facilities financed by the revenue bonds. California has always paid when due the principal and interest on all its debts, including general obligation bonds, general obligation
commercial paper notes, lease-revenue obligations and short term obligations, including revenue anticipation notes and revenue anticipation warrants.
Bond Ratings.
Three major credit rating agencies, Moody’s
Investors Service, Inc. (“Moody’s”), Standard and Poor’s Ratings Services (“S&P”), and Fitch Ratings (“Fitch”), assigned ratings to the California 2014 Bonds, as follows: Moody’s assigned a
rating of “Aa3”, S&P assigned a rating of “A+”, and Fitch assigned a rating of “A”. It is not possible to determine whether, or the extent to which, Moody’s, S&P, or Fitch will change its respective
rating in the future. In addition, ratings assigned to individual Municipal Obligations vary.
Georgia
Unless otherwise noted, the following information has been obtained
from disclosure contained in the Official Statement, dated June 18, 2014, for the $982,905,000 State of Georgia General Obligation Bonds, 2014A, 2014B (Federally Taxable), 2014C (Federally Taxable Qualified School Construction Bonds – Direct
Pay), and 2014D (the “Georgia 2014 Bonds”).
Current Economic Condition.
The State of Georgia (“Georgia”) is an
economic hub of the southeast. The City of Atlanta, the state capital, is the major economic and population center of Georgia, with major regional economic and population centers in the Cities of Augusta, Savannah, and Macon. Georgia’s
economic base is diverse, with major port facilities on the coast, agricultural resources throughout the state, and manufacturing and service industries, and is a major transportation hub with one of the busiest airports in the nation.
Georgia’s economy is experiencing a moderate recovery with growth in employment, home prices, and residential construction permits. While a moderate economic recovery is expected to continue, there are significant risks to continued growth,
including federal fiscal policy.
Georgia is
the eighth largest state, with an estimated population of 9.9 million people. For calendar year 2013, total personal income in Georgia grew by 2.7% over 2012 figures and wage and salary income growth was slightly stronger at 3.6%. For the fourth
quarter of 2013, total personal income growth had slowed to 0.4% over the prior fourth quarter, while wage and salary growth slowed to 1.1%.
Employment in Georgia is growing at a moderate pace;
over the February through April 2014 time period, employment growth has averaged 1.7% over the prior year for both the U.S. and Georgia. Georgia’s unemployment rate declined to 7.0% in April 2014 from 8.3% in April 2013.
Statement
of Additional Information – June 1, 2015
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State Budget.
Georgia’s amended fiscal year 2013-14 budget
(the “Amended FY 2014 Budget”) anticipates General Fund revenue growth of 3.4% over the fiscal year 2012-13 General Fund revenue collections and total tax revenue growth of 3.7% over the fiscal year 2012-13 tax revenue collections. The
Amended FY 2014 Budget was increased over the original fiscal year 2013-14 budget by $121.4 million. The Amended FY 2014 Budget revenue estimate includes $31 million in revenue from fees collected by Department of Revenue, which in prior years had
been retained for Department of Revenue operations. But, effective in fiscal year 2013-14, such fees will be transferred to the Georgia State Treasury. The Amended FY 2014 Budget revenue estimate also reflects the expected impact of legislative
changes on revenue collections. In particular, sales tax revenues are expected to fall 4.2% as the elimination of the sales tax on automobile sales continues to have an impact in year over year sales tax performance and title ad valorem tax revenues
are expected to increase substantially as that tax continues to phase-in. An estimated 3% reduction to the budget of state agencies was incorporated in building the original fiscal year 2013-14 budget, but no further across the board reductions were
necessary in the Amended FY 2014 budget. Full funding to meet the annual required contributions (ARC) for pension systems was also included in the original fiscal year 2013-14 budget.
The Amended FY 2014 Budget focused on meeting
critical growth needs in core areas of state spending, primarily education and healthcare. The Amended FY 2014 Budget included $130 million for mid-term growth in the Quality Basic Education funding formula for K-12 and $26 million for the
Forestland Protection Grant program, of which $14.8 million will go directly to local school systems whose property tax digests have been impacted by dedicated forestland. The Amended FY 2014 Budget also includes $25 million for the OneGeorgia
Authority to provide grants to local school systems to expand digital learning opportunities. Finally, the Amended FY 2014 Budget includes an additional $25 million for the Medicaid and PeachCare for Kids programs for projected expense growth due in
part to additional costs associated with implementation of the Patient Protection and Affordable Care Act of 2010 (PPACA).
The fiscal year 2014-15 budget (the “FY 2015
Budget”) revenue estimate assumes tax revenue growth of 4.4% and General Fund revenue growth in the range of 4.3% compared to the Amended FY 2014 revenue estimate. As in the Amended FY 2014 Budget, no additional reductions to agency budgets
were necessary in the FY 2015 Budget. Anticipated new growth in revenues primarily will be used to meet expected growth needs and to begin to restore funding reduced from the K-12 budget during the economic recession. The FY 2015 Budget also
includes $87 million for expense growth in Medicaid and PeachCare for Kids, including additional projected costs associated with implementation of PPACA, and fully funds the annual required contributions for the Teachers Retirement System and
Employees’ Retirement System through the appropriation of $71.8 million and $56.7 million respectively. Finally, the FY 2015 Budget includes continued capital investments in the Savannah port’s harbor deepening project and water supply
needs.
Real Estate and Housing.
Home prices in Georgia are recovering and trending
positively. Home prices for metro Atlanta have risen 18.2%, which exceeds the 12.2% increase for the composite index for 20 metro areas across the country. Other housing indicators have suggested the housing recovery has stalled. Nationally,
existing home sales have trended down since peaking in July 2013. New homes sales also are below their recent peak. This downward trend likely is related to a reduction in purchases of single family homes by investors as both prices and interest
rates have risen. In addition, mortgage credit availability is just now beginning to loosen which heretofore has limited the ability of buyers to finance purchases. Housing starts for the US and for Georgia also have slipped from recent peaks.
Foreclosure rates and mortgage delinquency rates in Georgia remain above the U.S. averages, but are trending down.
Long-Term Debt.
As of June 30, 2013, Georgia’s outstanding
general obligation bond indebtedness was $11.8 billion. Georgia’s long-term bond debt increased $900.1 million, or 8.3%, during fiscal year 2012-13, which represents the net difference between new issuances, payments, refunding of outstanding
debt, and prior period adjustments. General obligation bonds for the primarily government increased by $182.9 million, or 2.1%, while revenue bonds for the primary government increased $717.2 million, or 35%. Georgia issued new bonded debt during
fiscal year 2012-13 in the amount of $1.3 billion for the primarily government and $364.7 million for component units.
Bond Ratings.
Three major credit rating agencies, Moody’s,
S&P, and Fitch, assigned ratings to the Georgia 2014 Bonds, as follows: Moody’s assigned a rating of “Aaa,” S&P assigned a rating of “AAA,” and Fitch assigned a rating of “AAA”. It is not possible to
determine whether, or the extent to which, Moody’s, S&P, or Fitch will change its respective rating in the future. In addition, ratings assigned to individual Municipal Obligations may vary.
Statement
of Additional Information – June 1, 2015
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Maryland
Unless
otherwise noted, the following information has been obtained from disclosures contained in the Official Statement, dated March 5, 2014, as supplemented on April 9, 2014, for the $736,855,000 State of Maryland General Obligation Bonds, State and
Local Facilities Loan of 2014, First Series (the “Maryland 2014 Bonds”).
Current Economic Condition.
As the economy slowed in fiscal year 2006-07, and
the boost from mortgage refinancing and other housing-related issues faded, growth slowed precipitously in the State of Maryland (“Maryland”). Employment in Maryland is based largely in services, trade, and government. Those sectors,
along with financial activities, are the largest contributors to the gross state product, according to the U.S. Department of Commerce, Bureaus of Economic Analysis. Proximity to Washington, D.C., influences the above-average percentage of employees
in government.
Maryland has a population of
approximately 5.9 million, concentrated around the Baltimore and Washington, D.C. Metropolitan Statistical Areas. The average unemployment rate in 2013 was 6.7%, compared to an average national rate for the same period of 7.4%. In December 2013, the
rates were 6.1% in Maryland and 6.7% in the United States. Maryland’s per capita personal income was the fifth highest in the country in 2012, according to the U.S. Bureau of Economic Analysis, at 123% of the national average. Annual
unemployment rates have been below those of the national average for each of the last 36 years.
The onset of the most recent recession coupled with
high gas prices resulted in declining taxable retail sales for fiscal year 2007-08. Fiscal year 2008-09 saw continued reductions in retail sales as declining wealth, increased unemployment, and a lack of credit weighed heavily across all categories
of the base. Though sales and use tax collection growth in fiscal year 2009-10 finished negative, Maryland experienced four consecutive months of positive growth in sales and use tax collections in the final months of the fiscal year 2009-10 and
that trend carried into fiscal year 2010-11. In fiscal year 2010-11, taxable sales increased at their greatest rate since fiscal year 2005-06, as taxable purchases of vehicles and other goods rebounded, likely the result of improved equity markets,
a relatively stabilized job market, and pent-up demand. Fiscal years 2011-12 and 2012-13 continued the upward trend as the economy continued to improve.
State Budget.
General Fund revenues on a budgetary basis realized
in Maryland’s fiscal year ended June 30, 2013, were below revised estimates by $71.2 million, or 0 .5%. Maryland ended fiscal year 2012-13 with a $501.9 million General Fund balance on a budgetary basis. This balance reflects a $301.5 million
increase compared to the balance projected at the time the 2013 budget was enacted. In addition, there was a balance in the Revenue Stabilization Account of $700.4 million. For fiscal year 2013-14, the total budget is $37.4 billion, a $2.2 billion
increase over fiscal year 2012-13. The General Fund accounts for approximately $15.7 billion, of which the largest expenditures are for education and health, which together represent 73.9% of total General Fund expenditures. General Fund
expenditures exclude transportation, which is funded with special fund revenues from the Transportation Trust Fund.
Real Estate and Housing.
Following several years of declining activity and
values, monthly data from the Maryland Association of Realtors indicates that the residential real estate market is starting to show growth and possibly signs of a rebound. Preliminary data shows that unit sales for 2013 were up 12.8%, a relatively
sharp upwards turn from 5.5% growth in 2012. Additionally, the active housing inventory has continued to decline and is approximately 49.7% less than the peak levels of 2008. Those factors together have likely contributed to the recent upswing in
median home prices, which increased 5.1% for 2013. However, risk remains in the outlook as the percentage of loans beginning the foreclosure process in 2012 increased above 2010 and 2011 levels and the rate through the third quarter of 2013 remains
elevated, though this was somewhat expected as Maryland employs a judicial foreclosure process, and there may be an inventory of other homes that have been held from the market in anticipation of higher prices.
Long-Term Debt.
Maryland is empowered by law to authorize, issue,
and sell general obligation bonds, which are backed by the full faith and credit of the state. Maryland also issues dedicated revenue bonds for the Department of Transportation and various business-type activities. The payment of principal and
interest with respect to the revenue bonds comes solely from revenues received from the respective activities. This dedicated revenue debt is not backed by Maryland’s full faith and credit. At June 30, 2013, Maryland had outstanding bonds
totaling $15.8 billion. Of this amount, $8.0 billion were general obligation bonds, backed by the full faith and credit of the state. The remaining $7.8 billion were secured solely by the specified revenue sources.
Bond Ratings.
Three major credit rating agencies, Moody’s,
S&P, and Fitch, assigned ratings to the Maryland 2014 Bonds, as follows: Moody’s assigned a rating of “Aaa,” S&P assigned a rating of “AAA,” and Fitch assigned a rating of “AAA”. It is not possible
to determine whether, or the extent to which, Moody’s, S&P, or Fitch will change its respective rating in the future. In addition, ratings assigned to individual Municipal Obligations may vary.
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Minnesota
Unless
otherwise noted, the following information is based on disclosure contained in 1) the February 2014 Budget and Economic Forecast, published by the Minnesota Management and Budget Department (the “Forecast”), and (2) the Official
Statement, dated January 28, 2014, for the $462,065,000 State of Minnesota State General Fund Appropriation Bonds, Series 2014A and 2014B (Taxable) (the “Minnesota 2014 Bonds”).
Current Economic Condition.
According to the Forecast, a stronger U.S. economic
outlook is mirrored in the economic and budget forecast of the State of Minnesota (“Minnesota”). Positive year-to-date revenue collections combined with ongoing improvement in Minnesota’s economy contribute to higher projected
revenues for the remaining 16 months of the Current Biennium (as defined below). Forecast revenues are up $366 million compared to previous estimates, largely due to projected increases in income and sales tax collections. Forecast spending is down
$48 million due in part to savings in K-12 education aids and property tax refund programs. After transferring $6 million to the stadium reserve, these changes leave a projected $1.233 billion balance for the Current Biennium.
According to the Forecast, Minnesota’s economy
continues to make solid gains. The Bureau of Economic Analysis reports the state’s real gross domestic project (“GDP”) rose 3.5% in 2012, ranking among the six fastest-growing state economies during that year, and most labor market
indicators suggest that trend continued in 2013. Total population in Minnesota at December 31, 2013, was approximately $5.42 million. Minnesota’s unemployment rate ended the year at 4.6%, the lowest level since just before the recession began
in December 2007 and a full two percentage points less than the nation. First time claims for jobless benefits have fallen to levels not observed in more than a decade. And leading indicators, such as temporary help employment, average hours worked,
job vacancies, and the number of unemployed remain strong. On top of that, the state added 46,000 net new jobs, or 1.7%, in 2013, slightly stronger than the national rate of 1.6%, and gains are occurring across every major industry, with the
exception of manufacturing and federal government employment. That diverse economic revival has helped Minnesota recover from recession faster than the nation. As of December 2013, state employment levels are now 16,800 jobs above the pre-recession
peak. Nationally, employment remains about 1.2 million jobs (or 0.9%) below the peak.
According to the Forecast, despite high
unemployment, tax-restrained income growth, and low confidence, consumers still managed to modestly increase spending late last year. Real consumer spending grew at a solid 3.2% annualized rate in the fourth quarter of 2013, the fastest annual rate
since late 2010. Employment growth is expected to accelerate during the second half of 2014, with average monthly gains rising to more than 270,000 by late 2014. Real disposable income growth is expected to pick up to 2.8% in 2014 and 3.6% in 2015.
With job and wage growth rising, real consumer spending growth is expected to accelerate from 2.0% in 2013, to 2.7% in 2014 and 3.1% in 2015, led by autos and other big-ticket durable items.
State Budget.
Minnesota’s biennial budget appropriation
process relies on revenue and expenditure forecasting as the basis for establishing aggregate revenue and expenditure levels. The biennium that began on July 1, 2013 and will end on June 30, 2015 is referred to as the “Current
Biennium.”
According to the Forecast,
Minnesota’s budget outlook continues to improve. The forecast balance for the end of Current Biennium is expected to be $1.233 billion, $408 million above the $825 million projected in the November forecast. Forecast revenues are expected to
be $39.575 billion, $366 million higher than previous estimates. Revised spending for the Current Biennium is expected to be $39.019 billion, $48 million below earlier estimates. These positive changes are minimally offset by a $6 million increase
to the stadium reserve. While stadium-related revenues are largely unchanged, sale of the stadium bonds in January 2014 resulted in slightly lower costs. The difference increases the stadium reserve. Unlike prior forecasts, there are no statutory
allocations of the forecast balance. All prior obligations to repay payment shifts were completed in the November forecast.
General Fund reserves remain unchanged at $1.011
billion: $350 million in the cash flow account and $661 million in the budget reserve. At this level, reserves equal slightly over 2.6% of General Fund revenues forecast for the Current Biennium.
Real Estate and Housing.
According to the Forecast, a long-awaited housing
recovery is underway in Minnesota, as sales of both new and existing houses continue to gain traction. Ultra-low inventories are fueling more competition among buyers and pushing up home prices. The Federal Housing Finance Agency
(“FHFA”) purchase-only home price index rose 7.7% in 2013, the biggest gain since 2005. But home prices remain low compared to pre-recession peaks. Average house prices are still down about 7% from their early 2007 peak. The FHFA
purchase-only home price index is expected to rise 7.0% in 2014 and slow to 0.6% growth in 2015. And, as home price growth decelerates later this year and income growth picks up, affordability is expected to improve. Sales of new houses, which rose
16.7% in 2013 (to 430,000 units), are forecast to increase 22.8% in 2014 (to 528,000 units) and 37.7% in 2015 (to 726,000 units). Existing home sales, however, are forecast to slow from growth of 8.9% in 2013 (to 5.07 million units), to growth of
4.4% in 2014 (to 5.30 million units), due in part to the introduction of the Qualified Mortgage rule earlier this year, which requires lenders to thoroughly assess the borrower’s ability to repay and may lengthen the mortgage approval
process.
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Long-Term Debt.
Minnesota’s total long-term liabilities
increased by $338 million (3.7%) during the fiscal year 2012-13. The increase was primarily a result of the state issuing general obligation bonds for trunk highway projects and other various state purposes. In addition, Minnesota issued state
General Fund appropriation refunding bonds to refund the tobacco settlement revenue bonds issued by the Tobacco Securitization Authority (blended component unit) in fiscal year 2011-12.
Bond Ratings.
Two major credit rating agencies, S&P and Fitch,
assigned ratings to the Minnesota 2014 Bonds, as follows: S&P assigned a rating of “AA” and Fitch assigned a rating of “AA”. It is not possible to determine whether, or the extent to which, S&P or Fitch will change
its respective rating in the future. In addition, ratings assigned to individual Municipal Obligations may vary.
North Carolina
Unless
otherwise noted, the following information has been obtained from disclosure contained in the Official Statement, dated April 30, 2014, for the $199,570,000 State of North Carolina Limited Obligation Refunding Bonds, Series 2014B (the “North
Carolina 2014 Bonds”).
Current Economic
Condition.
The State of North Carolina
(“North Carolina”) is located on the Atlantic seacoast and is bordered by the states of South Carolina, Georgia, Tennessee, and Virginia. The major industry sectors of North Carolina are services, agriculture, trade, manufacturing,
exports, and tourism. Military operations and residential construction are also important economic drivers.
The estimated population of North Carolina as of
July 1, 2013 was 9,848,060, ranking it 10th in the nation. During the period from 2010 to 2013, North Carolina’s estimated population increased by 312,589, or 3.3% (the 3rd largest increase among the top 10 states on a percentage basis).
During the period from 2002 to 2012, per capita personal income in North Carolina grew from $28,522 to $37,910.
North Carolina is recovering from a period of high
unemployment and modest job growth in the wake of the national recession. North Carolina’s February 2014 seasonally adjusted unemployment rate was 6.4%, down 2.2 percentage points from 8.6% in February 2013. At 6.4%, North Carolina’s
unemployment rate was 0.3 of a percentage point lower the nation as a whole (6.7%).
State Budget.
North Carolina’s economy steadily gained
strength in fiscal year 2012-13. The improving economic growth combined with taxpayer reactions to federal tax changes resulted in a modest revenue surplus. Specifically, revenue collections finished $443 million, or 2.2%, above the budgeted
forecast in fiscal year 2012-13. The surplus was mainly fueled by better than anticipated individual and corporate income tax collections. Budget administration required an implementation plan to address a $305 million Medicaid shortfall. No other
budget management measures, such as allotment controls, were necessary in fiscal year 2012-13.
As of March 26, 2014, North Carolina’s overall
Unreserved Fund Balance was $770.7 million. This is a 76% increase over the March 26, 2013, Unreserved Fund Balance of $436.1 million. The enacted budget for fiscal year 2013-14 included an unappropriated General Fund balance of $323.7 million. The
unappropriated General Fund balance cannot be used without authorization from the General Assembly.
Real Estate and Housing.
North Carolina, like much of the nation, has shown
signs of improvement in the housing sector. In 2012, the state witnessed a 48.4% increase in building permits of new housing units compared to a 33% increase nationwide. In 2013, North Carolina witnessed a 4.3% increase in building permits of new
housing units compared to a 17.8% increase nationwide. North Carolina’s housing construction remains strong compared to other states. North Carolina issued approximately 50,787 residential building permits in 2013, ranking it among the top
four states in the nation.
Long-Term
Debt.
As of June 30, 2013, North Carolina had
total long-term debt outstanding (bonds, special indebtedness, and notes payable) of $8.598 billion, a decrease of 3.56% from the previous fiscal year-end. The state issued $250 million in limited obligation bonds reported in governmental activities
and refinanced $1.401 billion of its existing general obligation bonds to take advantage of lower interest rates. Additionally, the N.C. Turnpike Authority, a business-type activity, had additional borrowings of $89.37 million from a federal
transportation loan.
Bond Ratings.
Three major credit rating agencies, Moody’s,
S&P, Fitch, assigned ratings to the North Carolina 2014 Bonds, as follows: Moody’s assigned a rating of “Aaa”, S&P assigned a rating of “AAA”, and Fitch assigned a rating of “AAA”. It is not possible
to determine whether, or the extent to which, Moody’s, S&P, or Fitch will change its rating in the future. In addition, ratings assigned to individual Municipal Obligations may vary.
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South Carolina
Unless
otherwise noted, the following information has been obtained from disclosure contained in the Official Statement, dated as of May 20, 2014, for the $15,190,000 General Obligation State Institution Bonds (Issued on Behalf of the University of South
Carolina), Series 2014A, the $33,030,000 General Obligation State Institution Bonds (Issued on Behalf of Clemson University), Series 2014B, and $63,410,000 General Obligation State Highway Refunding Bonds, Series 2014A, of the State of South
Carolina (collectively, the “South Carolina 2014 Bonds”).
Current Economic Condition.
The State of South Carolina (“South
Carolina”) has a diversified economic base, including manufacturing, trade, healthcare, services, and leisure/hospitality. At December 31, 2012, principal contributors to South Carolina’s gross domestic product were the trade,
transportation, and utilities industries (19%), and financial activities (17%), followed by manufacturing (16%). During the years 2007 to 2012, the fastest growing contributors to South Carolina’s gross domestic product were the education and
health services (2.1% average annual growth), followed by professional and business services (1.6%) and information services (1.6%). Manufacturing grew over the period by 0.6% in South Carolina and by 0.4% in the nation, while declining slightly in
the southeastern states by 0.1%. South Carolina’s total gross domestic product grew at an average annual growth rate of 0.4% (versus 0.3% for southeastern states and 0.6% for the nation) from 2007 to 2012.
South Carolina’s population estimate at
December 31, 2013, was over 4.7 million, and the state’s rate of population growth was 11th fastest in the United States in 2013. In 2012, South Carolina’s per capita personal income increased to $34,928, or 4.0% over the previous year,
compared to an increase of 4.2% for the southeast and 4.4% for the nation. South Carolina’s per capita personal income was 80.6% of the nation’s (compared to 80.9% in 2011) and 88.5% of the southeast’s (compared to 88.6% in
2011).
South Carolina’s unemployment
rate in March 2014 was 5.5%. The state’s unemployment rate at December 31, 2013, was 6.8%, down 1.7% from 8.5% in December 31, 2012. By comparison, the unemployment rate in December 2013 was 6.8% for the southeastern states and 7.0% for the
nation. Over the past several years, South Carolina’s unemployment rates have trended higher than the unemployment rates of other southeastern states and the nation. Largest contributors to South Carolina’s unemployment rate are declines
in manufacturing jobs and growth in the labor force.
State Budget.
The South Carolina General Assembly approved a
budget totaling $22.7 billion for fiscal year 2013-14 (the “2014 Budget”). The 2014 Budget includes $6.3 billion in recurring General Fund revenues and $106 million in capital reserve funds. The 2014 Budget fully funds the General
Reserve Fund that totals $281.6 million at June 30, 2013, and is available for management of revenue shortfalls.
The 2014 Budget anticipates an increase in total
recurring General Fund revenues of $254 million, net of enhancements and adjustments, which include $41 million redirected from the General Fund for recurring transportation funding. Nonrecurring revenues are budgeted to increase $416 million, which
includes $160 million in surplus revenues from fiscal year 2012-13, $141 million in tobacco master settlement agreement funds, and $113 million released from the fiscal year 2012-13 capital reserve fund. Total federal funds are reduced by $1.05
billion, largely reflective of a change in South Carolina’s budgetary treatment of federal payments made directly to Supplemental Nutrition Assistance Program payment beneficiaries, under the rationale that those payments are never held in the
custody of the state. Other funds are budgeted to increase by $682 million, which includes $217 million in adjustment to the fiscal year 2013-14 base, $288 million in lottery revenue, $158 million in cigarette tax collections designated for the
Medicaid Reserve Fund, and a $20 million increase designated for the Education Improvement Act.
According to the 2014 Budget, recurring General
Funds are designated to increase the general reserve fund by $11 million; to increase the capital reserve fund by $5 million; and to provide for an increase in debt service paid by the General Fund by $3 million; and $12 million is appropriated to
cover a shortfall in the Homestead Exemption Fund. Nonrecurring funds are appropriated to fund an additional $30 million in the Local Government Fund; and a total of $43 million is appropriated from the Capital Reserve Fund for consumer protection
and statewide cyber security improvements, information security, tax processing system improvements, and loan repayment covering expenses for the breach of certain taxpayer data.
Real Estate and Housing.
The number of residential closings in June 2013, up
13% compared to the previous year, and the declining number of foreclosures in the state, down 24% in June 2013 compared to June 2012, have reduced the supply of available homes on the market. As inventory tightens, real estate values in South
Carolina have gained ground. The median home sales price in South Carolina as of June 30, 2013, was at the same level seen in 2007 before the recession. Residential building permits compared to fiscal year 2011-12 are up over 20%.
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Long-Term Debt.
Rather than directly limiting the amount of
outstanding general obligation debt, South Carolina law imposes a limitation on the annual debt service expenditures. The legal annual debt service margin at June 30, 2013, was $37.609 million for highway bonds, $176.852 million for general
obligation bonds excluding institution and highway bonds, $4.716 million for economic development bonds, and $8.785 million for research university infrastructure bonds. Excluded from the debt service limit calculations are a $170 million 2010 issue
of economic development bonds and a $50 million 2010 issue of air carrier hub terminal facilities bonds which by South Carolina law are not subject to the limitation on maximum annual debt service.
Bond Ratings.
Three major credit rating agencies, Moody’s,
S&P, Fitch, assigned ratings to the South Carolina 2014 Bonds, as follows: Moody’s assigned a rating of “Aaa”, S&P assigned a rating of “AA+”, and Fitch assigned a rating of “AAA”. It is not possible
to determine whether, or the extent to which, Moody’s, S&P, or Fitch will change its rating in the future. In addition, ratings assigned to individual Municipal Obligations may vary.
Commonwealth of Virginia
Unless otherwise noted, the following information has been obtained from disclosure contained in the Official Statement, dated March 27, 2014, for the $133,810,000 Commonwealth of Virginia General Obligation Bonds, Series
2014A and 2014B (together, the “Virginia 2014 Bonds”).
Current Economic Condition.
During fiscal year 2012-13, the Commonwealth of
Virginia (“Virginia”) continued its slow recovery that began in 2011 from the so-called “Great Recession.” While some of the financial and economic indicators of this recession are still visible, Virginia’s economy
seems to have rebounded on the four main economic indicators: jobs, income, sales, and housing. Although Virginia experienced a more moderate job growth rate than at the national level (1.0% at the state level versus 1.6% nationally), it is possible
to be optimistic about this improvement.
According to the U.S Census Bureau, Virginia’s
2013 estimated population was 8,260,405 which was 2.6 percent of the United States total. Among the 50 states, it ranked twelfth in population. From 2004 to 2013, Virginia’s population increased 10.6% versus 7.9% for the nation. Personal
income growth also continued to rise at a modest 3.0% rate during fiscal year 2013, compared to 4.7% in fiscal year 2012. Additionally, unemployment in Virginia continued to decline during fiscal year 2012-13, reaching 5.6% (versus 7.8%
nationally).
State Budget.
The original General Fund budget for fiscal year
2012-13 was $582.1 million or 3.5% higher than the final fiscal year 2011-12 revenue budget. Additionally, the final revenue budget for fiscal year 2012-13 was slightly higher ($134.0 million or 0.8%) than the original budget. The change between the
original and final budget was primarily attributable to increases in the final budget for individual and fiduciary income taxes of $181.3 million and sales and use taxes of $37.6 million offset by a decrease in the final budget for corporation
income of $65.1 million due to revised economic forecasts. Total actual General Fund revenues were greater than final budgeted revenues by $342.9 million due to stronger than anticipated collections. Total final budget expenditures for fiscal year
2012-13 were higher than original budget expenditures by $334.5 million or 1.9%. This increase was primarily attributable to education expenditures of $127.0 million, individual and family services expenditures of $97.5 million, and administration
of justice expenditures of $82.2 million. Virginia spent less than planned during fiscal year 2012-13, so actual expenditures were $562.3 million, or 3.1%, lower than final budget expenditures.
In order to mitigate the effects of difficult
economic conditions over the past several years, Virginia previously adopted temporary budget solutions such as accelerated sales taxes and the continued receipt of additional federal funding. As a result of Virginia’s improving economy, these
temporary budget solutions are being phased out. There is planned growth in the adopted budget for the 2012-2014 biennium (fiscal years 2012-13 and 2013-14). Based on the most recent General Fund revenue estimate, fiscal year 2013-14 revenue is
projected to increase 1.5% over the fiscal year 2012-13 revenue collections.
While the projected revenue growth is expected to
continue during the 2012-2014 biennium, pressures on the economic recovery persist due to the effect of federal budget uncertainties. In response to this uncertainty, Virginia created the Federal Action Contingency Trust Fund and deposited $30.0
million and has identified an additional $22.5 million to assist in mitigating the potential effect of federal budget uncertainties on the Virginia economy. In addition, the Governor instructed Cabinet Secretaries to prepare and submit plans for
2.0% reductions in General Fund spending for fiscal year 2013-14 and 4.0% for the 2014-2016 biennium (fiscal years 2014-15 and 2015-16).
Real Estate and Housing.
Economic indicators show that during fiscal year
2012-13, the housing market in Virginia and at the national level experienced increases of 20.3% and 28.6%, respectively. Housing prices in Virginia showed a positive change for fiscal year 2012-13, with an increase of nearly 4.0%, compared to
nearly 6.0% at the national level. Additionally, 27,275 residential building permits were issued in 2012, representing an increase of 18.4% from 2011.
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Long-Term Debt.
Virginia is prohibited from issuing general
obligation bonds for operating purposes. At the end of fiscal year 2012-13, the Commonwealth had total debt outstanding of $37.3 billion, including total tax-supported debt of $14.7 billion and total debt not supported by taxes of $22.6 billion.
Bonds backed by the full faith and credit of the government and tax-supported total $1.7 billion. Debt is considered tax-supported if Virginia tax revenues are used or pledged for debt service payments. An additional $836.7 million is considered
moral obligation debt which is not tax-supported. Virginia has no direct or indirect pledge of tax revenues to fund reserve deficiencies. However, in some cases, Virginia has made a moral obligation pledge to consider funding deficiencies in debt
service reserves that may occur. The remainder of Virginia’s debt represents bonds secured solely by specified revenue sources (i.e., revenue bonds).
Bond Ratings.
Three major credit rating agencies, Moody’s,
S&P, Fitch, assigned ratings to the Virginia 2014 Bonds, as follows: Moody’s assigned a rating of “Aaa”, S&P assigned a rating of “AAA”, and Fitch assigned a rating of “AAA”. It is not possible to
determine whether, or the extent to which, Moody’s, S&P, or Fitch will change its rating in the future. In addition, ratings assigned to individual Municipal Obligations may vary.
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APPENDIX D — SERIES OF CFST, CFST I AND CFST II
Below are the series of CFST, CFST I and CFST II. In
prospectuses dated prior to June 25, 2014, series of CFST and CFST I are referred to as “Legacy Columbia Funds” and series of CFST II are referred to as “Legacy RiverSource Funds”.
Columbia Funds Series Trust
Columbia AMT-Free California Intermediate Muni Bond Fund
Columbia AMT-Free Georgia Intermediate Muni Bond Fund
Columbia AMT-Free Maryland Intermediate Muni Bond Fund
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund
Columbia AMT-Free Virginia Intermediate Muni Bond Fund
Columbia Capital Allocation Moderate Aggressive Portfolio
Columbia Capital Allocation Moderate Conservative Portfolio
Columbia Convertible Securities Fund
Columbia International
Opportunities Fund
Columbia International Value Fund
Columbia Large Cap Enhanced Core Fund
Columbia Large Cap Index Fund
Columbia LifeGoal
®
Growth Portfolio
Columbia
Marsico 21st Century Fund
Columbia Marsico Focused Equities Fund
Columbia Marsico Global Fund
Columbia Marsico Growth Fund
Columbia Mid Cap Index Fund
Columbia Mid Cap Value Fund
Columbia Overseas Value Fund
Columbia
Select International Equity Fund
Columbia Select Large Cap Equity Fund
Columbia Short Term Bond Fund
Columbia Short Term Municipal Bond Fund
Columbia Small Cap Index Fund
Columbia Small Cap Value Fund II
Columbia Funds Series Trust I
Active Portfolios
®
Multi-Manager Alternative Strategies Fund
Active Portfolios
®
Multi-Manager Core Plus Bond Fund
Active Portfolios
®
Multi-Manager Growth Fund
Active Portfolios
®
Multi-Manager Small Cap Equity Fund
CMG Ultra Short Term Bond Fund
Columbia Adaptive Alternatives Fund
Columbia Adaptive Risk Allocation
Fund
Columbia AMT-Free Connecticut Intermediate Muni Bond Fund
Columbia AMT-Free Intermediate Muni Bond Fund
Columbia AMT-Free Massachusetts Intermediate Muni Bond Fund
Columbia AMT-Free New York Intermediate Muni Bond Fund
Columbia AMT-Free Oregon Intermediate Muni Bond Fund
Columbia Balanced Fund
Columbia Bond Fund
Columbia California Tax-Exempt Fund
Columbia Contrarian Core Fund
Columbia Corporate Income Fund
Columbia Diversified Absolute
Return Fund
Columbia Diversified Real Return Fund
Columbia Dividend Income Fund
Columbia Emerging Markets Fund
Columbia Global Dividend Opportunity Fund
Columbia Global Energy and Natural Resources Fund
Columbia Global
Inflation-Linked Bond Plus Fund
Columbia Global Technology Growth Fund
Columbia Greater China Fund
Columbia High Yield Municipal Fund
Columbia Intermediary Alternatives Fund
Columbia Intermediate Bond Fund
Columbia Large Cap
Growth Fund
Columbia Mid Cap Growth Fund
Columbia Multi-Asset Income Fund
Columbia New York Tax-Exempt Fund
Columbia Pacific/Asia Fund
Columbia Real Estate Equity Fund
Columbia Select Large Cap Growth Fund
Columbia Small
Cap Core Fund
Columbia Small Cap Growth Fund I
Columbia Small Cap Value Fund I
Columbia Strategic Income Fund
Columbia Tax-Exempt Fund
Columbia U.S. Social Bond Fund
Columbia U.S. Treasury Index Fund
Columbia Value and
Restructuring Fund
Columbia Funds Series Trust
II
Active Portfolios
®
Multi-Manager Value Fund
Columbia Absolute Return Currency and Income Fund
Columbia AMT-Free Tax-Exempt
Bond Fund
Columbia Asia Pacific ex-Japan Fund
Columbia Capital Allocation Aggressive Portfolio
Columbia Capital Allocation Conservative Portfolio
Columbia Capital Allocation Moderate Portfolio
Columbia Commodity Strategy Fund
Columbia Diversified Equity Income Fund
Columbia Dividend Opportunity Fund
Columbia Emerging Markets Bond Fund
Columbia European Equity Fund
Columbia Flexible Capital Income Fund
Columbia Floating Rate Fund
Columbia Global
Bond Fund
Columbia Global Equity Value Fund
Columbia Global Infrastructure Fund
Columbia Global Opportunities Fund
Columbia High Yield Bond Fund
Columbia Income Builder Fund
Columbia Income Opportunities Fund
Columbia
Inflation Protected Securities Fund
Columbia Large Core Quantitative Fund
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Columbia Large Growth Quantitative Fund
Columbia Large Value
Quantitative Fund
Columbia Limited Duration Credit Fund
Columbia Marsico Flexible Capital Fund
Columbia Minnesota Tax-Exempt Fund
Columbia Money Market Fund
Columbia Mortgage Opportunities Fund
Columbia Multi-Advisor Small
Cap Value Fund
Columbia Select Global Equity Fund
Columbia Select Large-Cap
Value Fund
Columbia Select Smaller-Cap Value Fund
Columbia Seligman Communications and Information Fund
Columbia Seligman Global Technology Fund
Columbia Short-Term Cash Fund
Columbia Small/Mid Cap Value Fund
Columbia U.S.
Government Mortgage Fund
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APPENDIX S — MORE INFORMATION ABOUT CHOOSING A SHARE CLASS
Class Y — Changes to Share Class
Eligibility
Effective June 25, 2014, Class Y shares of the
Funds are available to any retirement plan that maintains a plan-level or omnibus account with the Fund (through the Transfer Agent).
Prior to June 25, 2014, Class Y shares of a Fund
were available only to (i) omnibus retirement plans with plan assets of at least $10 million as of the date of funding the Fund account (without a minimum initial investment amount) and (ii) omnibus retirement plans with plan assets of less than $10
million as of the date of funding the Fund account, provided that such plans invest $500,000 or more in Class Y shares of the Fund. Effective June 25, 2014, these size and minimum initial investment requirements have been removed.
Prior to November 8, 2012, Class Y shares were
offered only to certain former shareholders of series of the former Columbia Funds Institutional Trust (together, Former CFIT Shareholders). Former CFIT Shareholders who opened and funded a Class Y account with a Fund as of the close of business on
November 7, 2012 may continue to make additional purchases of Class Y shares even if they do not satisfy the current eligibility requirements but may not establish new Class Y shares accounts and will not be eligible to exchange Class Y shares of a
Fund into Class Y shares of other Funds. Former CFIT Shareholders may exchange Class Y shares of a Fund for Class Z shares of the same Fund or Class Z shares of another Fund, subject to applicable minimum investments.
Changes to Share Class Names
Effective October 25, 2012, Class R4 shares were renamed Class K
shares. Effective October 31, 2012, Class R3 shares were renamed Class R4 shares. Prior to September 3, 2010, any Class R shares of a series of CFST II were known as Class R2 shares.
Front-End Sales Charge Reductions — Accounts
Eligible for Aggregation
The following accounts are eligible
for account value aggregation for purposes of the right of accumulation and letters of intent as described in the prospectuses offering share classes subject to a front-end sales charge:
■
|
Individual or
joint accounts;
|
■
|
Roth and
traditional Individual Retirement Accounts (IRAs), Simplified Employee Pension accounts (SEPs), Savings Investment Match Plans for Employees of Small Employers accounts (SIMPLEs) and Tax Sheltered Custodial Accounts (TSCAs);
|
■
|
Uniform Gifts to
Minors Act (UGMA)/Uniform Transfers to Minors (UTMA) accounts for which you, your spouse, or your domestic partner is parent or guardian of the minor child;
|
■
|
Revocable trust
accounts for which you or an immediate family member, individually, is the beneficial owner/grantor;
|
■
|
Accounts held in
the name of your, your spouse’s, or your domestic partner’s sole proprietorship or single owner limited liability company or S corporation;
|
■
|
Qualified
retirement plan assets, provided that you are the sole owner of the business sponsoring the plan, are the sole participant (other than a spouse) in the plan, and have no intention of adding participants to the plan; and
|
■
|
Investments
in wrap accounts;
|
provided that each of the
accounts identified above is invested in Class A, Class B, Class C, Class E, Class F, Class T, Class W, Class Z shares of the Funds and/or Class R4 or Class R5 shares of the Funds invested in non-retirement plan accounts.
The following accounts are
not
eligible for account value aggregation:
■
|
Accounts of
pension and retirement plans with multiple participants, such as 401(k) plans (which are combined to reduce the sales charge for the entire pension or retirement plan and therefore are not used to reduce the sales charge for your individual
accounts);
|
■
|
Accounts invested
in Class I, Class K, Class R and/or Class Y shares of the Funds;
|
■
|
Retirement plan
accounts invested in Class R4 and/or Class R5 shares;
|
■
|
Investments in 529
plans, donor advised funds, variable annuities, variable life insurance products, or managed separate accounts;
|
■
|
Charitable and
irrevocable trust accounts;
|
■
|
Accounts
holding shares of money market Funds that used the Columbia brand before May 1, 2010; and
|
Statement
of Additional Information – June 1, 2015
|
S-1
|
■
|
Direct purchases
of Columbia Money Market Fund shares. (Shares of Columbia Money Market Fund acquired by exchange from other Funds may be combined for letter of intent purposes.)
|
Your “Immediate Family” and Account Value
Aggregation
For purposes of obtaining a breakpoint discount
for Class A shares or Class T shares the value of your account will be deemed to include the value of all applicable shares in eligible Fund accounts that are held by you and your “immediate family,” which includes your spouse, domestic
partner, parent, step-parent, legal guardian, child under 21, step-child under 21, father-in-law and mother-in-law, provided that you and your immediate family members share the same mailing address. Any Fund accounts linked together for account
value aggregation purposes as of the close of business on September 3, 2010 will be permitted to remain linked together. Group plan accounts are valued at the plan level.
Sales Charge Waivers
Front-End Sales Charge Waivers
The following categories of investors may buy Class A, Class E and
Class T shares at net asset value, without payment of any front-end sales charge that would otherwise apply:
■
|
Current or retired
fund Board members, officers or employees of the funds or Columbia Management or its affiliates
(a)
;
|
■
|
Current or retired
Ameriprise Financial Services, Inc. (Ameriprise Financial Services) financial advisors and employees of such financial advisors
(a)
;
|
■
|
Registered
representatives and other employees of affiliated or unaffiliated selling agents (and their immediate family members and related trusts or other entities owned by the foregoing) having a selling agreement with the Distributor
(a)
;
|
■
|
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;
|
■
|
Portfolio managers
employed by subadvisers of the funds
(a)
;
|
■
|
Partners and
employees of outside legal counsel to the funds or the funds’ directors or trustees who regularly provide advice and services to the funds, or to their directors or trustees;
|
■
|
Direct rollovers (
i.e.
, rollovers of fund shares and not reinvestments of redemption proceeds) from qualified employee benefit plans, provided that the rollover involves a transfer to Class A shares in the same fund;
|
■
|
Employees of Bank
of America, its affiliates and subsidiaries;
|
■
|
Employees or
partners of Columbia Wanger Asset Management, LLC and Marsico Capital Management, LLC (or their successors);
|
■
|
(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;
|
■
|
Separate accounts
established and maintained by an insurance company which are exempt from registration under Section 3(c)(11);
|
■
|
At a 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 fund is a party;
|
■
|
In the
Distributor’s discretion, on (i) purchases (including exchanges) of Class A shares in accounts of selling agents that have entered into agreements with the Distributor to offer fund shares to self-directed investment brokerage accounts that
may or may not charge a transaction fee to customers and (ii) exchanges of Class Z shares of a fund for Class A shares of the fund; and
|
■
|
Purchases by
registered representatives and employees (and their immediate family members and related trusts or other entities owned by the foregoing (referred to as “Related Persons”)) of Ameriprise Financial Services and its affiliates; provided
that with respect to employees (and their Related Persons) of an affiliate of Ameriprise, such persons must make purchases through an account held at Ameriprise or its affiliates.
|
The following categories of investors may buy Class
A shares of any eligible series of CFST II at net asset value, without payment of any front-end sales charge that would otherwise apply:
■
|
Participants of
“eligible employee benefit plans” including 403(b) plans for which Ameriprise Financial Services serves as broker-dealer, and the school district or group received a written proposal from Ameriprise Financial Services between November 1,
2007 and December 31, 2008 (each a Qualifying 403(b) Plan). In order for participants in one of these
|
Statement
of Additional Information – June 1, 2015
|
S-2
|
|
403(b) plans to
receive this waiver, at least one participant account of the 403(b) plan must have been funded at Ameriprise Financial Services prior to December 31, 2009. This waiver may be discontinued for any Qualifying 403(b) Plan, in the sole discretion of the
Distributor.
|
Purchases of
Class A, Class E and Class T shares may be made at net asset value if they are made as follows:
■
|
With dividend or
capital gain distributions from a fund or from the same class of another fund
(b)
;
|
■
|
Through or under a
wrap fee product or other investment product sponsored by a selling agent that charges an account management fee or other managed agency/asset allocation accounts or programs involving fee-based compensation arrangements that have or that clear
trades through a selling agent that has a selling agreement with the Distributor;
|
■
|
Through state
sponsored college savings plans established under Section 529 of the Internal Revenue Code;
|
■
|
Through banks,
trust companies and thrift institutions, acting as fiduciaries; and
|
■
|
Through
“employee benefit plans” created under section 401(a), 401(k), 457 and 403(b), and qualified deferred compensation plans, that have a plan level or omnibus account maintained with the fund or the Transfer Agent and transacts directly
with the fund or the Transfer Agent through a third party administrator or third party recordkeeper.
|
(a)
|
Including their spouses or
domestic partners, children or step-children, parents, step-parents or legal guardians, and their spouse’s or domestic partner’s parents, step-parents, or legal guardians.
|
(b)
|
The ability to invest dividend
and capital gain distributions from one Fund to another Fund may not be available to accounts held at all Selling Agents.
|
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 of another fund in the Columbia Funds Complex (other than Columbia Money Market Fund) within 90 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 90 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 fund from which the
shares were sold. The Transfer Agent, Distributor or their agents must receive a written reinstatement request within 90 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.
Restrictions may apply to certain accounts and
certain transactions. The funds may change or cancel these terms at any time. Any change or cancellation applies only to future purchases. Unless you provide your financial advisor with information in writing about all of the factors that may count
toward a waiver of the sales charge, there can be no assurance that you will receive all of the waivers for which you may be eligible. You should request that your financial advisor provide this information to the funds when placing your purchase
order. For more information about the sales charge reductions and waivers described here, as well as additional categories of eligible investors, please see the applicable prospectus.
Contingent Deferred Sales Charge Waivers (Class A,
Class B, Class C and Class T Shares)
For purposes of
calculating a CDSC, the start of the holding period is generally the first day of the month in which your purchase was made. However, for purposes of calculating the CDSC on Class B shares of series of CFST II purchased on or before the close of
business on September 3, 2010, the start of the holding period is the date your purchase was made.
Shareholders won’t pay a CDSC on redemption of
Class A, Class C and Class T shares:
■
|
In the event of
the shareholder’s death;
|
■
|
For which no sales
commission or transaction fee was paid to an authorized selling agent at the time of purchase;
|
■
|
Purchased through
reinvestment of dividend and capital gain distributions;
|
■
|
In an account that
has been closed because it falls below the minimum account balance;
|
■
|
That result from
required minimum distributions taken from retirement accounts upon the shareholder’s attainment of age 70½;
|
■
|
That result from
returns of excess contributions made to retirement plans or individual retirement accounts, so long as the selling agent returns the applicable portion of any commission paid by the Distributor;
|
■
|
Of Class A shares
of a fund initially purchased by an employee benefit plan;
|
Statement
of Additional Information – June 1, 2015
|
S-3
|
■
|
Other than Class A
shares of a fund initially purchased by an employee benefit plan that are not connected with a plan level termination;
|
■
|
In connection with
the fund’s Small Account Policy (as described in the applicable prospectus); and
|
■
|
At a fund’s
discretion, issued in connection with plans of reorganization, including but not limited to mergers, asset acquisitions and exchange offers, to which the fund is a party.
|
Shareholders won’t pay a CDSC on redemption of
Class B or Class F shares:
■
|
In the event of
the shareholder’s death; and
|
■
|
That result from
required minimum distributions taken from retirement accounts upon the shareholder’s attainment of age 70½.
|
Shareholders won’t pay a CDSC on the following
categories of redemptions of Class B or Class F shares purchased prior to September 7, 2010:
■
|
By health savings
accounts sponsored by third party platforms, including those sponsored by Bank of America affiliates.*
|
■
|
For medical
payments that exceed 7.5% of income.*
|
■
|
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.*
|
■
|
Occurring pursuant
to a Systematic Withdrawal Plan (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.
|
■
|
For shares
purchased prior to September 7, 2010, 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.*
|
■
|
Shares redeemed in
connection with loans from qualified retirement plans to shareholders.*
|
■
|
CDSCs may be
waived on shares (except for Class B shares) sold by certain group retirement plans held in omnibus accounts. However, CDSCs may not be waived for Class C shares if the waiver would occur as a result of a plan-level termination.
|
Below are additional categories of CDSC
waivers for Class B or Class F shares of a series of CFST or CFST I purchased prior to September 7, 2010:
■
|
Shares redeemed 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 59½.**
|
*
|
Fund investors and Selling
Agents must inform the Fund or the Transfer Agent in writing that the Fund investor qualifies for the particular sales charge waiver and provide proof thereof.
|
**
|
For direct trades on
non-prototype retirement accounts where the date of birth of the shareholder is not maintained, the shareholder or Selling Agent must inform the Fund or the Transfer Agent in writing that the Fund investor qualifies for the particular sales charge
waiver and provide proof thereof.
|
Shareholders won’t pay a CDSC on the following
categories of redemptions of Class B shares of a series of CFST II:
■
|
Redemptions of
Class B shares of a series of CFST II held in investment-only accounts (
i.e.
, accounts for which Ameriprise Trust Company does not act as the custodian) at Ameriprise Financial Services on behalf of a trust
for an employee benefit plan.
|
■
|
Redemptions of
Class B shares of a series of CFST II held in individual retirement accounts or certain qualified plans, on or prior to June 12, 2009, such as Keogh plans, tax-sheltered custodial accounts or corporate pension plans where Ameriprise Trust Company is
acting as custodian, provided that the shareholder is (i) at least 59½ years old and taking a retirement distribution (if the sale is part of a transfer to an individual retirement account or qualified plan, or a custodian-to-custodian
transfer, the CDSC will not be waived* or (ii) selling under an approved substantially equal periodic payment arrangement.
|
■
|
Class B shares of
a series of CFST II held in individual retirement accounts and certain qualified plans where an Ameriprise Financial affiliate acts as selling agent that were purchased prior to September 7, 2010 and sold under an approved
|
Statement
of Additional Information – June 1, 2015
|
S-4
|
substantially equal periodic payment arrangement
(applies to retirement accounts when a shareholder sets up an arrangement with the IRS). The Distributor, in its discretion, may grant a waiver to accounts held directly with the Transfer Agent or held at other selling agents under similar
circumstances.**
*
|
You must notify the Fund or the
Transfer Agent prior to redeeming shares of the applicability of the CDSC waiver, but final decision of the applicability of the CDSC waiver is contingent on approval of the Fund or the Transfer Agent.
|
**
|
Fund investors and selling
and/or servicing agents must inform the Fund or the Transfer Agent in writing that the Fund investor qualifies for the particular sales charge waiver and provide proof thereof.
|
Restrictions may apply to certain accounts and
certain transactions. The Distributor may, in its sole discretion, authorize the waiver of the CDSC for additional classes of investors. 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, as well as additional categories of eligible redemptions, please see the prospectuses.
Minimum Initial Investment in Class Z Shares
Class Z shares are available only to certain eligible investors,
which are subject to different minimum initial investment requirements described in the prospectuses. In addition to the categories of Class Z investors described in the prospectuses, the minimum initial investments in Class Z shares are as
follows:
There is no minimum initial
investment in Class Z shares for any health savings account sponsored by a third party platform.
The minimum initial investment in Class Z shares for
the following eligible investors is $1,000:
■
|
Any persons
employed as of April 30, 2010 by the Previous Adviser, Previous Distributor or Previous Transfer Agent and immediate family members of any of the foregoing who share the same address and any employee of the Investment Manager, Distributor or
Transfer Agent and immediate family members of any of the foregoing who share the same address and are eligible to make new and subsequent purchases in Class Z shares through an individual retirement account. If you maintain your account with a
financial intermediary, you must contact that financial intermediary each time you seek to purchase shares to notify them that you qualify for Class Z shares.
|
The minimum initial investment in Class Z shares for
the following categories of eligible investors is $2,000:
■
|
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 employee (or
family member of an employee) of Bank of America or one of its subsidiaries.
|
■
|
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 persons
employed as of April 30, 2010 by the Previous Adviser, Previous Distributor or Previous Transfer Agent and immediate family members of any of the foregoing who share the same address and any employee of the Investment Manager, Distributor or
Transfer Agent and immediate family members of any of the foregoing who share the same address and are eligible to make new and subsequent purchases in Class Z shares through a non-retirement account. If you maintain your account with a financial
intermediary, you must contact that financial intermediary each time you seek to purchase shares to notify them that you qualify for Class Z shares.
|
As described in the prospectuses, 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 who holds Class Z shares is eligible to purchase Class Z shares subject to
a minimum initial investment of $2,000. If the account in which the shareholder holds Class Z shares is not eligible to purchase additional Class Z shares, the shareholder may purchase Class Z shares in an account maintained directly with the
Transfer Agent, subject to the $2,000 minimum for such direct account.
Class B Shares — Conversion to Class A
Shares
Class B shares purchased in a series of CFST or CFST I
at any time and a series of CFST II on or after June 13, 2009 automatically convert to Class A shares after you’ve owned the shares for eight years, except for Class B shares of Columbia Short Term Municipal Bond Fund, which do not convert to
Class A shares. Class B shares originally purchased in a series of CFST II (other than a former Seligman Fund) on or prior to June 12, 2009 will convert to Class A shares after eight and one half years of ownership. Class B shares originally
purchased in a former Seligman Fund on or prior to June 12, 2009 will convert to Class A shares in the month prior to the ninth year of ownership. The 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:
Statement
of Additional Information – June 1, 2015
|
S-5
|
■
|
Class B shares are
converted on or about the 15th day of the month that they become eligible for conversion. For purposes of determining the month when your Class B shares are eligible for conversion, the start of the holding period is the first day of the month in
which your purchase was made.
|
■
|
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 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 A Shares of Active Portfolio Funds
The Active Portfolio Funds offer only Class A shares that are
available only to certain eligible investors through certain wrap fee programs sponsored and/or managed by Ameriprise Financial or its affiliates. Class A shares of Active Portfolio Funds are not subject to any front-end sales charge or CDSC.
Additional Eligible Investors
The Distributor, in its sole discretion, may accept investments in
any share class of a Fund from investors other than those listed above and in the Fund’s prospectus(es).
Additional Information about Minimum Initial
Investments
The Distributor, in its sole discretion, may also
waive minimum initial investment requirements, including, without limitation, the requirement for omnibus retirement plans with plan assets of less than $10 million to invest $500,000 or more in Class Y shares of a Fund. Minimum investment and
related requirements may be modified at any time, with or without prior notice.
Additional Information about Systematic Withdrawal
Plans
Systematic Withdrawal Plans allow you to schedule
regular redemptions from your account any day of the month on a monthly, quarterly or semi-annual basis. Currently, Systematic Withdrawal Plans are generally available for Class A, B, C, R4, R5, T, W, Y and Z share accounts. Contact the Transfer
Agent or your financial advisor to set up the plan.
To set up the plan, your account balance must meet
the class minimum initial investment amount. 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 Signature Guaranteed, as described below.
You can choose to receive your withdrawals via check
or direct deposit into your bank account. The Fund will deduct any applicable CDSC from the withdrawals before sending the balance to you. You can cancel the plan by giving the Fund 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 withdraw your entire investment.
Fund Reorganizations
Class A shares may be issued without any initial sales charge in
connection with the acquisition of cash and securities owned by other investment companies. Any CDSC will be waived in connection with the redemption of shares of the fund if the fund is combined with another fund or in connection with a similar
reorganization transaction.
Rejection of
Purchases
Each fund and the distributor of the funds reserve
the right to reject any offer to purchase shares, in their sole discretion.
Medallion Signature Guarantees
The Transfer Agent may require a Medallion Signature Guarantee for
your signature in order to process certain transactions. A Medallion Signature Guarantee helps assure that a signature is genuine and not a forgery. A Medallion Signature Guarantee must be provided by an eligible guarantor institution including, but
not limited to, the following: bank, credit union, savings association, broker or dealer, that participates in the Securities Transfer Association Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) or the New York Stock Exchange
Medallion Signature Program (MSP). Notarization by a notary public is not an acceptable signature guarantee. The Transfer Agent reserves the right to reject a signature guarantee and to request additional documentation for any transaction.
A Medallion Signature Guarantee is required if: (i)
the transaction amount is over $100,000; (ii) you want your check made payable to someone other than yourself; (iii) your address has changed within the last 30 days; (iv) you want the check mailed to an address other than the address of record; (v)
you want proceeds to be sent according to existing bank account instructions not coded for outgoing ACH or wire, or to a bank account not on file; (vi) you are the beneficiary of the account and the account owner is deceased (other documentation may
be required); or (vii) you are changing legal ownership of your account.
Statement
of Additional Information – June 1, 2015
|
S-6
|
Dividend Diversification
Generally, you may automatically invest distributions made by
another Fund into the same class of shares (and in some cases certain other classes of shares) of a Fund at no additional sales charge. A sales charge may apply when you invest distributions made with respect to shares that were not subject to a
sales charge at the time of your initial purchase. Call the Transfer Agent at 800.345.6611 for details. The ability to invest distributions from one Fund to another Fund may not be available to accounts held at all selling agents.
Statement
of Additional Information – June 1, 2015
|
S-7
|
PART C. OTHER INFORMATION
Item 28. Exhibits
|
|
|
(a)(1)
|
|
Agreement and Declaration of Trust effective January 27, 2006, is incorporated by reference to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit (a)), filed on February 8, 2006.
|
|
|
(a)(2)
|
|
Amendment No. 1 to the Agreement and Declaration of Trust, dated September 11, 2007, is incorporated by reference to Post-Effective Amendment No. 5 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit
(a)(2)), filed on October 2, 2007.
|
|
|
(a)(3)
|
|
Amendment No. 2 to the Agreement and Declaration of Trust, dated January 8, 2009, is incorporated by reference to Post-Effective Amendment No. 8 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit
(a)(3)), filed on January 27, 2009.
|
|
|
(a)(4)
|
|
Amendment No. 3 to the Agreement and Declaration of Trust, dated August 9, 2010, is incorporated by reference to Post-Effective Amendment No. 19 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit
(a)(4)), filed on March 4, 2011.
|
|
|
(a)(5)
|
|
Amendment No. 4 to the Agreement and Declaration of Trust, dated January 13, 2011, is incorporated by reference to Post-Effective Amendment No. 19 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit
(a)(5)), filed on March 4, 2011.
|
|
|
(a)(6)
|
|
Amendment No. 5 to the Agreement and Declaration of Trust, dated April 14, 2011, is incorporated by reference to Post-Effective Amendment No. 33 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit
(a)(6)), filed on July 29, 2011.
|
|
|
(a)(7)
|
|
Amendment No. 6 to the Agreement and Declaration of Trust, dated January 12, 2012, is incorporated by reference to Post-Effective Amendment No. 52 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit
(a)(7)), filed on February 24, 2012.
|
|
|
(a)(8)
|
|
Amendment No. 7 to the Agreement and Declaration of Trust, dated December 12, 2012, is incorporated by reference to Post-Effective Amendment No. 87 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit
(a)(8)), filed on May 30, 2013.
|
|
|
(a)(9)
|
|
Amendment No. 8 to the Agreement and Declaration of Trust, dated November 20, 2013, is incorporated by reference to Post-Effective Amendment No. 99 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit
(a)(9)), filed on November 27, 2013.
|
|
|
(a)(10)
|
|
Amendment No. 9 to the Agreement and Declaration of Trust, dated April 11, 2014, is incorporated by reference to Post-Effective Amendment No. 107 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit
(a)(10)), filed on April 23, 2014.
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(a)(11)
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Amendment No. 10 to the Agreement and Declaration of Trust, dated June 17, 2014, is incorporated by reference to Post-Effective Amendment No. 112 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit
(a)(11)), filed on June 27, 2014.
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(a)(12)
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Amendment No. 11 to the Agreement and Declaration of Trust, dated September 15, 2014, is incorporated by reference to Post-Effective Amendment No. 118 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit
(a)(12)), filed on September 26, 2014.
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(a)(13)
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Amendment No. 12 to the Agreement and Declaration of Trust, dated January 28, 2015, is incorporated by reference to Post-Effective Amendment No. 125 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit
(a)(13)), filed on February 27, 2015.
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(a)(14)
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Amendment No. 13 to the Agreement and Declaration of Trust, dated April 14, 2015, is filed herewith as Exhibit (a)(14) to Post-Effective Amendment No. 128 to Registration Statement No. 333-131683 of the Registrant on Form
N-1A.
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(b)
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By-laws as amended March 7, 2011, are incorporated by reference to Post-Effective Amendment No. 87 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit (b)), filed on May 30, 2013.
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(c)
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Stock Certificate: Not Applicable.
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(d)(1)
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Investment Management Services Agreement between Columbia Management Investment Advisers, LLC and the Registrant, dated September 22, 2010, is incorporated by reference to Post-Effective Amendment No. 107 to Registration Statement
No.
333-131683
of the Registrant on Form N-1A (Exhibit (d)(1)), filed on April 23, 2014.
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(d)(2)
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Schedule A, dated April 14, 2015, to the Investment Management Services Agreement between Columbia Management Investment Advisers, LLC and the Registrant, dated September 22, 2010, is filed herewith as Exhibit (d)(2) to
Post-Effective Amendment No. 128 to Registration Statement No. 333-131683 of the Registrant on Form N-1A.
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(d)(3)
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Investment Management Services Agreement between Columbia Management Investment Advisers, LLC and CCSF Offshore Fund, Ltd., a wholly-owned subsidiary of Columbia Commodity Strategy Fund, a series of the Registrant, dated April 12,
2012, is incorporated by reference to Post-Effective Amendment No. 109 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit (d)(3)), filed on May 30, 2014.
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(d)(4)
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Subadvisory Agreement between Columbia Management Investment Advisers, LLC (formerly American Express Financial Corporation) and Barrow, Hanley, Mewhinney & Strauss, LLC, dated March 12, 2004, is incorporated by reference to
Post-Effective Amendment No. 39 to Registration Statement No. 333-146374 of Columbia Funds Variable Series Trust II on Form N-1A (Exhibit (d)(5)), filed on May 15, 2014.
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(d)(5)
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Subadvisory Transfer Agreement between Ameriprise Financial, Inc., RiverSource Investments, LLC, now known as Columbia Management Investment Advisers, LLC, and Barrow, Hanley, Mewhinney & Strauss, Inc., dated October 1, 2005, is
incorporated by reference to Post-Effective Amendment No. 14 to Registration Statement No. 333-57852 of RiverSource Managers Series, Inc. on Form N-1A (Exhibit (d)(27)), filed on May 24, 2006.
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(d)(6)
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Subadvisory Agreement between Columbia Management Investment Advisers, LLC and Dimensional Fund Advisors, L.P., dated September 23, 2011, last amended December 5, 2013, is incorporated by reference to Post-Effective Amendment
No. 39 to Registration Statement No. 333-146374 of Columbia Funds Variable Series Trust II on Form N-1A (Exhibit (d)(9)), filed on May 15, 2014.
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(d)(7)
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Amendment No. 2, as of June 5, 2014, to the Subadvisory Agreement, dated September 23, 2011, amended December 5, 2013, between Columbia Management Investment Advisers, LLC and Dimensional Fund Advisors, L.P., is incorporated by
reference to Post-Effective Amendment No. 41 to Registration Statement No. 333-146374 of Columbia Funds Variable Series Trust II on Form N-1A (Exhibit (d)(10)), filed on August 20, 2014.
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(d)(8)
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Subadvisory Agreement between Columbia Management Investment Advisers, LLC (formerly American Express Financial Corporation) and Donald Smith & Co., Inc., dated March 12, 2004, is incorporated by reference to Post-Effective
Amendment No. 39 to Registration Statement No. 333-146374 of Columbia Funds Variable Series Trust II on Form N-1A (Exhibit (d)(10)), filed on May 15, 2014.
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(d)(9)
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Subadvisory Transfer Agreement between Ameriprise Financial, Inc., RiverSource Investments, LLC, now known as Columbia Management Investment Advisers, LLC, and Donald Smith & Co.,
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Inc., dated October 1, 2005, is incorporated by reference to Post-Effective Amendment No. 14 to Registration Statement No. 333-57852 of RiverSource Managers Series, Inc. on Form N-1A (Exhibit (d)(25)), filed on May 24,
2006.
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(d)(10)
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Subadvisory Agreement between Columbia Management Investment Advisers, LLC (formerly RiverSource Investments, LLC) and Marsico Capital Management, LLC, dated April 8, 2010, last amended January 23, 2013, is incorporated by reference
to Post-Effective Amendment No. 109 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit (d)(9)), filed on May 30, 2014.
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(d)(11)
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Subadvisory Agreement between RiverSource Investments, LLC, now known as Columbia Management Investment Advisers, LLC, and Metropolitan West Capital Management, LLC, dated November 13, 2008, is incorporated by reference to
Post-Effective Amendment No. 21 to Registration Statement No. 333-57852 of RiverSource Managers Series, Inc. on Form N-1A (Exhibit (d)(25)), filed on July 28, 2009.
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(d)(12)
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Subadvisory Agreement, dated June 18, 2014, between Columbia Management Investment Advisers, LLC and Segall Bryant & Hamill, LLC, is incorporated by reference to Post-Effective Amendment No. 41 to Registration Statement No.
333-146374 of Columbia Funds Variable Series Trust II on Form N-1A (Exhibit (d)(27)), filed on August 20, 2014.
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(d)(13)
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Amended and Restated Subadvisory Agreement between Columbia Management Investment Advisers, LLC and Threadneedle International Limited, dated June 11, 2008, last amended January 16, 2013, is incorporated by reference to
Post-Effective Amendment No. 39 to Registration Statement No. 333-146374 of Columbia Funds Variable Series Trust II on
Form N-1A
(Exhibit (d)(27)), filed on May 15, 2014.
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(e)(1)
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Distribution Agreement between Columbia Management Investment Distributors, Inc. and the Registrant, dated September 7, 2010, is incorporated by reference to Post-Effective Amendment No. 107 to Registration Statement No.
333-131683 of the Registrant on Form N-1A (Exhibit (e)(1)), filed on April 23, 2014.
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(e)(2)
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Schedule I, as of May 1, 2015, and Schedule II, as of September 7, 2010, to the Distribution Agreement between Columbia Management Investment Distributors, Inc. and the Registrant, dated September 7, 2010, are filed herewith as
Exhibit (e)(2) to Post-Effective Amendment No. 128 to Registration Statement No. 333-131683 of the Registrant on Form N-1A.
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(e)(3)
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Form of Mutual Fund Sales Agreement is incorporated by reference to Post-Effective Amendment No. 63 to Registration Statement No. 2-72174 of RiverSource Bond Series, Inc. on Form N-1A (Exhibit (e)(2)), filed on July 9,
2010.
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(f)
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Deferred Compensation Plan, adopted as of December 31, 2011, is incorporated by reference to Post-Effective Amendment No. 52 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit (f)), filed on
February 24, 2012.
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(g)(1)
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Second Amended and Restated Master Global Custody Agreement with JP Morgan Chase Bank, N.A., dated March 7, 2011, is incorporated by reference to Post-Effective Amendment No. 39 to Registration Statement No. 333-146374 of
Columbia Funds Variable Series Trust II on Form N-1A (Exhibit (g)(1)), filed on May 15, 2014.
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(g)(2)
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Addendum (related to Columbia Commodity Strategy Fund), dated July 15, 2011, Addendum (related to Columbia Flexible Capital Income Fund), dated July 15, 2011, Addendum (related to Columbia Active Portfolios Diversified Equity
Income Fund, now known as
Active Portfolios
® Multi-Manager Value Fund), dated March 9, 2012, and Addendum (related to Columbia Mortgage Opportunities Fund), dated March 7, 2014, to the Second Amended and Restated Master Global Custody
Agreement with JP Morgan Chase Bank, N.A., dated March 7, 2011, are incorporated by reference to Post-Effective Amendment No. 109 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit (g)(2)), filed on May 30,
2014.
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(g)(3)
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Side letter (related to the China Connect Service on behalf of Columbia Global Opportunities Fund), dated December 19, 2014, to the Second Amended and Restated Master Global Custody Agreement with JP Morgan Chase Bank, N.A.,
dated March 7, 2011, is incorporated by reference to Post-Effective Amendment No. 125 to Registration Statement No.
333-131683
of the Registrant on Form N-1A (Exhibit (g)(3)), filed on February 27,
2015.
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(h)(1)
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Administrative Services Agreement between Columbia Management Investment Advisers, LLC and the Registrant, dated January 1, 2011, is incorporated by reference to Post-Effective Amendment No. 107 to Registration Statement No.
333-131683
of the Registrant on Form N-1A (Exhibit (h)(1)), filed on April 23, 2014.
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(h)(2)
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Schedule A and Schedule B, as of May 1, 2015, to the Administrative Services Agreement between Columbia Management Investment Advisers, LLC and the Registrant, dated January 1, 2011, are incorporated by reference to Post-Effective
Amendment No. 46 to Registration Statement No. 333-146374 of Columbia Funds Variable Series Trust II on Form N-1A (Exhibit (h)(2)), filed on May 15, 2015.
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(h)(3)
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Administrative Services Agreement between Columbia Management Investment Advisers, LLC and CCSF Offshore Fund, Ltd., a wholly-owned subsidiary of Columbia Commodity Strategy Fund, a series of the Registrant, dated April 12,
2012, is incorporated by reference to Post-Effective Amendment No. 109 to Registration Statement No.
333-131683
of the Registrant on Form N-1A (Exhibit (h)(3)), filed on May 30, 2014.
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(h)(4)
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Transfer and Dividend Disbursing Agent Agreement between Columbia Management Investment Services Corp. and the Registrant, dated September 7, 2010, is incorporated by reference to Post-Effective Amendment No. 107 to Registration
Statement No.
333-131683
of the Registrant on Form N-1A (Exhibit (h)(3)), filed on April 23, 2014.
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(h)(5)
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Schedule A as of May 1, 2015 and Schedule B, as of November 1, 2014, to the Transfer and Dividend Disbursing Agent Agreement, dated September 7, 2010, between Columbia Management Investment Services Corp. and the Registrant, are
filed herewith as Exhibit (h)(15) to Post-Effective Amendment No. 128 to Registration Statement No. 333-131683 of the Registrant on Form N-1A.
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(h)(6)
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Plan Administration Services Agreement between Columbia Management Investment Services Corp. and the Registrant, dated December 1, 2006, amended and restated September 13, 2012, is incorporated by reference to Post-Effective
Amendment No. 107 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit (h)(5)), filed on April 23, 2014.
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(h)(7)
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Exhibit A, as of May 1, 2015, to the Plan Administration Services Agreement between Columbia Management Investment Services Corp. and the Registrant, dated December 1, 2006, amended and restated September 13, 2012, is filed herewith
as Exhibit (h)(7) to Post-Effective Amendment No. 128 to Registration Statement No. 333-131683 of the Registrant on
Form N-1A.
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(h)(8)
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Fee Waiver and Expense Cap Agreement by and among Columbia Management Investment Advisers, LLC, Columbia Management Investment Distributors, Inc. and Columbia Management Investment Services Corp. and the Registrant, dated
April 12, 2012, is incorporated by reference to Post-Effective Amendment No. 107 to Registration Statement No.
333-131683
of the Registrant on Form N-1A (Exhibit (h)(7)), filed on April 23,
2014.
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(h)(9)
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Schedule A, as of May 1, 2015, to the Fee Waiver and Expense Cap Agreement by and among Columbia Management Investment Advisers, LLC, Columbia Management Investment Distributors, Inc. and Columbia Management Investment Services
Corp. and the Registrant, dated April 12, 2012, is incorporated by reference to Post-Effective Amendment No. 46 to Registration Statement No. 333-146374 of Columbia Funds Variable Series Trust II on Form N-1A (Exhibit (h)(7)), filed on
May 15, 2015.
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(h)(10)
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Agreement and Plan of Reorganization, dated December 20, 2010, is incorporated by reference to Post-Effective Amendment No. 15 to Registration Statement No. 333-146374 of Columbia Funds Variable Series Trust II on Form N-1A
(Exhibit (h)(9)), filed on April 29, 2011.
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(h)(11)
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Agreement and Plan of Reorganization, dated October 9, 2012, is incorporated by reference to Post-Effective Amendment No. 87 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit (h)(6)), filed on May 30,
2013.
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(h)(12)
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Agreement and Plan of Redomiciling, dated December 20, 2010, is incorporated by reference to Post-Effective Amendment No. 15 to Registration Statement No. 333-146374 of Columbia Funds Variable Series Trust II on Form N-1A (Exhibit
(h)(10)), filed on April 29, 2011.
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(h)(13)
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Amended and Restated Credit Agreement as of December 9, 2014, is incorporated by reference to Post-Effective Amendment No. 225 to Registration Statement No. 2-99356 of Columbia Funds Series Trust I on Form N-1A (Exhibit (h)(14)),
filed on April 16, 2015.
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(i)(1)
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Opinion and consent of counsel as to the legality of the securities being registered is incorporated by reference to Post-Effective Amendment No. 92 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit
(i)), filed on August 28, 2013.
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(i)(2)
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Opinion and consent of counsel as to the legality of the securities being registered for Columbia Mortgage Opportunities Fund is incorporated by reference to Post-Effective Amendment No. 107 to Registration Statement No. 333-131683
of the Registrant on Form N-1A (Exhibit (i)), filed on April 23, 2014.
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(j)
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Consent of PricewaterhouseCoopers LLP is filed electronically herewith.
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(k)
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Omitted Financial Statements: Not Applicable.
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(l)
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Initial Capital Agreement: Not Applicable.
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(m)(1)
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Plan of Distribution and Amended and Restated Agreement of Distribution between Columbia Management Investment Distributors, Inc. and the Registrant, dated November 7, 2008, amended and restated September 27, 2010, is incorporated
by reference to Post-Effective Amendment No. 107 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit (m)(1)), filed on April 23, 2014.
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(m)(2)
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Schedule A, dated May 1, 2015, to the Plan of Distribution and Amended and Restated Agreement of Distribution between Columbia Management Investment Distributors, Inc. and the Registrant, dated November 7, 2008, amended and restated
September 27, 2010, is filed herewith as Exhibit (m)(2) to Post-Effective Amendment No. 128 to Registration Statement No. 333-131683 of the Registrant on Form N-1A.
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(m)(3)
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Shareholder Services Plan (Class T Shares) is incorporated by reference to Post-Effective Amendment No. 107 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit (m)(3)), filed on April 23, 2014.
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(m)(4)
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Shareholder Servicing Plan Implementation Agreement (Class T Shares) is incorporated by reference to Post-Effective Amendment No. 107 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit (m)(4)), filed on
April 23, 2014.
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(m)(5)
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Schedule I, effective December 1, 2014, to Shareholder Servicing Plan Implementation Agreement (Class T Shares) is incorporated by reference to Post-Effective Amendment No. 120 to Registration Statement No. 333-131683 of the
Registrant on Form N-1A (Exhibit (m)(5)), filed on November 25, 2014.
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(n)
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Rule 18f 3 Multi-Class Plan, amended and restated as of May 1, 2015, is filed herewith as Exhibit (n) to Post-Effective Amendment No. 128 to Registration Statement No. 333-131683 of the Registrant on Form N-1A.
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(o)
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Reserved.
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(p)(1)
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Columbia Funds Family Code of Ethics, effective April 14, 2014, is incorporated by reference to Post-Effective Amendment No. 39 to Registration Statement No. 333-146374 of Columbia Funds Variable Series Trust II on Form N-1A
(Exhibit (p)(1)), filed on May 15, 2014.
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(p)(2)
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Columbia Management Investment Advisers, LLC, Columbia Management Investment Distributors, Inc. and Threadneedle International Ltd Code of Ethics, effective on December 8, 2014, is incorporated by reference to Post-Effective
Amendment No. 120 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit (p)(2)), filed on November 25, 2014.
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(p)(3)
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Barrow, Hanley, Mewhinney & Strauss, LLC Code of Ethics, dated December 31, 2014, is incorporated by reference to Post-Effective Amendment No. 46 to Registration Statement No. 333-146374 of Columbia Funds Variable Series Trust
II on Form N-1A (Exhibit (p)(4)), filed on May 15, 2015.
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(p)(4)
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Dimensional Fund Advisors, L.P. Code of Ethics, effective date January 1, 2015, is incorporated by reference to Post-Effective Amendment No. 46 to Registration Statement No. 333-146374 of Columbia Funds Variable Series Trust II on
Form N-1A (Exhibit (p)(8)), filed on May 15, 2015.
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(p)(5)
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Donald Smith & Co., Inc. Code of Ethics, adopted January 1, 2005, last revised November 2013, is incorporated by reference to Post-Effective Amendment No. 39 to Registration Statement No. 333-146374 of Columbia Funds Variable
Series Trust II on Form N-1A (Exhibit (p)(9)), filed on May 15, 2014.
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(p)(6)
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Marsico Capital Management, LLC Code of Ethics, dated December 10, 2012, is incorporated by reference to Post-Effective Amendment No. 87 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit (p)(8)), filed
on May 30, 2013.
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(p)(7)
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Metropolitan West Capital Management, LLC Code of Ethics, dated December 8, 2014, is filed herewith as Exhibit (p)(7) to Post-Effective Amendment No. 128 to Registration Statement No. 333-131683 of the Registrant on Form
N-1A.
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(p)(8)
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Segall Bryant & Hamill, LLC Code of Ethics, dated July 2013, is incorporated by reference to Post-Effective Amendment No. 41 to Registration Statement No. 333-146374 of Columbia Funds Variable Series Trust II on Form N-1A
(Exhibit (p)(24)), filed on August 20, 2014.
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(q)(1)
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Trustees Power of Attorney, dated January 28, 2015, is incorporated by reference to Post-Effective Amendment No. 125 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit (q)(1)), filed on February 27,
2015.
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(q)(2)
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Power of Attorney for Joseph F. DiMaria, dated February 16, 2015, is incorporated by reference to Post-Effective Amendment No. 125 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit (q)(2)), filed on
February 27, 2015.
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(q)(3)
|
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Power of Attorney for Michael G. Clarke, dated February 16, 2015, is incorporated by reference to Post-Effective Amendment No. 125 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit (q)(3)), filed on
February 27, 2015.
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(q)(4)
|
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Power of Attorney for Christopher O. Petersen, dated February 16, 2015, is incorporated by reference to Post-Effective Amendment No. 125 to Registration Statement No. 333-131683 of the Registrant on Form N-1A (Exhibit (q)(4)), filed
on February 27, 2015.
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Item 29. Persons Controlled by or Under Common Control with the Registrant
Columbia Management Investment Advisers, LLC (the investment manager or Columbia Management), as sponsor of the Columbia funds, may make initial capital
investments in Columbia funds (seed accounts). Columbia Management also serves as investment manager of certain Columbia funds-of-funds that invest primarily in shares of affiliated funds (the underlying funds). Columbia Management does not make
initial capital investments or invest in underlying funds for the purpose of exercising control. However, since these ownership interests may be significant, in excess of 25%, such that Columbia Management may be deemed to control certain Columbia
funds, procedures have been put in place to assure that public shareholders determine the outcome of all actions taken at shareholder meetings. Specifically, Columbia Management (which vote proxies for the seed accounts) and the Boards of Trustees
of the affiliated funds-of-funds (which votes proxies for the affiliated funds-of-funds) vote on each proposal in the same proportion as the vote of the direct public shareholders vote; provided, however, that if there are no direct public
shareholders of an underlying fund or if direct public shareholders represent only a minority interest in an underlying fund, the Fund may cast votes in accordance with instructions from the independent members of the Board.
Item 30. Indemnification
Article VII of the
Registrants Agreement and Declaration of Trust, as amended, provides that no trustee or officer of the Registrant shall be subject to any liability to any person in connection with Registrant property or the affairs of the Registrant, and no
trustee shall be responsible or liable in any event for any neglect or wrongdoing of any officer, agent, employee, investment adviser or principal underwriter of the Registrant or for the act or omission of any other trustee, all as more fully set
forth in the Agreement and Declaration of Trust, which is filed as an exhibit to this registration statement. Article X of the Registrants Bylaws provides that each person made or threatened to be made a party to or is involved in any actual
or threatened proceeding by reason of the former or present capacity as a trustee or officer of the Registrant or who, while a trustee or officer, is or was serving at the request of the Registrant or whose duties as a trustee or officer involve or
involved service as a director, officer, partner, trustee or agent of another organization or employee benefit plan whether the basis of any proceeding is alleged action in an official capacity or in any capacity while serving as a director,
officer, partner, trustee or agent, shall be indemnified by the Registrant, under specified circumstances, all as more fully set forth in the Bylaws, which are filed as an exhibit to the registration statement.
Section 17(h) of the Investment Company Act of 1940 (1940 Act) provides that no instrument pursuant to which Registrant is organized or administered
shall contain any provision which protects or purports to protect any trustee or officer of Registrant against any liability to Registrant or its shareholders to which he or she would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of his or her office.
The Registrants Declaration of Trust provides
that nothing in the Declaration of Trust shall protect any trustee or officer against any liabilities to the Registrant or its shareholders to which he or she would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of his or her office or position with or on behalf of the Registrant and the Registrants Bylaws provides that no indemnification will be made in violation of the provisions of the
1940 Act.
Pursuant to the Distribution Agreement, Columbia Management Investment Distributors, Inc. agrees to indemnify the Registrant, its officers and
trustees against claims, demands, liabilities and expenses under specified circumstances, all as more fully set forth in the Registrants Distribution Agreement, which has been filed as an exhibit to the registration statement.
The Registrant may be party to other contracts that include indemnification provisions for the benefit of the Registrants trustees and officers.
The trustees and officers of the Registrant and the personnel of the Registrants investment adviser and principal underwriter are insured under an
errors and omissions liability insurance policy. Registrants investment adviser, Columbia Management Investment Advisers, LLC, maintains investment advisory
professional liability insurance to insure it, for the benefit of Registrant and its non-interested trustees, against loss arising out of any effort, omission, or breach of any duty owed to
Registrant or any series of Registrant by Columbia Management Investment Advisers, LLC.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the 1933 Act) may be permitted to trustees, officers and controlling persons of the Registrant by the Registrant pursuant to the Registrants organizational instruments or otherwise, the Registrant is aware that in the
opinion of the Securities and Exchange Commission (SEC), such indemnification is against public policy as expressed in the 1933 Act and, therefore, is unenforceable.
Item 31. Business and Other Connections of the Investment Adviser
To the knowledge of the Registrant, none of the directors or officers of Columbia Management Investment Advisers, LLC (Columbia Management), the
Registrants investment adviser, or any subadviser to a series of the Registrant, except as set forth below, are or have been, at any time during the Registrants past two fiscal years, engaged in any other business, profession, vocation
or employment of a substantial nature.
(a)
|
Columbia Management, a wholly owned subsidiary of Ameriprise Financial, Inc., performs investment advisory services for the Registrant and certain other clients. Information regarding the business of Columbia Management
and the directors and principal officers of Columbia Management is also included in the Form ADV filed by Columbia Management 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 Columbia Management, certain directors and officers of Columbia Management also hold various positions with, and engage in business for, Ameriprise Financial, Inc. or its other subsidiaries.
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(b)
|
Barrow, Hanley, Mewhinney & Strauss, LLC performs investment management services for the Registrant and certain other clients. Information regarding the business of Barrow, Hanley, Mewhinney & Strauss,
LLC is set forth in the Prospectuses and Statement of Additional Information of the Registrants series that are subadvised by Barrow, Hanley, Mewhinney & Strauss, LLC and is incorporated herein by reference. Information about the
business of Barrow, Hanley, Mewhinney & Strauss, LLC and the directors and principal executive officers of Barrow, Hanley, Mewhinney & Strauss, LLC is also included in the Form ADV filed by Barrow, Hanley, Mewhinney &
Strauss, LLC with the SEC pursuant to the Investment Advisers Act of 1940 (File No. 801-31237), which is incorporated herein by reference.
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(c)
|
Dimensional Fund Advisors, L.P. performs investment management services for the Registrant and certain other clients. Information regarding the business of Dimensional Fund Advisors, L.P. is set forth in the
Prospectuses and Statement of Additional Information of the Registrants series that are subadvised by Dimensional Fund Advisors, L.P. and is incorporated herein by reference. Information about the business of Dimensional Fund Advisors, L.P.
and the directors and principal executive officers of Dimensional Fund Advisors, L.P. is also included in the Form ADV filed by Dimensional Fund Advisors, L.P. with the SEC pursuant to the Investment Advisers Act of 1940 (File No. 801-16283),
which is incorporated herein by reference.
|
(d)
|
Donald Smith & Co., Inc. performs investment management services for the Registrant and certain other clients. Information regarding the business of Donald Smith & Co., Inc. is set forth in the
Prospectuses and Statement of Additional Information of the Registrants series that are subadvised by Donald Smith & Co., Inc. and is incorporated herein by reference. Information about the business of Donald Smith & Co.,
Inc. and the directors and principal executive officers of Donald Smith & Co., Inc. is also included in the Form ADV filed by Donald Smith & Co., Inc. with the SEC pursuant to the Investment Advisers Act of 1940 (File
No. 801-10798), which is incorporated herein by reference.
|
(e)
|
Marsico Capital Management, LLC performs investment management services for the Registrant and certain other clients. Information regarding the
business of Marsico Capital Management, LLC is set forth in the Prospectuses and Statement of Additional Information of the Registrants series that are subadvised by Marsico Capital Management, LLC and is incorporated herein by reference.
Information about the business of Marsico Capital Management, LLC and the directors and principal executive
|
|
officers of Marsico Capital Management, LLC is also included in the Form ADV filed by Marsico Capital Management, LLC with the SEC pursuant to the Investment Advisers Act of 1940 (File
No. 801-54914), which is incorporated herein by reference.
|
(f)
|
Metropolitan West Capital Management, LLC performs investment management services for the Registrant and certain other clients. Information regarding the business of Metropolitan West Capital Management, LLC is set
forth in the Prospectuses and Statement of Additional Information of the Registrants series that are subadvised by Metropolitan West Capital Management, LLC and is incorporated herein by reference. Information about the business of
Metropolitan West Capital Management, LLC and the directors and principal executive officers of Metropolitan West Capital Management, LLC is also included in the Form ADV filed by Metropolitan West Capital Management, LLC with the SEC pursuant to
the Investment Advisers Act of 1940 (File No. 801-57001), which is incorporated herein by reference.
|
(g)
|
Segall Bryant & Hamill, LLC performs investment management services for the Registrant and certain other clients. Information regarding the business of Segall Bryan & Hamill, LLC is set forth in the
Prospectuses and Statement of Additional Information of the Registrants series that are subadvised by Segall Bryant & Hamill LLC and is incorporated herein by reference. Information about the business of Segall Bryant &
Hamill, LLC and the directors and principal executive officers of Segall Bryant & Hamill, LLC is also included in the Form ADV filed by Segall Bryant & Hamill, LLC with the SEC pursuant to the Investment Advisers Act of 1940 (File
No. 801-47232), which is incorporated herein by reference.
|
(h)
|
Threadneedle International Limited performs investment management services for the Registrant and certain other clients. Information regarding the business of Threadneedle International Limited is set forth in the
Prospectuses and Statement of Additional Information of the Registrants series that are subadvised by Threadneedle International Limited and is incorporated herein by reference. Information about the business of Threadneedle International
Limited and the directors and principal executive officers of Threadneedle International Limited is also included in the Form ADV filed by Threadneedle International Limited with the SEC pursuant to the Investment Advisers Act of 1940 (File
No. 801-63196), which is incorporated herein by reference.
|
Item 32. Principal Underwriter
(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
Series Trust II; Columbia Funds Variable Insurance Trust; Columbia Funds Variable Insurance Trust I and Wanger Advisors Trust.
(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. Truscott
|
|
Chief Executive Officer
|
|
Board Member, Senior Vice President
|
Joseph Kringdon
|
|
President and Head of Intermediary Distribution
|
|
None
|
Amy Unckless
|
|
Managing Director, Head of Private Wealth Management and Investment Only
|
|
None
|
Jeffrey F. Peters
|
|
Managing Director and Head of Global Institutional Distribution
|
|
None
|
Dave K. Stewart
|
|
Chief Financial Officer
|
|
None
|
|
|
|
|
|
Scott R. Plummer
|
|
Senior Vice President, Head of Global Asset Management Legal and Assistant Secretary
|
|
None
|
Michael E. DeFao
|
|
Vice President, Chief Legal Officer and Assistant Secretary
|
|
Vice President and Assistant Secretary
|
Stephen O. Buff
|
|
Vice President, Chief Compliance Officer
|
|
None
|
Joe Feloney
|
|
Vice President National Sales Manager U.S. Trust/Private Wealth Management
|
|
None
|
Thomas A. Jones
|
|
Vice President and Head of Strategic Relations
|
|
None
|
Gary Rawdon
|
|
Vice President Sales Governance and Administration
|
|
None
|
Thomas R. Moore
|
|
Secretary
|
|
None
|
Paul B. Goucher
|
|
Vice President and Assistant Secretary
|
|
Senior Vice President, Chief Legal Officer and Assistant Secretary
|
Tara W. Tilbury
|
|
Vice President and Assistant Secretary
|
|
Assistant Secretary
|
Nancy W. LeDonne
|
|
Vice President and Assistant Secretary
|
|
None
|
Ryan C. Larrenaga
|
|
Vice President and Assistant Secretary
|
|
Vice President and Secretary
|
Joseph L. DAlessandro
|
|
Vice President and Assistant Secretary
|
|
Assistant Secretary
|
Christopher O. Petersen
|
|
Vice President and Assistant Secretary
|
|
President and Principal Executive Officer
|
Eric T. Brandt
|
|
Vice President and Assistant Secretary
|
|
None
|
James L. Hamalainen
|
|
Treasurer
|
|
None
|
Ken Murphy
|
|
Anti-Money Laundering Officer
|
|
None
|
Kevin Wasp
|
|
Ombudsman
|
|
None
|
Kristin Weisser
|
|
Conflicts Officer
|
|
None
|
*
|
The principal business address of Columbia Management Investment Distributors, Inc. is 225 Franklin Street, Boston MA 02110.
|
Item 33. Location of Accounts and Records
Persons 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, 225 Franklin Street, Boston, MA, 02110;
|
|
|
Board Services Corporation, 901 Marquette Ave. S., Minneapolis, MN, 55402;
|
|
|
Registrants investment adviser and administrator, Columbia Management Investment Advisers, LLC, 225 Franklin Street, Boston, MA 02110;
|
|
|
Registrants subadviser, Barrow, Hanley, Mewhinney & Strauss, LLC, 2200 Ross Avenue, 31
st
Floor, Dallas, TX 75201;
|
|
|
Registrants subadviser, Dimensional Fund Advisors, L.P., 6300 Bee Cave Road, Building One, Austin, TX 78746;
|
|
|
Registrants subadviser, Donald Smith & Co., Inc., 152 West 57
th
Street, 22
nd
Floor, New York, NY
10019;
|
|
|
Registrants subadviser, Marsico Capital Management, LLC, 1200 17
th
Street, Suite 1600, Denver, CO 80202;
|
|
|
Registrants subadviser, Metropolitan West Capital Management, LLC, 610 Newport Center Drive, Suite 1000, Newport Beach, CA 92660;
|
|
|
Registrants subadviser, Segall Bryant & Hamill, LLC, 540 West Madison Street, Suite 1900, Chicago, Illinois 60661;
|
|
|
Registrants subadviser, Threadneedle International Limited, Cannon Place, 78 Cannon Street, London EC4N 6AG, United Kingdom;
|
|
|
Former subadviser, Turner Investments, L.P., 1205 Westlakes Drive, Suite 100, Berwyn, PA 19312;
|
|
|
Registrants principal underwriter, Columbia Management Investment Distributors, Inc., 225 Franklin Street, Boston, MA 02110;
|
|
|
Registrants transfer agent, Columbia Management Investment Services Corp., 225 Franklin Street, Boston, MA 02110; and
|
|
|
Registrants custodian, JPMorgan Chase Bank, N.A., 1 Chase Manhattan Plaza, New York, NY 10005.
|
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 II, certifies
that it meets all of the requirements for effectiveness of this Amendment to its Registration Statement under Rule 485(b) under the Securities Act and has duly caused this Amendment to its 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 28
th
day of May, 2015.
|
|
|
|
|
COLUMBIA FUNDS SERIES TRUST II
|
|
|
|
|
|
By:
|
|
/s/ Christopher O. Petersen
|
|
|
|
|
Christopher O. Petersen
|
|
|
|
|
President
|
Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed
below by the following persons in the capacities indicated on the 28
th
day of May, 2015.
|
|
|
|
|
|
|
Signature
|
|
Capacity
|
|
Signature
|
|
Capacity
|
|
|
|
|
/s/ Christopher O. Petersen
|
|
President
(Principal Executive Officer)
|
|
/s/ William A. Hawkins*
|
|
Trustee
|
Christopher O. Petersen
|
|
|
William A. Hawkins
|
|
|
|
|
|
/s/ Michael G. Clarke
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
/s/ R. Glenn Hilliard*
|
|
Trustee
|
Michael G. Clarke
|
|
|
R. Glenn Hilliard
|
|
|
|
|
|
/s/ Joseph F. DiMaria
|
|
Chief Accounting Officer
(Principal Accounting Officer)
|
|
/s/ Catherine James Paglia*
|
|
Trustee
|
Joseph F. DiMaria
|
|
|
Catherine James Paglia
|
|
|
|
|
|
/s/ William P. Carmichael*
|
|
Chair of the Board
|
|
/s/ Leroy C. Richie*
|
|
Trustee
|
William P. Carmichael
|
|
|
Leroy C. Richie
|
|
|
|
|
|
/s/ Kathleen A. Blatz*
|
|
Trustee
|
|
/s/ Anthony M. Santomero*
|
|
Trustee
|
Kathleen A. Blatz
|
|
|
Anthony M. Santomero
|
|
|
|
|
|
/s/ Edward J. Boudreau, Jr.*
|
|
Trustee
|
|
/s/ Minor M. Shaw*
|
|
Trustee
|
Edward J. Boudreau, Jr.
|
|
|
Minor M. Shaw
|
|
|
|
|
|
/s/ Pamela G. Carlton*
|
|
Trustee
|
|
/s/ Alison Taunton-Rigby*
|
|
Trustee
|
Pamela G. Carlton
|
|
|
Alison Taunton-Rigby
|
|
|
|
|
|
/s/ Patricia M. Flynn*
|
|
Trustee
|
|
/s/ William F. Truscott*
|
|
Trustee
|
Patricia M. Flynn
|
|
|
William F. Truscott
|
|
|
|
|
|
|
*
|
|
By:
|
|
/s/ Joseph L. D Alessandro
|
|
|
Name:
|
|
Joseph L. D Alessandro**
|
|
|
|
|
Attorney-in-fact
|
**
|
Executed by Joseph L. D Alessandro pursuant to Power of Attorney, dated January 28, 2015 and incorporated by reference to Post-Effective Amendment No. 125 to Registration Statement No. 333-131683 of
the Registrant on Form N-1A (Exhibit (q)(1)), filed with the Commission on February 27, 2015.
|
Exhibit Index
|
|
|
(a)(14)
|
|
Amendment No. 13 to the Agreement and Declaration of Trust, dated April 14, 2015.
|
|
|
(d)(2)
|
|
Schedule A, dated April 14, 2015, to the Investment Management Services Agreement between Columbia Management Investment Advisers, LLC and the Registrant, dated September 22, 2010.
|
|
|
(e)(2)
|
|
Schedule I, as of May 1, 2015, and Schedule II, as of September 7, 2010, to the Distribution Agreement between Columbia Management Investment Distributors, Inc. and the Registrant, dated September 7, 2010.
|
|
|
(h)(5)
|
|
Schedule A as of May 1, 2015 and Schedule B, as of November 1, 2014, to the Transfer and Dividend Disbursing Agent Agreement, dated September 7, 2010, between Columbia Management Investment Services Corp. and the
Registrant.
|
|
|
(h)(7)
|
|
Exhibit A, as of May 1, 2015, to the Plan Administration Services Agreement between Columbia Management Investment Services Corp. and the Registrant, dated December 1, 2006, amended and restated September 13,
2012.
|
|
|
(j)
|
|
Consent of PricewaterhouseCoopers LLP.
|
|
|
(m)(2)
|
|
Schedule A, dated May 1, 2015, to the Plan of Distribution and Amended and Restated Agreement of Distribution between Columbia Management Investment Distributors, Inc. and the Registrant, dated November 7, 2008, amended and
restated September 27, 2010.
|
|
|
(n)
|
|
Rule 18f 3 Multi-Class Plan, amended and restated as of May 1, 2015.
|
|
|
(p)(7)
|
|
Metropolitan West Capital Management, LLC Code of Ethics, dated December 8, 2014.
|
COLUMBIA FUNDS SERIES TRUST II
AMENDMENT NO. 13 TO THE
AGREEMENT
AND DECLARATION OF TRUST
WHEREAS, Section 5 of Article III of the Agreement and Declaration of Trust (the Declaration of
Trust) of Columbia Funds Series Trust II (the Trust), dated January 20, 2006, as amended from time to time, a copy of which is on file in the Office of the Secretary of The Commonwealth of Massachusetts, authorizes the
Trustees of the Trust to amend the Declaration of Trust to create one or more Series or classes of Shares without authorization by vote of the Shareholders of the Trust.
WHEREAS, Section 6 of Article III of the Declaration of Trust authorizes the Trustees of the Trust to abolish and rescind the
establishment and designation of Series or Class, either by amending the Declaration of Trust or by vote or written consent of a majority of the then Trustees.
NOW, THEREFORE, The undersigned, being at least a majority of the Trustees of Columbia Funds Series Trust II, do hereby certify that we have
authorized the liquidation of Columbia Absolute Return Emerging Markets Macro Fund, Columbia Absolute Return Enhanced Multi-Strategy Fund and Columbia Absolute Return Multi-Strategy Fund and have authorized the following amendment to said
Declaration of Trust:
Section 6 of Article III is hereby amended to read as follows:
Section 6. Establishment and Designation of Series and Classes. Without limiting the authority of the Trustees as set forth in
Section 5 and Section 6, inter alia, to establish and designate any further Series or classes or to modify the rights and preferences of any Series or class, the following Series shall be, and are hereby, established and designated:
Active Portfolios
Multi-Manager Value Fund
Columbia Absolute Return Currency and Income Fund
Columbia AMT-Free Tax-Exempt Bond Fund
Columbia Asia Pacific ex-Japan Fund
Columbia Capital Allocation Aggressive Portfolio
Columbia Capital Allocation Conservative Portfolio
Columbia Capital Allocation Moderate Portfolio
Columbia Commodity Strategy Fund
Columbia Diversified Equity Income Fund
Columbia Dividend Opportunity Fund
Columbia Emerging Markets Bond Fund
Columbia European Equity Fund
Columbia Flexible Capital Income Fund
Columbia Floating Rate Fund
Columbia Global Bond Fund
Columbia Global Equity Value Fund
Columbia Global Infrastructure Fund
Columbia Global Opportunities Fund
Columbia High Yield Bond Fund
Columbia Income Builder Fund
Columbia Income Opportunities Fund
Columbia Inflation Protected Securities Fund
Columbia Large Core Quantitative Fund
Columbia Large Growth Quantitative Fund
Columbia Large Value Quantitative Fund
Columbia Limited Duration Credit Fund
Columbia Marsico Flexible Capital Fund
Columbia Minnesota Tax-Exempt Fund
Columbia Money Market Fund
Columbia Mortgage Opportunities Fund
Columbia Multi-Advisor Small Cap Value Fund
Columbia Select Global Equity Fund
Columbia Select Large-Cap Value Fund
Columbia Select Smaller-Cap Value Fund
Columbia Seligman Communications and Information Fund
Columbia Seligman Global Technology Fund
Columbia Short-Term Cash Fund
Columbia Small/Mid Cap Value Fund
Columbia U.S. Government Mortgage Fund
Shares of each Series established in this Section 6 shall have the following rights and preferences relative to Shares of each other
Series, and Shares of each class of a Multi-Class Series shall have such rights and preferences relative to other classes of the same Series as are set forth in the Declaration of Trust, together with such other rights and preferences relative to
such other classes as are set forth in the Trusts Rule 18f-3 Plan, registration statement as from time to time amended, and any applicable resolutions of the Trustees establishing and designating such class of Shares.
The rest of this Section 6 remains unchanged.
The foregoing amendment is effective as of April 14, 2015.
IN WITNESS WHEREOF, the undersigned has signed this Amendment No. 13 to the Agreement and
Declaration of Trust on April 14, 2015.
|
|
|
|
|
/s/ Kathleen A. Blatz
Kathleen A. Blatz
|
|
|
|
/s/ Catherine James Paglia
Catherine James Paglia
|
|
|
|
/s/ Edward J. Boudreau, Jr.
Edward J. Boudreau, Jr.
|
|
|
|
/s/ Leroy C. Richie
Leroy C. Richie
|
|
|
|
/s/ Pamela G. Carlton
Pamela G. Carlton
|
|
|
|
/s/ Anthony M. Santomero
Anthony M. Santomero
|
|
|
|
/s/ William P. Carmichael
William P. Carmichael
|
|
|
|
/s/ Minor M. Shaw
Minor M. Shaw
|
|
|
|
/s/ Patricia M. Flynn
Patricia M. Flynn
|
|
|
|
/s/ Alison Taunton-Rigby
Alison Taunton-Rigby
|
|
|
|
/s/ William A. Hawkins
William A. Hawkins
|
|
|
|
/s/ William F. Truscott
William F. Truscott
|
|
|
|
/s/ R. Glenn Hilliard
R. Glenn Hilliard
|
|
|
|
|
|
|
|
Registered Agent:
|
|
Corporation Service Company
84 State Street
Boston,
MA 02109
|
IMS Schedule CFST II
Schedule A
As of
May 1, 2015
The following funds shall not pay the Investment Manager a direct fee for services rendered hereunder:
|
|
|
Columbia Income Builder Fund
|
|
|
|
Columbia Short-Term Cash Fund
|
For the following funds, the asset charge for each calendar day of each year
shall be equal to the total of 1/365
th
(1/366
th
in each leap year) of the amount computed in accordance with the fee schedule in the table,
below:
|
|
|
|
|
|
|
|
|
Fund
|
|
Agreement Adoption
and Schedule A
Effective
Date
|
|
Net Assets (billions)
|
|
Annual rate at
each asset level
Asset Charge
|
|
Active Portfolios Multi-Manager Value Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of November 10, 2011
|
|
First $0.5
Next $0.5
Next $0.5
Next $1.5
Next $3.0
Over $6.0
|
|
|
0.660
0.615
0.570
0.520
0.510
0.490
|
%
%
%
%
%
%
|
Columbia Absolute Return Currency and Income Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of March 7, 2011
|
|
First $1.0
Next $1.0
Next $1.0
Next $3.0
Next $1.5
Next $1.5
Next $1.0
Next $5.0
Next $5.0
Next $4.0
Next $26.0
Over $50.0
|
|
|
0.890
0.865
0.840
0.815
0.790
0.775
0.770
0.760
0.750
0.740
0.720
0.700
|
%
%
%
%
%
%
%
%
%
%
%
%
|
Columbia AMT-Free Tax-Exempt Bond Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of March 7, 2011
|
|
First $1.0
Next $1.0
Next $1.0
Next $3.0
Next $1.5
Next $2.5
Next $5.0
Next $9.0
Next $26.0
Over $50.0
|
|
|
0.410
0.385
0.360
0.335
0.310
0.300
0.290
0.280
0.260
0.250
|
%
%
%
%
%
%
%
%
%
%
|
Columbia Asia Pacific ex-Japan Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of April 1, 2011**
|
|
First $0.25
Next $0.25
Next $0.25
Next $0.25
Next $0.5
Next $1.5
Next $3.0
Next $6.0
Next $8.0
Next $4.0
Next $26.0
Over $50.0
|
|
|
0.800
0.775
0.750
0.725
0.700
0.650
0.640
0.620
0.620
0.610
0.600
0.570
|
%
%
%
%
%
%
%
%
%
%
%
%
|
IMS Schedule CFST II
|
|
|
|
|
|
|
Fund
|
|
Agreement Adoption
and Schedule A
Effective
Date
|
|
Net Assets (billions)
|
|
Annual rate at
each asset level
Asset Charge
|
Columbia Capital Allocation Aggressive Portfolio
Columbia Capital Allocation Conservative Portfolio
Columbia
Capital Allocation Moderate Portfolio
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of March 1, 2013
|
|
0%
|
|
Assets invested in underlying funds advised by Columbia
Management (excluding any underlying fund that does not pay an investment advisory fee to Columbia Management),
|
|
|
|
|
0.55%
|
|
Assets invested in securities, other than third-party advised mutual funds, and in Columbia proprietary funds that do not pay an advisory fee (including exchange-traded funds, derivatives and individual securities)
|
|
|
|
|
0.10%
|
|
Assets invested in nonexchange traded third-party advised mutual funds
|
Columbia Commodity Strategy Fund****
|
|
Agreement adopted as of April 14, 2011; and Schedule A effective as of April 14, 2011
|
|
First $0.50
Next $0.50
Next $2.00
Next $3.00
Over $6.00
|
|
0.550%
0.505%
0.480%
0.460%
0.440%
|
Columbia Diversified Equity Income Fund
Columbia Dividend Opportunity Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of July 1, 2011**
|
|
First $0.5
Next $0.5
Next $0.5
Next $1.5
Next $3.0
Over $6.0
|
|
0.660%
0.615%
0.570%
0.520%
0.510%
0.490%
|
Columbia European Equity Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of July 1, 2011**
|
|
First $0.25
Next $0.25
Next $0.25
Next $0.25
Next $0.5
Next $1.5
Next $3.0
Next $14.0
Next $4.0
Next $26.0
Over $50.0
|
|
0.800%
0.775%
0.750%
0.725%
0.700%
0.650%
0.640%
0.620%
0.610%
0.600%
0.570%
|
IMS Schedule CFST II
|
|
|
|
|
|
|
|
|
Fund
|
|
Agreement Adoption
and Schedule A
Effective
Date
|
|
Net Assets (billions)
|
|
Annual rate at
each asset level
Asset Charge
|
|
Columbia Limited Duration Credit Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of July 1, 2011***
|
|
First $1.0
Next $1.0
Next $1.0
Next $3.0
Next $1.5
Next $1.5
Next $1.0
Next $5.0
Next $5.0
Next $4.0
Next $26.0
Over $50.0
|
|
|
0.360
0.355
0.350
0.345
0.330
0.315
0.310
0.300
0.290
0.280
0.260
0.240
|
%
%
%
%
%
%
%
%
%
%
%
%
|
Columbia Large Core Quantitative Fund
Columbia
Large Growth Quantitative Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of July 1, 2011**
|
|
First $0.5
Next $0.5
Next $0.5
Next $1.5
Next $3.0
Over $6.0
|
|
|
0.690
0.645
0.600
0.550
0.540
0.520
|
%
%
%
%
%
%
|
Columbia Emerging Markets Bond Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of July 1, 2011***
|
|
First $0.50
Next $0.50
Next $1.0
Next $1.0
Next $3.0
Next $1.5
Next $1.5
Next $1.0
Next $5.0
Next $5.0
Next $4.0
Next $26.0
Over $50.0
|
|
|
0.530
0.525
0.515
0.495
0.480
0.455
0.440
0.431
0.419
0.409
0.393
0.374
0.353
|
%
%
%
%
%
%
%
%
%
%
%
%
%
|
Columbia Global Bond Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of July 1, 2011***
|
|
First $1.0
Next $1.0
Next $1.0
Next $3.0
Next $1.5
Next $4.5
Next $8.0
Next $30.0
Over $50.0
|
|
|
0.570
0.525
0.520
0.515
0.510
0.500
0.490
0.480
0.470
|
%
%
%
%
%
%
%
%
%
|
Columbia Global Equity Value Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of June 1, 2011**
|
|
First $0.5
Next $0.5
Next $0.5
Next $1.5
Next $3.0
Over $6.0
|
|
|
0.660
0.615
0.570
0.520
0.510
0.490
|
%
%
%
%
%
%
|
Columbia Flexible Capital Income Fund
|
|
Agreement adopted as of April 14, 2011; and Schedule A effective as of April 14, 2011
|
|
First $0.50
Next $0.50
Next $2.00
Next $3.00
Over $6.00
|
|
|
0.590
0.575
0.560
0.530
0.500
|
%
%
%
%
%
|
IMS Schedule CFST II
|
|
|
|
|
|
|
|
|
Fund
|
|
Agreement Adoption
and Schedule A
Effective
Date
|
|
Net Assets (billions)
|
|
Annual rate at
each asset level
Asset Charge
|
|
Columbia Floating Rate Fund
Columbia High Yield
Bond Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of July 1, 2011***
|
|
First $0.25
Next $0.25
Next $0.25
Next $0.25
Next $1.0
Next $1.0
Next $3.0
Next $1.5
Next $1.5
Next $1.0
Next $5.0
Next $5.0
Next $4.0
Next $26.0
Over $50.0
|
|
|
0.590
0.575
0.570
0.560
0.550
0.540
0.515
0.490
0.475
0.450
0.435
0.425
0.400
0.385
0.360
|
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
|
Columbia Select Global Equity Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of March 7, 2011
|
|
First $0.25
Next $0.25
Next $0.25
Next $0.25
Next $0.5
Next $1.5
Next $3.0
Next $14.0
Next $4.0
Next $26.0
Over $50.0
|
|
|
0.800
0.775
0.750
0.725
0.700
0.650
0.640
0.620
0.610
0.600
0.570
|
%
%
%
%
%
%
%
%
%
%
%
|
Columbia Global Infrastructure Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of July 1, 2011*
|
|
First $1.0
Next $1.0
Next $4.0
Over $6.0
|
|
|
0.650
0.600
0.550
0.500
|
%
%
%
%
|
Columbia Money Market Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of March 7, 2011
|
|
First $1.0
Next $0.5
Next $0.5
Next $0.5
Next $2.5
Next $1.0
Next $1.5
Next $1.5
Next $1.0
Next $5.0
Next $5.0
Next $4.0
Over $24.0
|
|
|
0.330
0.313
0.295
0.278
0.260
0.240
0.220
0.215
0.190
0.180
0.170
0.160
0.150
|
%
%
%
%
%
%
%
%
%
%
%
%
%
|
Columbia Income Opportunities Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of March 7, 2011
|
|
First $0.25
Next $0.25
Next $0.25
Next $0.25
Next $1.0
Next $1.0
Next $3.0
Next $1.5
Next $1.5
Next $1.0
|
|
|
0.590
0.575
0.570
0.560
0.550
0.540
0.515
0.490
0.475
0.450
|
%
%
%
%
%
%
%
%
%
%
|
IMS Schedule CFST II
|
|
|
|
|
|
|
|
|
Fund
|
|
Agreement Adoption
and Schedule A
Effective
Date
|
|
Net Assets (billions)
|
|
Annual rate at
each asset level
Asset Charge
|
|
|
|
|
|
Next $5.0
Next $5.0
Next $4.0
Next $26.0
Over $50.0
|
|
|
0.435
0.425
0.400
0.385
0.360
|
%
%
%
%
%
|
Columbia Inflation Protected Securities Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of March 7, 2011
|
|
First $1.0
Next $1.0
Next $1.0
Next $3.0
Next $1.5
Next $1.5
Next $1.0
Next $5.0
Next $5.0
Next $4.0
Next $26.0
Over $50.0
|
|
|
0.440
0.415
0.390
0.365
0.340
0.325
0.320
0.310
0.300
0.290
0.270
0.250
|
%
%
%
%
%
%
%
%
%
%
%
%
|
Columbia Large Value Quantitative Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of March 7, 2011
|
|
First $0.5
Next $0.5
Next $0.5
Next $1.5
Next $3.0
Over $6.0
|
|
|
0.690
0.645
0.600
0.550
0.540
0.520
|
%
%
%
%
%
%
|
Columbia Marsico Flexible Capital Fund
|
|
Agreement adopted as of Sept. 22, 2010; and Schedule A effective as of Jan. 23, 2013
|
|
First $0.50
Next $0.50
Next $0.50
Next $1.50
Next $3.00
Over $6.00
|
|
|
0.710
0.665
0.620
0.570
0.560
0.540
|
%
%
%
%
%
%
|
Columbia Small/Mid Cap Value Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of July 1, 2011**
|
|
First $0.5
Next $0.5
Next $0.5
Next $1.5
Next $9.0
Over $12.0
|
|
|
0.760
0.715
0.670
0.620
0.620
0.620
|
%
%
%
%
%
%
|
IMS Schedule CFST II
|
|
|
|
|
|
|
|
|
Columbia Minnesota Tax-Exempt Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of March 7, 2011
|
|
First $0.5
Next $0.5
Next $2.0
Next $3.0
Next $1.5
Over $7.5
|
|
|
0.400
0.350
0.320
0.290
0.280
0.270
|
%
%
%
%
%
%
|
Columbia Mortgage Opportunities Fund
|
|
Agreement adopted as of April 21, 2014; and Schedule A effective as of April 21, 2014
|
|
First $1.0
Next $1.0
Next $1.0
Next $3.0
Next $1.5
Next $1.5
Next $1.0
Over $10.0
|
|
|
0.570
0.560
0.550
0.535
0.520
0.505
0.495
0.485
|
%
%
%
%
%
%
%
%
|
Columbia Multi-Advisor Small Cap Value Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of July 1, 2011*
|
|
First $0.25
Next $0.25
Next $0.25
Next $0.25
Over $1.0
|
|
|
0.970
0.945
0.920
0.895
0.870
|
%
%
%
%
%
|
Columbia Select Large-Cap Value Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of March 7, 2011
|
|
First $0.5
Next $0.5
Next $2.0
Next $3.0
Over $6.0
|
|
|
0.710
0.660
0.565
0.560
0.540
|
%
%
%
%
%
|
Columbia Select Smaller-Cap Value Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of March 7, 2011
|
|
First $0.5
Next $0.5
Over $1.0
|
|
|
0.790
0.745
0.700
|
%
%
%
|
Columbia Seligman Communications and Information Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of June 1, 2013
|
|
First $3.0
Next $1.0
Next $2.0
Over $6.0
|
|
|
0.855
0.825
0.775
0.725
|
%
%
%
%
|
Columbia Seligman Global Technology Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of June 1, 2013
|
|
First $3.0
Next $1.0
Next $2.0
Over $6.0
|
|
|
0.855
0.825
0.775
0.725
|
%
%
%
%
|
Columbia Global Opportunities Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of April 12, 2012
|
|
Assets invested in underlying funds (including any ETFs) that pay an investment advisory fee to the Investment Manager
|
|
|
0.00
|
%
|
|
|
|
Assets invested in securities (other than underlying mutual funds (including any ETFs) that pay an investment advisory fee to
the Investment Manager), including other funds advised by the Investment Manager that do not pay an investment advisory fee, derivatives and individual securities.
|
|
|
|
|
First $0.5
Next $0.5
Next $0.5
Next $1.5
Next $3.0
Over $6.0
|
|
|
0.66
0.615
0.57
0.52
0.51
0.49
|
%
%
%
%
%
%
|
IMS Schedule CFST II
|
|
|
|
|
|
|
|
|
Columbia U.S. Government Mortgage Fund
|
|
Agreement adopted as of March 7, 2011; and Schedule A effective as of April 1, 2011***
|
|
First $0.5
Next $0.5
Next $1.0
Next $1.0
Next $3.0
Next $1.5
Next $1.5
Next $3.0
Next $8.0
Next $4.0
Next $26.0
Over $50.0
|
|
|
0.430
0.430
0.420
0.400
0.400
0.380
0.365
0.360
0.350
0.340
0.320
0.300
|
%
%
%
%
%
%
%
%
%
%
%
%
|
*
|
Reflects elimination of the Performance Incentive Adjustment.
|
**
|
Reflects elimination of the Performance Incentive Adjustment and changes to the fee schedule.
|
***
|
Reflects changes to the fee schedule.
|
****
|
When calculating asset levels for purposes of determining fee breakpoints, asset levels are based on net assets of the Fund, including assets invested in any wholly-owned subsidiary advised by the Investment Manager
(Subsidiaries). Fees payable by the Fund under this agreement shall be reduced by any investment management service fees paid to the Investment Manager by any Subsidiaries under separate investment management services agreements with the
Subsidiaries.
|
The computation shall be made for each calendar day on the basis of net assets as of the close of the preceding day. In the
case of the suspension of the computation of net asset value, the fee for each calendar day during such suspension shall be computed as of the close of business on the last full day on which the net assets were computed. Net assets as of the close
of a full day shall include all transactions in shares of the Fund recorded on the books of the Fund for that day.
IMS Schedule CFST II
IN WITNESS THEREOF, the parties hereto have executed the foregoing Schedule A as of April 15, 2015.
|
|
|
|
|
COLUMBIA FUNDS SERIES TRUST II
|
|
|
|
|
|
By:
|
|
/s/ Christopher O. Petersen
|
|
|
|
|
Name: Christopher O. Petersen
|
|
|
|
|
Title: President
|
|
|
|
COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC
|
|
|
|
By:
|
|
/s/ Amy K. Johnson
|
|
|
|
|
Name: Amy K. Johnson
|
|
|
|
|
Title: Managing Director and Chief Operating Officer
|
|
|
Distribution Agreement - Schedules CFST II
Schedule I
As of May 1, 2015
Columbia Funds Series Trust II
Active Portfolios
Multi-Manager Value Fund
Columbia Absolute Return Currency and Income Fund
Columbia AMT-Free Tax-Exempt Bond Fund
Columbia Asia Pacific ex-Japan Fund
Columbia Capital Allocation Aggressive Portfolio
Columbia Capital Allocation Conservative Portfolio
Columbia Capital Allocation Moderate Portfolio
Columbia Commodity Strategy Fund
Columbia Diversified Equity Income Fund
Columbia Dividend Opportunity Fund
Columbia Emerging Markets Bond Fund
Columbia European Equity Fund
Columbia Flexible Capital Income Fund
Columbia Floating Rate Fund
Columbia Global Bond Fund
Columbia Global Equity Value Fund
Columbia Global Opportunities Fund
Columbia Global Infrastructure Fund
Columbia High Yield Bond Fund
Columbia Income Builder Fund
Columbia Income Opportunities Fund
Columbia Inflation Protected Securities Fund
Columbia Large Core Quantitative Fund
Columbia Large Growth Quantitative Fund
Columbia Large Value Quantitative Fund
Columbia Limited Duration Credit Fund
Columbia Marsico Flexible Capital Fund
Columbia Minnesota Tax-Exempt Fund
Columbia Money Market Fund
Columbia Mortgage Opportunities Fund
Columbia Multi-Advisor Small Cap Value Fund
Columbia Select Global Equity Fund
Columbia Select Large-Cap Value Fund
Columbia Select Smaller-Cap Value Fund
Columbia Seligman Communications and Information Fund
Columbia Seligman Global Technology Fund
Columbia Short-Term Cash Fund
Columbia Small/Mid Cap Value Fund
Columbia U.S. Government Mortgage Fund
Distribution Agreement - Schedules CFST II
IN WITNESS THEREOF, the parties hereto have executed the foregoing Schedule I as of April 15, 2015
|
|
|
|
|
COLUMBIA FUNDS SERIES TRUST II
|
on behalf of its respective Funds
|
|
|
By:
|
|
/s/ Christopher O. Petersen
|
|
|
|
|
Name: Christopher O. Petersen
|
|
|
|
|
Title: President
|
|
COLUMBIA MANAGEMENT INVESTMENT DISTRIBUTORS, INC.
|
|
|
By:
|
|
/s/ Jeffrey F. Peters
|
|
|
|
|
Name: Jeffrey F. Peters
|
|
|
|
|
Title: Managing Director and Head of
|
|
|
|
|
Global Institutional Distribution
|
Distribution Agreement - Schedules CFST II
SCHEDULE II
COMPENSATION
COMPENSATION TO DISTRIBUTOR. In connection with the distribution of Shares, Distributor will be entitled to receive (i) payments pursuant to any
Distribution Plan and related agreement from time to time in effect between any Fund and Distributor or any particular class of shares of a Fund (12b-1 Plan), (ii) any CDSC applicable to the redemption of a Funds Shares,
determined in the manner set forth in the then current prospectus and Statement of Additional Information of that Fund, and (iii) any applicable front-end sales charges applicable to the sale of Shares, less any applicable dealer discount.
Approved as of: September 7, 2010
SCHEDULE A
Effective May 1, 2015
Columbia
Funds Series Trust II
Active Portfolios
Multi-Manager Value Fund
Columbia Absolute Return Currency and Income Fund
Columbia AMT-Free Tax-Exempt Bond Fund
Columbia Asia Pacific ex-Japan Fund
Columbia Capital Allocation Aggressive Portfolio
Columbia Capital Allocation Conservative Portfolio
Columbia Capital Allocation Moderate Portfolio
Columbia Commodity Strategy Fund
Columbia Diversified Equity Income Fund
Columbia Dividend Opportunity Fund
Columbia Emerging Markets Bond Fund
Columbia European Equity Fund
Columbia Flexible Capital Income Fund
Columbia Floating Rate Fund
Columbia Global Bond Fund
Columbia Global Equity Value Fund
Columbia Global Opportunities Fund
Columbia Global Infrastructure Fund
Columbia High Yield Bond Fund
Columbia Income Builder Fund
Columbia Income Opportunities Fund
Columbia Inflation Protected Securities Fund
Columbia Large Core Quantitative Fund
Columbia Large Growth Quantitative Fund
Columbia Large Value Quantitative Fund
Columbia Limited Duration Credit Fund
Columbia Marsico Flexible Capital Fund
Columbia Minnesota Tax-Exempt Fund
Columbia Money Market Fund
Columbia Mortgage Opportunities Fund
Columbia Multi-Advisor Small Cap Value Fund
Columbia Select Global Equity Fund
Columbia Select Large-Cap Value Fund
Columbia Select Smaller-Cap Value Fund
Columbia Seligman Communications and Information Fund
Columbia Seligman Global Technology Fund
Columbia Short-Term Cash Fund
Columbia Small/Mid Cap Value Fund
Columbia U.S. Government Mortgage Fund
IN WITNESS WHEREOF, the parties hereto have caused the forgoing Schedule A to be duly executed as of
April 15, 2015.
COLUMBIA FUNDS SERIES TRUST II,
on
behalf of their respective series listed on Schedule A
|
|
|
|
|
By:
|
|
/s/ Christopher O. Petersen
|
|
|
Name: Christopher O. Petersen
|
|
|
Title: President
|
COLUMBIA MANAGEMENT INVESTMENT SERVICES CORP.
|
|
|
By:
|
|
/s/ Lyn Kephart-Strong
|
|
|
Name: Lyn Kephart-Strong
|
|
|
Title: President
|
SCHEDULE B
Effective November 1, 2014
Payments
under the Agreement are payable to CMISC monthly.
Transfer agency costs are calculated separately for each of (i) Class Y shares, (ii) Class K
and R5 shares, and (iii) all other classes of shares (except Class I, which pay no transfer agency fees).
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)
|
i) Base transfer agency fee paid monthly of:
|
1. an annual fee of $34.25 per account for
accounts established directly with the Fund (direct accounts)*;
2. an annual fee of $11.00 per account for accounts established or
maintained pursuant to the National Securities Clearing Corporations networking system (network accounts)*;
3. an annual rate of
0.014% of the average daily value of accounts of intermediaries established with the Fund through CMISC that represents the combined holdings of, and transactions in, Fund shares of one or more clients of the intermediary (omnibus accounts)*;
*excluding Class I share accounts
PLUS
ii) The Funds
Allocated Share of CMISC Reimbursable Out-of-Pocket Expenses (allocated among the Funds classes (other than Class I shares) based on the number of open accounts); PLUS
iii) Sub-transfer agency fees (generally intended to offset amounts paid by CMISC to intermediaries for services they provide) EITHER
1. (for all classes other than Class I, K, R5 or Y) for each position held in an omnibus account (i) for which American Enterprise
Investment Services, Inc. is the broker of record or with respect to which the beneficial shareholder is a customer of Ameriprise Financial Services, Inc., at the rate of $16 per annum, calculated monthly based on the total number of positions in
such account at the end of such month; and (ii) for all other accounts, at an annual rate of 0.20% of the average aggregate value of the funds shares maintained in each such omnibus account; OR
2. (for Class K and Class R5 shares) at an annual rate of 0.05% of the average aggregate value of
the funds shares maintained in omnibus accounts.
|
(b)
|
For Class K and Class R5 shares the maximum annual rate for the fees set forth in paragraphs (a)(i) (a)(iii)(2) shall be 0.05%.
|
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) networking account
fees paid to dealer firms by CMISC on shareholder accounts established or maintained pursuant to the National Securities Clearing Corporations networking system, subject to a maximum annual rate of 0.20% of the month end value of the
Funds shares maintained in networked accounts of each dealer firm, and (ii) 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.
Out-of-Pocket Expenses
also include, but are not limited to, the following
items:
|
*
|
Printing, storage and programming costs associated with, but not limited to envelopes, checks, confirmations and stationery
|
|
*
|
Postage bulk, pre-sort, ZIP+4, barcoding, first class
|
|
*
|
Telephone and telecommunication costs, including all lease, maintenance and line costs
|
|
*
|
Proxy solicitations, mailings and tabulations
|
|
*
|
Daily & Distributions advice mailings
|
|
*
|
Implementing, monitoring or processing any Stop Orders
|
|
*
|
Shipping, Certified and Overnight mail and insurance
|
|
*
|
Year-end forms and mailings
|
|
*
|
National Securities Clearing Corporation charges related to fund transactions
|
|
*
|
Record retention costs including but not limited to the storage, movement, destruction, retrieval and handling charges
|
|
*
|
Data processing and storage for anti-market timing omnibus monitoring
|
|
*
|
Creation and maintenance of on-line records including reports, shareholder and dealer statements, year-end forms, and regulatory mailings
|
|
*
|
Third party quality control assessments
|
|
*
|
Compliance items including, but not limited to, lost shareholder review, lost certificate filings and compliance programs
|
|
*
|
Electronic website linkages to third party account management applications
|
|
*
|
Regulatory mailings inclusive of costs related to electronic delivery of such documents.
|
|
*
|
At the request, or with the consent of the Trust, 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.
Plan Admin CFST II
As of May 1, 2015
Columbia Funds Series
Trust II is a Massachusetts business trust:
EXHIBIT A
|
|
|
|
|
Funds
|
|
Class
|
|
Columbia Funds Series Trust II
|
|
|
|
|
Columbia Absolute Return Currency and Income Fund
|
|
|
K
|
|
Columbia Asia Pacific-ex Japan Fund
|
|
|
K
|
|
Columbia Capital Allocation Aggressive
|
|
|
K
|
|
Columbia Capital Allocation Conservative
|
|
|
K
|
|
Columbia Capital Allocation Moderate
|
|
|
K
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Columbia Commodity Strategy Fund
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K
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Columbia Diversified Equity Income
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K
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Columbia Dividend Opportunity
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K
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Columbia Emerging Markets Bond
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K
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Columbia European Equity
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K
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Columbia Flexible Capital Income Fund
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K
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Columbia Floating Rate
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K
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Columbia Global Bond
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K
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Columbia Global Infrastructure Fund
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K
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Columbia Global Opportunities
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K
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Columbia High Yield Bond
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K
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Columbia Income Builder
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K
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Columbia Income Opportunities
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K
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Columbia Inflation Protected Securities
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K
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Columbia Large Core Quantitative
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K
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Columbia Large Growth Quantitative
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K
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Columbia Large Value Quantitative
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K
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Columbia Limited Duration Credit
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K
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Columbia Marsico Flexible Capital Fund
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K
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Columbia Select Equity Value
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K
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Columbia Select Global Equity
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K
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Columbia Small/Mid Cap Value
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K
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Columbia Money Market
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K
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Columbia Multi-Advisor Small Cap Value
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K
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Columbia Select Large-Cap Value Fund
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K
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Columbia Select Smaller-Cap Value Fund
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K
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Columbia Seligman Communications and Information
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K
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Columbia Seligman Global Technology
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K
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Columbia U.S. Government Mortgage
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|
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K
|
|
Plan Admin CFST II
IN WITNESS THEREOF, the parties hereto have executed the foregoing Exhibit A as of April 15, 2015.
COLUMBIA FUNDS SERIES TRUST II
|
|
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By:
|
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/s/ Christopher O. Petersen
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|
|
Christopher O. Petersen
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|
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President
|
COLUMBIA MANAGEMENT INVESTMENT SERVICES CORP.
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|
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By:
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/s/ Lyn Kephart-Strong
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Lyn Kephart-Strong
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President
|
Plan Admin CFST II
EXHIBIT B
PLAN
ADMINISTRATION SERVICES
In exchange for the Plan Administration Fee payable on the share classes of the Funds, as set forth on Exhibit C, CMIS shall
enter into agreements with third party administrators to provide Plan Administration Services that may include, but are not limited to, the following:
Plan Implementation and Conversion Services such as:
Design, provide, prepare or amend plan documents
Collect historical data
Set-up
plan on recordkeeping system
Coordinate transfer of assets
Prepare and submit plan Internal Revenue Service filings
Prepare summary plan description and summaries of material modification
Prepare participant enrollment kits
Conduct plan education and enrollment meetings
Recordkeeping Services such as:
Administer
participant contributions
Administer employer contributions
Administer participant forfeitures
Administer participant withdrawals
Administer dividends, capital gains and interest payments
Administer investment net asset value fluctuations
Administer investment allocations
Balance or reconcile transactions
Administer vesting schedules
Plan Maintenance
Services such as
Review employee and participant data
Conduct or administer discrimination testing
Conduct or administer top heavy testing
Monitor section 402(g) compliance
Monitor section 415 compliance
Prepare or provide data for annual reports and Form 5500s
Conduct compliance consulting
Plan and
Participant Reports such as:
Periodic participant statements
Participant activity reports
Periodic plan or trust statements
Administrative Services such as:
Provide
distribution options
Provide and administer forms
Administer qualified domestic relations orders
Plan Admin CFST II
Administer loans
Administer
rollovers
Withhold taxes
Prepare and transmit tax forms
Issue checks
Administer asset
transfers
Education Activities such as:
Create or make available plan education material
Develop or provide programs designed to increase plan participation
Help participants consider investment/retirement goals
Provide general or customized plan education programs
Provide retirement readiness education material
Provide personalized statements
Support retirement education software, such as Morningstar Clear Future
Offer face to face education seminars
Create or distribute participant educational newsletters
Create or provide plan signage or posters
Plan
Sponsor Education Services such as:
Provide plan or investment option information to plan sponsors
Website and Inter-active Voice Response (IVR) System Maintenance Services such as:
Establish, maintain or improve plan website and IVR systems
Plan Admin CFST II
As of November 1, 2012
EXHIBIT C
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|
|
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SHARE CLASS
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FEE
|
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Class K
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|
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0.25
|
%
|
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form N-1A of our reports dated March 24, 2015, relating to the
financial statements and financial highlights, which appear in the January 31, 2015 Annual Report to Shareholders of Columbia Income Builder Fund, Columbia Capital Allocation Aggressive Portfolio, Columbia Capital Allocation Moderate Portfolio
and Columbia Capital Allocation Conservative Portfolio (four of the funds constituting Columbia Funds Series Trust II), which are also incorporated by reference into the Registration Statement. We also consent to the references to us under the
headings Financial Highlights, Independent Registered Public Accounting Firm and Organization and Management of Wholly-Owned Subsidiaries in such Registration Statement.
|
/s/ PricewaterhouseCoopers LLP
|
Minneapolis, Minnesota
|
May 27, 2015
|
12b-1 Plan and Agreement CFST II
Schedule A
As of
May 1, 2015
FOR FUNDS OTHER THAN COLUMBIA MONEY MARKET FUND:
Columbia Funds Series Trust II is a Massachusetts business trust:
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Funds
|
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Classes
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A
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B
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C
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|
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R
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|
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W
|
|
Columbia Funds Series Trust II
|
|
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|
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Active Portfolios
Multi-Manager Value
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A
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Columbia Absolute Return Currency and Income Fund
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A
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B
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C
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W
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Columbia AMT-Free Tax-Exempt Bond
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A
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B
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C
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Columbia Asia Pacific ex-Japan
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A
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C
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R
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Columbia Capital Allocation Aggressive
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A
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B
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C
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R
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Columbia Capital Allocation Conservative
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A
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B
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C
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R
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Columbia Capital Allocation Moderate
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A
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B
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C
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R
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Columbia Commodity Strategy
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A
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C
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R
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W
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Columbia Diversified Equity Income
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A
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B
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C
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R
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W
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Columbia Dividend Opportunity
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A
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B
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C
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R
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W
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Columbia Emerging Markets Bond
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A
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B
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C
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R
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W
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Columbia European Equity
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A
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B
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C
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W
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Columbia Flexible Capital Income
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A
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C
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R
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W
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Columbia Floating Rate
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A
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B
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C
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R
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W
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Columbia Global Bond
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A
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B
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C
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R
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W
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Columbia Global Equity Value Fund
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A
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B
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C
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R
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W
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Columbia Global Infrastructure
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A
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B
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C
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R
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Columbia Global Opportunities
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A
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B
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C
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R
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W
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Columbia High Yield Bond
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A
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B
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C
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R
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W
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Columbia Income Builder
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A
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B
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C
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R
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W
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Columbia Income Opportunities
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A
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B
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C
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R
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W
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Columbia Inflation Protected Securities
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A
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B
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C
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R
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W
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Columbia Large Core Quantitative
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A
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B
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C
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R
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W
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Columbia Large Growth Quantitative
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A
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B
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C
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R
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W
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Columbia Large Value Quantitative
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A
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B
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C
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R
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W
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Columbia Limited Duration Credit
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A
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B
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C
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W
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Columbia Marsico Flexible Capital
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A
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C
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R
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Columbia Minnesota Tax-Exempt
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A
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B
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C
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Columbia Mortgage Opportunities Fund
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A
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C
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W
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Columbia Multi-Advisor Small Cap Value
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A
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B
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C
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R
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Columbia Select Global Equity
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A
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B
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C
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R
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W
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Columbia Select Large-Cap Value
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A
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B
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C
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R
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W
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Columbia Select Smaller-Cap Value
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A
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B
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C
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R
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Columbia Seligman Communications and Information
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A
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B
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C
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R
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Columbia Seligman Global Technology
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A
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B
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C
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R
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Columbia Small/Mid Cap Value Fund
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A
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B
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C
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R
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W
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Columbia U.S. Government Mortgage
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|
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A
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B
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C
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W
|
|
12b-1 Plan and Agreement CFST II
Fee Schedule
The fee maximum for
services under this Plan and Agreement shall be the lesser of the amount of expenses eligible for reimbursement (including any unreimbursed expenses) or a rate equal on an annual basis to the following percentage of the average daily net assets of
the Fund attributable to the applicable class:
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Class
|
|
Fee
|
A
|
|
0.25%
|
B
|
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1.00%
|
C
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1.00%
|
R
|
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0.50%
|
W
|
|
0.25%
|
For Class A and Class W shares, the fee shall be paid to the Distributor in cash within five (5) business days after
the last day of each month.
For Class B and Class C shares, the maximum fee under this Plan and Agreement will be equal on an annual basis to 1.00% of
the average daily net assets of the Funds attributable to Class B shares and Class C share, respectively. Of that amount, up to 0.75% shall be reimbursed for distribution expenses. The fee shall be paid to the Distributor in cash within five
(5) business days after the last day of each month. Up to an additional 0.25% shall be reimbursed for shareholder servicing expenses. The fee shall be paid to the Distributor in cash within five (5) business days after the last day of each
month.
For Class R, the maximum fee under this Plan and Agreement, which shall be reimbursed for distribution expenses, will be equal on an annual basis
of 0.50% of the average daily net assets of the Funds attributable to Class R shares. Of that amount, for Class R, up to 0.25% may be reimbursed for shareholder servicing expenses. The fee shall be paid to the Distributor in cash within five
(5) business days after the last day of each month.
FOR COLUMBIA MONEY MARKET FUND:
Columbia Funds Series Trust II is a Massachusetts business trust:
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|
|
|
|
|
|
|
|
|
Funds
|
|
Classes
|
|
|
A
|
|
B
|
|
|
C
|
|
|
R
|
|
|
W
|
|
Columbia Funds Series Trust II
|
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|
|
|
|
|
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|
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|
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|
|
|
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|
|
Columbia Money Market Fund
|
|
A
|
|
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B
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|
|
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C
|
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|
R
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|
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|
W
|
|
Fee Schedule
The maximum fee for services under this Plan and Agreement shall be the lesser of the amount of expenses eligible for reimbursement (including any
unreimbursed expenses) or a rate equal on an annual basis to the following percentage of the average daily net assets of the Fund attributable to the applicable class.
12b-1 Plan and Agreement CFST II
|
|
|
|
|
Class
|
|
Fee
|
|
A
|
|
|
0.10
|
%
|
B
|
|
|
0.85
|
%
|
C
|
|
|
0.75
|
%
|
R
|
|
|
0.50
|
%
|
W
|
|
|
0.10
|
%
|
For Class A and Class W shares, the fee shall be paid to the Distributor in cash within five (5) business days after
the last day of each month.
For Class B shares, the maximum fee under this Plan and Agreement will be equal on an annual basis to 0.85% of the average
daily net assets of the Fund attributable to Class B shares. Of that amount, up to 0.75% shall be reimbursed for distribution expenses. The fee shall be paid to the Distributor in cash within five (5) business days after the last day of each
month. Up to an additional 0.10% shall be reimbursed for shareholder servicing expenses. The fee shall be paid to the Distributor in cash within five (5) business days after the last day of each month.
For Class C shares, the maximum fee under this Agreement will be equal on an annual basis to 0.75% of the average daily net assets of the Funds attributable
to Class C shares for distribution expenses. The fee shall be paid to the Distributor in cash within five (5) business days after the last day of each month.
For Class R, the maximum fee under this Plan and Agreement, which shall be reimbursed for distribution expenses, will be equal on an annual basis of 0.50% of
the average daily net assets of the Fund attributable to Class R shares. Of that amount, for Class R, up to 0.25% may be reimbursed for shareholder servicing expenses. The fee shall be paid to the Distributor in cash within five (5) business
days after the last day of each month.
12b-1 Plan and Agreement CFST II
IN WITNESS THEREOF, the parties hereto have executed the foregoing Schedule A as of April 15, 2015
COLUMBIA FUNDS SERIES TRUST II
|
|
|
By:
|
|
/s/ Christopher O. Petersen
|
Name:
|
|
Christopher O. Petersen
|
Title:
|
|
President
|
COLUMBIA MANAGEMENT INVESTMENT DISTRIBUTORS, INC.
|
|
|
By:
|
|
/s/ Jeffrey F. Peters
|
Name:
|
|
Jeffrey F. Peters
|
Title:
|
|
Managing Director and Head of
|
|
|
Global Institutional Distribution
|
RULE 18f-3 MULTI-CLASS PLAN
Pursuant to Rule 18f-3 under the Investment Company Act of 1940, as
amended (the 1940 Act), this Rule 18f-3 Multi-Class Plan (Plan) sets forth the methods for allocating fees and expenses among the classes of shares (Shares) in the investment portfolios (the Funds) of
the Columbia Funds Series Trust II (Registrant) listed in Schedule A. Among other things, this Plan identifies expenses that may be allocated to a particular class of Shares to the extent that they are actually incurred in a different
amount by the class or relate to a different kind or degree of services provided to the class. In addition, this Plan sets forth the maximum initial sales loads, contingent deferred sales charges, maximum distribution fees, maximum shareholder
servicing fees, maximum shareholder administration fees, conversion features, exchange privileges, other shareholder services and transfer agency fees, if any, applicable or allocated to each class of Shares of the Registrant.
The Registrant is an open-end investment company registered under the 1940 Act, the Shares of which are registered on Form N-1A under the
Securities Act of 1933. The Registrant offers multiple classes of Shares in their Funds pursuant to the provisions of Rule 18f-3 and this Plan.
Each Fund and the classes of Shares representing interests in the Fund it issues are set forth in
Schedule A
hereto. Schedule A shall
be updated by officers of the Registrant from time to time as necessary to reflect the current classes and Funds offered by the Registrant.
II.
|
Allocation of Expenses.
|
1.
Except as otherwise set forth herein or as may from
time to time be specifically approved by the Trustees, all expenses of each Fund shall be allocated proportionately among the classes of such Fund pro rata based on the relative net assets of each class. Pursuant to Rule 18f-3, the Registrant shall
allocate to each class of Shares in a Fund any fees and expenses incurred by the Registrant in connection with the distribution and/or the provision of shareholder services to holders of such class of Shares under any distribution plan, shareholder
servicing plan and/or plan administration agreement (a Distribution/Shareholder Servicing Plan).
2.
In
addition, pursuant to Rule 18f-3, the Registrant may allocate to a particular class of Shares the following fees and expenses, if any, but only to the extent they relate to (as defined below) the particular class of Shares:
|
(i)
|
transfer agency fees and expenses identified by the transfer agent or the officers as being fees and expenses that relate to such class of Shares (see paragraph 7 below);
|
|
(ii)
|
printing and postage expenses of preparing and distributing materials such as shareholder reports, prospectuses, reports and proxies to current shareholders of such class of Shares or to regulatory agencies that relate
to such class of Shares;
|
|
(iii)
|
blue sky registration or qualification fees that relate to such class of Shares;
|
|
(iv)
|
Securities and Exchange Commission registration fees that relate to such class of Shares;
|
|
(v)
|
expenses of administrative personnel and services (including, but not limited to, those of a portfolio accountant, custodian or dividend paying agent charged with calculating net asset values or determining or paying
dividends) as required to support the shareholders of such class of Shares;
|
|
(vi)
|
litigation or other legal expenses that relate to such class of Shares;
|
|
(vii)
|
fees of the Trustees of the Registrant incurred as a result of issues that relate to such class of Shares;
|
|
(viii)
|
independent accountants fees that relate to such class of Shares; and
|
|
(ix)
|
any other fees and expenses that relate to such class of Shares.
|
Notwithstanding the
foregoing, the Registrant may not allocate advisory or custodial fees or other expenses related to the management of a Funds assets to a particular class, except that the Registrant may cause a class to pay a different advisory fee to the
extent that any difference in amount paid is the result of the application of the same performance fee provisions in the advisory contract of the Fund to the different investment performance of each class.
3.
For all purposes under this Plan, fees and expenses that relate to a class of Shares are those fees and expenses that
are actually incurred in a different amount by the class or that relate to a different kind or degree of services provided to the class. The officers of the Registrant shall have the authority to determine, to the extent permitted by applicable law
or regulation and/or U.S. Securities and Exchange Commission guidance, whether any or all of the fees and expenses described in paragraph 2 above should be allocated to a particular class of Shares. The Treasurer, any Deputy or Assistant Treasurer,
or another appropriate officer of the Registrant shall periodically or as frequently as requested by the Board report to the Board of Trustees regarding any such allocations.
4.
For all purposes under this Plan, Daily Dividend Fund means any Fund that has a policy of declaring distributions of net
investment income daily, including any money market fund that determines net asset value using the amortized cost method permitted by Rule 2a-7 under the 1940 Act.
5.
Income and any expenses of Daily Dividend Funds that are not allocated to a particular class of any such Fund pursuant to this Plan
shall be allocated to each class of the Fund on the basis of the net assets of that class in relation to the net assets of the Fund, excluding the value of subscriptions receivable (the Settled Shares Method).
Realized and unrealized capital gains and losses of Daily Dividend Funds that are not allocated
to a particular class of any such Fund pursuant to this Plan shall be allocated to each class of the Fund on the basis of the net assets of that class in relation to the net assets of the Fund (the Relative Net Assets Method).
6.
Income, realized and unrealized capital gains and losses, and any expenses of Funds that are not Daily Dividend Funds that are not
allocated to a particular class of any such Fund pursuant to this Plan shall be allocated to each class of the Fund on the Relative Net Assets Method.
7.
Transfer agency costs vary among classes, and are calculated separately for each of (a) Class Y Shares, (b) Class K and R5
Shares, and (c) all other classes of Shares (excluding Class I Shares).
|
(i)
|
Class I Shares pay no transfer agency costs.
|
|
(ii)
|
Class A, B, C, K, R, R4, R5, T, W, Y and Z Shares pay an annual fee set forth in the transfer agency agreement in effect from time to time.
|
|
(iii)
|
Class A, B, C, K, R, R4, R5, T, W, Y and Z Shares pay an allocable share of reimbursable out-of-pocket expenses, with the allocation among the classes based on the number of open accounts.
|
|
(iv)
|
Class A, B, C, K, R, R4, R5, T, W and Z Shares pay sub-transfer agency fee as set forth in the transfer agency agreement in effect from time to time.
|
8.
In certain cases, a Fund service provider may waive or reimburse all or a portion of the expenses of a specific class of Shares of
the Fund. The applicable service provider shall report to the Board of Trustees regarding any such waivers or reimbursements, including why they are consistent with the fair and equitable treatment of shareholders of all classes.
The following summarizes the maximum initial sales loads,
contingent deferred sales charges, maximum distribution fees, maximum shareholder servicing fees, maximum plan administration and/or shareholder administration fees, if any, conversion features, exchange privileges and other shareholder service
fees, if any, applicable or allocated to each class of Shares of the Registrant. Additional details regarding such fees and services are set forth in the relevant Funds (or Funds) current prospectus(es) and statement of additional
information.
|
A.
|
Maximum Initial Sales Load:
|
|
(i)
|
Equity Funds (including certain asset allocation and balanced Funds as set forth in a Funds then-current prospectus(es)): maximum of 5.75%.
|
|
(ii)
|
Fixed income Funds (other than fixed income Funds listed below): maximum of 4.75%.
|
|
(iii)
|
Columbia Absolute Return Currency and Income Fund, Columbia AMT-Free Tax-Exempt Bond Fund, Columbia Floating Rate Fund, Columbia Inflation Protected Securities Fund, Columbia Limited Duration Credit Fund, Columbia
Minnesota Tax-Exempt Fund, Columbia Mortgage Opportunities Fund and Columbia U.S. Government Mortgage Fund: 3.00%.
|
|
B.
|
Maximum Contingent Deferred Sales Charge
:
|
|
(i)
|
1.00% for equity and fixed income Funds (other than fixed income Funds listed below).
|
|
(ii)
|
0.75% for Columbia AMT-Free Tax-Exempt Bond Fund and Columbia Minnesota Tax-Exempt Fund (For Class A shares of these Funds purchased prior to February 19, 2015, the maximum contingent deferred sales charge is
1.00%.)
|
|
C.
|
Maximum Distribution/Shareholder Servicing Fees
: Pursuant to a Distribution/Shareholder Servicing Plan, Class A Shares of each Fund may pay a distribution fee of up to 0.10% and/or a service fee of up to
0.25%, as set forth in the applicable Distribution/Shareholder Servicing Plan; providing, however, that certain Funds pay a distribution and/or servicing fee of up to 0.25%.
|
|
D.
|
Conversion Features/Exchange Privileges
: Class A Shares of a Fund shall have such conversion features and exchange privileges, if any, as are determined by or ratified by the Board of Trustees of the
Registrant and described in the then-current prospectus for such Shares of such Fund. Class A Shares of a Fund may generally be exchanged for Class A Shares of other Funds or funds in the same fund family (Affiliated Funds),
subject to exceptions described in the then-current prospectuses of the Fund and Affiliated Fund.
|
|
E.
|
Other Shareholder Services
: Class A Shares of a Fund shall have such arrangements for shareholder services as are determined by or ratified by the Board of Trustees of the Registrant and described in the
then-current prospectus for such Shares of such Fund.
|
|
A.
|
Initial Sales Load
: None
|
|
B.
|
Maximum Contingent Deferred Sales Charge
: 5.00%
|
|
C.
|
Maximum Distribution/Shareholder Servicing Fees
: Class B Shares may pay distribution and service fees pursuant to a Distribution/Shareholder Servicing Plan as described in the prospectuses as from time to time in
effect. Such distribution and service fees may be in amounts up to, but may not exceed, respectively, 0.75% and 0.25% per annum of the average daily net assets attributable to such class.
|
|
D.
|
Conversion Features/Exchange Privileges
: Class B Shares of a Fund shall have such conversion features and exchange privileges, if any, as are determined by or ratified by the Board of Trustees of the Registrant
and described in the then-current prospectus for such Shares of such Fund. Class B Shares of a Fund convert into Class A Shares as described in the then-current prospectus for such Shares of such Fund. Class B Shares of a Fund may generally be
exchanged for Class B Shares of Affiliated Funds, subject to exceptions described in the then-current prospectuses of the Fund and Affiliated Fund.
|
|
E.
|
Other Shareholder Services
: Class B Shares of a Fund shall have such arrangements for shareholder services as are determined by or ratified by the Board of Trustees of the Registrant and described in the
then-current prospectus for such Shares of such Fund.
|
|
A.
|
Initial Sales Load
: None
|
|
B.
|
Maximum Contingent Deferred Sales Charge
: 1.00%
|
|
C.
|
Maximum Distribution/Shareholder Servicing Fees
: Pursuant to a Distribution/Shareholder Servicing Plan, Class C Shares of each Fund may pay distribution fees of up to 0.75% of the average daily net assets of such
Shares and shareholder servicing fees of up to 0.25% of the average daily net assets of such Shares.
|
|
D.
|
Conversion Features/Exchange Privileges
: Class C Shares of a Fund shall have such conversion features and exchange privileges, if any, as are determined by or ratified by the Board of Trustees of the Registrant
and described in the then-current prospectus for such Shares of such Fund. Class C Shares of a Fund may generally be exchanged for Class C Shares of Affiliated Funds, subject to exceptions described in the then-current prospectuses of the Fund and
Affiliated Fund.
|
|
E.
|
Other Shareholder Services
: Class C Shares of a Fund shall have such arrangements for shareholder services as are determined by or ratified by the Board of Trustees of the Registrant and described in the
then-current prospectus for such Shares of such Fund.
|
|
A.
|
Initial Sales Load
: None
|
|
B.
|
Contingent Deferred Sales Charge
: None
|
|
C.
|
Distribution/Shareholder Servicing Fees
: None
|
|
D.
|
Conversion Features/Exchange Privileges
: Class I Shares of a Fund shall have such conversion features and exchange privileges, if any, as are determined by or ratified by the Board of Trustees of the Registrant
and described in the then-current prospectus for such Shares of such Fund. Class I Shares of a Fund may generally be exchanged for Class I Shares of Affiliated Funds, subject to exceptions described in the then-current prospectuses of the Fund and
Affiliated Fund.
|
|
E.
|
Other Shareholder Services
: Class I Shares of a Fund shall have such arrangements for shareholder services as are determined by or ratified by the Board of Trustees of the Registrant and described in the
then-current prospectus for such Shares of such Fund.
|
|
A.
|
Initial Sales Load
: None
|
|
B.
|
Contingent Deferred Sales Charge
: None
|
|
C.
|
Distribution/Shareholder Servicing Fees
: None
|
|
D.
|
Conversion Features/Exchange Privileges
: Class K Shares of a Fund shall have such conversion features and exchange privileges, if any, as are determined by or ratified by the Board of Trustees and described in
the then-current prospectus for such Shares of such Fund. Class K Shares of a Fund may generally be exchanged for Class K Shares of Affiliated Funds, subject to exceptions described in the then-current prospectuses of the Fund and Affiliated Fund.
|
|
E.
|
Other Shareholder Services
: Class K Shares of a Fund shall have such arrangements for shareholder services as are determined by or ratified by the Board of Trustees and described in the then-current prospectus
for such Shares of such Fund.
|
|
F.
|
Plan Administration Services Fee
: Class K Shares pay an annual plan administration services fee for the provision of various administrative, recordkeeping, communication and educational services. The fee for
Class K Shares is equal on an annual basis to 0.25% of average daily net assets attributable to such Shares.
|
*
|
Class K shares were known as Class R4 shares prior to October 25, 2012.
|
|
A.
|
Initial Sales Load
: None
|
|
B.
|
Contingent Deferred Sales Charge
: None
|
|
C.
|
Maximum Distribution Fees
: Pursuant to a Distribution/Shareholder Servicing Plan, Class R Shares of each Fund may pay distribution fees of up to 0.50% of the average daily net assets of such Shares.
|
|
D.
|
Conversion Features/Exchange Privileges
: Class R Shares of a Fund shall have such conversion features and exchange privileges, if any, as are determined by or ratified by the Trustees of the Registrant and
described in the then-current prospectus for such Shares of such Fund. Class R Shares of a Fund may generally be exchanged for Class R Shares of Affiliated Funds, subject to exceptions described in the then-current prospectuses of the Fund and
Affiliated Fund.
|
|
E.
|
Other Shareholder Services
: Class R Shares of a Fund shall have such arrangements for shareholder services as are determined by or ratified by the Board of Trustees of the Registrant and described in the
then-current prospectus for such Shares of such Fund.
|
|
A.
|
Initial Sales Load
: None
|
|
B.
|
Maximum Contingent Deferred Sales Charge
: None
|
|
C.
|
Distribution/Shareholder Servicing Fees
: None
|
|
D.
|
Conversion Features/Exchange Privileges
: Class R4 Shares of a Fund shall have such conversion features and exchange privileges, if any, as are determined by or ratified by the Board of Trustees of the Registrant
and described in the then-current prospectus for such Shares of such Fund. Class R4 Shares of a Fund may generally be exchanged for Class R4 Shares of Affiliated Funds, subject to exceptions described in the then-current prospectuses of the Fund and
Affiliated Fund.
|
|
E.
|
Other Shareholder Services
: Class R4 Shares of a Fund shall have such arrangements for shareholder services as are determined by or ratified by the Board of Trustees of the Registrant and described in the
then-current prospectus for such Shares of such Fund.
|
|
A.
|
Initial Sales Load
: None
|
|
B.
|
Contingent Deferred Sales Charge
: None
|
|
C.
|
Distribution/Shareholder Servicing Fees
: None
|
|
D.
|
Conversion Features/Exchange Privileges
: Class R5 Shares of a Fund shall have such conversion features and exchange privileges, if any, as are determined by or ratified by the Board of Trustees of the Registrant
and described in the then-current prospectus for such Shares of such Fund. Class R5 Shares of a Fund may generally be exchanged for Class R5 Shares of Affiliated Funds, subject to exceptions described in the then-current prospectuses of the Fund and
Affiliated Fund.
|
|
E.
|
Other Shareholder Services
: Class R5 Shares of a Fund shall have such arrangements for shareholder services as are determined by or ratified by the Board of Trustees of the Registrant and described in the
then-current prospectus for such Shares of such Fund.
|
|
A.
|
Maximum Initial Sales Load
:
|
(a) For equity Funds: 5.75%
(b) For fixed-income Funds: 4.75%
|
B.
|
Maximum Contingent Deferred Sales Charge
: 1.00%
|
|
C.
|
Maximum Distribution/Shareholder Servicing Fees
: Pursuant to a Distribution/Shareholder Servicing Plan, Class T Shares of each Fund may pay servicing fees of up to 0.50% for equity Funds and 0.40% for fixed
income Funds of the average daily net assets of such Shares.
|
|
D.
|
Conversion Features/Exchange Privileges
: Class T Shares of a Fund shall have such conversion features and exchange privileges, if any, as are determined by or ratified by the Board of Trustees of the Registrant
and described in the then-current prospectus for such Shares of such Fund. Class T Shares of a Fund may generally be exchanged for Class T Shares of Affiliated Funds, subject to exceptions described in the then-current prospectuses of the Fund and
Affiliated Fund.
|
|
E.
|
Other Shareholder Services
: Class T Shares of a Fund shall have such arrangements for shareholder services as are determined by or ratified by the Board of Trustees of the Registrant and described in the
then-current prospectus for such Shares of such Fund.
|
|
A.
|
Initial Sales Load
: None
|
|
B.
|
Contingent Deferred Sales Charge
: None
|
|
C.
|
Maximum Distribution/Shareholder Servicing Fees
: Pursuant to a Distribution/Shareholder Servicing Plan, Class W Shares may pay distribution and/or shareholder servicing fees of up to 0.25% of the average daily
net assets of such Shares.
|
|
D.
|
Conversion Features/Exchange Privileges
: Class W Shares of a Fund shall have such conversion features and exchange privileges, if any, as are determined by or ratified by the Board of Trustees of the Registrant
and described in the then-current prospectus for such Shares of such Fund. Class W Shares of a Fund may generally be exchanged for Class W Shares of Affiliated Funds, subject to exceptions described in the then-current prospectuses of the Fund and
Affiliated Fund.
|
|
E.
|
Other Shareholder Services
: Class W Shares of a Fund shall have such arrangements for shareholder services as are determined by or ratified by the Board of Trustees of the Registrant and described in the
then-current prospectus for such Shares of such Fund.
|
|
A.
|
Initial Sales Load
: None
|
|
B.
|
Contingent Deferred Sales Charge
: None
|
|
C.
|
Distribution/Shareholder Servicing Fees
: None
|
|
D.
|
Conversion Features/Exchange Privileges
: Class Y Shares of a Fund shall have such conversion features and exchange privileges, if any, as are determined by or ratified by the Board of Trustees of the Registrant
and described in the then-current prospectus for such Shares of such Fund. Class Y Shares of a Fund may generally be exchanged for Class Y Shares of Affiliated Funds, subject to exceptions described in the then-current prospectuses of the Fund and
Affiliated Fund.
|
|
E.
|
Other Shareholder Services
: Class Y Shares of a Fund shall have such arrangements for shareholder services as are determined by or ratified by the Board of Trustees of the Registrant and described in the
then-current prospectus for such Shares of such Fund.
|
|
A.
|
Initial Sales Load
: None
|
|
B.
|
Contingent Deferred Sales Charge
: None
|
|
C.
|
Distribution/Shareholder Servicing Fees
: None
|
|
D.
|
Conversion Features/Exchange Privileges
: Class Z Shares of a Fund shall have such conversion features and exchange privileges, if any, as are determined by or ratified by the Board of Trustees of the Registrant
and described in the then-current prospectus for such Shares of such Fund. If a shareholder becomes eligible, in accordance with the eligibility requirements described in the prospectuses as from time to time in effect, to purchase Class Z Shares of
a Fund, Shares of eligible classes may be exchanged for Class Z Shares of the same Fund, subject to the terms set forth in the prospectuses. An Affiliated Fund that holds Class Z Shares of a Fund may exchange such Shares for Class I Shares of the
same Fund, subject to exceptions described in the then-current prospectuses of the Affiliated Fund and Fund. Class Z Shares of a Fund may generally be exchanged for Class Z Shares of Affiliated Funds, subject to exceptions described in the
then-current prospectuses of the Fund and Affiliated Fund. Class Z shares of a Fund may generally be exchanged for such other shares of the same Fund as set forth in the Funds then-current prospectus, provided that the holder of such Class Z
shares is determined to be eligible to invest in such share classes in accordance with the Funds then current prospectus.
|
|
E.
|
Other Shareholder Services
: Class Z Shares of a Fund shall have such arrangements for shareholder services as are determined by or ratified by the Board of Trustees of the Registrant and described in the
then-current prospectus for such Shares of such Fund.
|
The Board of Trustees of the Registrant shall review this Plan, including
the application of the Relative Net Assets Method and the Settled Shares Method to the Funds, as frequently as it deems necessary. Prior to any material amendment(s) to this Plan, the Board of Trustees of the Registrant, including a majority of the
Trustees who are not interested persons of the Registrant, shall find that the Plan, as proposed to be amended (including any proposed amendments to the method of allocating class and/or Fund expenses), is in the best interests of each class of
Shares of the Fund individually and the Fund as a whole. In considering whether to approve any proposed amendment(s) to the Plan, the Board of Trustees of the Registrant shall request and evaluate such information as they consider reasonably
necessary to evaluate the proposed amendment(s) to the Plan.
|
|
|
Adopted:
|
|
September 7, 2010
|
Amended and Restated:
|
|
April 17, 2013
|
Amended and Restated
|
|
April 21, 2014
|
Amended and Restated
|
|
November 1, 2014
|
Amended and Restated
|
|
February 19, 2015
|
Amended and Restated
|
|
May 1, 2015
|
Schedule A
As of May 1, 2015
Funds and Authorized Classes of Shares
The Funds are authorized to issue those classes of shares representing interests in the Funds as indicated in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds
|
|
Classes
|
|
|
A
|
|
|
B
|
|
|
C
|
|
|
I
|
|
|
K
|
|
|
R
|
|
|
R4
|
|
|
R5
|
|
|
T
|
|
W
|
|
|
Y
|
|
|
Z
|
|
Columbia Funds Series Trust II
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Columbia Absolute Return Currency and Income Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
|
|
|
|
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
W
|
|
|
|
Y
|
|
|
|
Z
|
|
Columbia AMT-Free Tax-Exempt Bond Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Z
|
|
Columbia Asia Pacific ex-Japan Fund
|
|
|
A
|
|
|
|
|
|
|
|
C
|
|
|
|
I
|
|
|
|
|
|
|
|
R
|
|
|
|
|
|
|
|
R5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Z
|
|
Columbia Capital Allocation Aggressive Portfolio
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
|
|
|
|
K
|
|
|
|
R
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
|
|
|
|
Y
|
|
|
|
Z
|
|
Columbia Capital Allocation Conservative Portfolio
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
|
|
|
|
K
|
|
|
|
R
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
|
|
|
|
Y
|
|
|
|
Z
|
|
Columbia Capital Allocation Moderate Portfolio
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
|
|
|
|
K
|
|
|
|
R
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
|
|
|
|
Y
|
|
|
|
Z
|
|
Columbia Commodity Strategy Fund
|
|
|
A
|
|
|
|
|
|
|
|
C
|
|
|
|
I
|
|
|
|
|
|
|
|
R
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
W
|
|
|
|
Y
|
|
|
|
Z
|
|
Columbia Diversified Equity Income Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
R
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
W
|
|
|
|
Y
|
|
|
|
Z
|
|
Columbia Dividend Opportunity Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
R
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
W
|
|
|
|
Y
|
|
|
|
Z
|
|
Columbia Emerging Markets Bond Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
R
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
W
|
|
|
|
Y
|
|
|
|
Z
|
|
Columbia European Equity Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
W
|
|
|
|
|
|
|
|
Z
|
|
Columbia Flexible Capital Income Fund
|
|
|
A
|
|
|
|
|
|
|
|
C
|
|
|
|
I
|
|
|
|
|
|
|
|
R
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
W
|
|
|
|
|
|
|
|
Z
|
|
Columbia Floating Rate Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
R
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
W
|
|
|
|
Y
|
*
|
|
|
Z
|
|
Columbia Global Bond Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
R
|
|
|
|
|
|
|
|
|
|
|
|
|
|
W
|
|
|
|
Y
|
|
|
|
Z
|
|
Columbia Global Infrastructure Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
R
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Z
|
|
Columbia Global Equity Value Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
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|
|
|
K
|
|
|
|
R
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
W
|
|
|
|
Y
|
|
|
|
Z
|
|
Columbia Global Opportunities Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
|
|
|
|
K
|
|
|
|
R
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
W
|
|
|
|
|
|
|
|
Z
|
|
Columbia High Yield Bond Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
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|
|
K
|
|
|
|
R
|
|
|
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R4
|
|
|
|
R5
|
|
|
|
|
|
W
|
|
|
|
Y
|
|
|
|
Z
|
|
Columbia Income Builder Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
|
|
|
|
K
|
|
|
|
R
|
|
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|
R4
|
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|
|
R5
|
|
|
|
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W
|
|
|
|
|
|
|
|
Z
|
|
Columbia Income Opportunities Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
R
|
|
|
|
R4
|
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|
R5
|
|
|
|
|
|
W
|
|
|
|
Y
|
|
|
|
Z
|
|
Columbia Inflation Protected Securities Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
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|
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|
R
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|
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|
|
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|
R5
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W
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|
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|
Z
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|
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Funds
|
|
Classes
|
|
|
A
|
|
|
B
|
|
|
C
|
|
|
I
|
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|
K
|
|
|
R
|
|
|
R4
|
|
|
R5
|
|
|
T
|
|
|
W
|
|
|
Y
|
|
|
Z
|
|
Columbia Large Core Quantitative Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
R
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
|
|
W
|
|
|
|
Y
|
*
|
|
|
Z
|
|
Columbia Large Growth Quantitative Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
R
|
|
|
|
R4
|
*
|
|
|
R5
|
|
|
|
|
|
|
|
W
|
|
|
|
Y
|
*
|
|
|
Z
|
|
Columbia Large Value Quantitative Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
R
|
|
|
|
R4
|
*
|
|
|
R5
|
*
|
|
|
T
|
|
|
|
W
|
|
|
|
Y
|
*
|
|
|
Z
|
|
Columbia Limited Duration Credit Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
|
|
W
|
|
|
|
Y
|
|
|
|
Z
|
|
Columbia Marsico Flexible Capital Fund
|
|
|
A
|
|
|
|
|
|
|
|
C
|
|
|
|
I
|
|
|
|
|
|
|
|
R
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Z
|
|
Columbia Minnesota Tax-Exempt Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Z
|
|
Columbia Money Market Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
|
|
|
|
R
|
|
|
|
|
|
|
|
R5
|
|
|
|
|
|
|
|
W
|
|
|
|
|
|
|
|
Z
|
|
Columbia Mortgage Opportunities Fund
|
|
|
A
|
|
|
|
|
|
|
|
C
|
|
|
|
I
|
|
|
|
|
|
|
|
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
|
|
W
|
|
|
|
|
|
|
|
Z
|
|
Columbia Multi-Advisor Small Cap Value Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
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|
K
|
|
|
|
R
|
|
|
|
R4
|
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|
R5
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
Z
|
|
Columbia Select Global Equity Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
R
|
|
|
|
|
|
|
|
R5
|
|
|
|
|
|
|
|
W
|
|
|
|
|
|
|
|
Z
|
|
Columbia Select Large-Cap Value Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
R
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
|
|
W
|
|
|
|
Y
|
|
|
|
Z
|
|
Columbia Select Smaller-Cap Value Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
R
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
|
|
|
|
|
|
Y
|
|
|
|
Z
|
|
Columbia Seligman Communications and Information Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
R
|
|
|
|
R4
|
|
|
|
R5
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
Z
|
|
Columbia Seligman Global Technology Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
R
|
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R4
|
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R5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Z
|
|
Columbia Small/Mid Cap Value Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
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K
|
|
|
|
R
|
|
|
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R4
|
|
|
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R5
|
|
|
|
|
|
|
|
W
|
|
|
|
Y
|
|
|
|
Z
|
|
Columbia U.S. Government Mortgage Fund
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
|
|
I
|
|
|
|
K
|
|
|
|
|
|
|
|
R4
|
|
|
|
R5
|
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W
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|
|
|
Y
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|
|
|
Z
|
|
*
|
Effective June 1, 2015.
|
WELLS CAPITAL MANAGEMENT, INC.
JOINT CODE OF ETHICS
Policy on Personal Securities Transactions
and Trading on Insider Information
December 8, 2014
Preamble
The Joint Code of Ethics and Policy on Personal Securities Transactions and Trading on Insider Information (Joint Code) set forth herein apply to Wells Capital
Management, Inc. and related entities as follows:
1. Wells Capital Management, Inc., an SEC registered investment adviser based in San Francisco,
California.
2. Wells Fargo Bank, N.A., an SEC registered investment adviser based in Singapore conducting advisory business as Wells Capital Management
Singapore.
3. Metropolitan West Capital Management, LLC, an SEC registered investment adviser based in Newport Beach, California.
Where the Joint Code references WellsCap or Wells Capital Management, Inc., it applies to all the entities listed. Unless otherwise noted within the Joint
Code, all sections apply to entities noted above.
TABLE OF CONTENTS
Contents
|
|
|
|
|
|
|
1.
|
|
O
VERVIEW
|
|
|
1
|
|
|
|
1.1 Code of Ethics
|
|
|
1
|
|
|
|
1.2 Regulatory Requirements
|
|
|
2
|
|
|
|
1.3 Our Duties and Responsibilities to You
|
|
|
2
|
|
|
|
1.4 You are considered to be an Access Person
|
|
|
3
|
|
|
|
1.5 Your Duty of Loyalty
|
|
|
3
|
|
|
|
1.6 Your Standard of Business Conduct
|
|
|
3
|
|
|
|
1.7 Exceptions to the Code
|
|
|
4
|
|
|
|
|
2.
|
|
P
ERSONAL
S
ECURITIES
T
RANSACTIONS
|
|
|
5
|
|
|
|
2.1 Avoid Conflicts of Interest
|
|
|
5
|
|
|
|
2.2 Reporting Your Personal Securities Transactions
|
|
|
5
|
|
|
|
2.3 Reports of the CCO
|
|
|
7
|
|
|
|
2.4 Exceptions to Reporting
|
|
|
7
|
|
|
|
2.5 Summary of What You Need to Report
|
|
|
8
|
|
|
|
2.6 Your Reports are Kept Confidential
|
|
|
9
|
|
|
|
|
3.
|
|
RESTRICTIONS ON TRADING AND PRE-CLEARANCE REQUIREMENTS
|
|
|
10
|
|
|
|
3.1 Trading Restrictions
|
|
|
10
|
|
|
|
3.2
Pre-Clearance
Requirements
|
|
|
12
|
|
|
|
3.3 Prohibited Transactions
|
|
|
16
|
|
|
|
3.4 Ban on Short-Term Trading Profits
|
|
|
17
|
|
|
|
3.5 CCOs Approval of Your Transactions
|
|
|
18
|
|
|
|
|
4 .
|
|
T
RADING
ON
I
NSIDER
I
NFORMATION
|
|
|
19
|
|
|
|
4.1 What is Insider Trading?
|
|
|
19
|
|
|
|
4.2 Using Non-Public Information about an Account or our Advisory Activities
|
|
|
20
|
|
|
|
4.3 Wells Fargo & Company Securities
|
|
|
20
|
|
|
|
|
5.
|
|
G
IFTS
, D
IRECTORSHIPS
AND
O
THER
O
UTSIDE
E
MPLOYMENT
|
|
|
21
|
|
|
|
5.1 Gifts
|
|
|
21
|
|
|
|
5.2 Directorships and Other Outside Employment
|
|
|
21
|
|
|
|
5.3 Political Contributions
|
|
|
21
|
|
|
|
|
6.
|
|
C
ODE
V
IOLATIONS
|
|
|
22
|
|
|
|
6.1 Investigating Code Violations
|
|
|
22
|
|
|
|
6.3 Dismissal and/or Referral to Authorities
|
|
|
23
|
|
|
|
6.4 Your Obligation to Report Violations
|
|
|
24
|
|
|
|
A
PPENDIX
A D
EFINITIONS
|
|
|
25
|
|
|
|
A
PPENDIX
B R
ELEVANT
C
OMPLIANCE
D
EPARTMENT
S
TAFF
L
IST
**
|
|
|
29
|
|
|
|
A
PPENDIX
C P
OLICY
ON
G
IFTS
AND
A
CTIVITIES
WITH
C
USTOMERS
OR
V
ENDORS
|
|
|
30
|
|
|
|
A
PPENDIX
D R
EGISTERED
P
RODUCTS
|
|
|
32
|
|
|
|
A
PPENDIX
E C
OMPLIANCE
CODE
CHANGES
|
|
|
33
|
|
Wells Capital Management, Inc (WellsCap) is referred to as we or us throughout this Code.
We have adopted this Code of Ethics
(Code) pursuant to
Rule 204A-1
under the Investment Advisers Act of 1940, as amended (the Advisers Act). This Code outlines the policies and procedures you must follow and the
guidelines we use to govern your Personal Securities Transactions and prevent insider trading. We monitor any activity that may be perceived as conflicting with the fiduciary responsibility we have to our clients.
We are committed to maintaining the highest ethical standards in connection with managing Accounts. We have no tolerance for
dishonesty, self-dealing or trading on material, non-public information.
|
|
|
See the
Definitions located in
Appendix A
for definitions of capitalized terms.
|
|
As an employee, you must:
Be ethical,
Act professionally,
Exercise
independent judgment,
Comply with all applicable Federal Securities Laws, and
Promptly report
violations or suspected violations of the Code to the Compliance Department.
|
|
|
As a condition of your employment, you must acknowledge receipt of this Code and certify
annually that you have read it and complied with it. You can be disciplined or fired for violating this Code.
In addition
to this Code, you need to comply with the policies outlined in the
Handbook for Wells Fargo Team Members
and the
Wells Fargo Team Member Code of Ethics and Business Conduct
.
No written code of ethics can explicitly cover every situation that possibly may arise. Even in situations not expressly
described, the Code and your fiduciary obligations generally require you to put the interests of our clients ahead of your own.
The Code of Ethics Compliance Officer and/or the Chief Compliance Officer may have the obligation and duty to review
and take appropriate action concerning instances of conduct that, while not necessarily violating the letter of the Code, give the appearance of impropriety
. If you have any questions regarding the appropriateness of any action under this Code
or under your fiduciary duties generally, you should contact the Code of Ethics Compliance Officer or your Chief Compliance Officer to discuss the matter before taking the action in question. Similarly, you should consult with the Compliance
Department personnel if you have any questions concerning the meaning or interpretation of any provision of the Code. Should the Compliance Department need to initiate an investigation or fact-finding process, all team members would be required to
cooperate fully and honestly and to respect the confidentiality of the process.
|
|
|
|
|
April 2012
|
|
1
|
|
Code of Ethics
|
Wells Capital Management, Inc.
1.2
|
Regulatory Requirements
|
The Securities and Exchange Commission
(SEC) considers it a violation of the general antifraud provisions of the Federal Securities Laws whenever a Covered Company engages in fraudulent, deceptive or manipulative conduct.
The SEC can censure or fine us, limit our activities, functions or operations, suspend our activities for up to twelve months,
or revoke our registration if we fail to reasonably supervise you and you violate the Federal Securities Laws. However, we wont be considered to have failed to reasonably supervise you, if we have:
|
|
|
|
|
established procedures and a system for applying the procedures, which would reasonably
be expected to prevent and detect violations; and
|
|
|
|
|
reasonably communicated the duties and obligations of the procedures and system to you,
while reasonably enforcing compliance with our procedures and system.
|
1.3
|
Our Duties and Responsibilities to You
|
To help you comply with
this Code, the Chief Compliance Officer (CCO) or his or her designee will:
|
|
|
|
|
|
|
Notify you in writing that you are required to report under the Code and inform you of
your specific reporting requirements.
|
|
|
|
|
Give you a copy of the Code and require you to sign a form indicating that you read and
understand the Code.
|
See
Appendix B
for Relevant Compliance Department Staff list.
|
|
Give you a new copy of the Code if we make any material amendments to
it and then require you to sign another form indicating that you received and read the revised Code.
|
|
Require you, if you have been so designated, to have duplicate copies
of trade confirmations and account statements for each disclosed account from your
broker-dealer,
bank, or other party designated on the initial, quarterly, or annual certification sent to us as soon as
readily available.
|
|
|
|
|
Typically compare all of your reported Personal Securities Transactions with the
portfolio transactions report of the Accounts each quarter. Before we determine if you may have violated the Code on the basis of this comparison, we will give you an opportunity to provide an explanation.
|
|
|
|
|
Review the Code at least once a year to assess the adequacy of the Code and how
effectively it works.
|
|
|
|
|
|
August 2012
|
|
2
|
|
Code of Ethics
|
Wells Capital Management, Inc.
1.4
|
You are considered to be an Access Person
|
Generally, the Code
applies to all Access Persons of a Covered Company. However, Wells Capital Management Compliance in consultation with business line management will ultimately determine which team members are covered by the Code.
You have a duty of loyalty to our clients.
That means you always need to act in our clients best interests.
You must never do anything that allows (or even
appears to allow) you to inappropriately benefit from your relationships with the Accounts.
You cannot engage in
activities such as
self-dealing
and must disclose all conflicts of interest between the interests of our clients and your personal interests to the Compliance Department.
1.6
|
Your Standard of Business Conduct
|
You must always observe the
highest standards of business conduct and follow all applicable laws and regulations.
You may never:
|
|
|
use any device, scheme or artifice to defraud a client;
|
|
|
|
make any untrue statement of a material fact to a client or mislead a client by omitting to state a material fact;
|
|
|
|
engage in any act, practice or course of business that would defraud or deceive a client;
|
|
|
|
engage in any manipulative practice with respect to a client,
|
|
|
|
engage in any inappropriate trading practices, including price manipulation; or
|
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engage in any transaction that may give the appearance of impropriety.
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August 2012
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3
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Code of Ethics
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Wells Capital Management, Inc.
1.7
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Exceptions to the Code
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The CCO is responsible for enforcing the
Code. The CCO (or his or her designee for any exceptions sought by the CCO) may grant certain exceptions to the Code in compliance with applicable law, provided any requests and any approvals granted must be submitted and obtained, respectively, in
advance and in writing. The CCO or designee may refuse to authorize any request for exception under the Code and is not required to furnish any explanation for the refusal.
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August 2012
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4
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Code of Ethics
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Wells Capital Management, Inc.
2.
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P
ERSONAL
S
ECURITIES
T
RANSACTIONS
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2.1
|
Avoid Conflicts of Interest
|
When engaging in Personal Securities
Transactions, there might be conflicts between the interests of a client and your personal interests. Any conflicts that arise in such Personal Securities Transactions must be resolved in a manner that does not inappropriately benefit you or
adversely affect our clients. You shall always place the financial and business interests of the Covered Companies and our clients before your own personal financial and business interests.
Examples of inappropriate resolutions of conflicts are:
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Taking an investment opportunity away from an Account to benefit a portfolio of which you have Beneficial Ownership;
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Using your position to take advantage of available investments;
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Shadowing an Account by duplicating the trades of an Account;
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Front running an Account by trading in securities (or equivalent securities) ahead of the Account; and
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Taking advantage of information or using Account portfolio assets to affect the market in a way that personally benefits you or a portfolio of which you have Beneficial Ownership.
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2.2
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Reporting Your Personal Securities Transactions
|
If you have been
designated as an Access Person:
You must report all Personal Securities Accounts, along with the reportable holdings and
transactions in those accounts. There are three types of reports: (1) an
initial holdings
report that we receive when you first become an Access Person, (2) a
quarterly transactional
report, and (3) an
annual holdings
report.
You must give each
broker-dealer,
bank, or fund company where you have
a Personal Securities Account a letter to ensure that the Compliance Department is set up to receive all account statements and confirmations from such accounts.
*
The Compliance Department will
send the letter on your behalf. Access Persons may open brokerage accounts at any broker-dealer of their choice, however, Access Persons are prohibited from accepting any discounted brokerage rates or any other inducements from broker-dealers that a
Covered Company trades with for its clients. All Personal Securities Accounts and holdings of each Personal Securities Account must be input into the Code of Ethics System.
Initial Holdings Report.
Within 10 days of becoming an Access Person:
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You must report all Personal Securities Accounts, including account numbers, and holdings of Securities in those accounts. You must input all holdings of Securities in your Personal Securities Accounts into the Code of
Ethics System. The information in the statements must be current as of a date no more than 45 days prior to the date of becoming an access person.
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*
You should include accounts that have the ability to hold securities even if the account does not do so
at the report date.
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August 2012
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5
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Code of Ethics
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Wells Capital Management, Inc.
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You must also certify that you have read and will comply with this Code.
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You must provide us the report by the business day immediately before the weekend or holiday if the tenth day falls on a weekend or holiday.
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Annual Holdings Reports.
Within 30 days of each year end:
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You must report all Personal Securities Accounts, including account numbers, and holdings of Securities in those accounts. The information in the statements must be current as of a date no more than 45 days prior to
when you give us the report.
NOTE: Wachovia/Wells Fargo 401(k) plans and your Immediate Family Members 401(k) plans must be reported initially and annually as a Personal Securities Accounts, unless no Reportable Funds or Securities are
offered in such plans. Statements for 401(k) plans are not required to be provided directly to the Compliance Department; however, you need to report your holdings of Reportable Funds and Securities in such plans annually.
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You must also certify that you have read and will comply with this Code.
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You must provide us the report by the business day immediately before the weekend or holiday if the thirtieth day falls on a weekend or holiday.
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Quarterly Transactions Reports.
Within 30 days of calendar quarter end:
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You must give us a report showing all Securities trades made in your Personal Securities Accounts during the quarter. You must submit a report even if you didnt execute any Securities trades.
Because the
Compliance Department does not receive duplicate account statements for any Wachovia/Wells Fargo 401(k) plan account or from any plan in which your Immediate Family Members have accounts, any trades of Reportable Funds or other Securities outside of
any previously reported pre-set allocation must be reported on the quarterly transaction reports or you must manually furnish account statements. In addition, any transactions in employee stock or stock options in which you or your Immediate Family
Members engage must be reported on the quarterly transaction reports.
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You must inform us of any new Personal Securities Accounts you established during the past quarter.
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You must provide us the report by the business day immediately before the weekend or holiday if the thirtieth day falls on a weekend or holiday.
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August 2012
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6
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Code of Ethics
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Wells Capital Management, Inc.
Any personal Securities holdings and
transaction reports required to be filed by a CCO must be submitted to an alternate designee who will fulfill the duties of the CCO with respect to those reports.
2.4
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Exceptions to Reporting
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You are not required to report any of
the following types of transactions:
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(1)
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Purchases or sales of any of the following types of investments, which are not considered Securities for purposes of this Code:
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Direct obligations of the U.S. Government;
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Bankers acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements;
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Shares issued by money market mutual funds, whether affiliated or
non-affiliated;
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Shares issued by open-end investment companies that are not Reportable Funds; and
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Transactions in 529 plan accounts, except Edvest and tomorrows scholar (Reportable 529 Plans).
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(2)
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Purchases or sales that were done as part of an Automatic Investment Plan (AIP).
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However, you must report your initial pre-set schedule or allocation of an AIP that includes allocations to any Securities, including those made to any 401(k) plan (including to any Reportable Funds). Additionally, if
you make a purchase or sale that overrides or changes the
pre-set
schedule or allocation of the AIP, you must include that transaction in your quarterly transaction report if it is otherwise reportable.
Example: Need to report 10 % to ABC Fund and 30% to XYZ Fund (allocations to Reportable Funds). If you make a change to these allocation percentages, you must report the new percentages. In addition, if you execute a transaction that is not a
transaction of the pre-set schedule of an AIP, then you must report that transaction on the Quarterly Transaction Report.
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NOTE:
401(k) plans offered through employers other than Wachovia/Wells Fargo & Co are not required to be reported if no
Reportable Fund or other Security is offered as an investment in the plan.
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August 2012
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7
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Code of Ethics
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Wells Capital Management, Inc.
2.5
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Summary of What You Need to Report
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The table below serves
as a handy reference for you to know what types of transactions Access Persons need to report on
quarterly transactions reports
. If you have questions about any types of Securities not shown below, please contact the Compliance Department by
email at the following email address: [coe]@wellsfargo.com.
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Do I have to report transactions in the following types of investments?
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Corporate debt securities
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Yes
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Equity securities, including Wells Fargo & Co. stock and employee stock options and other Wells Fargo & Co securities granted as compensation
(including Wells Fargo Stock Fund)
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Yes*
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Reportable Funds see Appendix D for a list of registered funds managed by a Covered Company or its affiliate controlled by Wells Fargo & Co.
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Yes
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Municipal bonds
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Yes
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Securities held in discretionary IRA accounts
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Yes
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Securities purchased through Automatic Investment Plans including reportable Automatic Investments Plans for Immediate Family Members
(Reporting
requirements for allocations to 401(k) plans*** and Reportable 529 Plans**** apply)
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No
**
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Money Market Mutual Funds (affiliated and non-affiliated)
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No
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Mutual funds, other than ETFs and iShares, that are not Reportable Funds
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No
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Exchange Traded Funds and iShares, both open-end and closed-end, and Unit Investment Trusts
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Yes
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Short-Term Cash Equivalents
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No
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U.S. Government bonds (direct obligations)
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No
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U.S. Treasuries/Agencies (direct obligations)
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No
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*
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Because the Compliance Department does not receive duplicate account statements for any employee stock option accounts that you or your Immediate Family Members may have, any Personal Securities Transactions in such
employee stock option accounts must be reported on the quarterly transactions report. This means the employee executed transaction, i.e., the sell transaction of the employee stock option that was granted. If you or Immediate Family Members have
transactions in Wells Fargo & Co. securities granted as compensation for which account statements are not provided, you may be required to report similar account information from available sources, such as print outs of online screen
shots showing the relevant reportable information. Contact the Compliance department for any questions.
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**
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If you make a purchase or sale of a Security that overrides or changes the
pre-set
schedule or allocation of the AIP, you must include that transaction in your quarterly
transactions reports.
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***
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For any 401(k) plans, you must also report your initial pre-set schedule or allocation of the AIP that includes allocations to any Securities (including to any Reportable Fund, except for Reportable Funds that are money
market mutual funds), and any purchases or sales of any Reportable Fund made outside of your preset allocation.
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NOTE:
401(k) plans offered through employers other than Wells Fargo & Co are not required to be reported if no Reportable Fund or other Security is offered as an investment in the plan.
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****
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For transactions in Reportable 529 Plans, you must report your initial pre-set schedule or allocation of the AIP and any purchases or sales of the Reportable 529 Plans units outside of your preset allocation.
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August 2012
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8
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Code of Ethics
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Wells Capital Management, Inc.
2.6
|
Your Reports are Kept Confidential
|
The Covered Companies
will use reasonable efforts to ensure that the reports you submit to us under this Code are kept confidential. The reports will be reviewed by members of the Compliance Department and possibly our senior executives or legal counsel. Reports may be
provided to Reportable Fund officers and trustees, and will be provided to government authorities upon request or others if required to do so by law or court order.
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August 2012
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9
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Code of Ethics
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Wells Capital Management, Inc.
3.
|
RESTRICTIONS ON TRADING AND PRE-CLEARANCE REQUIREMENTS
|
All Access Persons must
pre-clear all Security trades and comply with the trading restrictions described here, as applicable.
All Access Persons must comply with the following trading
restrictions:
|
(1)
|
60-Day
Holding Period for Reportable Fund Shares (open-end and closed-end)
|
You are required to hold shares you purchase of the Reportable Funds for 60 days.
You are NOT required to comply with
the 60 day Holding Period for the Ultra Short-Term Income Fund, the Ultra Short-Term Municipal Income, the Ultra Short Duration Bond Fund, the Wells Fargo Stock Fund (including 401(K) and ESOP accounts), and the money market funds
. This
restriction applies without regard to tax lot considerations. You will need to hold the shares from the date of your most recent purchase for 60 days. If you need to sell Reportable Fund shares before the
60-day
holding period has passed, you must obtain advance written approval from the CCO or the Code of Ethics Compliance Officer. The
60-day
holding period does not
apply to transactions pursuant to Automatic Investment Plans.
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(2)
|
Restricted Investments
|
You may not purchase shares in an Initial
Public Offering. You must get written approval from the CCO or Code of Ethics Compliance Officer before you sell shares that you acquired in an IPO prior to starting work for us.
You may, subject to pre-clearance requirements, purchase shares in a Private Placement as long as you will hold less than a
10% interest in the issuer or are otherwise permitted under the Policy on Directorships and Other Outside Employment as outlined in the
Wells Fargo & Co. Team Member Code of Ethics and Business Conduct
. Private Placements must be
pre-approved by the Chief Compliance Officer and Chief Equity Officer. Documentation for all approved Private Placements will be kept on file by the Code of Ethics Compliance Officer.
NOTE:
Private Placements issued by a client are prohibited.
In addition, as set forth in Section 4.3, we remind you that you must comply with the policies outlined in the
Wells
Fargo Team Member Code of Ethics and Business Conduct
which imposes certain restrictions on your ability to trade in Wells Fargo & Company stock and employee stock options.
Section V.D.2 of the
Wells Fargo Team Member Code
of Ethics and Business Conduct
states, You may not invest or engage in derivative or hedging transactions involving securities issued by Wells Fargo & Company, including but not limited to options contracts (other than
employee stock options), puts, calls, short sales, futures contracts, or other similar transactions regardless of whether you have material inside information.
You may not participate in a tender offer made by a closed-end Evergreen or Wells Fargo Advantage Fund under the terms of
which the number of shares to be purchased is limited to less than all of the outstanding shares of such closed-end Evergreen or Wells Fargo Advantage Fund.
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August 2012
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10
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Code of Ethics
|
Wells Capital Management, Inc.
No team member may purchase or sell shares of any closed-end Evergreen or
Wells Fargo Advantage Fund within 60 days of the later of (i) the initial closing of the issuance of shares of such fund or (ii) the final closing of the issuance of shares in connection with an overallotment option. You may purchase or
sell shares of closed-end Evergreen or Wells Fargo Advantage Funds only during the 10-day period following the release of portfolio holdings information to the public for such fund, which typically occurs on or about the 15th day following the end
of each calendar quarter. Certain team members, who shall be notified by the Legal Department, are required to make filings with the Securities and Exchange Commission in connection with purchases and sales of shares of closed-end Evergreen or Wells
Fargo Advantage Funds, and may be required to hold their shares of such funds for longer periods of time and will be subject to potential short-swing profit disgorgement, including in civil litigation, and public disclosure of non-compliance with
applicable law.
You may not participate in the activities of an Investment Club without prior approval from the CCO or
the Code of Ethics Compliance Officer. If applicable, trades for an Investment Club would need to be pre-cleared.
|
(3)
|
You May Not Execute Your Own Personal Transactions
|
Team members may
never execute or process through Wells Fargo & Cos direct access software (TA2000 or any other similar software):
(a) your own personal transactions,
(b) transactions for Immediate Family Members, or
(c) transactions for accounts of other persons for which you or your Immediate Family Member have been given investment
discretion. This provision does not exclude you from trading directly with a broker/dealer or using a broker/dealers software. The foregoing also does not prohibit you from executing or processing transactions in Wells Fargo & Co.
securities granted to you as compensation through an online program designated by Wells Fargo & Co. for such purpose.
|
(4)
|
You must not Attempt to Manipulate the Market
|
You must not execute
any transactions intended to raise, lower, or maintain the price of any security or to create a false appearance of active trading.
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August 2012
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11
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Code of Ethics
|
Wells Capital Management, Inc.
3.2
|
Pre-Clearance
Requirements
|
Access Persons must
pre-clear
with the Compliance Department all Personal Securities
Transactions, except as set forth below.
Access Persons are not required to
pre-clear
any of the following types of transactions:
|
|
|
Exceptions from the
Pre-Clearance
Requirements
|
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|
Mutual Funds, including open-end Reportable Funds (pre-clearance may be required in certain situationssee Note)
|
|
Securities issued by any
open-end
investment company, including open-end Reportable Funds.
Note
: Open-end Reportable Funds do not have to be pre-cleared; however transactions in
open-end Reportable Funds must be reported (subject to any applicable exceptions) quarterly on the Quarterly Transactions Report. Further, transactions in open-end Reportable Funds are still subject to the 60 day holding period.
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No Knowledge
|
|
Personal Securities Transactions that take place without your knowledge or the knowledge of your Immediate Family Members and that are (i) effected for you by a trustee of a blind trust, (ii) discretionary trades involving an
investment partnership or managed account, (iii) a margin call in which you are neither consulted nor advised of the trade before it is executed, or (iv) the assignment of an option.
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Certain Corporate Actions
|
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Any acquisition or disposition of securities through stock dividends, dividend reinvestments, stock splits, reverse stock splits, mergers, consolidations, spin-offs, or other similar corporate reorganizations or distributions
which are generally applicable to all holders of the same class of securities.
Odd-lot
tender offers are also exempt but all other tender offers must be
pre-cleared.
All
of the foregoing transactions are subject to transaction reporting provisions of the Code.
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|
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Underlying Securities Through Exercise of Rights
|
|
Any acquisition or disposition of securities through the exercise of rights, options (including Wells Fargo & Co employee stock options), convertible bonds, or other instruments acquired in compliance with this
Code.
|
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Wells Fargo & Co. Securities Acquired as Employee Compensation
|
|
Any acquisition of employee stock options, shares of common stock as part of 401(k) plan matching or other types of securities of Wells Fargo & Co obtained through participation in employee stock option plan or other similar
plan granted to the team member as part of his or her employment.
|
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Municipal Bonds
|
|
Any municipal bond rated A or higher by a national rating agency.
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August 2012
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12
|
|
Code of Ethics
|
Wells Capital Management, Inc.
|
|
|
Exceptions from the
Pre-Clearance
Requirements
|
|
|
Commodities, Futures, Options on Futures, or option on Indices
|
|
Acquisitions and dispositions of commodities, futures (including currency futures), options on futures, options on currencies, and options
on indices are
NOT
subject to
pre-clearance
or the
fifteen-day
blackout described below in section 3.3, the ban on short-term trading
(60-day
profit disgorgement) and other prohibited transaction provisions of the Code, but are subject to transaction reporting provisions of the Code.
NOTE
:
Options on Securities
.
A
ll acquisitions and
dispositions of options on securities
ARE
subject to pre-clearance,
fifteen-day
blackout, the ban on short-term trading
(60-day
profit disgorgement;
in other words, settlement date of an option must be at least 60 days out), prohibited transaction provisions, and transaction reporting provisions of the Code.
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Transferring of Securities
|
|
Transferring a security to or from a Personal Securities Account; however, these transactions are subject to transaction reporting requirements. Transferring from a Personal Security Account to an account other than a Personal
Security Account requires pre-clearance.
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Managed Accounts
|
|
Transactions occurring within Managed Accounts do not require pre-clearance of trades or quarterly reporting. However, duplicate statements must be sent to Compliance and a copy of the investment management agreement must be sent
to the Code Administrator.
|
|
|
Exchange Traded Funds (ETFs)
|
|
Exchange Traded Funds, iShares, and Unit Investment Trusts. Note: Transactions in these securities are reportable on the Quarterly
Transaction Report.
Note: Transactions in closed-end mutual funds DO require
pre-clearance.
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August 2012
|
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13
|
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Code of Ethics
|
Wells Capital Management, Inc.
|
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|
Exceptions from the
Pre-Clearance
Requirements
|
|
|
Miscellaneous
|
|
Any transaction involving the following:
bankers acceptances;
bank certificates
of deposit (CDs);
commercial paper;
high quality
short-term debt instruments, including repurchase agreements;
direct obligations of the U.S. Government;
the acquisition of
equity securities in dividend reinvestment plans (DRIPs); however, these transactions are subject to transaction reporting provisions of the Code;
securities of the employer of your Immediate Family Member if such securities are
beneficially owned through participation by the Immediate Family Member in a profit sharing plan, 401(k) plan, employee stock option plan or other similar plan; however, any transaction that is not made pursuant to a pre-set schedule or
allocation or overrides a
pre-set
schedule or allocation must be included in a quarterly transaction report (this exception does not exempt transactions involving securities in such a plan when the issuer is
not the employer of your Immediate Family Member)
interests in 529 plans; however, any transaction in a Reportable 529 Plan that is not
made pursuant to a pre-set schedule or allocation or overrides a
pre-set
schedule or allocation must be included in a quarterly transaction report; and
other Securities as
the Code of Ethics Compliance Department designates from time to time in writing on the grounds that the risk of abuse is minimal or non-existent.
|
Excessive Trading for Personal Securities Accounts is strongly discouraged and Personal Securities
Accounts may be monitored for Excessive Trading activity and reported to management. Additional restrictions may be imposed by the Compliance Department if Excessive Trading is noted for a Personal Securities Account.
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August 2012
|
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14
|
|
Code of Ethics
|
Wells Capital Management, Inc.
How to
Pre-Clear
Your Securities Transactions
If you have been designated as an Access Person, you must follow the steps below to
pre-clear
your trades:
|
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|
|
|
Remember!
If you need to
pre-clear
a transaction, dont place an order until you receive written approval to
make the trade.
|
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|
(1)
Request Authorization
. Authorization for a transaction
that requires pre-clearance must be entered using the Code of Ethics System. Email requests will only be accepted for those employees who are on formal leave of absence or on PTO. When submitting a request, the following information must be
given:
Security
Name and Ticker or Cusip
Amount to be traded
Brokerage name and
Account Number
Transaction Type (Buy, Sell, Short)
Type of Security
(Bond, Option, Common Stock)
Price
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A CCO must submit any of his/her proposed Personal Securities Transactions that
require pre-clearance to the Chief Legal Officer. Also, no member of the Compliance Department is able to authorize their own
transactions.
You may only request pre-clearance for market orders
or same day limit orders.
(2)
Have Your Request Reviewed and Approved
. After receiving the electronic request the
Code of Ethics system will notify you if your trade has been approved or denied. If a trade request for pre-clearance came from an email, the approval or denial will be reported back using the same method of the request.
(3)
Trading in Foreign
Markets
. Request for pre-clearance in foreign markets that have already closed for the day may be given approval to trade for the following day because of time considerations. Approval will only be good for that following business day in that
local foreign market.
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August 2012
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15
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Code of Ethics
|
Wells Capital Management, Inc.
3.3
|
Prohibited Transactions
|
As Access Persons, you are prohibited
from engaging in any of the following Personal Securities Transactions. If any of these transactions would normally require
pre-clearance,
the CCO or Code of Ethics Compliance Officer will only authorize the
trades under exceptional circumstances:
|
|
|
Trading when there are pending buy or sell orders for an Account
. You can not purchase or sell securities on any day during which an Account has a pending buy or sell order in for the same
security (or equivalent security) of which the Compliance Department is aware until that order is withdrawn.
|
|
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|
Transactions within the
fifteen-day
blackout.
There is a fifteen-day blackout on purchases or sales of securities bought or sold by an Account. That means that
you may not buy or sell a security (or equivalent security) during the seven-day periods immediately preceding and immediately following the date that the Account trades in the security (blackout security). During the blackout period,
activity will be monitored by the Code of Ethics Compliance Officer or the CCO and any Personal Securities Transactions during a blackout window will be evaluated and investigated based on each situation. Violations may range from no action in cases
where Compliance has determined on a reasonable basis that there was no employee knowledge of portfolio trading activity to potential disgorgement of profits or payment of avoided losses (see Section 6 for Code violations and penalties). During
a blackout period, purchases of a blackout security may be subject to mandatory divestment. Similarly, during a blackout period, sales of a blackout security may be subject to mandatory repurchase. In the case of a purchase and subsequent mandatory
divestment at a higher price, any profits derived upon divestment may be subject to disgorgement; disgorged profits will be donated to your charity of choice. In the case of a sale and subsequent mandatory repurchase at a lower price, you may be
required to make up any avoided losses, as measured by the difference between the repurchase price and the price at which you sold the security; such avoided losses will be donated to your charity of choice.
|
|
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|
For example, if an Account trades in a blackout security on July 7, July 15 (the eighth day following the trade date) would be the first day you may engage in a Personal Securities Transaction involving
that security, and any purchases and sales in the blackout security made on or after June 30 through July 14 could be subject to divestment or repurchase. Purchases and sales in the security made on or before June 29 (the eighth day
before the trade date) would not be within the blackout period.
|
|
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|
The CCO or Code of Ethics Compliance Officer may approve additional exceptions to the blackout window.
|
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August 2012
|
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16
|
|
Code of Ethics
|
Wells Capital Management, Inc.
|
|
|
Intention to Buy or Sell for Accounts
. You are prohibited from buying or selling securities when you intend, or know of anothers intention, to purchase or sell that security (or an equivalent security) for
an Account. This prohibition applies whether the Personal Securities Transaction is in the same direction (
e.g
., two purchases or two sales) or the opposite direction (
e.g.,
a purchase and sale) as the transaction for the
Account.
|
NOTE:
There is a
de minimis
exception to the above three restrictions - Access Persons may purchase
and sell S&P 500 Securities of up to 500 shares and no more than $10,000, unless this conflicts with the
60-day
short-term profit restriction described below. Notwithstanding the
de minimis
exception to the foregoing three restrictions, all transactions in S&P 500 Securities must be pre-cleared.
|
|
|
Investment personnel are prohibited from personally trading in securities issued by publicly-traded companies they are covering, researching or recommending for Covered Company advisory accounts until compliance
determines the potential conflicts of interest have been resolved.
|
3.4
|
Ban on Short-Term Trading Profits
|
There is a ban on short-term
trading profits for Access Persons. Access Persons are not permitted to buy and sell, or sell and buy, the same security (or equivalent security) within 60 calendar days and make a profit; this will be considered short-term trading. Trading in
securities of Wells Fargo Stock or Wells Fargo Stock Fund (including 401(K) and ESOP accounts) are excluded from this restriction.
|
|
|
This prohibition applies without regard to tax lot.
|
|
|
|
Short sales are subject to the 60 profit ban.
|
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If you make a profit on an involuntary call of an option that you wrote, those profits are excluded from this ban; however, you cannot buy and sell options within 60 calendar days resulting in profits.
Settlement/expiration date on the opening option transaction must be at least 60 days out.
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Sales or purchases made at the original purchase or sale price or at a loss are not prohibited during the 60 calendar day profit holding period.
|
You may be required to disgorge any profits you make from any sale before the
60-day
period expires. In counting the 60 calendar days, multiple transactions in the same security (or equivalent security) will be counted in such a manner as to produce the shortest time period between transactions.
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August 2012
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17
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Code of Ethics
|
Wells Capital Management, Inc.
Although certain transactions may be deemed
de minimis
(
i.e.,
the exceptions noted in Section 3.3), they are still subject to the ban on short-term trading profits and are
required to be input into the Code of Ethics system. The ban on short-term trading profits does not apply to transactions that involve:
|
(i)
|
same-day sales of securities acquired through the exercise of employee stock options or other Wells Fargo & Co. securities granted to you as compensation or through the delivery (constructive or otherwise) of
previously owned employer stock to pay the exercise price and tax withholding;
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|
(ii)
|
Any transactions of Wells Fargo Stock , ESOPs or Wells Fargo Stock Fund in any reportable account
|
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(iii)
|
purchases or sales that were done as part of an Automatic Investment Plan (AIP). However, any purchases or sales outside the
pre-set
schedule or allocation of the AIP,
or other changes to the pre-set schedule or allocation of the AIP, within a 60-day period, are subject to the 60-day ban on short term profit. A purchase or sale that is
NOT
part of an AIP must be reported on the Quarterly Transaction Report.
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(iv)
|
transactions described in Section 3.2 for which a pre-clearance exception applies.
|
The
CCO or the Code of Ethics Compliance Officer may approve additional exceptions to the ban on short-term trading profits. Any additional exceptions require advance written approval.
3.5
|
CCOs Approval of Your Transactions
|
Your Request May be
Refused.
The CCO or the Code of Ethics Compliance Officer may refuse to authorize your Personal Securities Transaction and need not give you an explanation for the refusal. Some reasons for refusing your securities transactions are confidential.
Authorizations Expire.
Any transaction approved by the CCO or the Compliance Department is effective until the
close of business of the same trading day for which the authorization is granted (unless the CCO or Code of Ethics Compliance Officer revokes that authorization earlier). The CCO or the Code of Ethics Compliance Officer may indicate another date
when the authorization expires. If the order for the transaction is not executed within that period, you must obtain a new advance authorization before placing your trade.
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August 2012
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18
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Code of Ethics
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Wells Capital Management, Inc.
4.
|
T
RADING
ON
I
NSIDER
I
NFORMATION
|
The law requires us to have and enforce written policies and procedures to prevent you from misusing material, non-public
information. We do this by:
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limiting your access to files likely to contain non-public information,
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restricting or monitoring your trades, including trades in securities about which you might have non-public information, and
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providing you continuing education programs about insider trading.
|
You are
subject to all requirements of the
Wells Fargo Team Member Code of Ethics and Business Conduct
set forth under the heading Avoid Conflicts of InterestInsider Trading in Section V.C of Appendix A thereof, as the same may be
amended from time to time. A copy of this policy is available on the Wells Fargo & Co website at:
https:/
/www.wellsfargo.com/downloads/pdf/about/team_member_code_of_ethics.pdf
4.1
|
What is Insider Trading?
|
Insider trading is generally defined
as occurring when a person has possession of material, non-public information about an issuer and engages in a securities transaction involving securities issued by the issuer, or discloses the information to others who then trade in the
issuers securities.
|
|
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Information is considered
material
if there
is a substantial likelihood that a reasonable investor would consider it important in deciding how to act. Information is considered
non-public
when it has not been made available to investors generally. Information becomes public once it is
publicly disseminated. Limited disclosure does not make the information public (for example, if an insider makes information available to a select group of individuals,it is not public). Examples of illegal and prohibited insider trading and related
activity
|
|
WARNING!
Insider
trading is illegal. You could go to prison or be forced to pay a large fine for participating in insider trading. We could also be fined for your actions.
|
include, but are not limited to, the following:
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Tipping
of material, non-public information is illegal and prohibited. You are
tipping
when you give
non-public
information about an issuer to someone else
who then trades in securities of the issuer.
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Front running
is illegal and prohibited. You are
front running
if you trade ahead of an Account order in the same or equivalent security (such as options) in order to make a profit or avoid a loss.
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Scalping
is illegal and prohibited. You are
scalping
when you purchase or sell a security (or an equivalent security) for your own account before you recommend/buy or recommend/sell that security or
equivalent for an Account.
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See the discussion under the heading Avoid Conflicts of
InterestInsider Trading in Section V.C of Appendix A of the
Wells Fargo Team Member Code of Ethics and Business Conduct
for further detail.
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August 2012
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19
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Code of Ethics
|
Wells Capital Management, Inc.
4.2
|
Using Non-Public Information about an Account or our Advisory Activities
|
You may not:
|
|
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Share with any other person (unless you are permitted or required by law, its necessary to carry out your duties and appropriate confidentiality protections are in place, as necessary) any non-public information
about an Account , including, without limitation: (a) any securities holdings or transactions of an Account; (b) any securities recommendation made to an Account; (c) any securities transaction (or transaction under consideration) by
an Account, including information about actual or contemplated investment decisions; (d) any changes to portfolio management teams of Reportable Funds; and (e) any information about planned mergers or liquidations of Reportable Funds.
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Use any non-public information regarding an Account in any way that might compete with, or be contrary to, the interest of such Account.
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Use any non-public information regarding an Account in any way for personal gain.
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4.3
|
Wells Fargo & Company Securities
|
You are prohibited
from engaging in any transaction in Wells Fargo & Co securities that is not in compliance with applicable requirements of the
Wells Fargo Team Member Code of Ethics and Business Conduct
set forth under the heading Avoid
Conflicts of InterestPersonal Trading and InvestmentDerivative and Hedging Transactions in Securities Issued by Wells Fargo in Section V.D.2 thereof, as the same may be amended from time to time. A copy of this policy is available
on the Wells Fargo & Company website at:
https://www.wellsfargo.com/downloads/pdf/about/team_member_code_of_ethics.pdf
.
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August 2012
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20
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Code of Ethics
|
Wells Capital Management, Inc.
5.
|
G
IFTS
, D
IRECTORSHIPS
AND
O
THER
O
UTSIDE
E
MPLOYMENT
|
We generally follow the Wells Fargo & Company
policy regarding receiving gifts and activities with customers as vendors, as generally set forth in the
Wells Fargo Team Member Code of Ethics and Business Conduct
,
although we have made some changes to that policy, making it more
restrictive in some instances
. Please read and follow the version set forth in Appendix C.
5.2
|
Directorships and Other Outside Employment
|
We follow the Wells
Fargo & Co policy regarding holding directorship positions and other outside employment. Please read and follow the
Wells Fargo Team Member Code of Ethics and Business Conduct
for requirements regarding directorships. However, if you
receive an approval to participate in outside business or employment activities, your participation must be redisclosed annually when you certify to the Code and reapproved at any time there is a change in relevant facts upon which the original
approval was granted.
5.3
|
Political Contributions
|
We follow the
Wells Fargo Team Member
Code of Ethics and Business Conduct
regarding political contributions. Individual political contributions are not restricted; however, Access Persons must take care to ensure that any contribution made is on the behalf of the individual and not
on behalf of a Covered Company or Wells Fargo & Co. In addition, as an investment adviser, WellsCap and its employees are subject to the SEC and state and local regulations regarding political contributions, procurement lobbying and gifts
and entertainment to government entities. Please review the Political Contribution and State and Local Pay to Play/Procurement Lobbying policies and procedures (Sections 1.5 and 1.6) detailed in the Wells Capital Management Policies and Procedures
for details regarding pre-clearance requirements.
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August 2012
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21
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Code of Ethics
|
Wells Capital Management, Inc.
6.1
|
Investigating Code Violations
|
The CCO is responsible for
enforcing the Code. The CCO or his or her designee is responsible for investigating any suspected violation of the Code and if the CCO selects a designee, the designee will report the results of each investigation to the CCO. This includes not only
instances of violations against the letter of the Code, but also any instances that may give the appearance of impropriety. The CCO is responsible for reviewing the results of any investigation of any reported or suspected violation of the Code in
coordination with the designee. Any confirmed violation of the Code will be reported to your supervisor immediately.
The CCO is responsible for deciding whether an offense
is minor, substantive or serious. In determining the seriousness of a violation of this Code of Ethics, the following factors, among others, may be considered:
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the degree of willfulness of the violation;
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the severity of the violation;
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the extent, if any, to which a team member profited or benefited from the violation;
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the adverse effect, if any, of the violation on a Covered Company or an Account; and
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any history of prior violation of the Code.
|
Note: For purposes of imposing
sanctions, violations generally will be counted on a rolling twelve (12) month period. However, the CCO or senior management reserves the right to impose a more severe sanction/penalty depending on the severity of the violation and/or taking
into consideration violations dating back more than twelve months.
Any serious offenses as described below will be
reported immediately to the Chief Compliance Officer. All minor offenses and substantive offenses will be reported to the Chief Compliance Officer periodically. Penalties will be imposed as follows except as subject to exceptions described further
below:
Minor Offenses
:
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First minor offense Oral warning;
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Second minor offense Written notice;
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Third minor offense $250 fine to be donated to your charity of choice
*
.
|
*
|
All fines will be made payable to your charity of choice (reasonably acceptable to Wells Capital) and turned over to us and we will mail the donation check (cashiers or bank check only) on your behalf.
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August 2012
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22
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Code of Ethics
|
Wells Capital Management, Inc.
Minor offenses include, but are not limited to, the following: failure to submit quarterly
transaction reports, failure to submit signed acknowledgments of Code forms and certifications, excessive (
i.e.,
more than 3) late submissions of such documents and, conflicting
pre-clear
request
dates versus actual trade dates or other pre-clearance request errors or omissions involving the de minimis exception or securities not covered by the fifteen day blackout period.
Substantive Offenses:
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|
|
First substantive offense Written notice;
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|
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|
Second substantive offense $250 fine to be donated to your charity of choice
*
;
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|
Third substantive offense $1,000 fine or disgorgement of profits (whichever is greater) to be donated to your charity of choice
*
and/or termination of
employment and/or referral to authorities.
|
Substantive offenses include, but are not limited to, the following:
unauthorized purchase/sale of restricted investments as outlined in this Code, violations of short-term trading for profit (60-day rule), failure to request trade
pre-clearance
of restricted transactions,
failure to timely report a reportable brokerage account and violations of the fifteen-day blackout period.
Serious Offenses:
Trading with inside information, front running and scalping are each considered a serious offense. We will
take appropriate steps, which may include termination of employment and/or referral to governmental authorities for prosecution. The Wells Fargo Advantage Funds Board and the Evergreen Funds Board of Trustees will be informed immediately
of any serious offenses.
Exceptions
We may deviate from the penalties listed in the Code where the CCO and/or senior management determines that a more or less severe penalty is
appropriate based on the specific circumstances of that case. For example, a first substantive offense may warrant a more severe penalty if it follows two minor offenses. Any deviations from the penalties listed in the Code, and the reasons for such
deviations, will be documented and maintained in the Code files. The penalties listed in this Section 6.2 are in addition to disgorgement or other penalties imposed by other provisions of this Code.
6.3
|
Dismissal and/or Referral to Authorities
|
Repeated violations or
a flagrant violation of the Code may result in immediate dismissal from employment. In addition, the CCO and/or senior management may determine that a single flagrant violation of the law, such as insider trading, will result in immediate dismissal
and referral to authorities.
*
|
All fines will be made payable to your charity of choice (reasonably acceptable to Wells Capital) and turned over to us and we will mail the donation check (cashiers or bank check only) on your behalf.
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August 2012
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23
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|
Code of Ethics
|
Wells Capital Management, Inc.
6.4
|
Your Obligation to Report Violations
|
You must report any
violations or suspected violations of the Code to the CCO or to a member of the Code of Ethics Compliance Department. Your reports will be treated confidentially and will be investigated promptly and appropriately. Violations include:
|
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non-compliance with applicable laws, rules, and regulations;
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fraud or illegal acts involving any aspect of our business;
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material misstatements in reports;
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any activity that is specifically prohibited by the Code; and
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deviations from required controls and procedures that safeguard clients and us.
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August 2012
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24
|
|
Code of Ethics
|
A
PPENDIX
A
D
EFINITIONS
General Note:
The definitions and terms used
in the Code are intended to mean the same as they do under the 1940 Act and the other Federal Securities Laws. If a definition hereunder conflicts with the definition in the 1940 Act or other Federal Securities Laws, or if a term used in the Code is
not defined, you should follow the definitions and meanings in the 1940 Act or other Federal Securities Laws, as applicable.
|
|
|
Accounts
|
|
Accounts of investment advisory clients of Covered Companies, including but not limited to registered and unregistered investment companies and Managed Accounts.
|
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|
Automatic Investment Plan
|
|
A program that allows a person to purchase or sell securities, automatically and on a regular basis, with any further action by the person. May be part of a SIP (systematic investment plan), SWP (systematic withdrawal plan), SPP
(stock purchase plan), DRIP (dividend reinvestment plan), or employer-sponsored plan.
|
|
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Beneficial Owner (Ownership)
|
|
You are the beneficial owner of any securities in which you have a direct or indirect financial or pecuniary interest, whether or not you have the power to buy and sell, or to vote, the
securities.
|
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|
In addition, you are the beneficial owner of securities in which an Immediate Family Member has a direct or indirect financial or pecuniary interest, whether or not you or the Immediate Family Member has the power to
buy and sell, or to vote, the securities. For example, you have Beneficial Ownership of securities in trusts of which Immediate Family Members are beneficiaries.
|
|
|
|
|
You are also the beneficial owner of securities in any account, including but not limited to those of relatives, friends and entities in
which you have a non-controlling interest, over which you exercise investment discretion. Such accounts do not include accounts you manage on behalf of a Covered Company or any other affiliate of Wells Fargo & Co.
|
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|
Control
|
|
The power to exercise a controlling influence over the management or policies of a company, unless the power is solely the result of an official position with such company. Owning 25% or more of a companys outstanding
voting securities is presumed to give you control over the company. (See Section 2(a)(9) of the 1940 Act for a complete definition.)
|
|
|
Covered Company
|
|
Wells Capital Management, Inc.
|
|
|
Equivalent Security
|
|
Any security issued by the same entity as the issuer of a subject security that is convertible into the equity security of the issuer. Examples include, but are not limited to, options, rights, stock appreciation rights, warrants
and convertible bonds.
|
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|
Appendix A
|
|
25
|
|
Definitions
|
|
|
|
|
|
|
|
Excessive Trading
|
|
A high number of transactions during any month could be considered Excessive Trading. Compliance will report any Excessive Trading to management.
|
|
|
Federal Securities Laws
|
|
The Securities Act of 1933
(15 U.S.C. 77a-aa),
the Securities Exchange Act of 1934 (15 U.S.C. 78amm), the Sarbanes-Oxley Act of 2002
(Pub. L. 107-204,
116 Stat. 745 (2002)), the Investment Company Act of 1940 (15 U.S.C. 80a), the Investment Advisers Act of 1940 (15 U.S.C. 80b), Title V of the
Gramm-Leach-Bliley
Act
(Pub. L. No. 100-102,
113 Stat. 1338 (1999)), any rules adopted by the SEC under any of these statutes, the Bank Secrecy Act
(31 U.S.C. 5311-5314; 5316-5332) as it applies to funds and investment advisers, and any rules adopted thereunder by the SEC or the Department of the Treasury.
|
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|
Financial or Pecuniary Interest
|
|
The opportunity for you or your Immediate Family Member, directly or indirectly, to profit or share in any profit derived from a securities transaction. You or your Immediate Family Member may have a financial
interest in:
|
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|
Your accounts or the accounts of
Immediate Family Members;
A partnership or limited liability company, if you or an Immediate
Family Member is a general partner or a managing member;
A corporation or similar business entity, if you or an Immediate
Family Member has or shares investment control; or
A trust, if you or an Immediate Family Member is a
beneficiary.
|
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|
High quality short-term debt instrument
|
|
Any instrument that has a maturity at issuance of less than 366 days and that is rated in one of the two highest rating categories by a nationally recognized statistical rating organization such as Moodys
Investors Service.
|
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|
Immediate Family Member
|
|
Any of the following persons who reside in the same household with you:
|
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|
spouse
domestic
partner
parent
stepparent
child (including adopted)
stepchild
|
|
grandparent
grandchild
brother
sister
|
|
mother-in-law
father-in-law
daughter-in-law
son-in-law
sister-in-law
brother-in-law
|
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|
Immediate Family Member also includes any other relationship that the CCO determines could lead to possible conflicts of interest, diversions of corporate opportunity, or appearances of impropriety.
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Appendix A
|
|
26
|
|
Definitions
|
|
|
|
Investment Club
|
|
An investment club is a group of people who pool their money to make investments. Usually, investment clubs are organized as partnerships and, after the members study different investments, the group decides to buy or sell based
on a majority vote of the members. Club meetings may be educational and each member may actively participate in investment decisions.
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IPO
|
|
An initial public offering, or the first sale of a companys securities to public investors. Specifically it is 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 Section 15(d) of the Securities Exchange Act of 1934.
|
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|
Large Capitalization Security
|
|
A security whose issuer has an equity market capitalization of more than $5 billion.
|
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Managed Account
|
|
Any account for which the holder gives, in writing, his/her broker or someone else the authority to buy and sell securities, either absolutely or subject to certain restrictions. In other words, the holder gives up the right to
decide what securities are bought or sold for the account.
|
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|
Non-Public Information
|
|
Any information that is not generally available to the general public in widely disseminated media reports, SEC filings, public reports, prospectuses, or similar publications or sources.
|
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Personal Securities Account
|
|
Any holding of Securities of which you have Beneficial Ownership, other than a holding of Securities previously approved in writing by the Code of Ethics Compliance Officer over which you have no direct influence or Control. A
Personal Securities Account is not limited to securities accounts maintained at brokerage firms, but also includes holdings of Securities owned directly by you or an Immediate Family Member or held through a retirement plan of Wachovia, Wells Fargo
& Co. or any other employer.
|
|
|
Personal Securities Transaction
|
|
A purchase or sale of a Security, of which you have or acquire Beneficial Ownership.
|
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Private Placement
|
|
An offering that is exempt from registration under section 4(2) or 4(6) of the Securities Act of 1933, as amended, or Rule 504, Rule 505 or Rule 506 thereunder.
|
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Purchase or Sale of a Security
|
|
Includes, among other things, gifting or the writing of an option to purchase or sell a security.
|
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Reportable 529 Plan
|
|
Edvest and tomorrows scholar. See Section 2.4(1).
|
|
|
Reportable Fund
|
|
Reportable Fund means (i) any investment company registered under the Investment Company Act of 1940, as amended, for which a Covered Company serves as an investment adviser as defined in Section 2(a)(20) of that Act, or (ii) any
investment company registered under the Investment Company Act of 1940, as amended, whose investment adviser or principal underwriter controls a Covered Company, is controlled by a Covered Company, or is under common control with a
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Appendix A
|
|
27
|
|
Definitions
|
|
|
|
|
|
Covered Company; provided, however, that Reportable Fund shall not include an investment company that holds itself out as a money market fund. For purposes of this definition, control has the same meaning as it does
in Section 2(a)(9) of the Investment Company Act of 1940, as amended. A list of all Reportable Funds shall be maintained and made available for reference under Reportable Funds under the Code of Ethics tab in the Compliance
Department InvestNet web page.
|
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|
Security/Securities
|
|
As defined under Section 2(a)(36) of the 1940 Act or Section 202(a)(18) of the Advisers Act, except that it does not include 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 affiliated or unaffiliated money market mutual funds; or shares issued by open-end investment companies other than the
Reportable Funds.
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Appendix A
|
|
28
|
|
Definitions
|
A
PPENDIX
B
R
ELEVANT
C
OMPLIANCE
D
EPARTMENT
S
TAFF
L
IST
**
Please consult the intranet website for a current
list of compliance staff designated to monitoring the Code of Ethics.
Assistance with the Code of Ethics and the Code of Ethics System is also available
by e-mailing WellsCapitalCOE@wellsfargo.com.
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|
Appendix B
|
|
29
|
|
Compliance Department Staff List
|
A
PPENDIX
C
P
OLICY
ON
G
IFTS
AND
A
CTIVITIES
WITH
C
USTOMERS
OR
V
ENDORS
You and your family members must not accept gifts from or participate in activities with (including services, discounts, entertainment, travel
or promotional materials) an actual or potential customer or vendor or from business or professional people to whom you do or may refer business unless the gift or activity was in accordance with accepted, lawful business practices and is of
sufficiently limited value that no possible inference can be drawn that the gift or activity could influence you in the performance of your duties for Wells Fargo. It is unlawful for you to corruptly seek or accept anything of value from any person,
intending to be influenced or rewarded in connection with any business or transaction of Wells Fargo. This rule applies to all team members, including, but not limited to, those involved in recommending or making decisions related to:
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Pricing of products sold by the company
|
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Extension of credit, or
|
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|
Purchase of goods or services from outside vendors
|
1.
|
Money Money (cash, check, money order, electronic funds, Visa or similar gifts cards, or any type of gift that can be exchanged for or deposited as cash) must never be accepted or given.
|
2.
|
Giving Gifts Team members who wish to give gifts to vendors, customers or officials, or who are asked to authorize such gifts, must follow standard expense authorization procedures.
|
Gifts valued at more than $100 to a current or potential customer within any calendar year must be approved, in writing, by your Code of
Ethics Compliance Department.
Team members who wish to give personal gifts to other team members must follow the general guideline that
the gift be made in accordance with accepted business practices and is of sufficiently limited value that the gift could not influence the giver or the receiver in the performance of their duties for Wells Fargo, nor create actual or perceived
pressure to reciprocate.
3.
|
Accepting Gifts Unless approved, in writing, by your Code of Ethics Compliance Department, you may not accept gifts, gift cards or gift certificates worth more than $100 from a current or potential customer,
vendor or their agent within any calendar year. However, the following items are
not
subject to the $100 limit:
|
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|
Gifts based on obvious family or personal relationship when it is clear that the relationship, and not the companys business, is the basis for the gift;
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Discounts or rebates on merchandise or services from an actual or potential customer or vendor if they are comparable to and do not exceed the discount or rebate generally given by the customer or vendor to others;
|
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Awards from civic, charitable, educational or religious organizations for recognition of service and accomplishment.
|
4.
|
Activities with Customers or Vendors Activities with existing or potential customers or vendors that are paid for by them (including meals, winning door prizes, sporting events and other entertainment, as well as
trips to customer and vendor sites, exhibits and other activities) may be accepted only if the activity is a customary, accepted and lawful business practice and is of sufficiently limited value that no possible inference can be drawn that
participating in the activity could influence you in the performance of your duties for Wells Fargo.
|
If you
have any doubt about the propriety of participating in an activity offered by a customer or a vendor you should consult with your supervisor and Code of Ethics Compliance Department before accepting the offer. If the activity includes travel paid
for by a customer or vendor, you must obtain management approval before accepting the trip.
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|
|
Appendix C
|
|
30
|
|
Policy on Receiving Gifts
|
5. Dealings with Government Officials- Team members must comply with U.S. law, including the U.S. Foreign Corrupt
Practices Act, and the laws of foreign countries when dealing with domestic and foreign government officials. Under no circumstances may you pay or offer anything of value directly or indirectly, to a government official, including foreign
officials, political parties and party officials and candidates for the purpose of improperly influencing an official act or decision, securing an improper advantage, or assisting in obtaining or retraining business or directing business to anyone.
In countries in which there is a government involvement in business enterprises, such officials may include employees and manager of local enterprises.
6. ERISA - Given the increased scrutiny of gifts and entertainment for ERISA clients, WellsCaps policy limits any gift or entertainment to or from an
ERISA plan trustee or other representatives of a labor organization to $10 per plan trustee or representative.
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Appendix C
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31
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Policy on Receiving Gifts
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A
PPENDIX
D
R
EGISTERED
P
RODUCTS
PLEASE CONSULT THE WELLSCAP WEBSITE
FOR A COMPLETE LIST OF MUTUAL FUNDS AND CLOSED END FUNDS TO WHICH THE CODE APPLIES. PLEASE REFER TO THE FOLLOWING WEBSITE FOR A CURRENT LIST OF REPORTABLE FUNDS: [ADD LINK].
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Appendix D
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32
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Mutual Fund Products
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A
PPENDIX
E
C
OMPLIANCE
CODE
CHANGES
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1.
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Section 5.3 Political Contributions
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April 2012
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Added Political Contribution language for investment advisers.
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2.
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Appendix B Relevant Compliance Department Staff List
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April 2012
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Added current Compliance staff.
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3.
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Appendix C Gifts and Activities with Customers or Vendors
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April 2012
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Added ERISA guidelines for gifts
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4.
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Section 1.4 You are considered to be an Access Person
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June 2012
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Modified definition of an Access Person
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5.
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Cover Page and Preamble
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August 2012
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Cover page revised and Preamble created for joint use of Policies and Procedures with related entities, as
needed
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6.
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Preamble
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April 2014
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Preamble revised for joint use of Policies and Procedures with related entities, as needed (added Metropolitan West Capital
Management, LLC)
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7.
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Appendix B
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December 2014
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Updated appendix to remove Code of Ethics staff names and replace with an email distribution list for all questions related
to the Code of Ethics or the Code of Ethics System.
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Appendix E
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33
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Compliance Code Changes
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