UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number811-09645
Columbia Funds Series Trust
(Exact name of registrant as specified in charter)
225 Franklin Street
Boston, Massachusetts 02110
(Address of principal executive offices) (Zip code)
Christopher O. Petersen, Esq.
c/o Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, Massachusetts 02110
Ryan C. Larrenaga, Esq.
c/o Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 345-6611
Date of fiscal year end: February 29
Date of reporting period: February 29, 2020
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
Annual Report
February 29, 2020
February 29, 2020
Columbia Overseas
Value Fund
Beginning on January 1, 2021, as
permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports like this one will no longer be sent by mail, unless you
specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (columbiathreadneedleus.com/investor/), and each time a report is posted you will be notified
by mail and provided with a website address to access the report.
If you have already elected to
receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically
at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with the Fund, by calling 800.345.6611 or by enrolling in “eDelivery” by logging
into your account at columbiathreadneedleus.com/investor/.
You may elect to receive all future
reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you
invest directly with the Fund, you can call 800.345.6611 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive paper reports will apply to all Columbia
Funds held in your account if you invest through a financial intermediary or all Columbia Funds held with the fund complex if you invest directly with the Fund.
Not FDIC Insured • No bank
guarantee • May lose value
Table of Contents
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Columbia Overseas Value Fund (the
Fund) mails one shareholder report to each shareholder address, unless such shareholder elected to receive shareholder reports from the Fund electronically. If you would like more than one report, please call
shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and
procedures
The policy of the Board of Trustees
is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by
calling 800.345.6611; contacting your financial intermediary; visiting columbiathreadneedleus.com/investor/; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding
how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting
columbiathreadneedleus.com/investor/, or searching the website of the SEC at sec.gov.
Quarterly schedule of
investments
The Fund files a complete schedule
of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT, and for reporting periods ended prior to March 31, 2019, on Form N-Q. The Fund’s Form N-Q and Form N-PORT
filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q or Form N-PORT, can also be obtained without charge, upon request, by calling
800.345.6611.
Additional Fund information
For more information about the
Fund, please visit columbiathreadneedleus.com/investor/ or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC (the
Investment Manager)
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors,
Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 219104
Kansas City, MO 64121-9104
Columbia Overseas Value Fund | Annual
Report 2020
Fund at a Glance
Investment objective
The Fund
seeks long-term capital appreciation.
Portfolio management
Fred Copper, CFA
Co-Portfolio Manager
Managed Fund since 2008
Daisuke Nomoto, CMA (SAAJ)
Co-Portfolio Manager
Managed Fund since 2013
Morningstar style boxTM
The Morningstar Style Box is based on a fund’s portfolio holdings. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows
investment style (value, blend, or growth). Information shown is based on the most recent data provided by Morningstar.
© 2020 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or
distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
Returns for Class A shares are shown
with and without the maximum initial sales charge of 5.75%. Returns for Class C shares are shown with and without the 1.00% contingent deferred sales charge for the first year only. The Fund’s other share
classes are not subject to sales charges and have limited eligibility. Please see the Fund’s prospectus for details. Performance for different share classes will vary based on differences in sales charges and
fees associated with each share class. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the
redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee
waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown
represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than
their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial
intermediary, visiting columbiathreadneedleus.com/investor/ or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investor/investment-products/mutual-funds/appended-performance for more information. |
The MSCI EAFE Value Index (Net) is a
subset of the MSCI EAFE Index (Net), and constituents of the index include securities from Europe, Australasia and the Far East. The index generally represents approximately 50% of the free float-adjusted market
capitalization of the MSCI EAFE Index (Net), and consists of those securities classified by MSCI Inc. as most representing the value style, such as, higher book value-to-price ratios, higher forward earnings-to-price
ratios, higher dividend yields and lower forecasted growth rates than securities representing the growth style.
Indices are not available for
investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes (except the MSCI EAFE Value Index (Net), which reflects reinvested dividends net of withholding taxes) or
other expenses of investing. Securities in the Fund may not match those in an index.
Fund performance may be significantly
negatively impacted by the economic impact of the COVID-19 pandemic. The COVID-19 pandemic has adversely impacted economies and capital markets around the world in ways that will likely continue and may change in
unforeseen ways for an indeterminate period. The COVID-19 pandemic may exacerbate pre-existing political, social and economic risks in certain countries and globally.
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Columbia Overseas Value Fund | Annual Report 2020
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3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (February 28, 2010 — February 29, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Overseas Value Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions
or on the redemption of Fund shares.
| Equity sector breakdown (%) (at February 29, 2020) | |
| Communication Services | 5.9 |
| Consumer Discretionary | 7.9 |
| Consumer Staples | 11.1 |
| Energy | 11.6 |
| Financials | 26.8 |
| Health Care | 10.0 |
| Industrials | 12.5 |
| Information Technology | 3.0 |
| Materials | 6.6 |
| Real Estate | 1.5 |
| Utilities | 3.1 |
| Total | 100.0 |
Percentages indicated are based
upon total equity investments. The Fund’s portfolio composition is subject to change.
| 4 | Columbia Overseas Value Fund | Annual Report 2020 |
Fund at a Glance (continued)
| (a) | Rounds to zero. |
| (b) | Includes investments in Money Market Funds and Exchange-Traded Funds. |
Country breakdown is based
primarily on issuer’s place of organization/incorporation. Percentages indicated are based upon total investments including options purchased and excluding all other investments in derivatives, if any. The
Fund’s portfolio composition is subject to change.
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Columbia Overseas Value Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance
For the 12-month period that ended
February 29, 2020, the Fund’s Class A shares returned -4.10% excluding sales charges, outperforming its benchmark, the MSCI EAFE Value Index (Net), which returned -6.61%. The Fund’s security selection was
the principal driver of performance, while sector and country allocation detracted modestly.
Surprising financial market
resilience, then a global shock
Until the last two weeks of the
12-month period that ended February 29, 2020, markets performed surprisingly strongly. Global stocks were resilient despite a number of shocks that threatened to disrupt the global economy, in particular the ongoing
trade war between the United States and China, the world’s two largest economies. Reflecting trade tensions, global manufacturing indices (PMIs) steadily declined over most of the period. Other challenging
events included the Brexit (the U.K.’s departure from the European Union) standoff, severe political tensions in Hong Kong, and the attack on Saudi Arabia’s largest oil refinery. However, toward the end of
the period, economic and political reverberations from the coronavirus outbreak spurred a wave of selling within equity markets.
Over the 12-month period, a gradual
deceleration in economic growth caused global central banks’ monetary policies to remain extremely accommodative, supporting for a time the returns of fixed-income assets, as well as equities. Short-term
interest rates declined worldwide, while in the United States volatility within the money markets induced the U.S. Federal Reserve to expand its balance sheet in order to preserve liquidity.
The coronavirus outbreak in early
2020 was a seminal and extremely disruptive event for financial markets and investors. A localized outbreak in the Hubei province in China metastasized into a global pandemic that has caused a significant percentage
of the world’s population to shelter in place, creating both a supply shock as global supply chains are interrupted, as well as a demand shock as individuals have avoided travel and major events, and have
curtailed many forms of economic engagement.
Industry allocation and security
selection
During the period, the
Fund’s sector weighting decisions detracted modestly from relative return, in particular from an overweight to the energy sector and an underweight to the utilities sector. The Fund’s country weightings
detracted somewhat, driven by an overweight to the Netherlands. However, as is typical for the Fund, relative performance was largely driven by stock selection. In terms of individual holdings, the Fund’s
position in BW LPG, a Singapore-based shipping company, performed strongly as previously depressed freight rates improved. Elsewhere, holdings in Yamana Gold, Inc. boosted performance as the Canadian metals producer
benefited from a rally in gold prices. Lastly, the Fund’s position in Japanese import/export firm ITOCHU Corp. posted gains driven by strong cash flows across the company’s various divisions. Conversely,
holdings in Dutch financial firm ABN AMRO Bank NV detracted as the company’s results were hurt by declining interest rates, which squeezed the bank’s interest margins, and money laundering accusations
weighed on the stock. In addition, a position in Liberty Global PLC, a pan-European cable television provider, was hurt by pricing competition and weak demand in some core markets. Finally, holdings in U.K.-based
specialist insurer Just Group PLC weighed on returns as the company was hurt by falling interest rates and Brexit-related declines in property prices.
During the period, the Fund used
forward foreign currency contracts to hedge currency exposure associated with Fund 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 the benchmark, and/or to adjust an underweight country exposure in the portfolio. The Fund used options contracts to help efficiently exit from particular positions, or to implement
a particular tactical view on the overall market without having to trade in the Fund’s underlying securities. On a stand-alone basis, the use of these derivatives had a negative impact on Fund performance.
At period’s end
News regarding the coronavirus
has dominated global capital markets given the impact that the pandemic is having on both aggregate supply and demand due to the restrictive policies that are required to stem the spread of the virus. Markets dislike
uncertainty, and the unique characteristics of the virus have brought significant ambiguity regarding the severity and duration of the outbreak, and its impact on the global economy and markets. Until there is a
consensus expectation regarding the ultimate impact from COVID-19, markets are likely to remain extremely volatile. However, monetary conditions were very stimulative globally prior to the outbreak, and there has been
tremendous momentum to support individual economies and
| 6 | Columbia Overseas Value Fund | Annual Report 2020 |
Manager Discussion of Fund Performance (continued)
capital markets on a country-by-country basis with
an extraordinary quantity of stimulus. Once the focus turns to life after the coronavirus, we would expect a significant pickup in economic activity, as postponed demand is compressed into a catch-up period on a more
durable basis, and as the monetary and fiscal stimulus currently accumulating in the system turbocharges economic activity.
At the close of the reporting
period, the Fund was neutrally positioned after maintaining a defensive stance for most of 2018 and 2019 in response to expectations for decelerating economic activity. We look for an eventual market rotation into
more cyclical stocks in anticipation of a resumption in economic growth.
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Value securities may be unprofitable if the market fails to recognize their intrinsic worth or the portfolio manager misgauged that worth. International investing involves certain risks and volatility due to potential political, economic or currency instabilities and different financial and accounting standards. Risks are enhanced for
emerging market issuers. Investing in derivatives is a specialized activity that involves special risks that subject the Fund to significant loss potential, including when used as leverage, and may result in greater fluctuation in Fund
value. See the Fund’s prospectus for information on these and other risks.
The views expressed in this report
reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and
results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update
such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf
of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
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Columbia Overseas Value Fund | Annual Report 2020
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7 |
Understanding Your Fund’s
Expenses
(Unaudited)
(Unaudited)
As an investor, you incur two types
of costs. There are shareholder transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing fund costs, which generally include management fees,
distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with
the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s
expenses
To illustrate these ongoing
costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment
of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the
“Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the
expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under
the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the
Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or
the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are
required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the
hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are
meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in
comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
Expenses paid during the period
are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal
half year and divided by 366.
Expenses do not include fees and
expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment
Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
| 8 | Columbia Overseas Value Fund | Annual Report 2020 |
Portfolio of Investments
February 29, 2020
February 29, 2020
(Percentages represent value of
investments compared to net assets)
Investments in securities
| Common Stocks 98.0% | ||
| Issuer | Shares | Value ($) |
| Australia 2.4% | ||
| Ansell Ltd. | 1,055,466 | 20,647,754 |
| BHP Group Ltd., ADR | 289,271 | 12,528,327 |
| National Australia Bank Ltd. | 531,161 | 8,740,834 |
| Total | 41,916,915 | |
| Austria 1.3% | ||
| Andritz AG | 667,955 | 23,637,379 |
| Canada 4.8% | ||
| Alimentation Couche-Tard, Inc., Class B | 574,318 | 17,440,269 |
| Cameco Corp. | 2,060,169 | 17,882,267 |
| Stars Group, Inc. (The)(a) | 830,396 | 19,029,973 |
| Teck Resources Ltd., Class B | 743,938 | 7,528,653 |
| Teekay Tankers Ltd., Class A(a) | 204,366 | 3,382,257 |
| Yamana Gold, Inc. | 5,127,126 | 19,585,621 |
| Total | 84,849,040 | |
| China 0.7% | ||
| Tencent Holdings Ltd. | 230,500 | 11,687,435 |
| Finland 1.9% | ||
| UPM-Kymmene OYJ | 1,061,996 | 32,679,970 |
| France 11.4% | ||
| AXA SA | 1,932,180 | 44,912,250 |
| BNP Paribas SA | 732,983 | 35,579,227 |
| Capgemini SE | 204,777 | 22,692,827 |
| DBV Technologies SA, ADR(a) | 279,080 | 2,732,193 |
| Eiffage SA | 116,816 | 12,495,786 |
| Sanofi | 315,753 | 29,448,967 |
| Total SA | 1,209,773 | 52,289,263 |
| Total | 200,150,513 | |
| Germany 7.5% | ||
| Allianz SE, Registered Shares | 76,096 | 16,577,508 |
| Aroundtown SA | 1,737,252 | 15,093,131 |
| Bayer AG, Registered Shares | 238,373 | 17,335,930 |
| Covestro AG | 611,446 | 23,692,048 |
| Duerr AG | 697,951 | 22,137,580 |
| E.ON SE | 2,008,781 | 23,334,530 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| KION Group AG | 261,883 | 14,163,523 |
| Total | 132,334,250 | |
| Hong Kong 1.8% | ||
| WH Group Ltd. | 29,510,000 | 30,968,131 |
| Ireland 0.1% | ||
| Amarin Corp. PLC, ADR(a) | 116,960 | 1,715,803 |
| Israel 2.4% | ||
| Bank Hapoalim BM | 4,176,552 | 32,493,995 |
| Bezeq Israeli Telecommunication Corp., Ltd.(a) | 12,317,855 | 8,983,276 |
| Total | 41,477,271 | |
| Italy 0.4% | ||
| Esprinet SpA | 1,142,413 | 6,244,618 |
| Japan 22.6% | ||
| CYBERDYNE, Inc.(a) | 117,300 | 473,484 |
| Dai-ichi Life Holdings, Inc. | 1,023,100 | 13,875,640 |
| Invincible Investment Corp. | 25,552 | 10,339,997 |
| ITOCHU Corp. | 1,789,400 | 40,550,302 |
| Kinden Corp. | 1,009,100 | 15,235,380 |
| Koito Manufacturing Co., Ltd. | 252,700 | 9,899,449 |
| Matsumotokiyoshi Holdings Co., Ltd. | 780,700 | 25,632,691 |
| Mitsubishi UFJ Financial Group, Inc. | 4,207,300 | 20,556,698 |
| Nihon M&A Center, Inc. | 105,300 | 3,243,817 |
| Nippon Telegraph & Telephone Corp. | 1,754,900 | 40,941,416 |
| ORIX Corp. | 2,529,000 | 40,990,269 |
| Ricoh Co., Ltd. | 1,582,500 | 14,778,170 |
| Shionogi & Co., Ltd. | 324,000 | 17,440,931 |
| Ship Healthcare Holdings, Inc. | 334,100 | 13,460,939 |
| Sony Corp. | 412,400 | 25,423,586 |
| Starts Corp., Inc. | 252,800 | 5,209,282 |
| Subaru Corp. | 755,400 | 18,283,236 |
| Sumitomo Mitsui Financial Group, Inc. | 184,900 | 5,866,842 |
| Takeda Pharmaceutical Co., Ltd. | 1,155,700 | 39,910,459 |
| Takuma Co., Ltd. | 873,645 | 9,498,393 |
| Toyota Motor Corp. | 373,400 | 24,519,206 |
| Total | 396,130,187 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
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Columbia Overseas Value Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Netherlands 8.3% | ||
| ABN AMRO Bank NV | 1,830,164 | 25,101,325 |
| ASR Nederland NV | 950,387 | 31,982,618 |
| ING Groep NV | 4,111,241 | 39,368,592 |
| Koninklijke Ahold Delhaize NV | 846,278 | 19,770,983 |
| Signify NV | 982,139 | 29,264,285 |
| Total | 145,487,803 | |
| Norway 1.8% | ||
| BW LPG Ltd. | 1,927,674 | 12,033,310 |
| Kongsberg Automotive ASA(a) | 2,888,319 | 1,321,874 |
| Leroy Seafood Group ASA | 3,047,196 | 18,774,228 |
| Total | 32,129,412 | |
| Pakistan 0.6% | ||
| DG Khan Cement Co., Ltd. | 9,133,400 | 4,089,362 |
| Lucky Cement Ltd. | 1,790,650 | 5,697,767 |
| Total | 9,787,129 | |
| Portugal 0.0% | ||
| Banco Espirito Santo SA, Registered Shares(a),(b),(c) | 3,582,817 | 4 |
| Russian Federation 0.6% | ||
| Sberbank of Russia PJSC, ADR | 728,098 | 10,388,983 |
| Singapore 1.8% | ||
| DBS Group Holdings Ltd. | 1,780,300 | 31,127,149 |
| South Korea 1.0% | ||
| GS Home Shopping, Inc. | 20,751 | 2,130,312 |
| Hyundai Home Shopping Network Corp. | 100,321 | 6,111,562 |
| Youngone Corp. | 357,173 | 9,374,775 |
| Total | 17,616,649 | |
| Spain 3.5% | ||
| ACS Actividades de Construccion y Servicios SA | 519,103 | 15,478,854 |
| Banco Santander SA | 1,746,385 | 6,455,267 |
| Endesa SA | 1,148,477 | 29,552,616 |
| Tecnicas Reunidas SA(a) | 415,721 | 9,399,875 |
| Total | 60,886,612 | |
| Sweden 0.4% | ||
| Granges AB | 810,909 | 6,538,831 |
| Switzerland 0.5% | ||
| Novartis AG, Registered Shares | 106,910 | 8,993,617 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| United Kingdom 17.8% | ||
| Barclays Bank PLC | 7,304,963 | 13,999,905 |
| BP PLC | 6,347,334 | 32,978,255 |
| British American Tobacco PLC | 1,126,299 | 44,533,026 |
| BT Group PLC | 8,110,392 | 14,878,661 |
| Crest Nicholson Holdings PLC | 1,331,823 | 7,767,308 |
| DCC PLC | 404,644 | 28,981,841 |
| GW Pharmaceuticals PLC, ADR(a) | 38,201 | 3,908,344 |
| HSBC Holdings PLC | 1,982,418 | 13,389,737 |
| Inchcape PLC | 893,706 | 6,680,392 |
| John Wood Group PLC | 1,807,404 | 8,666,951 |
| Just Group PLC(a) | 22,156,475 | 20,624,152 |
| Legal & General Group PLC | 4,262,539 | 14,440,948 |
| Micro Focus International PLC | 855,269 | 8,145,340 |
| Royal Dutch Shell PLC, Class B | 2,884,298 | 62,517,845 |
| TP ICAP PLC | 4,755,387 | 22,436,654 |
| WPP PLC | 896,252 | 8,611,247 |
| Total | 312,560,606 | |
| United States 4.4% | ||
| Aerie Pharmaceuticals, Inc.(a) | 162,749 | 2,848,107 |
| Alexion Pharmaceuticals, Inc.(a) | 35,464 | 3,334,680 |
| Burford Capital Ltd. | 1,585,567 | 11,249,595 |
| Insmed, Inc.(a) | 121,314 | 3,020,719 |
| Liberty Global PLC, Class C(a) | 862,925 | 16,041,776 |
| Primo Water Corp. | 2,377,780 | 33,883,365 |
| Quotient Ltd.(a) | 746,481 | 4,538,604 |
| Sage Therapeutics, Inc.(a) | 49,617 | 2,331,999 |
| Total | 77,248,845 | |
|
Total Common Stocks
(Cost $1,909,883,833) |
1,716,557,152 | |
| Exchange-Traded Equity Funds 1.0% | ||
| Shares | Value ($) | |
| United States 1.0% | ||
| iShares MSCI EAFE ETF | 280,582 | 17,463,423 |
|
Total Exchange-Traded Equity Funds
(Cost $18,894,251) |
17,463,423 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Overseas Value Fund | Annual Report 2020 |
| Options Purchased Puts 0.0% | |||||
| Value ($) | |||||
| (Cost $778,033) | 867,680 | ||||
| Money Market Funds 0.9% | ||
| Shares | Value ($) | |
| Columbia Short-Term Cash Fund, 1.641%(d),(e) | 15,491,357 | 15,491,357 |
|
Total Money Market Funds
(Cost $15,490,644) |
15,491,357 | |
|
Total Investments in Securities
(Cost $1,945,046,761) |
1,750,379,612 | |
| Other Assets & Liabilities, Net | 1,698,063 | |
| Net Assets | $1,752,077,675 | |
Investments in derivatives
| Forward foreign currency exchange contracts | |||||
|
Currency to
be sold |
Currency to
be purchased |
Counterparty |
Settlement
date |
Unrealized
appreciation ($) |
Unrealized
depreciation ($) |
| 87,463,000 CAD | 66,225,080 USD | Goldman Sachs | 03/26/2020 | 1,061,737 | — |
| 114,268,000 ILS | 33,192,355 USD | Goldman Sachs | 03/26/2020 | 207,740 | — |
| 3,603,100,000 JPY | 33,129,212 USD | Goldman Sachs | 03/26/2020 | — | (320,069) |
| 20,671,007,000 KRW | 17,523,000 USD | Goldman Sachs | 03/26/2020 | 356,142 | — |
| 142,872,000 NOK | 15,578,300 USD | Goldman Sachs | 03/26/2020 | 391,360 | — |
| 78,109,315 USD | 115,560,000 AUD | Goldman Sachs | 03/26/2020 | — | (2,785,224) |
| 27,328,386 USD | 26,514,000 CHF | Goldman Sachs | 03/26/2020 | 200,013 | — |
| 27,291,738 USD | 261,927,000 SEK | Goldman Sachs | 03/26/2020 | — | (2,381) |
| Total | 2,216,992 | (3,107,674) | |||
| Put option contracts purchased | ||||||||
| Description | Counterparty |
Trading
currency |
Notional
amount |
Number of
contracts |
Exercise
price/Rate |
Expiration
date |
Cost ($) | Value ($) |
| CBOE Volatility Index | JPMorgan | USD | 6,000,456 | 1,496 | 30.00 | 03/18/2020 | 778,033 | 867,680 |
Notes to Portfolio of
Investments
| (a) | Non-income producing investment. |
| (b) | Represents fair value as determined in good faith under procedures approved by the Board of Trustees. At February 29, 2020, the total value of these securities amounted to $4, which represents less than 0.01% of total net assets. |
| (c) | Valuation based on significant unobservable inputs. |
| (d) | The rate shown is the seven-day current annualized yield at February 29, 2020. |
| (e) | As defined in the Investment Company Act of 1940, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. Holdings and transactions in these affiliated companies during the year ended February 29, 2020 are as follows: |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Overseas Value Fund | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Abbreviation Legend
| ADR | American Depositary Receipt |
Currency Legend
| AUD | Australian Dollar |
| CAD | Canada Dollar |
| CHF | Swiss Franc |
| ILS | Israeli Shekel |
| JPY | Japanese Yen |
| KRW | South Korean Won |
| NOK | Norwegian Krone |
| SEK | Swedish Krona |
| USD | US Dollar |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
Foreign equity securities actively
traded in markets where there is a significant delay in the local close relative to the New York Stock Exchange are classified as Level 2. The values of these securities may include an adjustment to reflect the impact
of market movements following the close of local trading, as described in Note 2 to the financial statements – Security valuation.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
Under the direction of the
Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of
voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly
to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of
Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third
party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale
pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to
discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members
of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 12 | Columbia Overseas Value Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Fair value measurements (continued)
The following table is a summary of the inputs used to value the Fund’s investments at February 29, 2020:
The following table is a summary of the inputs used to value the Fund’s investments at February 29, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Common Stocks | ||||
| Australia | 12,528,327 | 29,388,588 | — | 41,916,915 |
| Austria | — | 23,637,379 | — | 23,637,379 |
| Canada | 84,849,040 | — | — | 84,849,040 |
| China | — | 11,687,435 | — | 11,687,435 |
| Finland | — | 32,679,970 | — | 32,679,970 |
| France | 2,732,193 | 197,418,320 | — | 200,150,513 |
| Germany | — | 132,334,250 | — | 132,334,250 |
| Hong Kong | — | 30,968,131 | — | 30,968,131 |
| Ireland | 1,715,803 | — | — | 1,715,803 |
| Israel | — | 41,477,271 | — | 41,477,271 |
| Italy | — | 6,244,618 | — | 6,244,618 |
| Japan | — | 396,130,187 | — | 396,130,187 |
| Netherlands | — | 145,487,803 | — | 145,487,803 |
| Norway | — | 32,129,412 | — | 32,129,412 |
| Pakistan | — | 9,787,129 | — | 9,787,129 |
| Portugal | — | — | 4 | 4 |
| Russian Federation | — | 10,388,983 | — | 10,388,983 |
| Singapore | — | 31,127,149 | — | 31,127,149 |
| South Korea | — | 17,616,649 | — | 17,616,649 |
| Spain | — | 60,886,612 | — | 60,886,612 |
| Sweden | — | 6,538,831 | — | 6,538,831 |
| Switzerland | — | 8,993,617 | — | 8,993,617 |
| United Kingdom | 3,908,344 | 308,652,262 | — | 312,560,606 |
| United States | 65,999,250 | 11,249,595 | — | 77,248,845 |
| Total Common Stocks | 171,732,957 | 1,544,824,191 | 4 | 1,716,557,152 |
| Exchange-Traded Equity Funds | 17,463,423 | — | — | 17,463,423 |
| Options Purchased Puts | 867,680 | — | — | 867,680 |
| Money Market Funds | 15,491,357 | — | — | 15,491,357 |
| Total Investments in Securities | 205,555,417 | 1,544,824,191 | 4 | 1,750,379,612 |
| Investments in Derivatives | ||||
| Asset | ||||
| Forward Foreign Currency Exchange Contracts | — | 2,216,992 | — | 2,216,992 |
| Liability | ||||
| Forward Foreign Currency Exchange Contracts | — | (3,107,674) | — | (3,107,674) |
| Total | 205,555,417 | 1,543,933,509 | 4 | 1,749,488,930 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The Fund’s assets assigned to
the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical
assets. These assets include certain foreign securities for which a third party statistical pricing service may be employed for purposes of fair market valuation. The model utilized by such third party statistical
pricing service takes into account a security’s correlation to available market data including, but not limited to, intraday index, ADR, and exchange-traded fund movements.
Forward foreign currency exchange
contracts are valued at unrealized appreciation (depreciation).
The Fund does not hold any
significant investments (greater than one percent of net assets) categorized as Level 3.
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Overseas Value Fund | Annual Report 2020
|
13 |
Statement of Assets and Liabilities
February 29, 2020
February 29, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $1,928,778,084) | $1,734,020,575 |
| Affiliated issuers (cost $15,490,644) | 15,491,357 |
| Options purchased (cost $778,033) | 867,680 |
| Cash | 512,917 |
| Unrealized appreciation on forward foreign currency exchange contracts | 2,216,992 |
| Receivable for: | |
| Investments sold | 1,742,870 |
| Capital shares sold | 4,614,739 |
| Dividends | 3,866,782 |
| Foreign tax reclaims | 1,221,546 |
| Expense reimbursement due from Investment Manager | 598 |
| Prepaid expenses | 3,518 |
| Total assets | 1,764,559,574 |
| Liabilities | |
| Unrealized depreciation on forward foreign currency exchange contracts | 3,107,674 |
| Payable for: | |
| Investments purchased | 5,347,664 |
| Capital shares purchased | 3,388,958 |
| Management services fees | 38,700 |
| Distribution and/or service fees | 3,017 |
| Transfer agent fees | 157,847 |
| Compensation of board members | 216,167 |
| Other expenses | 221,872 |
| Total liabilities | 12,481,899 |
| Net assets applicable to outstanding capital stock | $1,752,077,675 |
| Represented by | |
| Paid in capital | 2,228,994,307 |
| Total distributable earnings (loss) | (476,916,632) |
| Total - representing net assets applicable to outstanding capital stock | $1,752,077,675 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 14 | Columbia Overseas Value Fund | Annual Report 2020 |
Statement of Assets and Liabilities (continued)
February 29, 2020
February 29, 2020
| Class A | |
| Net assets | $309,065,454 |
| Shares outstanding | 36,130,850 |
| Net asset value per share | $8.55 |
| Maximum sales charge | 5.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $9.07 |
| Advisor Class | |
| Net assets | $210,152,421 |
| Shares outstanding | 24,633,572 |
| Net asset value per share | $8.53 |
| Class C | |
| Net assets | $28,608,223 |
| Shares outstanding | 3,365,165 |
| Net asset value per share | $8.50 |
| Institutional Class | |
| Net assets | $443,216,959 |
| Shares outstanding | 51,734,219 |
| Net asset value per share | $8.57 |
| Institutional 2 Class | |
| Net assets | $493,226,061 |
| Shares outstanding | 57,910,737 |
| Net asset value per share | $8.52 |
| Institutional 3 Class | |
| Net assets | $260,599,185 |
| Shares outstanding | 30,560,398 |
| Net asset value per share | $8.53 |
| Class R | |
| Net assets | $7,209,372 |
| Shares outstanding | 864,277 |
| Net asset value per share | $8.34 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Overseas Value Fund | Annual Report 2020
|
15 |
Statement of Operations
Year Ended February 29, 2020
Year Ended February 29, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $69,819,509 |
| Dividends — affiliated issuers | 238,200 |
| Foreign taxes withheld | (5,821,920) |
| Total income | 64,235,789 |
| Expenses: | |
| Management services fees | 14,663,603 |
| Distribution and/or service fees | |
| Class A | 839,005 |
| Class C | 355,560 |
| Class R | 34,672 |
| Transfer agent fees | |
| Class A | 490,387 |
| Advisor Class | 279,188 |
| Class C | 51,971 |
| Institutional Class | 675,091 |
| Institutional 2 Class | 303,293 |
| Institutional 3 Class | 22,769 |
| Class R | 10,129 |
| Compensation of board members | 60,353 |
| Custodian fees | 272,520 |
| Printing and postage fees | 136,259 |
| Registration fees | 168,890 |
| Audit fees | 42,782 |
| Legal fees | 24,242 |
| Interest on collateral | 2,946 |
| Compensation of chief compliance officer | 386 |
| Other | 52,488 |
| Total expenses | 18,486,534 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (464,931) |
| Fees waived by transfer agent | |
| Institutional 2 Class | (89,926) |
| Expense reduction | (382) |
| Total net expenses | 17,931,295 |
| Net investment income | 46,304,494 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 37,737,449 |
| Investments — affiliated issuers | (1,553) |
| Foreign currency translations | 34,346 |
| Forward foreign currency exchange contracts | (6,607,559) |
| Options purchased | (4,145,582) |
| Options contracts written | 318,428 |
| Net realized gain | 27,335,529 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (144,874,731) |
| Investments — affiliated issuers | 713 |
| Foreign currency translations | (100,392) |
| Forward foreign currency exchange contracts | 839,915 |
| Options purchased | 608,884 |
| Options contracts written | 249 |
| Net change in unrealized appreciation (depreciation) | (143,525,362) |
| Net realized and unrealized loss | (116,189,833) |
| Net decrease in net assets resulting from operations | $(69,885,339) |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 16 | Columbia Overseas Value Fund | Annual Report 2020 |
Statement of Changes in Net Assets
|
Year Ended
February 29, 2020 |
Year Ended
February 28, 2019 |
|
| Operations | ||
| Net investment income | $46,304,494 | $40,968,366(a) |
| Net realized gain | 27,335,529 | 8,276,974(a) |
| Net change in unrealized appreciation (depreciation) | (143,525,362) | (137,012,216)(a) |
| Net decrease in net assets resulting from operations | (69,885,339) | (87,766,876) |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (12,173,862) | (11,129,073) |
| Advisor Class | (8,445,439) | (4,877,227) |
| Class C | (1,005,856) | (1,101,771) |
| Institutional Class | (18,507,512) | (13,232,351) |
| Institutional 2 Class | (21,627,056) | (11,949,202) |
| Institutional 3 Class | (10,936,273) | (7,891,502) |
| Class R | (257,575) | (129,052) |
| Class T | — | (12,607) |
| Total distributions to shareholders | (72,953,573) | (50,322,785) |
| Increase in net assets from capital stock activity | 130,646,357 | 691,732,292 |
| Total increase (decrease) in net assets | (12,192,555) | 553,642,631 |
| Net assets at beginning of year | 1,764,270,230 | 1,210,627,599 |
| Net assets at end of year | $1,752,077,675 | $1,764,270,230 |
| (a) | Amounts for the year ended February 28, 2019, as disclosed in the prior financial statements, have been corrected, see Note 10 to the Notes to Financial Statements. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Overseas Value Fund | Annual Report 2020
|
17 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| February 29, 2020 | February 28, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 6,127,924 | 57,347,219 | 10,252,736 | 100,421,639 |
| Distributions reinvested | 1,209,112 | 11,700,791 | 1,167,990 | 10,628,368 |
| Redemptions | (8,137,467) | (75,738,653) | (9,579,912) | (90,346,038) |
| Net increase (decrease) | (800,431) | (6,690,643) | 1,840,814 | 20,703,969 |
| Advisor Class | ||||
| Subscriptions | 14,289,588 | 131,823,892 | 16,608,652 | 158,458,810 |
| Distributions reinvested | 875,678 | 8,444,871 | 549,056 | 4,875,876 |
| Redemptions | (8,022,754) | (74,168,783) | (7,267,321) | (64,550,993) |
| Net increase | 7,142,512 | 66,099,980 | 9,890,387 | 98,783,693 |
| Class C | ||||
| Subscriptions | 559,233 | 5,214,228 | 2,382,707 | 23,294,142 |
| Distributions reinvested | 101,570 | 978,120 | 116,574 | 1,079,628 |
| Redemptions | (1,880,320) | (17,293,672) | (2,239,354) | (21,194,842) |
| Net increase (decrease) | (1,219,517) | (11,101,324) | 259,927 | 3,178,928 |
| Institutional Class | ||||
| Subscriptions | 22,205,355 | 206,972,718 | 37,501,046 | 356,509,812 |
| Distributions reinvested | 1,852,312 | 17,935,604 | 1,404,912 | 12,660,249 |
| Redemptions | (19,028,873) | (177,456,130) | (22,037,346) | (203,937,393) |
| Net increase | 5,028,794 | 47,452,192 | 16,868,612 | 165,232,668 |
| Institutional 2 Class | ||||
| Subscriptions | 12,158,615 | 112,681,798 | 58,444,628 | 534,350,296 |
| Distributions reinvested | 2,247,844 | 21,625,580 | 1,395,264 | 11,881,874 |
| Redemptions | (14,502,449) | (134,453,160) | (8,493,058) | (76,627,116) |
| Net increase (decrease) | (95,990) | (145,782) | 51,346,834 | 469,605,054 |
| Institutional 3 Class | ||||
| Subscriptions | 9,283,296 | 85,767,709 | 11,498,746 | 110,803,219 |
| Distributions reinvested | 1,135,561 | 10,936,162 | 881,444 | 7,891,406 |
| Redemptions | (6,815,245) | (63,661,555) | (18,347,804) | (186,649,689) |
| Net increase (decrease) | 3,603,612 | 33,042,316 | (5,967,614) | (67,955,064) |
| Class K | ||||
| Redemptions | — | — | (14,117) | (147,944) |
| Net decrease | — | — | (14,117) | (147,944) |
| Class R | ||||
| Subscriptions | 448,384 | 4,084,889 | 452,712 | 4,200,572 |
| Distributions reinvested | 24,432 | 230,639 | 12,449 | 109,035 |
| Redemptions | (258,643) | (2,325,910) | (121,077) | (1,105,947) |
| Net increase | 214,173 | 1,989,618 | 344,084 | 3,203,660 |
| Class T | ||||
| Distributions reinvested | — | — | 1,259 | 12,568 |
| Redemptions | — | — | (99,744) | (885,240) |
| Net decrease | — | — | (98,485) | (872,672) |
| Total net increase | 13,873,153 | 130,646,357 | 74,470,442 | 691,732,292 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 18 | Columbia Overseas Value Fund | Annual Report 2020 |
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BLANK]
|
Columbia Overseas Value Fund | Annual Report 2020
|
19 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. 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.
|
Net asset value,
beginning of period |
Net
investment income |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $9.24 | 0.22 | (0.56) | (0.34) | (0.33) | (0.02) | (0.35) |
| Year Ended 2/28/2019 | $10.37 | 0.27(e) | (1.10)(e) | (0.83) | (0.13) | (0.17) | (0.30) |
| Year Ended 2/28/2018 | $8.52 | 0.14 | 2.04 | 2.18 | (0.15) | (0.18) | (0.33) |
| Year Ended 2/28/2017 | $7.46 | 0.17 | 1.04 | 1.21 | (0.15) | — | (0.15) |
| Year Ended 2/29/2016 | $8.65 | 0.16 | (1.18) | (1.02) | (0.17) | — | (0.17) |
| Advisor Class | |||||||
| Year Ended 2/29/2020 | $9.21 | 0.22 | (0.52) | (0.30) | (0.36) | (0.02) | (0.38) |
| Year Ended 2/28/2019 | $10.35 | 0.28(e) | (1.10)(e) | (0.82) | (0.15) | (0.17) | (0.32) |
| Year Ended 2/28/2018 | $8.49 | 0.15 | 2.06 | 2.21 | (0.17) | (0.18) | (0.35) |
| Year Ended 2/28/2017 | $7.43 | 0.12 | 1.10 | 1.22 | (0.16) | — | (0.16) |
| Year Ended 2/29/2016(i) | $8.78 | 0.01 | (1.17) | (1.16) | (0.19) | — | (0.19) |
| Class C | |||||||
| Year Ended 2/29/2020 | $9.20 | 0.16 | (0.57) | (0.41) | (0.27) | (0.02) | (0.29) |
| Year Ended 2/28/2019 | $10.31 | 0.20(e) | (1.09)(e) | (0.89) | (0.05) | (0.17) | (0.22) |
| Year Ended 2/28/2018 | $8.48 | 0.06 | 2.04 | 2.10 | (0.09) | (0.18) | (0.27) |
| Year Ended 2/28/2017 | $7.44 | 0.06 | 1.08 | 1.14 | (0.10) | — | (0.10) |
| Year Ended 2/29/2016 | $8.64 | 0.09 | (1.17) | (1.08) | (0.12) | — | (0.12) |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $9.25 | 0.24 | (0.54) | (0.30) | (0.36) | (0.02) | (0.38) |
| Year Ended 2/28/2019 | $10.38 | 0.29(e) | (1.10)(e) | (0.81) | (0.15) | (0.17) | (0.32) |
| Year Ended 2/28/2018 | $8.53 | 0.15 | 2.05 | 2.20 | (0.17) | (0.18) | (0.35) |
| Year Ended 2/28/2017 | $7.46 | 0.12 | 1.11 | 1.23 | (0.16) | — | (0.16) |
| Year Ended 2/29/2016 | $8.66 | 0.10 | (1.11) | (1.01) | (0.19) | — | (0.19) |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $9.20 | 0.25 | (0.54) | (0.29) | (0.37) | (0.02) | (0.39) |
| Year Ended 2/28/2019 | $10.33 | 0.30(e) | (1.10)(e) | (0.80) | (0.16) | (0.17) | (0.33) |
| Year Ended 2/28/2018 | $8.48 | 0.18 | 2.03 | 2.21 | (0.18) | (0.18) | (0.36) |
| Year Ended 2/28/2017 | $7.42 | 0.15 | 1.09 | 1.24 | (0.18) | — | (0.18) |
| Year Ended 2/29/2016(k) | $8.78 | 0.02 | (1.18) | (1.16) | (0.20) | — | (0.20) |
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $9.21 | 0.25 | (0.54) | (0.29) | (0.37) | (0.02) | (0.39) |
| Year Ended 2/28/2019 | $10.35 | 0.30(e) | (1.10)(e) | (0.80) | (0.17) | (0.17) | (0.34) |
| Year Ended 2/28/2018 | $8.49 | 0.21 | 2.02 | 2.23 | (0.19) | (0.18) | (0.37) |
| Year Ended 2/28/2017 | $7.42 | 0.07 | 1.18 | 1.25 | (0.18) | — | (0.18) |
| Year Ended 2/29/2016(l) | $8.78 | 0.07 | (1.22) | (1.15) | (0.21) | — | (0.21) |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 20 | Columbia Overseas Value Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $8.55 | (4.10%) | 1.24%(c) | 1.22%(c),(d) | 2.35% | 35% | $309,065 |
| Year Ended 2/28/2019 | $9.24 | (7.96%) | 1.29%(c),(f) | 1.25%(c),(d),(f) | 2.80%(e) | 58% | $341,198 |
| Year Ended 2/28/2018 | $10.37 | 25.72% | 1.36%(g) | 1.36%(d),(g) | 1.41% | 47% | $363,817 |
| Year Ended 2/28/2017 | $8.52 | 16.25% | 1.45%(h) | 1.45%(h) | 2.13% | 89% | $243,879 |
| Year Ended 2/29/2016 | $7.46 | (11.95%) | 1.44% | 1.44%(d) | 1.93% | 68% | $171,630 |
| Advisor Class | |||||||
| Year Ended 2/29/2020 | $8.53 | (3.78%) | 0.99%(c) | 0.97%(c),(d) | 2.41% | 35% | $210,152 |
| Year Ended 2/28/2019 | $9.21 | (7.80%) | 1.04%(c),(f) | 0.99%(c),(d),(f) | 2.96%(e) | 58% | $161,150 |
| Year Ended 2/28/2018 | $10.35 | 26.18% | 1.11%(g) | 1.10%(d),(g) | 1.47% | 47% | $78,634 |
| Year Ended 2/28/2017 | $8.49 | 16.55% | 1.20%(h) | 1.20%(h) | 1.48% | 89% | $23,666 |
| Year Ended 2/29/2016(i) | $7.43 | (13.43%) | 1.23%(j) | 1.21%(d),(j) | 0.22%(j) | 68% | $1,425 |
| Class C | |||||||
| Year Ended 2/29/2020 | $8.50 | (4.81%) | 1.99%(c) | 1.97%(c),(d) | 1.73% | 35% | $28,608 |
| Year Ended 2/28/2019 | $9.20 | (8.60%) | 2.04%(c),(f) | 2.00%(c),(d),(f) | 2.09%(e) | 58% | $42,165 |
| Year Ended 2/28/2018 | $10.31 | 24.87% | 2.11%(g) | 2.10%(d),(g) | 0.61% | 47% | $44,594 |
| Year Ended 2/28/2017 | $8.48 | 15.32% | 2.20%(h) | 2.20%(h) | 0.80% | 89% | $20,829 |
| Year Ended 2/29/2016 | $7.44 | (12.66%) | 2.19% | 2.19%(d) | 1.08% | 68% | $5,345 |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $8.57 | (3.76%) | 0.99%(c) | 0.97%(c),(d) | 2.54% | 35% | $443,217 |
| Year Ended 2/28/2019 | $9.25 | (7.69%) | 1.04%(c),(f) | 1.00%(c),(d),(f) | 3.05%(e) | 58% | $432,061 |
| Year Ended 2/28/2018 | $10.38 | 25.94% | 1.11%(g) | 1.10%(d),(g) | 1.46% | 47% | $309,845 |
| Year Ended 2/28/2017 | $8.53 | 16.63% | 1.20%(h) | 1.20%(h) | 1.52% | 89% | $57,964 |
| Year Ended 2/29/2016 | $7.46 | (11.87%) | 1.22% | 1.20%(d) | 1.25% | 68% | $3,660 |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $8.52 | (3.68%) | 0.90%(c) | 0.86%(c) | 2.70% | 35% | $493,226 |
| Year Ended 2/28/2019 | $9.20 | (7.61%) | 0.96%(c),(f) | 0.88%(c),(f) | 3.39%(e) | 58% | $533,584 |
| Year Ended 2/28/2018 | $10.33 | 26.23% | 0.99%(g) | 0.98%(g) | 1.82% | 47% | $68,822 |
| Year Ended 2/28/2017 | $8.48 | 16.79% | 0.98%(h) | 0.98%(h) | 1.82% | 89% | $29,936 |
| Year Ended 2/29/2016(k) | $7.42 | (13.41%) | 1.04%(j) | 1.04%(j) | 0.45%(j) | 68% | $768 |
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $8.53 | (3.65%) | 0.85%(c) | 0.83%(c) | 2.67% | 35% | $260,599 |
| Year Ended 2/28/2019 | $9.21 | (7.64%) | 0.89%(c),(f) | 0.85%(c),(f) | 3.11%(e) | 58% | $248,248 |
| Year Ended 2/28/2018 | $10.35 | 26.37% | 0.94%(g) | 0.93%(g) | 2.08% | 47% | $340,651 |
| Year Ended 2/28/2017 | $8.49 | 16.95% | 0.95%(h) | 0.95%(h) | 0.85% | 89% | $13,916 |
| Year Ended 2/29/2016(l) | $7.42 | (13.34%) | 0.92%(j) | 0.92%(j) | 1.26%(j) | 68% | $2 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Overseas Value Fund | Annual Report 2020
|
21 |
Financial Highlights (continued)
|
Net asset value,
beginning of period |
Net
investment income |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class R | |||||||
| Year Ended 2/29/2020 | $9.02 | 0.18 | (0.53) | (0.35) | (0.31) | (0.02) | (0.33) |
| Year Ended 2/28/2019 | $10.13 | 0.23(e) | (1.07)(e) | (0.84) | (0.10) | (0.17) | (0.27) |
| Year Ended 2/28/2018 | $8.33 | 0.08 | 2.03 | 2.11 | (0.13) | (0.18) | (0.31) |
| Year Ended 2/28/2017(m) | $7.46 | 0.06 | 0.94 | 1.00 | (0.13) | — | (0.13) |
| 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) | Ratios include interest on collateral expense which is less than 0.01%. |
| (d) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (e) | Amounts for the year ended February 28, 2019, as disclosed in the prior financial statements, have been corrected, see Note 10 to the Notes to Financial Statements. |
| (f) | Ratios include interfund lending expense which is less than 0.01%. |
| (g) | Ratios include line of credit interest expense which is less than 0.01%. |
| (h) | Expenses have been reduced due to a reimbursement of expenses overbilled by a third party. If the reimbursement had been excluded, the expense ratios would have been higher by the percentages shown for each class in the table below. All fee waivers and expense reimbursements by the Investment Manager and its affiliates were applied before giving effect to this third party reimbursement. |
| Year Ended | Class A |
Advisor
Class |
Class C |
Institutional
Class |
Institutional 2
Class |
Institutional 3
Class |
Class R |
| 02/28/2017 | 0.01% | 0.02% | 0.02% | 0.02% | 0.02% | 0.03% | 0.02% |
| (i) | Advisor Class shares commenced operations on July 1, 2015. Per share data and total return reflect activity from that date. |
| (j) | Annualized. |
| (k) | Institutional 2 Class shares commenced operations on July 1, 2015. Per share data and total return reflect activity from that date. |
| (l) | Institutional 3 Class shares commenced operations on July 1, 2015. Per share data and total return reflect activity from that date. |
| (m) | Class R shares commenced operations on March 1, 2016. Per share data and total return reflect activity from that date. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 22 | Columbia Overseas Value Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Class R | |||||||
| Year Ended 2/29/2020 | $8.34 | (4.30%) | 1.49%(c) | 1.47%(c),(d) | 2.00% | 35% | $7,209 |
| Year Ended 2/28/2019 | $9.02 | (8.20%) | 1.55%(c),(f) | 1.49%(c),(d),(f) | 2.47%(e) | 58% | $5,864 |
| Year Ended 2/28/2018 | $10.13 | 25.46% | 1.61%(g) | 1.59%(d),(g) | 0.80% | 47% | $3,099 |
| Year Ended 2/28/2017(m) | $8.33 | 13.47% | 1.70%(h),(j) | 1.70%(h),(j) | 0.72%(j) | 89% | $972 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Overseas Value Fund | Annual Report 2020
|
23 |
Notes to Financial Statements
February 29, 2020
February 29, 2020
Note 1. Organization
Columbia Overseas Value Fund (the
Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a liquidation will be
proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A and Class C shares are offered to the general public for investment. Class C shares automatically convert to Class A shares after 10 years. Advisor Class, Institutional Class, Institutional 2
Class, Institutional 3 Class and Class R shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional investors and to certain other investors as also
described in the Fund’s prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
All equity securities and
exchange-traded funds are valued at the close of business of the New York Stock Exchange. Equity securities and exchange-traded funds are valued at the official closing price on the principal exchange or market on
which they trade. Unlisted securities or listed securities for which there were no sales during the day are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets.
Foreign equity securities are
valued based on the closing price on the foreign exchange in which such securities are primarily traded. If any foreign equity security closing prices are not readily available, the securities are valued at the mean
of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are determined at the scheduled closing time of the New York Stock Exchange. Many securities markets and exchanges
outside the U.S. close prior to the close of the New York Stock Exchange; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but
before the close of the New York Stock Exchange. In those situations, foreign securities will be fair valued pursuant to a policy adopted by the Board of Trustees. Under the policy, the Fund may utilize a third-party
pricing service to determine these fair values. The third-party pricing service takes into account multiple factors, including, but not limited to, movements in the U.S. securities markets, certain depositary
receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that reasonably reflects the current market
conditions as of the close of the New York Stock Exchange. The fair value of a security is likely to be different from the quoted or published price, if available.
Investments in open-end investment
companies, including money market funds, are valued at their latest net asset value.
| 24 | Columbia Overseas Value Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Forward foreign currency exchange
contracts are marked-to-market based upon foreign currency exchange rates provided by a pricing service.
Option contracts are valued at the
mean of the latest quoted bid and ask prices on their primary exchanges. Option contracts, including over-the-counter option contracts, with no readily available market quotations are valued using mid-market
evaluations from independent third-party vendors.
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published
price for the security, if available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Foreign currency transactions and
translations
The values of all assets and
liabilities denominated in foreign currencies are generally translated into U.S. dollars at exchange rates determined at the close of regular trading on the New York Stock Exchange. Net realized and unrealized gains
(losses) on foreign currency transactions and translations include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising
from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes,
the Fund does not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations
are included with the net realized and unrealized gains (losses) on investments in the Statement of Operations.
Derivative instruments
The Fund invests in certain
derivative instruments, as detailed below, to meet its investment objectives. Derivatives are instruments whose values depend on, or are derived from, in whole or in part, the value of one or more securities,
currencies, commodities, indices, or other assets or instruments. Derivatives may be used to increase investment flexibility (including to maintain cash reserves while maintaining desired exposure to certain assets),
for risk management (hedging) purposes, to facilitate trading, to reduce transaction costs and to pursue higher investment returns. The Fund may also use derivative instruments to mitigate certain investment risks,
such as foreign currency exchange rate risk, interest rate risk and credit risk. Derivatives may involve various risks, including the potential inability of the counterparty to fulfill its obligations under the terms
of the contract, the potential for an illiquid secondary market (making it difficult for the Fund to sell or terminate, including at favorable prices) and the potential for market movements which may expose the Fund
to gains or losses in excess of the amount shown in the Statement of Assets and Liabilities. The notional amounts of derivative instruments, if applicable, are not recorded in the financial statements.
A derivative instrument may suffer
a marked-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform its
obligations under the contract. The Fund’s risk of loss from counterparty credit risk on over-the-counter derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by
the Fund and the amount of any variation margin held by the counterparty, plus any replacement costs or related amounts. With exchange-traded or centrally cleared derivatives, there is reduced counterparty credit risk
to the Fund since the clearinghouse or central counterparty (CCP) provides some protection in the case of clearing member default. The clearinghouse or CCP stands between the buyer and the seller of the contract;
therefore, additional counterparty credit risk is failure of the clearinghouse or CCP. However, credit risk still exists in exchange-traded or centrally cleared derivatives with respect to initial and variation margin
that is held
|
Columbia Overseas Value Fund | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
in a broker’s customer account. While
brokers are required to segregate customer margin from their own assets, in the event that a broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin
held by the broker for all its clients, U.S. bankruptcy laws will typically allocate that shortfall on a pro-rata basis across all the broker’s customers (including the Fund), potentially resulting in losses to
the Fund.
In order to better define its
contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement)
or similar agreement with its derivatives contract counterparties. An ISDA Master Agreement is an agreement between the Fund and a counterparty that governs over-the-counter derivatives and typically contains, among
other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty
certain derivative instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment
in the event of default (close-out netting), including the bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or
prohibitions against the right of offset or netting in bankruptcy, insolvency or other events.
Collateral (margin) requirements
differ by type of derivative. Margin requirements are established by the clearinghouse or CCP for exchange-traded and centrally cleared derivatives. Brokers can ask for margin in excess of the minimum in certain
circumstances. Collateral terms are contract specific for over-the-counter derivatives. For over-the-counter derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by
netting the marked-to-market amount for each transaction under such agreement and comparing that amount to the value of any variation margin currently pledged by the Fund and/or the counterparty. Generally, the amount
of collateral due from or to a party has to exceed a minimum transfer amount threshold (e.g., $250,000) before a transfer has to be made. To the extent amounts due to the Fund from its counterparties are not fully
collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty nonperformance. The Fund may also pay interest expense on cash collateral received from the broker. Any interest expense
paid by the Fund is shown on the Statement of Operations. The Fund attempts to mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor
their obligations and by monitoring the financial stability of those counterparties.
Certain ISDA Master Agreements
allow counterparties of over-the-counter derivatives transactions to terminate derivatives contracts prior to maturity in the event the Fund’s net asset value declines by a stated percentage over a specified
time period or if the Fund fails to meet certain terms of the ISDA Master Agreement, which would cause the Fund to accelerate payment of any net liability owed to the counterparty. The Fund also has termination rights
if the counterparty fails to meet certain terms of the ISDA Master Agreement. In determining whether to exercise such termination rights, the Fund would consider, in addition to counterparty credit risk, whether
termination would result in a net liability owed from the counterparty.
For financial reporting purposes,
the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.
Forward foreign currency exchange
contracts
Forward foreign currency exchange
contracts are over-the-counter agreements between two parties to buy and sell a currency at a set price on a future date. The Fund utilized forward foreign currency exchange 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 and to shift U.S. dollar exposure to achieve a representative weighted mix of major currencies in
its benchmark. These instruments may be used for other purposes in future periods.
The values of forward foreign
currency exchange contracts fluctuate daily with changes in foreign currency exchange rates. Changes in the value of these contracts are recorded as unrealized appreciation or depreciation until the contract is
exercised or has expired. The Fund will realize a gain or loss when the forward foreign currency exchange contract is closed or expires. Non-deliverable forward foreign currency exchange contracts are settled with the
counterparty in U.S. dollars without delivery of foreign currency.
| 26 | Columbia Overseas Value Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
The use of forward foreign currency
exchange contracts does not eliminate fluctuations in the prices of the Fund’s portfolio securities. The risks of forward foreign currency exchange contracts include movement in the values of the foreign
currencies relative to the U.S. dollar (or other foreign currencies) and the possibility that counterparties will not complete their contractual obligations, which may be in excess of the amount reflected, if any, in
the Statement of Assets and Liabilities.
Options contracts
Options are contracts which entitle
the holder to purchase or sell securities or other identified assets at a specified price, or in the case of index option contracts, to receive or pay the difference between the index value and the strike price of the
index option contract. Option contracts can be either exchange-traded or over-the-counter. The Fund purchased and wrote option contracts to decrease the Fund’s exposure to equity market risk and to increase
return on investments and to facilitate buying and selling of securities for investments. These instruments may be used for other purposes in future periods. Completion of transactions for option contracts traded in
the over-the-counter market depends upon the performance of the other party. Cash collateral may be collected or posted by the Fund to secure certain over-the-counter option contract trades. Cash collateral held or
posted by the Fund for such option contract trades must be returned to the broker or the Fund upon closure, exercise or expiration of the contract.
Options contracts purchased are
recorded as investments. When the Fund writes an options contract, the premium received is recorded as an asset and an amount equivalent to the premium is recorded as a liability in the Statement of Assets and
Liabilities and is subsequently adjusted to reflect the current fair value of the option written. Changes in the fair value of the written option are recorded as unrealized appreciation or depreciation until the
contract is exercised or has expired. The Fund will realize a gain or loss when the option contract is closed or expires. When option contracts are exercised, the proceeds on sales for a written call or purchased put
option contract, or the purchase cost for a written put or purchased call option contract, is adjusted by the amount of premium received or paid.
For over-the-counter options
purchased, the Fund bears the risk of loss of the amount of the premiums paid plus the positive change in market values net of any collateral held by the Fund should the counterparty fail to perform under the
contracts. Option contracts written by the Fund do not typically give rise to significant counterparty credit risk, as options written generally obligate the Fund and not the counterparty to perform. The risk in
writing a call option contract is that the Fund gives up the opportunity for profit if the market price of the security increases above the strike price and the option contract is exercised. The risk in writing a put
option contract is that the Fund may incur a loss if the market price of the security decreases below the strike price and the option contract is exercised. Exercise of a written option could result in the Fund
purchasing or selling a security or foreign currency when it otherwise would not, or at a price different from the current market value. In purchasing and writing options, the Fund bears the risk of an unfavorable
change in the value of the underlying instrument or the risk that the Fund may not be able to enter into a closing transaction due to an illiquid market.
Effects of derivative transactions in
the financial statements
The following tables are intended
to provide additional information about the effect of derivatives on the financial statements of the Fund, including: the fair value of derivatives by risk category and the location of those fair values in the
Statement of Assets and Liabilities; and the impact of derivative transactions over the period in the Statement of Operations, including realized and unrealized gains (losses). The derivative instrument schedules
following the Portfolio of Investments present additional information regarding derivative instruments outstanding at the end of the period, if any.
The following table is a summary of
the fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) at February 29, 2020:
| Asset derivatives | ||
|
Risk exposure
category |
Statement
of assets and liabilities location |
Fair value ($) |
| Equity risk | Investments, at value — Options Purchased | 867,680 |
| Foreign exchange risk | Unrealized appreciation on forward foreign currency exchange contracts | 2,216,992 |
| Total | 3,084,672 |
|
Columbia Overseas Value Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
| Liability derivatives | ||
|
Risk exposure
category |
Statement
of assets and liabilities location |
Fair value ($) |
| Foreign exchange risk | Unrealized depreciation on forward foreign currency exchange contracts | 3,107,674 |
The following table indicates the
effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended February 29, 2020:
The following table is a summary
of the average outstanding volume by derivative instrument for the year ended February 29, 2020:
| Derivative instrument |
Average
value ($)* |
| Options contracts — purchased | 507,395 |
| Options contracts — written | (37,376) |
| Derivative instrument |
Average unrealized
appreciation ($)* |
Average unrealized
depreciation ($)* |
| Forward foreign currency exchange contracts | 1,480,205 | (2,791,890) |
| * | Based on the ending quarterly outstanding amounts for the year ended February 29, 2020. |
| 28 | Columbia Overseas Value Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Offsetting of assets and
liabilities
The following table presents the
Fund’s gross and net amount of assets and liabilities available for offset under netting arrangements as well as any related collateral received or pledged by the Fund as of February 29, 2020:
|
Goldman
Sachs ($) |
JPMorgan ($) | Total ($) | |
| Assets | |||
| Forward foreign currency exchange contracts | 2,216,992 | - | 2,216,992 |
| Options purchased puts | - | 867,680 | 867,680 |
| Total assets | 2,216,992 | 867,680 | 3,084,672 |
| Liabilities | |||
| Forward foreign currency exchange contracts | 3,107,674 | - | 3,107,674 |
| Total liabilities | 3,107,674 | - | 3,107,674 |
| Total financial and derivative net assets | (890,682) | 867,680 | (23,002) |
| Total collateral received (pledged) (a) | - | - | - |
| Net amount (b) | (890,682) | 867,680 | (23,002) |
| (a) | In some instances, the actual collateral received and/or pledged may be more than the amount shown due to overcollateralization. |
| (b) | Represents the net amount due from/(to) counterparties in the event of default. |
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Corporate actions and dividend
income are generally recorded net of any non-reclaimable tax withholdings, on the ex-dividend date or upon receipt of ex-dividend notification in the case of certain foreign securities.
The Fund may receive distributions
from holdings in equity securities, business development companies (BDCs), exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment companies (RICs), and real estate investment trusts
(REITs), which report information as to the tax character of their distributions annually. These distributions are allocated to dividend income, capital gain and return of capital based on actual information reported.
Return of capital is recorded as a reduction of the cost basis of securities held. If the Fund no longer owns the applicable securities, return of capital is recorded as a realized gain. With respect to REITs, to the
extent actual information has not yet been reported, estimates for return of capital are made by Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise
Financial, Inc. (Ameriprise Financial). The Investment Manager’s estimates are subsequently adjusted when the actual character of the distributions is disclosed by the REITs, which could result in a
proportionate change in return of capital to shareholders.
Awards from class action litigation
are recorded as a reduction of cost basis if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities on the payment date, the proceeds are recorded as
realized gains.
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
|
Columbia Overseas Value Fund | Annual Report 2020
|
29 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable income and net capital gain, if any, for its
tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net income and certain other
amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Foreign taxes
The Fund may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules
and regulations that exist in the markets in which it invests.
Realized gains in certain countries
may be subject to foreign taxes at the Fund level, based on statutory rates. The Fund accrues for such foreign taxes on realized and unrealized gains at the appropriate rate for each jurisdiction, as applicable. The
amount, if any, is disclosed as a liability on the Statement of Assets and Liabilities.
Distributions to shareholders
Distributions from net investment
income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Note 3. Fees and other
transactions with affiliates
Management services fees
The Fund has entered into a
Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the
Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the
Fund’s daily net assets that declines from 0.87% to 0.67% as the Fund’s net assets increase. The effective management services fee rate for the year ended February 29, 2020 was 0.80% of the Fund’s
average daily net assets.
Compensation of board members
Members of the Board of Trustees
who are not officers or employees of the Investment Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the
Deferred Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of
certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All
amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund.
| 30 | Columbia Overseas Value Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as
sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class. In addition, effective through June 30, 2020, Institutional 2 Class shares are
subject to a contractual transfer agency fee annual limitation of not more than 0.04% of the average daily net assets attributable to Institutional 2 Class shares.
For the year ended February 29,
2020, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| Effective rate (%) | |
| Class A | 0.15 |
| Advisor Class | 0.15 |
| Class C | 0.15 |
| Institutional Class | 0.15 |
| Institutional 2 Class | 0.04 |
| Institutional 3 Class | 0.01 |
| Class R | 0.15 |
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended February 29, 2020, these minimum account balance fees reduced total expenses
of the Fund by $382.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
|
Columbia Overseas Value Fund | Annual Report 2020
|
31 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays
a monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class C shares of the Fund and a monthly distribution fee to the Distributor at the
maximum annual rates of 0.75% and 0.50% of the average daily net assets attributable to Class C and Class R shares of the Fund, respectively.
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended February 29, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 5.75 | 0.50 - 1.00(a) | 219,406 |
| Class C | — | 1.00(b) | 4,866 |
| (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 applies to redemptions within 12 months after purchase, with certain limited exceptions. |
The Fund’s other share
classes are not subject to sales charges.
Expenses waived/reimbursed by the
Investment Manager and its affiliates
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) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, 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 following annual rate(s) as a percentage of the class’ average daily net assets:
|
Fee rate(s) contractual
June 30, 2020 |
|
| Class A | 1.22% |
| Advisor Class | 0.97 |
| Class C | 1.97 |
| Institutional Class | 0.97 |
| Institutional 2 Class | 0.86 |
| Institutional 3 Class | 0.83 |
| Class R | 1.47 |
Under the agreement governing
these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes
(including foreign transaction taxes), expenses associated with investments 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, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from
the Investment Manager, certain of its affiliates and the Fund. Reflected in the contractual cap commitment, effective through June 30, 2020, is the Transfer Agent’s contractual agreement to limit total transfer
agency fees to an annual rate of not more than 0.04% for Institutional 2 Class of the average daily net assets attributable to Institutional 2 Class, unless sooner terminated at the sole discretion of the Board of
Trustees. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its affiliates in future periods.
| 32 | Columbia Overseas Value Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At February 29, 2020, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, trustees’ deferred compensation, derivative investments, late-year ordinary losses, capital loss carryforward,
distribution reclassifications, foreign currency transactions, and passive foreign investment company (PFIC) holdings. To the extent these differences were permanent, reclassifications were made among the components
of the Fund’s net assets. Temporary differences do not require reclassifications.
The following reclassifications
were made:
|
Excess of distributions
over net investment income ($) |
Accumulated
net realized (loss) ($) |
Paid in
capital ($) |
| 4,904,801 | (4,904,800) | (1) |
Net investment income (loss) and
net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended February 29, 2020 | Year Ended February 28, 2019 | ||||
|
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 68,750,130 | 4,203,443 | 72,953,573 | 26,613,132 | 23,709,653 | 50,322,785 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At February 29, 2020, the
components of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
(depreciation) ($) |
| — | 8,068,493 | (277,650,518) | (202,765,847) |
At February 29, 2020, the cost of
all investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
|
Federal
tax cost ($) |
Gross unrealized
appreciation ($) |
Gross unrealized
(depreciation) ($) |
Net unrealized
(depreciation) ($) |
| 1,952,254,777 | 88,329,114 | (291,094,961) | (202,765,847) |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
The following capital loss
carryforwards, determined at February 29, 2020, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code. Capital
loss carryforwards with no expiration are required to be utilized prior to any capital losses which carry an expiration date. As a result of this ordering rule, capital loss carryforwards which carry an expiration
date may be more likely to expire unused. In addition, for the year ended February 29, 2020, capital loss carryforwards utilized and expired unused, if any, were as follows:
|
No expiration
short-term ($) |
No expiration
long-term ($) |
Total ($) | Utilized ($) | Expired ($) |
| — | (277,650,518) | (277,650,518) | 2,780,919 | — |
|
Columbia Overseas Value Fund | Annual Report 2020
|
33 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Under current tax rules, regulated
investment companies can elect to treat certain late-year ordinary losses incurred and post-October capital losses (capital losses realized after October 31) as arising on the first day of the following taxable year.
As of February 29, 2020, the Fund will elect to treat the following late-year ordinary losses and post-October capital losses as arising on March 1, 2020.
|
Late year
ordinary losses ($) |
Post-October
capital losses ($) |
| 4,291,732 | — |
Management of the Fund has
concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at
a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the
prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio
information
The cost of purchases and
proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $709,165,027 and $622,238,239, respectively, for the year ended February 29, 2020. The amount of purchase and
sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes referred to
as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
Note 7. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund did not borrow or lend
money under the Interfund Program during the year ended February 29, 2020.
Note 8. Line of credit
The Fund has access to a
revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. The credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager or an affiliated investment manager, severally and
not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the federal funds effective rate, (ii) the
one-month LIBOR rate and (iii) the overnight bank funding rate, plus in each case, 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The
| 34 | Columbia Overseas Value Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Fund also pays a commitment fee equal to its pro
rata share of the unused amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations. This agreement expires annually in December unless
extended or renewed.
The Fund had no borrowings during
the year ended February 29, 2020.
Note 9. Significant
risks
Derivatives risk
Losses involving derivative
instruments may be substantial, because a relatively small movement in the underlying reference (which is generally the price, rate or other economic indicator associated with a security(ies), commodity, currency or
index or other instrument or asset) 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 within the Fund.
Derivatives 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, liquidity risk and pricing risk.
Financial sector risk
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.
Foreign securities and emerging
market countries risk
Investing in foreign securities may
involve certain risks not typically associated with investing in U.S. securities, such as increased currency volatility and risks associated with political, regulatory, economic, social, diplomatic and other
conditions or events occurring in the country or region, which may result in significant market volatility. In addition, certain foreign securities may not be as liquid as U.S. securities. Investing in emerging
markets may increase these risks and expose the Fund to elevated risks associated with increased inflation, deflation or currency devaluation. To the extent that the Fund concentrates its investment exposure to any
one or a few specific countries, the Fund will be particularly susceptible to the risks associated with the conditions, events or other factors impacting those countries or regions and may, therefore, have a greater
risk than that of a fund that is more geographically diversified.
Market and environment risk
The Fund may incur losses due to
declines in the value of one or more securities in which it invests. These declines may be due to factors affecting a particular issuer, or the result of, among other things, political, regulatory, market, economic or
social developments affecting the relevant market(s) more generally. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers,
which could adversely affect Fund, including causing difficulty in assigning prices to hard-to-value assets in thinly traded and closed markets, significant redemptions and operational challenges. Global economies and
financial markets are increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may
be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional or global events
such as terrorism, war, natural disasters, disease/virus outbreaks and epidemics or other public health issues, recessions, depressions or other events – or the potential for such events – could have a
significant negative impact on global economic and market conditions.
|
Columbia Overseas Value Fund | Annual Report 2020
|
35 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
The coronavirus disease 2019
(COVID-19) public health crisis has become a pandemic that has resulted in, and may continue to result in, significant global economic and societal disruption and market volatility due to disruptions in market access,
resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. Such disruptions may be caused, or exacerbated by, quarantines and travel restrictions,
workforce displacement and loss in human and other resources. The uncertainty surrounding the magnitude, duration, reach, costs and effects of the global pandemic, as well as actions that have been or could be taken
by governmental authorities or other third parties, present unknowns that are yet to unfold. The impacts, as well as the uncertainty over impacts to come, of COVID-19 – and any other infectious illness
outbreaks, epidemics and pandemics that may arise in the future – could negatively affect global economies and markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illness
outbreaks and epidemics in emerging market countries may be greater due to generally less established healthcare systems, governments and financial markets. Public health crises caused by the COVID-19 outbreak may
exacerbate other pre-existing political, social and economic risks in certain countries or globally. The disruptions caused by COVID-19 could prevent the Fund from executing advantageous investment decisions in a
timely manner and negatively impact the Fund’s ability to achieve their investment objectives. Any such event(s) could have a significant adverse impact on the value and risk profile of the Fund.
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting different communities at different times with varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including
the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to continue ordinary business operations and technology functions over near- or longer-term periods.
Shareholder concentration risk
At February 29, 2020, two
unaffiliated shareholders of record owned 33.4% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Affiliated
shareholders of record owned 23.8% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the
Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of
less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 10. Revision of
previously issued financial statements
During the preparation of the
February 29, 2020 financial statements, it was determined that certain amounts reported in the February 28, 2019 financial statements for the Fund were incorrect due to an error in accounting for a corporate action,
which resulted in an understatement of reported investment income and change in unrealized depreciation and an overstatement of realized gain during that year. Management evaluated the impact of the error to the
current and prior year financial statements and determined that the previously issued financial statements were not materially misstated; however, it would not be appropriate to reflect the misclassification in the
current year. Accordingly, management has revised the February 28, 2019 financial statements. As the 2019 financial statements are not presented herein, the revision has been reflected by revising applicable account
balances or line items in the Statement of Changes in Net Assets and Financial Highlights for 2019 to correct the error. The result of the correction was an increase to investment income and change in unrealized
depreciation and a decrease to realized gain for the year then ended and the resulting impact to the per share amounts and
| 36 | Columbia Overseas Value Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
the net investment income ratio. The error did not
impact the net increase or decrease in net assets resulting from operations, net assets, total return or NAV per share. The following represents the previously reported information and the corrected information:
|
February 28, 2019
Previously Reported |
February 28, 2019
Corrected |
|
| Statement of Changes in Net Assets | ||
| Net investment income | $28,373,886 | $40,968,366 |
| Net realized gain | 10,747,810 | 8,276,974 |
| Net change in unrealized depreciation | (126,888,572) | (137,012,216) |
| Net decrease in net assets resulting from operations | (87,766,876) | (87,766,876) |
| February 28, 2019 | |||||||
| Financial Highlights | Class A |
Advisor
Class |
Class C |
Institutional
Class |
Institutional 2
Class |
Institutional 3
Class |
Class R
|
| Previously Reported | |||||||
| Net Investment Income | 0.20 | 0.20 | 0.13 | 0.21 | 0.14 | 0.23 | 0.15 |
| Net realized and unrealized gain (loss) | (1.03) | (1.02) | (1.02) | (1.02) | (0.94) | (1.03) | (0.99) |
| Net investment income ratio to average net assets | 2.10% | 2.10% | 1.41% | 2.23% | 1.58% | 2.36% | 1.57% |
| Corrected | |||||||
| Net Investment Income | 0.27 | 0.28 | 0.20 | 0.29 | 0.30 | 0.30 | 0.23 |
| Net realized and unrealized gain (loss) | (1.10) | (1.10) | (1.09) | (1.10) | (1.10) | (1.10) | (1.07) |
| Net investment income ratio to average net assets | 2.80% | 2.96% | 2.09% | 3.05% | 3.39% | 3.11% | 2.47% |
Note 11. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued. Other than as noted below, there were no items requiring adjustment of the financial statements or additional
disclosure.
On March 31, 2020, certain European
issuers canceled dividends following a request originating from the Bank of England, amid the economic uncertainty surrounding the COVID 19 pandemic. These financial statements include income recorded on the ex-date
of these securities, in the amount of $981,274, which was 1.28% of total income. Upon notification of the cancelation, the Fund reversed the income previously recognized.
Note 12. Information
regarding pending and settled legal proceedings
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. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to
Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that
these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe
proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines,
penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.
|
Columbia Overseas Value Fund | Annual Report 2020
|
37 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust and Shareholders of Columbia Overseas Value Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Overseas Value Fund (one of the funds constituting Columbia Funds Series Trust, referred to hereafter as the "Fund") as of
February 29, 2020, the related statement of operations for the year ended February 29, 2020, the statement of changes in net assets for each of the two years in the period ended February 29, 2020, including the
related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in
all material respects, the financial position of the Fund as of February 29, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended
February 29, 2020 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the
responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these
financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of February 29, 2020 by correspondence with the custodian, transfer agent and brokers; when replies
were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
April 29, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
| 38 | Columbia Overseas Value Fund | Annual Report 2020 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended February 29, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Qualified
dividend income |
Dividends
received deduction |
Capital
gain dividend |
Foreign
taxes paid to foreign countries |
Foreign
taxes paid per share to foreign countries |
Foreign
source income |
Foreign
source income per share |
| 100.00% | 0.52% | $12,885,533 | $5,821,920 | $0.03 | $81,975,146 | $0.40 |
Qualified dividend income. For
taxable, non-corporate shareholders, the percentage of ordinary income distributed during the fiscal year that represents qualified dividend income subject to reduced tax rates.
Dividends received deduction. The
percentage of ordinary income distributed during the fiscal year that qualifies for the corporate dividends received deduction.
Capital gain dividend. The Fund
designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
Foreign taxes. The Fund makes the
election to pass through to shareholders the foreign taxes paid. Eligible shareholders may claim a foreign tax credit. These taxes, and the corresponding foreign source income, are provided.
TRUSTEES AND
OFFICERS
The Board oversees the Fund’s
operations and 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 Fund’s Trustees as
of the printing of this report, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not
affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach the mandatory retirement age established by the Board.
Independent trustees
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
George S. Batejan
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1953 |
Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 117 | Former Chairman of the Board, NICSA (National Investment Company Services Association) (Executive Committee, Nominating Committee and Governance Committee), 2014-2016; former Director, Intech Investment Management, 2011-2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016; former Advisory Board Member, University of Colorado Business School, 2015-2018 |
|
Columbia Overseas Value Fund | Annual Report 2020
|
39 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Kathleen Blatz
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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; Member and Interim Chair, Minnesota Sports Facilities Authority, January 2017-July 2017; Interim President and Chief Executive Officer, Blue Cross and Blue Shield of Minnesota (health care insurance), February-July 2018 | 117 | Trustee, BlueCross BlueShield of Minnesota since 2009 (Chair of the Business Development Committee, 2014-2017; Chair of the Governance Committee since 2017); Chair of the Robina Foundation since August 2013; former Member and Chair of the Board, Minnesota Sports Facilities Authority, January 2017-July 2017 |
|
Pamela G. Carlton
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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 | 117 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996; Director, DR Bank (Audit Committee) since 2017; Director, Evercore Inc. (Audit Committee, Nominating and Governance Committee) since 2019 |
|
Patricia M. Flynn
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1950 |
Trustee 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 | 117 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010; Board of Directors, The MA Business Roundtable 2003-2019 |
|
Brian J. Gallagher
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee since 12/17 | Retired; Partner with Deloitte & Touche LLP and its predecessors, 1977-2016 | 117 | Trustee, Catholic Schools Foundation since 2004 |
|
Catherine James Paglia
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Chair of the Board since 1/20; Trustee 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. | 117 | 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) |
| 40 | Columbia Overseas Value Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Anthony M. Santomero
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1946 |
Trustee 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 | 117 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; former Director, Citigroup Inc. and Citibank, N.A., 2009-2019; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
|
Minor M. Shaw
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1947 |
Trustee 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 | 117 | Director, BlueCross BlueShield of South Carolina since April 2008; Trustee, Hollingsworth Funds since 2016 (previously Board Chair from 2016-2019); Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016; former Director, National Association of Corporate Directors, Carolinas Chapter, 2013-2018 |
|
Sandra Yeager
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1964 |
Trustee since 12/17 | Retired; President and founder, Hanoverian Capital, LLC (SEC registered investment advisor firm), 2008-2016; Managing Director, DuPont Capital, 2006-2008; Managing Director, Morgan Stanley Investment Management, 2004-2006; Senior Vice President, Alliance Bernstein, 1990-2004 | 115 | Director, NAPE Education Foundation since October 2016 |
|
Columbia Overseas Value Fund | Annual Report 2020
|
41 |
TRUSTEES AND OFFICERS (continued)
Interested trustee affiliated with Investment Manager*
Interested trustee affiliated with Investment Manager*
| * | 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. |
Nations Funds refer to the Funds
within the Columbia Funds Complex that historically bore the Nations brand and includes series of Columbia Funds Series Trust. RiverSource Funds refer to the Funds within the Columbia Funds Complex that historically
bore the RiverSource brand and includes series of Columbia Funds Series Trust II.
The Statement of Additional
Information has additional information about the Fund’s Board members and is available, without charge, upon request by calling 800.345.6611, visiting columbiathreadneedleus.com/investor/ or contacting your
financial intermediary.
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 of the
Fund as of the printing of this report, 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 Fund’s other officers are:
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); officer of Columbia Funds and affiliated funds since 2007. |
|
Michael G. Clarke
225 Franklin Street Boston, MA 02110 Born 1969 |
Chief Financial Officer, Principal Financial Officer (2009), and Senior Vice President (2019) | Vice President, Head of North American Operations, and Co-Head of Global Operations, – Accounting and Tax, Columbia Management Investment Advisers, LLC, since June 2019 (previously Vice President – Accounting and Tax, May 2010 – May 2019); senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009 – January 2019 and December 2015 – January 2019, respectively). |
|
Joseph Beranek
5890 Ameriprise Financial Center Minneapolis, MN 55474 Born 1965 |
Treasurer, Chief Accounting Officer (Principal Accounting Officer) (2019), and Principal Financial Officer (2020) | Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and March 2017, respectively (previously Vice President — Pricing and Corporate Actions, May 2010 - March 2017). |
| 42 | Columbia Overseas Value Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Fund officers (continued)
Fund officers (continued)
|
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 |
|
Paul B. Goucher
485 Lexington Avenue New York, NY 10017 Born 1968 |
Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since March 2015 (previously Vice President and Assistant Secretary, May 2010 – March 2015). |
|
Thomas P. McGuire
225 Franklin Street Boston, MA 02110 Born 1972 |
Senior 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; Chief Compliance Officer, Columbia Acorn/Wanger Funds since December 2015. |
|
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; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013. |
|
Ryan C. Larrenaga
225 Franklin Street Boston, MA 02110 Born 1970 |
Senior Vice President (2017), Chief Legal Officer (2017), and Secretary (2015) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously Vice President and Group Counsel, August 2011 - August 2018); officer of Columbia Funds and affiliated funds since 2005. |
|
Daniel J. Beckman
225 Franklin Street Boston, MA 02110 Born 1962 |
Senior Vice President (2020) | Vice President – Head of North America Product, Columbia Management Investment Advisers, LLC (since April 2015); previously, Senior Vice President of Investment Product Management, Fidelity Financial Advisor Solutions, a division of Fidelity Investments (January 2012 – March 2015). |
|
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. |
|
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. |
|
Columbia Overseas Value Fund | Annual Report 2020
|
43 |
Columbia Overseas Value Fund
P.O. Box 219104
Kansas City, MO 64121-9104
Please read and consider the
investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments
(Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved.
© 2020 Columbia Management Investment
Advisers, LLC.
columbiathreadneedleus.com/investor/
ANN208_02_K01_(04/20)
Annual Report
February 29, 2020
February 29, 2020
Columbia
Convertible Securities Fund
Beginning on January 1, 2021, as
permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports like this one will no longer be sent by mail, unless you
specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (columbiathreadneedleus.com/investor/), and each time a report is posted you will be notified
by mail and provided with a website address to access the report.
If you have already elected to
receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically
at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with the Fund, by calling 800.345.6611 or by enrolling in “eDelivery” by logging
into your account at columbiathreadneedleus.com/investor/.
You may elect to receive all future
reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you
invest directly with the Fund, you can call 800.345.6611 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive paper reports will apply to all Columbia
Funds held in your account if you invest through a financial intermediary or all Columbia Funds held with the fund complex if you invest directly with the Fund.
Not FDIC Insured • No bank
guarantee • May lose value
Table of Contents
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Columbia Convertible Securities
Fund (the Fund) mails one shareholder report to each shareholder address, unless such shareholder elected to receive shareholder reports from the Fund electronically. If you would like more than one report, please
call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and
procedures
The policy of the Board of Trustees
is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by
calling 800.345.6611; contacting your financial intermediary; visiting columbiathreadneedleus.com/investor/; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding
how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting
columbiathreadneedleus.com/investor/, or searching the website of the SEC at sec.gov.
Quarterly schedule of
investments
The Fund files a complete schedule
of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT, and for reporting periods ended prior to March 31, 2019, on Form N-Q. The Fund’s Form N-Q and Form N-PORT
filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q or Form N-PORT, can also be obtained without charge, upon request, by calling
800.345.6611.
Additional Fund information
For more information about the
Fund, please visit columbiathreadneedleus.com/investor/ or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC (the
Investment Manager)
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors,
Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 219104
Kansas City, MO 64121-9104
Columbia Convertible Securities
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks total return, consisting of capital appreciation and current income.
Portfolio management
David King, CFA
Lead Portfolio Manager
Managed Fund since 2010
Yan Jin
Portfolio Manager
Managed Fund since 2006
Returns for Class A shares are shown
with and without the maximum initial sales charge of 5.75%. Returns for Class C shares are shown with and without the 1.00% contingent deferred sales charge for the first year only. The Fund’s other share
classes are not subject to sales charges and have limited eligibility. Please see the Fund’s prospectus for details. Performance for different share classes will vary based on differences in sales charges and
fees associated with each share class. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the
redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee
waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown
represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than
their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial
intermediary, visiting columbiathreadneedleus.com/investor/ or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investor/investment-products/mutual-funds/appended-performance for more information. |
The ICE BofA All Convertibles All
Qualities Index measures the performance of U.S. dollar-denominated convertible securities not currently in bankruptcy with a total market value greater than $50 million at issuance. Effective January 1, 2020, the ICE
BofAML All Convertibles All Qualities Index was re-branded the ICE BofA All Convertibles All Qualities Index.
Indices are not available for
investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Fund performance may be significantly
negatively impacted by the economic impact of the COVID-19 pandemic. The COVID-19 pandemic has adversely impacted economies and capital markets around the world in ways that will likely continue and may change in
unforeseen ways for an indeterminate period. The COVID-19 pandemic may exacerbate pre-existing political, social and economic risks in certain countries and globally.
|
Columbia Convertible Securities Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (February 28, 2010 — February 29, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Convertible Securities Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund
distributions or on the redemption of Fund shares.
| Portfolio breakdown (%) (at February 29, 2020) | |
| Common Stocks | 1.8 |
| Convertible Bonds | 73.6 |
| Convertible Preferred Stocks | 22.6 |
| Money Market Funds | 2.0 |
| Total | 100.0 |
Percentages indicated are based
upon total investments excluding investments in derivatives, if any. The Fund’s portfolio composition is subject to change.
| 4 | Columbia Convertible Securities Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period ended
February 29, 2020, the Fund’s Class A shares returned 12.55% excluding sales charges. The Fund outperformed its benchmark, the ICE BofA All Convertibles All Qualities Index, which returned 11.59% for the same
time period. Convertible securities outperformed the U.S. stock market and performed in line with broad measures of the U.S. bond market.
Global uncertainty curbed stock
market gains, boosted bonds
Optimism prevailed early in 2019,
buoyed by solid economic growth and a recovery from meaningful stock market losses in 2018. Strong job gains drove the unemployment rate down to 3.5%, annualized. Consumer spending and export trade supported U.S.
economic growth. However, the pace of U.S. growth slowed to an estimated 2.1% for the year. In Europe, economic growth slowed as trade tensions and uncertainty mounted regarding Brexit (the U.K’s departure from
the European Union), which was finally resolved late in the year. At the same time, emerging markets came under pressure, driven by trade and tariff concerns. China’s economic conditions weakened and the spread
of the Coronavirus introduced enough global uncertainty to drive stock markets around the world down sharply in the final week of the period, raising concerns about the impact on global economic growth going forward.
Bonds and convertible securities benefited as interest rates moved lower and investors fled the stock market.
Against this backdrop, the S&P
500 Index returned 8.19% for the 12-month period, giving up substantial gains during the last few trading days of February. The Bloomberg Barclays U.S. Aggregate Bond Index gained 11.68%, as the yield on the 10-year
U.S. Treasury fell to 1.10%. (Bond yields and prices move in opposite directions.)
Contributors and detractors
Despite year-end volatility,
which cut into returns, convertible securities were among the top performing assets for the period. The Fund’s gains were driven by solid issue selection across a range of sectors. In technology, a position in
semiconductor capital equipment company Lam Research Corp. common stock nearly doubled. Investors continue to be attracted to Lam Research for the high-growth potential associated with the chip memory market. The
company has been aggressive in buying back its shares, and it pays a modest dividend. In the general area of software as a service (SAAS), RingCentral, Inc. convertibles generated a significant gain for the Fund on
news of outstanding revenue growth for the company, a leading provider of global enterprise videoconferencing. Investors also responded favorably to RingCentral’s announced partnership with Avaya Holdings Corp.,
a communications software maker. We sold the high-performing convertible and bought a newer, more defensive issue for the Fund. In the health care sector, Teledoc Health, Inc. was a standout performer. The medical
diagnostics company, which uses telephone and videoconferencing technology to provide on-demand remote medical care, benefited against the backdrop of the Coronavirus outbreak. We trimmed some of the Fund’s
holdings on strong gains. Also in health care, Medicines Co. convertibles made a solid contribution to Fund returns, as the company’s announced takeover at a significant premium by Swiss pharmaceutical giant
Novartis International AG boosted its shares. We sold the position.
Merger and acquisition activity
also figured into Fund gains from Caesars Entertainment Corp., Cypress Semiconductor Corporation and Array BioPharma, Inc. Late in 2019, Caesars and Eldorado Resorts, both casino operators, announced a merger, which
was favorably received by investors. German chipmaker Infineon Technologies AG announced its intent to purchase Cypress Semiconductor in a deal that has yet to close. We exited the position. Array BioPharma, which
develops small molecule medicines primarily to treat cancer, was acquired at a premium by Pfizer, Inc.
In a year of few disappointments,
an underweight in Tesla, Inc. detracted from relative results even though Tesla’s strong gains made a significant contribution to Fund returns. Energy holdings were mostly down for the year. A position in
Chesapeake Energy Corp. convertibles was a significant detractor as the company may be facing bankruptcy. While the outlook for the company is not good, it has not defaulted on current payments and we maintained a
small position. Wrestling and media company World Wrestling Entertainment, Inc. detracted from results, as the company’s revenues and declining subscriptions dropped. We exited the position before its most
significant drop.
At period’s end
During the period, we took
advantage of an increase in convertibles issuance, which has continued to improve since 2018. We believe that our research-driven process is an advantage in an environment of abundant new issuance. We also believe
that recent volatility has worked in our favor because we are active managers, seeking to exploit market inefficiencies through
|
Columbia Convertible Securities Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
careful security selection. We continue to use
bottom-up security selection to target convertibles and other income-generating securities that we believe have the potential for both price appreciation and high current income. We believe the Fund continues to offer
long-term investors a solid building block for diversification.
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Convertible securities are subject to issuer default risk. A rise in interest rates may result in a price decline of fixed-income instruments held by the Fund, negatively impacting its performance and NAV. Falling rates may result in the Fund investing in lower yielding
debt instruments, lowering the Fund’s income and yield. These risks may be heightened for longer maturity and duration securities. The Fund may also be forced to convert a convertible security at an inopportune
time, which may decrease the Fund’s return. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Foreign investments subject the Fund to risks, including political, economic, market, social and others within a particular country, as well as to currency instabilities and less stringent
financial and accounting standards generally applicable to U.S. issuers. Short positions (where the underlying asset is not owned) can create unlimited risk. Market or other (e.g., interest rate) environments may adversely affect the liquidity of Fund investments, negatively impacting their price. Generally, the less liquid the market at the time the Fund sells a holding, the greater the risk of loss or decline of value to the
Fund.
The views expressed in this report
reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and
results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update
such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf
of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
| 6 | Columbia Convertible Securities Fund | Annual Report 2020 |
Understanding Your Fund’s
Expenses
(Unaudited)
(Unaudited)
As an investor, you incur two types
of costs. There are shareholder transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing fund costs, which generally include management fees,
distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with
the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s
expenses
To illustrate these ongoing
costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment
of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the
“Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the
expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under
the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the
Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or
the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are
required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the
hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are
meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in
comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
Expenses paid during the period
are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal
half year and divided by 366.
Expenses do not include fees and
expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment
Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
|
Columbia Convertible Securities Fund | Annual Report 2020
|
7 |
Portfolio of Investments
February 29, 2020
February 29, 2020
(Percentages represent value of
investments compared to net assets)
Investments in securities
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 8 | Columbia Convertible Securities Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Convertible Securities Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Convertible Securities Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Convertible Preferred Stocks (continued) | |||
| Issuer | Shares | Value ($) | |
| Information Technology 2.1% | |||
| Semiconductors & Semiconductor Equipment 2.1% | |||
| Broadcom, Inc. | 8.000% | 29,500 | 30,650,500 |
| Total Information Technology | 30,650,500 | ||
| Materials 0.7% | |||
| Chemicals 0.7% | |||
| International Flavors & Fragrances, Inc. | 6.000% | 220,000 | 9,941,800 |
| Total Materials | 9,941,800 | ||
| Real Estate 2.1% | |||
| Equity Real Estate Investment Trusts (REITS) 2.1% | |||
| Crown Castle International Corp. | 6.875% | 14,500 | 18,477,403 |
| QTS Realty Trust, Inc. | 6.500% | 90,000 | 12,000,816 |
| Total | 30,478,219 | ||
| Total Real Estate | 30,478,219 | ||
| Utilities 7.7% | |||
| Electric Utilities 5.1% | |||
| American Electric Power Co., Inc. | 6.125% | 315,000 | 16,433,676 |
| NextEra Energy, Inc. | 4.872% | 270,000 | 13,861,233 |
| NextEra Energy, Inc. | 5.279% | 640,000 | 29,235,200 |
| Southern Co. (The) | 6.750% | 260,000 | 13,249,600 |
| Total | 72,779,709 | ||
| Multi-Utilities 1.9% | |||
| Dominion Energy, Inc. | 7.250% | 135,000 | 13,702,500 |
| DTE Energy Co. | 6.250% | 285,000 | 13,067,820 |
| Total | 26,770,320 | ||
| Water Utilities 0.7% | |||
| Essential Utilities, Inc. | 6.000% | 175,000 | 10,116,610 |
| Total Utilities | 109,666,639 | ||
|
Total Convertible Preferred Stocks
(Cost $305,521,569) |
323,283,661 | ||
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Convertible Securities Fund | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Money Market Funds 2.0% | ||
| Shares | Value ($) | |
| Columbia Short-Term Cash Fund, 1.641%(i),(j) | 28,318,922 | 28,318,922 |
|
Total Money Market Funds
(Cost $28,316,320) |
28,318,922 | |
|
Total Investments in Securities
(Cost: $1,313,284,016) |
1,426,644,404 | |
| Other Assets & Liabilities, Net | 3,830,171 | |
| Net Assets | 1,430,474,575 | |
Notes to Portfolio of
Investments
| (a) | Represents fair value as determined in good faith under procedures approved by the Board of Trustees. At February 29, 2020, the total value of these securities amounted to $2,295,715, which represents 0.16% of total net assets. |
| (b) | Non-income producing investment. |
| (c) | Valuation based on significant unobservable inputs. |
| (d) | Principal amounts are denominated in United States Dollars unless otherwise noted. |
| (e) | Represents privately placed and other securities and instruments exempt from Securities and Exchange Commission registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. The Fund may invest in private placements determined to be liquid as well as those determined to be illiquid. Private placements may be determined to be liquid under guidelines established by the Fund’s Board of Trustees. At February 29, 2020, the total value of these securities amounted to $416,095,840, which represents 29.09% of total net assets. |
| (f) | Represents a variable rate security with a step coupon where the rate adjusts 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 interest rate shown was the current rate as of February 29, 2020. |
| (g) | Represents a security purchased on a when-issued basis. |
| (h) | Zero coupon bond. |
| (i) | The rate shown is the seven-day current annualized yield at February 29, 2020. |
| (j) | As defined in the Investment Company Act of 1940, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. Holdings and transactions in these affiliated companies during the year ended February 29, 2020 are as follows: |
Abbreviation Legend
| ADR | American Depositary Receipt |
Currency Legend
| CAD | Canada Dollar |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 12 | Columbia Convertible Securities Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Fair value measurements (continued)
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
Foreign equity securities actively
traded in markets where there is a significant delay in the local close relative to the New York Stock Exchange are classified as Level 2. The values of these securities may include an adjustment to reflect the impact
of market movements following the close of local trading, as described in Note 2 to the financial statements – Security valuation.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
Under the direction of the
Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of
voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly
to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of
Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third
party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale
pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to
discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members
of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of
the inputs used to value the Fund’s investments at February 29, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Common Stocks | ||||
| Energy | — | — | 2,295,715 | 2,295,715 |
| Health Care | — | 1,995,511 | — | 1,995,511 |
| Information Technology | 20,982,750 | — | — | 20,982,750 |
| Total Common Stocks | 20,982,750 | 1,995,511 | 2,295,715 | 25,273,976 |
| Convertible Bonds | — | 1,049,767,845 | — | 1,049,767,845 |
| Convertible Preferred Stocks | ||||
| Consumer Staples | — | 9,376,950 | 0* | 9,376,950 |
| Financials | — | 50,129,647 | — | 50,129,647 |
| Health Care | — | 62,840,602 | — | 62,840,602 |
| Industrials | — | 20,199,304 | — | 20,199,304 |
| Information Technology | — | 30,650,500 | — | 30,650,500 |
| Materials | — | 9,941,800 | — | 9,941,800 |
| Real Estate | — | 30,478,219 | — | 30,478,219 |
| Utilities | — | 109,666,639 | — | 109,666,639 |
| Total Convertible Preferred Stocks | — | 323,283,661 | 0* | 323,283,661 |
| Money Market Funds | 28,318,922 | — | — | 28,318,922 |
| Total Investments in Securities | 49,301,672 | 1,375,047,017 | 2,295,715 | 1,426,644,404 |
| * | Rounds to zero. |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The Fund’s assets assigned to
the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical
assets. These assets include certain foreign securities for which a third party statistical pricing service may be employed for purposes of fair market valuation. The model utilized by such third party statistical
pricing service takes into account a security’s correlation to available market data including, but not limited to, intraday index, ADR, and exchange-traded fund movements.
The Fund does not hold any
significant investments (greater than one percent of net assets) categorized as Level 3.
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Convertible Securities Fund | Annual Report 2020
|
13 |
Statement of Assets and Liabilities
February 29, 2020
February 29, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $1,284,967,696) | $1,398,325,482 |
| Affiliated issuers (cost $28,316,320) | 28,318,922 |
| Receivable for: | |
| Investments sold | 44,654,257 |
| Capital shares sold | 3,537,656 |
| Dividends | 718,472 |
| Interest | 4,186,484 |
| Expense reimbursement due from Investment Manager | 1,477 |
| Prepaid expenses | 2,806 |
| Total assets | 1,479,745,556 |
| Liabilities | |
| Payable for: | |
| Investments purchased | 2,458,823 |
| Investments purchased on a delayed delivery basis | 41,940,000 |
| Capital shares purchased | 4,524,049 |
| Management services fees | 30,405 |
| Distribution and/or service fees | 3,933 |
| Transfer agent fees | 110,719 |
| Compensation of board members | 140,587 |
| Other expenses | 62,465 |
| Total liabilities | 49,270,981 |
| Net assets applicable to outstanding capital stock | $1,430,474,575 |
| Represented by | |
| Paid in capital | 1,271,994,177 |
| Total distributable earnings (loss) | 158,480,398 |
| Total - representing net assets applicable to outstanding capital stock | $1,430,474,575 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 14 | Columbia Convertible Securities Fund | Annual Report 2020 |
Statement of Assets and Liabilities (continued)
February 29, 2020
February 29, 2020
| Class A | |
| Net assets | $317,364,806 |
| Shares outstanding | 14,366,913 |
| Net asset value per share | $22.09 |
| Maximum sales charge | 5.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $23.44 |
| Advisor Class | |
| Net assets | $94,944,982 |
| Shares outstanding | 4,250,727 |
| Net asset value per share | $22.34 |
| Class C | |
| Net assets | $62,312,851 |
| Shares outstanding | 2,832,527 |
| Net asset value per share | $22.00 |
| Institutional Class | |
| Net assets | $733,399,936 |
| Shares outstanding | 33,135,225 |
| Net asset value per share | $22.13 |
| Institutional 2 Class | |
| Net assets | $92,232,717 |
| Shares outstanding | 4,133,742 |
| Net asset value per share | $22.31 |
| Institutional 3 Class | |
| Net assets | $128,318,963 |
| Shares outstanding | 5,703,193 |
| Net asset value per share | $22.50 |
| Class R | |
| Net assets | $1,900,320 |
| Shares outstanding | 86,124 |
| Net asset value per share | $22.06 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Convertible Securities Fund | Annual Report 2020
|
15 |
Statement of Operations
Year Ended February 29, 2020
Year Ended February 29, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $15,598,229 |
| Dividends — affiliated issuers | 642,490 |
| Interest | 21,242,053 |
| Interfund lending | 91 |
| Foreign taxes withheld | (7,931) |
| Total income | 37,474,932 |
| Expenses: | |
| Management services fees | 9,961,757 |
| Distribution and/or service fees | |
| Class A | 765,289 |
| Class C | 525,009 |
| Class R | 10,588 |
| Transfer agent fees | |
| Class A | 340,232 |
| Advisor Class | 80,198 |
| Class C | 58,227 |
| Institutional Class | 707,311 |
| Institutional 2 Class | 60,649 |
| Institutional 3 Class | 8,680 |
| Class R | 2,358 |
| Compensation of board members | 43,315 |
| Custodian fees | 12,752 |
| Printing and postage fees | 87,219 |
| Registration fees | 161,579 |
| Audit fees | 29,750 |
| Legal fees | 18,870 |
| Interest on interfund lending | 198 |
| Compensation of chief compliance officer | 271 |
| Other | 41,113 |
| Total expenses | 12,915,365 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (660,488) |
| Fees waived by transfer agent | |
| Institutional 2 Class | (2,314) |
| Institutional 3 Class | (2,467) |
| Expense reduction | (580) |
| Total net expenses | 12,249,516 |
| Net investment income | 25,225,416 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 96,071,992 |
| Investments — affiliated issuers | (902) |
| Foreign currency translations | 1,458 |
| Net realized gain | 96,072,548 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | 28,212,283 |
| Investments — affiliated issuers | 2,602 |
| Foreign currency translations | (235) |
| Net change in unrealized appreciation (depreciation) | 28,214,650 |
| Net realized and unrealized gain | 124,287,198 |
| Net increase in net assets resulting from operations | $149,512,614 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 16 | Columbia Convertible Securities Fund | Annual Report 2020 |
Statement of Changes in Net Assets
|
Year Ended
February 29, 2020 |
Year Ended
February 28, 2019 |
|
| Operations | ||
| Net investment income | $25,225,416 | $19,521,831 |
| Net realized gain | 96,072,548 | 49,816,976 |
| Net change in unrealized appreciation (depreciation) | 28,214,650 | (145,667) |
| Net increase in net assets resulting from operations | 149,512,614 | 69,193,140 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (19,462,475) | (12,738,952) |
| Advisor Class | (4,865,869) | (1,481,568) |
| Class C | (3,070,845) | (1,662,746) |
| Institutional Class | (42,810,874) | (24,982,005) |
| Institutional 2 Class | (6,918,147) | (3,368,780) |
| Institutional 3 Class | (7,115,129) | (4,841,333) |
| Class R | (122,603) | (118,214) |
| Class T | — | (1,687) |
| Total distributions to shareholders | (84,365,942) | (49,195,285) |
| Increase in net assets from capital stock activity | 256,745,390 | 245,000,419 |
| Total increase in net assets | 321,892,062 | 264,998,274 |
| Net assets at beginning of year | 1,108,582,513 | 843,584,239 |
| Net assets at end of year | $1,430,474,575 | $1,108,582,513 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Convertible Securities Fund | Annual Report 2020
|
17 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| February 29, 2020 | February 28, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 4,360,574 | 94,935,324 | 4,172,480 | 85,945,217 |
| Distributions reinvested | 638,016 | 13,768,058 | 431,159 | 8,523,504 |
| Redemptions | (4,307,203) | (93,362,623) | (3,082,744) | (62,933,185) |
| Net increase | 691,387 | 15,340,759 | 1,520,895 | 31,535,536 |
| Advisor Class | ||||
| Subscriptions | 3,314,559 | 73,339,965 | 2,549,520 | 52,499,070 |
| Distributions reinvested | 222,512 | 4,854,911 | 73,988 | 1,481,424 |
| Redemptions | (1,722,208) | (37,901,225) | (1,081,929) | (22,255,559) |
| Net increase | 1,814,863 | 40,293,651 | 1,541,579 | 31,724,935 |
| Class C | ||||
| Subscriptions | 1,070,570 | 23,306,724 | 683,086 | 14,015,683 |
| Distributions reinvested | 123,128 | 2,653,398 | 72,090 | 1,413,721 |
| Redemptions | (474,408) | (10,254,412) | (629,862) | (13,016,084) |
| Net increase | 719,290 | 15,705,710 | 125,314 | 2,413,320 |
| Institutional Class | ||||
| Subscriptions | 13,888,726 | 303,951,549 | 15,114,824 | 312,133,611 |
| Distributions reinvested | 1,535,050 | 33,176,052 | 916,774 | 18,154,010 |
| Redemptions | (8,252,510) | (179,691,428) | (9,303,311) | (186,562,038) |
| Net increase | 7,171,266 | 157,436,173 | 6,728,287 | 143,725,583 |
| Institutional 2 Class | ||||
| Subscriptions | 5,014,833 | 109,175,210 | 2,622,930 | 54,101,373 |
| Distributions reinvested | 318,069 | 6,915,549 | 168,798 | 3,368,633 |
| Redemptions | (5,005,134) | (110,303,792) | (1,400,041) | (27,998,257) |
| Net increase | 327,768 | 5,786,967 | 1,391,687 | 29,471,749 |
| Institutional 3 Class | ||||
| Subscriptions | 1,833,426 | 40,855,531 | 833,390 | 17,415,288 |
| Distributions reinvested | 324,002 | 7,114,937 | 240,177 | 4,840,196 |
| Redemptions | (1,159,672) | (25,218,350) | (738,309) | (15,321,230) |
| Net increase | 997,756 | 22,752,118 | 335,258 | 6,934,254 |
| Class R | ||||
| Subscriptions | 42,464 | 932,277 | 24,847 | 507,976 |
| Distributions reinvested | 2,063 | 44,526 | 1,340 | 26,465 |
| Redemptions | (70,252) | (1,546,791) | (63,010) | (1,295,811) |
| Net decrease | (25,725) | (569,988) | (36,823) | (761,370) |
| Class T | ||||
| Distributions reinvested | — | — | 78 | 1,548 |
| Redemptions | — | — | (2,311) | (45,136) |
| Net decrease | — | — | (2,233) | (43,588) |
| Total net increase | 11,696,605 | 256,745,390 | 11,603,964 | 245,000,419 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 18 | Columbia Convertible Securities Fund | Annual Report 2020 |
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|
Columbia Convertible Securities Fund | Annual Report 2020
|
19 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. 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.
|
Net asset value,
beginning of period |
Net
investment income |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $20.92 | 0.39 | 2.18 | 2.57 | (0.50) | (0.90) | (1.40) |
| Year Ended 2/28/2019 | $20.41 | 0.39 | 1.11 | 1.50 | (0.40) | (0.59) | (0.99) |
| Year Ended 2/28/2018 | $18.64 | 0.43 | 1.89 | 2.32 | (0.55) | — | (0.55) |
| Year Ended 2/28/2017 | $15.07 | 0.47 | 3.52 | 3.99 | (0.42) | — | (0.42) |
| Year Ended 2/29/2016 | $19.53 | 0.38 | (3.25) | (2.87) | (0.75) | (0.87) | (1.62) |
| Advisor Class | |||||||
| Year Ended 2/29/2020 | $21.14 | 0.45 | 2.20 | 2.65 | (0.55) | (0.90) | (1.45) |
| Year Ended 2/28/2019 | $20.61 | 0.44 | 1.13 | 1.57 | (0.45) | (0.59) | (1.04) |
| Year Ended 2/28/2018 | $18.82 | 0.48 | 1.90 | 2.38 | (0.59) | — | (0.59) |
| Year Ended 2/28/2017 | $15.21 | 0.50 | 3.57 | 4.07 | (0.46) | — | (0.46) |
| Year Ended 2/29/2016 | $19.69 | 0.45 | (3.29) | (2.84) | (0.80) | (0.87) | (1.67) |
| Class C | |||||||
| Year Ended 2/29/2020 | $20.84 | 0.23 | 2.17 | 2.40 | (0.34) | (0.90) | (1.24) |
| Year Ended 2/28/2019 | $20.33 | 0.23 | 1.12 | 1.35 | (0.25) | (0.59) | (0.84) |
| Year Ended 2/28/2018 | $18.57 | 0.29 | 1.87 | 2.16 | (0.40) | — | (0.40) |
| Year Ended 2/28/2017 | $15.02 | 0.34 | 3.50 | 3.84 | (0.29) | — | (0.29) |
| Year Ended 2/29/2016 | $19.46 | 0.25 | (3.24) | (2.99) | (0.61) | (0.87) | (1.48) |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $20.96 | 0.45 | 2.17 | 2.62 | (0.55) | (0.90) | (1.45) |
| Year Ended 2/28/2019 | $20.44 | 0.44 | 1.12 | 1.56 | (0.45) | (0.59) | (1.04) |
| Year Ended 2/28/2018 | $18.67 | 0.48 | 1.88 | 2.36 | (0.59) | — | (0.59) |
| Year Ended 2/28/2017 | $15.10 | 0.51 | 3.52 | 4.03 | (0.46) | — | (0.46) |
| Year Ended 2/29/2016 | $19.56 | 0.42 | (3.24) | (2.82) | (0.80) | (0.87) | (1.67) |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $21.12 | 0.47 | 2.18 | 2.65 | (0.56) | (0.90) | (1.46) |
| Year Ended 2/28/2019 | $20.59 | 0.45 | 1.14 | 1.59 | (0.47) | (0.59) | (1.06) |
| Year Ended 2/28/2018 | $18.80 | 0.50 | 1.90 | 2.40 | (0.61) | — | (0.61) |
| Year Ended 2/28/2017 | $15.20 | 0.52 | 3.55 | 4.07 | (0.47) | — | (0.47) |
| Year Ended 2/29/2016 | $19.68 | 0.45 | (3.27) | (2.82) | (0.82) | (0.87) | (1.69) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 20 | Columbia Convertible Securities Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Proceeds from
regulatory settlements |
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Class A | ||||||||
| Year Ended 2/29/2020 | — | $22.09 | 12.55% | 1.17%(c) | 1.12%(c),(d) | 1.81% | 74% | $317,365 |
| Year Ended 2/28/2019 | — | $20.92 | 7.70% | 1.20%(c) | 1.13%(c),(d) | 1.88% | 60% | $286,075 |
| Year Ended 2/28/2018 | — | $20.41 | 12.65% | 1.22% | 1.12%(d) | 2.21% | 67% | $248,052 |
| Year Ended 2/28/2017 | — | $18.64 | 26.68% | 1.25% | 1.13%(d) | 2.73% | 72% | $289,232 |
| Year Ended 2/29/2016 | 0.03 | $15.07 | (15.46%)(e) | 1.23%(f) | 1.11%(d),(f) | 2.11% | 71% | $287,364 |
| Advisor Class | ||||||||
| Year Ended 2/29/2020 | — | $22.34 | 12.84% | 0.92%(c) | 0.87%(c),(d) | 2.06% | 74% | $94,945 |
| Year Ended 2/28/2019 | — | $21.14 | 7.99% | 0.95%(c) | 0.88%(c),(d) | 2.15% | 60% | $51,487 |
| Year Ended 2/28/2018 | — | $20.61 | 12.91% | 0.97% | 0.87%(d) | 2.43% | 67% | $18,432 |
| Year Ended 2/28/2017 | — | $18.82 | 27.00% | 1.00% | 0.88%(d) | 2.95% | 72% | $11,789 |
| Year Ended 2/29/2016 | 0.03 | $15.21 | (15.21%)(e) | 1.00%(f) | 0.87%(d),(f) | 2.59% | 71% | $14,556 |
| Class C | ||||||||
| Year Ended 2/29/2020 | — | $22.00 | 11.71% | 1.92%(c) | 1.87%(c),(d) | 1.06% | 74% | $62,313 |
| Year Ended 2/28/2019 | — | $20.84 | 6.92% | 1.95%(c) | 1.88%(c),(d) | 1.14% | 60% | $44,035 |
| Year Ended 2/28/2018 | — | $20.33 | 11.80% | 1.97% | 1.87%(d) | 1.47% | 67% | $40,419 |
| Year Ended 2/28/2017 | — | $18.57 | 25.70% | 2.00% | 1.88%(d) | 1.98% | 72% | $42,161 |
| Year Ended 2/29/2016 | 0.03 | $15.02 | (16.06%)(e) | 1.99%(f) | 1.87%(d),(f) | 1.38% | 71% | $47,322 |
| Institutional Class | ||||||||
| Year Ended 2/29/2020 | — | $22.13 | 12.81% | 0.92%(c) | 0.87%(c),(d) | 2.06% | 74% | $733,400 |
| Year Ended 2/28/2019 | — | $20.96 | 8.00% | 0.95%(c) | 0.88%(c),(d) | 2.13% | 60% | $544,140 |
| Year Ended 2/28/2018 | — | $20.44 | 12.91% | 0.97% | 0.87%(d) | 2.49% | 67% | $393,240 |
| Year Ended 2/28/2017 | — | $18.67 | 26.94% | 1.00% | 0.88%(d) | 2.97% | 72% | $229,113 |
| Year Ended 2/29/2016 | 0.03 | $15.10 | (15.21%)(e) | 0.98%(f) | 0.86%(d),(f) | 2.27% | 71% | $203,574 |
| Institutional 2 Class | ||||||||
| Year Ended 2/29/2020 | — | $22.31 | 12.88% | 0.87%(c) | 0.81%(c) | 2.13% | 74% | $92,233 |
| Year Ended 2/28/2019 | — | $21.12 | 8.07% | 0.89%(c) | 0.81%(c) | 2.19% | 60% | $80,367 |
| Year Ended 2/28/2018 | — | $20.59 | 13.02% | 0.90% | 0.80% | 2.54% | 67% | $49,709 |
| Year Ended 2/28/2017 | — | $18.80 | 27.08% | 0.90% | 0.79% | 3.02% | 72% | $65,291 |
| Year Ended 2/29/2016 | 0.03 | $15.20 | (15.13%)(e) | 0.87%(f) | 0.76%(f) | 2.48% | 71% | $38,717 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Convertible Securities Fund | Annual Report 2020
|
21 |
Financial Highlights (continued)
|
Net asset value,
beginning of period |
Net
investment income |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $21.28 | 0.48 | 2.21 | 2.69 | (0.57) | (0.90) | (1.47) |
| Year Ended 2/28/2019 | $20.74 | 0.47 | 1.14 | 1.61 | (0.48) | (0.59) | (1.07) |
| Year Ended 2/28/2018 | $18.94 | 0.51 | 1.91 | 2.42 | (0.62) | — | (0.62) |
| Year Ended 2/28/2017 | $15.31 | 0.53 | 3.58 | 4.11 | (0.48) | — | (0.48) |
| Year Ended 2/29/2016 | $19.81 | 0.51 | (3.34) | (2.83) | (0.83) | (0.87) | (1.70) |
| Class R | |||||||
| Year Ended 2/29/2020 | $20.90 | 0.34 | 2.16 | 2.50 | (0.44) | (0.90) | (1.34) |
| Year Ended 2/28/2019 | $20.39 | 0.33 | 1.12 | 1.45 | (0.35) | (0.59) | (0.94) |
| Year Ended 2/28/2018 | $18.62 | 0.38 | 1.89 | 2.27 | (0.50) | — | (0.50) |
| Year Ended 2/28/2017 | $15.06 | 0.42 | 3.51 | 3.93 | (0.37) | — | (0.37) |
| Year Ended 2/29/2016 | $19.51 | 0.34 | (3.24) | (2.90) | (0.71) | (0.87) | (1.58) |
| 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) | Ratios include interfund lending expense which is less than 0.01%. |
| (d) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (e) | The Fund received proceeds from regulatory settlements. Had the Fund not received these proceeds, the total return would have been lower by 0.14%. |
| (f) | Ratios include line of credit interest expense which is less than 0.01%. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 22 | Columbia Convertible Securities Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Proceeds from
regulatory settlements |
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Institutional 3 Class | ||||||||
| Year Ended 2/29/2020 | — | $22.50 | 12.97% | 0.82%(c) | 0.77%(c) | 2.17% | 74% | $128,319 |
| Year Ended 2/28/2019 | — | $21.28 | 8.11% | 0.84%(c) | 0.76%(c) | 2.25% | 60% | $100,142 |
| Year Ended 2/28/2018 | — | $20.74 | 13.03% | 0.85% | 0.75% | 2.58% | 67% | $90,655 |
| Year Ended 2/28/2017 | — | $18.94 | 27.14% | 0.85% | 0.74% | 3.06% | 72% | $1,269 |
| Year Ended 2/29/2016 | 0.03 | $15.31 | (15.09%)(e) | 0.84%(f) | 0.72%(f) | 3.01% | 71% | $812 |
| Class R | ||||||||
| Year Ended 2/29/2020 | — | $22.06 | 12.23% | 1.42%(c) | 1.37%(c),(d) | 1.56% | 74% | $1,900 |
| Year Ended 2/28/2019 | — | $20.90 | 7.44% | 1.45%(c) | 1.38%(c),(d) | 1.63% | 60% | $2,337 |
| Year Ended 2/28/2018 | — | $20.39 | 12.38% | 1.47% | 1.37%(d) | 1.97% | 67% | $3,031 |
| Year Ended 2/28/2017 | — | $18.62 | 26.32% | 1.50% | 1.38%(d) | 2.44% | 72% | $3,240 |
| Year Ended 2/29/2016 | 0.03 | $15.06 | (15.63%)(e) | 1.49%(f) | 1.37%(d),(f) | 1.91% | 71% | $2,429 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Convertible Securities Fund | Annual Report 2020
|
23 |
Notes to Financial Statements
February 29, 2020
February 29, 2020
Note 1. Organization
Columbia Convertible Securities
Fund (the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a liquidation will be
proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A and Class C shares are offered to the general public for investment. Class C shares automatically convert to Class A shares after 10 years. Advisor Class, Institutional Class, Institutional 2
Class, Institutional 3 Class and Class R shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional investors and to certain other investors as also
described in the Fund’s prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
All equity securities are valued at
the close of business of the New York Stock Exchange. Equity securities are valued at the official closing price on the principal exchange or market on which they trade. Unlisted securities or listed securities for
which there were no sales during the day are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets.
Debt securities generally are
valued by pricing services approved by the Board of Trustees based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques that take
into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes. Debt securities for
which quotations are not readily available or not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities maturing in 60 days or
less are valued primarily at amortized cost value, unless this method results in a valuation that management believes does not approximate market value.
Foreign equity securities are
valued based on the closing price on the foreign exchange in which such securities are primarily traded. If any foreign equity security closing prices are not readily available, the securities are valued at the mean
of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are determined at the scheduled closing time of the New York Stock Exchange. Many securities markets and exchanges
outside the U.S. close prior to the close of the New York Stock Exchange; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but
before the close of the New York Stock Exchange. In those situations, foreign securities will be fair valued pursuant to a policy adopted by the Board of Trustees. Under the policy, the Fund may utilize a third-party
pricing service to determine these fair values. The third-party pricing service takes into account multiple
| 24 | Columbia Convertible Securities Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
factors, including, but not limited to, movements
in the U.S. securities markets, certain depositary receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith
estimate that reasonably reflects the current market conditions as of the close of the New York Stock Exchange. The fair value of a security is likely to be different from the quoted or published price, if
available.
Investments in open-end investment
companies, including money market funds, are valued at their latest net asset value.
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published
price for the security, if available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Foreign currency transactions and
translations
The values of all assets and
liabilities denominated in foreign currencies are generally translated into U.S. dollars at exchange rates determined at the close of regular trading on the New York Stock Exchange. Net realized and unrealized gains
(losses) on foreign currency transactions and translations include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising
from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes,
the Fund does not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations
are included with the net realized and unrealized gains (losses) on investments in the Statement of Operations.
Delayed delivery securities
The Fund may trade securities on
other than normal settlement terms, including securities purchased or sold on a “when-issued” or "forward commitment" basis. This may increase risk to the Fund since the other party to the transaction may
fail to deliver, which could cause the Fund to subsequently invest at less advantageous prices. The Fund designates cash or liquid securities in an amount equal to the delayed delivery commitment.
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Interest income is recorded on an
accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted. For
convertible securities, premiums attributable to the conversion feature are not amortized.
The Fund may place a debt security
on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. A defaulted debt security
is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Corporate actions and dividend
income are recorded on the ex-dividend date.
|
Columbia Convertible Securities Fund | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
The Fund may receive distributions
from holdings in equity securities, business development companies (BDCs), exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment companies (RICs), and real estate investment trusts
(REITs), which report information as to the tax character of their distributions annually. These distributions are allocated to dividend income, capital gain and return of capital based on actual information reported.
Return of capital is recorded as a reduction of the cost basis of securities held. If the Fund no longer owns the applicable securities, return of capital is recorded as a realized gain. With respect to REITs, to the
extent actual information has not yet been reported, estimates for return of capital are made by Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise
Financial, Inc. (Ameriprise Financial). The Investment Manager’s estimates are subsequently adjusted when the actual character of the distributions is disclosed by the REITs, which could result in a
proportionate change in return of capital to shareholders.
Awards from class action litigation
are recorded as a reduction of cost basis if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities on the payment date, the proceeds are recorded as
realized gains.
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable income and net capital gain, if any, for its
tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net income and certain other
amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Foreign taxes
The Fund may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules
and regulations that exist in the markets in which it invests.
Realized gains in certain countries
may be subject to foreign taxes at the Fund level, based on statutory rates. The Fund accrues for such foreign taxes on realized and unrealized gains at the appropriate rate for each jurisdiction, as applicable. The
amount, if any, is disclosed as a liability on the Statement of Assets and Liabilities.
Distributions to shareholders
Distributions from net investment
income, if any, are declared and paid each calendar quarter. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with
federal income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
| 26 | Columbia Convertible Securities Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Note 3. Fees and other
transactions with affiliates
Management services fees
The Fund has entered into a
Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the
Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the
Fund’s daily net assets that declines from 0.82% to 0.67% as the Fund’s net assets increase. The effective management services fee rate for the year ended February 29, 2020 was 0.78% of the Fund’s
average daily net assets.
Compensation of board members
Members of the Board of Trustees
who are not officers or employees of the Investment Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the
Deferred Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of
certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All
amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as
sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class. In addition, prior to July 1, 2019, Institutional 2 Class shares were subject to a
contractual transfer agency fee annual limitation of not more than 0.05% and Institutional 3 Class shares were subject to a contractual transfer agency fee annual limitation of not more than 0.00% of the average daily
net assets attributable to each share class.
|
Columbia Convertible Securities Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
For the year ended February 29,
2020, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| Effective rate (%) | |
| Class A | 0.11 |
| Advisor Class | 0.11 |
| Class C | 0.11 |
| Institutional Class | 0.11 |
| Institutional 2 Class | 0.06 |
| Institutional 3 Class | 0.01 |
| Class R | 0.11 |
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended February 29, 2020, these minimum account balance fees reduced total expenses
of the Fund by $580.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays
a monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class C shares of the Fund and a monthly distribution fee to the Distributor at the
maximum annual rates of 0.75% and 0.50% of the average daily net assets attributable to Class C and Class R shares of the Fund, respectively.
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended February 29, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 5.75 | 0.50 - 1.00(a) | 776,404 |
| Class C | — | 1.00(b) | 8,381 |
| (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 applies to redemptions within 12 months after purchase, with certain limited exceptions. |
The Fund’s other share
classes are not subject to sales charges.
| 28 | Columbia Convertible Securities Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Expenses waived/reimbursed by the
Investment Manager and its affiliates
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) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, 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 following annual rate(s) as a percentage of the class’ average daily net assets:
Under the agreement governing
these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes
(including foreign transaction taxes), expenses associated with investments 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, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from
the Investment Manager, certain of its affiliates and the Fund. In addition to the contractual agreement, the Investment Manager and certain of its affiliates have voluntarily agreed to waive fees and/or reimburse
Fund expenses (excluding certain fees and expenses described above) so that Fund level expenses (expenses directly attributable to the Fund and not to a specific share class) are waived proportionately across all
share classes, but the Fund’s net operating expenses shall not exceed the contractual annual rates listed in the table above. This arrangement may be revised or discontinued at any time. Reflected in the
contractual cap commitment, prior to July 1, 2019, is the Transfer Agent’s contractual agreement to limit total transfer agency fees to an annual rate of not more than 0.05% for Institutional 2 Class and 0.00%
for Institutional 3 Class of the average daily net assets attributable to each share class. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable
by the Investment Manager or its affiliates in future periods.
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At February 29, 2020, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, trustees’ deferred compensation, re-characterization of distributions for investments, principal and/or interest
of fixed income securities, foreign currency transactions, deemed distributions, non-deductible expenses and amortization/accretion on certain convertible securities. To the extent these differences were permanent,
reclassifications were made among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
The following reclassifications
were made:
|
Undistributed net
investment income ($) |
Accumulated
net realized gain ($) |
Paid in
capital ($) |
| 7,500,547 | (7,491,014) | (9,533) |
|
Columbia Convertible Securities Fund | Annual Report 2020
|
29 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Net investment income (loss) and
net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended February 29, 2020 | Year Ended February 28, 2019 | ||||
|
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 48,258,619 | 36,107,323 | 84,365,942 | 20,534,084 | 28,661,201 | 49,195,285 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At February 29, 2020, the
components of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| 30,042,484 | 18,837,137 | — | 109,739,671 |
At February 29, 2020, the cost of
all investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
|
Federal
tax cost ($) |
Gross unrealized
appreciation ($) |
Gross unrealized
(depreciation) ($) |
Net unrealized
appreciation ($) |
| 1,316,904,733 | 142,816,356 | (33,076,685) | 109,739,671 |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
Management of the Fund has
concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at
a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the
prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio
information
The cost of purchases and
proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $1,118,562,949 and $914,833,452, respectively, for the year ended February 29, 2020. The amount of purchase
and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes referred to
as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
Note 7. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
| 30 | Columbia Convertible Securities Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the
Interfund Program during the year ended February 29, 2020 was as follows:
| Borrower or lender |
Average loan
balance ($) |
Weighted average
interest rate (%) |
Number of days
with outstanding loans |
| Borrower | 900,000 | 2.64 | 3 |
| Lender | 700,000 | 2.34 | 2 |
Interest income earned by the Fund
is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at February 29, 2020.
Note 8. Line of credit
The Fund has access to a
revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. The credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager or an affiliated investment manager, severally and
not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the federal funds effective rate, (ii) the
one-month LIBOR rate and (iii) the overnight bank funding rate, plus in each case, 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a
commitment fee equal to its pro rata share of the unused amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations. This agreement
expires annually in December unless extended or renewed.
The Fund had no borrowings during
the year ended February 29, 2020.
Note 9. Significant
risks
Convertible securities risk
Convertible securities are subject
to the usual risks associated with debt instruments, 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.
Credit risk
Credit risk is the risk that the
value of debt instruments in the Fund’s portfolio may decline because the issuer 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. Credit rating agencies assign credit ratings to certain debt instruments to indicate their credit risk. Lower rated or unrated debt instruments held by the Fund may
present increased credit risk as compared to higher-rated debt instruments.
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.
Actions by governments and central banking authorities can result in increases in interest rates. Increasing interest rates may negatively affect the value of debt securities held by the Fund, resulting in a negative
impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt security, the greater its sensitivity to changes in interest rates. The Fund is subject
to the risk that the income generated by its investments may not keep pace with inflation.
|
Columbia Convertible Securities Fund | Annual Report 2020
|
31 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
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. Changing regulatory, market or other conditions or environments (for example, the
interest rate or credit environments) may adversely affect the liquidity of the Fund’s investments. The Fund may have to accept a lower selling price for the holding, sell other investments, or forego another,
more appealing investment opportunity. 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. A less liquid market can
lead to an increase in Fund redemptions, which may negatively impact Fund performance and net asset value per share, including, for example, if the Fund is forced to sell securities in a down market.
Market and environment risk
The Fund may incur losses due to
declines in the value of one or more securities in which it invests. These declines may be due to factors affecting a particular issuer, or the result of, among other things, political, regulatory, market, economic or
social developments affecting the relevant market(s) more generally. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers,
which could adversely affect Fund, including causing difficulty in assigning prices to hard-to-value assets in thinly traded and closed markets, significant redemptions and operational challenges. Global economies and
financial markets are increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may
be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional or global events
such as terrorism, war, natural disasters, disease/virus outbreaks and epidemics or other public health issues, recessions, depressions or other events – or the potential for such events – could have a
significant negative impact on global economic and market conditions.
The coronavirus disease 2019
(COVID-19) public health crisis has become a pandemic that has resulted in, and may continue to result in, significant global economic and societal disruption and market volatility due to disruptions in market access,
resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. Such disruptions may be caused, or exacerbated by, quarantines and travel restrictions,
workforce displacement and loss in human and other resources. The uncertainty surrounding the magnitude, duration, reach, costs and effects of the global pandemic, as well as actions that have been or could be taken
by governmental authorities or other third parties, present unknowns that are yet to unfold. The impacts, as well as the uncertainty over impacts to come, of COVID-19 – and any other infectious illness
outbreaks, epidemics and pandemics that may arise in the future – could negatively affect global economies and markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illness
outbreaks and epidemics in emerging market countries may be greater due to generally less established healthcare systems, governments and financial markets. Public health crises caused by the COVID-19 outbreak may
exacerbate other pre-existing political, social and economic risks in certain countries or globally. The disruptions caused by COVID-19 could prevent the Fund from executing advantageous investment decisions in a
timely manner and negatively impact the Fund’s ability to achieve their investment objectives. Any such event(s) could have a significant adverse impact on the value and risk profile of the Fund.
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting different communities at different times with varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including
the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to continue ordinary business operations and technology functions over near- or longer-term periods.
| 32 | Columbia Convertible Securities Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Shareholder concentration risk
At February 29, 2020, one
unaffiliated shareholder of record owned 17.9% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Affiliated
shareholders of record owned 27.1% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the
Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of
less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 10. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 11. Information
regarding pending and settled legal proceedings
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. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to
Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that
these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe
proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines,
penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.
|
Columbia Convertible Securities Fund | Annual Report 2020
|
33 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust and Shareholders of Columbia Convertible Securities Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Convertible Securities Fund (one of the funds constituting Columbia Funds Series Trust, referred to hereafter as the "Fund") as
of February 29, 2020, the related statement of operations for the year ended February 29, 2020, the statement of changes in net assets for each of the two years in the period ended February 29, 2020, including the
related notes, and the financial highlights for each of the five years in the period ended February 29, 2020 (collectively referred to as the “financial statements”). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Fund as of February 29, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two
years in the period ended February 29, 2020 and the financial highlights for each of the five years in the period ended February 29, 2020 in conformity with accounting principles generally accepted in the United
States of America.
Basis for Opinion
These financial statements are the
responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these
financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of February 29, 2020 by correspondence with the custodian, transfer agent and brokers; when replies
were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
April 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
| 34 | Columbia Convertible Securities Fund | Annual Report 2020 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended February 29, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Qualified
dividend income |
Dividends
received deduction |
Capital
gain dividend |
| 14.47% | 14.41% | $47,975,419 |
Qualified dividend income. For
taxable, non-corporate shareholders, the percentage of ordinary income distributed during the fiscal year that represents qualified dividend income subject to reduced tax rates.
Dividends received deduction. The
percentage of ordinary income distributed during the fiscal year that qualifies for the corporate dividends received deduction.
Capital gain dividend. The Fund
designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
TRUSTEES AND
OFFICERS
The Board oversees the Fund’s
operations and 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 Fund’s Trustees as
of the printing of this report, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not
affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach the mandatory retirement age established by the Board.
Independent trustees
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
George S. Batejan
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1953 |
Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 117 | Former Chairman of the Board, NICSA (National Investment Company Services Association) (Executive Committee, Nominating Committee and Governance Committee), 2014-2016; former Director, Intech Investment Management, 2011-2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016; former Advisory Board Member, University of Colorado Business School, 2015-2018 |
|
Columbia Convertible Securities Fund | Annual Report 2020
|
35 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Kathleen Blatz
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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; Member and Interim Chair, Minnesota Sports Facilities Authority, January 2017-July 2017; Interim President and Chief Executive Officer, Blue Cross and Blue Shield of Minnesota (health care insurance), February-July 2018 | 117 | Trustee, BlueCross BlueShield of Minnesota since 2009 (Chair of the Business Development Committee, 2014-2017; Chair of the Governance Committee since 2017); Chair of the Robina Foundation since August 2013; former Member and Chair of the Board, Minnesota Sports Facilities Authority, January 2017-July 2017 |
|
Pamela G. Carlton
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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 | 117 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996; Director, DR Bank (Audit Committee) since 2017; Director, Evercore Inc. (Audit Committee, Nominating and Governance Committee) since 2019 |
|
Patricia M. Flynn
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1950 |
Trustee 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 | 117 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010; Board of Directors, The MA Business Roundtable 2003-2019 |
|
Brian J. Gallagher
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee since 12/17 | Retired; Partner with Deloitte & Touche LLP and its predecessors, 1977-2016 | 117 | Trustee, Catholic Schools Foundation since 2004 |
|
Catherine James Paglia
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Chair of the Board since 1/20; Trustee 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. | 117 | 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) |
| 36 | Columbia Convertible Securities Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Anthony M. Santomero
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1946 |
Trustee 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 | 117 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; former Director, Citigroup Inc. and Citibank, N.A., 2009-2019; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
|
Minor M. Shaw
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1947 |
Trustee 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 | 117 | Director, BlueCross BlueShield of South Carolina since April 2008; Trustee, Hollingsworth Funds since 2016 (previously Board Chair from 2016-2019); Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016; former Director, National Association of Corporate Directors, Carolinas Chapter, 2013-2018 |
|
Sandra Yeager
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1964 |
Trustee since 12/17 | Retired; President and founder, Hanoverian Capital, LLC (SEC registered investment advisor firm), 2008-2016; Managing Director, DuPont Capital, 2006-2008; Managing Director, Morgan Stanley Investment Management, 2004-2006; Senior Vice President, Alliance Bernstein, 1990-2004 | 115 | Director, NAPE Education Foundation since October 2016 |
|
Columbia Convertible Securities Fund | Annual Report 2020
|
37 |
TRUSTEES AND OFFICERS (continued)
Interested trustee affiliated with Investment Manager*
Interested trustee affiliated with Investment Manager*
| * | 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. |
Nations Funds refer to the Funds
within the Columbia Funds Complex that historically bore the Nations brand and includes series of Columbia Funds Series Trust. RiverSource Funds refer to the Funds within the Columbia Funds Complex that historically
bore the RiverSource brand and includes series of Columbia Funds Series Trust II.
The Statement of Additional
Information has additional information about the Fund’s Board members and is available, without charge, upon request by calling 800.345.6611, visiting columbiathreadneedleus.com/investor/ or contacting your
financial intermediary.
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 of the
Fund as of the printing of this report, 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 Fund’s other officers are:
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); officer of Columbia Funds and affiliated funds since 2007. |
|
Michael G. Clarke
225 Franklin Street Boston, MA 02110 Born 1969 |
Chief Financial Officer, Principal Financial Officer (2009), and Senior Vice President (2019) | Vice President, Head of North American Operations, and Co-Head of Global Operations, – Accounting and Tax, Columbia Management Investment Advisers, LLC, since June 2019 (previously Vice President – Accounting and Tax, May 2010 – May 2019); senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009 – January 2019 and December 2015 – January 2019, respectively). |
|
Joseph Beranek
5890 Ameriprise Financial Center Minneapolis, MN 55474 Born 1965 |
Treasurer, Chief Accounting Officer (Principal Accounting Officer) (2019), and Principal Financial Officer (2020) | Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and March 2017, respectively (previously Vice President — Pricing and Corporate Actions, May 2010 - March 2017). |
| 38 | Columbia Convertible Securities Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Fund officers (continued)
Fund officers (continued)
|
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 |
|
Paul B. Goucher
485 Lexington Avenue New York, NY 10017 Born 1968 |
Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since March 2015 (previously Vice President and Assistant Secretary, May 2010 – March 2015). |
|
Thomas P. McGuire
225 Franklin Street Boston, MA 02110 Born 1972 |
Senior 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; Chief Compliance Officer, Columbia Acorn/Wanger Funds since December 2015. |
|
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; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013. |
|
Ryan C. Larrenaga
225 Franklin Street Boston, MA 02110 Born 1970 |
Senior Vice President (2017), Chief Legal Officer (2017), and Secretary (2015) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously Vice President and Group Counsel, August 2011 - August 2018); officer of Columbia Funds and affiliated funds since 2005. |
|
Daniel J. Beckman
225 Franklin Street Boston, MA 02110 Born 1962 |
Senior Vice President (2020) | Vice President – Head of North America Product, Columbia Management Investment Advisers, LLC (since April 2015); previously, Senior Vice President of Investment Product Management, Fidelity Financial Advisor Solutions, a division of Fidelity Investments (January 2012 – March 2015). |
|
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. |
|
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. |
|
Columbia Convertible Securities Fund | Annual Report 2020
|
39 |
Columbia Convertible Securities Fund
P.O. Box 219104
Kansas City, MO 64121-9104
Please read and consider the
investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments
(Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved.
© 2020 Columbia Management Investment
Advisers, LLC.
columbiathreadneedleus.com/investor/
ANN134_02_K01_(04/20)
Annual Report
February 29, 2020
February 29, 2020
Columbia Select
Large Cap Equity Fund
Beginning on January 1, 2021, as
permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports like this one will no longer be sent by mail, unless you
specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (columbiathreadneedleus.com/investor/), and each time a report is posted you will be notified
by mail and provided with a website address to access the report.
If you have already elected to
receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically
at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with the Fund, by calling 800.345.6611 or by enrolling in “eDelivery” by logging
into your account at columbiathreadneedleus.com/investor/.
You may elect to receive all future
reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you
invest directly with the Fund, you can call 800.345.6611 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive paper reports will apply to all Columbia
Funds held in your account if you invest through a financial intermediary or all Columbia Funds held with the fund complex if you invest directly with the Fund.
Not FDIC Insured • No bank
guarantee • May lose value
Table of Contents
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5 |
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7 |
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8 |
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12 |
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13 |
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32 |
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33 |
Columbia Select Large Cap Equity
Fund (the Fund) mails one shareholder report to each shareholder address, unless such shareholder elected to receive shareholder reports from the Fund electronically. If you would like more than one report, please
call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and
procedures
The policy of the Board of Trustees
is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by
calling 800.345.6611; contacting your financial intermediary; visiting columbiathreadneedleus.com/investor/; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding
how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting
columbiathreadneedleus.com/investor/, or searching the website of the SEC at sec.gov.
Quarterly schedule of
investments
The Fund files a complete schedule
of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT, and for reporting periods ended prior to March 31, 2019, on Form N-Q. The Fund’s Form N-Q and Form N-PORT
filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q or Form N-PORT, can also be obtained without charge, upon request, by calling
800.345.6611.
Additional Fund information
For more information about the
Fund, please visit columbiathreadneedleus.com/investor/ or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC (the
Investment Manager)
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors,
Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 219104
Kansas City, MO 64121-9104
Columbia Select Large Cap Equity
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks long-term capital appreciation.
Portfolio management
Peter Santoro, CFA
Co-Portfolio Manager
Managed Fund since 2004
Melda Mergen, CFA, CAIA
Co-Portfolio Manager
Managed Fund since 2014
Tiffany Wade
Co-Portfolio Manager
Managed Fund since November 2019
Morningstar style boxTM
The Morningstar Style Box is based on a fund’s portfolio holdings. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows
investment style (value, blend, or growth). Information shown is based on the most recent data provided by Morningstar.
© 2020 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or
distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
Returns for Class A shares are shown
with and without the maximum initial sales charge of 5.75%. Returns for Class C shares are shown with and without the 1.00% contingent deferred sales charge for the first year only. The Fund’s other share
classes are not subject to sales charges and have limited eligibility. Please see the Fund’s prospectus for details. Performance for different share classes will vary based on differences in sales charges and
fees associated with each share class. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the
redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee
waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown
represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than
their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial
intermediary, visiting columbiathreadneedleus.com/investor/ or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investor/investment-products/mutual-funds/appended-performance for more information. |
The S&P 500 Index, an unmanaged
index, measures the performance of 500 widely held, large-capitalization U.S. stocks and is frequently used as a general measure of market performance.
Indices are not available for
investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Fund performance may be significantly
negatively impacted by the economic impact of the COVID-19 pandemic. The COVID-19 pandemic has adversely impacted economies and capital markets around the world in ways that will likely continue and may change in
unforeseen ways for an indeterminate period. The COVID-19 pandemic may exacerbate pre-existing political, social and economic risks in certain countries and globally.
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (February 28, 2010 — February 29, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Select Large Cap Equity Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund
distributions or on the redemption of Fund shares.
| Portfolio breakdown (%) (at February 29, 2020) | |
| Common Stocks | 99.1 |
| Money Market Funds | 0.9 |
| Total | 100.0 |
Percentages indicated are based
upon total investments excluding investments in derivatives, if any. The Fund’s portfolio composition is subject to change.
Percentages indicated are based
upon total equity investments. The Fund’s portfolio composition is subject to change.
| 4 | Columbia Select Large Cap Equity Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
At February 29, 2020, approximately
42.1% of the Fund’s shares were owned in the aggregate by affiliated funds-of-funds managed by Columbia Management Investment Advisers, LLC (the Investment Manager). As a result of asset allocation decisions by
the Investment Manager, it is possible that the Fund may experience relatively large purchases or redemptions from affiliated funds-of-funds. The Investment Manager seeks to minimize the impact of these transactions
by structuring them over a reasonable period of time. The Fund may also experience increased expenses as it buys and sells securities as a result of purchases or redemptions by affiliated funds-of-funds.
For the 12-month period that ended
February 29, 2020, the Fund’s Class A shares returned 7.30% excluding sales charges. The Fund underperformed its benchmark, the S&P 500 Index, which returned 8.19% for the same time period. Management fees,
which the Fund pays but the benchmark does not, generally accounted for the modest shortfall between the Fund and the benchmark.
Global uncertainty cut into strong
stock market gains, solid economic growth
Optimism prevailed early in 2019,
buoyed by solid economic growth and a recovery from meaningful stock market losses in 2018. Strong job gains drove the unemployment rate down to 3.5%, annualized. Consumer spending and export trade supported U.S.
economic growth. However, the pace of growth slowed to an estimated 2.1% for the year. In Europe, economic growth slowed as trade tensions and uncertainty mounted regarding Brexit (the U.K.’s departure from the
European Union), which was finally resolved late in the year. At the same time, emerging markets came under pressure, driven by trade and tariff concerns. China’s economic conditions weakened and the spread of
the coronavirus introduced enough global uncertainty to drive stock markets around the world down sharply in the final week of the period, raising concerns about the impact on global economic growth going forward.
Against this backdrop, the S&P
500 Index returned 8.19% for the 12-month period, giving up substantial gains during the last few trading days of February. The Bloomberg Barclays U.S. Aggregate Bond Index gained 11.68%, as the yield on the 10-year
U.S. Treasury fell to 1.10%. (Bond yields and prices move in opposite directions.)
Contributors and detractors
The Fund’s gains were
driven by stock selection in the industrials, materials and technology sectors. Within industrials, shares of L3 Harris Technologies, Inc. and Northrup Grumman Corp. rose on the trend to higher defense spending in an
environment of geopolitical uncertainty. Both delivered on anticipated synergies from recently completed acquisitions. Northrup marked a near-term inflection point in organic growth, while also reporting strong
margins and an impressive backlog. Ingersoll-Rand PLC was another strong contributor to Fund gains. The company’s end markets have grown and it has gained market share in its heating, ventilation and air
conditioning (HVAC) businesses. Investors responded favorably to Ingersoll-Rand’s spinoff of its industrial business, which has made the company’s prospects less cyclical. We sold the Fund’s position
in Ingersoll-Rand, taking profits.
In the materials sector, a position
in Barrick Gold Corp., the world’s largest gold mining company, made a solid contribution to Fund gains as investors bid up the price of gold against a backdrop of heightened political and economic uncertainty.
Investors also responded favorably to Barrick’s joint venture with Newmont Goldcorp to establish Nevada Gold Mines, a move that may potentially deliver synergies to both companies.
In the technology sector,
MasterCard, Inc. was a standout performer. The company continued to accelerate across all metrics, beating earnings expectations as consumers continued to move away from cash and checks. Microsoft Corp. shares
continued to rise as the company continued to transition from a sleepy software company to products and services that generate recurring revenue, including its cloud-based Azure and Office 365. Microsoft, which has a
AAA rated balance sheet, exceeded revenue and earnings expectations and offered a solid outlook. Semiconductor equipment manufacturer NVIDIA Corp. delivered a solid gain, with notable strength in both its data center
and gaming divisions.
The consumer discretionary and
health care sectors delivered some major disappointments for the year. Within the consumer discretionary sector, specialty retailer Tapestry, Inc. lost ground as the company struggled with the integration of Kate
Spade & Company. Tariff concerns also weighed on the company. Ultimately, we felt that the company’s execution differed from our
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
original thesis for Tapestry and we sold the
stock. Canada Goose Holdings, Inc., a top outerwear and leisurewear company, which had been a solid performer in 2018, missed on the market’s high expectations in 2019. Growth decelerated and we sold Canada
Goose during the year.
In the health care sector, Pfizer,
Inc., Johnson & Johnson and Biogen, Inc. detracted from results. Pfizer sold off after it announced its intention to merge its Upjohn division with Mylan N.V. While the intention to focus more on innovative pharma
makes sense, we were not comfortable with the ensuing balance sheet and valuation of the remaining business and sold the stock. Johnson & Johnson was hurt by negative news flow surrounding its talc multidistrict
litigation as well as possible opioid liability. Biogen sold off on poor results for its Alzheimer’s drug, a big blow for the company. We sold Johnson & Johnson and Biogen.
At period’s end
We expect market volatility to
remain elevated with a presidential election near year end. Geopolitical uncertainty remains high with the spread of the coronavirus and its implications for economic dislocation. Against this backdrop, we continue to
aim to deliver long-term capital growth by focusing mainly on individual stock selection. We emphasize companies that have strong free cash flow generation potential, improving revenue and earnings trends, high or
rising returns on invested capital and sound or improving balance sheets. Especially during periods of volatility, we believe this combination of characteristics has the potential to serve our shareholders well.
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. 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. Value securities may be unprofitable if the market fails to recognize their intrinsic worth or the portfolio manager misgauged that worth. Foreign investments subject the Fund to risks, including political, economic, market, social and others within a particular country, as well as to currency instabilities and less stringent
financial and accounting standards generally applicable to U.S. issuers. Investments in a limited number of companies or sectors subject the Fund to greater risk of loss. The Fund may invest significantly in issuers within a particular sector, which may be negatively affected by market, economic or other conditions, making the Fund more vulnerable to unfavorable developments in the sector. Investing in derivatives is a specialized activity that involves special risks, which may result in significant losses. See the Fund’s prospectus for more information on these and other risks.
The views expressed in this report
reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and
results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update
such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf
of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
| 6 | Columbia Select Large Cap Equity Fund | Annual Report 2020 |
Understanding Your Fund’s
Expenses
(Unaudited)
(Unaudited)
As an investor, you incur two types
of costs. There are shareholder transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing fund costs, which generally include management fees,
distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with
the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s
expenses
To illustrate these ongoing
costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment
of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the
“Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the
expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under
the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the
Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or
the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are
required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the
hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are
meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in
comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
Expenses paid during the period
are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal
half year and divided by 366.
Expenses do not include fees and
expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment
Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
7 |
Portfolio of Investments
February 29, 2020
February 29, 2020
(Percentages represent value of
investments compared to net assets)
Investments in securities
| Common Stocks 99.0% | ||
| Issuer | Shares | Value ($) |
| Communication Services 12.8% | ||
| Entertainment 3.0% | ||
| Electronic Arts, Inc.(a) | 81,636 | 8,275,441 |
| Walt Disney Co. (The) | 102,706 | 12,083,361 |
| Total | 20,358,802 | |
| Interactive Media & Services 4.7% | ||
| Alphabet, Inc., Class C(a) | 23,821 | 31,904,180 |
| Media 3.7% | ||
| Comcast Corp., Class A | 334,416 | 13,520,439 |
| Discovery, Inc., Class A(a) | 314,654 | 8,086,608 |
| DISH Network Corp., Class A(a) | 105,883 | 3,549,198 |
| Total | 25,156,245 | |
| Wireless Telecommunication Services 1.4% | ||
| T-Mobile U.S.A., Inc.(a) | 106,021 | 9,558,853 |
| Total Communication Services | 86,978,080 | |
| Consumer Discretionary 9.2% | ||
| Automobiles 1.2% | ||
| General Motors Co. | 266,130 | 8,116,965 |
| Internet & Direct Marketing Retail 4.5% | ||
| Amazon.com, Inc.(a) | 16,364 | 30,825,685 |
| Multiline Retail 1.3% | ||
| Target Corp. | 84,993 | 8,754,279 |
| Specialty Retail 2.2% | ||
| Home Depot, Inc. (The) | 68,759 | 14,978,461 |
| Total Consumer Discretionary | 62,675,390 | |
| Consumer Staples 6.1% | ||
| Beverages 1.7% | ||
| PepsiCo, Inc. | 90,301 | 11,922,441 |
| Food Products 1.4% | ||
| Mondelez International, Inc., Class A | 175,124 | 9,246,547 |
| Household Products 1.3% | ||
| Kimberly-Clark Corp. | 66,314 | 8,699,734 |
| Tobacco 1.7% | ||
| Philip Morris International, Inc. | 137,726 | 11,275,628 |
| Total Consumer Staples | 41,144,350 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Energy 2.5% | ||
| Oil, Gas & Consumable Fuels 2.5% | ||
| Chevron Corp. | 130,983 | 12,225,953 |
| EOG Resources, Inc. | 73,012 | 4,618,739 |
| Total | 16,844,692 | |
| Total Energy | 16,844,692 | |
| Financials 10.7% | ||
| Banks 8.1% | ||
| Bank of America Corp. | 493,144 | 14,054,604 |
| Citigroup, Inc. | 174,458 | 11,071,105 |
| JPMorgan Chase & Co. | 149,280 | 17,332,901 |
| KeyCorp | 477,993 | 7,815,185 |
| Popular, Inc. | 92,387 | 4,432,728 |
| Total | 54,706,523 | |
| Insurance 2.6% | ||
| Allstate Corp. (The) | 99,967 | 10,521,527 |
| Lincoln National Corp. | 159,903 | 7,257,997 |
| Total | 17,779,524 | |
| Total Financials | 72,486,047 | |
| Health Care 13.5% | ||
| Biotechnology 2.6% | ||
| Alexion Pharmaceuticals, Inc.(a) | 41,095 | 3,864,163 |
| BioMarin Pharmaceutical, Inc.(a) | 53,460 | 4,831,180 |
| Exact Sciences Corp.(a) | 43,081 | 3,487,407 |
| Vertex Pharmaceuticals, Inc.(a) | 22,748 | 5,096,234 |
| Total | 17,278,984 | |
| Health Care Equipment & Supplies 6.4% | ||
| Abbott Laboratories | 170,318 | 13,119,595 |
| Baxter International, Inc. | 128,295 | 10,708,784 |
| Dentsply Sirona, Inc. | 135,543 | 6,674,137 |
| Medtronic PLC | 130,416 | 13,128,979 |
| Total | 43,631,495 | |
| Health Care Providers & Services 1.6% | ||
| Cigna Corp. | 60,983 | 11,156,230 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 8 | Columbia Select Large Cap Equity Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Pharmaceuticals 2.9% | ||
| Bristol-Myers Squibb Co. | 121,758 | 7,191,028 |
| Eli Lilly & Co. | 97,317 | 12,274,593 |
| Total | 19,465,621 | |
| Total Health Care | 91,532,330 | |
| Industrials 9.6% | ||
| Aerospace & Defense 2.7% | ||
| L3 Harris Technologies, Inc. | 41,247 | 8,155,769 |
| Northrop Grumman Corp. | 31,838 | 10,469,608 |
| Total | 18,625,377 | |
| Building Products 1.3% | ||
| Masco Corp. | 211,669 | 8,746,163 |
| Machinery 2.9% | ||
| Stanley Black & Decker, Inc. | 64,234 | 9,230,426 |
| Trane Technologies PLC | 79,200 | 10,219,968 |
| Total | 19,450,394 | |
| Road & Rail 2.7% | ||
| Norfolk Southern Corp. | 46,176 | 8,420,193 |
| Union Pacific Corp. | 63,202 | 10,100,312 |
| Total | 18,520,505 | |
| Total Industrials | 65,342,439 | |
| Information Technology 25.9% | ||
| Communications Equipment 1.9% | ||
| Cisco Systems, Inc. | 327,995 | 13,096,840 |
| IT Services 6.0% | ||
| Fidelity National Information Services, Inc. | 84,479 | 11,803,406 |
| International Business Machines Corp. | 91,115 | 11,858,617 |
| MasterCard, Inc., Class A | 59,318 | 17,217,049 |
| Total | 40,879,072 | |
| Semiconductors & Semiconductor Equipment 5.1% | ||
| Broadcom, Inc. | 46,599 | 12,703,819 |
| NVIDIA Corp. | 31,438 | 8,490,461 |
| NXP Semiconductors NV | 75,798 | 8,617,475 |
| Qorvo, Inc.(a) | 49,178 | 4,946,323 |
| Total | 34,758,078 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Software 9.5% | ||
| Adobe, Inc.(a) | 41,393 | 14,285,552 |
| Microsoft Corp. | 254,772 | 41,275,612 |
| Symantec Corp. | 445,527 | 8,478,379 |
| Total | 64,039,543 | |
| Technology Hardware, Storage & Peripherals 3.4% | ||
| Apple, Inc.(b) | 82,727 | 22,614,253 |
| Total Information Technology | 175,387,786 | |
| Materials 1.2% | ||
| Metals & Mining 1.2% | ||
| Barrick Gold Corp. | 419,545 | 7,988,137 |
| Total Materials | 7,988,137 | |
| Real Estate 3.5% | ||
| Equity Real Estate Investment Trusts (REITS) 3.5% | ||
| American Tower Corp. | 41,079 | 9,316,717 |
| Medical Properties Trust, Inc. | 298,745 | 6,312,482 |
| ProLogis, Inc. | 98,713 | 8,319,532 |
| Total | 23,948,731 | |
| Total Real Estate | 23,948,731 | |
| Utilities 4.0% | ||
| Electric Utilities 2.7% | ||
| American Electric Power Co., Inc. | 107,892 | 9,630,440 |
| Xcel Energy, Inc. | 133,780 | 8,337,170 |
| Total | 17,967,610 | |
| Multi-Utilities 1.3% | ||
| Ameren Corp. | 112,702 | 8,903,458 |
| Total Utilities | 26,871,068 | |
|
Total Common Stocks
(Cost $501,390,143) |
671,199,050 | |
| Money Market Funds 0.9% | ||
| Shares | Value ($) | |
| Columbia Short-Term Cash Fund, 1.641%(c),(d) | 6,034,636 | 6,034,636 |
|
Total Money Market Funds
(Cost $6,034,053) |
6,034,636 | |
|
Total Investments in Securities
(Cost: $507,424,196) |
677,233,686 | |
| Other Assets & Liabilities, Net | 529,372 | |
| Net Assets | 677,763,058 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
At February 29, 2020, securities
and/or cash totaling $414,140 were pledged as collateral.
Investments in derivatives
| Long futures contracts | ||||||
| Description |
Number of
contracts |
Expiration
date |
Trading
currency |
Notional
amount |
Value/Unrealized
appreciation ($) |
Value/Unrealized
depreciation ($) |
| S&P 500 Index E-mini | 37 | 03/2020 | USD | 5,459,535 | — | (461,617) |
Notes to Portfolio of
Investments
| (a) | Non-income producing investment. |
| (b) | This security or a portion of this security has been pledged as collateral in connection with derivative contracts. |
| (c) | The rate shown is the seven-day current annualized yield at February 29, 2020. |
| (d) | As defined in the Investment Company Act of 1940, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. Holdings and transactions in these affiliated companies during the year ended February 29, 2020 are as follows: |
Currency Legend
| USD | US Dollar |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
Under the direction of the
Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of
voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly
to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of
Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third
party pricing vendors and a determination of appropriate pricing
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 10 | Columbia Select Large Cap Equity Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Fair value measurements (continued)
methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of
the inputs used to value the Fund’s investments at February 29, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Common Stocks | ||||
| Communication Services | 86,978,080 | — | — | 86,978,080 |
| Consumer Discretionary | 62,675,390 | — | — | 62,675,390 |
| Consumer Staples | 41,144,350 | — | — | 41,144,350 |
| Energy | 16,844,692 | — | — | 16,844,692 |
| Financials | 72,486,047 | — | — | 72,486,047 |
| Health Care | 91,532,330 | — | — | 91,532,330 |
| Industrials | 65,342,439 | — | — | 65,342,439 |
| Information Technology | 175,387,786 | — | — | 175,387,786 |
| Materials | 7,988,137 | — | — | 7,988,137 |
| Real Estate | 23,948,731 | — | — | 23,948,731 |
| Utilities | 26,871,068 | — | — | 26,871,068 |
| Total Common Stocks | 671,199,050 | — | — | 671,199,050 |
| Money Market Funds | 6,034,636 | — | — | 6,034,636 |
| Total Investments in Securities | 677,233,686 | — | — | 677,233,686 |
| Investments in Derivatives | ||||
| Liability | ||||
| Futures Contracts | (461,617) | — | — | (461,617) |
| Total | 676,772,069 | — | — | 676,772,069 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
Derivative instruments are valued at
unrealized appreciation (depreciation).
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
11 |
Statement of Assets and Liabilities
February 29, 2020
February 29, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $501,390,143) | $671,199,050 |
| Affiliated issuers (cost $6,034,053) | 6,034,636 |
| Receivable for: | |
| Capital shares sold | 296,762 |
| Dividends | 982,672 |
| Foreign tax reclaims | 2,937 |
| Expense reimbursement due from Investment Manager | 6,720 |
| Prepaid expenses | 2,067 |
| Total assets | 678,524,844 |
| Liabilities | |
| Payable for: | |
| Capital shares purchased | 507,641 |
| Variation margin for futures contracts | 10,730 |
| Management services fees | 14,126 |
| Distribution and/or service fees | 1,238 |
| Transfer agent fees | 36,602 |
| Compensation of board members | 148,549 |
| Compensation of chief compliance officer | 4 |
| Other expenses | 42,896 |
| Total liabilities | 761,786 |
| Net assets applicable to outstanding capital stock | $677,763,058 |
| Represented by | |
| Paid in capital | 481,673,204 |
| Total distributable earnings (loss) | 196,089,854 |
| Total - representing net assets applicable to outstanding capital stock | $677,763,058 |
| Class A | |
| Net assets | $155,698,675 |
| Shares outstanding | 10,952,584 |
| Net asset value per share | $14.22 |
| Maximum sales charge | 5.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $15.09 |
| Advisor Class | |
| Net assets | $3,294,211 |
| Shares outstanding | 234,700 |
| Net asset value per share | $14.04 |
| Class C | |
| Net assets | $6,039,537 |
| Shares outstanding | 467,365 |
| Net asset value per share | $12.92 |
| Institutional Class | |
| Net assets | $125,623,297 |
| Shares outstanding | 8,911,773 |
| Net asset value per share | $14.10 |
| Institutional 2 Class | |
| Net assets | $22,675,742 |
| Shares outstanding | 1,558,146 |
| Net asset value per share | $14.55 |
| Institutional 3 Class | |
| Net assets | $364,431,596 |
| Shares outstanding | 26,262,407 |
| Net asset value per share | $13.88 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 12 | Columbia Select Large Cap Equity Fund | Annual Report 2020 |
Statement of Operations
Year Ended February 29, 2020
Year Ended February 29, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $17,151,738 |
| Dividends — affiliated issuers | 306,669 |
| Interfund lending | 13 |
| Foreign taxes withheld | (79,409) |
| Total income | 17,379,011 |
| Expenses: | |
| Management services fees | 5,442,592 |
| Distribution and/or service fees | |
| Class A | 402,485 |
| Class C | 70,522 |
| Transfer agent fees | |
| Class A | 229,298 |
| Advisor Class | 5,492 |
| Class C | 10,042 |
| Institutional Class | 231,149 |
| Institutional 2 Class | 15,168 |
| Institutional 3 Class | 27,222 |
| Compensation of board members | 38,004 |
| Custodian fees | 9,907 |
| Printing and postage fees | 30,165 |
| Registration fees | 85,203 |
| Audit fees | 28,738 |
| Legal fees | 13,977 |
| Compensation of chief compliance officer | 152 |
| Other | 17,524 |
| Total expenses | 6,657,640 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (2,717,031) |
| Expense reduction | (1,277) |
| Total net expenses | 3,939,332 |
| Net investment income | 13,439,679 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 30,806,770 |
| Investments — affiliated issuers | (756) |
| Foreign currency translations | 1,308 |
| Futures contracts | 3,285,339 |
| Options purchased | (144,155) |
| Net realized gain | 33,948,506 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | 8,403,217 |
| Investments — affiliated issuers | 583 |
| Futures contracts | (1,550,089) |
| Net change in unrealized appreciation (depreciation) | 6,853,711 |
| Net realized and unrealized gain | 40,802,217 |
| Net increase in net assets resulting from operations | $54,241,896 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
13 |
Statement of Changes in Net Assets
|
Year Ended
February 29, 2020 |
Year Ended
February 28, 2019 |
|
| Operations | ||
| Net investment income | $13,439,679 | $8,768,891 |
| Net realized gain | 33,948,506 | 45,818,322 |
| Net change in unrealized appreciation (depreciation) | 6,853,711 | (28,265,706) |
| Net increase in net assets resulting from operations | 54,241,896 | 26,321,507 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (8,128,738) | (13,958,703) |
| Advisor Class | (211,295) | (139,047) |
| Class C | (331,874) | (716,858) |
| Institutional Class | (8,874,648) | (15,805,690) |
| Institutional 2 Class | (1,276,966) | (421,522) |
| Institutional 3 Class | (20,084,460) | (32,264,321) |
| Class T | — | (258) |
| Total distributions to shareholders | (38,907,981) | (63,306,399) |
| Increase (decrease) in net assets from capital stock activity | (18,482,795) | 48,484,123 |
| Total increase (decrease) in net assets | (3,148,880) | 11,499,231 |
| Net assets at beginning of year | 680,911,938 | 669,412,707 |
| Net assets at end of year | $677,763,058 | $680,911,938 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 14 | Columbia Select Large Cap Equity Fund | Annual Report 2020 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| February 29, 2020 | February 28, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 1,117,225 | 16,161,538 | 1,722,849 | 24,297,972 |
| Distributions reinvested | 193,648 | 2,772,344 | 327,491 | 4,539,237 |
| Redemptions | (1,231,202) | (18,070,781) | (1,267,527) | (18,043,220) |
| Net increase | 79,671 | 863,101 | 782,813 | 10,793,989 |
| Advisor Class | ||||
| Subscriptions | 103,618 | 1,483,868 | 362,240 | 5,115,795 |
| Distributions reinvested | 14,912 | 211,152 | 10,342 | 138,788 |
| Redemptions | (111,845) | (1,662,976) | (160,927) | (2,350,125) |
| Net increase | 6,685 | 32,044 | 211,655 | 2,904,458 |
| Class C | ||||
| Subscriptions | 96,991 | 1,277,788 | 238,221 | 2,999,930 |
| Distributions reinvested | 22,225 | 288,516 | 50,872 | 648,448 |
| Redemptions | (262,590) | (3,453,111) | (279,518) | (3,687,068) |
| Net increase (decrease) | (143,374) | (1,886,807) | 9,575 | (38,690) |
| Institutional Class | ||||
| Subscriptions | 1,617,438 | 22,932,594 | 1,060,395 | 14,613,282 |
| Distributions reinvested | 449,621 | 6,390,254 | 751,916 | 10,340,006 |
| Redemptions | (4,574,789) | (68,579,665) | (1,977,365) | (27,630,441) |
| Net decrease | (2,507,730) | (39,256,817) | (165,054) | (2,677,153) |
| Institutional 2 Class | ||||
| Subscriptions | 505,441 | 7,507,267 | 1,215,011 | 16,522,712 |
| Distributions reinvested | 87,065 | 1,276,817 | 29,817 | 421,257 |
| Redemptions | (399,153) | (5,986,153) | (593,073) | (8,837,909) |
| Net increase | 193,353 | 2,797,931 | 651,755 | 8,106,060 |
| Institutional 3 Class | ||||
| Subscriptions | 4,413,726 | 64,981,120 | 5,053,174 | 72,022,667 |
| Distributions reinvested | 1,241,280 | 17,368,334 | 2,236,881 | 30,308,418 |
| Redemptions | (4,384,530) | (63,381,701) | (5,060,529) | (72,933,175) |
| Net increase | 1,270,476 | 18,967,753 | 2,229,526 | 29,397,910 |
| Class T | ||||
| Redemptions | — | — | (189) | (2,451) |
| Net decrease | — | — | (189) | (2,451) |
| Total net increase (decrease) | (1,100,919) | (18,482,795) | 3,720,081 | 48,484,123 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
15 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. 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.
|
Net asset value,
beginning of period |
Net
investment income (loss) |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $13.95 | 0.24 | 0.77 | 1.01 | (0.12) | (0.62) | (0.74) |
| Year Ended 2/28/2019 | $14.82 | 0.16 | 0.33 | 0.49 | (0.14) | (1.22) | (1.36) |
| Year Ended 2/28/2018 | $13.16 | 0.09 | 2.36 | 2.45 | (0.08) | (0.71) | (0.79) |
| Year Ended 2/28/2017 | $10.85 | 0.12 | 2.43 | 2.55 | (0.12) | (0.12) | (0.24) |
| Year Ended 2/29/2016 | $12.86 | 0.05 | (0.62) | (0.57) | (0.20) | (1.24) | (1.44) |
| Advisor Class | |||||||
| Year Ended 2/29/2020 | $13.78 | 0.26 | 0.78 | 1.04 | (0.16) | (0.62) | (0.78) |
| Year Ended 2/28/2019 | $14.66 | 0.20 | 0.33 | 0.53 | (0.19) | (1.22) | (1.41) |
| Year Ended 2/28/2018(f) | $13.61 | 0.11 | 1.63 | 1.74 | (0.10) | (0.59) | (0.69) |
| Class C | |||||||
| Year Ended 2/29/2020 | $12.74 | 0.11 | 0.71 | 0.82 | (0.02) | (0.62) | (0.64) |
| Year Ended 2/28/2019 | $13.64 | 0.05 | 0.31 | 0.36 | (0.04) | (1.22) | (1.26) |
| Year Ended 2/28/2018 | $12.18 | (0.02) | 2.19 | 2.17 | — | (0.71) | (0.71) |
| Year Ended 2/28/2017 | $10.07 | 0.03 | 2.24 | 2.27 | (0.04) | (0.12) | (0.16) |
| Year Ended 2/29/2016 | $12.04 | (0.04) | (0.57) | (0.61) | (0.12) | (1.24) | (1.36) |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $13.84 | 0.26 | 0.78 | 1.04 | (0.16) | (0.62) | (0.78) |
| Year Ended 2/28/2019 | $14.71 | 0.19 | 0.34 | 0.53 | (0.18) | (1.22) | (1.40) |
| Year Ended 2/28/2018 | $13.06 | 0.12 | 2.35 | 2.47 | (0.11) | (0.71) | (0.82) |
| Year Ended 2/28/2017 | $10.78 | 0.15 | 2.40 | 2.55 | (0.15) | (0.12) | (0.27) |
| Year Ended 2/29/2016 | $12.78 | 0.07 | (0.60) | (0.53) | (0.23) | (1.24) | (1.47) |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $14.26 | 0.29 | 0.79 | 1.08 | (0.17) | (0.62) | (0.79) |
| Year Ended 2/28/2019 | $15.11 | 0.22 | 0.34 | 0.56 | (0.19) | (1.22) | (1.41) |
| Year Ended 2/28/2018 | $13.41 | 0.13 | 2.40 | 2.53 | (0.12) | (0.71) | (0.83) |
| Year Ended 2/28/2017 | $11.05 | 0.15 | 2.49 | 2.64 | (0.16) | (0.12) | (0.28) |
| Year Ended 2/29/2016 | $13.07 | 0.06 | (0.60) | (0.54) | (0.24) | (1.24) | (1.48) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 16 | Columbia Select Large Cap Equity Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Proceeds from
regulatory settlements |
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income (loss) ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Class A | ||||||||
| Year Ended 2/29/2020 | — | $14.22 | 7.30% | 1.18% | 0.80%(c) | 1.63% | 46% | $155,699 |
| Year Ended 2/28/2019 | — | $13.95 | 3.61% | 1.19% | 0.80%(c) | 1.10% | 62% | $151,703 |
| Year Ended 2/28/2018 | — | $14.82 | 18.87% | 1.19% | 1.13%(c) | 0.61% | 45% | $149,489 |
| Year Ended 2/28/2017 | — | $13.16 | 23.66% | 1.22% | 1.17%(c) | 0.98% | 67% | $136,584 |
| Year Ended 2/29/2016 | 0.00(d) | $10.85 | (5.38%)(e) | 1.25% | 1.18%(c) | 0.41% | 102% | $119,928 |
| Advisor Class | ||||||||
| Year Ended 2/29/2020 | — | $14.04 | 7.58% | 0.93% | 0.55%(c) | 1.81% | 46% | $3,294 |
| Year Ended 2/28/2019 | — | $13.78 | 3.88% | 0.94% | 0.55%(c) | 1.45% | 62% | $3,143 |
| Year Ended 2/28/2018(f) | — | $14.66 | 12.96% | 0.97%(g) | 0.69%(c),(g) | 1.17%(g) | 45% | $240 |
| Class C | ||||||||
| Year Ended 2/29/2020 | — | $12.92 | 6.45% | 1.93% | 1.55%(c) | 0.83% | 46% | $6,040 |
| Year Ended 2/28/2019 | — | $12.74 | 2.85% | 1.94% | 1.55%(c) | 0.34% | 62% | $7,783 |
| Year Ended 2/28/2018 | — | $13.64 | 18.03% | 1.94% | 1.87%(c) | (0.15%) | 45% | $8,199 |
| Year Ended 2/28/2017 | — | $12.18 | 22.66% | 1.97% | 1.92%(c) | 0.23% | 67% | $5,692 |
| Year Ended 2/29/2016 | 0.00(d) | $10.07 | (6.05%)(e) | 2.00% | 1.93%(c) | (0.35%) | 102% | $4,739 |
| Institutional Class | ||||||||
| Year Ended 2/29/2020 | — | $14.10 | 7.54% | 0.93% | 0.55%(c) | 1.76% | 46% | $125,623 |
| Year Ended 2/28/2019 | — | $13.84 | 3.90% | 0.94% | 0.55%(c) | 1.34% | 62% | $158,057 |
| Year Ended 2/28/2018 | — | $14.71 | 19.21% | 0.94% | 0.88%(c) | 0.86% | 45% | $170,394 |
| Year Ended 2/28/2017 | — | $13.06 | 23.83% | 0.97% | 0.92%(c) | 1.23% | 67% | $159,193 |
| Year Ended 2/29/2016 | 0.00(d) | $10.78 | (5.09%)(e) | 1.00% | 0.93%(c) | 0.55% | 102% | $149,765 |
| Institutional 2 Class | ||||||||
| Year Ended 2/29/2020 | — | $14.55 | 7.61% | 0.85% | 0.46% | 1.97% | 46% | $22,676 |
| Year Ended 2/28/2019 | — | $14.26 | 4.01% | 0.84% | 0.46% | 1.53% | 62% | $19,466 |
| Year Ended 2/28/2018 | — | $15.11 | 19.15% | 0.86% | 0.80% | 0.90% | 45% | $10,777 |
| Year Ended 2/28/2017 | — | $13.41 | 24.09% | 0.86% | 0.83% | 1.21% | 67% | $269 |
| Year Ended 2/29/2016 | 0.00(d) | $11.05 | (5.05%)(e) | 0.86% | 0.84% | 0.47% | 102% | $153 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
17 |
Financial Highlights (continued)
|
Net asset value,
beginning of period |
Net
investment income (loss) |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $13.63 | 0.29 | 0.76 | 1.05 | (0.18) | (0.62) | (0.80) |
| Year Ended 2/28/2019 | $14.51 | 0.21 | 0.33 | 0.54 | (0.20) | (1.22) | (1.42) |
| Year Ended 2/28/2018(h) | $13.08 | 0.14 | 2.13 | 2.27 | (0.13) | (0.71) | (0.84) |
| 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%. |
| (d) | Rounds to zero. |
| (e) | The Fund received proceeds from regulatory settlements. Had the Fund not received these proceeds, the total return would have been lower by 0.07%. |
| (f) | Advisor Class shares commenced operations on July 5, 2017. Per share data and total return reflect activity from that date. |
| (g) | Annualized. |
| (h) | Institutional 3 Class shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 18 | Columbia Select Large Cap Equity Fund | Annual Report 2020 |
Financial Highlights (continued)
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
19 |
Notes to Financial Statements
February 29, 2020
February 29, 2020
Note 1. Organization
Columbia Select Large Cap Equity
Fund (the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a liquidation will be
proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A and Class C shares are offered to the general public for investment. Class C shares automatically convert to Class A shares after 10 years. Advisor Class, Institutional Class, Institutional 2 Class
and Institutional 3 Class shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional investors and to certain other investors as also described in the
Fund’s prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
All equity securities are valued at
the close of business of the New York Stock Exchange. Equity securities are valued at the official closing price on the principal exchange or market on which they trade. Unlisted securities or listed securities for
which there were no sales during the day are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets.
Foreign equity securities are
valued based on the closing price on the foreign exchange in which such securities are primarily traded. If any foreign equity security closing prices are not readily available, the securities are valued at the mean
of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are determined at the scheduled closing time of the New York Stock Exchange. Many securities markets and exchanges
outside the U.S. close prior to the close of the New York Stock Exchange; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but
before the close of the New York Stock Exchange. In those situations, foreign securities will be fair valued pursuant to a policy adopted by the Board of Trustees. Under the policy, the Fund may utilize a third-party
pricing service to determine these fair values. The third-party pricing service takes into account multiple factors, including, but not limited to, movements in the U.S. securities markets, certain depositary
receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that reasonably reflects the current market
conditions as of the close of the New York Stock Exchange. The fair value of a security is likely to be different from the quoted or published price, if available.
Investments in open-end investment
companies, including money market funds, are valued at their latest net asset value.
| 20 | Columbia Select Large Cap Equity Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Futures and options on futures
contracts are valued based upon the settlement price at the close of regular trading on their principal exchanges or, in the absence of transactions, at the mean of the latest quoted bid and ask prices.
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published
price for the security, if available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Foreign currency transactions and
translations
The values of all assets and
liabilities denominated in foreign currencies are generally translated into U.S. dollars at exchange rates determined at the close of regular trading on the New York Stock Exchange. Net realized and unrealized gains
(losses) on foreign currency transactions and translations include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising
from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes,
the Fund does not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations
are included with the net realized and unrealized gains (losses) on investments in the Statement of Operations.
Derivative instruments
The Fund invests in certain
derivative instruments, as detailed below, to meet its investment objectives. Derivatives are instruments whose values depend on, or are derived from, in whole or in part, the value of one or more securities,
currencies, commodities, indices, or other assets or instruments. Derivatives may be used to increase investment flexibility (including to maintain cash reserves while maintaining desired exposure to certain assets),
for risk management (hedging) purposes, to facilitate trading, to reduce transaction costs and to pursue higher investment returns. The Fund may also use derivative instruments to mitigate certain investment risks,
such as foreign currency exchange rate risk, interest rate risk and credit risk. Derivatives may involve various risks, including the potential inability of the counterparty to fulfill its obligations under the terms
of the contract, the potential for an illiquid secondary market (making it difficult for the Fund to sell or terminate, including at favorable prices) and the potential for market movements which may expose the Fund
to gains or losses in excess of the amount shown in the Statement of Assets and Liabilities. The notional amounts of derivative instruments, if applicable, are not recorded in the financial statements.
A derivative instrument may suffer
a marked-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform its
obligations under the contract. The Fund’s risk of loss from counterparty credit risk on over-the-counter derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by
the Fund and the amount of any variation margin held by the counterparty, plus any replacement costs or related amounts. With exchange-traded or centrally cleared derivatives, there is reduced counterparty credit risk
to the Fund since the clearinghouse or central counterparty (CCP) provides some protection in the case of clearing member default. The clearinghouse or CCP stands between the buyer and the seller of the contract;
therefore, additional counterparty credit risk is failure of the clearinghouse or CCP. However, credit risk still exists in exchange-traded or centrally cleared derivatives with respect to initial and variation margin
that is held in a broker’s customer account. While brokers are required to segregate customer margin from their own assets, in the event that a broker becomes insolvent or goes into bankruptcy and at that time
there is a shortfall in the aggregate amount of margin held by the broker for all its clients, U.S. bankruptcy laws will typically allocate that shortfall on a pro-rata basis across all the broker’s customers
(including the Fund), potentially resulting in losses to the Fund.
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
21 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
In order to better define its
contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement)
or similar agreement with its derivatives contract counterparties. An ISDA Master Agreement is an agreement between the Fund and a counterparty that governs over-the-counter derivatives and typically contains, among
other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty
certain derivative instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment
in the event of default (close-out netting), including the bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or
prohibitions against the right of offset or netting in bankruptcy, insolvency or other events.
Collateral (margin) requirements
differ by type of derivative. Margin requirements are established by the clearinghouse or CCP for exchange-traded and centrally cleared derivatives. Brokers can ask for margin in excess of the minimum in certain
circumstances. Collateral terms are contract specific for over-the-counter derivatives. For over-the-counter derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by
netting the marked-to-market amount for each transaction under such agreement and comparing that amount to the value of any variation margin currently pledged by the Fund and/or the counterparty. Generally, the amount
of collateral due from or to a party has to exceed a minimum transfer amount threshold (e.g., $250,000) before a transfer has to be made. To the extent amounts due to the Fund from its counterparties are not fully
collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty nonperformance. The Fund may also pay interest expense on cash collateral received from the broker. Any interest expense
paid by the Fund is shown on the Statement of Operations. The Fund attempts to mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor
their obligations and by monitoring the financial stability of those counterparties.
Certain ISDA Master Agreements
allow counterparties of over-the-counter derivatives transactions to terminate derivatives contracts prior to maturity in the event the Fund’s net asset value declines by a stated percentage over a specified
time period or if the Fund fails to meet certain terms of the ISDA Master Agreement, which would cause the Fund to accelerate payment of any net liability owed to the counterparty. The Fund also has termination rights
if the counterparty fails to meet certain terms of the ISDA Master Agreement. In determining whether to exercise such termination rights, the Fund would consider, in addition to counterparty credit risk, whether
termination would result in a net liability owed from the counterparty.
For financial reporting purposes,
the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.
Futures contracts
Futures contracts are
exchange-traded and represent commitments for the future purchase or sale of an asset at a specified price on a specified date. The Fund bought and sold futures contracts to maintain appropriate equity market exposure
while keeping sufficient cash to accommodate daily redemptions. These instruments may be used for other purposes in future periods. Upon entering into futures contracts, the Fund bears risks that it may not achieve
the anticipated benefits of the futures contracts and may realize a loss. Additional risks include counterparty credit risk, the possibility of an illiquid market, and that a change in the value of the contract or
option may not correlate with changes in the value of the underlying asset.
Upon entering into a futures
contract, the Fund deposits cash or securities with the broker, known as a futures commission merchant (FCM), in an amount sufficient to meet the initial margin requirement. The initial margin deposit must be
maintained at an established level over the life of the contract. Cash deposited as initial margin is recorded in the Statement of Assets and Liabilities as margin deposits. Securities deposited as initial margin are
designated in the Portfolio of Investments. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily change in the contract value and are
recorded as variation margin receivable or payable and are offset in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed or expires. Futures contracts involve, to
varying degrees, risk of loss in excess of the variation margin disclosed in the Statement of Assets and Liabilities.
| 22 | Columbia Select Large Cap Equity Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Options contracts
Options are contracts which entitle
the holder to purchase or sell securities or other identified assets at a specified price, or in the case of index option contracts, to receive or pay the difference between the index value and the strike price of the
index option contract. Option contracts can be either exchange-traded or over-the-counter. The Fund purchased option contracts to decrease the Fund’s exposure to equity market risk and to increase return on
investments. These instruments may be used for other purposes in future periods. Completion of transactions for option contracts traded in the over-the-counter market depends upon the performance of the other party.
Cash collateral may be collected or posted by the Fund to secure certain over-the-counter option contract trades. Cash collateral held or posted by the Fund for such option contract trades must be returned to the
broker or the Fund upon closure, exercise or expiration of the contract.
Options contracts purchased are
recorded as investments. When the Fund writes an options contract, the premium received is recorded as an asset and an amount equivalent to the premium is recorded as a liability in the Statement of Assets and
Liabilities and is subsequently adjusted to reflect the current fair value of the option written. Changes in the fair value of the written option are recorded as unrealized appreciation or depreciation until the
contract is exercised or has expired. The Fund will realize a gain or loss when the option contract is closed or expires. When option contracts are exercised, the proceeds on sales for a written call or purchased put
option contract, or the purchase cost for a written put or purchased call option contract, is adjusted by the amount of premium received or paid.
For over-the-counter options
purchased, the Fund bears the risk of loss of the amount of the premiums paid plus the positive change in market values net of any collateral held by the Fund should the counterparty fail to perform under the
contracts. Option contracts written by the Fund do not typically give rise to significant counterparty credit risk, as options written generally obligate the Fund and not the counterparty to perform. The risk in
writing a call option contract is that the Fund gives up the opportunity for profit if the market price of the security increases above the strike price and the option contract is exercised. The risk in writing a put
option contract is that the Fund may incur a loss if the market price of the security decreases below the strike price and the option contract is exercised. Exercise of a written option could result in the Fund
purchasing or selling a security or foreign currency when it otherwise would not, or at a price different from the current market value. In purchasing and writing options, the Fund bears the risk of an unfavorable
change in the value of the underlying instrument or the risk that the Fund may not be able to enter into a closing transaction due to an illiquid market.
Effects of derivative transactions in
the financial statements
The following tables are intended
to provide additional information about the effect of derivatives on the financial statements of the Fund, including: the fair value of derivatives by risk category and the location of those fair values in the
Statement of Assets and Liabilities; and the impact of derivative transactions over the period in the Statement of Operations, including realized and unrealized gains (losses). The derivative instrument schedules
following the Portfolio of Investments present additional information regarding derivative instruments outstanding at the end of the period, if any.
The following table is a summary of
the fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) at February 29, 2020:
| Liability derivatives | ||
|
Risk exposure
category |
Statement
of assets and liabilities location |
Fair value ($) |
| Equity risk | Component of total distributable earnings (loss) — unrealized depreciation on futures contracts | 461,617* |
| * | Includes cumulative appreciation (depreciation) as reported in the tables following the Portfolio of Investments. Only the current day’s variation margin is reported in receivables or payables in the Statement of Assets and Liabilities. |
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
23 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
The following table indicates the
effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended February 29, 2020:
| Amount of realized gain (loss) on derivatives recognized in income | |||
| Risk exposure category |
Futures
contracts ($) |
Options
contracts purchased ($) |
Total
($) |
| Equity risk | 3,285,339 | (144,155) | 3,141,184 |
| Change in unrealized appreciation (depreciation) on derivatives recognized in income | |
| Risk exposure category |
Futures
contracts ($) |
| Equity risk | (1,550,089) |
The following table is a summary
of the average outstanding volume by derivative instrument for the year ended February 29, 2020:
| Derivative instrument |
Average notional
amounts ($)* |
| Futures contracts — long | 12,837,933 |
| Derivative instrument |
Average
value ($)** |
| Options contracts — purchased | 795 |
| * | Based on the ending quarterly outstanding amounts for the year ended February 29, 2020. |
| ** | Based on the ending daily outstanding amounts for the year ended February 29, 2020. |
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Corporate actions and dividend
income are generally recorded net of any non-reclaimable tax withholdings, on the ex-dividend date or upon receipt of ex-dividend notification in the case of certain foreign securities.
The Fund may receive distributions
from holdings in equity securities, business development companies (BDCs), exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment companies (RICs), and real estate investment trusts
(REITs), which report information as to the tax character of their distributions annually. These distributions are allocated to dividend income, capital gain and return of capital based on actual information reported.
Return of capital is recorded as a reduction of the cost basis of securities held. If the Fund no longer owns the applicable securities, return of capital is recorded as a realized gain. With respect to REITs, to the
extent actual information has not yet been reported, estimates for return of capital are made by Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise
Financial, Inc. (Ameriprise Financial). The Investment Manager’s estimates are subsequently adjusted when the actual character of the distributions is disclosed by the REITs, which could result in a
proportionate change in return of capital to shareholders.
Awards from class action litigation
are recorded as a reduction of cost basis if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities on the payment date, the proceeds are recorded as
realized gains.
| 24 | Columbia Select Large Cap Equity Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable income and net capital gain, if any, for its
tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net income and certain other
amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Foreign taxes
The Fund may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules
and regulations that exist in the markets in which it invests.
Realized gains in certain countries
may be subject to foreign taxes at the Fund level, based on statutory rates. The Fund accrues for such foreign taxes on realized and unrealized gains at the appropriate rate for each jurisdiction, as applicable. The
amount, if any, is disclosed as a liability on the Statement of Assets and Liabilities.
Distributions to shareholders
Distributions from net investment
income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Note 3. Fees and other
transactions with affiliates
Management services fees
The Fund has entered into a
Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the
Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the
Fund’s daily net assets that declines from 0.77% to 0.57% as the Fund’s net assets increase. The effective management services fee rate for the year ended February 29, 2020 was 0.76% of the Fund’s
average daily net assets.
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Compensation of board members
Members of the Board of Trustees
who are not officers or employees of the Investment Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the
Deferred Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of
certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All
amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as
sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class.
For the year ended February 29,
2020, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| Effective rate (%) | |
| Class A | 0.14 |
| Advisor Class | 0.14 |
| Class C | 0.14 |
| Institutional Class | 0.14 |
| Institutional 2 Class | 0.06 |
| Institutional 3 Class | 0.01 |
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended February 29, 2020, these minimum account balance fees reduced total expenses
of the Fund by $1,277.
| 26 | Columbia Select Large Cap Equity Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays a
monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class C shares of the Fund and a monthly distribution fee to the Distributor at the maximum
annual rate of 0.75% of the average daily net assets attributable to Class C shares of the Fund.
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended February 29, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 5.75 | 0.50 - 1.00(a) | 65,256 |
| Class C | — | 1.00(b) | 419 |
| (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 applies to redemptions within 12 months after purchase, with certain limited exceptions. |
The Fund’s other share
classes are not subject to sales charges.
Expenses waived/reimbursed by the
Investment Manager and its affiliates
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) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, 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 following annual rate(s) as a percentage of the class’ average daily net assets:
Under the agreement governing
these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes
(including foreign transaction taxes), expenses associated with investments 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, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from
the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or
its affiliates in future periods.
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At February 29, 2020, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, trustees’ deferred compensation, derivative investments, re-characterization of distributions for investments, and
foreign currency transactions. To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences do not require
reclassifications.
The following reclassifications
were made:
|
Undistributed net
investment income ($) |
Accumulated
net realized gain ($) |
Paid in
capital ($) |
| (6,063) | 6,062 | 1 |
Net investment income (loss) and
net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended February 29, 2020 | Year Ended February 28, 2019 | ||||
|
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 7,960,854 | 30,947,127 | 38,907,981 | 10,865,951 | 52,440,448 | 63,306,399 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At February 29, 2020, the
components of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| 6,901,250 | 19,909,973 | — | 169,425,871 |
At February 29, 2020, the cost of
all investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
|
Federal
tax cost ($) |
Gross unrealized
appreciation ($) |
Gross unrealized
(depreciation) ($) |
Net unrealized
appreciation ($) |
| 507,346,198 | 194,228,470 | (24,802,599) | 169,425,871 |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
Management of the Fund has
concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at
a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the
prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio
information
The cost of purchases and
proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $322,204,722 and $357,138,916, respectively, for the year ended February 29, 2020. The amount of purchase and
sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
| 28 | Columbia Select Large Cap Equity Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes referred to
as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
Note 7. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the
Interfund Program during the year ended February 29, 2020 was as follows:
| Borrower or lender |
Average loan
balance ($) |
Weighted average
interest rate (%) |
Number of days
with outstanding loans |
| Lender | 200,000 | 2.29 | 1 |
Note 8. Line of credit
The Fund has access to a
revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. The credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager or an affiliated investment manager, severally and
not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the federal funds effective rate, (ii) the
one-month LIBOR rate and (iii) the overnight bank funding rate, plus in each case, 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a
commitment fee equal to its pro rata share of the unused amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations. This agreement
expires annually in December unless extended or renewed.
The Fund had no borrowings during
the year ended February 29, 2020.
Note 9. Significant
risks
Information technology sector
risk
The Fund may be more susceptible to
the particular risks that may affect companies in the information technology sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the information 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
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
29 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
margins. As a result, the value of their
securities may fall or fail to rise. In addition, many information 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.
Market and environment risk
The Fund may incur losses due to
declines in the value of one or more securities in which it invests. These declines may be due to factors affecting a particular issuer, or the result of, among other things, political, regulatory, market, economic or
social developments affecting the relevant market(s) more generally. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers,
which could adversely affect Fund, including causing difficulty in assigning prices to hard-to-value assets in thinly traded and closed markets, significant redemptions and operational challenges. Global economies and
financial markets are increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may
be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional or global events
such as terrorism, war, natural disasters, disease/virus outbreaks and epidemics or other public health issues, recessions, depressions or other events – or the potential for such events – could have a
significant negative impact on global economic and market conditions.
The coronavirus disease 2019
(COVID-19) public health crisis has become a pandemic that has resulted in, and may continue to result in, significant global economic and societal disruption and market volatility due to disruptions in market access,
resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. Such disruptions may be caused, or exacerbated by, quarantines and travel restrictions,
workforce displacement and loss in human and other resources. The uncertainty surrounding the magnitude, duration, reach, costs and effects of the global pandemic, as well as actions that have been or could be taken
by governmental authorities or other third parties, present unknowns that are yet to unfold. The impacts, as well as the uncertainty over impacts to come, of COVID-19 – and any other infectious illness
outbreaks, epidemics and pandemics that may arise in the future – could negatively affect global economies and markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illness
outbreaks and epidemics in emerging market countries may be greater due to generally less established healthcare systems, governments and financial markets. Public health crises caused by the COVID-19 outbreak may
exacerbate other pre-existing political, social and economic risks in certain countries or globally. The disruptions caused by COVID-19 could prevent the Fund from executing advantageous investment decisions in a
timely manner and negatively impact the Fund’s ability to achieve their investment objectives. Any such event(s) could have a significant adverse impact on the value and risk profile of the Fund.
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting different communities at different times with varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including
the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to continue ordinary business operations and technology functions over near- or longer-term periods.
Shareholder concentration risk
At February 29, 2020, one
unaffiliated shareholder of record owned 28.0% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Affiliated
shareholders of record owned 47.0% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the
Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of
less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
| 30 | Columbia Select Large Cap Equity Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Note 10. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 11. Information
regarding pending and settled legal proceedings
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. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to
Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that
these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe
proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines,
penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
31 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust and Shareholders of Columbia Select Large Cap Equity Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Select Large Cap Equity Fund (one of the funds constituting Columbia Funds Series Trust, referred to hereafter as the "Fund") as
of February 29, 2020, the related statement of operations for the year ended February 29, 2020, the statement of changes in net assets for each of the two years in the period ended February 29, 2020, including the
related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in
all material respects, the financial position of the Fund as of February 29, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended
February 29, 2020 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the
responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these
financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of February 29, 2020 by correspondence with the custodian, transfer agent and brokers. We believe that
our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
April 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
| 32 | Columbia Select Large Cap Equity Fund | Annual Report 2020 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended February 29, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Qualified
dividend income |
Dividends
received deduction |
Capital
gain dividend |
| 100.00% | 100.00% | $30,301,764 |
Qualified dividend income. For
taxable, non-corporate shareholders, the percentage of ordinary income distributed during the fiscal year that represents qualified dividend income subject to reduced tax rates.
Dividends received deduction. The
percentage of ordinary income distributed during the fiscal year that qualifies for the corporate dividends received deduction.
Capital gain dividend. The Fund
designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
TRUSTEES AND
OFFICERS
The Board oversees the Fund’s
operations and 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 Fund’s Trustees as
of the printing of this report, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not
affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach the mandatory retirement age established by the Board.
Independent trustees
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
George S. Batejan
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1953 |
Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 117 | Former Chairman of the Board, NICSA (National Investment Company Services Association) (Executive Committee, Nominating Committee and Governance Committee), 2014-2016; former Director, Intech Investment Management, 2011-2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016; former Advisory Board Member, University of Colorado Business School, 2015-2018 |
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
33 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Kathleen Blatz
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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; Member and Interim Chair, Minnesota Sports Facilities Authority, January 2017-July 2017; Interim President and Chief Executive Officer, Blue Cross and Blue Shield of Minnesota (health care insurance), February-July 2018 | 117 | Trustee, BlueCross BlueShield of Minnesota since 2009 (Chair of the Business Development Committee, 2014-2017; Chair of the Governance Committee since 2017); Chair of the Robina Foundation since August 2013; former Member and Chair of the Board, Minnesota Sports Facilities Authority, January 2017-July 2017 |
|
Pamela G. Carlton
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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 | 117 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996; Director, DR Bank (Audit Committee) since 2017; Director, Evercore Inc. (Audit Committee, Nominating and Governance Committee) since 2019 |
|
Patricia M. Flynn
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1950 |
Trustee 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 | 117 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010; Board of Directors, The MA Business Roundtable 2003-2019 |
|
Brian J. Gallagher
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee since 12/17 | Retired; Partner with Deloitte & Touche LLP and its predecessors, 1977-2016 | 117 | Trustee, Catholic Schools Foundation since 2004 |
|
Catherine James Paglia
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Chair of the Board since 1/20; Trustee 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. | 117 | 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) |
| 34 | Columbia Select Large Cap Equity Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Anthony M. Santomero
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1946 |
Trustee 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 | 117 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; former Director, Citigroup Inc. and Citibank, N.A., 2009-2019; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
|
Minor M. Shaw
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1947 |
Trustee 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 | 117 | Director, BlueCross BlueShield of South Carolina since April 2008; Trustee, Hollingsworth Funds since 2016 (previously Board Chair from 2016-2019); Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016; former Director, National Association of Corporate Directors, Carolinas Chapter, 2013-2018 |
|
Sandra Yeager
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1964 |
Trustee since 12/17 | Retired; President and founder, Hanoverian Capital, LLC (SEC registered investment advisor firm), 2008-2016; Managing Director, DuPont Capital, 2006-2008; Managing Director, Morgan Stanley Investment Management, 2004-2006; Senior Vice President, Alliance Bernstein, 1990-2004 | 115 | Director, NAPE Education Foundation since October 2016 |
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
35 |
TRUSTEES AND OFFICERS (continued)
Interested trustee affiliated with Investment Manager*
Interested trustee affiliated with Investment Manager*
| * | 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. |
Nations Funds refer to the Funds
within the Columbia Funds Complex that historically bore the Nations brand and includes series of Columbia Funds Series Trust. RiverSource Funds refer to the Funds within the Columbia Funds Complex that historically
bore the RiverSource brand and includes series of Columbia Funds Series Trust II.
The Statement of Additional
Information has additional information about the Fund’s Board members and is available, without charge, upon request by calling 800.345.6611, visiting columbiathreadneedleus.com/investor/ or contacting your
financial intermediary.
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 of the
Fund as of the printing of this report, 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 Fund’s other officers are:
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); officer of Columbia Funds and affiliated funds since 2007. |
|
Michael G. Clarke
225 Franklin Street Boston, MA 02110 Born 1969 |
Chief Financial Officer, Principal Financial Officer (2009), and Senior Vice President (2019) | Vice President, Head of North American Operations, and Co-Head of Global Operations, – Accounting and Tax, Columbia Management Investment Advisers, LLC, since June 2019 (previously Vice President – Accounting and Tax, May 2010 – May 2019); senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009 – January 2019 and December 2015 – January 2019, respectively). |
|
Joseph Beranek
5890 Ameriprise Financial Center Minneapolis, MN 55474 Born 1965 |
Treasurer, Chief Accounting Officer (Principal Accounting Officer) (2019), and Principal Financial Officer (2020) | Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and March 2017, respectively (previously Vice President — Pricing and Corporate Actions, May 2010 - March 2017). |
| 36 | Columbia Select Large Cap Equity Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Fund officers (continued)
Fund officers (continued)
|
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 |
|
Paul B. Goucher
485 Lexington Avenue New York, NY 10017 Born 1968 |
Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since March 2015 (previously Vice President and Assistant Secretary, May 2010 – March 2015). |
|
Thomas P. McGuire
225 Franklin Street Boston, MA 02110 Born 1972 |
Senior 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; Chief Compliance Officer, Columbia Acorn/Wanger Funds since December 2015. |
|
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; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013. |
|
Ryan C. Larrenaga
225 Franklin Street Boston, MA 02110 Born 1970 |
Senior Vice President (2017), Chief Legal Officer (2017), and Secretary (2015) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously Vice President and Group Counsel, August 2011 - August 2018); officer of Columbia Funds and affiliated funds since 2005. |
|
Daniel J. Beckman
225 Franklin Street Boston, MA 02110 Born 1962 |
Senior Vice President (2020) | Vice President – Head of North America Product, Columbia Management Investment Advisers, LLC (since April 2015); previously, Senior Vice President of Investment Product Management, Fidelity Financial Advisor Solutions, a division of Fidelity Investments (January 2012 – March 2015). |
|
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. |
|
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. |
|
Columbia Select Large Cap Equity Fund | Annual Report 2020
|
37 |
[THIS PAGE INTENTIONALLY LEFT
BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia Select Large Cap Equity Fund
P.O. Box 219104
Kansas City, MO 64121-9104
Please read and consider the
investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments
(Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved.
© 2020 Columbia Management Investment
Advisers, LLC.
columbiathreadneedleus.com/investor/
ANN172_02_K01_(04/20)
Annual Report
February 29, 2020
February 29, 2020
Columbia Large Cap
Index Fund
Beginning on January 1, 2021, as
permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports like this one will no longer be sent by mail, unless you
specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (columbiathreadneedleus.com/investor/), and each time a report is posted you will be notified
by mail and provided with a website address to access the report.
If you have already elected to
receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically
at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with the Fund, by calling 800.345.6611 or by enrolling in “eDelivery” by logging
into your account at columbiathreadneedleus.com/investor/.
You may elect to receive all future
reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you
invest directly with the Fund, you can call 800.345.6611 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive paper reports will apply to all Columbia
Funds held in your account if you invest through a financial intermediary or all Columbia Funds held with the fund complex if you invest directly with the Fund.
Not FDIC Insured • No bank
guarantee • May lose value
Table of Contents
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Columbia Large Cap Index Fund (the
Fund) mails one shareholder report to each shareholder address, unless such shareholder elected to receive shareholder reports from the Fund electronically. If you would like more than one report, please call
shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and
procedures
The policy of the Board of Trustees
is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by
calling 800.345.6611; contacting your financial intermediary; visiting columbiathreadneedleus.com/investor/; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding
how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting
columbiathreadneedleus.com/investor/, or searching the website of the SEC at sec.gov.
Quarterly schedule of
investments
The Fund files a complete schedule
of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT, and for reporting periods ended prior to March 31, 2019, on Form N-Q. The Fund’s Form N-Q and Form N-PORT
filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q or Form N-PORT, can also be obtained without charge, upon request, by calling
800.345.6611.
Additional Fund information
For more information about the
Fund, please visit columbiathreadneedleus.com/investor/ or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC (the
Investment Manager)
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors,
Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 219104
Kansas City, MO 64121-9104
Columbia Large Cap Index Fund | Annual
Report 2020
Fund at a Glance
Investment objective
The Fund
seeks total return before fees and expenses that corresponds to the total return of the Standard & Poor’s (S&P) 500 Index.
Portfolio management
Christopher Lo, CFA
Lead Portfolio Manager
Managed Fund since 2014
Vadim Shteyn
Portfolio Manager
Managed Fund since 2011
Morningstar style boxTM
The Morningstar Style Box is based on a fund’s portfolio holdings. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows
investment style (value, blend, or growth). Information shown is based on the most recent data provided by Morningstar.
© 2020 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or
distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
All results shown assume
reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the
effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance
results would have been lower.
The performance information shown
represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than
their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial
intermediary, visiting columbiathreadneedleus.com/investor/ or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investor/investment-products/mutual-funds/appended-performance for more information. |
The S&P 500 Index, an unmanaged
index, measures the performance of 500 widely held, large-capitalization U.S. stocks and is frequently used as a general measure of market performance.
Indices are not available for
investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Fund performance may be significantly
negatively impacted by the economic impact of the COVID-19 pandemic. The COVID-19 pandemic has adversely impacted economies and capital markets around the world in ways that will likely continue and may change in
unforeseen ways for an indeterminate period. The COVID-19 pandemic may exacerbate pre-existing political, social and economic risks in certain countries and globally.
|
Columbia Large Cap Index Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (February 28, 2010 — February 29, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Large Cap Index Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions
or on the redemption of Fund shares.
| Portfolio breakdown (%) (at February 29, 2020) | |
| Common Stocks | 99.0 |
| Money Market Funds | 1.0 |
| Total | 100.0 |
Percentages indicated are based
upon total investments excluding investments in derivatives, if any. The Fund’s portfolio composition is subject to change.
Percentages indicated are based
upon total equity investments. The Fund’s portfolio composition is subject to change.
| 4 | Columbia Large Cap Index Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that ended
February 29, 2020, the Fund’s Class A shares returned 7.70%. The Fund closely tracked its benchmark, the unmanaged S&P 500 Index, which returned 8.19% for the same period. Mutual funds, unlike unmanaged
indices, incur operating expenses.
U.S. equity markets posted
divergent results amid extreme volatility
The 12 months that ended February
29, 2020 proved to be volatile for U.S. equities. The annual period began with mixed results, as large-cap stocks wobbled modestly higher, while mid-cap and small-cap companies posted negative absolute returns on
fears that economic growth was potentially slowing and the impact of U.S.-China trade headlines might be greater than the U.S. Administration was stating. Through the second quarter of 2019, large-cap stocks continued
to better weather the “risk off” sentiment, or heightened risk aversion, that dominated these months, as did growth stocks across the capitalization spectrum. Speculation around the market’s
hoped-for interest rate cuts from the U.S. Federal Reserve (Fed) contributed to frequent swings in investor optimism.
Day-to-day sentiment about the
state of U.S.-China trade relations remained a major factor influencing the U.S. equity markets going into the second half of 2019. Also adding to the list of worries were U.S. recession fears based on weak
manufacturing data, uncertainties about global economic growth, several geopolitical hotspots, domestic political turmoil around the impeachment of the U.S. President and the then-diverse and differentiated Democratic
presidential candidate campaigns. Toward the end of 2019, however, investor optimism soared. Hopeful expectations surrounding a “Phase 1” trade deal between the U.S. and China, an accommodative Fed and the
seemingly persistent resilience of the American consumer led the S&P 500 Index to its best fourth quarter since 2013. Mid-cap and small-cap stocks lagged their large-cap counterparts but also posted a strong
fourth calendar quarter.
The optimism seen at the end of the
2019 calendar year continued into the start of the new decade but was derailed quickly by the outbreak of the highly contagious and novel coronavirus first identified in Wuhan, Hubei province in China. As the impact
of the virus became more pronounced and fears of a severe pandemic that could cause a global recession grew, markets around the world, including the U.S., sold off dramatically. The S&P 500 Index lost almost 11.5%
in the last week of February 2020 alone, its biggest weekly decline since October 2008. Mid-cap and small-cap companies struggled similarly.
Still, even with the sharp decline
in February 2020, the S&P 500 Index ended the annual period up 8.19%. However, amid heightened volatility and risk aversion, mid-cap and small-cap stocks significantly underperformed large-cap stocks, with the
S&P Mid Cap 400 Index and the S&P Small Cap 600 Index posting returns of -3.39% and -7.68%, respectively, for the same annual period.
S&P 500 Index saw greatest
gains in information technology sector
Eight of the eleven sectors of
the S&P 500 Index posted a positive return during the 12 months that ended February 29, 2020. In terms of total return, information technology was the best relative performer by some distance, followed by the
utilities and communication services sectors. On the basis of impact, which takes weighting and total returns into account, information technology, communication services and consumer staples were the best relative
performers. The top performing industries for the annual period on the basis of total return were technology hardware, storage and peripherals; software; health care technology; water utilities; and semiconductors and
semiconductor equipment.
Conversely, energy, materials and
industrials were weakest from both a total return perspective and on the basis of impact. The worst performing industries for the annual period on the basis of total return were energy equipment and services; oil, gas
and consumable fuels; leisure products; airlines; and automobiles.
Top individual contributors within
the S&P 500 Index during the annual period included information technology giants Apple, Inc. and Microsoft Corp.; e-commerce retailing behemoth Amazon.com, Inc.; social media leader Facebook, Inc.; and
semiconductor producer NVIDIA Corp. Top detractors were integrated oil companies Exxon Mobil Corp. and Chevron Corp.; aerospace and defense company Boeing Co.; pharmaceuticals company Pfizer, Inc.; and technology
hardware company Cisco Systems, Inc.
|
Columbia Large Cap Index Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
Information technology was the
largest sector by weighting in the S&P 500 Index as of February 29, 2020, with a weighting of 24.42%. As always, each sector and stock in the S&P 500 Index was represented in the Fund with approximately the
same weighting as in the Index and therefore had a similar effect.
Index additions and deletions
drove Fund portfolio changes
During the annual period, there
were 28 additions and 28 deletions to the Index and the Fund’s portfolio. Among those stocks added to the Index and Fund were Fox Corp., Dow, Inc., MarketAxess Holdings, Inc., T-Mobile U.S.A., Inc., Las Vegas
Sands Corp., ServiceNow, Inc., WR Berkley Corp., Old Dominion Freight Line, Inc., Live Nation Entertainment, Inc. and Zebra Technologies Corp. Deletions included Anadarko Petroleum Corp., Brighthouse Financial, Inc.,
Celgene Corp., Foot Locker, Inc., Fluor Corp., L3 Technologies, Inc., Mattel, Inc., Nektar Therapeutics, SunTrust Banks, Inc. and TripAdvisor, Inc.
We do not anticipate any changes in
the portfolio beyond the customary quarterly rebalancings and stock substitutions we make to align the Fund with the S&P 500 Index.
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Investing in derivatives is a specialized activity that involves special risks, which may result in significant losses. The Fund’s net value will generally decline when the performance of its targeted
index declines. See the Fund’s prospectus for more information on these and other risks.
The views expressed in this report
reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and
results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update
such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf
of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
| 6 | Columbia Large Cap Index Fund | Annual Report 2020 |
Understanding Your Fund’s
Expenses
(Unaudited)
(Unaudited)
As an investor, you incur two types
of costs. There are shareholder transaction costs, which may include redemption fees. There are also ongoing fund costs, which generally include management fees, distribution and/or service fees, and other fund
expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual
funds.
Analyzing your Fund’s
expenses
To illustrate these ongoing
costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment
of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the
“Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the
expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under
the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the
Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or
the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are
required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the
hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are
meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
Expenses paid during the period
are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal
half year and divided by 366.
Expenses do not include fees and
expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment
Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
|
Columbia Large Cap Index Fund | Annual Report 2020
|
7 |
Portfolio of Investments
February 29, 2020
February 29, 2020
(Percentages represent value of
investments compared to net assets)
Investments in securities
| Common Stocks 99.2% | ||
| Issuer | Shares | Value ($) |
| Communication Services 10.6% | ||
| Diversified Telecommunication Services 2.0% | ||
| AT&T, Inc. | 911,582 | 32,105,918 |
| CenturyLink, Inc. | 122,441 | 1,477,863 |
| Verizon Communications, Inc. | 516,093 | 27,951,597 |
| Total | 61,535,378 | |
| Entertainment 1.9% | ||
| Activision Blizzard, Inc. | 95,870 | 5,572,923 |
| Electronic Arts, Inc.(a) | 36,432 | 3,693,112 |
| Live Nation Entertainment, Inc.(a) | 17,580 | 1,068,337 |
| Netflix, Inc.(a) | 54,687 | 20,181,144 |
| Take-Two Interactive Software, Inc.(a) | 14,122 | 1,517,832 |
| Walt Disney Co. (The) | 224,915 | 26,461,250 |
| Total | 58,494,598 | |
| Interactive Media & Services 5.2% | ||
| Alphabet, Inc., Class A(a) | 37,387 | 50,070,540 |
| Alphabet, Inc., Class C(a) | 37,295 | 49,950,312 |
| Facebook, Inc., Class A(a) | 300,301 | 57,798,933 |
| Twitter, Inc.(a) | 96,879 | 3,216,383 |
| Total | 161,036,168 | |
| Media 1.4% | ||
| Charter Communications, Inc., Class A(a) | 19,566 | 9,649,364 |
| Comcast Corp., Class A | 566,517 | 22,904,282 |
| Discovery, Inc., Class A(a) | 19,736 | 507,215 |
| Discovery, Inc., Class C(a) | 41,856 | 1,050,586 |
| DISH Network Corp., Class A(a) | 31,945 | 1,070,796 |
| Fox Corp., Class A | 44,234 | 1,359,753 |
| Fox Corp., Class B | 20,261 | 616,948 |
| Interpublic Group of Companies, Inc. (The) | 48,381 | 1,033,418 |
| News Corp., Class A | 48,488 | 585,493 |
| News Corp., Class B | 15,198 | 189,063 |
| Omnicom Group, Inc. | 27,170 | 1,882,338 |
| ViacomCBS, Inc., Class B | 67,438 | 1,659,649 |
| Total | 42,508,905 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Wireless Telecommunication Services 0.1% | ||
| T-Mobile U.S.A., Inc.(a) | 39,500 | 3,561,320 |
| Total Communication Services | 327,136,369 | |
| Consumer Discretionary 9.8% | ||
| Auto Components 0.1% | ||
| Aptiv PLC | 31,858 | 2,488,429 |
| BorgWarner, Inc. | 25,772 | 814,395 |
| Total | 3,302,824 | |
| Automobiles 0.3% | ||
| Ford Motor Co. | 485,927 | 3,382,052 |
| General Motors Co. | 156,900 | 4,785,450 |
| Harley-Davidson, Inc. | 19,251 | 586,578 |
| Total | 8,754,080 | |
| Distributors 0.1% | ||
| Genuine Parts Co. | 18,128 | 1,581,487 |
| LKQ Corp.(a) | 38,245 | 1,131,287 |
| Total | 2,712,774 | |
| Diversified Consumer Services 0.0% | ||
| H&R Block, Inc. | 24,368 | 503,687 |
| Hotels, Restaurants & Leisure 1.8% | ||
| Carnival Corp. | 49,981 | 1,672,364 |
| Chipotle Mexican Grill, Inc.(a) | 3,195 | 2,471,588 |
| Darden Restaurants, Inc. | 15,298 | 1,491,555 |
| Hilton Worldwide Holdings, Inc. | 35,214 | 3,422,801 |
| Las Vegas Sands Corp. | 42,170 | 2,458,933 |
| Marriott International, Inc., Class A | 33,859 | 4,198,516 |
| McDonald’s Corp. | 93,976 | 18,247,320 |
| MGM Resorts International | 64,267 | 1,578,397 |
| Norwegian Cruise Line Holdings Ltd.(a) | 26,553 | 989,365 |
| Royal Caribbean Cruises Ltd. | 21,447 | 1,724,553 |
| Starbucks Corp. | 147,373 | 11,558,464 |
| Wynn Resorts Ltd. | 12,059 | 1,302,131 |
| Yum! Brands, Inc. | 37,747 | 3,368,920 |
| Total | 54,484,907 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 8 | Columbia Large Cap Index Fund | Annual Report 2020 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Household Durables 0.4% | ||
| D.R. Horton, Inc. | 41,844 | 2,229,030 |
| Garmin Ltd. | 18,027 | 1,593,407 |
| Leggett & Platt, Inc. | 16,425 | 651,416 |
| Lennar Corp., Class A | 34,922 | 2,107,193 |
| Mohawk Industries, Inc.(a) | 7,423 | 899,296 |
| Newell Brands, Inc. | 47,552 | 733,727 |
| NVR, Inc.(a) | 430 | 1,576,887 |
| PulteGroup, Inc. | 31,791 | 1,277,998 |
| Whirlpool Corp. | 7,882 | 1,007,793 |
| Total | 12,076,747 | |
| Internet & Direct Marketing Retail 3.6% | ||
| Amazon.com, Inc.(a) | 51,970 | 97,898,487 |
| Booking Holdings, Inc.(a) | 5,222 | 8,854,737 |
| eBay, Inc. | 95,429 | 3,305,661 |
| Expedia Group, Inc. | 17,439 | 1,719,834 |
| Total | 111,778,719 | |
| Leisure Products 0.0% | ||
| Hasbro, Inc. | 15,882 | 1,226,884 |
| Multiline Retail 0.5% | ||
| Dollar General Corp. | 31,771 | 4,775,181 |
| Dollar Tree, Inc.(a) | 29,528 | 2,451,710 |
| Kohl’s Corp. | 19,539 | 764,952 |
| Macy’s, Inc. | 38,556 | 510,096 |
| Nordstrom, Inc. | 13,369 | 463,904 |
| Target Corp. | 63,234 | 6,513,102 |
| Total | 15,478,945 | |
| Specialty Retail 2.3% | ||
| Advance Auto Parts, Inc. | 8,647 | 1,149,878 |
| AutoZone, Inc.(a) | 2,977 | 3,073,782 |
| Best Buy Co., Inc. | 28,422 | 2,150,124 |
| CarMax, Inc.(a) | 20,524 | 1,791,951 |
| Gap, Inc. (The) | 26,556 | 380,548 |
| Home Depot, Inc. (The) | 136,123 | 29,653,034 |
| L Brands, Inc. | 28,984 | 627,794 |
| Lowe’s Companies, Inc. | 95,647 | 10,193,101 |
| O’Reilly Automotive, Inc.(a) | 9,438 | 3,479,979 |
| Ross Stores, Inc. | 45,135 | 4,909,785 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Tiffany & Co. | 13,471 | 1,799,591 |
| TJX Companies, Inc. (The) | 151,322 | 9,049,056 |
| Tractor Supply Co. | 14,777 | 1,307,912 |
| Ulta Beauty, Inc.(a) | 7,135 | 1,834,337 |
| Total | 71,400,872 | |
| Textiles, Apparel & Luxury Goods 0.7% | ||
| Capri Holdings Ltd.(a) | 18,919 | 488,489 |
| Hanesbrands, Inc. | 45,138 | 597,627 |
| Nike, Inc., Class B | 155,487 | 13,897,428 |
| PVH Corp. | 9,255 | 685,888 |
| Ralph Lauren Corp. | 6,211 | 655,323 |
| Tapestry, Inc. | 34,438 | 807,571 |
| Under Armour, Inc., Class A(a) | 23,485 | 333,252 |
| Under Armour, Inc., Class C(a) | 24,282 | 303,039 |
| VF Corp. | 40,870 | 2,942,640 |
| Total | 20,711,257 | |
| Total Consumer Discretionary | 302,431,696 | |
| Consumer Staples 7.2% | ||
| Beverages 1.9% | ||
| Brown-Forman Corp., Class B | 22,740 | 1,396,463 |
| Coca-Cola Co. (The) | 481,185 | 25,738,586 |
| Constellation Brands, Inc., Class A | 20,897 | 3,602,225 |
| Molson Coors Beverage Co., Class B | 23,439 | 1,162,809 |
| Monster Beverage Corp.(a) | 47,637 | 2,973,025 |
| PepsiCo, Inc. | 174,010 | 22,974,540 |
| Total | 57,847,648 | |
| Food & Staples Retailing 1.5% | ||
| Costco Wholesale Corp. | 55,129 | 15,498,967 |
| Kroger Co. (The) | 100,079 | 2,815,222 |
| Sysco Corp. | 63,670 | 4,243,605 |
| Walgreens Boots Alliance, Inc. | 93,559 | 4,281,260 |
| Walmart, Inc. | 177,026 | 19,062,160 |
| Total | 45,901,214 | |
| Food Products 1.1% | ||
| Archer-Daniels-Midland Co. | 69,471 | 2,615,583 |
| Campbell Soup Co. | 21,076 | 950,949 |
| ConAgra Foods, Inc. | 60,729 | 1,620,857 |
| General Mills, Inc. | 75,423 | 3,695,727 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Large Cap Index Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Hershey Co. (The) | 18,509 | 2,665,111 |
| Hormel Foods Corp. | 34,696 | 1,443,354 |
| JM Smucker Co. (The) | 14,236 | 1,466,166 |
| Kellogg Co. | 31,076 | 1,879,166 |
| Kraft Heinz Co. (The) | 77,719 | 1,925,100 |
| Lamb Weston Holdings, Inc. | 18,223 | 1,583,396 |
| McCormick & Co., Inc. | 15,423 | 2,254,688 |
| Mondelez International, Inc., Class A | 179,675 | 9,486,840 |
| Tyson Foods, Inc., Class A | 36,838 | 2,498,721 |
| Total | 34,085,658 | |
| Household Products 1.7% | ||
| Church & Dwight Co., Inc. | 30,623 | 2,128,911 |
| Clorox Co. (The) | 15,658 | 2,496,198 |
| Colgate-Palmolive Co. | 106,951 | 7,226,679 |
| Kimberly-Clark Corp. | 42,776 | 5,611,784 |
| Procter & Gamble Co. (The) | 311,198 | 35,236,950 |
| Total | 52,700,522 | |
| Personal Products 0.2% | ||
| Coty, Inc., Class A | 36,888 | 340,476 |
| Estee Lauder Companies, Inc. (The), Class A | 27,771 | 5,098,756 |
| Total | 5,439,232 | |
| Tobacco 0.8% | ||
| Altria Group, Inc. | 233,123 | 9,411,176 |
| Philip Morris International, Inc. | 194,159 | 15,895,797 |
| Total | 25,306,973 | |
| Total Consumer Staples | 221,281,247 | |
| Energy 3.5% | ||
| Energy Equipment & Services 0.3% | ||
| Baker Hughes Co. | 81,093 | 1,304,786 |
| Halliburton Co. | 109,544 | 1,857,866 |
| Helmerich & Payne, Inc. | 13,532 | 499,196 |
| National Oilwell Varco, Inc. | 48,146 | 900,812 |
| Schlumberger Ltd. | 172,755 | 4,679,933 |
| TechnipFMC PLC | 52,437 | 778,165 |
| Total | 10,020,758 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Oil, Gas & Consumable Fuels 3.2% | ||
| Apache Corp. | 46,924 | 1,169,346 |
| Cabot Oil & Gas Corp. | 50,906 | 709,121 |
| Chevron Corp. | 235,958 | 22,024,320 |
| Cimarex Energy Co. | 12,709 | 420,032 |
| Concho Resources, Inc. | 25,082 | 1,706,078 |
| ConocoPhillips Co. | 136,925 | 6,629,908 |
| Devon Energy Corp. | 48,289 | 784,213 |
| Diamondback Energy, Inc. | 20,108 | 1,246,696 |
| EOG Resources, Inc. | 72,602 | 4,592,803 |
| Exxon Mobil Corp.(b) | 527,989 | 27,159,754 |
| Hess Corp. | 32,318 | 1,815,625 |
| HollyFrontier Corp. | 18,528 | 624,023 |
| Kinder Morgan, Inc. | 243,075 | 4,659,748 |
| Marathon Oil Corp. | 99,821 | 826,518 |
| Marathon Petroleum Corp. | 81,025 | 3,842,206 |
| Noble Energy, Inc. | 59,684 | 944,798 |
| Occidental Petroleum Corp. | 111,479 | 3,649,822 |
| ONEOK, Inc. | 51,552 | 3,439,549 |
| Phillips 66 | 55,455 | 4,151,361 |
| Pioneer Natural Resources Co. | 20,673 | 2,538,231 |
| Valero Energy Corp. | 51,245 | 3,394,981 |
| Williams Companies, Inc. (The) | 151,254 | 2,881,389 |
| Total | 99,210,522 | |
| Total Energy | 109,231,280 | |
| Financials 12.1% | ||
| Banks 4.9% | ||
| Bank of America Corp. | 1,010,237 | 28,791,755 |
| Citigroup, Inc. | 272,433 | 17,288,598 |
| Citizens Financial Group, Inc. | 54,246 | 1,719,056 |
| Comerica, Inc. | 17,984 | 946,678 |
| Fifth Third Bancorp | 88,554 | 2,160,718 |
| First Republic Bank | 21,030 | 2,114,987 |
| Huntington Bancshares, Inc. | 128,875 | 1,581,296 |
| JPMorgan Chase & Co. | 391,400 | 45,445,454 |
| KeyCorp | 122,915 | 2,009,660 |
| M&T Bank Corp. | 16,467 | 2,311,637 |
| People’s United Financial, Inc. | 55,426 | 775,410 |
| PNC Financial Services Group, Inc. (The) | 54,683 | 6,911,931 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Large Cap Index Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Regions Financial Corp. | 120,378 | 1,627,511 |
| SVB Financial Group(a) | 6,439 | 1,340,342 |
| Truist Financial Corp. | 167,346 | 7,721,344 |
| U.S. Bancorp | 177,365 | 8,236,831 |
| Wells Fargo & Co. | 480,278 | 19,619,356 |
| Zions Bancorp | 21,267 | 849,617 |
| Total | 151,452,181 | |
| Capital Markets 2.7% | ||
| Ameriprise Financial, Inc.(c) | 15,809 | 2,233,812 |
| Bank of New York Mellon Corp. (The) | 104,718 | 4,178,248 |
| BlackRock, Inc. | 14,715 | 6,813,192 |
| Cboe Global Markets, Inc. | 13,837 | 1,577,418 |
| Charles Schwab Corp. (The) | 142,664 | 5,813,558 |
| CME Group, Inc. | 44,723 | 8,891,827 |
| E*TRADE Financial Corp. | 28,190 | 1,290,538 |
| Franklin Resources, Inc. | 34,805 | 757,357 |
| Goldman Sachs Group, Inc. (The) | 39,772 | 7,985,024 |
| Intercontinental Exchange, Inc. | 69,485 | 6,199,452 |
| Invesco Ltd. | 46,448 | 668,851 |
| MarketAxess Holdings, Inc. | 4,730 | 1,534,081 |
| Moody’s Corp. | 20,258 | 4,862,528 |
| Morgan Stanley | 153,503 | 6,912,240 |
| MSCI, Inc. | 10,573 | 3,123,687 |
| Nasdaq, Inc. | 14,314 | 1,467,901 |
| Northern Trust Corp. | 26,441 | 2,320,462 |
| Raymond James Financial, Inc. | 15,410 | 1,288,738 |
| S&P Global, Inc. | 30,499 | 8,109,989 |
| State Street Corp. | 45,373 | 3,090,355 |
| T. Rowe Price Group, Inc. | 29,163 | 3,441,526 |
| Total | 82,560,784 | |
| Consumer Finance 0.6% | ||
| American Express Co. | 83,733 | 9,204,769 |
| Capital One Financial Corp. | 58,121 | 5,129,759 |
| Discover Financial Services | 39,116 | 2,565,227 |
| Synchrony Financial | 70,430 | 2,049,513 |
| Total | 18,949,268 | |
| Diversified Financial Services 1.6% | ||
| Berkshire Hathaway, Inc., Class B(a) | 244,088 | 50,365,118 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Insurance 2.3% | ||
| Aflac, Inc. | 91,600 | 3,925,060 |
| Allstate Corp. (The) | 40,423 | 4,254,521 |
| American International Group, Inc. | 108,558 | 4,576,805 |
| Aon PLC | 29,221 | 6,077,968 |
| Arthur J Gallagher & Co. | 23,272 | 2,268,787 |
| Assurant, Inc. | 7,564 | 912,143 |
| Chubb Ltd. | 56,551 | 8,201,592 |
| Cincinnati Financial Corp. | 18,962 | 1,768,017 |
| Everest Re Group Ltd. | 5,086 | 1,260,718 |
| Globe Life, Inc. | 12,428 | 1,151,579 |
| Hartford Financial Services Group, Inc. (The) | 44,974 | 2,246,451 |
| Lincoln National Corp. | 24,746 | 1,123,221 |
| Loews Corp. | 31,922 | 1,456,601 |
| Marsh & McLennan Companies, Inc. | 62,979 | 6,585,084 |
| MetLife, Inc. | 97,543 | 4,167,037 |
| Principal Financial Group, Inc. | 32,223 | 1,430,379 |
| Progressive Corp. (The) | 72,952 | 5,337,168 |
| Prudential Financial, Inc. | 50,163 | 3,784,798 |
| Travelers Companies, Inc. (The) | 32,205 | 3,858,481 |
| Unum Group | 25,742 | 600,046 |
| Willis Towers Watson PLC | 16,045 | 3,036,516 |
| WR Berkley Corp. | 18,110 | 1,215,905 |
| Total | 69,238,877 | |
| Total Financials | 372,566,228 | |
| Health Care 13.9% | ||
| Biotechnology 2.1% | ||
| AbbVie, Inc. | 184,542 | 15,817,095 |
| Alexion Pharmaceuticals, Inc.(a) | 27,612 | 2,596,356 |
| Amgen, Inc. | 74,149 | 14,809,780 |
| Biogen, Inc.(a) | 22,514 | 6,943,093 |
| Gilead Sciences, Inc. | 157,879 | 10,950,487 |
| Incyte Corp.(a) | 22,310 | 1,682,397 |
| Regeneron Pharmaceuticals, Inc.(a) | 9,972 | 4,433,252 |
| Vertex Pharmaceuticals, Inc.(a) | 32,094 | 7,190,019 |
| Total | 64,422,479 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Large Cap Index Fund | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Health Care Equipment & Supplies 3.5% | ||
| Abbott Laboratories | 220,551 | 16,989,044 |
| ABIOMED, Inc.(a) | 5,632 | 846,264 |
| Align Technology, Inc.(a) | 8,952 | 1,954,669 |
| Baxter International, Inc. | 63,713 | 5,318,124 |
| Becton Dickinson and Co. | 33,752 | 8,026,901 |
| Boston Scientific Corp.(a) | 173,928 | 6,503,168 |
| Cooper Companies, Inc. (The) | 6,185 | 2,007,465 |
| Danaher Corp. | 79,776 | 11,534,014 |
| Dentsply Sirona, Inc. | 27,751 | 1,366,459 |
| Edwards Lifesciences Corp.(a) | 26,026 | 5,331,166 |
| Hologic, Inc.(a) | 33,460 | 1,576,635 |
| IDEXX Laboratories, Inc.(a) | 10,709 | 2,725,548 |
| Intuitive Surgical, Inc.(a) | 14,421 | 7,700,237 |
| Medtronic PLC | 167,266 | 16,838,668 |
| ResMed, Inc. | 17,942 | 2,852,060 |
| STERIS PLC | 10,580 | 1,678,200 |
| Stryker Corp. | 40,183 | 7,658,478 |
| Teleflex, Inc. | 5,780 | 1,936,416 |
| Varian Medical Systems, Inc.(a) | 11,347 | 1,395,341 |
| Zimmer Biomet Holdings, Inc. | 25,670 | 3,494,970 |
| Total | 107,733,827 | |
| Health Care Providers & Services 2.7% | ||
| AmerisourceBergen Corp. | 18,759 | 1,581,759 |
| Anthem, Inc. | 31,638 | 8,133,814 |
| Cardinal Health, Inc. | 36,496 | 1,902,172 |
| Centene Corp.(a) | 72,855 | 3,862,772 |
| Cigna Corp. | 46,595 | 8,524,089 |
| CVS Health Corp. | 162,347 | 9,607,696 |
| DaVita, Inc.(a) | 11,187 | 868,335 |
| HCA Healthcare, Inc. | 33,009 | 4,192,473 |
| Henry Schein, Inc.(a) | 18,313 | 1,115,994 |
| Humana, Inc. | 16,530 | 5,284,310 |
| Laboratory Corp. of America Holdings(a) | 12,115 | 2,128,484 |
| McKesson Corp. | 22,486 | 3,144,892 |
| Quest Diagnostics, Inc. | 16,806 | 1,782,444 |
| UnitedHealth Group, Inc. | 118,226 | 30,142,901 |
| Universal Health Services, Inc., Class B | 10,025 | 1,240,494 |
| Total | 83,512,629 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Health Care Technology 0.1% | ||
| Cerner Corp. | 39,194 | 2,714,968 |
| Life Sciences Tools & Services 1.0% | ||
| Agilent Technologies, Inc. | 38,618 | 2,976,289 |
| Illumina, Inc.(a) | 18,343 | 4,873,185 |
| IQVIA Holdings, Inc.(a) | 22,515 | 3,140,617 |
| Mettler-Toledo International, Inc.(a) | 3,042 | 2,134,571 |
| PerkinElmer, Inc. | 13,865 | 1,198,491 |
| Thermo Fisher Scientific, Inc. | 50,040 | 14,551,632 |
| Waters Corp.(a) | 8,037 | 1,566,331 |
| Total | 30,441,116 | |
| Pharmaceuticals 4.5% | ||
| Allergan PLC | 40,965 | 7,810,797 |
| Bristol-Myers Squibb Co. | 292,529 | 17,276,763 |
| Eli Lilly & Co. | 105,438 | 13,298,895 |
| Johnson & Johnson | 328,427 | 44,166,863 |
| Merck & Co., Inc. | 317,709 | 24,323,801 |
| Mylan NV(a) | 64,412 | 1,107,242 |
| Perrigo Co. PLC | 16,987 | 861,071 |
| Pfizer, Inc. | 690,593 | 23,079,618 |
| Zoetis, Inc. | 59,440 | 7,919,191 |
| Total | 139,844,241 | |
| Total Health Care | 428,669,260 | |
| Industrials 8.8% | ||
| Aerospace & Defense 2.4% | ||
| Arconic, Inc. | 48,335 | 1,418,632 |
| Boeing Co. (The) | 66,721 | 18,355,614 |
| General Dynamics Corp. | 29,240 | 4,669,336 |
| Huntington Ingalls Industries, Inc. | 5,105 | 1,049,231 |
| L3 Harris Technologies, Inc. | 27,582 | 5,453,789 |
| Lockheed Martin Corp. | 30,972 | 11,455,614 |
| Northrop Grumman Corp. | 19,557 | 6,431,124 |
| Raytheon Co. | 34,751 | 6,552,649 |
| Textron, Inc. | 28,482 | 1,156,369 |
| TransDigm Group, Inc. | 6,215 | 3,466,789 |
| United Technologies Corp. | 101,245 | 13,221,584 |
| Total | 73,230,731 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 12 | Columbia Large Cap Index Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Air Freight & Logistics 0.5% | ||
| CH Robinson Worldwide, Inc. | 16,877 | 1,162,825 |
| Expeditors International of Washington, Inc. | 21,256 | 1,496,848 |
| FedEx Corp. | 29,955 | 4,228,747 |
| United Parcel Service, Inc., Class B | 87,446 | 7,912,989 |
| Total | 14,801,409 | |
| Airlines 0.3% | ||
| Alaska Air Group, Inc. | 15,369 | 775,520 |
| American Airlines Group, Inc. | 48,649 | 926,763 |
| Delta Air Lines, Inc. | 71,833 | 3,313,656 |
| Southwest Airlines Co. | 59,108 | 2,730,199 |
| United Airlines Holdings, Inc.(a) | 27,160 | 1,672,784 |
| Total | 9,418,922 | |
| Building Products 0.3% | ||
| Allegion PLC | 11,596 | 1,333,424 |
| AO Smith Corp. | 17,106 | 676,542 |
| Fortune Brands Home & Security, Inc. | 17,361 | 1,072,042 |
| Johnson Controls International PLC | 96,263 | 3,520,338 |
| Masco Corp. | 35,457 | 1,465,083 |
| Total | 8,067,429 | |
| Commercial Services & Supplies 0.4% | ||
| Cintas Corp. | 10,460 | 2,790,100 |
| Copart, Inc.(a) | 25,528 | 2,156,605 |
| Republic Services, Inc. | 26,283 | 2,372,304 |
| Rollins, Inc. | 17,566 | 657,671 |
| Waste Management, Inc. | 48,710 | 5,397,555 |
| Total | 13,374,235 | |
| Construction & Engineering 0.1% | ||
| Jacobs Engineering Group, Inc. | 16,909 | 1,561,377 |
| Quanta Services, Inc. | 17,761 | 677,227 |
| Total | 2,238,604 | |
| Electrical Equipment 0.5% | ||
| AMETEK, Inc. | 28,528 | 2,453,408 |
| Eaton Corp. PLC | 51,592 | 4,680,426 |
| Emerson Electric Co. | 76,013 | 4,873,194 |
| Rockwell Automation, Inc. | 14,424 | 2,646,804 |
| Total | 14,653,832 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Industrial Conglomerates 1.3% | ||
| 3M Co. | 71,763 | 10,709,910 |
| General Electric Co. | 1,089,849 | 11,857,557 |
| Honeywell International, Inc. | 89,163 | 14,459,564 |
| Roper Technologies, Inc. | 12,987 | 4,567,528 |
| Total | 41,594,559 | |
| Machinery 1.5% | ||
| Caterpillar, Inc. | 68,962 | 8,567,839 |
| Cummins, Inc. | 19,118 | 2,892,362 |
| Deere & Co. | 39,295 | 6,148,882 |
| Dover Corp. | 18,125 | 1,862,162 |
| Flowserve Corp. | 16,330 | 656,303 |
| Fortive Corp. | 36,880 | 2,550,621 |
| IDEX Corp. | 9,490 | 1,404,520 |
| Illinois Tool Works, Inc. | 36,501 | 6,124,138 |
| PACCAR, Inc. | 43,157 | 2,887,203 |
| Parker-Hannifin Corp. | 16,029 | 2,961,678 |
| Pentair PLC | 20,972 | 826,087 |
| Snap-On, Inc. | 6,847 | 991,103 |
| Stanley Black & Decker, Inc. | 18,970 | 2,725,989 |
| Trane Technologies PLC | 29,898 | 3,858,038 |
| Westinghouse Air Brake Technologies Corp. | 22,726 | 1,561,276 |
| Xylem, Inc. | 22,473 | 1,738,062 |
| Total | 47,756,263 | |
| Professional Services 0.3% | ||
| Equifax, Inc. | 15,108 | 2,145,940 |
| IHS Markit Ltd. | 50,038 | 3,564,707 |
| Nielsen Holdings PLC | 44,403 | 808,579 |
| Robert Half International, Inc. | 14,670 | 739,515 |
| Verisk Analytics, Inc. | 20,454 | 3,172,620 |
| Total | 10,431,361 | |
| Road & Rail 1.0% | ||
| CSX Corp. | 97,036 | 6,836,186 |
| JB Hunt Transport Services, Inc. | 10,642 | 1,026,314 |
| Kansas City Southern | 12,372 | 1,864,213 |
| Norfolk Southern Corp. | 32,543 | 5,934,216 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Large Cap Index Fund | Annual Report 2020
|
13 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Old Dominion Freight Line, Inc. | 7,970 | 1,544,586 |
| Union Pacific Corp. | 86,629 | 13,844,181 |
| Total | 31,049,696 | |
| Trading Companies & Distributors 0.2% | ||
| Fastenal Co. | 71,572 | 2,449,194 |
| United Rentals, Inc.(a) | 9,374 | 1,241,868 |
| W.W. Grainger, Inc. | 5,447 | 1,511,760 |
| Total | 5,202,822 | |
| Total Industrials | 271,819,863 | |
| Information Technology 24.2% | ||
| Communications Equipment 0.9% | ||
| Arista Networks, Inc.(a) | 6,772 | 1,307,809 |
| Cisco Systems, Inc. | 529,384 | 21,138,303 |
| F5 Networks, Inc.(a) | 7,584 | 909,701 |
| Juniper Networks, Inc. | 41,767 | 886,296 |
| Motorola Solutions, Inc. | 21,383 | 3,542,735 |
| Total | 27,784,844 | |
| Electronic Equipment, Instruments & Components 0.5% | ||
| Amphenol Corp., Class A | 36,994 | 3,391,610 |
| CDW Corp. | 17,930 | 2,047,965 |
| Corning, Inc. | 95,971 | 2,289,868 |
| FLIR Systems, Inc. | 16,741 | 710,990 |
| IPG Photonics Corp.(a) | 4,440 | 566,722 |
| Keysight Technologies, Inc.(a) | 23,407 | 2,218,047 |
| TE Connectivity Ltd. | 41,736 | 3,458,662 |
| Zebra Technologies Corp., Class A(a) | 6,730 | 1,419,828 |
| Total | 16,103,692 | |
| IT Services 5.6% | ||
| Accenture PLC, Class A | 79,253 | 14,312,299 |
| Akamai Technologies, Inc.(a) | 20,166 | 1,744,561 |
| Alliance Data Systems Corp. | 5,118 | 439,534 |
| Automatic Data Processing, Inc. | 53,999 | 8,355,805 |
| Broadridge Financial Solutions, Inc. | 14,306 | 1,492,974 |
| Cognizant Technology Solutions Corp., Class A | 68,334 | 4,163,590 |
| DXC Technology Co. | 31,945 | 770,194 |
| Fidelity National Information Services, Inc. | 76,690 | 10,715,127 |
| Fiserv, Inc.(a) | 71,267 | 7,793,759 |
| FleetCor Technologies, Inc.(a) | 10,828 | 2,877,974 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Gartner, Inc.(a) | 11,164 | 1,444,510 |
| Global Payments, Inc. | 37,508 | 6,900,347 |
| International Business Machines Corp. | 110,518 | 14,383,918 |
| Jack Henry & Associates, Inc. | 9,605 | 1,457,463 |
| Leidos Holdings, Inc. | 16,610 | 1,705,016 |
| MasterCard, Inc., Class A | 110,774 | 32,152,153 |
| Paychex, Inc. | 39,758 | 3,080,450 |
| PayPal Holdings, Inc.(a) | 146,522 | 15,822,911 |
| VeriSign, Inc.(a) | 12,891 | 2,446,067 |
| Visa, Inc., Class A | 213,614 | 38,826,481 |
| Western Union Co. (The) | 52,315 | 1,171,333 |
| Total | 172,056,466 | |
| Semiconductors & Semiconductor Equipment 4.3% | ||
| Advanced Micro Devices, Inc.(a) | 145,958 | 6,638,170 |
| Analog Devices, Inc. | 45,964 | 5,012,374 |
| Applied Materials, Inc. | 115,278 | 6,699,957 |
| Broadcom, Inc. | 49,498 | 13,494,145 |
| Intel Corp. | 542,827 | 30,137,755 |
| KLA Corp. | 19,686 | 3,025,935 |
| Lam Research Corp. | 18,106 | 5,312,844 |
| Maxim Integrated Products, Inc. | 33,766 | 1,878,065 |
| Microchip Technology, Inc. | 29,824 | 2,705,335 |
| Micron Technology, Inc.(a) | 138,146 | 7,260,954 |
| NVIDIA Corp. | 76,367 | 20,624,436 |
| Qorvo, Inc.(a) | 14,495 | 1,457,907 |
| QUALCOMM, Inc. | 142,492 | 11,157,124 |
| Skyworks Solutions, Inc. | 21,262 | 2,130,027 |
| Texas Instruments, Inc. | 116,647 | 13,314,088 |
| Xilinx, Inc. | 31,384 | 2,620,250 |
| Total | 133,469,366 | |
| Software 7.9% | ||
| Adobe, Inc.(a) | 60,410 | 20,848,699 |
| ANSYS, Inc.(a) | 10,676 | 2,585,620 |
| Autodesk, Inc.(a) | 27,461 | 5,241,756 |
| Cadence Design Systems, Inc.(a) | 35,013 | 2,315,760 |
| Citrix Systems, Inc. | 14,353 | 1,483,957 |
| Fortinet, Inc.(a) | 17,712 | 1,807,687 |
| Intuit, Inc. | 32,479 | 8,634,542 |
| Microsoft Corp. | 951,989 | 154,231,738 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 14 | Columbia Large Cap Index Fund | Annual Report 2020 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Oracle Corp. | 270,346 | 13,371,313 |
| Paycom Software, Inc.(a) | 6,120 | 1,729,818 |
| Salesforce.com, Inc.(a) | 110,687 | 18,861,065 |
| ServiceNow, Inc.(a) | 23,540 | 7,676,158 |
| Symantec Corp. | 71,555 | 1,361,692 |
| Synopsys, Inc.(a) | 18,756 | 2,587,015 |
| Total | 242,736,820 | |
| Technology Hardware, Storage & Peripherals 5.0% | ||
| Apple, Inc. | 521,202 | 142,475,779 |
| Hewlett Packard Enterprise Co. | 161,481 | 2,065,342 |
| HP, Inc. | 184,929 | 3,844,674 |
| NetApp, Inc. | 28,484 | 1,330,772 |
| Seagate Technology PLC | 28,852 | 1,383,453 |
| Western Digital Corp. | 37,114 | 2,062,054 |
| Xerox Holdings Corp. | 23,200 | 747,040 |
| Total | 153,909,114 | |
| Total Information Technology | 746,060,302 | |
| Materials 2.5% | ||
| Chemicals 1.8% | ||
| Air Products & Chemicals, Inc. | 27,508 | 6,041,032 |
| Albemarle Corp. | 13,235 | 1,083,285 |
| Celanese Corp., Class A | 15,086 | 1,414,162 |
| CF Industries Holdings, Inc. | 27,133 | 1,000,122 |
| Corteva, Inc. | 93,389 | 2,540,181 |
| Dow, Inc. | 92,533 | 3,739,259 |
| DuPont de Nemours, Inc. | 92,449 | 3,966,062 |
| Eastman Chemical Co. | 16,970 | 1,043,825 |
| Ecolab, Inc. | 31,296 | 5,647,363 |
| FMC Corp. | 16,179 | 1,506,265 |
| International Flavors & Fragrances, Inc. | 13,322 | 1,595,709 |
| Linde PLC | 67,031 | 12,803,591 |
| LyondellBasell Industries NV, Class A | 32,035 | 2,289,221 |
| Mosaic Co. (The) | 43,631 | 743,036 |
| PPG Industries, Inc. | 29,510 | 3,082,320 |
| Sherwin-Williams Co. (The) | 10,254 | 5,298,754 |
| Total | 53,794,187 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Construction Materials 0.1% | ||
| Martin Marietta Materials, Inc. | 7,800 | 1,774,734 |
| Vulcan Materials Co. | 16,515 | 1,986,094 |
| Total | 3,760,828 | |
| Containers & Packaging 0.3% | ||
| Amcor PLC | 202,170 | 1,884,224 |
| Avery Dennison Corp. | 10,419 | 1,192,871 |
| Ball Corp. | 40,821 | 2,876,248 |
| International Paper Co. | 48,931 | 1,808,490 |
| Packaging Corp. of America | 11,814 | 1,070,585 |
| Sealed Air Corp. | 19,282 | 584,437 |
| WestRock Co. | 32,179 | 1,069,952 |
| Total | 10,486,807 | |
| Metals & Mining 0.3% | ||
| Freeport-McMoRan, Inc. | 181,059 | 1,803,347 |
| Newmont Corp. | 102,306 | 4,565,917 |
| Nucor Corp. | 37,837 | 1,564,560 |
| Total | 7,933,824 | |
| Total Materials | 75,975,646 | |
| Real Estate 3.1% | ||
| Equity Real Estate Investment Trusts (REITS) 3.0% | ||
| Alexandria Real Estate Equities, Inc. | 15,300 | 2,323,764 |
| American Tower Corp. | 55,274 | 12,536,143 |
| Apartment Investment & Management Co., Class A | 18,584 | 889,059 |
| AvalonBay Communities, Inc. | 17,433 | 3,496,885 |
| Boston Properties, Inc. | 17,947 | 2,314,086 |
| Crown Castle International Corp. | 51,885 | 7,434,602 |
| Digital Realty Trust, Inc. | 26,049 | 3,128,745 |
| Duke Realty Corp. | 45,873 | 1,489,496 |
| Equinix, Inc. | 10,640 | 6,094,592 |
| Equity Residential | 43,561 | 3,271,431 |
| Essex Property Trust, Inc. | 8,243 | 2,335,736 |
| Extra Space Storage, Inc. | 16,161 | 1,621,918 |
| Federal Realty Investment Trust | 8,760 | 1,019,138 |
| Healthpeak Properties, Inc. | 61,764 | 1,954,213 |
| Host Hotels & Resorts, Inc. | 89,494 | 1,295,873 |
| Iron Mountain, Inc. | 35,832 | 1,089,651 |
| Kimco Realty Corp. | 52,686 | 914,102 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Large Cap Index Fund | Annual Report 2020
|
15 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Mid-America Apartment Communities, Inc. | 14,237 | 1,840,275 |
| ProLogis, Inc. | 92,129 | 7,764,632 |
| Public Storage | 18,747 | 3,920,373 |
| Realty Income Corp. | 40,670 | 2,944,101 |
| Regency Centers Corp. | 20,913 | 1,201,243 |
| SBA Communications Corp. | 14,051 | 3,724,780 |
| Simon Property Group, Inc. | 38,295 | 4,713,349 |
| SL Green Realty Corp. | 10,177 | 798,284 |
| UDR, Inc. | 36,573 | 1,645,054 |
| Ventas, Inc. | 46,511 | 2,500,896 |
| Vornado Realty Trust | 19,769 | 1,059,223 |
| Welltower, Inc. | 50,630 | 3,788,137 |
| Weyerhaeuser Co. | 92,984 | 2,415,724 |
| Total | 91,525,505 | |
| Real Estate Management & Development 0.1% | ||
| CBRE Group, Inc., Class A(a) | 41,771 | 2,345,024 |
| Total Real Estate | 93,870,529 | |
| Utilities 3.5% | ||
| Electric Utilities 2.2% | ||
| Alliant Energy Corp. | 29,989 | 1,563,027 |
| American Electric Power Co., Inc. | 61,641 | 5,502,076 |
| Duke Energy Corp. | 90,973 | 8,342,224 |
| Edison International | 44,753 | 3,006,954 |
| Entergy Corp. | 24,843 | 2,904,395 |
| Evergy, Inc. | 28,435 | 1,858,227 |
| Eversource Energy | 40,401 | 3,493,070 |
| Exelon Corp. | 121,308 | 5,229,588 |
| FirstEnergy Corp. | 67,427 | 3,002,524 |
| NextEra Energy, Inc. | 60,991 | 15,416,085 |
| NRG Energy, Inc. | 31,398 | 1,042,728 |
| Pinnacle West Capital Corp. | 14,029 | 1,255,455 |
| PPL Corp. | 95,820 | 2,875,558 |
| Southern Co. (The) | 130,866 | 7,899,072 |
| Xcel Energy, Inc. | 65,436 | 4,077,972 |
| Total | 67,468,955 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Gas Utilities 0.1% | ||
| Atmos Energy Corp. | 14,890 | 1,537,392 |
| Independent Power and Renewable Electricity Producers 0.0% | ||
| AES Corp. (The) | 82,846 | 1,386,014 |
| Multi-Utilities 1.1% | ||
| Ameren Corp. | 30,698 | 2,425,142 |
| CenterPoint Energy, Inc. | 62,669 | 1,442,640 |
| CMS Energy Corp. | 35,418 | 2,139,956 |
| Consolidated Edison, Inc. | 41,486 | 3,269,927 |
| Dominion Energy, Inc. | 102,708 | 8,029,711 |
| DTE Energy Co. | 23,968 | 2,676,507 |
| NiSource, Inc. | 46,614 | 1,259,510 |
| Public Service Enterprise Group, Inc. | 63,105 | 3,237,918 |
| Sempra Energy | 35,176 | 4,916,901 |
| WEC Energy Group, Inc. | 39,361 | 3,634,201 |
| Total | 33,032,413 | |
| Water Utilities 0.1% | ||
| American Water Works Co., Inc. | 22,563 | 2,790,140 |
| Total Utilities | 106,214,914 | |
|
Total Common Stocks
(Cost $1,173,072,098) |
3,055,257,334 | |
| Money Market Funds 1.0% | ||
| Shares | Value ($) | |
| Columbia Short-Term Cash Fund, 1.641%(c),(d) | 31,165,087 | 31,165,087 |
|
Total Money Market Funds
(Cost $31,164,225) |
31,165,087 | |
|
Total Investments in Securities
(Cost: $1,204,236,323) |
3,086,422,421 | |
| Other Assets & Liabilities, Net | (6,868,438) | |
| Net Assets | 3,079,553,983 | |
At February 29, 2020,
securities and/or cash totaling $2,443,400 were pledged as collateral.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 16 | Columbia Large Cap Index Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Investments in derivatives
| Long futures contracts | ||||||
| Description |
Number of
contracts |
Expiration
date |
Trading
currency |
Notional
amount |
Value/Unrealized
appreciation ($) |
Value/Unrealized
depreciation ($) |
| S&P 500 Index E-mini | 205 | 03/2020 | USD | 30,248,775 | — | (2,846,370) |
Notes to Portfolio of
Investments
| (a) | Non-income producing investment. |
| (b) | This security or a portion of this security has been pledged as collateral in connection with derivative contracts. |
| (c) | As defined in the Investment Company Act of 1940, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. Holdings and transactions in these affiliated companies during the year ended February 29, 2020 are as follows: |
| (d) | The rate shown is the seven-day current annualized yield at February 29, 2020. |
Currency Legend
| USD | US Dollar |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
Under the direction of the
Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of
voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Large Cap Index Fund | Annual Report 2020
|
17 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Fair value measurements (continued)
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of
the inputs used to value the Fund’s investments at February 29, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Common Stocks | ||||
| Communication Services | 327,136,369 | — | — | 327,136,369 |
| Consumer Discretionary | 302,431,696 | — | — | 302,431,696 |
| Consumer Staples | 221,281,247 | — | — | 221,281,247 |
| Energy | 109,231,280 | — | — | 109,231,280 |
| Financials | 372,566,228 | — | — | 372,566,228 |
| Health Care | 428,669,260 | — | — | 428,669,260 |
| Industrials | 271,819,863 | — | — | 271,819,863 |
| Information Technology | 746,060,302 | — | — | 746,060,302 |
| Materials | 75,975,646 | — | — | 75,975,646 |
| Real Estate | 93,870,529 | — | — | 93,870,529 |
| Utilities | 106,214,914 | — | — | 106,214,914 |
| Total Common Stocks | 3,055,257,334 | — | — | 3,055,257,334 |
| Money Market Funds | 31,165,087 | — | — | 31,165,087 |
| Total Investments in Securities | 3,086,422,421 | — | — | 3,086,422,421 |
| Investments in Derivatives | ||||
| Liability | ||||
| Futures Contracts | (2,846,370) | — | — | (2,846,370) |
| Total | 3,083,576,051 | — | — | 3,083,576,051 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
Derivative instruments are valued at
unrealized appreciation (depreciation).
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 18 | Columbia Large Cap Index Fund | Annual Report 2020 |
Statement of Assets and Liabilities
February 29, 2020
February 29, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $1,172,735,139) | $3,053,023,522 |
| Affiliated issuers (cost $31,501,184) | 33,398,899 |
| Receivable for: | |
| Investments sold | 204,529 |
| Capital shares sold | 3,792,859 |
| Dividends | 6,156,195 |
| Foreign tax reclaims | 9,596 |
| Variation margin for futures contracts | 24,381 |
| Expense reimbursement due from Investment Manager | 94 |
| Total assets | 3,096,610,075 |
| Liabilities | |
| Payable for: | |
| Investments purchased | 167,756 |
| Capital shares purchased | 16,546,420 |
| Variation margin for futures contracts | 72,790 |
| Management services fees | 17,046 |
| Distribution and/or service fees | 3,994 |
| Compensation of board members | 248,086 |
| Total liabilities | 17,056,092 |
| Net assets applicable to outstanding capital stock | $3,079,553,983 |
| Represented by | |
| Paid in capital | 1,100,993,429 |
| Total distributable earnings (loss) | 1,978,560,554 |
| Total - representing net assets applicable to outstanding capital stock | $3,079,553,983 |
| Class A | |
| Net assets | $579,726,406 |
| Shares outstanding | 12,297,055 |
| Net asset value per share | $47.14 |
| Institutional Class | |
| Net assets | $2,136,889,875 |
| Shares outstanding | 45,040,317 |
| Net asset value per share | $47.44 |
| Institutional 2 Class | |
| Net assets | $311,673,579 |
| Shares outstanding | 6,461,601 |
| Net asset value per share | $48.23 |
| Institutional 3 Class | |
| Net assets | $51,264,123 |
| Shares outstanding | 1,099,285 |
| Net asset value per share | $46.63 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Large Cap Index Fund | Annual Report 2020
|
19 |
Statement of Operations
Year Ended February 29, 2020
Year Ended February 29, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $70,984,615 |
| Dividends — affiliated issuers | 890,770 |
| Total income | 71,875,385 |
| Expenses: | |
| Management services fees | 6,735,646 |
| Distribution and/or service fees | |
| Class A | 1,723,420 |
| Compensation of board members | 80,334 |
| Other | 17,227 |
| Total expenses | 8,556,627 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (116,212) |
| Expense reduction | (2,720) |
| Total net expenses | 8,437,695 |
| Net investment income | 63,437,690 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 216,724,228 |
| Investments — affiliated issuers | 419,171 |
| Futures contracts | 5,828,555 |
| Net realized gain | 222,971,954 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (10,058,912) |
| Investments — affiliated issuers | (193,933) |
| Futures contracts | (4,857,315) |
| Net change in unrealized appreciation (depreciation) | (15,110,160) |
| Net realized and unrealized gain | 207,861,794 |
| Net increase in net assets resulting from operations | $271,299,484 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 20 | Columbia Large Cap Index Fund | Annual Report 2020 |
Statement of Changes in Net Assets
|
Year Ended
February 29, 2020 |
Year Ended
February 28, 2019 |
|
| Operations | ||
| Net investment income | $63,437,690 | $65,669,245 |
| Net realized gain | 222,971,954 | 292,517,545 |
| Net change in unrealized appreciation (depreciation) | (15,110,160) | (208,454,663) |
| Net increase in net assets resulting from operations | 271,299,484 | 149,732,127 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (66,153,830) | (72,003,666) |
| Institutional Class | (219,833,585) | (191,279,357) |
| Institutional 2 Class | (33,886,772) | (28,460,122) |
| Institutional 3 Class | (10,828,920) | (3,603,049) |
| Total distributions to shareholders | (330,703,107) | (295,346,194) |
| Decrease in net assets from capital stock activity | (103,762,339) | (329,802,578) |
| Total decrease in net assets | (163,165,962) | (475,416,645) |
| Net assets at beginning of year | 3,242,719,945 | 3,718,136,590 |
| Net assets at end of year | $3,079,553,983 | $3,242,719,945 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Large Cap Index Fund | Annual Report 2020
|
21 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| February 29, 2020 | February 28, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 2,673,174 | 133,945,597 | 3,602,972 | 176,634,521 |
| Distributions reinvested | 1,227,614 | 60,363,226 | 1,393,705 | 66,633,359 |
| Redemptions | (6,644,814) | (333,488,086) | (8,888,336) | (426,451,981) |
| Net decrease | (2,744,026) | (139,179,263) | (3,891,659) | (183,184,101) |
| Institutional Class | ||||
| Subscriptions | 7,474,928 | 374,259,348 | 9,361,576 | 460,787,545 |
| Distributions reinvested | 3,690,482 | 182,829,027 | 3,272,218 | 157,231,884 |
| Redemptions | (10,074,191) | (505,004,711) | (15,856,072) | (781,638,149) |
| Net increase (decrease) | 1,091,219 | 52,083,664 | (3,222,278) | (163,618,720) |
| Institutional 2 Class | ||||
| Subscriptions | 1,465,664 | 75,091,232 | 1,745,397 | 86,867,384 |
| Distributions reinvested | 670,343 | 33,706,797 | 583,231 | 28,449,210 |
| Redemptions | (2,495,254) | (127,811,335) | (2,755,072) | (139,570,550) |
| Net decrease | (359,247) | (19,013,306) | (426,444) | (24,253,956) |
| Institutional 3 Class | ||||
| Subscriptions | 3,171,942 | 154,038,825 | 4,123,039 | 197,786,960 |
| Distributions reinvested | 223,497 | 10,825,775 | 76,120 | 3,602,817 |
| Redemptions | (3,247,613) | (162,518,034) | (3,258,741) | (160,135,578) |
| Net increase | 147,826 | 2,346,566 | 940,418 | 41,254,199 |
| Total net decrease | (1,864,228) | (103,762,339) | (6,599,963) | (329,802,578) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 22 | Columbia Large Cap Index Fund | Annual Report 2020 |
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|
Columbia Large Cap Index Fund | Annual Report 2020
|
23 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. 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.
|
Net asset value,
beginning of period |
Net
investment income |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $48.30 | 0.84 | 2.97 | 3.81 | (0.88) | (4.09) | (4.97) |
| Year Ended 2/28/2019 | $50.42 | 0.81 | 1.18 | 1.99 | (0.83) | (3.28) | (4.11) |
| Year Ended 2/28/2018 | $45.16 | 0.73 | 6.65 | 7.38 | (0.77) | (1.35) | (2.12) |
| Year Ended 2/28/2017 | $37.05 | 0.73 | 8.24 | 8.97 | (0.73) | (0.13) | (0.86) |
| Year Ended 2/29/2016 | $40.60 | 0.64 | (3.24) | (2.60) | (0.85) | (0.10) | (0.95) |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $48.57 | 0.98 | 2.98 | 3.96 | (1.00) | (4.09) | (5.09) |
| Year Ended 2/28/2019 | $50.68 | 0.94 | 1.18 | 2.12 | (0.95) | (3.28) | (4.23) |
| Year Ended 2/28/2018 | $45.38 | 0.85 | 6.69 | 7.54 | (0.89) | (1.35) | (2.24) |
| Year Ended 2/28/2017 | $37.22 | 0.84 | 8.28 | 9.12 | (0.83) | (0.13) | (0.96) |
| Year Ended 2/29/2016 | $40.78 | 0.75 | (3.26) | (2.51) | (0.95) | (0.10) | (1.05) |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $49.30 | 0.99 | 3.03 | 4.02 | (1.00) | (4.09) | (5.09) |
| Year Ended 2/28/2019 | $51.38 | 0.95 | 1.20 | 2.15 | (0.95) | (3.28) | (4.23) |
| Year Ended 2/28/2018 | $45.98 | 0.87 | 6.77 | 7.64 | (0.89) | (1.35) | (2.24) |
| Year Ended 2/28/2017 | $37.70 | 0.85 | 8.39 | 9.24 | (0.83) | (0.13) | (0.96) |
| Year Ended 2/29/2016 | $41.29 | 0.84 | (3.38) | (2.54) | (0.95) | (0.10) | (1.05) |
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $47.81 | 0.98 | 2.93 | 3.91 | (1.00) | (4.09) | (5.09) |
| Year Ended 2/28/2019 | $49.95 | 0.92 | 1.17 | 2.09 | (0.95) | (3.28) | (4.23) |
| Year Ended 2/28/2018(f) | $45.37 | 0.98 | 5.84 | 6.82 | (0.89) | (1.35) | (2.24) |
| 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%. |
| (d) | Ratios include interfund lending expense which is less than 0.01%. |
| (e) | Ratios include line of credit interest expense which is less than 0.01%. |
| (f) | Institutional 3 Class shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 24 | Columbia Large Cap Index Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $47.14 | 7.70% | 0.45% | 0.45%(c) | 1.68% | 7% | $579,726 |
| Year Ended 2/28/2019 | $48.30 | 4.19% | 0.45%(d) | 0.45%(c),(d) | 1.64% | 6% | $726,445 |
| Year Ended 2/28/2018 | $50.42 | 16.59% | 0.45% | 0.45%(c) | 1.53% | 2% | $954,529 |
| Year Ended 2/28/2017 | $45.16 | 24.40% | 0.45%(e) | 0.45%(c),(e) | 1.77% | 4% | $1,071,791 |
| Year Ended 2/29/2016 | $37.05 | (6.57%) | 0.45% | 0.45%(c) | 1.63% | 11% | $993,376 |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $47.44 | 7.97% | 0.20% | 0.20%(c) | 1.94% | 7% | $2,136,890 |
| Year Ended 2/28/2019 | $48.57 | 4.46% | 0.20%(d) | 0.20%(c),(d) | 1.89% | 6% | $2,134,512 |
| Year Ended 2/28/2018 | $50.68 | 16.88% | 0.20% | 0.20%(c) | 1.78% | 2% | $2,390,677 |
| Year Ended 2/28/2017 | $45.38 | 24.72% | 0.20%(e) | 0.20%(c),(e) | 2.02% | 4% | $2,259,128 |
| Year Ended 2/29/2016 | $37.22 | (6.34%) | 0.20% | 0.20%(c) | 1.88% | 11% | $1,975,099 |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $48.23 | 7.97% | 0.20% | 0.20% | 1.93% | 7% | $311,674 |
| Year Ended 2/28/2019 | $49.30 | 4.45% | 0.20%(d) | 0.20%(d) | 1.89% | 6% | $336,271 |
| Year Ended 2/28/2018 | $51.38 | 16.87% | 0.20% | 0.20% | 1.78% | 2% | $372,379 |
| Year Ended 2/28/2017 | $45.98 | 24.73% | 0.20%(e) | 0.20%(e) | 2.02% | 4% | $361,419 |
| Year Ended 2/29/2016 | $37.70 | (6.33%) | 0.20% | 0.20% | 2.12% | 11% | $273,170 |
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $46.63 | 7.99% | 0.20% | 0.20% | 1.98% | 7% | $51,264 |
| Year Ended 2/28/2019 | $47.81 | 4.46% | 0.20%(d) | 0.20%(d) | 1.91% | 6% | $45,493 |
| Year Ended 2/28/2018(f) | $49.95 | 15.29% | 0.21% | 0.20% | 2.01% | 2% | $552 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Large Cap Index Fund | Annual Report 2020
|
25 |
Notes to Financial Statements
February 29, 2020
February 29, 2020
Note 1. Organization
Columbia Large Cap Index Fund
(the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a liquidation will be
proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A shares are offered to the general public for investment. Institutional Class, Institutional 2 Class and Institutional 3 Class shares are available for purchase through authorized investment
professionals to omnibus retirement plans or to institutional investors and to certain other investors as also described in the Fund’s prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
All equity securities are valued at
the close of business of the New York Stock Exchange. Equity securities are valued at the official closing price on the principal exchange or market on which they trade. Unlisted securities or listed securities for
which there were no sales during the day are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets.
Foreign equity securities are
valued based on the closing price on the foreign exchange in which such securities are primarily traded. If any foreign equity security closing prices are not readily available, the securities are valued at the mean
of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are determined at the scheduled closing time of the New York Stock Exchange. Many securities markets and exchanges
outside the U.S. close prior to the close of the New York Stock Exchange; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but
before the close of the New York Stock Exchange. In those situations, foreign securities will be fair valued pursuant to a policy adopted by the Board of Trustees. Under the policy, the Fund may utilize a third-party
pricing service to determine these fair values. The third-party pricing service takes into account multiple factors, including, but not limited to, movements in the U.S. securities markets, certain depositary
receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that reasonably reflects the current market
conditions as of the close of the New York Stock Exchange. The fair value of a security is likely to be different from the quoted or published price, if available.
Investments in open-end investment
companies, including money market funds, are valued at their latest net asset value.
| 26 | Columbia Large Cap Index Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Futures and options on futures
contracts are valued based upon the settlement price at the close of regular trading on their principal exchanges or, in the absence of transactions, at the mean of the latest quoted bid and ask prices.
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published
price for the security, if available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Derivative instruments
The Fund invests in certain
derivative instruments, as detailed below, to meet its investment objectives. Derivatives are instruments whose values depend on, or are derived from, in whole or in part, the value of one or more securities,
currencies, commodities, indices, or other assets or instruments. Derivatives may be used to increase investment flexibility (including to maintain cash reserves while maintaining desired exposure to certain assets),
for risk management (hedging) purposes, to facilitate trading, to reduce transaction costs and to pursue higher investment returns. The Fund may also use derivative instruments to mitigate certain investment risks,
such as foreign currency exchange rate risk, interest rate risk and credit risk. Derivatives may involve various risks, including the potential inability of the counterparty to fulfill its obligations under the terms
of the contract, the potential for an illiquid secondary market (making it difficult for the Fund to sell or terminate, including at favorable prices) and the potential for market movements which may expose the Fund
to gains or losses in excess of the amount shown in the Statement of Assets and Liabilities. The notional amounts of derivative instruments, if applicable, are not recorded in the financial statements.
A derivative instrument may suffer
a marked-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform its
obligations under the contract. The Fund’s risk of loss from counterparty credit risk on over-the-counter derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by
the Fund and the amount of any variation margin held by the counterparty, plus any replacement costs or related amounts. With exchange-traded or centrally cleared derivatives, there is reduced counterparty credit risk
to the Fund since the clearinghouse or central counterparty (CCP) provides some protection in the case of clearing member default. The clearinghouse or CCP stands between the buyer and the seller of the contract;
therefore, additional counterparty credit risk is failure of the clearinghouse or CCP. However, credit risk still exists in exchange-traded or centrally cleared derivatives with respect to initial and variation margin
that is held in a broker’s customer account. While brokers are required to segregate customer margin from their own assets, in the event that a broker becomes insolvent or goes into bankruptcy and at that time
there is a shortfall in the aggregate amount of margin held by the broker for all its clients, U.S. bankruptcy laws will typically allocate that shortfall on a pro-rata basis across all the broker’s customers
(including the Fund), potentially resulting in losses to the Fund.
In order to better define its
contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement)
or similar agreement with its derivatives contract counterparties. An ISDA Master Agreement is an agreement between the Fund and a counterparty that governs over-the-counter derivatives and typically contains, among
other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty
certain derivative instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment
in the event of default (close-out netting), including the bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or
prohibitions against the right of offset or netting in bankruptcy, insolvency or other events.
|
Columbia Large Cap Index Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Collateral (margin) requirements
differ by type of derivative. Margin requirements are established by the clearinghouse or CCP for exchange-traded and centrally cleared derivatives. Brokers can ask for margin in excess of the minimum in certain
circumstances. Collateral terms are contract specific for over-the-counter derivatives. For over-the-counter derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by
netting the marked-to-market amount for each transaction under such agreement and comparing that amount to the value of any variation margin currently pledged by the Fund and/or the counterparty. Generally, the amount
of collateral due from or to a party has to exceed a minimum transfer amount threshold (e.g., $250,000) before a transfer has to be made. To the extent amounts due to the Fund from its counterparties are not fully
collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty nonperformance. The Fund may also pay interest expense on cash collateral received from the broker. Any interest expense
paid by the Fund is shown on the Statement of Operations. The Fund attempts to mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor
their obligations and by monitoring the financial stability of those counterparties.
Certain ISDA Master Agreements
allow counterparties of over-the-counter derivatives transactions to terminate derivatives contracts prior to maturity in the event the Fund’s net asset value declines by a stated percentage over a specified
time period or if the Fund fails to meet certain terms of the ISDA Master Agreement, which would cause the Fund to accelerate payment of any net liability owed to the counterparty. The Fund also has termination rights
if the counterparty fails to meet certain terms of the ISDA Master Agreement. In determining whether to exercise such termination rights, the Fund would consider, in addition to counterparty credit risk, whether
termination would result in a net liability owed from the counterparty.
For financial reporting purposes,
the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.
Futures contracts
Futures contracts are
exchange-traded and represent commitments for the future purchase or sale of an asset at a specified price on a specified date. The Fund bought and sold futures contracts to maintain appropriate equity market exposure
while keeping sufficient cash to accommodate daily redemptions. These instruments may be used for other purposes in future periods. Upon entering into futures contracts, the Fund bears risks that it may not achieve
the anticipated benefits of the futures contracts and may realize a loss. Additional risks include counterparty credit risk, the possibility of an illiquid market, and that a change in the value of the contract or
option may not correlate with changes in the value of the underlying asset.
Upon entering into a futures
contract, the Fund deposits cash or securities with the broker, known as a futures commission merchant (FCM), in an amount sufficient to meet the initial margin requirement. The initial margin deposit must be
maintained at an established level over the life of the contract. Cash deposited as initial margin is recorded in the Statement of Assets and Liabilities as margin deposits. Securities deposited as initial margin are
designated in the Portfolio of Investments. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily change in the contract value and are
recorded as variation margin receivable or payable and are offset in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed or expires. Futures contracts involve, to
varying degrees, risk of loss in excess of the variation margin disclosed in the Statement of Assets and Liabilities.
Effects of derivative transactions in
the financial statements
The following tables are intended
to provide additional information about the effect of derivatives on the financial statements of the Fund, including: the fair value of derivatives by risk category and the location of those fair values in the
Statement of Assets and Liabilities; and the impact of derivative transactions over the period in the Statement of Operations, including realized and unrealized gains (losses). The derivative instrument schedules
following the Portfolio of Investments present additional information regarding derivative instruments outstanding at the end of the period, if any.
| 28 | Columbia Large Cap Index Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
The following table is a summary of
the fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) at February 29, 2020:
| Liability derivatives | ||
|
Risk exposure
category |
Statement
of assets and liabilities location |
Fair value ($) |
| Equity risk | Component of total distributable earnings (loss) — unrealized depreciation on futures contracts | 2,846,370* |
| * | Includes cumulative appreciation (depreciation) as reported in the tables following the Portfolio of Investments. Only the current day’s variation margin is reported in receivables or payables in the Statement of Assets and Liabilities. |
The following table indicates the
effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended February 29, 2020:
The following table is a summary
of the average outstanding volume by derivative instrument for the year ended February 29, 2020:
| Derivative instrument |
Average notional
amounts ($)* |
| Futures contracts — long | 40,940,615 |
| * | Based on the ending quarterly outstanding amounts for the year ended February 29, 2020. |
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Corporate actions and dividend
income are generally recorded net of any non-reclaimable tax withholdings, on the ex-dividend date or upon receipt of ex-dividend notification in the case of certain foreign securities.
The Fund may receive distributions
from holdings in equity securities, business development companies (BDCs), exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment companies (RICs), and real estate investment trusts
(REITs), which report information as to the tax character of their distributions annually. These distributions are allocated to dividend income, capital gain and return of capital based on actual information reported.
Return of capital is recorded as a reduction of the cost basis of securities held. If the Fund no longer owns the applicable securities, return of capital is recorded as a realized gain. With respect to REITs, to the
extent actual information has not yet been reported, estimates for return of capital are made by Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise
Financial, Inc. (Ameriprise Financial). The Investment Manager’s estimates are subsequently adjusted when the actual character of the distributions is disclosed by the REITs, which could result in a
proportionate change in return of capital to shareholders.
|
Columbia Large Cap Index Fund | Annual Report 2020
|
29 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Awards from class action litigation
are recorded as a reduction of cost basis if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities on the payment date, the proceeds are recorded as
realized gains.
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable income and net capital gain, if any, for its
tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net income and certain other
amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Foreign taxes
The Fund may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules
and regulations that exist in the markets in which it invests.
Realized gains in certain countries
may be subject to foreign taxes at the Fund level, based on statutory rates. The Fund accrues for such foreign taxes on realized and unrealized gains at the appropriate rate for each jurisdiction, as applicable. The
amount, if any, is disclosed as a liability on the Statement of Assets and Liabilities.
Distributions to shareholders
Distributions from net investment
income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Note 3. Fees and other
transactions with affiliates
Management services fees
The Fund has entered into a
Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the
Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to 0.20% of the Fund’s
daily net assets.
| 30 | Columbia Large Cap Index Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
The Investment Manager, from the
management services fee it receives from the Fund, pays all operating expenses of the Fund, with the exception of brokerage fees and commissions, taxes, interest, fees and expenses of Board of Trustees who are not
officers, directors or employees of the Investment Manager or its affiliates, distribution and/or shareholder servicing and any extraordinary non-recurring expenses that may arise, including litigation fees.
Compensation of board members
Members of the Board of Trustees
who are not officers or employees of the Investment Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the
Deferred Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of
certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All
amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. A portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other allocations to
affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets. The expenses of the Chief Compliance Officer allocated to the Fund are payable by the
Investment Manager.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent.
The transfer agency fees are
payable by the Investment Manager. The Transfer Agent pays the fees of DST for services as sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund. The Transfer Agent also receives
compensation from the Investment Manager for various shareholder services and reimbursements for certain out-of-pocket expenses.
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended February 29, 2020, these minimum account balance fees reduced total expenses
of the Fund by $2,720.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund.
|
Columbia Large Cap Index Fund | Annual Report 2020
|
31 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Expenses waived/reimbursed by the
Investment Manager and its affiliates
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) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, 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 following annual rate(s) as a percentage of the class’ average daily net assets:
|
Fee rate(s) contractual
June 30, 2020 |
|
| Class A | 0.45% |
| Institutional Class | 0.20 |
| Institutional 2 Class | 0.20 |
| Institutional 3 Class | 0.20 |
Under the agreement governing
these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes
(including foreign transaction taxes), expenses associated with investments 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, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from
the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or
its affiliates in future periods.
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At February 29, 2020, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, trustees’ deferred compensation, derivative investments, re-characterization of distributions for investments, and
corporate action. To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
The following reclassifications
were made:
|
Undistributed net
investment income ($) |
Accumulated
net realized gain ($) |
Paid in
capital ($) |
| (415,107) | 415,107 | — |
Net investment income (loss) and
net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended February 29, 2020 | Year Ended February 28, 2019 | ||||
|
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 63,027,455 | 267,675,652 | 330,703,107 | 65,174,131 | 230,172,063 | 295,346,194 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
| 32 | Columbia Large Cap Index Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
At February 29, 2020, the
components of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| 9,653,981 | 110,390,296 | — | 1,858,760,612 |
At February 29, 2020, the cost of
all investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
|
Federal
tax cost ($) |
Gross unrealized
appreciation ($) |
Gross unrealized
(depreciation) ($) |
Net unrealized
appreciation ($) |
| 1,224,815,439 | 1,933,230,469 | (74,469,857) | 1,858,760,612 |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
Management of the Fund has
concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at
a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the
prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio
information
The cost of purchases and
proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $214,718,334 and $562,722,054, respectively, for the year ended February 29, 2020. The amount of purchase and
sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes referred to
as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
Note 7. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund did not borrow or lend
money under the Interfund Program during the year ended February 29, 2020.
|
Columbia Large Cap Index Fund | Annual Report 2020
|
33 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Note 8. Line of credit
The Fund has access to a
revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. The credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager or an affiliated investment manager, severally and
not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the federal funds effective rate, (ii) the
one-month LIBOR rate and (iii) the overnight bank funding rate, plus in each case, 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a
commitment fee equal to its pro rata share of the unused amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations. This agreement
expires annually in December unless extended or renewed.
The Fund had no borrowings during
the year ended February 29, 2020.
Note 9. Significant
risks
Information technology sector
risk
The Fund may be more susceptible to
the particular risks that may affect companies in the information technology sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the information 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 information 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.
Market and environment risk
The Fund may incur losses due to
declines in the value of one or more securities in which it invests. These declines may be due to factors affecting a particular issuer, or the result of, among other things, political, regulatory, market, economic or
social developments affecting the relevant market(s) more generally. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers,
which could adversely affect Fund, including causing difficulty in assigning prices to hard-to-value assets in thinly traded and closed markets, significant redemptions and operational challenges. Global economies and
financial markets are increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may
be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional or global events
such as terrorism, war, natural disasters, disease/virus outbreaks and epidemics or other public health issues, recessions, depressions or other events – or the potential for such events – could have a
significant negative impact on global economic and market conditions.
The coronavirus disease 2019
(COVID-19) public health crisis has become a pandemic that has resulted in, and may continue to result in, significant global economic and societal disruption and market volatility due to disruptions in market access,
resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. Such disruptions may be caused, or exacerbated by, quarantines and travel restrictions,
workforce displacement and loss in human and other resources. The uncertainty surrounding the magnitude, duration, reach, costs and effects of the global pandemic, as well as actions that have been or could be taken
by governmental authorities or other third parties, present unknowns that are yet to unfold. The impacts, as well as the uncertainty over impacts to come, of COVID-19 – and any other infectious illness
outbreaks, epidemics and pandemics that may arise in the future – could negatively affect global economies and markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illness
outbreaks and epidemics in emerging market countries may be greater due to generally less established healthcare systems,
| 34 | Columbia Large Cap Index Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
governments and financial markets. Public health
crises caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and economic risks in certain countries or globally. The disruptions caused by COVID-19 could prevent the Fund from executing
advantageous investment decisions in a timely manner and negatively impact the Fund’s ability to achieve their investment objectives. Any such event(s) could have a significant adverse impact on the value and
risk profile of the Fund.
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting different communities at different times with varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including
the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to continue ordinary business operations and technology functions over near- or longer-term periods.
Passive investment risk
The Fund is not
“actively” managed and may be affected by a general decline in market segments related to its underlying index. The Fund invests in securities or instruments included in, or believed by the Investment
Manager to be representative of, its underlying index, regardless of their investment merits. The Fund does not seek temporary defensive positions when markets decline or appear overvalued. The decision of whether to
remove a security from an index is made by an independent index provider who is not affiliated with the Fund or the Investment Manager.
Shareholder concentration risk
At February 29, 2020, one
unaffiliated shareholder of record owned 10.3% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Affiliated
shareholders of record owned 25.4% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the
Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of
less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 10. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 11. Information
regarding pending and settled legal proceedings
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. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to
Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that
these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe
proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, these proceedings are subject to
uncertainties and, as such, we are unable to
|
Columbia Large Cap Index Fund | Annual Report 2020
|
35 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
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.
| 36 | Columbia Large Cap Index Fund | Annual Report 2020 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust and Shareholders of Columbia Large Cap Index Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Large Cap Index Fund (one of the funds constituting Columbia Funds Series Trust, referred to hereafter as the "Fund") as of
February 29, 2020, the related statement of operations for the year ended February 29, 2020, the statement of changes in net assets for each of the two years in the period ended February 29, 2020, including the
related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in
all material respects, the financial position of the Fund as of February 29, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended
February 29, 2020 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the
responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these
financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of February 29, 2020 by correspondence with the custodian, transfer agent and brokers; when replies
were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
April 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
|
Columbia Large Cap Index Fund | Annual Report 2020
|
37 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended February 29, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Qualified
dividend income |
Dividends
received deduction |
Capital
gain dividend |
| 100.00% | 100.00% | $223,118,482 |
Qualified dividend income. For
taxable, non-corporate shareholders, the percentage of ordinary income distributed during the fiscal year that represents qualified dividend income subject to reduced tax rates.
Dividends received deduction. The
percentage of ordinary income distributed during the fiscal year that qualifies for the corporate dividends received deduction.
Capital gain dividend. The Fund
designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
TRUSTEES AND
OFFICERS
The Board oversees the Fund’s
operations and 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 Fund’s Trustees as
of the printing of this report, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not
affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach the mandatory retirement age established by the Board.
Independent trustees
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
George S. Batejan
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1953 |
Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 117 | Former Chairman of the Board, NICSA (National Investment Company Services Association) (Executive Committee, Nominating Committee and Governance Committee), 2014-2016; former Director, Intech Investment Management, 2011-2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016; former Advisory Board Member, University of Colorado Business School, 2015-2018 |
| 38 | Columbia Large Cap Index Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Kathleen Blatz
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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; Member and Interim Chair, Minnesota Sports Facilities Authority, January 2017-July 2017; Interim President and Chief Executive Officer, Blue Cross and Blue Shield of Minnesota (health care insurance), February-July 2018 | 117 | Trustee, BlueCross BlueShield of Minnesota since 2009 (Chair of the Business Development Committee, 2014-2017; Chair of the Governance Committee since 2017); Chair of the Robina Foundation since August 2013; former Member and Chair of the Board, Minnesota Sports Facilities Authority, January 2017-July 2017 |
|
Pamela G. Carlton
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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 | 117 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996; Director, DR Bank (Audit Committee) since 2017; Director, Evercore Inc. (Audit Committee, Nominating and Governance Committee) since 2019 |
|
Patricia M. Flynn
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1950 |
Trustee 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 | 117 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010; Board of Directors, The MA Business Roundtable 2003-2019 |
|
Brian J. Gallagher
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee since 12/17 | Retired; Partner with Deloitte & Touche LLP and its predecessors, 1977-2016 | 117 | Trustee, Catholic Schools Foundation since 2004 |
|
Catherine James Paglia
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Chair of the Board since 1/20; Trustee 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. | 117 | 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) |
|
Columbia Large Cap Index Fund | Annual Report 2020
|
39 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Anthony M. Santomero
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1946 |
Trustee 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 | 117 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; former Director, Citigroup Inc. and Citibank, N.A., 2009-2019; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
|
Minor M. Shaw
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1947 |
Trustee 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 | 117 | Director, BlueCross BlueShield of South Carolina since April 2008; Trustee, Hollingsworth Funds since 2016 (previously Board Chair from 2016-2019); Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016; former Director, National Association of Corporate Directors, Carolinas Chapter, 2013-2018 |
|
Sandra Yeager
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1964 |
Trustee since 12/17 | Retired; President and founder, Hanoverian Capital, LLC (SEC registered investment advisor firm), 2008-2016; Managing Director, DuPont Capital, 2006-2008; Managing Director, Morgan Stanley Investment Management, 2004-2006; Senior Vice President, Alliance Bernstein, 1990-2004 | 115 | Director, NAPE Education Foundation since October 2016 |
| 40 | Columbia Large Cap Index Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Interested trustee affiliated with Investment Manager*
Interested trustee affiliated with Investment Manager*
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Funds Complex overseen | Other directorships held by Trustee during the past five years |
|
William F. Truscott
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Boston, MA 02110 1960 |
Trustee
2012 |
Chief Executive Officer, Global Asset Management, Ameriprise Financial, Inc. since September 2012; Chairman of the Board and President, Columbia Management Investment Advisers, LLC since July 2004 and February 2012, respectively; Chairman of the Board and Chief Executive Officer, Columbia Management Investment Distributors, Inc. since November 2008 and February 2012, respectively; Chairman of the Board and Director, Threadneedle Asset Management Holdings, Sàrl since March 2013 and December 2008, respectively; senior executive of various entities affiliated with Columbia Threadneedle | 185 | Trustee, Columbia Funds since November 2001 |
| * | 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 Board oversees the
Fund’s operations and 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
Fund’s Trustees as of the printing of this report, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board
policy, Trustees not affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach the mandatory retirement age established by the Board.
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); officer of Columbia Funds and affiliated funds since 2007. |
|
Michael G. Clarke
225 Franklin Street Boston, MA 02110 Born 1969 |
Chief Financial Officer, Principal Financial Officer (2009), and Senior Vice President (2019) | Vice President, Head of North American Operations, and Co-Head of Global Operations, – Accounting and Tax, Columbia Management Investment Advisers, LLC, since June 2019 (previously Vice President – Accounting and Tax, May 2010 – May 2019); senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009 – January 2019 and December 2015 – January 2019, respectively). |
|
Joseph Beranek
5890 Ameriprise Financial Center Minneapolis, MN 55474 Born 1965 |
Treasurer, Chief Accounting Officer (Principal Accounting Officer) (2019), and Principal Financial Officer (2020) | Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and March 2017, respectively (previously Vice President — Pricing and Corporate Actions, May 2010 - March 2017). |
|
Paul B. Goucher
485 Lexington Avenue New York, NY 10017 Born 1968 |
Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since March 2015 (previously Vice President and Assistant Secretary, May 2010 – March 2015). |
|
Columbia Large Cap Index Fund | Annual Report 2020
|
41 |
TRUSTEES AND OFFICERS (continued)
Fund officers (continued)
Fund officers (continued)
|
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 |
|
Thomas P. McGuire
225 Franklin Street Boston, MA 02110 Born 1972 |
Senior 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; Chief Compliance Officer, Columbia Acorn/Wanger Funds since December 2015. |
|
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; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013. |
|
Ryan C. Larrenaga
225 Franklin Street Boston, MA 02110 Born 1970 |
Senior Vice President (2017), Chief Legal Officer (2017), and Secretary (2015) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously Vice President and Group Counsel, August 2011 - August 2018); officer of Columbia Funds and affiliated funds since 2005. |
|
Daniel J. Beckman
225 Franklin Street Boston, MA 02110 Born 1962 |
Senior Vice President (2020) | Vice President – Head of North America Product, Columbia Management Investment Advisers, LLC (since April 2015); previously, Senior Vice President of Investment Product Management, Fidelity Financial Advisor Solutions, a division of Fidelity Investments (January 2012 – March 2015). |
|
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. |
|
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. |
| 42 | Columbia Large Cap Index Fund | Annual Report 2020 |
[THIS PAGE INTENTIONALLY LEFT
BLANK]
Columbia Large Cap Index Fund
P.O. Box 219104
Kansas City, MO 64121-9104
Please read and consider the
investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments
(Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved.
© 2020 Columbia Management Investment
Advisers, LLC.
columbiathreadneedleus.com/investor/
ANN175_02_K01_(04/20)
Annual Report
February 29, 2020
February 29, 2020
Columbia Large Cap
Growth Opportunity Fund
(formerly, Columbia
Large Cap Growth Fund III)
Beginning on January 1, 2021, as
permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports like this one will no longer be sent by mail, unless you
specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (columbiathreadneedleus.com/investor/), and each time a report is posted you will be notified
by mail and provided with a website address to access the report.
If you have already elected to
receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically
at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with the Fund, by calling 800.345.6611 or by enrolling in “eDelivery” by logging
into your account at columbiathreadneedleus.com/investor/.
You may elect to receive all future
reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you
invest directly with the Fund, you can call 800.345.6611 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive paper reports will apply to all Columbia
Funds held in your account if you invest through a financial intermediary or all Columbia Funds held with the fund complex if you invest directly with the Fund.
Not FDIC Insured • No bank
guarantee • May lose value
Table of Contents
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Columbia Large Cap Growth
Opportunity Fund (the Fund) mails one shareholder report to each shareholder address, unless such shareholder elected to receive shareholder reports from the Fund electronically. If you would like more than one
report, please call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and
procedures
The policy of the Board of Trustees
is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by
calling 800.345.6611; contacting your financial intermediary; visiting columbiathreadneedleus.com/investor/; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding
how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting
columbiathreadneedleus.com/investor/, or searching the website of the SEC at sec.gov.
Quarterly schedule of
investments
The Fund files a complete schedule
of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT, and for reporting periods ended prior to March 31, 2019, on Form N-Q. The Fund’s Form N-Q and Form N-PORT
filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q or Form N-PORT, can also be obtained without charge, upon request, by calling
800.345.6611.
Additional Fund information
For more information about the
Fund, please visit columbiathreadneedleus.com/investor/ or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC (the
Investment Manager)
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors,
Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 219104
Kansas City, MO 64121-9104
Columbia Large Cap Growth Opportunity
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks long-term growth of capital.
Portfolio management
Nadia Grant, CFA
Co-Portfolio Manager
Managed Fund since November 2019
Tchintcia Barros, CFA
Co-Portfolio Manager
Managed Fund since 2015
Effective November 2019, John Wilson no longer serves as a Portfolio Manager of the Fund.
Morningstar style boxTM
The Morningstar Style Box is based on a fund’s portfolio holdings. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows
investment style (value, blend, or growth). Information shown is based on the most recent data provided by Morningstar.
© 2020 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or
distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
Returns for Class A shares are shown
with and without the maximum initial sales charge of 5.75%. Returns for Class C shares are shown with and without the 1.00% contingent deferred sales charge for the first year only. The Fund’s other share
classes are not subject to sales charges and have limited eligibility. Please see the Fund’s prospectus for details. Performance for different share classes will vary based on differences in sales charges and
fees associated with each share class. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the
redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee
waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown
represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than
their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial
intermediary, visiting columbiathreadneedleus.com/investor/ or calling 800.345.6611.
The Fund’s performance prior
to November 2015, when the Investment Manager assumed day-to-day portfolio management responsibilities over the Fund, reflects returns achieved by a subadviser that managed the Fund according to different principal
investment strategies. If the Fund’s current strategies had been in place for the prior periods, results shown may have been different.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. Since the Fund launched more than one class of shares at its inception, Class A shares were used. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investor/investment-products/mutual-funds/appended-performance for more information. |
The Russell 1000 Growth Index, an
unmanaged index, measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values.
Indices are not available for
investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Fund performance may be significantly
negatively impacted by the economic impact of the COVID-19 pandemic. The COVID-19 pandemic has adversely impacted economies and capital markets around the world in ways that will likely continue and may change in
unforeseen ways for an indeterminate period. The COVID-19 pandemic may exacerbate pre-existing political, social and economic risks in certain countries and globally.
|
Columbia Large Cap Growth Opportunity Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (February 28, 2010 — February 29, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Large Cap Growth Opportunity Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund
distributions or on the redemption of Fund shares.
| Portfolio breakdown (%) (at February 29, 2020) | |
| Common Stocks | 99.7 |
| Money Market Funds | 0.3 |
| Total | 100.0 |
Percentages indicated are based
upon total investments excluding investments in derivatives, if any. The Fund’s portfolio composition is subject to change.
Percentages indicated are based
upon total equity investments. The Fund’s portfolio composition is subject to change.
| 4 | Columbia Large Cap Growth Opportunity Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that ended
February 29, 2020, the Fund’s Class A shares returned 13.54% excluding sales charges, underperforming the Fund’s benchmark, the Russell 1000 Growth Index, which returned 15.11% for the same period. For the
annual period, sector allocation contributed slightly to relative performance while stock selection had a modest negative impact.
Stocks posted strong gains despite
late dip on coronavirus concerns
As the period opened, investor
sentiment was supported by the market’s expectation that the Federal Reserve (Fed) was on hold with respect to its benchmark rate. Stocks declined in May of 2019 on signs of slower economic growth and President
Trump’s announcement of plans to impose 25% tariffs on $200 billion in imports from China. Concerns were exacerbated by an inversion of the Treasury yield curve, something which has often foreshadowed
recession.
However, the stock market would
soon rebound as the Fed signaled that it was prepared to cut rates one or more times before the end of 2019. Together with a firming in corporate earnings expectations, the increasingly accommodative Fed policy
outlook counterbalanced anxieties around growth and trade.
U.S. equities essentially traded
within a range during the third quarter of 2019, with moves in either direction mostly driven by macro headlines. As it had signaled, the Fed implemented quarter-point interest rate cuts in August and September, while
corporate earnings generally came in above their previously lowered forecasts. The large-cap S&P 500 Index reached a record high on July 26, before an escalation in the U.S.-China trade war led stocks lower. While
the market regained its footing as trade tensions eased, stocks were pressured as the quarter drew to a close by growing signs of global manufacturing weakness.
U.S. equities moved higher over the
fourth quarter of 2019 as investors were encouraged by data suggesting improving economic growth globally. The U.S. economy continued to be bolstered by consumers amid historically low unemployment. In addition,
December saw the U.S. and China reach a much-anticipated “phase one” agreement on trade under which the U.S agreed to eliminate some existing tariffs and China agreed to increase purchases of U.S.
agricultural products. The House of Representative’s approval of the Trump administration’s deal with Canada and Mexico further reduced uncertainty around trade.
Market sentiment remained
well-supported into February of 2020. However, as the period drew to a close, concerns emanating from China over the rapid spread of a new and highly contagious coronavirus drove stock prices sharply lower.
Contributors and detractors
For the 12 months, the
Fund’s underweight allocation to industrials added to performance relative to the benchmark while an overweight to health care detracted. Stock selection within industrials, health care and information
technology contributed positively while selection within materials and communications services constrained return.
In terms of individual positions,
positive contributions to relative performance were led by a lack of exposure to Boeing within industrials, as the well-publicized issues with the 737 Max airplane weighed heavily on the stock. Within information
technology, contributions were led by a lack of exposure to networking firm Cisco Systems Inc. and overweights to semiconductor processing equipment firm Lam Research Corp. and processing unit manufacturer NVIDIA
Corp. Shares of Lam rebounded as demand from chipmakers recovered and the company came out of an earnings trough. NVIDIA has seen demand for its products benefit from the increasing adoption of technologies such as
artificial intelligence and cloud computing across a range of industries.
On the downside, within information
technology an overweight to enterprise software company VMware, Inc. and an underweight to consumer electronics firm Apple, Inc. weighed most notably on performance. VMware shares lagged on concerns over increased
competition driven by the move to cloud computing. The Fund’s modestly below-benchmark exposure to Apple constrained performance as the company reported better than expected revenue and profits driven by strong
iPhone sales. Elsewhere, within consumer discretionary an overweight to beauty store chain Ulta Beauty, Inc. detracted. A slowdown in the U.S. cosmetics industry led Ulta to lower guidance relative to expectations for
above-market growth.
|
Columbia Large Cap Growth Opportunity Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
Fund positioning
The Fund continues to seek
long-term growth of capital by investing in large-cap stocks. During the annual period, the Fund took steps to reduce the number of holdings and thereby hold a more concentrated portfolio featuring greater active
weighting of individual stocks. In doing so we focused on holding or avoiding individual stocks which we believed were priced inefficiently based on investor behavioral biases such as overconfidence, loss aversion and
inertia. At the same time, we have sought to avoid undue exposure to any individual macro risk at the portfolio level.
As a result of our stock selection
process, the Fund moved from a slight underweight to an overweight in technology stocks. We retained overweight exposure to the health care and communication services sectors, along with underweights to consumer
staples, materials and financials.
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. 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. Foreign investments subject the Fund to risks, including political, economic, market, social and others within a particular country, as well as to currency instabilities and less stringent
financial and accounting standards generally applicable to U.S. issuers. The Fund may invest significantly in issuers within a particular sector, which may be negatively affected by market, economic or other conditions, making the Fund more vulnerable to unfavorable developments in the sector. See the Fund’s prospectus for
more information on these and other risks.
The views expressed in this report
reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and
results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update
such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf
of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
| 6 | Columbia Large Cap Growth Opportunity Fund | Annual Report 2020 |
Understanding Your Fund’s
Expenses
(Unaudited)
(Unaudited)
As an investor, you incur two types
of costs. There are shareholder transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing fund costs, which generally include management fees,
distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with
the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s
expenses
To illustrate these ongoing
costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment
of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the
“Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the
expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under
the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the
Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or
the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are
required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the
hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are
meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in
comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
Expenses paid during the period
are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal
half year and divided by 366.
Expenses do not include fees and
expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment
Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
|
Columbia Large Cap Growth Opportunity Fund | Annual Report 2020
|
7 |
Portfolio of Investments
February 29, 2020
February 29, 2020
(Percentages represent value of
investments compared to net assets)
Investments in securities
| Common Stocks 100.4% | ||
| Issuer | Shares | Value ($) |
| Communication Services 14.1% | ||
| Entertainment 1.4% | ||
| Electronic Arts, Inc.(a) | 200,366 | 20,311,102 |
| Interactive Media & Services 10.6% | ||
| Alphabet, Inc., Class A(a) | 60,637 | 81,208,102 |
| Alphabet, Inc., Class C(a) | 6,244 | 8,362,777 |
| Facebook, Inc., Class A(a) | 312,220 | 60,092,983 |
| Total | 149,663,862 | |
| Media 2.1% | ||
| Comcast Corp., Class A | 746,911 | 30,197,612 |
| Total Communication Services | 200,172,576 | |
| Consumer Discretionary 13.3% | ||
| Internet & Direct Marketing Retail 8.8% | ||
| Alibaba Group Holding Ltd., ADR(a) | 75,846 | 15,775,968 |
| Amazon.com, Inc.(a) | 47,250 | 89,007,187 |
| Booking Holdings, Inc.(a) | 12,148 | 20,598,878 |
| Total | 125,382,033 | |
| Multiline Retail 1.3% | ||
| Target Corp. | 180,322 | 18,573,166 |
| Specialty Retail 2.2% | ||
| Home Depot, Inc. (The) | 141,268 | 30,773,821 |
| Textiles, Apparel & Luxury Goods 1.0% | ||
| VF Corp. | 198,486 | 14,290,992 |
| Total Consumer Discretionary | 189,020,012 | |
| Consumer Staples 2.4% | ||
| Food & Staples Retailing 2.4% | ||
| Costco Wholesale Corp. | 120,072 | 33,757,042 |
| Total Consumer Staples | 33,757,042 | |
| Financials 2.1% | ||
| Banks 1.0% | ||
| Citigroup, Inc. | 229,980 | 14,594,531 |
| Insurance 1.1% | ||
| Allstate Corp. (The) | 152,344 | 16,034,206 |
| Total Financials | 30,628,737 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Health Care 14.9% | ||
| Biotechnology 3.6% | ||
| Alexion Pharmaceuticals, Inc.(a) | 132,870 | 12,493,766 |
| BioMarin Pharmaceutical, Inc.(a) | 154,875 | 13,996,054 |
| Exact Sciences Corp.(a) | 78,770 | 6,376,432 |
| Vertex Pharmaceuticals, Inc.(a) | 84,368 | 18,900,963 |
| Total | 51,767,215 | |
| Health Care Equipment & Supplies 4.6% | ||
| Abbott Laboratories | 317,988 | 24,494,616 |
| Baxter International, Inc. | 261,562 | 21,832,580 |
| Danaher Corp. | 137,014 | 19,809,484 |
| Total | 66,136,680 | |
| Health Care Providers & Services 2.0% | ||
| Guardant Health, Inc.(a) | 77,429 | 6,733,226 |
| Humana, Inc. | 66,865 | 21,375,403 |
| Total | 28,108,629 | |
| Life Sciences Tools & Services 0.7% | ||
| Bio-Techne Corp. | 50,733 | 9,582,956 |
| Pharmaceuticals 4.0% | ||
| Bristol-Myers Squibb Co. | 453,078 | 26,758,787 |
| Eli Lilly & Co. | 235,096 | 29,652,658 |
| Total | 56,411,445 | |
| Total Health Care | 212,006,925 | |
| Industrials 8.3% | ||
| Aerospace & Defense 2.5% | ||
| L3 Harris Technologies, Inc. | 136,653 | 27,020,398 |
| Spirit AeroSystems Holdings, Inc., Class A | 151,698 | 8,015,722 |
| Total | 35,036,120 | |
| Electrical Equipment 1.1% | ||
| AMETEK, Inc. | 177,584 | 15,272,224 |
| Industrial Conglomerates 1.2% | ||
| Honeywell International, Inc. | 105,738 | 17,147,531 |
| Machinery 1.3% | ||
| Trane Technologies PLC | 146,438 | 18,896,360 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 8 | Columbia Large Cap Growth Opportunity Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Road & Rail 2.2% | ||
| Norfolk Southern Corp. | 114,723 | 20,919,739 |
| Uber Technologies, Inc.(a) | 304,102 | 10,299,935 |
| Total | 31,219,674 | |
| Total Industrials | 117,571,909 | |
| Information Technology 43.6% | ||
| IT Services 12.4% | ||
| Fidelity National Information Services, Inc. | 248,387 | 34,704,632 |
| MasterCard, Inc., Class A | 150,850 | 43,784,212 |
| PayPal Holdings, Inc.(a) | 403,735 | 43,599,343 |
| Visa, Inc., Class A | 301,215 | 54,748,838 |
| Total | 176,837,025 | |
| Semiconductors & Semiconductor Equipment 8.3% | ||
| Broadcom, Inc. | 99,635 | 27,162,494 |
| Lam Research Corp. | 69,023 | 20,253,419 |
| NVIDIA Corp. | 141,650 | 38,255,415 |
| NXP Semiconductors NV | 153,529 | 17,454,712 |
| Qorvo, Inc.(a) | 143,578 | 14,441,075 |
| Total | 117,567,115 | |
| Software 17.1% | ||
| Adobe, Inc.(a) | 149,391 | 51,557,822 |
| Microsoft Corp. | 674,617 | 109,294,700 |
| Salesforce.com, Inc.(a) | 150,597 | 25,661,729 |
| ServiceNow, Inc.(a) | 103,447 | 33,733,032 |
| VMware, Inc., Class A(a) | 195,252 | 23,531,771 |
| Total | 243,779,054 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Technology Hardware, Storage & Peripherals 5.8% | ||
| Apple, Inc. | 299,393 | 81,842,071 |
| Total Information Technology | 620,025,265 | |
| Real Estate 1.7% | ||
| Equity Real Estate Investment Trusts (REITS) 1.7% | ||
| Equinix, Inc. | 41,514 | 23,779,219 |
| Total Real Estate | 23,779,219 | |
|
Total Common Stocks
(Cost $959,994,285) |
1,426,961,685 | |
| Money Market Funds 0.4% | ||
| Shares | Value ($) | |
| Columbia Short-Term Cash Fund, 1.641%(b),(c) | 5,011,288 | 5,011,288 |
|
Total Money Market Funds
(Cost $5,011,247) |
5,011,288 | |
|
Total Investments in Securities
(Cost: $965,005,532) |
1,431,972,973 | |
| Other Assets & Liabilities, Net | (11,420,399) | |
| Net Assets | 1,420,552,574 | |
Notes to Portfolio of
Investments
| (a) | Non-income producing investment. |
| (b) | The rate shown is the seven-day current annualized yield at February 29, 2020. |
| (c) | As defined in the Investment Company Act of 1940, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. Holdings and transactions in these affiliated companies during the year ended February 29, 2020 are as follows: |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Large Cap Growth Opportunity Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Abbreviation Legend
| ADR | American Depositary Receipt |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
Under the direction of the
Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of
voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly
to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of
Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third
party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale
pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to
discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members
of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of
the inputs used to value the Fund’s investments at February 29, 2020:
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 10 | Columbia Large Cap Growth Opportunity Fund | Annual Report 2020 |
Statement of Assets and Liabilities
February 29, 2020
February 29, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $959,994,285) | $1,426,961,685 |
| Affiliated issuers (cost $5,011,247) | 5,011,288 |
| Receivable for: | |
| Capital shares sold | 261,065 |
| Dividends | 1,219,017 |
| Expense reimbursement due from Investment Manager | 2,508 |
| Prepaid expenses | 3,180 |
| Total assets | 1,433,458,743 |
| Liabilities | |
| Payable for: | |
| Capital shares purchased | 12,138,336 |
| Management services fees | 28,267 |
| Distribution and/or service fees | 7,552 |
| Transfer agent fees | 150,198 |
| Compensation of board members | 507,471 |
| Compensation of chief compliance officer | 16 |
| Other expenses | 74,329 |
| Total liabilities | 12,906,169 |
| Net assets applicable to outstanding capital stock | $1,420,552,574 |
| Represented by | |
| Paid in capital | 856,227,184 |
| Total distributable earnings (loss) | 564,325,390 |
| Total - representing net assets applicable to outstanding capital stock | $1,420,552,574 |
| Class A | |
| Net assets | $913,904,820 |
| Shares outstanding | 51,731,338 |
| Net asset value per share | $17.67 |
| Maximum sales charge | 5.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $18.75 |
| Advisor Class | |
| Net assets | $17,808,847 |
| Shares outstanding | 887,218 |
| Net asset value per share | $20.07 |
| Class C | |
| Net assets | $37,004,319 |
| Shares outstanding | 3,261,281 |
| Net asset value per share | $11.35 |
| Institutional Class | |
| Net assets | $410,155,790 |
| Shares outstanding | 21,148,809 |
| Net asset value per share | $19.39 |
| Institutional 2 Class | |
| Net assets | $19,798,367 |
| Shares outstanding | 974,758 |
| Net asset value per share | $20.31 |
| Institutional 3 Class | |
| Net assets | $874,737 |
| Shares outstanding | 44,816 |
| Net asset value per share | $19.52 |
| Class R | |
| Net assets | $21,005,694 |
| Shares outstanding | 1,183,467 |
| Net asset value per share | $17.75 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Large Cap Growth Opportunity Fund | Annual Report 2020
|
11 |
Statement of Operations
Year Ended February 29, 2020
Year Ended February 29, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $13,257,826 |
| Dividends — affiliated issuers | 333,189 |
| Foreign taxes withheld | (34,678) |
| Total income | 13,556,337 |
| Expenses: | |
| Management services fees | 10,978,248 |
| Distribution and/or service fees | |
| Class A | 2,393,707 |
| Class C | 463,031 |
| Class R | 117,995 |
| Transfer agent fees | |
| Class A | 1,183,919 |
| Advisor Class | 34,030 |
| Class C | 57,596 |
| Institutional Class | 567,182 |
| Institutional 2 Class | 9,573 |
| Institutional 3 Class | 160 |
| Class R | 29,248 |
| Compensation of board members | 96,157 |
| Custodian fees | 14,975 |
| Printing and postage fees | 106,538 |
| Registration fees | 102,779 |
| Audit fees | 25,950 |
| Legal fees | 21,447 |
| Compensation of chief compliance officer | 322 |
| Other | 32,582 |
| Total expenses | 16,235,439 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (1,155,543) |
| Expense reduction | (1,422) |
| Total net expenses | 15,078,474 |
| Net investment loss | (1,522,137) |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 218,109,115 |
| Investments — affiliated issuers | 3,591 |
| Net realized gain | 218,112,706 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (18,779,755) |
| Investments — affiliated issuers | 41 |
| Net change in unrealized appreciation (depreciation) | (18,779,714) |
| Net realized and unrealized gain | 199,332,992 |
| Net increase in net assets resulting from operations | $197,810,855 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 12 | Columbia Large Cap Growth Opportunity Fund | Annual Report 2020 |
Statement of Changes in Net Assets
|
Year Ended
February 29, 2020 |
Year Ended
February 28, 2019 |
|
| Operations | ||
| Net investment loss | $(1,522,137) | $(2,510,193) |
| Net realized gain | 218,112,706 | 121,415,653 |
| Net change in unrealized appreciation (depreciation) | (18,779,714) | (53,833,080) |
| Net increase in net assets resulting from operations | 197,810,855 | 65,072,380 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (91,976,806) | (92,700,334) |
| Advisor Class | (2,372,940) | (2,500,640) |
| Class C | (6,218,009) | (21,242,037) |
| Institutional Class | (39,564,337) | (48,574,637) |
| Institutional 2 Class | (1,589,099) | (926,044) |
| Institutional 3 Class | (73,495) | (39,559) |
| Class R | (2,241,486) | (2,480,069) |
| Class T | — | (432) |
| Total distributions to shareholders | (144,036,172) | (168,463,752) |
| Decrease in net assets from capital stock activity | (157,007,442) | (113,505,925) |
| Total decrease in net assets | (103,232,759) | (216,897,297) |
| Net assets at beginning of year | 1,523,785,333 | 1,740,682,630 |
| Net assets at end of year | $1,420,552,574 | $1,523,785,333 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Large Cap Growth Opportunity Fund | Annual Report 2020
|
13 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| February 29, 2020 | February 28, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 2,942,055 | 53,053,134 | 13,931,715 | 255,985,558 |
| Distributions reinvested | 3,565,912 | 63,599,348 | 3,648,728 | 62,240,447 |
| Redemptions | (8,884,378) | (162,380,630) | (9,878,792) | (175,241,781) |
| Net increase (decrease) | (2,376,411) | (45,728,148) | 7,701,651 | 142,984,224 |
| Advisor Class | ||||
| Subscriptions | 152,256 | 3,126,971 | 215,699 | 4,244,833 |
| Distributions reinvested | 117,417 | 2,371,747 | 130,158 | 2,500,242 |
| Redemptions | (747,396) | (15,204,476) | (351,883) | (6,956,623) |
| Net decrease | (477,723) | (9,705,758) | (6,026) | (211,548) |
| Class C | ||||
| Subscriptions | 180,883 | 2,159,733 | 320,078 | 3,907,106 |
| Distributions reinvested | 432,903 | 5,020,316 | 1,535,594 | 19,223,307 |
| Redemptions | (2,251,655) | (27,388,520) | (19,119,904) | (248,986,743) |
| Net decrease | (1,637,869) | (20,208,471) | (17,264,232) | (225,856,330) |
| Institutional Class | ||||
| Subscriptions | 1,372,045 | 27,161,104 | 2,885,192 | 56,261,008 |
| Distributions reinvested | 1,670,174 | 32,614,073 | 2,150,109 | 40,009,637 |
| Redemptions | (7,235,914) | (144,163,493) | (6,961,211) | (132,258,738) |
| Net decrease | (4,193,695) | (84,388,316) | (1,925,910) | (35,988,093) |
| Institutional 2 Class | ||||
| Subscriptions | 463,220 | 9,736,148 | 316,668 | 6,320,603 |
| Distributions reinvested | 77,701 | 1,588,715 | 47,893 | 925,648 |
| Redemptions | (200,912) | (4,228,728) | (185,086) | (3,628,917) |
| Net increase | 340,009 | 7,096,135 | 179,475 | 3,617,334 |
| Institutional 3 Class | ||||
| Subscriptions | 20,334 | 415,755 | 30,754 | 592,956 |
| Distributions reinvested | 3,428 | 67,329 | 2,123 | 38,955 |
| Redemptions | (20,523) | (411,573) | (4,535) | (87,404) |
| Net increase | 3,239 | 71,511 | 28,342 | 544,507 |
| Class R | ||||
| Subscriptions | 162,535 | 3,008,794 | 240,337 | 4,380,576 |
| Distributions reinvested | 122,734 | 2,200,623 | 135,316 | 2,340,222 |
| Redemptions | (507,884) | (9,353,812) | (293,297) | (5,313,149) |
| Net increase (decrease) | (222,615) | (4,144,395) | 82,356 | 1,407,649 |
| Class T | ||||
| Redemptions | — | — | (231) | (3,668) |
| Net decrease | — | — | (231) | (3,668) |
| Total net decrease | (8,565,065) | (157,007,442) | (11,204,575) | (113,505,925) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 14 | Columbia Large Cap Growth Opportunity Fund | Annual Report 2020 |
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|
Columbia Large Cap Growth Opportunity Fund | Annual Report 2020
|
15 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. 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.
|
Net asset value,
beginning of period |
Net
investment income (loss) |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class A | ||||||
| Year Ended 2/29/2020 | $17.18 | (0.03) | 2.34 | 2.31 | (1.82) | (1.82) |
| Year Ended 2/28/2019 | $18.33 | (0.03) | 0.75 | 0.72 | (1.87) | (1.87) |
| Year Ended 2/28/2018 | $15.74 | (0.01) | 3.66 | 3.65 | (1.06) | (1.06) |
| Year Ended 2/28/2017 | $14.87 | 0.02 | 2.84 | 2.86 | (1.99) | (1.99) |
| Year Ended 2/29/2016 | $20.50 | (0.09) | (1.73) | (1.82) | (3.81) | (3.81) |
| Advisor Class | ||||||
| Year Ended 2/29/2020 | $19.26 | 0.02 | 2.61 | 2.63 | (1.82) | (1.82) |
| Year Ended 2/28/2019 | $20.27 | 0.02 | 0.85 | 0.87 | (1.88) | (1.88) |
| Year Ended 2/28/2018 | $17.30 | 0.03 | 4.03 | 4.06 | (1.09) | (1.09) |
| Year Ended 2/28/2017 | $16.13 | 0.06 | 3.10 | 3.16 | (1.99) | (1.99) |
| Year Ended 2/29/2016 | $21.88 | (0.05) | (1.89) | (1.94) | (3.81) | (3.81) |
| Class C | ||||||
| Year Ended 2/29/2020 | $11.70 | (0.11) | 1.58 | 1.47 | (1.82) | (1.82) |
| Year Ended 2/28/2019 | $13.14 | (0.12) | 0.53 | 0.41 | (1.85) | (1.85) |
| Year Ended 2/28/2018 | $11.58 | (0.10) | 2.66 | 2.56 | (1.00) | (1.00) |
| Year Ended 2/28/2017 | $11.51 | (0.07) | 2.13 | 2.06 | (1.99) | (1.99) |
| Year Ended 2/29/2016 | $16.81 | (0.18) | (1.34) | (1.52) | (3.78) | (3.78) |
| Institutional Class | ||||||
| Year Ended 2/29/2020 | $18.66 | 0.02 | 2.53 | 2.55 | (1.82) | (1.82) |
| Year Ended 2/28/2019 | $19.70 | 0.02 | 0.82 | 0.84 | (1.88) | (1.88) |
| Year Ended 2/28/2018 | $16.84 | 0.03 | 3.92 | 3.95 | (1.09) | (1.09) |
| Year Ended 2/28/2017 | $15.74 | 0.06 | 3.03 | 3.09 | (1.99) | (1.99) |
| Year Ended 2/29/2016 | $21.44 | (0.04) | (1.85) | (1.89) | (3.81) | (3.81) |
| Institutional 2 Class | ||||||
| Year Ended 2/29/2020 | $19.46 | 0.03 | 2.64 | 2.67 | (1.82) | (1.82) |
| Year Ended 2/28/2019 | $20.45 | 0.03 | 0.86 | 0.89 | (1.88) | (1.88) |
| Year Ended 2/28/2018 | $17.44 | 0.05 | 4.06 | 4.11 | (1.10) | (1.10) |
| Year Ended 2/28/2017 | $16.23 | 0.08 | 3.12 | 3.20 | (1.99) | (1.99) |
| Year Ended 2/29/2016 | $21.96 | (0.01) | (1.90) | (1.91) | (3.82) | (3.82) |
| Institutional 3 Class | ||||||
| Year Ended 2/29/2020 | $18.75 | 0.04 | 2.55 | 2.59 | (1.82) | (1.82) |
| Year Ended 2/28/2019 | $19.77 | 0.04 | 0.82 | 0.86 | (1.88) | (1.88) |
| Year Ended 2/28/2018(f) | $17.10 | 0.04 | 3.74 | 3.78 | (1.11) | (1.11) |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 16 | Columbia Large Cap Growth Opportunity Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income (loss) ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $17.67 | 13.54% | 1.12% | 1.04%(c) | (0.16%) | 42% | $913,905 |
| Year Ended 2/28/2019 | $17.18 | 4.19% | 1.12% | 1.08%(c) | (0.16%) | 23% | $929,808 |
| Year Ended 2/28/2018 | $18.33 | 23.65% | 1.12% | 1.12%(c) | (0.07%) | 37% | $850,411 |
| Year Ended 2/28/2017 | $15.74 | 20.85% | 1.18%(d) | 1.17%(c),(d) | 0.11% | 29% | $840,034 |
| Year Ended 2/29/2016 | $14.87 | (11.07%) | 1.24%(e) | 1.22%(c),(e) | (0.46%) | 102% | $356,035 |
| Advisor Class | |||||||
| Year Ended 2/29/2020 | $20.07 | 13.75% | 0.87% | 0.79%(c) | 0.09% | 42% | $17,809 |
| Year Ended 2/28/2019 | $19.26 | 4.53% | 0.87% | 0.83%(c) | 0.09% | 23% | $26,286 |
| Year Ended 2/28/2018 | $20.27 | 23.93% | 0.87% | 0.87%(c) | 0.18% | 37% | $27,793 |
| Year Ended 2/28/2017 | $17.30 | 21.11% | 0.92%(d) | 0.92%(c),(d) | 0.32% | 29% | $24,411 |
| Year Ended 2/29/2016 | $16.13 | (10.88%) | 0.98%(e) | 0.97%(c),(e) | (0.23%) | 102% | $3,401 |
| Class C | |||||||
| Year Ended 2/29/2020 | $11.35 | 12.66% | 1.87% | 1.80%(c) | (0.91%) | 42% | $37,004 |
| Year Ended 2/28/2019 | $11.70 | 3.46% | 1.86% | 1.84%(c) | (0.96%) | 23% | $57,316 |
| Year Ended 2/28/2018 | $13.14 | 22.74% | 1.87% | 1.87%(c) | (0.79%) | 37% | $291,221 |
| Year Ended 2/28/2017 | $11.58 | 19.89% | 1.91%(d) | 1.91%(c),(d) | (0.63%) | 29% | $426,640 |
| Year Ended 2/29/2016 | $11.51 | (11.70%) | 1.99%(e) | 1.97%(c),(e) | (1.21%) | 102% | $148,420 |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $19.39 | 13.76% | 0.87% | 0.79%(c) | 0.09% | 42% | $410,156 |
| Year Ended 2/28/2019 | $18.66 | 4.51% | 0.87% | 0.83%(c) | 0.09% | 23% | $472,922 |
| Year Ended 2/28/2018 | $19.70 | 23.93% | 0.87% | 0.87%(c) | 0.19% | 37% | $537,229 |
| Year Ended 2/28/2017 | $16.84 | 21.19% | 0.90%(d) | 0.90%(c),(d) | 0.37% | 29% | $450,897 |
| Year Ended 2/29/2016 | $15.74 | (10.87%) | 0.98%(e) | 0.97%(c),(e) | (0.22%) | 102% | $129,655 |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $20.31 | 13.81% | 0.80% | 0.73% | 0.16% | 42% | $19,798 |
| Year Ended 2/28/2019 | $19.46 | 4.60% | 0.80% | 0.76% | 0.17% | 23% | $12,349 |
| Year Ended 2/28/2018 | $20.45 | 24.04% | 0.80% | 0.80% | 0.26% | 37% | $9,310 |
| Year Ended 2/28/2017 | $17.44 | 21.23% | 0.83%(d) | 0.83%(d) | 0.46% | 29% | $8,530 |
| Year Ended 2/29/2016 | $16.23 | (10.72%) | 0.83%(e) | 0.83%(e) | (0.07%) | 102% | $4,934 |
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $19.52 | 13.91% | 0.76% | 0.69% | 0.20% | 42% | $875 |
| Year Ended 2/28/2019 | $18.75 | 4.61% | 0.77% | 0.71% | 0.24% | 23% | $780 |
| Year Ended 2/28/2018(f) | $19.77 | 22.55% | 0.76% | 0.76% | 0.19% | 37% | $262 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Large Cap Growth Opportunity Fund | Annual Report 2020
|
17 |
Financial Highlights (continued)
|
Net asset value,
beginning of period |
Net
investment income (loss) |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class R | ||||||
| Year Ended 2/29/2020 | $17.30 | (0.07) | 2.34 | 2.27 | (1.82) | (1.82) |
| Year Ended 2/28/2019 | $18.47 | (0.07) | 0.76 | 0.69 | (1.86) | (1.86) |
| Year Ended 2/28/2018 | $15.87 | (0.05) | 3.67 | 3.62 | (1.02) | (1.02) |
| Year Ended 2/28/2017(g) | $14.69 | (0.01) | 1.30 | 1.29 | (0.11) | (0.11) |
| 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%. |
| (d) | Expenses have been reduced due to a reimbursement of expenses overbilled by a third party. If the reimbursement had been excluded, the expense ratios would have been higher by the percentages shown for each class in the table below. All fee waivers and expense reimbursements by the Investment Manager and its affiliates were applied before giving effect to this third party reimbursement. |
| Year Ended | Class A |
Advisor
Class |
Class C |
Institutional
Class |
Institutional 2
Class |
| 02/28/2017 | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
| (e) | Ratios include line of credit interest expense which is less than 0.01%. |
| (f) | Institutional 3 Class shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (g) | Class R shares commenced operations on October 26, 2016. Per share data and total return reflect activity from that date. |
| (h) | Annualized. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 18 | Columbia Large Cap Growth Opportunity Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income (loss) ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Class R | |||||||
| Year Ended 2/29/2020 | $17.75 | 13.20% | 1.37% | 1.30%(c) | (0.41%) | 42% | $21,006 |
| Year Ended 2/28/2019 | $17.30 | 4.00% | 1.37% | 1.33%(c) | (0.41%) | 23% | $24,324 |
| Year Ended 2/28/2018 | $18.47 | 23.28% | 1.37% | 1.37%(c) | (0.31%) | 37% | $24,453 |
| Year Ended 2/28/2017(g) | $15.87 | 8.81% | 1.35%(h) | 1.35%(c),(h) | (0.14%)(h) | 29% | $26,278 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Large Cap Growth Opportunity Fund | Annual Report 2020
|
19 |
Notes to Financial Statements
February 29, 2020
February 29, 2020
Note 1. Organization
Columbia Large Cap Growth
Opportunity Fund (formerly known as Columbia Large Cap Growth Fund III) (the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act
of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Delaware statutory trust.
Effective January 10, 2020,
Columbia Large Cap Growth Fund III was renamed Columbia Large Cap Growth Opportunity Fund.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a liquidation will be
proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A and Class C shares are offered to the general public for investment. Class C shares automatically convert to Class A shares after 10 years. Advisor Class, Institutional Class, Institutional 2
Class, Institutional 3 Class and Class R shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional investors and to certain other investors as also
described in the Fund’s prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
All equity securities are valued at
the close of business of the New York Stock Exchange. Equity securities are valued at the official closing price on the principal exchange or market on which they trade. Unlisted securities or listed securities for
which there were no sales during the day are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets.
Foreign equity securities are
valued based on the closing price on the foreign exchange in which such securities are primarily traded. If any foreign equity security closing prices are not readily available, the securities are valued at the mean
of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are determined at the scheduled closing time of the New York Stock Exchange. Many securities markets and exchanges
outside the U.S. close prior to the close of the New York Stock Exchange; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but
before the close of the New York Stock Exchange. In those situations, foreign securities will be fair valued pursuant to a policy adopted by the Board of Trustees. Under the policy, the Fund may utilize a third-party
pricing service to determine these fair values. The third-party pricing service takes into account multiple factors, including, but not limited to, movements in the U.S. securities markets, certain depositary
receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that reasonably reflects the current market
conditions as of the close of the New York Stock Exchange. The fair value of a security is likely to be different from the quoted or published price, if available.
| 20 | Columbia Large Cap Growth Opportunity Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Investments in open-end investment
companies, including money market funds, are valued at their latest net asset value.
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published
price for the security, if available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Corporate actions and dividend
income are generally recorded net of any non-reclaimable tax withholdings, on the ex-dividend date or upon receipt of ex-dividend notification in the case of certain foreign securities.
The Fund may receive distributions
from holdings in equity securities, business development companies (BDCs), exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment companies (RICs), and real estate investment trusts
(REITs), which report information as to the tax character of their distributions annually. These distributions are allocated to dividend income, capital gain and return of capital based on actual information reported.
Return of capital is recorded as a reduction of the cost basis of securities held. If the Fund no longer owns the applicable securities, return of capital is recorded as a realized gain. With respect to REITs, to the
extent actual information has not yet been reported, estimates for return of capital are made by Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise
Financial, Inc. (Ameriprise Financial). The Investment Manager’s estimates are subsequently adjusted when the actual character of the distributions is disclosed by the REITs, which could result in a
proportionate change in return of capital to shareholders.
Awards from class action litigation
are recorded as a reduction of cost basis if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities on the payment date, the proceeds are recorded as
realized gains.
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
|
Columbia Large Cap Growth Opportunity Fund | Annual Report 2020
|
21 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable income and net capital gain, if any, for its
tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net income and certain other
amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Foreign taxes
The Fund may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules
and regulations that exist in the markets in which it invests.
Realized gains in certain countries
may be subject to foreign taxes at the Fund level, based on statutory rates. The Fund accrues for such foreign taxes on realized and unrealized gains at the appropriate rate for each jurisdiction, as applicable. The
amount, if any, is disclosed as a liability on the Statement of Assets and Liabilities.
Distributions to shareholders
Distributions from net investment
income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Note 3. Fees and other
transactions with affiliates
Management services fees
The Fund has entered into a
Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the
Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the
Fund’s daily net assets that declines from 0.77% to 0.57% as the Fund’s net assets increase. The effective management services fee rate for the year ended February 29, 2020 was 0.72% of the Fund’s
average daily net assets.
Participating Affiliates
The Investment Manager and its
investment advisory affiliates (Participating Affiliates) around the world may coordinate in providing services to their clients. From time to time the Investment Manager (or any affiliated investment subadviser to
the Fund, 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 Fund. These Participating Affiliates provide services to the Investment Manager (or any affiliated investment subadviser to
the Fund as the case may be) either pursuant to subadvisory agreements, personnel-sharing agreements or similar inter-company arrangements and the Fund pays 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 Financial and are registered, as appropriate, with respective regulators in their home jurisdictions and, where required, the Securities
and Exchange Commission and the Commodity Futures Trading Commission in the United States.
| 22 | Columbia Large Cap Growth Opportunity Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
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 Fund’s prospectus and Statement of Additional Information (SAI), may provide such services to the Fund on behalf of the
Investment Manager.
Compensation of board members
Members of the Board of Trustees
who are not officers or employees of the Investment Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the
Deferred Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of
certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All
amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as
sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class.
For the year ended February 29,
2020, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
|
Columbia Large Cap Growth Opportunity Fund | Annual Report 2020
|
23 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended February 29, 2020, these minimum account balance fees reduced total expenses
of the Fund by $1,422.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays
a monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class C shares of the Fund and a monthly distribution fee to the Distributor at the
maximum annual rates of 0.75% and 0.50% of the average daily net assets attributable to Class C and Class R shares of the Fund, respectively.
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended February 29, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 5.75 | 0.50 - 1.00(a) | 111,245 |
| Class C | — | 1.00(b) | 1,364 |
| (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 applies to redemptions within 12 months after purchase, with certain limited exceptions. |
The Fund’s other share
classes are not subject to sales charges.
Expenses waived/reimbursed by the
Investment Manager and its affiliates
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) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, 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 following annual rate(s) as a percentage of the class’ average daily net assets:
|
Fee rate(s) contractual
June 30, 2020 |
|
| Class A | 1.05% |
| Advisor Class | 0.80 |
| Class C | 1.80 |
| Institutional Class | 0.80 |
| Institutional 2 Class | 0.73 |
| Institutional 3 Class | 0.69 |
| Class R | 1.30 |
Under the agreement governing
these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes
(including foreign transaction taxes), expenses associated with investments in affiliated and non-affiliated
| 24 | Columbia Large Cap Growth Opportunity Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
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, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This
agreement may be modified or amended only with approval from the Investment Manager, certain of its affiliates and the Fund. In addition to the contractual agreement, the Investment Manager and certain of its
affiliates have voluntarily agreed to waive fees and/or reimburse Fund expenses (excluding certain fees and expenses described above) so that Fund level expenses (expenses directly attributable to the Fund and not to
a specific share class) are waived proportionately across all share classes, but the Fund’s net operating expenses shall not exceed the contractual annual rates listed in the table above. This arrangement may be
revised or discontinued at any time. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its affiliates in future
periods.
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At February 29, 2020, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, trustees’ deferred compensation, late-year ordinary losses and net operating loss reclassification. To the extent
these differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
The following reclassifications
were made:
|
Excess of distributions
over net investment income ($) |
Accumulated
net realized gain ($) |
Paid in
capital ($) |
| 1,215,444 | — | (1,215,444) |
Net investment income (loss) and
net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended February 29, 2020 | Year Ended February 28, 2019 | ||||
|
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
| — | 144,036,172 | 144,036,172 | 1,490,192 | 166,973,560 | 168,463,752 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At February 29, 2020, the
components of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| — | 99,719,739 | — | 465,639,507 |
At February 29, 2020, the cost of
all investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
|
Federal
tax cost ($) |
Gross unrealized
appreciation ($) |
Gross unrealized
(depreciation) ($) |
Net unrealized
appreciation ($) |
| 966,333,466 | 512,790,228 | (47,150,721) | 465,639,507 |
|
Columbia Large Cap Growth Opportunity Fund | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
Under current tax rules, regulated
investment companies can elect to treat certain late-year ordinary losses incurred and post-October capital losses (capital losses realized after October 31) as arising on the first day of the following taxable year.
As of February 29, 2020, the Fund will elect to treat the following late-year ordinary losses and post-October capital losses as arising on March 1, 2020.
|
Late year
ordinary losses ($) |
Post-October
capital losses ($) |
| 528,411 | — |
Management of the Fund has
concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at
a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the
prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio
information
The cost of purchases and
proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $629,537,481 and $913,155,702, respectively, for the year ended February 29, 2020. The amount of purchase and
sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes referred to
as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
Note 7. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund did not borrow or lend
money under the Interfund Program during the year ended February 29, 2020.
Note 8. Line of credit
The Fund has access to a
revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. The credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager or an affiliated investment manager, severally and
not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the federal funds effective rate, (ii) the
one-month LIBOR rate and (iii) the overnight bank funding rate, plus in
| 26 | Columbia Large Cap Growth Opportunity Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
each case, 1.00%. Each borrowing under the credit
facility matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the unused amount of the credit facility at a rate of 0.15% per annum. The
commitment fee is included in other expenses in the Statement of Operations. This agreement expires annually in December unless extended or renewed.
The Fund had no borrowings during
the year ended February 29, 2020.
Note 9. Significant
risks
Information technology sector
risk
The Fund may be more susceptible to
the particular risks that may affect companies in the information technology sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the information 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 information 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.
Market and environment risk
The Fund may incur losses due to
declines in the value of one or more securities in which it invests. These declines may be due to factors affecting a particular issuer, or the result of, among other things, political, regulatory, market, economic or
social developments affecting the relevant market(s) more generally. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers,
which could adversely affect Fund, including causing difficulty in assigning prices to hard-to-value assets in thinly traded and closed markets, significant redemptions and operational challenges. Global economies and
financial markets are increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may
be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional or global events
such as terrorism, war, natural disasters, disease/virus outbreaks and epidemics or other public health issues, recessions, depressions or other events – or the potential for such events – could have a
significant negative impact on global economic and market conditions.
The coronavirus disease 2019
(COVID-19) public health crisis has become a pandemic that has resulted in, and may continue to result in, significant global economic and societal disruption and market volatility due to disruptions in market access,
resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. Such disruptions may be caused, or exacerbated by, quarantines and travel restrictions,
workforce displacement and loss in human and other resources. The uncertainty surrounding the magnitude, duration, reach, costs and effects of the global pandemic, as well as actions that have been or could be taken
by governmental authorities or other third parties, present unknowns that are yet to unfold. The impacts, as well as the uncertainty over impacts to come, of COVID-19 – and any other infectious illness
outbreaks, epidemics and pandemics that may arise in the future – could negatively affect global economies and markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illness
outbreaks and epidemics in emerging market countries may be greater due to generally less established healthcare systems, governments and financial markets. Public health crises caused by the COVID-19 outbreak may
exacerbate other pre-existing political, social and economic risks in certain countries or globally. The disruptions caused by COVID-19 could prevent the Fund from executing advantageous investment decisions in a
timely manner and negatively impact the Fund’s ability to achieve their investment objectives. Any such event(s) could have a significant adverse impact on the value and risk profile of the Fund.
|
Columbia Large Cap Growth Opportunity Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting different communities at different times with varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including
the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to continue ordinary business operations and technology functions over near- or longer-term periods.
Shareholder concentration risk
At February 29, 2020, one
unaffiliated shareholder of record owned 25.2% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Subscription
and redemption activity by concentrated accounts may have a significant effect on the operations of the Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times,
including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of less liquid positions. Large redemptions could result in decreased economies of scale and increased operating
expenses for non-redeeming Fund shareholders.
Note 10. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 11. Information
regarding pending and settled legal proceedings
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. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to
Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that
these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe
proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines,
penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.
| 28 | Columbia Large Cap Growth Opportunity Fund | Annual Report 2020 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust and Shareholders of Columbia Large Cap Growth Opportunity Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Large Cap Growth Opportunity Fund (formerly known as Columbia Large Cap Growth Fund III) (one of the funds constituting Columbia
Funds Series Trust, referred to hereafter as the "Fund") as of February 29, 2020, the related statement of operations for the year ended February 29, 2020, the statement of changes in net assets for each of the two
years in the period ended February 29, 2020, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In
our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of February 29, 2020, the results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period ended February 29, 2020 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United
States of America.
Basis for Opinion
These financial statements are the
responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these
financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of February 29, 2020 by correspondence with the custodian and transfer agent. We believe that our
audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
April 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
|
Columbia Large Cap Growth Opportunity Fund | Annual Report 2020
|
29 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended February 29, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Capital
gain dividend |
|
| $220,423,199 |
Capital gain dividend. The Fund
designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
TRUSTEES AND
OFFICERS
The Board oversees the Fund’s
operations and 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 Fund’s Trustees as
of the printing of this report, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not
affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach the mandatory retirement age established by the Board.
Independent trustees
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
George S. Batejan
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1953 |
Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 117 | Former Chairman of the Board, NICSA (National Investment Company Services Association) (Executive Committee, Nominating Committee and Governance Committee), 2014-2016; former Director, Intech Investment Management, 2011-2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016; former Advisory Board Member, University of Colorado Business School, 2015-2018 |
|
Kathleen Blatz
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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; Member and Interim Chair, Minnesota Sports Facilities Authority, January 2017-July 2017; Interim President and Chief Executive Officer, Blue Cross and Blue Shield of Minnesota (health care insurance), February-July 2018 | 117 | Trustee, BlueCross BlueShield of Minnesota since 2009 (Chair of the Business Development Committee, 2014-2017; Chair of the Governance Committee since 2017); Chair of the Robina Foundation since August 2013; former Member and Chair of the Board, Minnesota Sports Facilities Authority, January 2017-July 2017 |
| 30 | Columbia Large Cap Growth Opportunity Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Pamela G. Carlton
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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 | 117 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996; Director, DR Bank (Audit Committee) since 2017; Director, Evercore Inc. (Audit Committee, Nominating and Governance Committee) since 2019 |
|
Patricia M. Flynn
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1950 |
Trustee 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 | 117 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010; Board of Directors, The MA Business Roundtable 2003-2019 |
|
Brian J. Gallagher
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee since 12/17 | Retired; Partner with Deloitte & Touche LLP and its predecessors, 1977-2016 | 117 | Trustee, Catholic Schools Foundation since 2004 |
|
Catherine James Paglia
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Chair of the Board since 1/20; Trustee 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. | 117 | 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) |
|
Anthony M. Santomero
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1946 |
Trustee 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 | 117 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; former Director, Citigroup Inc. and Citibank, N.A., 2009-2019; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
|
Columbia Large Cap Growth Opportunity Fund | Annual Report 2020
|
31 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Minor M. Shaw
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1947 |
Trustee 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 | 117 | Director, BlueCross BlueShield of South Carolina since April 2008; Trustee, Hollingsworth Funds since 2016 (previously Board Chair from 2016-2019); Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016; former Director, National Association of Corporate Directors, Carolinas Chapter, 2013-2018 |
|
Sandra Yeager
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1964 |
Trustee since 12/17 | Retired; President and founder, Hanoverian Capital, LLC (SEC registered investment advisor firm), 2008-2016; Managing Director, DuPont Capital, 2006-2008; Managing Director, Morgan Stanley Investment Management, 2004-2006; Senior Vice President, Alliance Bernstein, 1990-2004 | 115 | Director, NAPE Education Foundation since October 2016 |
Interested trustee affiliated
with Investment Manager*
| * | 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. |
Nations Funds refer to the Funds
within the Columbia Funds Complex that historically bore the Nations brand and includes series of Columbia Funds Series Trust. RiverSource Funds refer to the Funds within the Columbia Funds Complex that historically
bore the RiverSource brand and includes series of Columbia Funds Series Trust II.
| 32 | Columbia Large Cap Growth Opportunity Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
The Statement of Additional Information has additional information about the Fund’s Board members and is available, without charge, upon request by calling 800.345.6611, visiting columbiathreadneedleus.com/investor/ or contacting your financial intermediary.
The Statement of Additional Information has additional information about the Fund’s Board members and is available, without charge, upon request by calling 800.345.6611, visiting columbiathreadneedleus.com/investor/ or contacting your financial intermediary.
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 of the
Fund as of the printing of this report, 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 Fund’s other officers are:
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); officer of Columbia Funds and affiliated funds since 2007. |
|
Michael G. Clarke
225 Franklin Street Boston, MA 02110 Born 1969 |
Chief Financial Officer, Principal Financial Officer (2009), and Senior Vice President (2019) | Vice President, Head of North American Operations, and Co-Head of Global Operations, – Accounting and Tax, Columbia Management Investment Advisers, LLC, since June 2019 (previously Vice President – Accounting and Tax, May 2010 – May 2019); senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009 – January 2019 and December 2015 – January 2019, respectively). |
|
Joseph Beranek
5890 Ameriprise Financial Center Minneapolis, MN 55474 Born 1965 |
Treasurer, Chief Accounting Officer (Principal Accounting Officer) (2019), and Principal Financial Officer (2020) | Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and March 2017, respectively (previously Vice President — Pricing and Corporate Actions, May 2010 - March 2017). |
|
Paul B. Goucher
485 Lexington Avenue New York, NY 10017 Born 1968 |
Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since March 2015 (previously Vice President and Assistant Secretary, May 2010 – March 2015). |
|
Thomas P. McGuire
225 Franklin Street Boston, MA 02110 Born 1972 |
Senior 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; Chief Compliance Officer, Columbia Acorn/Wanger Funds since December 2015. |
|
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; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013. |
|
Ryan C. Larrenaga
225 Franklin Street Boston, MA 02110 Born 1970 |
Senior Vice President (2017), Chief Legal Officer (2017), and Secretary (2015) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously Vice President and Group Counsel, August 2011 - August 2018); officer of Columbia Funds and affiliated funds since 2005. |
|
Daniel J. Beckman
225 Franklin Street Boston, MA 02110 Born 1962 |
Senior Vice President (2020) | Vice President – Head of North America Product, Columbia Management Investment Advisers, LLC (since April 2015); previously, Senior Vice President of Investment Product Management, Fidelity Financial Advisor Solutions, a division of Fidelity Investments (January 2012 – March 2015). |
|
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. |
|
Columbia Large Cap Growth Opportunity Fund | Annual Report 2020
|
33 |
TRUSTEES AND OFFICERS (continued)
Fund officers (continued)
Fund officers (continued)
|
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 |
|
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. |
| 34 | Columbia Large Cap Growth Opportunity Fund | Annual Report 2020 |
[THIS PAGE INTENTIONALLY LEFT
BLANK]
Columbia Large Cap Growth Opportunity Fund
P.O. Box 219104
Kansas City, MO 64121-9104
Please read and consider the
investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments
(Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved.
© 2020 Columbia Management Investment
Advisers, LLC.
columbiathreadneedleus.com/investor/
ANN186_02_K01_(04/20)
Annual Report
February 29, 2020
February 29, 2020
Columbia Mid Cap
Index Fund
Beginning on January 1, 2021, as
permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports like this one will no longer be sent by mail, unless you
specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (columbiathreadneedleus.com/investor/), and each time a report is posted you will be notified
by mail and provided with a website address to access the report.
If you have already elected to
receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically
at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with the Fund, by calling 800.345.6611 or by enrolling in “eDelivery” by logging
into your account at columbiathreadneedleus.com/investor/.
You may elect to receive all future
reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you
invest directly with the Fund, you can call 800.345.6611 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive paper reports will apply to all Columbia
Funds held in your account if you invest through a financial intermediary or all Columbia Funds held with the fund complex if you invest directly with the Fund.
Not FDIC Insured • No bank
guarantee • May lose value
Table of Contents
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Columbia Mid Cap Index Fund (the
Fund) mails one shareholder report to each shareholder address, unless such shareholder elected to receive shareholder reports from the Fund electronically. If you would like more than one report, please call
shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and
procedures
The policy of the Board of Trustees
is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by
calling 800.345.6611; contacting your financial intermediary; visiting columbiathreadneedleus.com/investor/; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding
how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting
columbiathreadneedleus.com/investor/, or searching the website of the SEC at sec.gov.
Quarterly schedule of
investments
The Fund files a complete schedule
of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT, and for reporting periods ended prior to March 31, 2019, on Form N-Q. The Fund’s Form N-Q and Form N-PORT
filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q or Form N-PORT, can also be obtained without charge, upon request, by calling
800.345.6611.
Additional Fund information
For more information about the
Fund, please visit columbiathreadneedleus.com/investor/ or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC (the
Investment Manager)
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors,
Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 219104
Kansas City, MO 64121-9104
Columbia Mid Cap Index Fund | Annual
Report 2020
Fund at a Glance
Investment objective
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.
Portfolio management
Christopher Lo, CFA
Lead Portfolio Manager
Managed Fund since 2014
Vadim Shteyn
Portfolio Manager
Managed Fund since 2011
Morningstar style boxTM
The Morningstar Style Box is based on a fund’s portfolio holdings. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows
investment style (value, blend, or growth). Information shown is based on the most recent data provided by Morningstar.
© 2020 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or
distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
All results shown assume
reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the
effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance
results would have been lower.
The performance information shown
represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than
their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial
intermediary, visiting columbiathreadneedleus.com/investor/ or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investor/investment-products/mutual-funds/appended-performance for more information. |
The S&P MidCap 400 Index is a
market-value weighted index that tracks the performance of 400 mid-cap U.S. companies.
Indices are not available for
investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Fund performance may be significantly
negatively impacted by the economic impact of the COVID-19 pandemic. The COVID-19 pandemic has adversely impacted economies and capital markets around the world in ways that will likely continue and may change in
unforeseen ways for an indeterminate period. The COVID-19 pandemic may exacerbate pre-existing political, social and economic risks in certain countries and globally.
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (February 28, 2010 — February 29, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Mid Cap Index Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions
or on the redemption of Fund shares.
| Portfolio breakdown (%) (at February 29, 2020) | |
| Common Stocks | 99.4 |
| Money Market Funds | 0.6 |
| Total | 100.0 |
Percentages indicated are based
upon total investments excluding investments in derivatives, if any. The Fund’s portfolio composition is subject to change.
Percentages indicated are based
upon total equity investments. The Fund’s portfolio composition is subject to change.
| 4 | Columbia Mid Cap Index Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that ended
February 29, 2020, the Fund’s Class A shares returned -3.88%. The Fund closely tracked its benchmark, the unmanaged S&P Mid Cap 400 Index, which returned -3.39% for the same period. Mutual funds, unlike
unmanaged indices, incur operating expenses.
U.S. equity markets posted
divergent results amid extreme volatility
The 12 months ended February 29,
2020 proved to be volatile for U.S. equities. The annual period began with mixed results, as large cap stocks wobbled modestly higher, while mid-cap and small-cap companies posted negative absolute returns on fears
that economic growth was potentially slowing and the impact of U.S.-China trade headlines might be greater than the U.S. Administration was stating. Through the second quarter of 2019, large-cap stocks continued to
better weather the “risk off” sentiment, or heightened risk aversion, that dominated these months, as did growth stocks across the capitalization spectrum. Speculation around the market’s hoped-for
interest rate cuts from the U.S. Federal Reserve (Fed) contributed to frequent swings in investor optimism.
Day-to-day sentiment about the
state of U.S.-China trade relations remained a major factor influencing the U.S. equity markets going into the second half of 2019. Also adding to the list of worries were U.S. recession fears based on weak
manufacturing data, uncertainties about global economic growth, several geopolitical hotspots, domestic political turmoil around the impeachment of the U.S. President and the then-diverse and differentiated Democratic
presidential candidate campaigns. Toward the end of 2019, however, investor optimism soared. Hopeful expectations surrounding a “Phase 1” trade deal between the U.S. and China, an accommodative Fed and the
seemingly persistent resilience of the American consumer led the S&P 500 Index to its best fourth quarter since 2013. Mid-cap and small-cap stocks lagged their large-cap counterparts but also posted a strong
fourth calendar quarter.
The optimism seen at the end of the
2019 calendar year continued into the start of the new decade but was derailed quickly by the outbreak of the highly contagious and novel coronavirus first identified in Wuhan, Hubei province in China. As the impact
of the coronavirus became more pronounced and fears of a severe pandemic that could cause a global recession grew, markets around the world, including the U.S., sold off dramatically. The S&P 500 Index lost almost
11.5% in the last week of February 2020 alone, its biggest weekly decline since October 2008. Mid-cap and small-cap companies struggled similarly.
Still, even with the sharp decline
in February 2020, the S&P 500 Index ended the annual period up 8.19%. However, amid heightened volatility and risk aversion, mid-cap and small-cap stocks significantly underperformed large-cap stocks, with the
S&P Mid Cap 400 Index and the S&P Small Cap 600 Index posting returns of -3.39% and -7.68%, respectively, for the same annual period.
S&P Mid Cap 400 Index returns
hampered most by energy sector
Only two of the eleven sectors of
the S&P Mid Cap 400 Index posted a positive return during the 12 months that ended February 29, 2020. In terms of total return, information technology and real estate were the best relative performers, followed by
consumer discretionary, which posted a modest negative absolute return. On the basis of impact, which takes weighting and total returns into account, information technology and real estate were again the best relative
performers, followed by industrials, which posted a modest negative absolute return. The top performing industries on the basis of total return were air freight and logistics; distributors; aerospace and defense;
household durables; and water utilities, each of which posted a positive double-digit return during the annual period.
Conversely, energy was by far the
weakest sector from both a total return perspective and on the basis of impact. Materials and communication services also posted weak total returns. Financials and materials were the next weakest sectors on the basis
of impact. The worst performing industries for the annual period on the basis of total return were energy equipment and services; oil, gas and consumable fuels; personal products; interactive media and services; and
multiline retail.
Top individual contributors within
the S&P Mid Cap 400 Index during the annual period included local government-focused software provider Tyler Technologies, Inc.; aerospace and defense company Teledyne Technologies, Inc.; technology services
provider Fair Isaac Corp.; quick-service restaurant owner and franchiser Domino’s Pizza, Inc.; and homebuilder and
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
mortgage-related services provider NVR, Inc.. Top
detractors were chemicals manufacturer Chemours Co. LLC; utilities company UGI Corp.; integrated natural gas company EQT Corp.; database management company Teradata Corp.; and oil and gas exploration and production
company Chesapeake Energy Corp.
Financials was the largest sector
by weighting in the S&P Mid Cap 400 Index, with a weighting of 16.45% as of February 29, 2020. As always, each sector and stock in the S&P Mid Cap 400 Index was represented in the Fund with approximately the
same weighting as in the Index and therefore had a similar effect.
Index additions and deletions
drove Fund portfolio changes
During the annual period, there
were 52 additions and 52 deletions to the Index and the Fund’s portfolio. Among those stocks added to the Index and Fund were XPO Logistics, Inc., Trex Company, Inc., Brighthouse Financial Inc., PS Business
Parks, Inc., Fluor Corp., Mattel, Inc., Foot Locker, Inc., GrubHub, Inc., Park Hotels & Resorts, Inc., Etsy, Inc., Owens Corning, Pilgrim’s Pride Corp., Repligen Corp., Nektar Therapeutics, SolarEdge
Technologies, Inc., BJ’s Wholesale Club Holdings, Inc., Choice Hotels International, Inc., Columbia Sportswear Co., TripAdvisor, Inc., CIT Group, Inc, and Generac Holdings, Inc. Deletions included
Sotheby’s, Big Lots, Inc., Cars.com Inc, Diamond Offshore Drilling, Inc., Esterline Technologies Corp., IDEX Corp., Inogen, Inc., International Speedway Corp., Live Nation Entertainment, Inc., Medidata
Solutions, Inc., Mallinckrodt PLC, NVR, Old Dominion Freight Line, Inc., Pitney Bowes, Inc., Realogy Holdings Corp., Range Resources Corp., Signet Jewelers Ltd., Tanger Factory Outlet Centers, Inc., Tupperware Brands
Corp., WR Berkley Corp. and Zebra Technologies Corp.
We do not anticipate any changes in
the portfolio beyond the customary quarterly rebalancings and stock substitutions we make to align the Fund with the S&P Mid Cap 400 Index.
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Investments in mid-cap companies involve risks and volatility greater than investments in larger, more established companies. The Fund’s net value will generally decline when the performance of its
targeted index declines. Investing in derivatives is a specialized activity that involves special risks, which may result in significant losses. See the Fund’s prospectus for more information on these and other risks.
The views expressed in this report
reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and
results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update
such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf
of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
| 6 | Columbia Mid Cap Index Fund | Annual Report 2020 |
Understanding Your Fund’s
Expenses
(Unaudited)
(Unaudited)
As an investor, you incur two types
of costs. There are shareholder transaction costs, which may include redemption fees. There are also ongoing fund costs, which generally include management fees, distribution and/or service fees, and other fund
expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual
funds.
Analyzing your Fund’s
expenses
To illustrate these ongoing
costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment
of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the
“Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the
expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under
the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the
Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or
the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are
required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the
hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are
meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
Expenses paid during the period
are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal
half year and divided by 366.
Expenses do not include fees and
expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment
Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
7 |
Portfolio of Investments
February 29, 2020
February 29, 2020
(Percentages represent value of
investments compared to net assets)
Investments in securities
| Common Stocks 99.4% | ||
| Issuer | Shares | Value ($) |
| Communication Services 2.0% | ||
| Entertainment 0.3% | ||
| Cinemark Holdings, Inc. | 215,063 | 5,583,035 |
| World Wrestling Entertainment, Inc., Class A | 95,740 | 4,477,760 |
| Total | 10,060,795 | |
| Interactive Media & Services 0.3% | ||
| TripAdvisor, Inc. | 211,960 | 4,970,462 |
| Yelp, Inc.(a) | 128,880 | 4,030,078 |
| Total | 9,000,540 | |
| Media 1.3% | ||
| AMC Networks, Inc., Class A(a) | 88,914 | 2,756,334 |
| Cable One, Inc. | 10,134 | 15,940,985 |
| John Wiley & Sons, Inc., Class A | 88,254 | 3,282,166 |
| Meredith Corp. | 81,098 | 2,136,932 |
| New York Times Co. (The), Class A | 289,999 | 10,863,363 |
| TEGNA, Inc. | 437,570 | 6,266,002 |
| Total | 41,245,782 | |
| Wireless Telecommunication Services 0.1% | ||
| Telephone & Data Systems, Inc. | 197,305 | 3,973,723 |
| Total Communication Services | 64,280,840 | |
| Consumer Discretionary 13.8% | ||
| Auto Components 1.4% | ||
| Adient PLC(a) | 175,610 | 4,202,347 |
| Dana, Inc. | 290,350 | 4,175,233 |
| Delphi Technologies PLC(a) | 173,640 | 2,451,797 |
| Gentex Corp. | 510,326 | 13,625,704 |
| Goodyear Tire & Rubber Co. (The) | 469,160 | 4,543,815 |
| Lear Corp. | 111,010 | 12,344,312 |
| Visteon Corp.(a) | 56,410 | 3,668,906 |
| Total | 45,012,114 | |
| Automobiles 0.3% | ||
| Thor Industries, Inc. | 111,354 | 8,397,205 |
| Distributors 0.5% | ||
| Pool Corp. | 80,770 | 17,039,239 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Diversified Consumer Services 1.1% | ||
| Adtalem Global Education, Inc.(a) | 108,928 | 3,362,607 |
| Graham Holdings Co., Class B | 8,772 | 4,411,263 |
| Grand Canyon Education, Inc.(a) | 97,290 | 7,849,357 |
| Service Corp. International | 368,731 | 17,621,655 |
| WW International, Inc.(a) | 93,710 | 2,811,300 |
| Total | 36,056,182 | |
| Hotels, Restaurants & Leisure 4.5% | ||
| Boyd Gaming Corp. | 161,470 | 4,312,864 |
| Brinker International, Inc. | 75,389 | 2,589,612 |
| Caesars Entertainment Corp.(a) | 1,125,950 | 14,310,825 |
| Cheesecake Factory, Inc. (The) | 82,835 | 2,951,411 |
| Choice Hotels International, Inc. | 64,080 | 5,849,222 |
| Churchill Downs, Inc. | 71,520 | 8,985,773 |
| Cracker Barrel Old Country Store, Inc. | 48,540 | 6,957,238 |
| Domino’s Pizza, Inc. | 78,040 | 26,491,459 |
| Dunkin’ Brands Group, Inc. | 167,120 | 11,116,822 |
| Eldorado Resorts, Inc.(a) | 131,790 | 6,613,222 |
| Jack in the Box, Inc. | 47,710 | 3,285,311 |
| Marriott Vacations Worldwide Corp. | 75,479 | 7,304,858 |
| Papa John’s International, Inc. | 44,470 | 2,561,917 |
| Penn National Gaming, Inc.(a) | 219,810 | 6,499,782 |
| Scientific Games Corp., Class A(a) | 109,110 | 1,990,166 |
| Six Flags Entertainment Corp. | 158,580 | 4,008,902 |
| Texas Roadhouse, Inc. | 131,620 | 7,399,676 |
| Wendy’s Co. (The) | 371,268 | 7,009,540 |
| Wyndham Destinations, Inc. | 182,980 | 7,300,902 |
| Wyndham Hotels & Resorts, Inc. | 191,980 | 9,781,381 |
| Total | 147,320,883 | |
| Household Durables 1.2% | ||
| Helen of Troy Ltd.(a) | 50,760 | 8,355,096 |
| KB Home | 172,826 | 5,632,399 |
| Taylor Morrison Home Corp., Class A(a) | 266,820 | 6,008,786 |
| Tempur Sealy International, Inc.(a) | 91,664 | 6,851,884 |
| Toll Brothers, Inc. | 243,516 | 9,017,398 |
| TRI Pointe Group, Inc.(a) | 280,890 | 4,306,044 |
| Total | 40,171,607 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 8 | Columbia Mid Cap Index Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Internet & Direct Marketing Retail 0.7% | ||
| Etsy, Inc.(a) | 239,030 | 13,818,324 |
| GrubHub, Inc.(a) | 184,480 | 8,875,333 |
| Total | 22,693,657 | |
| Leisure Products 0.8% | ||
| Brunswick Corp. | 164,560 | 8,754,592 |
| Mattel, Inc.(a) | 699,440 | 8,246,398 |
| Polaris, Inc. | 116,004 | 9,573,810 |
| Total | 26,574,800 | |
| Multiline Retail 0.2% | ||
| Dillard’s, Inc., Class A | 19,890 | 1,119,608 |
| Ollie’s Bargain Outlet Holdings, Inc.(a) | 110,320 | 5,611,979 |
| Total | 6,731,587 | |
| Specialty Retail 2.1% | ||
| Aaron’s, Inc. | 135,469 | 5,327,996 |
| American Eagle Outfitters, Inc. | 320,404 | 4,126,804 |
| AutoNation, Inc.(a) | 118,780 | 5,075,469 |
| Bed Bath & Beyond, Inc. | 255,330 | 2,760,117 |
| Dick’s Sporting Goods, Inc. | 128,290 | 4,671,039 |
| Five Below, Inc.(a) | 112,310 | 10,888,454 |
| Foot Locker, Inc. | 215,930 | 7,827,462 |
| Murphy U.S.A., Inc.(a) | 58,330 | 5,687,175 |
| Restoration Hardware Holdings, Inc.(a) | 32,960 | 5,978,944 |
| Sally Beauty Holdings, Inc.(a) | 234,670 | 2,919,295 |
| Urban Outfitters, Inc.(a) | 142,310 | 3,345,708 |
| Williams-Sonoma, Inc. | 156,568 | 9,768,278 |
| Total | 68,376,741 | |
| Textiles, Apparel & Luxury Goods 1.0% | ||
| Carter’s, Inc. | 89,062 | 8,146,501 |
| Columbia Sportswear Co. | 58,580 | 4,762,554 |
| Deckers Outdoor Corp.(a) | 56,442 | 9,809,620 |
| Skechers U.S.A., Inc., Class A(a) | 270,150 | 8,936,562 |
| Total | 31,655,237 | |
| Total Consumer Discretionary | 450,029,252 | |
| Consumer Staples 3.1% | ||
| Beverages 0.2% | ||
| Boston Beer Co., Inc. (The), Class A(a) | 18,590 | 6,892,986 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Food & Staples Retailing 0.6% | ||
| BJ’s Wholesale Club Holdings, Inc.(a) | 246,450 | 4,746,627 |
| Casey’s General Stores, Inc. | 74,200 | 12,096,084 |
| Sprouts Farmers Market, Inc.(a) | 238,330 | 3,808,514 |
| Total | 20,651,225 | |
| Food Products 1.9% | ||
| Darling Ingredients, Inc.(a) | 330,260 | 8,487,682 |
| Flowers Foods, Inc. | 388,291 | 8,359,905 |
| Hain Celestial Group, Inc. (The)(a) | 162,070 | 3,845,921 |
| Ingredion, Inc. | 134,686 | 11,219,344 |
| Lancaster Colony Corp. | 39,925 | 5,767,166 |
| Pilgrim’s Pride Corp.(a) | 105,730 | 2,237,247 |
| Post Holdings, Inc.(a) | 134,081 | 13,577,042 |
| Sanderson Farms, Inc. | 39,770 | 4,913,981 |
| Tootsie Roll Industries, Inc. | 33,849 | 1,085,876 |
| TreeHouse Foods, Inc.(a) | 113,400 | 4,321,674 |
| Total | 63,815,838 | |
| Household Products 0.2% | ||
| Energizer Holdings, Inc. | 129,783 | 5,579,371 |
| Personal Products 0.2% | ||
| Edgewell Personal Care Co.(a) | 109,353 | 3,319,957 |
| Nu Skin Enterprises, Inc., Class A | 112,060 | 2,747,711 |
| Total | 6,067,668 | |
| Total Consumer Staples | 103,007,088 | |
| Energy 1.4% | ||
| Energy Equipment & Services 0.3% | ||
| Apergy Corp.(a) | 156,260 | 2,906,436 |
| Core Laboratories NV | 89,520 | 2,402,717 |
| Patterson-UTI Energy, Inc. | 392,453 | 2,248,756 |
| Transocean Ltd.(a) | 1,160,270 | 3,886,904 |
| Total | 11,444,813 | |
| Oil, Gas & Consumable Fuels 1.1% | ||
| Antero Midstream Corp. | 599,180 | 2,612,425 |
| Chesapeake Energy Corp.(a) | 2,365,320 | 650,463 |
| CNX Resources Corp.(a) | 376,410 | 1,998,737 |
| EQT Corp. | 515,720 | 3,027,276 |
| Equitrans Midstream Corp. | 411,120 | 2,902,507 |
| Matador Resources Co.(a) | 221,190 | 2,132,272 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
9 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Murphy Oil Corp. | 301,330 | 5,680,070 |
| PBF Energy, Inc., Class A | 205,500 | 4,601,145 |
| World Fuel Services Corp. | 131,920 | 3,730,698 |
| WPX Energy, Inc.(a) | 840,710 | 7,843,824 |
| Total | 35,179,417 | |
| Total Energy | 46,624,230 | |
| Financials 16.4% | ||
| Banks 6.9% | ||
| Associated Banc-Corp. | 321,449 | 5,442,132 |
| BancorpSouth Bank | 193,570 | 4,736,658 |
| Bank of Hawaii Corp. | 81,246 | 6,046,327 |
| Bank OZK | 243,870 | 6,191,859 |
| Cathay General Bancorp | 152,755 | 4,701,799 |
| CIT Group, Inc. | 191,090 | 7,588,184 |
| Commerce Bancshares, Inc. | 209,216 | 12,770,545 |
| Cullen/Frost Bankers, Inc. | 114,859 | 9,003,797 |
| East West Bancorp, Inc. | 293,777 | 11,380,921 |
| First Financial Bankshares, Inc. | 274,050 | 7,876,197 |
| First Horizon National Corp. | 627,750 | 8,367,907 |
| FNB Corp. | 655,480 | 6,613,793 |
| Fulton Financial Corp. | 331,085 | 4,784,178 |
| Hancock Whitney Corp. | 175,941 | 5,894,023 |
| Home Bancshares, Inc. | 313,010 | 5,246,048 |
| International Bancshares Corp. | 115,742 | 3,946,802 |
| PacWest Bancorp | 241,740 | 7,648,654 |
| Pinnacle Financial Partners, Inc. | 145,190 | 7,642,802 |
| Prosperity Bancshares, Inc. | 190,445 | 12,302,747 |
| Signature Bank | 108,911 | 13,624,766 |
| Sterling Bancorp | 407,590 | 6,757,842 |
| Synovus Financial Corp. | 295,635 | 8,579,328 |
| TCF Financial Corp. | 309,474 | 11,277,233 |
| Texas Capital Bancshares, Inc.(a) | 101,510 | 4,779,091 |
| Trustmark Corp. | 129,630 | 3,487,047 |
| UMB Financial Corp. | 87,150 | 5,067,773 |
| Umpqua Holdings Corp. | 444,250 | 6,837,007 |
| United Bankshares, Inc. | 204,820 | 5,915,202 |
| Valley National Bancorp | 790,161 | 7,348,497 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Webster Financial Corp. | 185,655 | 7,049,320 |
| Wintrust Financial Corp. | 115,130 | 6,149,093 |
| Total | 225,057,572 | |
| Capital Markets 2.8% | ||
| Affiliated Managers Group, Inc. | 99,400 | 7,476,868 |
| Eaton Vance Corp. | 228,252 | 9,417,678 |
| Evercore, Inc., Class A | 78,850 | 5,252,987 |
| Factset Research Systems, Inc. | 76,544 | 20,359,939 |
| Federated Hermes, Inc., Class B | 193,810 | 5,591,418 |
| Interactive Brokers Group, Inc., Class A | 154,830 | 7,911,813 |
| Janus Henderson Group PLC | 313,927 | 6,655,252 |
| Legg Mason, Inc. | 164,600 | 8,200,372 |
| SEI Investments Co. | 254,615 | 13,929,987 |
| Stifel Financial Corp. | 137,930 | 7,508,909 |
| Total | 92,305,223 | |
| Consumer Finance 0.7% | ||
| FirstCash, Inc. | 86,100 | 6,622,812 |
| LendingTree, Inc.(a) | 15,470 | 4,266,936 |
| Navient Corp. | 392,400 | 4,406,652 |
| SLM Corp. | 851,660 | 8,831,714 |
| Total | 24,128,114 | |
| Diversified Financial Services 0.3% | ||
| Jefferies Financial Group, Inc. | 482,550 | 9,511,060 |
| Insurance 5.2% | ||
| Alleghany Corp.(a) | 29,038 | 19,520,795 |
| American Financial Group, Inc. | 150,987 | 13,954,219 |
| Brighthouse Financial, Inc.(a) | 220,420 | 7,899,853 |
| Brown & Brown, Inc. | 471,756 | 20,290,226 |
| CNO Financial Group, Inc. | 304,900 | 4,884,498 |
| First American Financial Corp. | 226,615 | 12,939,716 |
| Genworth Financial, Inc., Class A(a) | 1,015,350 | 3,959,865 |
| Hanover Insurance Group, Inc. (The) | 79,470 | 9,420,374 |
| Kemper Corp. | 126,381 | 8,700,068 |
| Mercury General Corp. | 54,721 | 2,369,967 |
| Old Republic International Corp. | 575,656 | 11,351,936 |
| Primerica, Inc. | 83,435 | 9,289,653 |
| Reinsurance Group of America, Inc. | 126,309 | 15,413,487 |
| RenaissanceRe Holdings Ltd. | 89,090 | 15,180,936 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Mid Cap Index Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| RLI Corp. | 80,500 | 6,470,590 |
| Selective Insurance Group, Inc. | 119,830 | 6,684,117 |
| Total | 168,330,300 | |
| Thrifts & Mortgage Finance 0.5% | ||
| New York Community Bancorp, Inc. | 942,804 | 10,191,711 |
| Washington Federal, Inc. | 158,049 | 4,739,890 |
| Total | 14,931,601 | |
| Total Financials | 534,263,870 | |
| Health Care 10.2% | ||
| Biotechnology 1.0% | ||
| Arrowhead Pharmaceuticals, Inc.(a) | 201,950 | 7,140,952 |
| Exelixis, Inc.(a) | 612,960 | 11,394,927 |
| Ligand Pharmaceuticals, Inc.(a) | 35,430 | 3,316,248 |
| United Therapeutics Corp.(a) | 88,518 | 9,113,813 |
| Total | 30,965,940 | |
| Health Care Equipment & Supplies 3.6% | ||
| Avanos Medical, Inc.(a) | 96,690 | 3,133,723 |
| Cantel Medical Corp. | 75,590 | 4,769,729 |
| Globus Medical, Inc., Class A(a) | 155,280 | 7,023,314 |
| Haemonetics Corp.(a) | 102,240 | 11,075,659 |
| Hill-Rom Holdings, Inc. | 134,684 | 12,936,398 |
| ICU Medical, Inc.(a) | 38,790 | 7,595,470 |
| Integra LifeSciences Holdings Corp.(a) | 143,770 | 7,490,417 |
| LivaNova PLC(a) | 97,640 | 6,807,461 |
| Masimo Corp.(a) | 98,970 | 16,164,770 |
| NuVasive, Inc.(a) | 105,050 | 6,913,341 |
| Penumbra, Inc.(a) | 64,800 | 10,747,728 |
| West Pharmaceutical Services, Inc. | 149,260 | 22,472,586 |
| Total | 117,130,596 | |
| Health Care Providers & Services 2.5% | ||
| Acadia Healthcare Co., Inc.(a) | 178,680 | 5,288,928 |
| Amedisys, Inc.(a) | 65,070 | 11,322,831 |
| Chemed Corp. | 32,300 | 13,489,126 |
| Encompass Health Corp. | 198,910 | 14,886,424 |
| HealthEquity, Inc.(a) | 142,990 | 10,150,860 |
| Mednax, Inc.(a) | 170,062 | 2,906,360 |
| Molina Healthcare, Inc.(a) | 126,490 | 15,501,349 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Patterson Companies, Inc. | 173,790 | 4,134,464 |
| Tenet Healthcare Corp.(a) | 209,590 | 5,508,025 |
| Total | 83,188,367 | |
| Health Care Technology 0.1% | ||
| Allscripts Healthcare Solutions, Inc.(a) | 327,543 | 2,469,674 |
| Life Sciences Tools & Services 2.2% | ||
| Bio-Rad Laboratories, Inc., Class A(a) | 43,591 | 15,344,904 |
| Bio-Techne Corp. | 76,881 | 14,522,052 |
| Charles River Laboratories International, Inc.(a) | 98,528 | 15,328,001 |
| Pra Health Sciences, Inc.(a) | 127,590 | 12,018,978 |
| Repligen Corp.(a) | 94,520 | 8,090,912 |
| Syneos Health, Inc.(a) | 125,630 | 7,958,660 |
| Total | 73,263,507 | |
| Pharmaceuticals 0.8% | ||
| Catalent, Inc.(a) | 312,190 | 16,087,151 |
| Nektar Therapeutics(a) | 354,890 | 7,385,261 |
| Prestige Consumer Healthcare, Inc.(a) | 101,340 | 3,786,062 |
| Total | 27,258,474 | |
| Total Health Care | 334,276,558 | |
| Industrials 15.8% | ||
| Aerospace & Defense 1.6% | ||
| Axon Enterprise, Inc.(a) | 119,710 | 9,261,963 |
| Curtiss-Wright Corp. | 86,120 | 10,329,233 |
| Mercury Systems, Inc.(a) | 112,040 | 8,230,458 |
| Teledyne Technologies, Inc.(a) | 73,570 | 24,816,632 |
| Total | 52,638,286 | |
| Air Freight & Logistics 0.4% | ||
| XPO Logistics, Inc.(a) | 186,200 | 13,773,214 |
| Airlines 0.3% | ||
| JetBlue Airways Corp.(a) | 582,396 | 9,190,209 |
| Building Products 1.3% | ||
| Lennox International, Inc. | 70,732 | 16,136,091 |
| Owens Corning | 219,460 | 12,397,295 |
| Resideo Technologies, Inc.(a) | 247,770 | 2,663,528 |
| Trex Company, Inc.(a) | 117,690 | 11,257,049 |
| Total | 42,453,963 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Commercial Services & Supplies 1.9% | ||
| Brink’s Co. (The) | 100,920 | 7,901,027 |
| Clean Harbors, Inc.(a) | 103,580 | 7,200,882 |
| Deluxe Corp. | 84,932 | 2,828,236 |
| Healthcare Services Group, Inc. | 149,520 | 4,117,781 |
| Herman Miller, Inc. | 119,139 | 4,079,319 |
| HNI Corp. | 86,395 | 2,836,348 |
| KAR Auction Services, Inc. | 259,780 | 5,000,765 |
| MSA Safety, Inc. | 71,896 | 8,747,586 |
| Stericycle, Inc.(a) | 183,840 | 10,557,931 |
| Tetra Tech, Inc. | 110,120 | 8,905,404 |
| Total | 62,175,279 | |
| Construction & Engineering 1.2% | ||
| AECOM(a) | 316,895 | 14,241,261 |
| Dycom Industries, Inc.(a) | 63,590 | 1,879,720 |
| EMCOR Group, Inc. | 113,280 | 8,713,498 |
| Fluor Corp. | 282,780 | 2,635,510 |
| MasTec, Inc.(a) | 121,650 | 5,970,582 |
| Valmont Industries, Inc. | 43,421 | 5,046,389 |
| Total | 38,486,960 | |
| Electrical Equipment 1.7% | ||
| Acuity Brands, Inc. | 79,930 | 8,221,600 |
| EnerSys | 85,310 | 5,253,390 |
| Generac Holdings, Inc.(a) | 126,170 | 12,994,248 |
| Hubbell, Inc. | 109,715 | 14,618,427 |
| nVent Electric PLC | 313,930 | 7,537,459 |
| Regal Beloit Corp. | 82,594 | 6,412,598 |
| Total | 55,037,722 | |
| Industrial Conglomerates 0.5% | ||
| Carlisle Companies, Inc. | 114,324 | 16,610,134 |
| Machinery 4.3% | ||
| AGCO Corp. | 126,451 | 7,641,434 |
| Colfax Corp.(a) | 168,660 | 5,645,050 |
| Crane Co. | 102,845 | 6,988,318 |
| Donaldson Co., Inc. | 255,315 | 11,509,600 |
| Graco, Inc. | 336,456 | 16,594,010 |
| ITT, Inc. | 176,922 | 10,641,858 |
| Kennametal, Inc. | 167,146 | 4,646,659 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Lincoln Electric Holdings, Inc. | 123,355 | 10,101,541 |
| Nordson Corp. | 103,216 | 14,997,285 |
| Oshkosh Corp. | 137,290 | 9,905,474 |
| Terex Corp. | 132,325 | 2,912,473 |
| Timken Co. (The) | 136,755 | 6,132,094 |
| Toro Co. (The) | 215,050 | 15,361,021 |
| Trinity Industries, Inc. | 197,996 | 4,029,219 |
| Woodward, Inc. | 113,757 | 11,739,722 |
| Total | 138,845,758 | |
| Marine 0.2% | ||
| Kirby Corp.(a) | 120,938 | 7,709,797 |
| Professional Services 0.9% | ||
| ASGN, Inc.(a) | 106,520 | 5,401,629 |
| FTI Consulting, Inc.(a) | 75,910 | 8,546,707 |
| Insperity, Inc. | 75,850 | 5,102,430 |
| ManpowerGroup, Inc. | 118,947 | 9,032,835 |
| Total | 28,083,601 | |
| Road & Rail 0.8% | ||
| Avis Budget Group, Inc.(a) | 114,680 | 3,712,765 |
| Knight-Swift Transportation Holdings, Inc. | 247,860 | 7,916,649 |
| Landstar System, Inc. | 79,608 | 8,038,020 |
| Ryder System, Inc. | 107,510 | 4,089,680 |
| Werner Enterprises, Inc. | 89,354 | 3,002,294 |
| Total | 26,759,408 | |
| Trading Companies & Distributors 0.7% | ||
| GATX Corp. | 70,808 | 5,064,896 |
| MSC Industrial Direct Co., Inc., Class A | 90,870 | 5,617,583 |
| NOW, Inc.(a) | 219,490 | 1,938,097 |
| Watsco, Inc. | 65,863 | 10,339,174 |
| Total | 22,959,750 | |
| Total Industrials | 514,724,081 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 12 | Columbia Mid Cap Index Fund | Annual Report 2020 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Information Technology 15.7% | ||
| Communications Equipment 1.2% | ||
| Ciena Corp.(a) | 312,072 | 11,999,168 |
| InterDigital, Inc. | 62,804 | 3,321,704 |
| Lumentum Holdings, Inc.(a) | 155,740 | 12,119,687 |
| Netscout Systems, Inc.(a) | 132,860 | 3,414,502 |
| Viasat, Inc.(a) | 116,340 | 6,689,550 |
| Total | 37,544,611 | |
| Electronic Equipment, Instruments & Components 3.6% | ||
| Arrow Electronics, Inc.(a) | 164,306 | 11,018,360 |
| Avnet, Inc. | 203,670 | 6,248,596 |
| Belden, Inc. | 77,950 | 3,112,543 |
| Cognex Corp. | 344,760 | 15,355,610 |
| Coherent, Inc.(a) | 48,720 | 6,270,751 |
| II-VI, Inc.(a) | 175,940 | 5,223,659 |
| Jabil, Inc. | 280,240 | 8,981,692 |
| Littelfuse, Inc. | 49,140 | 7,846,675 |
| National Instruments Corp. | 237,956 | 9,584,868 |
| SYNNEX Corp. | 82,430 | 10,306,223 |
| Tech Data Corp.(a) | 71,464 | 10,175,759 |
| Trimble Navigation Ltd.(a) | 502,588 | 19,842,174 |
| Vishay Intertechnology, Inc. | 266,988 | 4,992,676 |
| Total | 118,959,586 | |
| IT Services 2.4% | ||
| CACI International, Inc., Class A(a) | 50,520 | 12,378,410 |
| CoreLogic, Inc. | 160,417 | 7,278,119 |
| KBR, Inc. | 285,887 | 7,421,627 |
| LiveRamp Holdings, Inc.(a) | 136,563 | 4,839,793 |
| MAXIMUS, Inc. | 129,070 | 8,133,991 |
| Perspecta, Inc. | 277,400 | 6,926,678 |
| Sabre Corp. | 552,520 | 7,522,560 |
| Science Applications International Corp. | 98,984 | 7,931,588 |
| WEX, Inc.(a) | 87,327 | 16,351,108 |
| Total | 78,783,874 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Semiconductors & Semiconductor Equipment 4.2% | ||
| Cabot Microelectronics Corp. | 58,710 | 8,177,129 |
| Cirrus Logic, Inc.(a) | 116,600 | 8,003,424 |
| Cree, Inc.(a) | 217,288 | 9,719,292 |
| Cypress Semiconductor Corp. | 745,032 | 17,202,789 |
| First Solar, Inc.(a) | 153,100 | 7,007,387 |
| MKS Instruments, Inc. | 109,970 | 11,017,894 |
| Monolithic Power Systems, Inc. | 81,500 | 12,929,160 |
| Semtech Corp.(a) | 133,640 | 5,277,444 |
| Silicon Laboratories, Inc.(a) | 87,502 | 7,759,677 |
| SolarEdge Technologies, Inc.(a) | 98,060 | 12,230,043 |
| Synaptics, Inc.(a) | 67,510 | 4,459,035 |
| Teradyne, Inc. | 338,060 | 19,864,406 |
| Universal Display Corp. | 85,530 | 13,581,309 |
| Total | 137,228,989 | |
| Software 4.1% | ||
| ACI Worldwide, Inc.(a) | 233,198 | 6,499,228 |
| Blackbaud, Inc. | 99,220 | 6,727,116 |
| CDK Global, Inc. | 244,900 | 11,270,298 |
| Ceridian HCM Holding, Inc.(a) | 203,320 | 14,380,824 |
| CommVault Systems, Inc.(a) | 84,835 | 3,537,619 |
| Fair Isaac Corp.(a) | 58,422 | 21,968,425 |
| j2 Global, Inc. | 93,390 | 8,155,749 |
| LogMeIn, Inc. | 98,480 | 8,393,943 |
| Manhattan Associates, Inc.(a) | 128,910 | 8,683,378 |
| PTC, Inc.(a) | 209,690 | 15,842,079 |
| Teradata Corp.(a) | 226,950 | 4,525,383 |
| Tyler Technologies, Inc.(a) | 78,650 | 24,644,977 |
| Total | 134,629,019 | |
| Technology Hardware, Storage & Peripherals 0.2% | ||
| NCR Corp.(a) | 257,410 | 6,486,732 |
| Total Information Technology | 513,632,811 | |
| Materials 5.7% | ||
| Chemicals 2.4% | ||
| Ashland Global Holdings, Inc. | 121,500 | 8,692,110 |
| Cabot Corp. | 114,939 | 4,296,420 |
| Chemours Co. LLC (The) | 329,840 | 4,901,422 |
| Ingevity Corp.(a) | 84,370 | 3,800,025 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
13 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Minerals Technologies, Inc. | 70,315 | 3,155,034 |
| NewMarket Corp. | 14,893 | 5,787,271 |
| Olin Corp. | 322,113 | 5,215,009 |
| PolyOne Corp. | 182,060 | 4,507,806 |
| RPM International, Inc. | 261,611 | 16,771,881 |
| Scotts Miracle-Gro Co. (The), Class A | 79,927 | 8,471,463 |
| Sensient Technologies Corp. | 85,370 | 4,198,497 |
| Valvoline, Inc. | 380,057 | 7,411,111 |
| Total | 77,208,049 | |
| Construction Materials 0.2% | ||
| Eagle Materials, Inc. | 83,980 | 6,628,542 |
| Containers & Packaging 1.0% | ||
| AptarGroup, Inc. | 128,962 | 13,034,189 |
| Greif, Inc., Class A | 52,973 | 1,872,066 |
| O-I Glass, Inc. | 313,960 | 3,390,768 |
| Silgan Holdings, Inc. | 156,420 | 4,478,305 |
| Sonoco Products Co. | 201,936 | 9,735,334 |
| Total | 32,510,662 | |
| Metals & Mining 1.8% | ||
| Allegheny Technologies, Inc.(a) | 254,360 | 4,347,012 |
| Carpenter Technology Corp. | 96,272 | 3,537,996 |
| Commercial Metals Co. | 239,352 | 4,370,567 |
| Compass Minerals International, Inc. | 68,354 | 3,728,711 |
| Reliance Steel & Aluminum Co. | 134,471 | 13,755,039 |
| Royal Gold, Inc. | 132,325 | 12,765,393 |
| Steel Dynamics, Inc. | 434,639 | 11,574,437 |
| United States Steel Corp. | 343,020 | 2,751,020 |
| Worthington Industries, Inc. | 74,460 | 2,367,828 |
| Total | 59,198,003 | |
| Paper & Forest Products 0.3% | ||
| Domtar Corp. | 115,536 | 3,323,971 |
| Louisiana-Pacific Corp. | 236,947 | 6,741,142 |
| Total | 10,065,113 | |
| Total Materials | 185,610,369 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Real Estate 10.8% | ||
| Equity Real Estate Investment Trusts (REITS) 10.3% | ||
| American Campus Communities, Inc. | 277,193 | 12,041,264 |
| Brixmor Property Group, Inc. | 600,860 | 10,941,661 |
| Camden Property Trust | 195,347 | 20,702,875 |
| CoreCivic, Inc. | 240,255 | 3,558,177 |
| Coresite Realty Corp. | 76,030 | 7,886,592 |
| Corporate Office Properties Trust | 226,061 | 5,728,386 |
| Cousins Properties, Inc. | 296,065 | 10,566,560 |
| CyrusOne, Inc. | 228,360 | 13,834,049 |
| Diversified Healthcare Trust | 479,925 | 3,018,728 |
| Douglas Emmett, Inc. | 332,510 | 12,695,232 |
| EastGroup Properties, Inc. | 77,490 | 9,742,818 |
| EPR Properties | 158,280 | 9,376,507 |
| First Industrial Realty Trust, Inc. | 256,100 | 9,859,850 |
| GEO Group, Inc. (The) | 244,655 | 3,581,749 |
| Healthcare Realty Trust, Inc. | 269,790 | 9,253,797 |
| Highwoods Properties, Inc. | 209,284 | 9,392,666 |
| JBG SMITH Properties | 238,110 | 8,733,875 |
| Kilroy Realty Corp. | 196,755 | 14,302,121 |
| Lamar Advertising Co., Class A | 173,509 | 14,529,644 |
| Life Storage, Inc. | 94,110 | 10,155,410 |
| Macerich Co. (The) | 222,280 | 4,538,958 |
| Mack-Cali Realty Corp. | 182,678 | 3,467,228 |
| Medical Properties Trust, Inc. | 1,043,850 | 22,056,550 |
| National Retail Properties, Inc. | 346,248 | 17,606,711 |
| Omega Healthcare Investors, Inc. | 440,790 | 17,455,284 |
| Park Hotels & Resorts, Inc. | 482,920 | 8,818,119 |
| Pebblebrook Hotel Trust | 263,533 | 5,326,002 |
| PotlatchDeltic Corp. | 135,605 | 4,982,128 |
| PS Business Parks, Inc. | 40,410 | 6,002,905 |
| Rayonier, Inc. | 260,865 | 6,920,748 |
| Sabra Health Care REIT, Inc. | 390,759 | 7,639,338 |
| Service Properties Trust | 331,983 | 6,002,253 |
| Spirit Realty Capital, Inc. | 201,190 | 9,154,145 |
| Taubman Centers, Inc. | 123,499 | 6,429,358 |
| Urban Edge Properties | 232,320 | 3,763,584 |
| Weingarten Realty Investors | 244,007 | 6,571,108 |
| Total | 336,636,380 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 14 | Columbia Mid Cap Index Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Real Estate Management & Development 0.5% | ||
| Jones Lang LaSalle, Inc. | 103,968 | 15,363,351 |
| Total Real Estate | 351,999,731 | |
| Utilities 4.5% | ||
| Electric Utilities 1.5% | ||
| Allete, Inc. | 104,230 | 7,190,828 |
| Hawaiian Electric Industries, Inc. | 219,836 | 9,417,774 |
| IDACORP, Inc. | 101,669 | 9,825,292 |
| OGE Energy Corp. | 403,818 | 15,385,466 |
| PNM Resources, Inc. | 160,690 | 7,565,285 |
| Total | 49,384,645 | |
| Gas Utilities 1.6% | ||
| National Fuel Gas Co. | 174,145 | 6,375,448 |
| New Jersey Resources Corp. | 192,660 | 6,802,825 |
| ONE Gas, Inc. | 106,390 | 8,738,874 |
| Southwest Gas Holdings, Inc. | 110,200 | 7,127,736 |
| Spire, Inc. | 102,840 | 7,718,142 |
| UGI Corp. | 421,641 | 15,195,942 |
| Total | 51,958,967 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Multi-Utilities 0.8% | ||
| Black Hills Corp. | 123,972 | 8,950,778 |
| MDU Resources Group, Inc. | 404,246 | 11,209,742 |
| NorthWestern Corp. | 101,770 | 7,158,502 |
| Total | 27,319,022 | |
| Water Utilities 0.6% | ||
| Essential Utilities, Inc. | 435,428 | 18,727,758 |
| Total Utilities | 147,390,392 | |
|
Total Common Stocks
(Cost $2,440,660,139) |
3,245,839,222 | |
| Money Market Funds 0.6% | ||
| Shares | Value ($) | |
| Columbia Short-Term Cash Fund, 1.641%(b),(c) | 20,517,021 | 20,517,021 |
|
Total Money Market Funds
(Cost $20,516,327) |
20,517,021 | |
|
Total Investments in Securities
(Cost: $2,461,176,466) |
3,266,356,243 | |
| Other Assets & Liabilities, Net | 718,236 | |
| Net Assets | 3,267,074,479 | |
At February 29, 2020,
securities and/or cash totaling $1,587,900 were pledged as collateral.
Investments in
derivatives
| Long futures contracts | ||||||
| Description |
Number of
contracts |
Expiration
date |
Trading
currency |
Notional
amount |
Value/Unrealized
appreciation ($) |
Value/Unrealized
depreciation ($) |
| S&P Mid 400 Index E-mini | 141 | 03/2020 | USD | 25,552,020 | — | (3,502,244) |
Notes to Portfolio of
Investments
| (a) | Non-income producing investment. |
| (b) | The rate shown is the seven-day current annualized yield at February 29, 2020. |
| (c) | As defined in the Investment Company Act of 1940, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. Holdings and transactions in these affiliated companies during the year ended February 29, 2020 are as follows: |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
15 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Currency Legend
| USD | US Dollar |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
Under the direction of the
Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of
voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly
to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of
Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third
party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale
pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to
discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members
of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of
the inputs used to value the Fund’s investments at February 29, 2020:
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 16 | Columbia Mid Cap Index Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Fair value measurements (continued)
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Derivatives | ||||
| Liability | ||||
| Futures Contracts | (3,502,244) | — | — | (3,502,244) |
| Total | 3,262,853,999 | — | — | 3,262,853,999 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
Derivative instruments are valued at
unrealized appreciation (depreciation).
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
17 |
Statement of Assets and Liabilities
February 29, 2020
February 29, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $2,440,660,139) | $3,245,839,222 |
| Affiliated issuers (cost $20,516,327) | 20,517,021 |
| Margin deposits on: | |
| Futures contracts | 1,587,900 |
| Receivable for: | |
| Investments sold | 1,517,353 |
| Capital shares sold | 8,204,946 |
| Dividends | 3,855,098 |
| Expense reimbursement due from Investment Manager | 9,661 |
| Prepaid expenses | 6,612 |
| Total assets | 3,281,537,813 |
| Liabilities | |
| Payable for: | |
| Capital shares purchased | 12,732,417 |
| Variation margin for futures contracts | 935,759 |
| Management services fees | 18,309 |
| Distribution and/or service fees | 6,883 |
| Transfer agent fees | 416,542 |
| Compensation of board members | 236,935 |
| Other expenses | 116,489 |
| Total liabilities | 14,463,334 |
| Net assets applicable to outstanding capital stock | $3,267,074,479 |
| Represented by | |
| Paid in capital | 2,344,012,668 |
| Total distributable earnings (loss) | 923,061,811 |
| Total - representing net assets applicable to outstanding capital stock | $3,267,074,479 |
| Class A | |
| Net assets | $986,054,574 |
| Shares outstanding | 70,060,301 |
| Net asset value per share | $14.07 |
| Institutional Class | |
| Net assets | $1,579,863,108 |
| Shares outstanding | 112,835,349 |
| Net asset value per share | $14.00 |
| Institutional 2 Class | |
| Net assets | $663,450,703 |
| Shares outstanding | 46,315,319 |
| Net asset value per share | $14.32 |
| Institutional 3 Class | |
| Net assets | $37,706,094 |
| Shares outstanding | 2,745,976 |
| Net asset value per share | $13.73 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 18 | Columbia Mid Cap Index Fund | Annual Report 2020 |
Statement of Operations
Year Ended February 29, 2020
Year Ended February 29, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $62,624,523 |
| Dividends — affiliated issuers | 832,287 |
| Foreign taxes withheld | (29,029) |
| Total income | 63,427,781 |
| Expenses: | |
| Management services fees | 7,922,667 |
| Distribution and/or service fees | |
| Class A | 3,134,929 |
| Transfer agent fees | |
| Class A | 1,459,899 |
| Institutional Class | 2,205,812 |
| Institutional 2 Class | 476,891 |
| Institutional 3 Class | 4,186 |
| Compensation of board members | 90,086 |
| Custodian fees | 44,824 |
| Printing and postage fees | 132,856 |
| Registration fees | 103,161 |
| Licensing fees and expenses | 37,202 |
| Audit fees | 32,738 |
| Legal fees | 44,221 |
| Interest on interfund lending | 3,535 |
| Compensation of chief compliance officer | 757 |
| Other | 64,923 |
| Total expenses | 15,758,687 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (4,723,607) |
| Expense reduction | (90) |
| Total net expenses | 11,034,990 |
| Net investment income | 52,392,791 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 261,816,650 |
| Investments — affiliated issuers | 8,783 |
| Futures contracts | 2,753,101 |
| Net realized gain | 264,578,534 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (402,641,260) |
| Investments — affiliated issuers | 694 |
| Futures contracts | (7,725,697) |
| Net change in unrealized appreciation (depreciation) | (410,366,263) |
| Net realized and unrealized loss | (145,787,729) |
| Net decrease in net assets resulting from operations | $(93,394,938) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
19 |
Statement of Changes in Net Assets
|
Year Ended
February 29, 2020 |
Year Ended
February 28, 2019 |
|
| Operations | ||
| Net investment income | $52,392,791 | $57,223,936 |
| Net realized gain | 264,578,534 | 374,130,650 |
| Net change in unrealized appreciation (depreciation) | (410,366,263) | (281,069,075) |
| Net increase (decrease) in net assets resulting from operations | (93,394,938) | 150,285,511 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (67,586,479) | (112,473,667) |
| Institutional Class | (107,030,985) | (171,180,770) |
| Institutional 2 Class | (42,569,287) | (74,829,346) |
| Institutional 3 Class | (1,743,771) | (1,466,207) |
| Total distributions to shareholders | (218,930,522) | (359,949,990) |
| Decrease in net assets from capital stock activity | (574,554,776) | (310,371,005) |
| Total decrease in net assets | (886,880,236) | (520,035,484) |
| Net assets at beginning of year | 4,153,954,715 | 4,673,990,199 |
| Net assets at end of year | $3,267,074,479 | $4,153,954,715 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 20 | Columbia Mid Cap Index Fund | Annual Report 2020 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| February 29, 2020 | February 28, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 15,831,966 | 244,750,699 | 24,120,775 | 384,645,440 |
| Distributions reinvested | 3,570,527 | 55,075,275 | 6,162,434 | 91,963,935 |
| Redemptions | (36,684,751) | (571,517,309) | (37,890,405) | (608,338,512) |
| Net decrease | (17,282,258) | (271,691,335) | (7,607,196) | (131,729,137) |
| Institutional Class | ||||
| Subscriptions | 19,312,783 | 297,752,749 | 27,366,724 | 432,869,133 |
| Distributions reinvested | 4,880,426 | 74,874,392 | 7,916,559 | 117,549,063 |
| Redemptions | (39,946,568) | (620,682,586) | (44,471,861) | (707,216,715) |
| Net decrease | (15,753,359) | (248,055,445) | (9,188,578) | (156,798,519) |
| Institutional 2 Class | ||||
| Subscriptions | 15,811,518 | 250,291,819 | 18,580,954 | 306,142,993 |
| Distributions reinvested | 2,198,835 | 34,502,941 | 4,279,226 | 64,820,342 |
| Redemptions | (22,457,159) | (356,427,513) | (26,235,382) | (410,732,294) |
| Net decrease | (4,446,806) | (71,632,753) | (3,375,202) | (39,768,959) |
| Institutional 3 Class | ||||
| Subscriptions | 1,603,685 | 24,643,173 | 1,296,683 | 20,300,162 |
| Distributions reinvested | 107,820 | 1,623,506 | 95,922 | 1,387,369 |
| Redemptions | (624,153) | (9,441,922) | (242,668) | (3,761,921) |
| Net increase | 1,087,352 | 16,824,757 | 1,149,937 | 17,925,610 |
| Total net decrease | (36,395,071) | (574,554,776) | (19,021,039) | (310,371,005) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
21 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. 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.
|
Net asset value,
beginning of period |
Net
investment income |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $15.47 | 0.18 | (0.71) | (0.53) | (0.19) | (0.68) | (0.87) |
| Year Ended 2/28/2019 | $16.25 | 0.18 | 0.36 | 0.54 | (0.17) | (1.15) | (1.32) |
| Year Ended 2/28/2018 | $16.05 | 0.17 | 1.26 | 1.43 | (0.16) | (1.07) | (1.23) |
| Year Ended 2/28/2017 | $13.23 | 0.16 | 3.87 | 4.03 | (0.17) | (1.04) | (1.21) |
| Year Ended 2/29/2016 | $16.14 | 0.16 | (1.71) | (1.55) | (0.16) | (1.20) | (1.36) |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $15.39 | 0.22 | (0.70) | (0.48) | (0.23) | (0.68) | (0.91) |
| Year Ended 2/28/2019 | $16.18 | 0.22 | 0.35 | 0.57 | (0.21) | (1.15) | (1.36) |
| Year Ended 2/28/2018 | $15.99 | 0.21 | 1.25 | 1.46 | (0.20) | (1.07) | (1.27) |
| Year Ended 2/28/2017 | $13.18 | 0.20 | 3.85 | 4.05 | (0.20) | (1.04) | (1.24) |
| Year Ended 2/29/2016 | $16.09 | 0.20 | (1.71) | (1.51) | (0.20) | (1.20) | (1.40) |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $15.73 | 0.22 | (0.72) | (0.50) | (0.23) | (0.68) | (0.91) |
| Year Ended 2/28/2019 | $16.50 | 0.22 | 0.37 | 0.59 | (0.21) | (1.15) | (1.36) |
| Year Ended 2/28/2018 | $16.28 | 0.22 | 1.27 | 1.49 | (0.20) | (1.07) | (1.27) |
| Year Ended 2/28/2017 | $13.41 | 0.20 | 3.91 | 4.11 | (0.20) | (1.04) | (1.24) |
| Year Ended 2/29/2016 | $16.34 | 0.20 | (1.73) | (1.53) | (0.20) | (1.20) | (1.40) |
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $15.11 | 0.21 | (0.68) | (0.47) | (0.23) | (0.68) | (0.91) |
| Year Ended 2/28/2019 | $15.91 | 0.22 | 0.34 | 0.56 | (0.21) | (1.15) | (1.36) |
| Year Ended 2/28/2018(e) | $16.00 | 0.21 | 0.97 | 1.18 | (0.20) | (1.07) | (1.27) |
| 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) | Ratios include interfund lending expense which is less than 0.01%. |
| (d) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (e) | Institutional 3 Class shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 22 | Columbia Mid Cap Index Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $14.07 | (3.88%) | 0.58%(c) | 0.45%(c),(d) | 1.16% | 14% | $986,055 |
| Year Ended 2/28/2019 | $15.47 | 3.66% | 0.58% | 0.45%(d) | 1.08% | 17% | $1,351,153 |
| Year Ended 2/28/2018 | $16.25 | 8.99% | 0.58% | 0.45%(d) | 1.05% | 23% | $1,543,057 |
| Year Ended 2/28/2017 | $16.05 | 31.10% | 0.61% | 0.45%(d) | 1.07% | 18% | $1,602,086 |
| Year Ended 2/29/2016 | $13.23 | (10.37%) | 0.66% | 0.45%(d) | 1.05% | 20% | $1,044,589 |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $14.00 | (3.59%) | 0.33%(c) | 0.20%(c),(d) | 1.40% | 14% | $1,579,863 |
| Year Ended 2/28/2019 | $15.39 | 3.89% | 0.33% | 0.20%(d) | 1.33% | 17% | $1,979,350 |
| Year Ended 2/28/2018 | $16.18 | 9.22% | 0.33% | 0.20%(d) | 1.30% | 23% | $2,229,366 |
| Year Ended 2/28/2017 | $15.99 | 31.45% | 0.37% | 0.20%(d) | 1.32% | 18% | $2,108,834 |
| Year Ended 2/29/2016 | $13.18 | (10.18%) | 0.41% | 0.20%(d) | 1.29% | 20% | $1,736,596 |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $14.32 | (3.65%) | 0.28%(c) | 0.20%(c) | 1.40% | 14% | $663,451 |
| Year Ended 2/28/2019 | $15.73 | 3.94% | 0.27% | 0.20% | 1.33% | 17% | $798,386 |
| Year Ended 2/28/2018 | $16.50 | 9.24% | 0.28% | 0.20% | 1.30% | 23% | $893,473 |
| Year Ended 2/28/2017 | $16.28 | 31.35% | 0.27% | 0.20% | 1.32% | 18% | $747,812 |
| Year Ended 2/29/2016 | $13.41 | (10.14%) | 0.26% | 0.20% | 1.29% | 20% | $506,524 |
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $13.73 | (3.59%) | 0.23%(c) | 0.20%(c) | 1.41% | 14% | $37,706 |
| Year Ended 2/28/2019 | $15.11 | 3.89% | 0.23% | 0.20% | 1.38% | 17% | $25,066 |
| Year Ended 2/28/2018(e) | $15.91 | 7.47% | 0.22% | 0.20% | 1.33% | 23% | $8,094 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
23 |
Notes to Financial Statements
February 29, 2020
February 29, 2020
Note 1. Organization
Columbia Mid Cap Index Fund (the
Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a liquidation will be
proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A shares are offered to the general public for investment. Institutional Class, Institutional 2 Class and Institutional 3 Class shares are available for purchase through authorized investment
professionals to omnibus retirement plans or to institutional investors and to certain other investors as also described in the Fund’s prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
All equity securities are valued at
the close of business of the New York Stock Exchange. Equity securities are valued at the official closing price on the principal exchange or market on which they trade. Unlisted securities or listed securities for
which there were no sales during the day are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets.
Foreign equity securities are
valued based on the closing price on the foreign exchange in which such securities are primarily traded. If any foreign equity security closing prices are not readily available, the securities are valued at the mean
of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are determined at the scheduled closing time of the New York Stock Exchange. Many securities markets and exchanges
outside the U.S. close prior to the close of the New York Stock Exchange; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but
before the close of the New York Stock Exchange. In those situations, foreign securities will be fair valued pursuant to a policy adopted by the Board of Trustees. Under the policy, the Fund may utilize a third-party
pricing service to determine these fair values. The third-party pricing service takes into account multiple factors, including, but not limited to, movements in the U.S. securities markets, certain depositary
receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that reasonably reflects the current market
conditions as of the close of the New York Stock Exchange. The fair value of a security is likely to be different from the quoted or published price, if available.
Investments in open-end investment
companies, including money market funds, are valued at their latest net asset value.
| 24 | Columbia Mid Cap Index Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Futures and options on futures
contracts are valued based upon the settlement price at the close of regular trading on their principal exchanges or, in the absence of transactions, at the mean of the latest quoted bid and ask prices.
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published
price for the security, if available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Derivative instruments
The Fund invests in certain
derivative instruments, as detailed below, to meet its investment objectives. Derivatives are instruments whose values depend on, or are derived from, in whole or in part, the value of one or more securities,
currencies, commodities, indices, or other assets or instruments. Derivatives may be used to increase investment flexibility (including to maintain cash reserves while maintaining desired exposure to certain assets),
for risk management (hedging) purposes, to facilitate trading, to reduce transaction costs and to pursue higher investment returns. The Fund may also use derivative instruments to mitigate certain investment risks,
such as foreign currency exchange rate risk, interest rate risk and credit risk. Derivatives may involve various risks, including the potential inability of the counterparty to fulfill its obligations under the terms
of the contract, the potential for an illiquid secondary market (making it difficult for the Fund to sell or terminate, including at favorable prices) and the potential for market movements which may expose the Fund
to gains or losses in excess of the amount shown in the Statement of Assets and Liabilities. The notional amounts of derivative instruments, if applicable, are not recorded in the financial statements.
A derivative instrument may suffer
a marked-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform its
obligations under the contract. The Fund’s risk of loss from counterparty credit risk on over-the-counter derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by
the Fund and the amount of any variation margin held by the counterparty, plus any replacement costs or related amounts. With exchange-traded or centrally cleared derivatives, there is reduced counterparty credit risk
to the Fund since the clearinghouse or central counterparty (CCP) provides some protection in the case of clearing member default. The clearinghouse or CCP stands between the buyer and the seller of the contract;
therefore, additional counterparty credit risk is failure of the clearinghouse or CCP. However, credit risk still exists in exchange-traded or centrally cleared derivatives with respect to initial and variation margin
that is held in a broker’s customer account. While brokers are required to segregate customer margin from their own assets, in the event that a broker becomes insolvent or goes into bankruptcy and at that time
there is a shortfall in the aggregate amount of margin held by the broker for all its clients, U.S. bankruptcy laws will typically allocate that shortfall on a pro-rata basis across all the broker’s customers
(including the Fund), potentially resulting in losses to the Fund.
In order to better define its
contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement)
or similar agreement with its derivatives contract counterparties. An ISDA Master Agreement is an agreement between the Fund and a counterparty that governs over-the-counter derivatives and typically contains, among
other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty
certain derivative instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment
in the event of default (close-out netting), including the bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or
prohibitions against the right of offset or netting in bankruptcy, insolvency or other events.
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Collateral (margin) requirements
differ by type of derivative. Margin requirements are established by the clearinghouse or CCP for exchange-traded and centrally cleared derivatives. Brokers can ask for margin in excess of the minimum in certain
circumstances. Collateral terms are contract specific for over-the-counter derivatives. For over-the-counter derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by
netting the marked-to-market amount for each transaction under such agreement and comparing that amount to the value of any variation margin currently pledged by the Fund and/or the counterparty. Generally, the amount
of collateral due from or to a party has to exceed a minimum transfer amount threshold (e.g., $250,000) before a transfer has to be made. To the extent amounts due to the Fund from its counterparties are not fully
collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty nonperformance. The Fund may also pay interest expense on cash collateral received from the broker. Any interest expense
paid by the Fund is shown on the Statement of Operations. The Fund attempts to mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor
their obligations and by monitoring the financial stability of those counterparties.
Certain ISDA Master Agreements
allow counterparties of over-the-counter derivatives transactions to terminate derivatives contracts prior to maturity in the event the Fund’s net asset value declines by a stated percentage over a specified
time period or if the Fund fails to meet certain terms of the ISDA Master Agreement, which would cause the Fund to accelerate payment of any net liability owed to the counterparty. The Fund also has termination rights
if the counterparty fails to meet certain terms of the ISDA Master Agreement. In determining whether to exercise such termination rights, the Fund would consider, in addition to counterparty credit risk, whether
termination would result in a net liability owed from the counterparty.
For financial reporting purposes,
the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.
Futures contracts
Futures contracts are
exchange-traded and represent commitments for the future purchase or sale of an asset at a specified price on a specified date. The Fund bought and sold futures contracts to maintain appropriate equity market exposure
while keeping sufficient cash to accommodate daily redemptions. These instruments may be used for other purposes in future periods. Upon entering into futures contracts, the Fund bears risks that it may not achieve
the anticipated benefits of the futures contracts and may realize a loss. Additional risks include counterparty credit risk, the possibility of an illiquid market, and that a change in the value of the contract or
option may not correlate with changes in the value of the underlying asset.
Upon entering into a futures
contract, the Fund deposits cash or securities with the broker, known as a futures commission merchant (FCM), in an amount sufficient to meet the initial margin requirement. The initial margin deposit must be
maintained at an established level over the life of the contract. Cash deposited as initial margin is recorded in the Statement of Assets and Liabilities as margin deposits. Securities deposited as initial margin are
designated in the Portfolio of Investments. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily change in the contract value and are
recorded as variation margin receivable or payable and are offset in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed or expires. Futures contracts involve, to
varying degrees, risk of loss in excess of the variation margin disclosed in the Statement of Assets and Liabilities.
Effects of derivative transactions in
the financial statements
The following tables are intended
to provide additional information about the effect of derivatives on the financial statements of the Fund, including: the fair value of derivatives by risk category and the location of those fair values in the
Statement of Assets and Liabilities; and the impact of derivative transactions over the period in the Statement of Operations, including realized and unrealized gains (losses). The derivative instrument schedules
following the Portfolio of Investments present additional information regarding derivative instruments outstanding at the end of the period, if any.
| 26 | Columbia Mid Cap Index Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
The following table is a summary of
the fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) at February 29, 2020:
| Liability derivatives | ||
|
Risk exposure
category |
Statement
of assets and liabilities location |
Fair value ($) |
| Equity risk | Component of total distributable earnings (loss) — unrealized depreciation on futures contracts | 3,502,244* |
| * | Includes cumulative appreciation (depreciation) as reported in the tables following the Portfolio of Investments. Only the current day’s variation margin is reported in receivables or payables in the Statement of Assets and Liabilities. |
The following table indicates the
effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended February 29, 2020:
The following table is a summary
of the average outstanding volume by derivative instrument for the year ended February 29, 2020:
| Derivative instrument |
Average notional
amounts ($)* |
| Futures contracts — long | 37,756,015 |
| * | Based on the ending quarterly outstanding amounts for the year ended February 29, 2020. |
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Corporate actions and dividend
income are generally recorded net of any non-reclaimable tax withholdings, on the ex-dividend date or upon receipt of ex-dividend notification in the case of certain foreign securities.
The Fund may receive distributions
from holdings in equity securities, business development companies (BDCs), exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment companies (RICs), and real estate investment trusts
(REITs), which report information as to the tax character of their distributions annually. These distributions are allocated to dividend income, capital gain and return of capital based on actual information reported.
Return of capital is recorded as a reduction of the cost basis of securities held. If the Fund no longer owns the applicable securities, return of capital is recorded as a realized gain. With respect to REITs, to the
extent actual information has not yet been reported, estimates for return of capital are made by Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise
Financial, Inc. (Ameriprise Financial). The Investment Manager’s estimates are subsequently adjusted when the actual character of the distributions is disclosed by the REITs, which could result in a
proportionate change in return of capital to shareholders.
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Awards from class action litigation
are recorded as a reduction of cost basis if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities on the payment date, the proceeds are recorded as
realized gains.
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable income and net capital gain, if any, for its
tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net income and certain other
amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Foreign taxes
The Fund may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules
and regulations that exist in the markets in which it invests.
Realized gains in certain countries
may be subject to foreign taxes at the Fund level, based on statutory rates. The Fund accrues for such foreign taxes on realized and unrealized gains at the appropriate rate for each jurisdiction, as applicable. The
amount, if any, is disclosed as a liability on the Statement of Assets and Liabilities.
Distributions to shareholders
Distributions from net investment
income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Note 3. Fees and other
transactions with affiliates
Management services fees
The Fund has entered into a
Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the
Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to 0.20% of the Fund’s
daily net assets.
| 28 | Columbia Mid Cap Index Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Compensation of board members
Members of the Board of Trustees
who are not officers or employees of the Investment Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the
Deferred Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of
certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All
amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as
sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class.
For the year ended February 29,
2020, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| Effective rate (%) | |
| Class A | 0.12 |
| Institutional Class | 0.12 |
| Institutional 2 Class | 0.06 |
| Institutional 3 Class | 0.01 |
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended February 29, 2020, these minimum account balance fees reduced total expenses
of the Fund by $90.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
29 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Plans) applicable to certain share classes, which
set the distribution and service fees for the Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and
providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund.
Expenses waived/reimbursed by the
Investment Manager and its affiliates
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) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, 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 following annual rate(s) as a percentage of the class’ average daily net assets:
|
Fee rate(s) contractual
June 30, 2020 |
|
| Class A | 0.45% |
| Institutional Class | 0.20 |
| Institutional 2 Class | 0.20 |
| Institutional 3 Class | 0.20 |
Under the agreement governing
these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes
(including foreign transaction taxes), expenses associated with investments 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, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from
the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or
its affiliates in future periods.
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At February 29, 2020, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, trustees’ deferred compensation, derivative investments, and earnings and profits distributed to shareholders on
the redemption of shares. To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
The following reclassifications
were made:
|
Undistributed net
investment income ($) |
Accumulated
net realized gain ($) |
Paid in
capital ($) |
| (890,277) | (20,895,815) | 21,786,092 |
Net investment income (loss) and
net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
| 30 | Columbia Mid Cap Index Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended February 29, 2020 | Year Ended February 28, 2019 | ||||
|
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 51,928,314 | 167,002,208 | 218,930,522 | 65,783,290 | 294,166,700 | 359,949,990 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At February 29, 2020, the
components of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| 5,240,513 | 123,000,726 | — | 795,053,394 |
At February 29, 2020, the cost of
all investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
|
Federal
tax cost ($) |
Gross unrealized
appreciation ($) |
Gross unrealized
(depreciation) ($) |
Net unrealized
appreciation ($) |
| 2,467,800,605 | 1,133,259,113 | (338,205,719) | 795,053,394 |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
Management of the Fund has
concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at
a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the
prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio
information
The cost of purchases and
proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $529,932,082 and $1,232,436,608, respectively, for the year ended February 29, 2020. The amount of purchase
and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes referred to
as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
Note 7. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
31 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the
Interfund Program during the year ended February 29, 2020 was as follows:
| Borrower or lender |
Average loan
balance ($) |
Weighted average
interest rate (%) |
Number of days
with outstanding loans |
| Borrower | 29,500,000 | 2.15 | 2 |
Interest expense incurred by the
Fund is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at February 29, 2020.
Note 8. Line of credit
The Fund has access to a
revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. The credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager or an affiliated investment manager, severally and
not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the federal funds effective rate, (ii) the
one-month LIBOR rate and (iii) the overnight bank funding rate, plus in each case, 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a
commitment fee equal to its pro rata share of the unused amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations. This agreement
expires annually in December unless extended or renewed.
The Fund had no borrowings during
the year ended February 29, 2020.
Note 9. Significant
risks
Market and environment risk
The Fund may incur losses due to
declines in the value of one or more securities in which it invests. These declines may be due to factors affecting a particular issuer, or the result of, among other things, political, regulatory, market, economic or
social developments affecting the relevant market(s) more generally. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers,
which could adversely affect Fund, including causing difficulty in assigning prices to hard-to-value assets in thinly traded and closed markets, significant redemptions and operational challenges. Global economies and
financial markets are increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may
be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional or global events
such as terrorism, war, natural disasters, disease/virus outbreaks and epidemics or other public health issues, recessions, depressions or other events – or the potential for such events – could have a
significant negative impact on global economic and market conditions.
The coronavirus disease 2019
(COVID-19) public health crisis has become a pandemic that has resulted in, and may continue to result in, significant global economic and societal disruption and market volatility due to disruptions in market access,
resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. Such disruptions may be caused, or exacerbated by, quarantines and travel restrictions,
workforce displacement and loss in human and other resources. The uncertainty surrounding the magnitude, duration, reach, costs and effects of the global pandemic, as well as actions that have been or could be taken
by governmental authorities or other third parties, present unknowns that are yet to unfold. The impacts, as well as the uncertainty over impacts to come, of COVID-19 – and any other infectious illness
outbreaks, epidemics and pandemics that may arise in the future – could negatively affect global economies and markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illness
outbreaks and epidemics in emerging market countries may be greater due to generally less established healthcare systems,
| 32 | Columbia Mid Cap Index Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
governments and financial markets. Public health
crises caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and economic risks in certain countries or globally. The disruptions caused by COVID-19 could prevent the Fund from executing
advantageous investment decisions in a timely manner and negatively impact the Fund’s ability to achieve their investment objectives. Any such event(s) could have a significant adverse impact on the value and
risk profile of the Fund.
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting different communities at different times with varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including
the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to continue ordinary business operations and technology functions over near- or longer-term periods.
Passive investment risk
The Fund is not
“actively” managed and may be affected by a general decline in market segments related to its underlying index. The Fund invests in securities or instruments included in, or believed by the Investment
Manager to be representative of, its underlying index, regardless of their investment merits. The Fund does not seek temporary defensive positions when markets decline or appear overvalued. The decision of whether to
remove a security from an index is made by an independent index provider who is not affiliated with the Fund or the Investment Manager.
Shareholder concentration risk
At February 29, 2020, one
unaffiliated shareholder of record owned 22.9% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Affiliated
shareholders of record owned 11.1% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the
Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of
less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Small- and mid-cap company 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.
Note 10. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 11. Information
regarding pending and settled legal proceedings
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
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
33 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
to perform under their contracts with the Fund.
Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to Ameriprise
Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that
these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe
proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines,
penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.
| 34 | Columbia Mid Cap Index Fund | Annual Report 2020 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust and Shareholders of Columbia Mid Cap Index Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Mid Cap Index Fund (one of the funds constituting Columbia Funds Series Trust, referred to hereafter as the "Fund") as of
February 29, 2020, the related statement of operations for the year ended February 29, 2020, the statement of changes in net assets for each of the two years in the period ended February 29, 2020, including the
related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in
all material respects, the financial position of the Fund as of February 29, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended
February 29, 2020 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the
responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these
financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of February 29, 2020 by correspondence with the custodian, transfer agent and brokers. We believe that
our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
April 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
35 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended February 29, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Qualified
dividend income |
Dividends
received deduction |
Capital
gain dividend |
| 93.65% | 92.19% | $246,237,840 |
Qualified dividend income. For
taxable, non-corporate shareholders, the percentage of ordinary income distributed during the fiscal year that represents qualified dividend income subject to reduced tax rates.
Dividends received deduction. The
percentage of ordinary income distributed during the fiscal year that qualifies for the corporate dividends received deduction.
Capital gain dividend. The Fund
designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
TRUSTEES AND
OFFICERS
The Board oversees the Fund’s
operations and 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 Fund’s Trustees as
of the printing of this report, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not
affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach the mandatory retirement age established by the Board.
Independent trustees
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
George S. Batejan
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1953 |
Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 117 | Former Chairman of the Board, NICSA (National Investment Company Services Association) (Executive Committee, Nominating Committee and Governance Committee), 2014-2016; former Director, Intech Investment Management, 2011-2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016; former Advisory Board Member, University of Colorado Business School, 2015-2018 |
| 36 | Columbia Mid Cap Index Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Kathleen Blatz
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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; Member and Interim Chair, Minnesota Sports Facilities Authority, January 2017-July 2017; Interim President and Chief Executive Officer, Blue Cross and Blue Shield of Minnesota (health care insurance), February-July 2018 | 117 | Trustee, BlueCross BlueShield of Minnesota since 2009 (Chair of the Business Development Committee, 2014-2017; Chair of the Governance Committee since 2017); Chair of the Robina Foundation since August 2013; former Member and Chair of the Board, Minnesota Sports Facilities Authority, January 2017-July 2017 |
|
Pamela G. Carlton
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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 | 117 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996; Director, DR Bank (Audit Committee) since 2017; Director, Evercore Inc. (Audit Committee, Nominating and Governance Committee) since 2019 |
|
Patricia M. Flynn
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1950 |
Trustee 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 | 117 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010; Board of Directors, The MA Business Roundtable 2003-2019 |
|
Brian J. Gallagher
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee since 12/17 | Retired; Partner with Deloitte & Touche LLP and its predecessors, 1977-2016 | 117 | Trustee, Catholic Schools Foundation since 2004 |
|
Catherine James Paglia
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Chair of the Board since 1/20; Trustee 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. | 117 | 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) |
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
37 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Anthony M. Santomero
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1946 |
Trustee 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 | 117 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; former Director, Citigroup Inc. and Citibank, N.A., 2009-2019; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
|
Minor M. Shaw
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1947 |
Trustee 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 | 117 | Director, BlueCross BlueShield of South Carolina since April 2008; Trustee, Hollingsworth Funds since 2016 (previously Board Chair from 2016-2019); Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016; former Director, National Association of Corporate Directors, Carolinas Chapter, 2013-2018 |
|
Sandra Yeager
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1964 |
Trustee since 12/17 | Retired; President and founder, Hanoverian Capital, LLC (SEC registered investment advisor firm), 2008-2016; Managing Director, DuPont Capital, 2006-2008; Managing Director, Morgan Stanley Investment Management, 2004-2006; Senior Vice President, Alliance Bernstein, 1990-2004 | 115 | Director, NAPE Education Foundation since October 2016 |
| 38 | Columbia Mid Cap Index Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Independent trustees
Independent trustees
| * | 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. |
Nations Funds refer to the Funds
within the Columbia Funds Complex that historically bore the Nations brand and includes series of Columbia Funds Series Trust. RiverSource Funds refer to the Funds within the Columbia Funds Complex that historically
bore the RiverSource brand and includes series of Columbia Funds Series Trust II.
The Statement of Additional
Information has additional information about the Fund’s Board members and is available, without charge, upon request by calling 800.345.6611, visiting columbiathreadneedleus.com/investor/ or contacting your
financial intermediary.
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 of the
Fund as of the printing of this report, 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 Fund’s other officers are:
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); officer of Columbia Funds and affiliated funds since 2007. |
|
Michael G. Clarke
225 Franklin Street Boston, MA 02110 Born 1969 |
Chief Financial Officer, Principal Financial Officer (2009), and Senior Vice President (2019) | Vice President, Head of North American Operations, and Co-Head of Global Operations, – Accounting and Tax, Columbia Management Investment Advisers, LLC, since June 2019 (previously Vice President – Accounting and Tax, May 2010 – May 2019); senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009 – January 2019 and December 2015 – January 2019, respectively). |
|
Joseph Beranek
5890 Ameriprise Financial Center Minneapolis, MN 55474 Born 1965 |
Treasurer, Chief Accounting Officer (Principal Accounting Officer) (2019), and Principal Financial Officer (2020) | Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and March 2017, respectively (previously Vice President — Pricing and Corporate Actions, May 2010 - March 2017). |
|
Columbia Mid Cap Index Fund | Annual Report 2020
|
39 |
TRUSTEES AND OFFICERS (continued)
Fund officers (continued)
Fund officers (continued)
|
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 |
|
Paul B. Goucher
485 Lexington Avenue New York, NY 10017 Born 1968 |
Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since March 2015 (previously Vice President and Assistant Secretary, May 2010 – March 2015). |
|
Thomas P. McGuire
225 Franklin Street Boston, MA 02110 Born 1972 |
Senior 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; Chief Compliance Officer, Columbia Acorn/Wanger Funds since December 2015. |
|
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; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013. |
|
Ryan C. Larrenaga
225 Franklin Street Boston, MA 02110 Born 1970 |
Senior Vice President (2017), Chief Legal Officer (2017), and Secretary (2015) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously Vice President and Group Counsel, August 2011 - August 2018); officer of Columbia Funds and affiliated funds since 2005. |
|
Daniel J. Beckman
225 Franklin Street Boston, MA 02110 Born 1962 |
Senior Vice President (2020) | Vice President – Head of North America Product, Columbia Management Investment Advisers, LLC (since April 2015); previously, Senior Vice President of Investment Product Management, Fidelity Financial Advisor Solutions, a division of Fidelity Investments (January 2012 – March 2015). |
|
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. |
|
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. |
| 40 | Columbia Mid Cap Index Fund | Annual Report 2020 |
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Columbia Mid Cap Index Fund
P.O. Box 219104
Kansas City, MO 64121-9104
Please read and consider the
investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments
(Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved.
© 2020 Columbia Management Investment
Advisers, LLC.
columbiathreadneedleus.com/investor/
ANN196_02_K01_(04/20)
Annual Report
February 29, 2020
February 29, 2020
Columbia Select Mid
Cap Value Fund
Beginning on January 1, 2021, as
permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports like this one will no longer be sent by mail, unless you
specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (columbiathreadneedleus.com/investor/), and each time a report is posted you will be notified
by mail and provided with a website address to access the report.
If you have already elected to
receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically
at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with the Fund, by calling 800.345.6611 or by enrolling in “eDelivery” by logging
into your account at columbiathreadneedleus.com/investor/.
You may elect to receive all future
reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you
invest directly with the Fund, you can call 800.345.6611 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive paper reports will apply to all Columbia
Funds held in your account if you invest through a financial intermediary or all Columbia Funds held with the fund complex if you invest directly with the Fund.
Not FDIC Insured • No bank
guarantee • May lose value
Table of Contents
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Columbia Select Mid Cap Value Fund
(the Fund) mails one shareholder report to each shareholder address, unless such shareholder elected to receive shareholder reports from the Fund electronically. If you would like more than one report, please call
shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and
procedures
The policy of the Board of Trustees
is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by
calling 800.345.6611; contacting your financial intermediary; visiting columbiathreadneedleus.com/investor/; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding
how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting
columbiathreadneedleus.com/investor/, or searching the website of the SEC at sec.gov.
Quarterly schedule of
investments
The Fund files a complete schedule
of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT, and for reporting periods ended prior to March 31, 2019, on Form N-Q. The Fund’s Form N-Q and Form N-PORT
filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q or Form N-PORT, can also be obtained without charge, upon request, by calling
800.345.6611.
Additional Fund information
For more information about the
Fund, please visit columbiathreadneedleus.com/investor/ or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC (the
Investment Manager)
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors,
Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 219104
Kansas City, MO 64121-9104
Columbia Select Mid Cap Value
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks long-term capital appreciation.
Portfolio management
Kari Montanus
Lead Portfolio Manager
Managed Fund since 2018
Jonas Patrikson, CFA
Portfolio Manager
Managed Fund since 2014
Morningstar style boxTM
The Morningstar Style Box is based on a fund’s portfolio holdings. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows
investment style (value, blend, or growth). Information shown is based on the most recent data provided by Morningstar.
© 2020 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or
distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
Returns for Class A shares are shown
with and without the maximum initial sales charge of 5.75%. Returns for Class C shares are shown with and without the 1.00% contingent deferred sales charge for the first year only. Please see the Fund’s
prospectus for details. Performance for different share classes will vary based on differences in sales charges and fees associated with each share class. All results shown assume reinvestment of distributions during
the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or
reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been
lower.
The performance information shown
represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than
their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial
intermediary, visiting columbiathreadneedleus.com/investor/ or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. Since the Fund launched more than one share class at its inception, Class A shares were used. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investor/investment-products/mutual-funds/appended-performance for more information. |
The Russell Midcap Value Index, an
unmanaged index, measures the performance of those Russell Midcap Index companies with lower price-to-book ratios and forecasted growth values.
Indices are not available for
investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Fund performance may be significantly
negatively impacted by the economic impact of the COVID-19 pandemic. The COVID-19 pandemic has adversely impacted economies and capital markets around the world in ways that will likely continue and may change in
unforeseen ways for an indeterminate period. The COVID-19 pandemic may exacerbate pre-existing political, social and economic risks in certain countries and globally.
|
Columbia Select Mid Cap Value Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (February 28, 2010 — February 29, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Select Mid Cap Value Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund
distributions or on the redemption of Fund shares.
| Portfolio breakdown (%) (at February 29, 2020) | |
| Common Stocks | 98.5 |
| Money Market Funds | 1.5 |
| Total | 100.0 |
Percentages indicated are based
upon total investments excluding investments in derivatives, if any. The Fund’s portfolio composition is subject to change.
Percentages indicated are based
upon total equity investments. The Fund’s portfolio composition is subject to change.
| 4 | Columbia Select Mid Cap Value Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that ended
February 29, 2020, the Fund’s Class A shares returned -2.47% excluding sales charges. The Fund lagged the -1.36% return of its benchmark, the Russell Midcap Value Index. In a difficult period for mid-cap stocks,
security selection within the financials and consumer discretionary sectors detracted from relative results.
Global uncertainty curbed stock
market gains, boosted bonds
Optimism prevailed early in 2019,
buoyed by solid economic growth and a recovery from meaningful stock market losses in 2018. Strong job gains drove the unemployment rate down to 3.5%, annualized. Consumer spending and export trade supported U.S.
economic growth. However, the pace of growth slowed to an estimated 2.1% for the year. In Europe, economic growth slowed as trade tensions and uncertainty mounted regarding Brexit (the U.K.’s departure from the
European Union), which was finally resolved late in the year. At the same time, emerging markets came under pressure, driven by trade and tariff concerns. China’s economic conditions weakened and the spread of
the coronavirus introduced enough global uncertainty to drive stock markets around the world down sharply in the final week of the period, raising concerns about the impact on global economic growth going forward.
Shares of large companies and
growth-oriented companies weathered the year-end volatility better than small- and mid-cap value stocks. The S&P 500 Index returned 8.19% for the 12-month period, giving up substantial gains during the last few
trading days of February. The Bloomberg Barclays U.S. Aggregate Bond Index gained 11.68%, as the yield on the 10-year U.S. Treasury fell to 1.10%. (Bond yields and prices move in opposite directions.)
Contributors and detractors
Solid stock selection within the
industrials, energy, health care and materials sectors aided relative results as did a modest overweight in utilities, the best performing sector in the benchmark, valued by investors for its defensive qualities.
Top contributors to relative
performance included Teradyne, Inc., FMC Corp. and Ingersoll-Rand PLC. Shares in semiconductor company Teradyne climbed higher due to the company’s solid earnings reports and an expected increase in demand for
equipment for “5G” infrastructure. (5G is the fifth generation of wireless technology for digital cellular networks, which began wide deployment in 2019.) Agricultural chemical maker FMC reported strong
earnings and execution, with especially noteworthy results in Latin America. Shares in diversified industrials manufacturer Ingersoll-Rand climbed early in the period due to strong quarterly earnings and increased
forward earnings guidance. The company’s announcement that it would merge its industrials business with Gardner Denver Holdings Inc. was well received by investors. The Fund continued to own Teradyne and FMC at
period end, but had sold Ingersoll-Rand, taking profits.
Stock selection within the
financials and consumer discretionary sectors, an underweight in real estate and a modest overweight in energy detracted from relative results. Sector weights are primarily a function of our bottom up stock selection
process. DXC Technology Co., Lincoln National Corp. and Royal Caribbean Cruises Ltd. were notable detractors from relative returns for the period. Shares in the IT services and consulting company DXC dropped after the
company reported mostly in-line quarterly results but lowered forward earnings guidance because of delays in certain deals, foreign exchange headwinds and higher-than-expected pressures on its core outsourcing
business. Shares of insurance company Lincoln National declined as low interest rates weighed on investor sentiment even though the company’s earnings remained in line with expectations. Cruise line operator
Royal Caribbean sold off sharply with the outbreak of the coronavirus, as fears of a pandemic ravaged the cruise line industry. Despite these disappointments, we continued to own all three stocks.
At period’s end
At the end of the period, the
Fund was overweight in the utilities, consumer staples and information technology sectors and meaningfully underweight in communication services and real estate. These weights, relative to the benchmark, were
byproducts of our bottom-up stock selection process. Most important, we continue to look for companies that are trading at attractive valuations and that have identifiable catalysts with the potential to accelerate
earnings and change investor perception. In doing so, we believe we have the potential to generate attractive returns for our shareholders.
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Foreign investments subject the Fund to risks, including political, economic, market, social and others within a particular country, as well as to currency instabilities and less stringent
financial and accounting standards generally applicable to U.S. issuers. Investments in mid-cap companies involve risks and volatility greater than investments in larger, more
|
Columbia Select Mid Cap Value Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
established companies. Value securities may be unprofitable if the market fails to recognize their intrinsic worth or the portfolio manager misgauged that worth. The Fund may invest significantly in issuers
within a particular sector, which may be negatively affected by market, economic or other conditions, making the fund more vulnerable to unfavorable developments in the sector. See the Fund’s
prospectus for more information on these and other risks.
The views expressed in this report
reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and
results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update
such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf
of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
| 6 | Columbia Select Mid Cap Value Fund | Annual Report 2020 |
Understanding Your Fund’s
Expenses
(Unaudited)
(Unaudited)
As an investor, you incur two types
of costs. There are shareholder transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing fund costs, which generally include management fees,
distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with
the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s
expenses
To illustrate these ongoing
costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment
of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the
“Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the
expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under
the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the
Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or
the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are
required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the
hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are
meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in
comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
Expenses paid during the period
are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal
half year and divided by 366.
Expenses do not include fees and
expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment
Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
|
Columbia Select Mid Cap Value Fund | Annual Report 2020
|
7 |
Portfolio of Investments
February 29, 2020
February 29, 2020
(Percentages represent value of
investments compared to net assets)
Investments in securities
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Diversified Financial Services 2.6% | ||
| Voya Financial, Inc. | 668,625 | 35,196,420 |
| Insurance 6.2% | ||
| Hanover Insurance Group, Inc. (The) | 235,000 | 27,856,900 |
| Lincoln National Corp. | 636,715 | 28,900,494 |
| Reinsurance Group of America, Inc. | 215,000 | 26,236,450 |
| Total | 82,993,844 | |
| Total Financials | 228,673,788 | |
| Health Care 8.6% | ||
| Health Care Equipment & Supplies 2.8% | ||
| Zimmer Biomet Holdings, Inc. | 276,665 | 37,667,940 |
| Health Care Providers & Services 3.7% | ||
| Centene Corp.(a) | 403,845 | 21,411,862 |
| Quest Diagnostics, Inc. | 262,160 | 27,804,689 |
| Total | 49,216,551 | |
| Life Sciences Tools & Services 2.1% | ||
| Agilent Technologies, Inc. | 374,885 | 28,892,387 |
| Total Health Care | 115,776,878 | |
| Industrials 12.1% | ||
| Aerospace & Defense 3.0% | ||
| L3 Harris Technologies, Inc. | 200,778 | 39,699,834 |
| Electrical Equipment 2.7% | ||
| AMETEK, Inc. | 420,655 | 36,176,330 |
| Machinery 2.9% | ||
| Trane Technologies PLC | 302,208 | 38,996,921 |
| Road & Rail 2.5% | ||
| Norfolk Southern Corp. | 187,795 | 34,244,418 |
| Trading Companies & Distributors 1.0% | ||
| United Rentals, Inc.(a) | 105,000 | 13,910,400 |
| Total Industrials | 163,027,903 | |
| Information Technology 9.1% | ||
| Communications Equipment 2.4% | ||
| Motorola Solutions, Inc. | 192,335 | 31,866,063 |
| Electronic Equipment, Instruments & Components 1.7% | ||
| Corning, Inc. | 952,000 | 22,714,720 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 8 | Columbia Select Mid Cap Value Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| IT Services 0.6% | ||
| DXC Technology Co. | 343,165 | 8,273,708 |
| Semiconductors & Semiconductor Equipment 4.4% | ||
| Marvell Technology Group Ltd. | 992,100 | 21,131,730 |
| ON Semiconductor Corp.(a) | 960,000 | 17,913,600 |
| Teradyne, Inc. | 346,675 | 20,370,623 |
| Total | 59,415,953 | |
| Total Information Technology | 122,270,444 | |
| Materials 6.4% | ||
| Chemicals 4.6% | ||
| Eastman Chemical Co. | 339,975 | 20,911,862 |
| FMC Corp. | 443,230 | 41,264,713 |
| Total | 62,176,575 | |
| Metals & Mining 1.8% | ||
| Freeport-McMoRan, Inc. | 2,391,295 | 23,817,298 |
| Total Materials | 85,993,873 | |
| Real Estate 11.1% | ||
| Equity Real Estate Investment Trusts (REITS) 11.1% | ||
| First Industrial Realty Trust, Inc. | 950,000 | 36,575,000 |
| Gaming and Leisure Properties, Inc. | 953,775 | 42,605,129 |
| SL Green Realty Corp. | 397,875 | 31,209,315 |
| Welltower, Inc. | 520,190 | 38,920,616 |
| Total | 149,310,060 | |
| Total Real Estate | 149,310,060 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Utilities 14.5% | ||
| Electric Utilities 5.3% | ||
| Edison International | 521,315 | 35,027,155 |
| Pinnacle West Capital Corp. | 412,600 | 36,923,574 |
| Total | 71,950,729 | |
| Independent Power and Renewable Electricity Producers 2.8% | ||
| AES Corp. (The) | 2,260,350 | 37,815,656 |
| Multi-Utilities 6.4% | ||
| Ameren Corp. | 512,550 | 40,491,450 |
| CMS Energy Corp. | 745,275 | 45,029,515 |
| Total | 85,520,965 | |
| Total Utilities | 195,287,350 | |
|
Total Common Stocks
(Cost $1,260,860,185) |
1,325,950,965 | |
| Money Market Funds 1.5% | ||
| Shares | Value ($) | |
| Columbia Short-Term Cash Fund, 1.641%(b),(c) | 20,794,404 | 20,794,404 |
|
Total Money Market Funds
(Cost $20,793,806) |
20,794,404 | |
|
Total Investments in Securities
(Cost: $1,281,653,991) |
1,346,745,369 | |
| Other Assets & Liabilities, Net | (1,496,648) | |
| Net Assets | 1,345,248,721 | |
Notes to Portfolio of
Investments
| (a) | Non-income producing investment. |
| (b) | The rate shown is the seven-day current annualized yield at February 29, 2020. |
| (c) | As defined in the Investment Company Act of 1940, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. Holdings and transactions in these affiliated companies during the year ended February 29, 2020 are as follows: |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Select Mid Cap Value Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
Under the direction of the
Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of
voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly
to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of
Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third
party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale
pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to
discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members
of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of
the inputs used to value the Fund’s investments at February 29, 2020:
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 10 | Columbia Select Mid Cap Value Fund | Annual Report 2020 |
Statement of Assets and Liabilities
February 29, 2020
February 29, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $1,260,860,185) | $1,325,950,965 |
| Affiliated issuers (cost $20,793,806) | 20,794,404 |
| Receivable for: | |
| Capital shares sold | 737,954 |
| Dividends | 1,515,046 |
| Expense reimbursement due from Investment Manager | 1,062 |
| Prepaid expenses | 3,199 |
| Total assets | 1,349,002,630 |
| Liabilities | |
| Payable for: | |
| Capital shares purchased | 3,173,293 |
| Management services fees | 29,041 |
| Distribution and/or service fees | 4,031 |
| Transfer agent fees | 254,230 |
| Compensation of board members | 220,307 |
| Compensation of chief compliance officer | 12 |
| Other expenses | 72,995 |
| Total liabilities | 3,753,909 |
| Net assets applicable to outstanding capital stock | $1,345,248,721 |
| Represented by | |
| Paid in capital | 1,243,054,490 |
| Total distributable earnings (loss) | 102,194,231 |
| Total - representing net assets applicable to outstanding capital stock | $1,345,248,721 |
| Class A | |
| Net assets | $479,921,168 |
| Shares outstanding | 49,155,941 |
| Net asset value per share | $9.76 |
| Maximum sales charge | 5.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $10.36 |
| Advisor Class | |
| Net assets | $20,432,596 |
| Shares outstanding | 2,009,312 |
| Net asset value per share | $10.17 |
| Class C | |
| Net assets | $12,726,178 |
| Shares outstanding | 1,453,044 |
| Net asset value per share | $8.76 |
| Institutional Class | |
| Net assets | $605,614,236 |
| Shares outstanding | 61,795,459 |
| Net asset value per share | $9.80 |
| Institutional 2 Class | |
| Net assets | $62,808,064 |
| Shares outstanding | 6,174,154 |
| Net asset value per share | $10.17 |
| Institutional 3 Class | |
| Net assets | $140,100,297 |
| Shares outstanding | 14,352,356 |
| Net asset value per share | $9.76 |
| Class R | |
| Net assets | $23,646,182 |
| Shares outstanding | 2,435,323 |
| Net asset value per share | $9.71 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Select Mid Cap Value Fund | Annual Report 2020
|
11 |
Statement of Operations
Year Ended February 29, 2020
Year Ended February 29, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $31,725,701 |
| Dividends — affiliated issuers | 390,117 |
| Foreign taxes withheld | (71,349) |
| Total income | 32,044,469 |
| Expenses: | |
| Management services fees | 11,879,635 |
| Distribution and/or service fees | |
| Class A | 1,405,090 |
| Class C | 171,253 |
| Class R | 148,093 |
| Transfer agent fees | |
| Class A | 931,957 |
| Advisor Class | 39,605 |
| Class C | 28,501 |
| Institutional Class | 1,148,737 |
| Institutional 2 Class | 41,401 |
| Institutional 3 Class | 12,719 |
| Class R | 49,143 |
| Compensation of board members | 58,215 |
| Custodian fees | 11,143 |
| Printing and postage fees | 111,879 |
| Registration fees | 95,950 |
| Audit fees | 25,950 |
| Legal fees | 21,760 |
| Compensation of chief compliance officer | 333 |
| Other | 30,783 |
| Total expenses | 16,212,147 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (696,721) |
| Fees waived by transfer agent | |
| Institutional 2 Class | (3,088) |
| Expense reduction | (4,007) |
| Total net expenses | 15,508,331 |
| Net investment income | 16,536,138 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 85,768,008 |
| Investments — affiliated issuers | 2,151 |
| Net realized gain | 85,770,159 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (123,239,208) |
| Investments — affiliated issuers | 598 |
| Net change in unrealized appreciation (depreciation) | (123,238,610) |
| Net realized and unrealized loss | (37,468,451) |
| Net decrease in net assets resulting from operations | $(20,932,313) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 12 | Columbia Select Mid Cap Value Fund | Annual Report 2020 |
Statement of Changes in Net Assets
|
Year Ended
February 29, 2020 |
Year Ended
February 28, 2019 |
|
| Operations | ||
| Net investment income | $16,536,138 | $12,979,444 |
| Net realized gain | 85,770,159 | 293,473,612 |
| Net change in unrealized appreciation (depreciation) | (123,238,610) | (249,287,067) |
| Net increase (decrease) in net assets resulting from operations | (20,932,313) | 57,165,989 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (18,193,680) | (154,997,509) |
| Advisor Class | (835,092) | (9,252,914) |
| Class C | (449,205) | (8,753,910) |
| Institutional Class | (24,467,859) | (186,659,217) |
| Institutional 2 Class | (2,396,789) | (13,122,849) |
| Institutional 3 Class | (5,612,786) | (48,940,519) |
| Class R | (881,879) | (8,636,973) |
| Class T | — | (41,228) |
| Total distributions to shareholders | (52,837,290) | (430,405,119) |
| Decrease in net assets from capital stock activity | (149,323,097) | (90,838,369) |
| Total decrease in net assets | (223,092,700) | (464,077,499) |
| Net assets at beginning of year | 1,568,341,421 | 2,032,418,920 |
| Net assets at end of year | $1,345,248,721 | $1,568,341,421 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Select Mid Cap Value Fund | Annual Report 2020
|
13 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| February 29, 2020 | February 28, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 3,720,206 | 39,978,178 | 6,845,468 | 82,321,052 |
| Distributions reinvested | 1,549,857 | 16,747,145 | 14,110,115 | 143,170,441 |
| Redemptions | (11,806,729) | (126,986,064) | (17,454,758) | (205,393,415) |
| Net increase (decrease) | (6,536,666) | (70,260,741) | 3,500,825 | 20,098,078 |
| Advisor Class | ||||
| Subscriptions | 768,934 | 8,564,800 | 1,063,773 | 13,560,981 |
| Distributions reinvested | 70,554 | 793,026 | 820,904 | 9,120,135 |
| Redemptions | (862,542) | (9,750,853) | (4,944,600) | (61,448,614) |
| Net decrease | (23,054) | (393,027) | (3,059,923) | (38,767,498) |
| Class C | ||||
| Subscriptions | 99,155 | 956,282 | 196,327 | 2,057,701 |
| Distributions reinvested | 42,422 | 413,178 | 839,232 | 8,239,279 |
| Redemptions | (920,275) | (8,838,996) | (4,470,813) | (52,052,375) |
| Net decrease | (778,698) | (7,469,536) | (3,435,254) | (41,755,395) |
| Institutional Class | ||||
| Subscriptions | 6,609,536 | 71,587,344 | 5,320,887 | 63,037,043 |
| Distributions reinvested | 2,108,240 | 22,834,881 | 16,850,564 | 172,232,428 |
| Redemptions | (13,887,409) | (150,522,554) | (18,143,253) | (216,878,671) |
| Net increase (decrease) | (5,169,633) | (56,100,329) | 4,028,198 | 18,390,800 |
| Institutional 2 Class | ||||
| Subscriptions | 1,675,027 | 18,814,543 | 3,890,214 | 41,231,272 |
| Distributions reinvested | 213,491 | 2,396,789 | 1,216,107 | 13,115,217 |
| Redemptions | (2,256,270) | (25,034,276) | (4,573,681) | (58,493,418) |
| Net increase (decrease) | (367,752) | (3,822,944) | 532,640 | (4,146,929) |
| Institutional 3 Class | ||||
| Subscriptions | 3,349,292 | 36,095,945 | 3,232,831 | 39,389,706 |
| Distributions reinvested | 391,920 | 4,224,192 | 2,758,688 | 28,294,838 |
| Redemptions | (4,230,934) | (45,292,288) | (9,172,108) | (109,531,841) |
| Net decrease | (489,722) | (4,972,151) | (3,180,589) | (41,847,297) |
| Class K | ||||
| Redemptions | — | — | (456) | (6,275) |
| Net decrease | — | — | (456) | (6,275) |
| Class R | ||||
| Subscriptions | 504,029 | 5,369,854 | 555,228 | 6,591,157 |
| Distributions reinvested | 79,460 | 854,855 | 807,129 | 8,188,648 |
| Redemptions | (1,171,497) | (12,529,078) | (1,462,863) | (17,412,415) |
| Net decrease | (588,008) | (6,304,369) | (100,506) | (2,632,610) |
| Class T | ||||
| Distributions reinvested | — | — | 4,003 | 40,739 |
| Redemptions | — | — | (20,899) | (211,982) |
| Net decrease | — | — | (16,896) | (171,243) |
| Total net decrease | (13,953,533) | (149,323,097) | (1,731,961) | (90,838,369) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 14 | Columbia Select Mid Cap Value Fund | Annual Report 2020 |
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BLANK]
|
Columbia Select Mid Cap Value Fund | Annual Report 2020
|
15 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. 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.
|
Net asset value,
beginning of period |
Net
investment income (loss) |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $10.34 | 0.10 | (0.32) | (0.22) | (0.10) | (0.26) | (0.36) |
| Year Ended 2/28/2019 | $13.27 | 0.07 | 0.18 | 0.25 | (0.07) | (3.11) | (3.18) |
| Year Ended 2/28/2018 | $15.19 | 0.13 | 0.80 | 0.93 | (0.14) | (2.71) | (2.85) |
| Year Ended 2/28/2017 | $12.88 | 0.11 | 3.35 | 3.46 | (0.11) | (1.04) | (1.15) |
| Year Ended 2/29/2016 | $17.18 | 0.06 | (2.03) | (1.97) | (0.05) | (2.28) | (2.33) |
| Advisor Class | |||||||
| Year Ended 2/29/2020 | $10.75 | 0.13 | (0.33) | (0.20) | (0.12) | (0.26) | (0.38) |
| Year Ended 2/28/2019 | $13.67 | 0.10 | 0.19 | 0.29 | (0.10) | (3.11) | (3.21) |
| Year Ended 2/28/2018 | $15.57 | 0.17 | 0.82 | 0.99 | (0.18) | (2.71) | (2.89) |
| Year Ended 2/28/2017 | $13.18 | 0.15 | 3.42 | 3.57 | (0.14) | (1.04) | (1.18) |
| Year Ended 2/29/2016 | $17.52 | 0.10 | (2.07) | (1.97) | (0.09) | (2.28) | (2.37) |
| Class C | |||||||
| Year Ended 2/29/2020 | $9.30 | 0.02 | (0.28) | (0.26) | (0.02) | (0.26) | (0.28) |
| Year Ended 2/28/2019 | $12.29 | (0.02) | 0.14 | 0.12 | — | (3.11) | (3.11) |
| Year Ended 2/28/2018 | $14.29 | 0.01 | 0.75 | 0.76 | (0.05) | (2.71) | (2.76) |
| Year Ended 2/28/2017 | $12.20 | 0.00(d) | 3.17 | 3.17 | (0.04) | (1.04) | (1.08) |
| Year Ended 2/29/2016 | $16.47 | (0.06) | (1.93) | (1.99) | — | (2.28) | (2.28) |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $10.38 | 0.13 | (0.33) | (0.20) | (0.12) | (0.26) | (0.38) |
| Year Ended 2/28/2019 | $13.31 | 0.10 | 0.18 | 0.28 | (0.10) | (3.11) | (3.21) |
| Year Ended 2/28/2018 | $15.23 | 0.18 | 0.79 | 0.97 | (0.18) | (2.71) | (2.89) |
| Year Ended 2/28/2017 | $12.91 | 0.15 | 3.35 | 3.50 | (0.14) | (1.04) | (1.18) |
| Year Ended 2/29/2016 | $17.21 | 0.10 | (2.03) | (1.93) | (0.09) | (2.28) | (2.37) |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $10.76 | 0.14 | (0.33) | (0.19) | (0.14) | (0.26) | (0.40) |
| Year Ended 2/28/2019 | $13.67 | 0.11 | 0.20 | 0.31 | (0.11) | (3.11) | (3.22) |
| Year Ended 2/28/2018 | $15.57 | 0.18 | 0.83 | 1.01 | (0.20) | (2.71) | (2.91) |
| Year Ended 2/28/2017 | $13.18 | 0.17 | 3.42 | 3.59 | (0.16) | (1.04) | (1.20) |
| Year Ended 2/29/2016 | $17.52 | 0.12 | (2.07) | (1.95) | (0.11) | (2.28) | (2.39) |
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $10.34 | 0.14 | (0.32) | (0.18) | (0.14) | (0.26) | (0.40) |
| Year Ended 2/28/2019 | $13.27 | 0.12 | 0.18 | 0.30 | (0.12) | (3.11) | (3.23) |
| Year Ended 2/28/2018 | $15.20 | 0.14 | 0.84 | 0.98 | (0.20) | (2.71) | (2.91) |
| Year Ended 2/28/2017 | $12.89 | 0.17 | 3.35 | 3.52 | (0.17) | (1.04) | (1.21) |
| Year Ended 2/29/2016 | $17.19 | 0.13 | (2.03) | (1.90) | (0.12) | (2.28) | (2.40) |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 16 | Columbia Select Mid Cap Value Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income (loss) ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $9.76 | (2.47%) | 1.21% | 1.16%(c) | 0.91% | 28% | $479,921 |
| Year Ended 2/28/2019 | $10.34 | 3.57% | 1.20% | 1.17%(c) | 0.57% | 79% | $575,861 |
| Year Ended 2/28/2018 | $13.27 | 5.96% | 1.18% | 1.18%(c) | 0.86% | 59% | $692,641 |
| Year Ended 2/28/2017 | $15.19 | 27.41% | 1.17% | 1.17%(c) | 0.78% | 33% | $886,910 |
| Year Ended 2/29/2016 | $12.88 | (12.77%) | 1.18% | 1.18%(c) | 0.37% | 47% | $837,676 |
| Advisor Class | |||||||
| Year Ended 2/29/2020 | $10.17 | (2.14%) | 0.96% | 0.91%(c) | 1.16% | 28% | $20,433 |
| Year Ended 2/28/2019 | $10.75 | 3.79% | 0.95% | 0.92%(c) | 0.78% | 79% | $21,857 |
| Year Ended 2/28/2018 | $13.67 | 6.20% | 0.93% | 0.92%(c) | 1.10% | 59% | $69,624 |
| Year Ended 2/28/2017 | $15.57 | 27.70% | 0.93% | 0.93%(c) | 1.02% | 33% | $105,459 |
| Year Ended 2/29/2016 | $13.18 | (12.53%) | 0.94% | 0.94%(c) | 0.64% | 47% | $63,910 |
| Class C | |||||||
| Year Ended 2/29/2020 | $8.76 | (3.11%) | 1.96% | 1.92%(c) | 0.17% | 28% | $12,726 |
| Year Ended 2/28/2019 | $9.30 | 2.78% | 1.95% | 1.92%(c) | (0.20%) | 79% | $20,763 |
| Year Ended 2/28/2018 | $12.29 | 5.09% | 1.93% | 1.92%(c) | 0.10% | 59% | $69,670 |
| Year Ended 2/28/2017 | $14.29 | 26.48% | 1.92% | 1.92%(c) | 0.03% | 33% | $99,413 |
| Year Ended 2/29/2016 | $12.20 | (13.42%) | 1.93% | 1.93%(c) | (0.38%) | 47% | $99,372 |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $9.80 | (2.22%) | 0.96% | 0.91%(c) | 1.16% | 28% | $605,614 |
| Year Ended 2/28/2019 | $10.38 | 3.84% | 0.95% | 0.92%(c) | 0.82% | 79% | $694,941 |
| Year Ended 2/28/2018 | $13.31 | 6.21% | 0.93% | 0.93%(c) | 1.20% | 59% | $837,610 |
| Year Ended 2/28/2017 | $15.23 | 27.74% | 0.93% | 0.93%(c) | 1.02% | 33% | $1,421,365 |
| Year Ended 2/29/2016 | $12.91 | (12.51%) | 0.93% | 0.93%(c) | 0.61% | 47% | $1,450,834 |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $10.17 | (2.12%) | 0.85% | 0.80% | 1.27% | 28% | $62,808 |
| Year Ended 2/28/2019 | $10.76 | 3.99% | 0.83% | 0.80% | 0.89% | 79% | $70,379 |
| Year Ended 2/28/2018 | $13.67 | 6.33% | 0.82% | 0.82% | 1.17% | 59% | $82,174 |
| Year Ended 2/28/2017 | $15.57 | 27.86% | 0.80% | 0.80% | 1.15% | 33% | $88,789 |
| Year Ended 2/29/2016 | $13.18 | (12.40%) | 0.79% | 0.79% | 0.76% | 47% | $58,924 |
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $9.76 | (2.07%) | 0.80% | 0.75% | 1.32% | 28% | $140,100 |
| Year Ended 2/28/2019 | $10.34 | 4.02% | 0.78% | 0.76% | 0.97% | 79% | $153,442 |
| Year Ended 2/28/2018 | $13.27 | 6.34% | 0.77% | 0.77% | 0.98% | 59% | $239,180 |
| Year Ended 2/28/2017 | $15.20 | 27.94% | 0.75% | 0.75% | 1.19% | 33% | $78,828 |
| Year Ended 2/29/2016 | $12.89 | (12.35%) | 0.74% | 0.74% | 0.81% | 47% | $44,147 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Select Mid Cap Value Fund | Annual Report 2020
|
17 |
Financial Highlights (continued)
|
Net asset value,
beginning of period |
Net
investment income (loss) |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class R | |||||||
| Year Ended 2/29/2020 | $10.29 | 0.07 | (0.32) | (0.25) | (0.07) | (0.26) | (0.33) |
| Year Ended 2/28/2019 | $13.22 | 0.04 | 0.18 | 0.22 | (0.04) | (3.11) | (3.15) |
| Year Ended 2/28/2018 | $15.14 | 0.09 | 0.80 | 0.89 | (0.10) | (2.71) | (2.81) |
| Year Ended 2/28/2017 | $12.84 | 0.08 | 3.33 | 3.41 | (0.07) | (1.04) | (1.11) |
| Year Ended 2/29/2016 | $17.14 | 0.02 | (2.03) | (2.01) | (0.01) | (2.28) | (2.29) |
| 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%. |
| (d) | Rounds to zero. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 18 | Columbia Select Mid Cap Value Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income (loss) ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Class R | |||||||
| Year Ended 2/29/2020 | $9.71 | (2.72%) | 1.46% | 1.41%(c) | 0.66% | 28% | $23,646 |
| Year Ended 2/28/2019 | $10.29 | 3.34% | 1.45% | 1.42%(c) | 0.32% | 79% | $31,097 |
| Year Ended 2/28/2018 | $13.22 | 5.71% | 1.43% | 1.42%(c) | 0.61% | 59% | $41,290 |
| Year Ended 2/28/2017 | $15.14 | 27.10% | 1.42% | 1.42%(c) | 0.54% | 33% | $53,457 |
| Year Ended 2/29/2016 | $12.84 | (13.02%) | 1.43% | 1.43%(c) | 0.11% | 47% | $52,550 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Select Mid Cap Value Fund | Annual Report 2020
|
19 |
Notes to Financial Statements
February 29, 2020
February 29, 2020
Note 1. Organization
Columbia Select Mid Cap Value
Fund (the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a liquidation will be
proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A and Class C shares are offered to the general public for investment. Class C shares automatically convert to Class A shares after 10 years. Advisor Class, Institutional Class, Institutional 2
Class, Institutional 3 Class and Class R shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional investors and to certain other investors as also
described in the Fund’s prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
All equity securities are valued at
the close of business of the New York Stock Exchange. Equity securities are valued at the official closing price on the principal exchange or market on which they trade. Unlisted securities or listed securities for
which there were no sales during the day are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets.
Foreign equity securities are
valued based on the closing price on the foreign exchange in which such securities are primarily traded. If any foreign equity security closing prices are not readily available, the securities are valued at the mean
of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are determined at the scheduled closing time of the New York Stock Exchange. Many securities markets and exchanges
outside the U.S. close prior to the close of the New York Stock Exchange; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but
before the close of the New York Stock Exchange. In those situations, foreign securities will be fair valued pursuant to a policy adopted by the Board of Trustees. Under the policy, the Fund may utilize a third-party
pricing service to determine these fair values. The third-party pricing service takes into account multiple factors, including, but not limited to, movements in the U.S. securities markets, certain depositary
receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that reasonably reflects the current market
conditions as of the close of the New York Stock Exchange. The fair value of a security is likely to be different from the quoted or published price, if available.
Investments in open-end investment
companies, including money market funds, are valued at their latest net asset value.
| 20 | Columbia Select Mid Cap Value Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published
price for the security, if available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Corporate actions and dividend
income are generally recorded net of any non-reclaimable tax withholdings, on the ex-dividend date or upon receipt of ex-dividend notification in the case of certain foreign securities.
The Fund may receive distributions
from holdings in equity securities, business development companies (BDCs), exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment companies (RICs), and real estate investment trusts
(REITs), which report information as to the tax character of their distributions annually. These distributions are allocated to dividend income, capital gain and return of capital based on actual information reported.
Return of capital is recorded as a reduction of the cost basis of securities held. If the Fund no longer owns the applicable securities, return of capital is recorded as a realized gain. With respect to REITs, to the
extent actual information has not yet been reported, estimates for return of capital are made by Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise
Financial, Inc. (Ameriprise Financial). The Investment Manager’s estimates are subsequently adjusted when the actual character of the distributions is disclosed by the REITs, which could result in a
proportionate change in return of capital to shareholders.
Awards from class action litigation
are recorded as a reduction of cost basis if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities on the payment date, the proceeds are recorded as
realized gains.
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable income and net capital gain, if any, for its
tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net income and certain other
amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
|
Columbia Select Mid Cap Value Fund | Annual Report 2020
|
21 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Foreign taxes
The Fund may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules
and regulations that exist in the markets in which it invests.
Realized gains in certain countries
may be subject to foreign taxes at the Fund level, based on statutory rates. The Fund accrues for such foreign taxes on realized and unrealized gains at the appropriate rate for each jurisdiction, as applicable. The
amount, if any, is disclosed as a liability on the Statement of Assets and Liabilities.
Distributions to shareholders
Distributions from net investment
income, if any, are declared and paid each calendar quarter. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with
federal income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Note 3. Fees and other
transactions with affiliates
Management services fees
The Fund has entered into a
Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the
Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the
Fund’s daily net assets that declines from 0.82% to 0.65% as the Fund’s net assets increase. The effective management services fee rate for the year ended February 29, 2020 was 0.77% of the Fund’s
average daily net assets.
Compensation of board members
Members of the Board of Trustees
who are not officers or employees of the Investment Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the
Deferred Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of
certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All
amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transactions with affiliates
For the year ended February 29,
2020, the Fund engaged in purchase and/or sale transactions with affiliates and/or accounts that have a common investment manager (or affiliated investment managers), common directors/trustees, and/or common officers.
Those purchase and sale transactions complied with provisions of Rule 17a-7 under the 1940 Act and were $7,286,207 and $0, respectively.
| 22 | Columbia Select Mid Cap Value Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as
sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class. In addition, effective July 1, 2019 through June 30, 2020, Institutional 2 Class
shares are subject to a contractual transfer agency fee annual limitation of not more than 0.05% of the average daily net assets attributable to Institutional 2 Class shares.
For the year ended February 29,
2020, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| Effective rate (%) | |
| Class A | 0.17 |
| Advisor Class | 0.17 |
| Class C | 0.17 |
| Institutional Class | 0.17 |
| Institutional 2 Class | 0.05 |
| Institutional 3 Class | 0.01 |
| Class R | 0.17 |
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended February 29, 2020, these minimum account balance fees reduced total expenses
of the Fund by $4,007.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays
a monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class C shares of the Fund and a monthly distribution fee to the Distributor at the
maximum annual rates of 0.75% and 0.50% of the average daily net assets attributable to Class C and Class R shares of the Fund, respectively.
|
Columbia Select Mid Cap Value Fund | Annual Report 2020
|
23 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended February 29, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 5.75 | 0.50 - 1.00(a) | 102,985 |
| Class C | — | 1.00(b) | 710 |
| (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 applies to redemptions within 12 months after purchase, with certain limited exceptions. |
The Fund’s other share
classes are not subject to sales charges.
Expenses waived/reimbursed by the
Investment Manager and its affiliates
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) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, 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 following annual rate(s) as a percentage of the class’ average daily net assets:
Under the agreement governing
these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes
(including foreign transaction taxes), expenses associated with investments 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, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from
the Investment Manager, certain of its affiliates and the Fund. In addition to the contractual agreement, the Investment Manager and certain of its affiliates have voluntarily agreed to waive fees and/or reimburse
Fund expenses (excluding certain fees and expenses described above) so that Fund level expenses (expenses directly attributable to the Fund and not to a specific share class) are waived proportionately across all
share classes, but the Fund’s net operating expenses shall not exceed the contractual annual rates listed in the table above. This arrangement may be revised or discontinued at any time. Reflected in the
contractual cap commitment, effective July 1, 2019 through June 30, 2020, is the Transfer Agent’s contractual agreement to limit total transfer agency fees to an annual rate of not more than 0.05% for
Institutional 2 Class of the average daily net assets attributable to Institutional 2 Class, unless sooner terminated at the sole discretion of the Board of Trustees. Any fees waived and/or expenses reimbursed under
the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its affiliates in future periods.
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
| 24 | Columbia Select Mid Cap Value Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
At February 29, 2020, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses and trustees’ deferred compensation. To the extent these differences were permanent, reclassifications were made
among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
The Fund did not have any permanent
differences; therefore, no reclassifications were made.
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended February 29, 2020 | Year Ended February 28, 2019 | ||||
|
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 16,762,090 | 36,075,200 | 52,837,290 | 51,537,238 | 378,867,881 | 430,405,119 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At February 29, 2020, the
components of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| 1,921,839 | 38,432,001 | — | 62,058,629 |
At February 29, 2020, the cost of
all investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
|
Federal
tax cost ($) |
Gross unrealized
appreciation ($) |
Gross unrealized
(depreciation) ($) |
Net unrealized
appreciation ($) |
| 1,284,686,740 | 183,674,101 | (121,615,472) | 62,058,629 |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
Management of the Fund has
concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at
a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the
prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio
information
The cost of purchases and
proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $425,055,328 and $600,392,044, respectively, for the year ended February 29, 2020. The amount of purchase and
sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes referred to
as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
|
Columbia Select Mid Cap Value Fund | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Note 7. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund did not borrow or lend
money under the Interfund Program during the year ended February 29, 2020.
Note 8. Line of credit
The Fund has access to a
revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. The credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager or an affiliated investment manager, severally and
not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the federal funds effective rate, (ii) the
one-month LIBOR rate and (iii) the overnight bank funding rate, plus in each case, 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a
commitment fee equal to its pro rata share of the unused amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations. This agreement
expires annually in December unless extended or renewed.
The Fund had no borrowings during
the year ended February 29, 2020.
Note 9. Significant
risks
Market and environment risk
The Fund may incur losses due to
declines in the value of one or more securities in which it invests. These declines may be due to factors affecting a particular issuer, or the result of, among other things, political, regulatory, market, economic or
social developments affecting the relevant market(s) more generally. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers,
which could adversely affect Fund, including causing difficulty in assigning prices to hard-to-value assets in thinly traded and closed markets, significant redemptions and operational challenges. Global economies and
financial markets are increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may
be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional or global events
such as terrorism, war, natural disasters, disease/virus outbreaks and epidemics or other public health issues, recessions, depressions or other events – or the potential for such events – could have a
significant negative impact on global economic and market conditions.
The coronavirus disease 2019
(COVID-19) public health crisis has become a pandemic that has resulted in, and may continue to result in, significant global economic and societal disruption and market volatility due to disruptions in market access,
resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. Such disruptions may be caused, or exacerbated by, quarantines and travel restrictions,
workforce displacement and loss in human and other resources. The uncertainty surrounding the magnitude, duration, reach, costs and effects of the global pandemic, as well as actions that have been or could be taken
by governmental authorities or other third parties, present unknowns that are yet to unfold. The impacts, as well as the uncertainty over impacts to come, of COVID-19 – and any other infectious illness
outbreaks, epidemics and pandemics that may arise in the future – could negatively affect global economies and markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illness
outbreaks
| 26 | Columbia Select Mid Cap Value Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
and epidemics in emerging market countries may be
greater due to generally less established healthcare systems, governments and financial markets. Public health crises caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and economic
risks in certain countries or globally. The disruptions caused by COVID-19 could prevent the Fund from executing advantageous investment decisions in a timely manner and negatively impact the Fund’s ability to
achieve their investment objectives. Any such event(s) could have a significant adverse impact on the value and risk profile of the Fund.
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting different communities at different times with varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including
the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to continue ordinary business operations and technology functions over near- or longer-term periods.
Small- and mid-cap company 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.
Note 10. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 11. Information
regarding pending and settled legal proceedings
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. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to
Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that
these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe
proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines,
penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.
|
Columbia Select Mid Cap Value Fund | Annual Report 2020
|
27 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust and Shareholders of Columbia Select Mid Cap Value Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Select Mid Cap Value Fund (one of the funds constituting Columbia Funds Series Trust, referred to hereafter as the "Fund") as of
February 29, 2020, the related statement of operations for the year ended February 29, 2020, the statement of changes in net assets for each of the two years in the period ended February 29, 2020, including the
related notes, and the financial highlights for each of the five years in the period ended February 29, 2020 (collectively referred to as the “financial statements”). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Fund as of February 29, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two
years in the period ended February 29, 2020 and the financial highlights for each of the five years in the period ended February 29, 2020 in conformity with accounting principles generally accepted in the United
States of America.
Basis for Opinion
These financial statements are the
responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these
financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of February 29, 2020 by correspondence with the custodian and transfer agent. We believe that our
audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
April 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
| 28 | Columbia Select Mid Cap Value Fund | Annual Report 2020 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended February 29, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Qualified
dividend income |
Dividends
received deduction |
Capital
gain dividend |
| 94.81% | 94.26% | $75,218,564 |
Qualified dividend income. For
taxable, non-corporate shareholders, the percentage of ordinary income distributed during the fiscal year that represents qualified dividend income subject to reduced tax rates.
Dividends received deduction. The
percentage of ordinary income distributed during the fiscal year that qualifies for the corporate dividends received deduction.
Capital gain dividend. The Fund
designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
TRUSTEES AND
OFFICERS
The Board oversees the Fund’s
operations and 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 Fund’s Trustees as
of the printing of this report, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not
affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach the mandatory retirement age established by the Board.
Independent trustees
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
George S. Batejan
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1953 |
Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 117 | Former Chairman of the Board, NICSA (National Investment Company Services Association) (Executive Committee, Nominating Committee and Governance Committee), 2014-2016; former Director, Intech Investment Management, 2011-2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016; former Advisory Board Member, University of Colorado Business School, 2015-2018 |
|
Columbia Select Mid Cap Value Fund | Annual Report 2020
|
29 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Kathleen Blatz
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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; Member and Interim Chair, Minnesota Sports Facilities Authority, January 2017-July 2017; Interim President and Chief Executive Officer, Blue Cross and Blue Shield of Minnesota (health care insurance), February-July 2018 | 117 | Trustee, BlueCross BlueShield of Minnesota since 2009 (Chair of the Business Development Committee, 2014-2017; Chair of the Governance Committee since 2017); Chair of the Robina Foundation since August 2013; former Member and Chair of the Board, Minnesota Sports Facilities Authority, January 2017-July 2017 |
|
Pamela G. Carlton
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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 | 117 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996; Director, DR Bank (Audit Committee) since 2017; Director, Evercore Inc. (Audit Committee, Nominating and Governance Committee) since 2019 |
|
Patricia M. Flynn
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1950 |
Trustee 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 | 117 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010; Board of Directors, The MA Business Roundtable 2003-2019 |
|
Brian J. Gallagher
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee since 12/17 | Retired; Partner with Deloitte & Touche LLP and its predecessors, 1977-2016 | 117 | Trustee, Catholic Schools Foundation since 2004 |
|
Catherine James Paglia
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Chair of the Board since 1/20; Trustee 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. | 117 | 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) |
| 30 | Columbia Select Mid Cap Value Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Anthony M. Santomero
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1946 |
Trustee 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 | 117 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; former Director, Citigroup Inc. and Citibank, N.A., 2009-2019; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
|
Minor M. Shaw
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1947 |
Trustee 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 | 117 | Director, BlueCross BlueShield of South Carolina since April 2008; Trustee, Hollingsworth Funds since 2016 (previously Board Chair from 2016-2019); Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016; former Director, National Association of Corporate Directors, Carolinas Chapter, 2013-2018 |
|
Sandra Yeager
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1964 |
Trustee since 12/17 | Retired; President and founder, Hanoverian Capital, LLC (SEC registered investment advisor firm), 2008-2016; Managing Director, DuPont Capital, 2006-2008; Managing Director, Morgan Stanley Investment Management, 2004-2006; Senior Vice President, Alliance Bernstein, 1990-2004 | 115 | Director, NAPE Education Foundation since October 2016 |
|
Columbia Select Mid Cap Value Fund | Annual Report 2020
|
31 |
TRUSTEES AND OFFICERS (continued)
Interested trustee affiliated with Investment Manager*
Interested trustee affiliated with Investment Manager*
| * | 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. |
Nations Funds refer to the Funds
within the Columbia Funds Complex that historically bore the Nations brand and includes series of Columbia Funds Series Trust. RiverSource Funds refer to the Funds within the Columbia Funds Complex that historically
bore the RiverSource brand and includes series of Columbia Funds Series Trust II.
The Statement of Additional
Information has additional information about the Fund’s Board members and is available, without charge, upon request by calling 800.345.6611, visiting columbiathreadneedleus.com/investor/ or contacting your
financial intermediary.
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 of the
Fund as of the printing of this report, 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 Fund’s other officers are:
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); officer of Columbia Funds and affiliated funds since 2007. |
|
Michael G. Clarke
225 Franklin Street Boston, MA 02110 Born 1969 |
Chief Financial Officer, Principal Financial Officer (2009), and Senior Vice President (2019) | Vice President, Head of North American Operations, and Co-Head of Global Operations, – Accounting and Tax, Columbia Management Investment Advisers, LLC, since June 2019 (previously Vice President – Accounting and Tax, May 2010 – May 2019); senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009 – January 2019 and December 2015 – January 2019, respectively). |
|
Joseph Beranek
5890 Ameriprise Financial Center Minneapolis, MN 55474 Born 1965 |
Treasurer, Chief Accounting Officer (Principal Accounting Officer) (2019), and Principal Financial Officer (2020) | Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and March 2017, respectively (previously Vice President — Pricing and Corporate Actions, May 2010 - March 2017). |
| 32 | Columbia Select Mid Cap Value Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Fund officers (continued)
Fund officers (continued)
|
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 |
|
Paul B. Goucher
485 Lexington Avenue New York, NY 10017 Born 1968 |
Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since March 2015 (previously Vice President and Assistant Secretary, May 2010 – March 2015). |
|
Thomas P. McGuire
225 Franklin Street Boston, MA 02110 Born 1972 |
Senior 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; Chief Compliance Officer, Columbia Acorn/Wanger Funds since December 2015. |
|
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; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013. |
|
Ryan C. Larrenaga
225 Franklin Street Boston, MA 02110 Born 1970 |
Senior Vice President (2017), Chief Legal Officer (2017), and Secretary (2015) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously Vice President and Group Counsel, August 2011 - August 2018); officer of Columbia Funds and affiliated funds since 2005. |
|
Daniel J. Beckman
225 Franklin Street Boston, MA 02110 Born 1962 |
Senior Vice President (2020) | Vice President – Head of North America Product, Columbia Management Investment Advisers, LLC (since April 2015); previously, Senior Vice President of Investment Product Management, Fidelity Financial Advisor Solutions, a division of Fidelity Investments (January 2012 – March 2015). |
|
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. |
|
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. |
|
Columbia Select Mid Cap Value Fund | Annual Report 2020
|
33 |
[THIS PAGE INTENTIONALLY LEFT
BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia Select Mid Cap Value Fund
P.O. Box 219104
Kansas City, MO 64121-9104
Please read and consider the
investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments
(Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved.
© 2020 Columbia Management Investment
Advisers, LLC.
columbiathreadneedleus.com/investor/
ANN197_02_K01_(04/20)
Annual Report
February 29, 2020
February 29, 2020
Columbia Small Cap
Index Fund
Beginning on January 1, 2021, as
permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports like this one will no longer be sent by mail, unless you
specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (columbiathreadneedleus.com/investor/), and each time a report is posted you will be notified
by mail and provided with a website address to access the report.
If you have already elected to
receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically
at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with the Fund, by calling 800.345.6611 or by enrolling in “eDelivery” by logging
into your account at columbiathreadneedleus.com/investor/.
You may elect to receive all future
reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you
invest directly with the Fund, you can call 800.345.6611 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive paper reports will apply to all Columbia
Funds held in your account if you invest through a financial intermediary or all Columbia Funds held with the fund complex if you invest directly with the Fund.
Not FDIC Insured • No bank
guarantee • May lose value
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Columbia Small Cap Index Fund (the
Fund) mails one shareholder report to each shareholder address, unless such shareholder elected to receive shareholder reports from the Fund electronically. If you would like more than one report, please call
shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and
procedures
The policy of the Board of Trustees
is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by
calling 800.345.6611; contacting your financial intermediary; visiting columbiathreadneedleus.com/investor/; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding
how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting
columbiathreadneedleus.com/investor/, or searching the website of the SEC at sec.gov.
Quarterly schedule of
investments
The Fund files a complete schedule
of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT, and for reporting periods ended prior to March 31, 2019, on Form N-Q. The Fund’s Form N-Q and Form N-PORT
filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q or Form N-PORT, can also be obtained without charge, upon request, by calling
800.345.6611.
Additional Fund information
For more information about the
Fund, please visit columbiathreadneedleus.com/investor/ or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC (the
Investment Manager)
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors,
Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 219104
Kansas City, MO 64121-9104
Columbia Small Cap Index Fund | Annual
Report 2020
Fund at a Glance
Investment objective
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.
Portfolio management
Christopher Lo, CFA
Lead Portfolio Manager
Managed Fund since 2014
Vadim Shteyn
Portfolio Manager
Managed Fund since 2011
Morningstar style boxTM
The Morningstar Style Box is based on a fund’s portfolio holdings. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows
investment style (value, blend, or growth). Information shown is based on the most recent data provided by Morningstar.
© 2020 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or
distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
All results shown assume
reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the
effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance
results would have been lower.
The performance information shown
represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than
their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial
intermediary, visiting columbiathreadneedleus.com/investor/ or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. Since the Fund launched more than one share class at its inception, Class A shares were used. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investor/investment-products/mutual-funds/appended-performance for more information. |
The S&P SmallCap 600 Index
tracks the performance of 600 domestic companies traded on major stock exchanges. The S&P SmallCap 600 Index is heavily weighted with the stocks of companies with small market capitalizations.
Indices are not available for
investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Fund performance may be significantly
negatively impacted by the economic impact of the COVID-19 pandemic. The COVID-19 pandemic has adversely impacted economies and capital markets around the world in ways that will likely continue and may change in
unforeseen ways for an indeterminate period. The COVID-19 pandemic may exacerbate pre-existing political, social and economic risks in certain countries and globally.
|
Columbia Small Cap Index Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (February 28, 2010 — February 29, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Small Cap Index Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions
or on the redemption of Fund shares.
| Portfolio breakdown (%) (at February 29, 2020) | |
| Common Stocks | 99.6 |
| Exchange-Traded Equity Funds | 0.3 |
| Money Market Funds | 0.1 |
| Rights | 0.0(a) |
| Total | 100.0 |
| (a) | Rounds to zero. |
Percentages indicated are based upon
total investments excluding investments in derivatives, if any. The Fund’s portfolio composition is subject to change.
Percentages indicated are based
upon total equity investments. The Fund’s portfolio composition is subject to change.
| 4 | Columbia Small Cap Index Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that ended
February 29, 2020, the Fund’s Class A shares returned -8.08%. The Fund closely tracked its benchmark, the unmanaged S&P Small Cap 600 Index, which returned -7.68% for the same period. Mutual funds, unlike
unmanaged indices, incur operating expenses.
U.S. equity markets posted
divergent results amid extreme volatility
The 12 months ended February 29,
2020 proved to be volatile for U.S. equities. The annual period began with mixed results, as large-cap stocks wobbled modestly higher, while mid-cap and small-cap companies posted negative absolute returns on fears
that economic growth was potentially slowing and the impact of U.S.-China trade headlines might be greater than the U.S. Administration was stating. Through the second quarter of 2019, large-cap stocks continued to
better weather the “risk off” sentiment, or heightened risk aversion, that dominated these months, as did growth stocks across the capitalization spectrum. Speculation around the market’s hoped-for
interest rate cuts from the U.S. Federal Reserve (Fed) contributed to frequent swings in investor optimism.
Day-to-day sentiment about the
state of U.S.-China trade relations remained a major factor influencing the U.S. equity markets going into the second half of 2019. Also adding to the list of worries were U.S. recession fears based on weak
manufacturing data, uncertainties about global economic growth, several geopolitical hotspots, domestic political turmoil around the impeachment of the U.S. President and the then-diverse and differentiated Democratic
presidential candidate campaigns. Toward the end of 2019, however, investor optimism soared. Hopeful expectations surrounding a “Phase 1” trade deal between the U.S. and China, an accommodative Fed and the
seemingly persistent resilience of the American consumer led the S&P 500 Index to its best fourth quarter since 2013. Mid-cap and small-cap stocks lagged their large-cap counterparts but also posted a strong
fourth calendar quarter.
The optimism seen at the end of the
2019 calendar year continued into the start of the new decade but was derailed quickly by the outbreak of the highly contagious and novel coronavirus first identified in Wuhan, Hubei province in China. As the impact
of the coronavirus became more pronounced and fears of a severe pandemic that could cause a global recession grew, markets around the world, including the U.S., sold off dramatically. The S&P 500 Index lost almost
11.5% in the last week of February 2020 alone, its biggest weekly decline since October 2008. Mid-cap and small-cap companies struggled similarly.
Still, even with the sharp decline
in February 2020, the S&P 500 Index ended the annual period up 8.19%. However, amid heightened volatility and risk aversion, mid-cap and small-cap stocks significantly underperformed large-cap stocks, with the
S&P Mid Cap 400 Index and the S&P Small Cap 600 Index posting returns of -3.39% and -7.68%, respectively, for the same annual period.
S&P Small Cap 600 Index
returns hampered most by energy sector
Only three of the eleven sectors
of the S&P Small Cap 600 Index posted a positive return during the 12 months ended February 29, 2020. In terms of total return, utilities, real estate and information technology were the best relative performers.
On the basis of impact, which takes weightings and total returns into account, the same three sectors, led by information technology and then utilities and real estate, were the biggest contributors to the
Index’s return. The top performing industries for the annual period on the basis of total return were automobiles; life sciences tools and services; Internet and direct marketing retail; diversified financial
services; and multi-utilities.
Conversely, energy was by far the
weakest sector from both a total return perspective and on the basis of impact. Materials and consumer staples also posted weak total returns. Financials and consumer discretionary were the next weakest sectors on the
basis of impact. The worst performing industries for the annual period on the basis of total return were energy equipment and services; oil, gas and consumable fuels; multiline retail; food and staples retailing; and
beverages.
Top individual contributors within
the S&P Small Cap 600 Index during the annual period included pharmaceuticals company Medicines Co.; biotechnology company Arrowhead Pharmaceuticals, Inc.; renewable energy company SolarEdge Technologies, Inc.;
biopharmaceutical company Momenta Pharmaceuticals, Inc.; and insulation installation services provider TopBuild Corp. Top detractors were robot manufacturer iRobot Corp.; oil and gas exploration and production company
Whiting Petroleum Corp.; oil and gas producer and distributor PDC Energy, Inc.; machinery manufacturer Hillenbrand, Inc.; and medical equipment manufacturer Merit Medical Systems, Inc.
|
Columbia Small Cap Index Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
Industrials remained the largest
sector by weighting in the S&P Small Cap 600 Index as of February 29, 2020, with a weighting of 18.03%. As always, each sector and stock in the S&P Small Cap 600 Index was represented in the Fund with
approximately the same weighting as in the Index and therefore had a similar effect.
Index additions and deletions
drove Fund portfolio changes
During the annual period, there
were 90 additions and 90 deletions to the Index and the Fund’s portfolio. Among those stocks added to the Index and Fund were Big Lots, Inc., Diamond Offshore Drilling, Inc., Livent Corp., Whiting Petroleum,
Pitney Bowes, Arrowhead Pharmaceuticals, Realogy Holdings Corp., Genomic Health, Inc. Inogen, Inc., QEP Resources, Inc., Signet Jewelers Ltd., Tupperware Brands Corp., Fresh Del Monte Produce, Inc., Oceaneering
International, Inc., Granite Construction, Inc. and Tanger Factory Outlet Centers, Inc. Deletions included Gannett Co., Ambac Financial Group, Inc., Avon Products, Inc., Barnes & Noble Education, Inc., CARBO
Ceramics, Inc., Finisar Corp., Kirkland’s, Inc., LSC Communications, Inc., Medicines Co., PS Business Parks, Inc., Repligen Corp., SolarEdge Technologies, Trex Co., Inc., Vitamin Shoppe, Inc., Wageworks, Inc.
and Nutrisystem, Inc..
We do not anticipate any changes in
the portfolio beyond the customary quarterly rebalancings and stock substitutions we make to align the Fund with the S&P Small Cap 600 Index.
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Investments in small-cap companies involve risks and volatility greater than investments in larger, more established companies. The Fund’s net value will generally decline when the performance of its
targeted index declines. Investing in derivatives is a specialized activity that involves special risks, which may result in significant losses. The Fund may invest significantly in issuers within a particular sector, which may be negatively affected by market, economic or other conditions, making the Fund more vulnerable to unfavorable developments in the sector. See the Fund’s prospectus for
more information on these and other risks.
The views expressed in this report
reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and
results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update
such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf
of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
| 6 | Columbia Small Cap Index Fund | Annual Report 2020 |
Understanding Your Fund’s
Expenses
(Unaudited)
(Unaudited)
As an investor, you incur two types
of costs. There are shareholder transaction costs, which may include redemption fees. There are also ongoing fund costs, which generally include management fees, distribution and/or service fees, and other fund
expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual
funds.
Analyzing your Fund’s
expenses
To illustrate these ongoing
costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment
of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the
“Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the
expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under
the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the
Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or
the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are
required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the
hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are
meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
Expenses paid during the period
are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal
half year and divided by 366.
Expenses do not include fees and
expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment
Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
|
Columbia Small Cap Index Fund | Annual Report 2020
|
7 |
Portfolio of Investments
February 29, 2020
February 29, 2020
(Percentages represent value of
investments compared to net assets)
Investments in securities
| Common Stocks 99.8% | ||
| Issuer | Shares | Value ($) |
| Communication Services 2.4% | ||
| Diversified Telecommunication Services 1.4% | ||
| ATN International, Inc. | 54,034 | 2,912,433 |
| Cincinnati Bell, Inc.(a) | 250,452 | 3,268,399 |
| Cogent Communications Holdings, Inc. | 207,040 | 15,115,990 |
| Consolidated Communications Holdings, Inc. | 358,010 | 2,226,822 |
| Iridium Communications, Inc.(a) | 481,870 | 13,044,221 |
| Vonage Holdings Corp.(a) | 1,132,880 | 10,150,605 |
| Total | 46,718,470 | |
| Entertainment 0.2% | ||
| Glu Mobile, Inc.(a) | 572,080 | 4,073,209 |
| Marcus Corp. (The) | 114,183 | 3,050,970 |
| Total | 7,124,179 | |
| Interactive Media & Services 0.1% | ||
| QuinStreet, Inc.(a) | 228,999 | 2,949,507 |
| Media 0.4% | ||
| EW Scripps Co. (The), Class A | 270,694 | 3,221,259 |
| Gannett Co, Inc. | 610,382 | 2,563,604 |
| Scholastic Corp. | 152,690 | 4,899,822 |
| TechTarget, Inc.(a) | 114,000 | 2,636,820 |
| Total | 13,321,505 | |
| Wireless Telecommunication Services 0.3% | ||
| Shenandoah Telecommunications Co. | 232,790 | 10,342,860 |
| Spok Holdings, Inc. | 87,099 | 867,506 |
| Total | 11,210,366 | |
| Total Communication Services | 81,324,027 | |
| Consumer Discretionary 13.5% | ||
| Auto Components 1.8% | ||
| American Axle & Manufacturing Holdings, Inc.(a) | 558,700 | 3,536,571 |
| Cooper Tire & Rubber Co. | 249,280 | 6,354,147 |
| Cooper-Standard Holding, Inc.(a) | 83,640 | 1,445,299 |
| Dorman Products, Inc.(a) | 144,915 | 8,787,646 |
| Fox Factory Holding Corp.(a) | 191,360 | 12,132,224 |
| Garrett Motion, Inc.(a) | 371,680 | 2,579,459 |
| Gentherm, Inc.(a) | 162,640 | 6,632,459 |
| LCI Industries | 124,317 | 12,002,806 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Motorcar Parts of America, Inc.(a) | 94,170 | 1,576,406 |
| Standard Motor Products, Inc. | 100,389 | 4,417,116 |
| Total | 59,464,133 | |
| Automobiles 0.3% | ||
| Winnebago Industries, Inc. | 167,320 | 8,682,235 |
| Distributors 0.2% | ||
| Core-Mark Holding Co., Inc. | 226,340 | 5,208,083 |
| Diversified Consumer Services 0.7% | ||
| American Public Education, Inc.(a) | 76,484 | 1,702,534 |
| Perdoceo Education Corp.(a) | 349,578 | 5,219,200 |
| Regis Corp.(a) | 120,070 | 1,532,093 |
| Strategic Education, Inc. | 109,106 | 16,080,042 |
| Total | 24,533,869 | |
| Hotels, Restaurants & Leisure 1.7% | ||
| BJ’s Restaurants, Inc. | 95,192 | 3,136,576 |
| Bloomin’ Brands, Inc. | 431,480 | 7,762,325 |
| Chuy’s Holdings, Inc.(a) | 82,530 | 1,769,443 |
| Dave & Buster’s Entertainment, Inc. | 153,150 | 5,055,482 |
| Dine Brands Global, Inc. | 83,411 | 6,827,190 |
| El Pollo Loco Holdings, Inc.(a) | 97,030 | 1,251,687 |
| Fiesta Restaurant Group, Inc.(a) | 106,450 | 1,028,307 |
| Monarch Casino & Resort, Inc.(a) | 59,275 | 2,802,522 |
| Red Robin Gourmet Burgers, Inc.(a) | 64,274 | 1,767,535 |
| Ruth’s Hospitality Group, Inc. | 134,818 | 2,579,068 |
| Shake Shack, Inc., Class A(a) | 154,240 | 9,168,026 |
| Wingstop, Inc. | 146,300 | 12,355,035 |
| Total | 55,503,196 | |
| Household Durables 2.7% | ||
| Cavco Industries, Inc.(a) | 42,650 | 8,603,358 |
| Century Communities, Inc.(a) | 141,260 | 4,708,196 |
| Ethan Allen Interiors, Inc. | 121,512 | 1,603,958 |
| Installed Building Products, Inc.(a) | 105,860 | 6,992,053 |
| iRobot Corp.(a) | 140,425 | 6,738,996 |
| La-Z-Boy, Inc. | 230,397 | 6,600,874 |
| LGI Homes, Inc.(a) | 99,180 | 7,473,213 |
| M/I Homes, Inc.(a) | 139,793 | 5,204,493 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 8 | Columbia Small Cap Index Fund | Annual Report 2020 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| MDC Holdings, Inc. | 248,759 | 9,786,179 |
| Meritage Homes Corp.(a) | 178,831 | 11,348,615 |
| TopBuild Corp.(a) | 168,630 | 17,031,630 |
| Tupperware Brands Corp. | 242,890 | 692,237 |
| Universal Electronics, Inc.(a) | 69,189 | 2,921,160 |
| Total | 89,704,962 | |
| Internet & Direct Marketing Retail 0.5% | ||
| Liquidity Services, Inc.(a) | 133,720 | 524,182 |
| PetMed Express, Inc. | 100,218 | 2,645,755 |
| Shutterstock, Inc.(a) | 95,110 | 3,665,540 |
| Stamps.com, Inc.(a) | 80,570 | 11,369,233 |
| Total | 18,204,710 | |
| Leisure Products 0.4% | ||
| Callaway Golf Co. | 467,455 | 7,937,386 |
| Sturm Ruger & Co., Inc. | 82,510 | 3,963,780 |
| Vista Outdoor, Inc.(a) | 287,240 | 2,111,214 |
| Total | 14,012,380 | |
| Multiline Retail 0.1% | ||
| Big Lots, Inc. | 193,800 | 3,063,978 |
| JCPenney Co., Inc.(a) | 1,494,130 | 1,030,950 |
| Total | 4,094,928 | |
| Specialty Retail 3.5% | ||
| Abercrombie & Fitch Co., Class A | 311,730 | 4,093,015 |
| America’s Car-Mart, Inc.(a) | 30,660 | 3,150,928 |
| Asbury Automotive Group, Inc.(a) | 96,110 | 8,519,190 |
| Barnes & Noble Education, Inc.(a) | 191,923 | 635,265 |
| Boot Barn Holdings, Inc.(a) | 141,880 | 4,351,460 |
| Buckle, Inc. (The) | 141,811 | 3,209,183 |
| Caleres, Inc. | 202,244 | 2,331,873 |
| Cato Corp. (The), Class A | 107,935 | 1,745,309 |
| Chico’s FAS, Inc. | 589,220 | 2,362,772 |
| Children’s Place, Inc. (The) | 77,341 | 4,454,842 |
| Conn’s, Inc.(a) | 94,760 | 772,294 |
| Designer Brands, Inc. | 274,070 | 3,702,686 |
| Express, Inc.(a) | 334,130 | 1,236,281 |
| GameStop Corp., Class A | 327,450 | 1,178,820 |
| Genesco, Inc.(a) | 70,782 | 2,435,609 |
| Group 1 Automotive, Inc. | 86,935 | 7,409,470 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Guess?, Inc. | 211,930 | 3,433,266 |
| Haverty Furniture Companies, Inc. | 89,866 | 1,511,546 |
| Hibbett Sports, Inc.(a) | 87,573 | 1,709,425 |
| Lithia Motors, Inc., Class A | 112,482 | 13,403,355 |
| Lumber Liquidators Holdings, Inc.(a) | 142,608 | 1,397,558 |
| MarineMax, Inc.(a) | 106,569 | 1,804,213 |
| Michaels Companies, Inc. (The)(a) | 379,140 | 1,626,511 |
| Monro, Inc. | 165,271 | 9,275,009 |
| Office Depot, Inc. | 2,714,530 | 6,379,146 |
| Rent-A-Center, Inc. | 244,780 | 5,211,366 |
| Shoe Carnival, Inc. | 44,420 | 1,328,602 |
| Signet Jewelers Ltd. | 260,020 | 6,063,666 |
| Sleep Number Corp.(a) | 141,201 | 6,219,904 |
| Sonic Automotive, Inc., Class A | 120,511 | 3,374,308 |
| Tailored Brands, Inc. | 251,560 | 822,601 |
| Zumiez, Inc.(a) | 101,258 | 2,686,375 |
| Total | 117,835,848 | |
| Textiles, Apparel & Luxury Goods 1.6% | ||
| Crocs, Inc.(a) | 340,768 | 8,917,899 |
| Fossil Group, Inc.(a) | 230,850 | 1,059,602 |
| G-III Apparel Group Ltd.(a) | 213,800 | 4,780,568 |
| Kontoor Brands, Inc. | 231,950 | 7,825,993 |
| Movado Group, Inc. | 81,533 | 1,198,535 |
| Oxford Industries, Inc. | 84,616 | 5,109,960 |
| Steven Madden Ltd. | 384,313 | 12,567,035 |
| Unifi, Inc.(a) | 72,580 | 1,551,035 |
| Vera Bradley, Inc.(a) | 116,490 | 962,207 |
| Wolverine World Wide, Inc. | 401,732 | 10,561,534 |
| Total | 54,534,368 | |
| Total Consumer Discretionary | 451,778,712 | |
| Consumer Staples 3.2% | ||
| Beverages 0.3% | ||
| Coca-Cola Bottling Co. Consolidated | 23,060 | 4,528,523 |
| MGP Ingredients, Inc. | 65,970 | 1,897,297 |
| National Beverage Corp.(a) | 57,820 | 2,445,208 |
| Total | 8,871,028 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Small Cap Index Fund | Annual Report 2020
|
9 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Food & Staples Retailing 0.5% | ||
| Andersons, Inc. (The) | 161,929 | 2,974,636 |
| PriceSmart, Inc. | 110,730 | 6,166,554 |
| SpartanNash Co. | 180,549 | 2,244,224 |
| The Chefs’ Warehouse(a) | 126,560 | 3,875,267 |
| United Natural Foods, Inc.(a) | 264,850 | 1,713,579 |
| Total | 16,974,260 | |
| Food Products 1.1% | ||
| B&G Foods, Inc. | 318,126 | 4,708,265 |
| Calavo Growers, Inc. | 81,282 | 5,888,881 |
| Cal-Maine Foods, Inc. | 150,436 | 5,248,712 |
| Fresh Del Monte Produce, Inc. | 150,470 | 4,125,887 |
| J&J Snack Foods Corp. | 74,167 | 11,927,537 |
| John B. Sanfilippo & Son, Inc. | 43,670 | 3,065,197 |
| Seneca Foods Corp., Class A(a) | 33,983 | 1,179,890 |
| Total | 36,144,369 | |
| Household Products 0.5% | ||
| Central Garden & Pet Co.(a) | 48,720 | 1,304,722 |
| Central Garden & Pet Co., Class A(a) | 199,582 | 5,051,420 |
| WD-40 Co. | 68,069 | 11,741,222 |
| Total | 18,097,364 | |
| Personal Products 0.4% | ||
| Inter Parfums, Inc. | 87,529 | 5,256,991 |
| Medifast, Inc. | 57,699 | 4,795,364 |
| Usana Health Sciences, Inc.(a) | 62,350 | 4,121,335 |
| Total | 14,173,690 | |
| Tobacco 0.4% | ||
| Universal Corp. | 123,210 | 6,080,414 |
| Vector Group Ltd. | 572,610 | 6,653,728 |
| Total | 12,734,142 | |
| Total Consumer Staples | 106,994,853 | |
| Energy 3.0% | ||
| Energy Equipment & Services 1.5% | ||
| Archrock, Inc. | 633,840 | 4,468,572 |
| Diamond Offshore Drilling, Inc.(a) | 321,460 | 980,453 |
| DMC Global Inc | 72,750 | 2,623,365 |
| Dril-Quip, Inc.(a) | 179,720 | 6,401,627 |
| Era Group, Inc.(a) | 98,349 | 963,820 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Exterran Corp.(a) | 139,760 | 712,776 |
| Geospace Technologies Corp.(a) | 67,710 | 834,864 |
| Helix Energy Solutions Group, Inc.(a) | 702,220 | 4,711,896 |
| KLX Energy Services Holdings, Inc.(a) | 104,350 | 252,527 |
| Matrix Service Co.(a) | 134,916 | 1,629,785 |
| Nabors Industries Ltd. | 1,678,820 | 2,954,723 |
| Newpark Resources, Inc.(a) | 445,630 | 1,564,161 |
| Noble Corp. PLC(a) | 1,237,840 | 867,974 |
| Oceaneering International, Inc.(a) | 491,410 | 5,179,462 |
| Oil States International, Inc.(a) | 300,530 | 2,377,192 |
| ProPetro Holding Corp.(a) | 409,030 | 3,583,103 |
| RPC, Inc. | 255,710 | 879,642 |
| SEACOR Holdings, Inc.(a) | 87,204 | 3,252,709 |
| Tetra Technologies, Inc.(a) | 623,599 | 785,735 |
| US Silica Holdings, Inc. | 365,430 | 1,677,324 |
| Valaris PLC | 982,910 | 3,626,938 |
| Total | 50,328,648 | |
| Oil, Gas & Consumable Fuels 1.5% | ||
| Bonanza Creek Energy, Inc.(a) | 92,250 | 1,502,753 |
| Callon Petroleum Co.(a) | 1,939,560 | 4,402,801 |
| CONSOL Energy, Inc.(a) | 128,660 | 732,075 |
| Denbury Resources, Inc.(a) | 2,447,420 | 1,841,439 |
| Dorian LPG Ltd.(a) | 143,730 | 1,598,278 |
| Green Plains, Inc. | 167,880 | 2,012,881 |
| Gulfport Energy Corp.(a) | 721,920 | 591,686 |
| HighPoint Resources Corp.(a) | 541,300 | 368,463 |
| Laredo Petroleum, Inc.(a) | 895,210 | 966,827 |
| Oasis Petroleum, Inc.(a) | 1,436,430 | 2,348,563 |
| Par Pacific Holdings, Inc.(a) | 183,050 | 3,036,799 |
| PDC Energy, Inc.(a) | 482,257 | 9,177,351 |
| Penn Virginia Corp.(a) | 66,860 | 1,063,074 |
| QEP Resources, Inc. | 1,181,180 | 2,657,655 |
| Range Resources Corp. | 1,036,590 | 2,871,354 |
| Renewable Energy Group, Inc.(a) | 193,540 | 5,119,133 |
| REX American Resources Corp.(a) | 27,820 | 1,947,678 |
| Ring Energy, Inc.(a) | 296,420 | 417,952 |
| SM Energy Co. | 526,960 | 3,462,127 |
| Southwestern Energy Co.(a) | 2,688,770 | 3,818,053 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Small Cap Index Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Talos Energy, Inc.(a) | 99,610 | 1,414,462 |
| Whiting Petroleum Corp.(a) | 453,510 | 838,994 |
| Total | 52,190,398 | |
| Total Energy | 102,519,046 | |
| Financials 17.8% | ||
| Banks 9.2% | ||
| Allegiance Bancshares, Inc. | 95,100 | 3,154,467 |
| Ameris Bancorp | 325,260 | 11,117,387 |
| Banc of California, Inc. | 222,840 | 3,416,137 |
| Banner Corp. | 185,133 | 8,449,470 |
| Berkshire Hills Bancorp, Inc. | 213,330 | 5,207,385 |
| Boston Private Financial Holdings, Inc. | 413,485 | 4,033,546 |
| Brookline Bancorp, Inc. | 396,224 | 5,495,627 |
| Cadence BanCorp | 635,880 | 8,978,626 |
| Central Pacific Financial Corp. | 140,960 | 3,371,763 |
| City Holding Co. | 80,980 | 5,662,122 |
| Columbia Banking System, Inc. | 358,315 | 11,896,058 |
| Community Bank System, Inc. | 256,820 | 15,617,224 |
| Customers Bancorp, Inc.(a) | 143,130 | 2,904,108 |
| CVB Financial Corp. | 661,154 | 12,257,795 |
| Dime Community Bancshares, Inc. | 153,174 | 2,570,260 |
| Eagle Bancorp, Inc. | 166,820 | 6,242,404 |
| First BanCorp | 1,079,679 | 8,572,651 |
| First Commonwealth Financial Corp. | 488,362 | 5,762,672 |
| First Financial Bancorp | 493,655 | 10,169,293 |
| First Midwest Bancorp, Inc. | 546,252 | 9,914,474 |
| Franklin Financial Network, Inc. | 66,520 | 2,227,755 |
| Glacier Bancorp, Inc. | 425,867 | 15,880,580 |
| Great Western Bancorp, Inc. | 279,580 | 7,512,315 |
| Hanmi Financial Corp. | 154,550 | 2,410,980 |
| Heritage Financial Corp. | 181,890 | 4,218,029 |
| Hope Bancorp, Inc. | 629,352 | 7,684,388 |
| Independent Bank Corp. | 170,746 | 11,530,477 |
| National Bank Holdings Corp., Class A | 154,830 | 4,736,250 |
| NBT Bancorp, Inc. | 217,530 | 7,328,586 |
| OFG Bancorp | 255,050 | 4,269,537 |
| Old National Bancorp | 844,586 | 13,310,675 |
| Opus Bank | 107,310 | 2,540,028 |
| Pacific Premier Bancorp, Inc. | 294,880 | 7,616,750 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Preferred Bank | 67,590 | 3,455,877 |
| S&T Bancorp, Inc. | 191,407 | 6,291,548 |
| Seacoast Banking Corp. of Florida(a) | 255,720 | 6,367,428 |
| ServisFirst Bancshares, Inc. | 228,940 | 7,909,877 |
| Simmons First National Corp., Class A | 566,094 | 12,103,090 |
| Southside Bancshares, Inc. | 157,675 | 5,080,288 |
| Tompkins Financial Corp. | 60,853 | 4,836,596 |
| Triumph Bancorp, Inc.(a) | 115,880 | 3,924,856 |
| United Community Banks, Inc. | 392,325 | 9,717,890 |
| Veritex Holdings, Inc. | 234,621 | 5,647,327 |
| Westamerica Bancorporation | 134,390 | 7,770,430 |
| Total | 309,165,026 | |
| Capital Markets 0.8% | ||
| Blucora, Inc.(a) | 243,109 | 4,230,097 |
| Donnelley Financial Solutions, Inc.(a) | 155,046 | 1,348,900 |
| Greenhill & Co., Inc. | 73,930 | 1,080,857 |
| INTL FCStone, Inc.(a) | 80,910 | 3,685,450 |
| Piper Sandler Companies | 79,108 | 5,543,889 |
| Virtus Investment Partners, Inc. | 36,377 | 4,016,021 |
| Waddell & Reed Financial, Inc., Class A | 349,310 | 4,806,505 |
| WisdomTree Investments, Inc. | 585,950 | 2,378,957 |
| Total | 27,090,676 | |
| Consumer Finance 0.8% | ||
| Encore Capital Group, Inc.(a) | 137,305 | 5,102,254 |
| Enova International, Inc.(a) | 167,741 | 3,223,982 |
| Ezcorp, Inc., Class A(a) | 261,104 | 1,253,299 |
| Green Dot Corp., Class A(a) | 235,340 | 8,039,214 |
| PRA Group, Inc.(a) | 225,564 | 8,756,395 |
| World Acceptance Corp.(a) | 27,520 | 2,149,312 |
| Total | 28,524,456 | |
| Diversified Financial Services 0.2% | ||
| FGL Holdings | 649,620 | 7,431,653 |
| Insurance 2.9% | ||
| Ambac Financial Group, Inc.(a) | 226,280 | 4,349,102 |
| American Equity Investment Life Holding Co. | 452,250 | 11,432,880 |
| AMERISAFE, Inc. | 95,870 | 6,247,848 |
| eHealth, Inc.(a) | 100,968 | 11,848,595 |
| Employers Holdings, Inc. | 158,036 | 6,090,708 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Small Cap Index Fund | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| HCI Group, Inc. | 31,860 | 1,354,687 |
| Horace Mann Educators Corp. | 204,747 | 7,970,801 |
| James River Group Holdings Ltd. | 151,030 | 6,103,122 |
| Kinsale Capital Group, Inc. | 102,360 | 12,433,669 |
| ProAssurance Corp. | 267,196 | 7,254,371 |
| Safety Insurance Group, Inc. | 72,597 | 5,716,288 |
| Stewart Information Services Corp. | 117,760 | 4,260,557 |
| Third Point Reinsurance Ltd.(a) | 397,820 | 3,548,554 |
| United Fire Group, Inc. | 105,685 | 4,051,963 |
| United Insurance Holdings Corp. | 103,080 | 968,952 |
| Universal Insurance Holdings, Inc. | 151,770 | 3,140,121 |
| Total | 96,772,218 | |
| Mortgage Real Estate Investment Trusts (REITS) 2.2% | ||
| Apollo Commercial Real Estate Finance, Inc. | 709,270 | 11,490,174 |
| ARMOUR Residential REIT, Inc. | 292,520 | 5,288,762 |
| Capstead Mortgage Corp. | 469,935 | 3,336,538 |
| Granite Point Mortgage Trust, Inc. | 272,470 | 4,473,957 |
| Invesco Mortgage Capital, Inc. | 798,750 | 12,843,900 |
| KKR Real Estate Finance Trust, Inc. | 119,930 | 2,355,425 |
| New York Mortgage Trust, Inc. | 1,814,890 | 10,344,873 |
| PennyMac Mortgage Investment Trust | 497,630 | 10,300,941 |
| Ready Capital Corp. | 175,130 | 2,539,385 |
| Redwood Trust, Inc. | 559,760 | 9,560,701 |
| Total | 72,534,656 | |
| Thrifts & Mortgage Finance 1.7% | ||
| Axos Financial, Inc.(a) | 264,860 | 6,597,663 |
| Flagstar Bancorp, Inc. | 171,230 | 5,458,812 |
| HomeStreet, Inc. | 121,260 | 3,284,933 |
| Meta Financial Group, Inc. | 171,750 | 5,641,988 |
| NMI Holdings, Inc., Class A(a) | 337,680 | 7,881,451 |
| Northfield Bancorp, Inc. | 214,950 | 3,037,244 |
| Northwest Bancshares, Inc. | 498,076 | 6,918,276 |
| Provident Financial Services, Inc. | 298,281 | 5,959,654 |
| TrustCo Bank Corp. | 481,415 | 3,302,507 |
| Walker & Dunlop, Inc. | 142,360 | 9,232,046 |
| Total | 57,314,574 | |
| Total Financials | 598,833,259 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Health Care 12.3% | ||
| Biotechnology 2.1% | ||
| Acorda Therapeutics, Inc.(a) | 238,575 | 343,548 |
| AMAG Pharmaceuticals, Inc.(a) | 168,470 | 1,305,642 |
| Anika Therapeutics, Inc.(a) | 70,880 | 2,959,949 |
| Cytokinetics, Inc.(a) | 293,480 | 4,091,111 |
| Eagle Pharmaceuticals, Inc.(a) | 50,250 | 2,306,475 |
| Emergent Biosolutions, Inc.(a) | 217,969 | 12,790,421 |
| Enanta Pharmaceuticals, Inc.(a) | 79,370 | 4,038,346 |
| Momenta Pharmaceuticals, Inc.(a) | 563,981 | 15,955,022 |
| Myriad Genetics, Inc.(a) | 369,510 | 6,510,766 |
| Progenics Pharmaceuticals, Inc.(a) | 429,280 | 2,026,202 |
| REGENXBIO, Inc.(a) | 155,690 | 6,227,600 |
| Spectrum Pharmaceuticals, Inc.(a) | 561,165 | 1,604,932 |
| Vanda Pharmaceuticals, Inc.(a) | 264,940 | 2,922,288 |
| Xencor, Inc.(a) | 245,120 | 7,963,949 |
| Total | 71,046,251 | |
| Health Care Equipment & Supplies 3.3% | ||
| Angiodynamics, Inc.(a) | 186,870 | 2,147,136 |
| Cardiovascular Systems, Inc.(a) | 174,850 | 6,577,857 |
| CONMED Corp. | 140,968 | 13,341,212 |
| CryoLife, Inc.(a) | 186,290 | 4,774,613 |
| Cutera, Inc.(a) | 70,700 | 1,751,946 |
| Heska Corp.(a) | 35,000 | 3,341,450 |
| Inogen, Inc.(a) | 90,690 | 4,151,788 |
| Integer Holdings Corp.(a) | 162,322 | 14,636,575 |
| Invacare Corp. | 167,272 | 1,267,922 |
| Lantheus Holdings, Inc.(a) | 194,960 | 3,031,628 |
| LeMaitre Vascular, Inc. | 81,430 | 2,320,755 |
| Meridian Bioscience, Inc.(a) | 212,310 | 1,696,357 |
| Merit Medical Systems, Inc.(a) | 274,238 | 9,875,310 |
| Mesa Laboratories, Inc. | 19,950 | 4,773,836 |
| Natus Medical, Inc.(a) | 169,330 | 4,551,590 |
| Neogen Corp.(a) | 260,395 | 15,818,996 |
| OraSure Technologies, Inc.(a) | 306,610 | 1,848,858 |
| Orthofix Medical, Inc.(a) | 94,650 | 3,344,931 |
| SurModics, Inc.(a) | 67,299 | 2,349,408 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 12 | Columbia Small Cap Index Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Tactile Systems Technology, Inc.(a) | 94,520 | 4,764,753 |
| Varex Imaging Corp.(a) | 190,600 | 4,425,732 |
| Total | 110,792,653 | |
| Health Care Providers & Services 3.5% | ||
| Addus HomeCare Corp.(a) | 67,240 | 5,128,395 |
| AMN Healthcare Services, Inc.(a) | 232,030 | 17,077,408 |
| BioTelemetry, Inc.(a) | 168,840 | 7,212,845 |
| Community Health Systems, Inc.(a) | 585,360 | 2,885,825 |
| Corvel Corp.(a) | 44,488 | 3,067,003 |
| Covetrus, Inc.(a) | 484,540 | 5,383,239 |
| Cross Country Healthcare, Inc.(a) | 183,181 | 1,736,556 |
| Ensign Group, Inc. (The) | 249,118 | 11,085,751 |
| Hanger, Inc.(a) | 185,470 | 4,278,793 |
| LHC Group, Inc.(a) | 147,130 | 17,870,410 |
| Magellan Health, Inc.(a) | 108,176 | 6,491,642 |
| Owens & Minor, Inc. | 312,200 | 2,132,326 |
| Pennant Group, Inc. (The)(a) | 130,029 | 3,532,888 |
| Providence Service Corp. (The)(a) | 57,020 | 3,522,695 |
| RadNet, Inc.(a) | 207,260 | 4,234,322 |
| Select Medical Holdings Corp.(a) | 533,790 | 12,778,932 |
| Tivity Health, Inc.(a) | 214,557 | 2,718,437 |
| U.S. Physical Therapy, Inc. | 63,450 | 6,612,759 |
| Total | 117,750,226 | |
| Health Care Technology 1.2% | ||
| Computer Programs & Systems, Inc. | 62,041 | 1,661,458 |
| HealthStream, Inc.(a) | 127,059 | 3,090,075 |
| HMS Holdings Corp.(a) | 437,610 | 10,051,902 |
| NextGen Healthcare, Inc.(a) | 240,513 | 3,145,910 |
| Omnicell, Inc.(a) | 208,315 | 16,971,423 |
| Tabula Rasa HealthCare, Inc.(a) | 97,650 | 5,485,000 |
| Total | 40,405,768 | |
| Life Sciences Tools & Services 1.0% | ||
| Luminex Corp. | 208,124 | 5,153,150 |
| Medpace Holdings, Inc.(a) | 136,020 | 12,233,639 |
| NeoGenomics, Inc.(a) | 518,620 | 14,692,505 |
| Total | 32,079,294 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Pharmaceuticals 1.2% | ||
| Akorn, Inc.(a) | 469,950 | 545,142 |
| Amphastar Pharmaceuticals, Inc.(a) | 170,200 | 2,619,378 |
| ANI Pharmaceuticals, Inc.(a) | 46,200 | 2,218,062 |
| Corcept Therapeutics, Inc.(a) | 510,900 | 6,447,558 |
| Endo International PLC(a) | 1,002,550 | 5,534,076 |
| Innoviva, Inc.(a) | 332,030 | 4,472,444 |
| Lannett Co., Inc.(a) | 166,290 | 1,446,723 |
| Pacira Pharmaceuticals, Inc.(a) | 207,290 | 8,992,241 |
| Phibro Animal Health Corp., Class A | 100,780 | 2,544,695 |
| Supernus Pharmaceuticals, Inc.(a) | 260,600 | 4,688,194 |
| Total | 39,508,513 | |
| Total Health Care | 411,582,705 | |
| Industrials 18.0% | ||
| Aerospace & Defense 1.7% | ||
| AAR Corp. | 163,283 | 5,641,427 |
| Aerojet Rocketdyne Holdings, Inc.(a) | 359,617 | 17,721,926 |
| Aerovironment, Inc.(a) | 107,249 | 5,511,526 |
| Cubic Corp. | 155,347 | 8,457,091 |
| Moog, Inc., Class A | 160,124 | 12,348,763 |
| National Presto Industries, Inc. | 25,027 | 1,966,622 |
| Park Aerospace Corp. | 96,827 | 1,346,863 |
| Triumph Group, Inc. | 248,790 | 4,727,010 |
| Total | 57,721,228 | |
| Air Freight & Logistics 0.7% | ||
| Atlas Air Worldwide Holdings, Inc.(a) | 128,505 | 3,433,654 |
| Echo Global Logistics, Inc.(a) | 135,580 | 2,501,451 |
| Forward Air Corp. | 139,939 | 8,257,800 |
| HUB Group, Inc., Class A(a) | 165,787 | 7,664,333 |
| Total | 21,857,238 | |
| Airlines 0.8% | ||
| Allegiant Travel Co. | 65,532 | 8,882,207 |
| Hawaiian Holdings, Inc. | 231,430 | 4,832,258 |
| Skywest, Inc. | 250,459 | 11,370,839 |
| Total | 25,085,304 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Small Cap Index Fund | Annual Report 2020
|
13 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Building Products 2.3% | ||
| AAON, Inc. | 201,849 | 11,103,714 |
| American Woodmark Corp.(a) | 77,330 | 6,477,934 |
| Apogee Enterprises, Inc. | 131,900 | 3,982,061 |
| Gibraltar Industries, Inc.(a) | 160,307 | 8,122,756 |
| Griffon Corp. | 211,575 | 3,681,405 |
| Insteel Industries, Inc. | 90,890 | 1,807,802 |
| Patrick Industries, Inc. | 110,960 | 5,862,017 |
| PGT, Inc.(a) | 290,110 | 4,400,969 |
| Quanex Building Products Corp. | 164,724 | 2,767,363 |
| Simpson Manufacturing Co., Inc. | 200,366 | 15,915,071 |
| Universal Forest Products, Inc. | 304,940 | 14,289,488 |
| Total | 78,410,580 | |
| Commercial Services & Supplies 2.2% | ||
| ABM Industries, Inc. | 329,908 | 10,860,571 |
| Brady Corp., Class A | 247,196 | 11,702,259 |
| Harsco Corp.(a) | 390,470 | 4,681,735 |
| Interface, Inc. | 290,179 | 4,233,712 |
| Matthews International Corp., Class A | 155,670 | 4,601,605 |
| Mobile Mini, Inc. | 219,169 | 8,545,399 |
| Pitney Bowes, Inc. | 848,650 | 2,902,383 |
| RR Donnelley & Sons Co. | 352,183 | 669,148 |
| Team, Inc.(a) | 150,830 | 1,920,066 |
| Unifirst Corp. | 76,012 | 14,123,790 |
| US Ecology, Inc. | 126,410 | 5,316,805 |
| Viad Corp. | 100,962 | 5,068,292 |
| Total | 74,625,765 | |
| Construction & Engineering 0.8% | ||
| Aegion Corp.(a) | 152,788 | 2,751,712 |
| Arcosa, Inc. | 240,370 | 10,326,295 |
| Comfort Systems U.S.A., Inc. | 182,183 | 7,691,766 |
| Granite Construction, Inc. | 232,170 | 4,717,695 |
| MYR Group, Inc.(a) | 82,700 | 2,109,677 |
| Total | 27,597,145 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Electrical Equipment 0.7% | ||
| AZZ, Inc. | 129,905 | 4,792,195 |
| Encore Wire Corp. | 104,124 | 5,098,952 |
| Powell Industries, Inc. | 43,745 | 1,462,395 |
| Sunrun, Inc.(a) | 387,040 | 7,485,354 |
| Vicor Corp.(a) | 91,069 | 3,937,824 |
| Total | 22,776,720 | |
| Industrial Conglomerates 0.2% | ||
| Raven Industries, Inc. | 177,630 | 5,099,757 |
| Machinery 5.8% | ||
| Alamo Group, Inc. | 48,170 | 5,335,791 |
| Albany International Corp., Class A | 152,492 | 9,770,162 |
| Astec Industries, Inc. | 111,987 | 4,205,112 |
| Barnes Group, Inc. | 236,800 | 12,716,160 |
| Briggs & Stratton Corp. | 211,034 | 668,978 |
| Chart Industries, Inc.(a) | 177,820 | 10,121,514 |
| CIRCOR International, Inc.(a) | 98,902 | 3,558,494 |
| Enerpac Tool Group Corp. | 267,624 | 5,719,125 |
| EnPro Industries, Inc. | 103,243 | 5,569,960 |
| ESCO Technologies, Inc. | 129,052 | 11,733,408 |
| Federal Signal Corp. | 300,556 | 8,716,124 |
| Franklin Electric Co., Inc. | 191,146 | 9,880,337 |
| Greenbrier Companies, Inc. (The) | 161,910 | 3,923,079 |
| Hillenbrand, Inc. | 368,115 | 8,613,891 |
| John Bean Technologies Corp. | 157,298 | 15,235,884 |
| Lindsay Corp. | 53,708 | 5,318,703 |
| Lydall, Inc.(a) | 87,038 | 1,036,623 |
| Meritor, Inc.(a) | 367,130 | 8,330,180 |
| Mueller Industries, Inc. | 282,900 | 7,915,542 |
| Proto Labs, Inc.(a) | 132,920 | 11,649,109 |
| SPX Corp.(a) | 219,280 | 9,194,410 |
| SPX FLOW, Inc.(a) | 211,440 | 7,776,763 |
| Standex International Corp. | 61,898 | 3,926,190 |
| Tennant Co. | 90,740 | 6,491,540 |
| Titan International, Inc. | 248,560 | 551,803 |
| Wabash National Corp. | 268,690 | 2,950,216 |
| Watts Water Technologies, Inc., Class A | 137,105 | 12,875,531 |
| Total | 193,784,629 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 14 | Columbia Small Cap Index Fund | Annual Report 2020 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Marine 0.2% | ||
| Matson, Inc. | 212,930 | 7,071,405 |
| Professional Services 1.2% | ||
| Exponent, Inc. | 257,450 | 18,961,192 |
| Forrester Research, Inc.(a) | 52,730 | 1,901,444 |
| Heidrick & Struggles International, Inc. | 95,222 | 2,123,450 |
| Kelly Services, Inc., Class A | 164,849 | 2,738,142 |
| Korn/Ferry International | 274,767 | 9,611,350 |
| Resources Connection, Inc. | 149,537 | 1,873,699 |
| TrueBlue, Inc.(a) | 193,501 | 2,879,295 |
| Total | 40,088,572 | |
| Road & Rail 0.6% | ||
| ArcBest Corp. | 126,705 | 2,510,026 |
| Heartland Express, Inc. | 232,226 | 4,159,168 |
| Marten Transport Ltd. | 192,873 | 3,768,739 |
| Saia, Inc.(a) | 128,830 | 11,248,147 |
| Total | 21,686,080 | |
| Trading Companies & Distributors 0.8% | ||
| Applied Industrial Technologies, Inc. | 192,011 | 11,326,729 |
| DXP Enterprises, Inc.(a) | 79,570 | 2,258,992 |
| Foundation Building Materials, Inc.(a) | 87,550 | 1,365,780 |
| GMS, Inc.(a) | 209,460 | 4,786,161 |
| Kaman Corp. | 138,391 | 7,675,165 |
| Veritiv Corp.(a) | 63,180 | 760,687 |
| Total | 28,173,514 | |
| Total Industrials | 603,977,937 | |
| Information Technology 14.1% | ||
| Communications Equipment 1.1% | ||
| ADTRAN, Inc. | 237,560 | 1,911,170 |
| Applied Optoelectronics, Inc.(a) | 94,930 | 847,725 |
| CalAmp Corp.(a) | 169,485 | 1,630,446 |
| Comtech Telecommunications Corp. | 121,147 | 3,394,539 |
| Digi International, Inc.(a) | 140,647 | 1,862,166 |
| Extreme Networks, Inc.(a) | 603,860 | 3,037,416 |
| Harmonic, Inc.(a) | 448,756 | 2,755,362 |
| NETGEAR, Inc.(a) | 149,755 | 2,825,877 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Plantronics, Inc. | 162,580 | 2,232,223 |
| Viavi Solutions, Inc.(a) | 1,141,430 | 15,055,462 |
| Total | 35,552,386 | |
| Electronic Equipment, Instruments & Components 4.5% | ||
| Anixter International, Inc.(a) | 149,551 | 14,582,718 |
| Arlo Technologies, Inc.(a) | 376,057 | 1,233,467 |
| Badger Meter, Inc. | 144,606 | 8,706,727 |
| Bel Fuse, Inc., Class B | 50,310 | 575,546 |
| Benchmark Electronics, Inc. | 186,901 | 5,079,969 |
| CTS Corp. | 161,947 | 4,221,958 |
| Daktronics, Inc. | 186,133 | 915,774 |
| ePlus, Inc.(a) | 67,090 | 5,082,738 |
| Fabrinet(a) | 183,800 | 10,131,056 |
| FARO Technologies, Inc.(a) | 86,446 | 4,948,169 |
| Insight Enterprises, Inc.(a) | 177,764 | 9,793,019 |
| Itron, Inc.(a) | 174,920 | 13,265,933 |
| KEMET Corp. | 288,560 | 7,525,645 |
| Knowles Corp.(a) | 427,440 | 7,104,053 |
| Methode Electronics, Inc. | 184,241 | 5,648,829 |
| MTS Systems Corp. | 88,421 | 3,549,219 |
| OSI Systems, Inc.(a) | 84,797 | 6,891,452 |
| PC Connection, Inc. | 54,910 | 2,233,190 |
| Plexus Corp.(a) | 144,944 | 9,617,035 |
| Rogers Corp.(a) | 92,256 | 10,701,696 |
| Sanmina Corp.(a) | 347,590 | 9,138,141 |
| Scansource, Inc.(a) | 125,505 | 3,568,107 |
| TTM Technologies, Inc.(a) | 487,333 | 6,330,456 |
| Total | 150,844,897 | |
| IT Services 2.3% | ||
| Cardtronics PLC, Class A(a) | 179,468 | 6,509,305 |
| CSG Systems International, Inc. | 163,657 | 7,241,822 |
| EVERTEC, Inc. | 296,540 | 8,801,307 |
| ExlService Holdings, Inc.(a) | 169,360 | 12,642,724 |
| Mantech International Corp., Class A | 133,690 | 10,013,381 |
| NIC, Inc. | 332,635 | 6,083,894 |
| Perficient, Inc.(a) | 161,983 | 6,636,444 |
| Sykes Enterprises, Inc.(a) | 191,403 | 6,063,647 |
| TTEC Holdings, Inc. | 87,745 | 3,284,295 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Small Cap Index Fund | Annual Report 2020
|
15 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Unisys Corp.(a) | 257,240 | 3,994,937 |
| Virtusa Corp.(a) | 148,248 | 6,539,219 |
| Total | 77,810,975 | |
| Semiconductors & Semiconductor Equipment 3.5% | ||
| Advanced Energy Industries, Inc.(a) | 190,293 | 11,317,676 |
| Axcelis Technologies, Inc.(a) | 161,040 | 3,863,350 |
| Brooks Automation, Inc. | 359,119 | 12,393,197 |
| Ceva, Inc.(a) | 109,245 | 3,103,650 |
| Cohu, Inc. | 204,976 | 4,195,859 |
| Diodes, Inc.(a) | 205,367 | 9,038,202 |
| DSP Group, Inc.(a) | 114,263 | 1,555,119 |
| Formfactor, Inc.(a) | 376,020 | 8,411,567 |
| Ichor Holdings Ltd.(a) | 111,740 | 3,231,521 |
| Kulicke & Soffa Industries, Inc. | 314,965 | 7,190,651 |
| MaxLinear, Inc., Class A(a) | 323,490 | 5,001,155 |
| Onto Innovation, Inc.(a) | 243,699 | 7,449,878 |
| PDF Solutions, Inc.(a) | 138,190 | 2,023,102 |
| Photronics, Inc.(a) | 333,790 | 4,155,686 |
| Power Integrations, Inc. | 146,144 | 12,721,835 |
| Rambus, Inc.(a) | 553,820 | 7,742,404 |
| SMART Global Holdings, Inc.(a) | 65,350 | 1,753,994 |
| Ultra Clean Holdings, Inc.(a) | 197,730 | 4,134,534 |
| Veeco Instruments, Inc.(a) | 242,914 | 3,252,618 |
| Xperi Corp. | 246,084 | 4,230,184 |
| Total | 116,766,182 | |
| Software 2.5% | ||
| 8x8, Inc.(a) | 497,850 | 9,210,225 |
| Agilysys, Inc.(a) | 101,064 | 3,247,187 |
| Alarm.com Holdings, Inc.(a) | 180,950 | 8,730,838 |
| Bottomline Technologies de, Inc.(a) | 189,322 | 8,383,178 |
| Ebix, Inc. | 110,578 | 2,923,682 |
| LivePerson, Inc.(a) | 305,802 | 8,091,521 |
| MicroStrategy, Inc., Class A(a) | 40,889 | 5,526,557 |
| OneSpan, Inc.(a) | 161,753 | 2,670,542 |
| Progress Software Corp. | 222,463 | 8,295,645 |
| Qualys, Inc.(a) | 165,590 | 13,277,006 |
| SPS Commerce, Inc.(a) | 173,050 | 9,102,430 |
| TiVo Corp. | 629,070 | 4,762,060 |
| Total | 84,220,871 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Technology Hardware, Storage & Peripherals 0.2% | ||
| 3D Systems Corp.(a) | 588,230 | 5,388,187 |
| Diebold, Inc.(a) | 381,460 | 2,677,849 |
| Total | 8,066,036 | |
| Total Information Technology | 473,261,347 | |
| Materials 4.5% | ||
| Chemicals 2.6% | ||
| AdvanSix, Inc.(a) | 138,650 | 2,014,584 |
| American Vanguard Corp. | 131,951 | 2,012,253 |
| Balchem Corp. | 159,792 | 15,093,952 |
| Ferro Corp.(a) | 407,160 | 4,731,199 |
| FutureFuel Corp. | 128,200 | 1,303,794 |
| GCP Applied Technologies(a) | 267,180 | 5,201,995 |
| Hawkins, Inc. | 46,987 | 1,679,785 |
| HB Fuller Co. | 253,243 | 9,934,723 |
| Innospec, Inc. | 121,680 | 10,530,187 |
| Koppers Holdings, Inc.(a) | 102,812 | 2,247,470 |
| Kraton Performance Polymers, Inc.(a) | 157,485 | 1,593,748 |
| Livent Corp.(a) | 725,130 | 6,475,411 |
| LSB Industries, Inc.(a) | 108,655 | 211,877 |
| Quaker Chemical Corp. | 64,303 | 10,132,224 |
| Rayonier Advanced Materials, Inc. | 248,050 | 607,723 |
| Stepan Co. | 99,489 | 8,738,119 |
| Tredegar Corp. | 122,588 | 2,091,351 |
| Trinseo SA | 194,620 | 4,258,286 |
| Total | 88,858,681 | |
| Construction Materials 0.1% | ||
| U.S. Concrete, Inc.(a) | 78,800 | 2,114,992 |
| Containers & Packaging 0.1% | ||
| Myers Industries, Inc. | 176,439 | 2,394,277 |
| Metals & Mining 1.0% | ||
| AK Steel Holding Corp.(a) | 1,571,885 | 3,631,054 |
| Century Aluminum Co.(a) | 247,274 | 1,434,189 |
| Cleveland-Cliffs, Inc. | 1,341,580 | 7,794,580 |
| Haynes International, Inc. | 62,164 | 1,573,371 |
| Kaiser Aluminum Corp. | 78,879 | 7,458,009 |
| Materion Corp. | 101,349 | 4,595,164 |
| Olympic Steel, Inc. | 45,334 | 546,275 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 16 | Columbia Small Cap Index Fund | Annual Report 2020 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| SunCoke Energy, Inc. | 430,937 | 1,986,619 |
| TimkenSteel Corp.(a) | 198,140 | 1,004,570 |
| Warrior Met Coal, Inc. | 253,690 | 4,495,387 |
| Total | 34,519,218 | |
| Paper & Forest Products 0.7% | ||
| Boise Cascade Co. | 193,600 | 6,868,928 |
| Clearwater Paper Corp.(a) | 82,041 | 2,237,258 |
| Mercer International, Inc. | 198,860 | 1,761,900 |
| Neenah, Inc. | 83,525 | 4,825,239 |
| PH Glatfelter Co. | 219,409 | 3,128,772 |
| Schweitzer-Mauduit International, Inc. | 153,477 | 5,175,245 |
| Total | 23,997,342 | |
| Total Materials | 151,884,510 | |
| Real Estate 8.7% | ||
| Equity Real Estate Investment Trusts (REITS) 8.3% | ||
| Acadia Realty Trust | 431,902 | 9,864,642 |
| Agree Realty Corp. | 226,195 | 16,245,325 |
| Alexander & Baldwin, Inc. | 337,390 | 6,342,932 |
| American Assets Trust, Inc. | 238,260 | 9,875,877 |
| Armada Hoffler Properties, Inc. | 275,300 | 4,614,028 |
| CareTrust REIT, Inc. | 474,656 | 9,906,071 |
| CBL & Associates Properties, Inc. | 861,840 | 457,465 |
| Cedar Realty Trust, Inc. | 426,896 | 1,105,661 |
| Chatham Lodging Trust | 233,090 | 3,249,275 |
| Community Healthcare Trust, Inc. | 94,220 | 4,487,699 |
| DiamondRock Hospitality Co. | 994,428 | 9,069,183 |
| Easterly Government Properties, Inc. | 368,370 | 8,756,155 |
| Essential Properties Realty Trust, Inc. | 436,790 | 10,006,859 |
| Four Corners Property Trust, Inc. | 342,334 | 9,821,562 |
| Franklin Street Properties Corp. | 532,645 | 3,797,759 |
| Getty Realty Corp. | 169,866 | 4,814,002 |
| Global Net Lease, Inc. | 444,360 | 8,198,442 |
| Hersha Hospitality Trust | 178,370 | 2,056,606 |
| Independence Realty Trust, Inc. | 451,500 | 5,986,890 |
| Industrial Logistics Properties Trust | 323,770 | 6,689,088 |
| Innovative Industrial Properties, Inc. | 84,620 | 7,779,963 |
| Investors Real Estate Trust | 57,740 | 4,067,783 |
| iStar, Inc. | 370,970 | 5,612,776 |
| Kite Realty Group Trust | 417,140 | 6,736,811 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Lexington Realty Trust | 1,231,249 | 12,768,052 |
| LTC Properties, Inc. | 197,461 | 8,852,177 |
| National Storage Affiliates Trust | 294,700 | 9,943,178 |
| NexPoint Residential Trust, Inc. | 111,920 | 4,980,440 |
| Office Properties Income Trust | 239,435 | 6,974,741 |
| Pennsylvania Real Estate Investment Trust | 296,774 | 700,387 |
| Retail Opportunity Investments Corp. | 576,180 | 8,642,700 |
| RPT Realty | 399,250 | 5,174,280 |
| Safehold, Inc. | 61,710 | 3,370,600 |
| Saul Centers, Inc. | 58,522 | 2,517,031 |
| Summit Hotel Properties, Inc. | 522,380 | 4,842,463 |
| Tanger Factory Outlet Centers, Inc. | 461,420 | 5,527,812 |
| Uniti Group, Inc. | 960,050 | 9,370,088 |
| Universal Health Realty Income Trust | 62,866 | 6,771,925 |
| Urstadt Biddle Properties, Inc., Class A | 148,486 | 3,060,296 |
| Washington Prime Group, Inc. | 926,890 | 2,548,947 |
| Washington Real Estate Investment Trust | 400,340 | 10,749,129 |
| Whitestone REIT | 201,840 | 2,480,614 |
| Xenia Hotels & Resorts, Inc. | 559,520 | 8,370,419 |
| Total | 277,188,133 | |
| Real Estate Management & Development 0.4% | ||
| Marcus & Millichap, Inc.(a) | 116,630 | 3,727,495 |
| RE/MAX Holdings, Inc., Class A | 88,600 | 2,582,690 |
| Realogy Holdings Corp. | 567,960 | 5,264,989 |
| St. Joe Co. (The)(a) | 156,420 | 3,076,781 |
| Total | 14,651,955 | |
| Total Real Estate | 291,840,088 | |
| Utilities 2.3% | ||
| Electric Utilities 0.4% | ||
| El Paso Electric Co. | 202,345 | 13,733,155 |
| Gas Utilities 0.7% | ||
| Northwest Natural Holding Co. | 151,185 | 9,943,437 |
| South Jersey Industries, Inc. | 458,936 | 12,414,219 |
| Total | 22,357,656 | |
| Multi-Utilities 0.5% | ||
| Avista Corp. | 331,364 | 15,623,813 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Small Cap Index Fund | Annual Report 2020
|
17 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Water Utilities 0.7% | ||
| American States Water Co. | 182,994 | 14,015,511 |
| California Water Service Group | 239,150 | 11,469,634 |
| Total | 25,485,145 | |
| Total Utilities | 77,199,769 | |
|
Total Common Stocks
(Cost $2,766,560,541) |
3,351,196,253 | |
| Exchange-Traded Equity Funds 0.3% | ||
| Shares | Value ($) | |
| U.S. Small Cap 0.3% | ||
| iShares Core S&P Small-Cap ETF | 117,500 | 8,552,825 |
|
Total Exchange-Traded Equity Funds
(Cost $8,561,050) |
8,552,825 | |
| Rights 0.0% | ||
| Issuer | Shares | Value ($) |
| Industrials 0.0% | ||
| Industrial Conglomerates 0.0% | ||
| A. Schulman, Inc. CVR(a),(b),(c) | 164,023 | 328,046 |
| Total Industrials | 328,046 | |
|
Total Rights
(Cost $328,046) |
328,046 | |
| Money Market Funds 0.1% | ||
| Shares | Value ($) | |
| Columbia Short-Term Cash Fund, 1.641%(d),(e) | 4,270,988 | 4,270,988 |
|
Total Money Market Funds
(Cost $4,270,561) |
4,270,988 | |
|
Total Investments in Securities
(Cost: $2,779,720,198) |
3,364,348,112 | |
| Other Assets & Liabilities, Net | (7,294,676) | |
| Net Assets | 3,357,053,436 | |
At February 29, 2020,
securities and/or cash totaling $620,800 were pledged as collateral.
Investments in
derivatives
| Long futures contracts | ||||||
| Description |
Number of
contracts |
Expiration
date |
Trading
currency |
Notional
amount |
Value/Unrealized
appreciation ($) |
Value/Unrealized
depreciation ($) |
| Russell 2000 Index E-mini | 11 | 03/2020 | USD | 811,195 | — | (86,815) |
Notes to Portfolio of
Investments
| (a) | Non-income producing investment. |
| (b) | Represents fair value as determined in good faith under procedures approved by the Board of Trustees. At February 29, 2020, the total value of these securities amounted to $328,046, which represents 0.01% of total net assets. |
| (c) | Valuation based on significant unobservable inputs. |
| (d) | The rate shown is the seven-day current annualized yield at February 29, 2020. |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 18 | Columbia Small Cap Index Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Notes to Portfolio of Investments (continued)
| (e) | As defined in the Investment Company Act of 1940, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. Holdings and transactions in these affiliated companies during the year ended February 29, 2020 are as follows: |
Abbreviation Legend
| CVR | Contingent Value Rights |
Currency Legend
| USD | US Dollar |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
Under the direction of the
Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of
voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly
to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of
Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third
party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale
pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to
discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members
of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Small Cap Index Fund | Annual Report 2020
|
19 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Fair value measurements (continued)
The following table is a summary of the inputs used to value the Fund’s investments at February 29, 2020:
The following table is a summary of the inputs used to value the Fund’s investments at February 29, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Common Stocks | ||||
| Communication Services | 81,324,027 | — | — | 81,324,027 |
| Consumer Discretionary | 451,778,712 | — | — | 451,778,712 |
| Consumer Staples | 106,994,853 | — | — | 106,994,853 |
| Energy | 102,519,046 | — | — | 102,519,046 |
| Financials | 598,833,259 | — | — | 598,833,259 |
| Health Care | 411,582,705 | — | — | 411,582,705 |
| Industrials | 603,977,937 | — | — | 603,977,937 |
| Information Technology | 473,261,347 | — | — | 473,261,347 |
| Materials | 151,884,510 | — | — | 151,884,510 |
| Real Estate | 291,840,088 | — | — | 291,840,088 |
| Utilities | 77,199,769 | — | — | 77,199,769 |
| Total Common Stocks | 3,351,196,253 | — | — | 3,351,196,253 |
| Exchange-Traded Equity Funds | 8,552,825 | — | — | 8,552,825 |
| Rights | ||||
| Industrials | — | — | 328,046 | 328,046 |
| Total Rights | — | — | 328,046 | 328,046 |
| Money Market Funds | 4,270,988 | — | — | 4,270,988 |
| Total Investments in Securities | 3,364,020,066 | — | 328,046 | 3,364,348,112 |
| Investments in Derivatives | ||||
| Liability | ||||
| Futures Contracts | (86,815) | — | — | (86,815) |
| Total | 3,363,933,251 | — | 328,046 | 3,364,261,297 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
Derivative instruments are valued at
unrealized appreciation (depreciation).
The Fund does not hold any
significant investments (greater than one percent of net assets) categorized as Level 3.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 20 | Columbia Small Cap Index Fund | Annual Report 2020 |
Statement of Assets and Liabilities
February 29, 2020
February 29, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $2,775,449,637) | $3,360,077,124 |
| Affiliated issuers (cost $4,270,561) | 4,270,988 |
| Margin deposits on: | |
| Futures contracts | 620,800 |
| Receivable for: | |
| Capital shares sold | 7,819,462 |
| Dividends | 2,218,894 |
| Expense reimbursement due from Investment Manager | 94 |
| Total assets | 3,375,007,362 |
| Liabilities | |
| Payable for: | |
| Investments purchased | 2,288,885 |
| Capital shares purchased | 15,184,316 |
| Variation margin for futures contracts | 217,174 |
| Management services fees | 18,735 |
| Distribution and/or service fees | 7,199 |
| Compensation of board members | 237,617 |
| Total liabilities | 17,953,926 |
| Net assets applicable to outstanding capital stock | $3,357,053,436 |
| Represented by | |
| Paid in capital | 2,763,716,203 |
| Total distributable earnings (loss) | 593,337,233 |
| Total - representing net assets applicable to outstanding capital stock | $3,357,053,436 |
| Class A | |
| Net assets | $1,032,676,992 |
| Shares outstanding | 50,811,005 |
| Net asset value per share | $20.32 |
| Institutional Class | |
| Net assets | $1,603,859,422 |
| Shares outstanding | 78,352,617 |
| Net asset value per share | $20.47 |
| Institutional 2 Class | |
| Net assets | $638,046,131 |
| Shares outstanding | 30,408,169 |
| Net asset value per share | $20.98 |
| Institutional 3 Class | |
| Net assets | $82,470,891 |
| Shares outstanding | 4,142,884 |
| Net asset value per share | $19.91 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Small Cap Index Fund | Annual Report 2020
|
21 |
Statement of Operations
Year Ended February 29, 2020
Year Ended February 29, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $58,620,294 |
| Dividends — affiliated issuers | 885,495 |
| Foreign taxes withheld | (25,028) |
| Total income | 59,480,761 |
| Expenses: | |
| Management services fees | 7,989,133 |
| Distribution and/or service fees | |
| Class A | 3,213,366 |
| Compensation of board members | 86,632 |
| Interest on interfund lending | 1,825 |
| Other | 20,640 |
| Total expenses | 11,311,596 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (132,424) |
| Expense reduction | (1,700) |
| Total net expenses | 11,177,472 |
| Net investment income | 48,303,289 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 192,732,622 |
| Investments — affiliated issuers | 6,949 |
| Futures contracts | 9,644 |
| Net realized gain | 192,749,215 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (525,802,107) |
| Investments — affiliated issuers | 427 |
| Futures contracts | (7,296,645) |
| Net change in unrealized appreciation (depreciation) | (533,098,325) |
| Net realized and unrealized loss | (340,349,110) |
| Net decrease in net assets resulting from operations | $(292,045,821) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 22 | Columbia Small Cap Index Fund | Annual Report 2020 |
Statement of Changes in Net Assets
|
Year Ended
February 29, 2020 |
Year Ended
February 28, 2019 |
|
| Operations | ||
| Net investment income | $48,303,289 | $45,732,145 |
| Net realized gain | 192,749,215 | 336,761,566 |
| Net change in unrealized appreciation (depreciation) | (533,098,325) | (131,987,680) |
| Net increase (decrease) in net assets resulting from operations | (292,045,821) | 250,506,031 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (79,317,130) | (138,189,343) |
| Institutional Class | (119,535,076) | (190,181,500) |
| Institutional 2 Class | (47,099,472) | (65,475,539) |
| Institutional 3 Class | (5,489,399) | (5,811,465) |
| Class T | — | (26,604) |
| Total distributions to shareholders | (251,441,077) | (399,684,451) |
| Increase (decrease) in net assets from capital stock activity | (386,733,006) | 490,156,857 |
| Total increase (decrease) in net assets | (930,219,904) | 340,978,437 |
| Net assets at beginning of year | 4,287,273,340 | 3,946,294,903 |
| Net assets at end of year | $3,357,053,436 | $4,287,273,340 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Small Cap Index Fund | Annual Report 2020
|
23 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| February 29, 2020 | February 28, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 9,413,627 | 215,248,040 | 15,655,887 | 395,797,918 |
| Distributions reinvested | 3,011,038 | 68,514,539 | 5,217,324 | 120,100,570 |
| Redemptions | (22,806,332) | (519,492,529) | (20,840,413) | (518,791,016) |
| Net increase (decrease) | (10,381,667) | (235,729,950) | 32,798 | (2,892,528) |
| Institutional Class | ||||
| Subscriptions | 14,677,533 | 337,285,084 | 24,634,983 | 622,818,261 |
| Distributions reinvested | 3,895,130 | 89,337,745 | 5,963,857 | 137,882,592 |
| Redemptions | (25,782,422) | (591,445,484) | (21,316,512) | (527,511,753) |
| Net increase (decrease) | (7,209,759) | (164,822,655) | 9,282,328 | 233,189,100 |
| Institutional 2 Class | ||||
| Subscriptions | 11,503,124 | 270,539,248 | 14,705,902 | 379,016,972 |
| Distributions reinvested | 1,759,413 | 41,351,061 | 2,514,445 | 59,405,165 |
| Redemptions | (13,735,398) | (322,112,787) | (9,723,235) | (247,933,263) |
| Net increase (decrease) | (472,861) | (10,222,478) | 7,497,112 | 190,488,874 |
| Institutional 3 Class | ||||
| Subscriptions | 1,205,971 | 27,098,539 | 2,780,764 | 69,603,523 |
| Distributions reinvested | 241,971 | 5,407,744 | 252,853 | 5,685,170 |
| Redemptions | (378,673) | (8,464,206) | (141,040) | (3,318,182) |
| Net increase | 1,069,269 | 24,042,077 | 2,892,577 | 71,970,511 |
| Class K | ||||
| Subscriptions | — | — | 502 | 12,752 |
| Redemptions | — | — | (90,475) | (2,326,799) |
| Net decrease | — | — | (89,973) | (2,314,047) |
| Class T | ||||
| Distributions reinvested | — | — | 1,155 | 26,350 |
| Redemptions | — | — | (14,378) | (311,403) |
| Net decrease | — | — | (13,223) | (285,053) |
| Total net increase (decrease) | (16,995,018) | (386,733,006) | 19,601,619 | 490,156,857 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 24 | Columbia Small Cap Index Fund | Annual Report 2020 |
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|
Columbia Small Cap Index Fund | Annual Report 2020
|
25 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. 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.
|
Net asset value,
beginning of period |
Net
investment income |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $23.54 | 0.24 | (2.00) | (1.76) | (0.26) | (1.20) | (1.46) |
| Year Ended 2/28/2019 | $24.33 | 0.23 | 1.32 | 1.55 | (0.23) | (2.11) | (2.34) |
| Year Ended 2/28/2018 | $23.83 | 0.21 | 2.11 | 2.32 | (0.22) | (1.60) | (1.82) |
| Year Ended 2/28/2017 | $19.05 | 0.19 | 6.28 | 6.47 | (0.19) | (1.50) | (1.69) |
| Year Ended 2/29/2016 | $23.29 | 0.22 | (2.25) | (2.03) | (0.22) | (1.99) | (2.21) |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $23.69 | 0.30 | (2.02) | (1.72) | (0.30) | (1.20) | (1.50) |
| Year Ended 2/28/2019 | $24.47 | 0.29 | 1.33 | 1.62 | (0.29) | (2.11) | (2.40) |
| Year Ended 2/28/2018 | $23.96 | 0.27 | 2.12 | 2.39 | (0.28) | (1.60) | (1.88) |
| Year Ended 2/28/2017 | $19.14 | 0.24 | 6.32 | 6.56 | (0.24) | (1.50) | (1.74) |
| Year Ended 2/29/2016 | $23.39 | 0.27 | (2.25) | (1.98) | (0.28) | (1.99) | (2.27) |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $24.25 | 0.30 | (2.07) | (1.77) | (0.30) | (1.20) | (1.50) |
| Year Ended 2/28/2019 | $24.99 | 0.30 | 1.36 | 1.66 | (0.29) | (2.11) | (2.40) |
| Year Ended 2/28/2018 | $24.43 | 0.28 | 2.16 | 2.44 | (0.28) | (1.60) | (1.88) |
| Year Ended 2/28/2017 | $19.49 | 0.25 | 6.43 | 6.68 | (0.24) | (1.50) | (1.74) |
| Year Ended 2/29/2016 | $23.78 | 0.28 | (2.30) | (2.02) | (0.28) | (1.99) | (2.27) |
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $23.08 | 0.29 | (1.96) | (1.67) | (0.30) | (1.20) | (1.50) |
| Year Ended 2/28/2019 | $23.90 | 0.29 | 1.29 | 1.58 | (0.29) | (2.11) | (2.40) |
| Year Ended 2/28/2018(e) | $23.87 | 0.24 | 1.67 | 1.91 | (0.28) | (1.60) | (1.88) |
| 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) | Ratios include interfund lending expense which is less than 0.01%. |
| (d) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (e) | Institutional 3 Class shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 26 | Columbia Small Cap Index Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $20.32 | (8.08%) | 0.45%(c) | 0.45%(c),(d) | 1.04% | 17% | $1,032,677 |
| Year Ended 2/28/2019 | $23.54 | 6.70% | 0.45% | 0.45%(d) | 0.89% | 22% | $1,440,665 |
| Year Ended 2/28/2018 | $24.33 | 9.86% | 0.45% | 0.45%(d) | 0.88% | 16% | $1,488,143 |
| Year Ended 2/28/2017 | $23.83 | 34.40% | 0.45% | 0.45%(d) | 0.85% | 18% | $1,638,983 |
| Year Ended 2/29/2016 | $19.05 | (9.67%) | 0.45% | 0.45%(d) | 0.99% | 19% | $1,131,160 |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $20.47 | (7.85%) | 0.20%(c) | 0.20%(c),(d) | 1.29% | 17% | $1,603,859 |
| Year Ended 2/28/2019 | $23.69 | 6.99% | 0.20% | 0.20%(d) | 1.14% | 22% | $2,026,925 |
| Year Ended 2/28/2018 | $24.47 | 10.11% | 0.20% | 0.20%(d) | 1.12% | 16% | $1,866,835 |
| Year Ended 2/28/2017 | $23.96 | 34.74% | 0.20% | 0.20%(d) | 1.10% | 18% | $1,665,820 |
| Year Ended 2/29/2016 | $19.14 | (9.44%) | 0.20% | 0.20%(d) | 1.22% | 19% | $1,326,728 |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $20.98 | (7.87%) | 0.20%(c) | 0.20%(c) | 1.29% | 17% | $638,046 |
| Year Ended 2/28/2019 | $24.25 | 7.01% | 0.20% | 0.20% | 1.14% | 22% | $748,749 |
| Year Ended 2/28/2018 | $24.99 | 10.12% | 0.20% | 0.20% | 1.12% | 16% | $584,472 |
| Year Ended 2/28/2017 | $24.43 | 34.73% | 0.20% | 0.20% | 1.10% | 18% | $437,779 |
| Year Ended 2/29/2016 | $19.49 | (9.46%) | 0.20% | 0.20% | 1.24% | 19% | $208,441 |
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $19.91 | (7.84%) | 0.20%(c) | 0.20%(c) | 1.30% | 17% | $82,471 |
| Year Ended 2/28/2019 | $23.08 | 6.99% | 0.20% | 0.20% | 1.16% | 22% | $70,934 |
| Year Ended 2/28/2018(e) | $23.90 | 8.14% | 0.21% | 0.20% | 1.01% | 16% | $4,327 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Small Cap Index Fund | Annual Report 2020
|
27 |
Notes to Financial Statements
February 29, 2020
February 29, 2020
Note 1. Organization
Columbia Small Cap Index Fund
(the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a liquidation will be
proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A shares are offered to the general public for investment. Institutional Class, Institutional 2 Class and Institutional 3 Class shares are available for purchase through authorized investment
professionals to omnibus retirement plans or to institutional investors and to certain other investors as also described in the Fund’s prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
All equity securities and
exchange-traded funds are valued at the close of business of the New York Stock Exchange. Equity securities and exchange-traded funds are valued at the official closing price on the principal exchange or market on
which they trade. Unlisted securities or listed securities for which there were no sales during the day are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets.
Foreign equity securities are
valued based on the closing price on the foreign exchange in which such securities are primarily traded. If any foreign equity security closing prices are not readily available, the securities are valued at the mean
of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are determined at the scheduled closing time of the New York Stock Exchange. Many securities markets and exchanges
outside the U.S. close prior to the close of the New York Stock Exchange; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but
before the close of the New York Stock Exchange. In those situations, foreign securities will be fair valued pursuant to a policy adopted by the Board of Trustees. Under the policy, the Fund may utilize a third-party
pricing service to determine these fair values. The third-party pricing service takes into account multiple factors, including, but not limited to, movements in the U.S. securities markets, certain depositary
receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that reasonably reflects the current market
conditions as of the close of the New York Stock Exchange. The fair value of a security is likely to be different from the quoted or published price, if available.
Investments in open-end investment
companies, including money market funds, are valued at their latest net asset value.
| 28 | Columbia Small Cap Index Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Futures and options on futures
contracts are valued based upon the settlement price at the close of regular trading on their principal exchanges or, in the absence of transactions, at the mean of the latest quoted bid and ask prices.
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published
price for the security, if available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Derivative instruments
The Fund invests in certain
derivative instruments, as detailed below, to meet its investment objectives. Derivatives are instruments whose values depend on, or are derived from, in whole or in part, the value of one or more securities,
currencies, commodities, indices, or other assets or instruments. Derivatives may be used to increase investment flexibility (including to maintain cash reserves while maintaining desired exposure to certain assets),
for risk management (hedging) purposes, to facilitate trading, to reduce transaction costs and to pursue higher investment returns. The Fund may also use derivative instruments to mitigate certain investment risks,
such as foreign currency exchange rate risk, interest rate risk and credit risk. Derivatives may involve various risks, including the potential inability of the counterparty to fulfill its obligations under the terms
of the contract, the potential for an illiquid secondary market (making it difficult for the Fund to sell or terminate, including at favorable prices) and the potential for market movements which may expose the Fund
to gains or losses in excess of the amount shown in the Statement of Assets and Liabilities. The notional amounts of derivative instruments, if applicable, are not recorded in the financial statements.
A derivative instrument may suffer
a marked-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform its
obligations under the contract. The Fund’s risk of loss from counterparty credit risk on over-the-counter derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by
the Fund and the amount of any variation margin held by the counterparty, plus any replacement costs or related amounts. With exchange-traded or centrally cleared derivatives, there is reduced counterparty credit risk
to the Fund since the clearinghouse or central counterparty (CCP) provides some protection in the case of clearing member default. The clearinghouse or CCP stands between the buyer and the seller of the contract;
therefore, additional counterparty credit risk is failure of the clearinghouse or CCP. However, credit risk still exists in exchange-traded or centrally cleared derivatives with respect to initial and variation margin
that is held in a broker’s customer account. While brokers are required to segregate customer margin from their own assets, in the event that a broker becomes insolvent or goes into bankruptcy and at that time
there is a shortfall in the aggregate amount of margin held by the broker for all its clients, U.S. bankruptcy laws will typically allocate that shortfall on a pro-rata basis across all the broker’s customers
(including the Fund), potentially resulting in losses to the Fund.
In order to better define its
contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement)
or similar agreement with its derivatives contract counterparties. An ISDA Master Agreement is an agreement between the Fund and a counterparty that governs over-the-counter derivatives and typically contains, among
other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty
certain derivative instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment
in the event of default (close-out netting), including the bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or
prohibitions against the right of offset or netting in bankruptcy, insolvency or other events.
|
Columbia Small Cap Index Fund | Annual Report 2020
|
29 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Collateral (margin) requirements
differ by type of derivative. Margin requirements are established by the clearinghouse or CCP for exchange-traded and centrally cleared derivatives. Brokers can ask for margin in excess of the minimum in certain
circumstances. Collateral terms are contract specific for over-the-counter derivatives. For over-the-counter derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by
netting the marked-to-market amount for each transaction under such agreement and comparing that amount to the value of any variation margin currently pledged by the Fund and/or the counterparty. Generally, the amount
of collateral due from or to a party has to exceed a minimum transfer amount threshold (e.g., $250,000) before a transfer has to be made. To the extent amounts due to the Fund from its counterparties are not fully
collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty nonperformance. The Fund may also pay interest expense on cash collateral received from the broker. Any interest expense
paid by the Fund is shown on the Statement of Operations. The Fund attempts to mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor
their obligations and by monitoring the financial stability of those counterparties.
Certain ISDA Master Agreements
allow counterparties of over-the-counter derivatives transactions to terminate derivatives contracts prior to maturity in the event the Fund’s net asset value declines by a stated percentage over a specified
time period or if the Fund fails to meet certain terms of the ISDA Master Agreement, which would cause the Fund to accelerate payment of any net liability owed to the counterparty. The Fund also has termination rights
if the counterparty fails to meet certain terms of the ISDA Master Agreement. In determining whether to exercise such termination rights, the Fund would consider, in addition to counterparty credit risk, whether
termination would result in a net liability owed from the counterparty.
For financial reporting purposes,
the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.
Futures contracts
Futures contracts are
exchange-traded and represent commitments for the future purchase or sale of an asset at a specified price on a specified date. The Fund bought and sold futures contracts to maintain appropriate equity market exposure
while keeping sufficient cash to accommodate daily redemptions. These instruments may be used for other purposes in future periods. Upon entering into futures contracts, the Fund bears risks that it may not achieve
the anticipated benefits of the futures contracts and may realize a loss. Additional risks include counterparty credit risk, the possibility of an illiquid market, and that a change in the value of the contract or
option may not correlate with changes in the value of the underlying asset.
Upon entering into a futures
contract, the Fund deposits cash or securities with the broker, known as a futures commission merchant (FCM), in an amount sufficient to meet the initial margin requirement. The initial margin deposit must be
maintained at an established level over the life of the contract. Cash deposited as initial margin is recorded in the Statement of Assets and Liabilities as margin deposits. Securities deposited as initial margin are
designated in the Portfolio of Investments. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily change in the contract value and are
recorded as variation margin receivable or payable and are offset in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed or expires. Futures contracts involve, to
varying degrees, risk of loss in excess of the variation margin disclosed in the Statement of Assets and Liabilities.
Effects of derivative transactions in
the financial statements
The following tables are intended
to provide additional information about the effect of derivatives on the financial statements of the Fund, including: the fair value of derivatives by risk category and the location of those fair values in the
Statement of Assets and Liabilities; and the impact of derivative transactions over the period in the Statement of Operations, including realized and unrealized gains (losses). The derivative instrument schedules
following the Portfolio of Investments present additional information regarding derivative instruments outstanding at the end of the period, if any.
| 30 | Columbia Small Cap Index Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
The following table is a summary of
the fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) at February 29, 2020:
| Liability derivatives | ||
|
Risk exposure
category |
Statement
of assets and liabilities location |
Fair value ($) |
| Equity risk | Component of total distributable earnings (loss) — unrealized depreciation on futures contracts | 86,815* |
| * | Includes cumulative appreciation (depreciation) as reported in the tables following the Portfolio of Investments. Only the current day’s variation margin is reported in receivables or payables in the Statement of Assets and Liabilities. |
The following table indicates the
effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended February 29, 2020:
The following table is a summary
of the average outstanding volume by derivative instrument for the year ended February 29, 2020:
| Derivative instrument |
Average notional
amounts ($)* |
| Futures contracts — long | 29,699,900 |
| * | Based on the ending quarterly outstanding amounts for the year ended February 29, 2020. |
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Corporate actions and dividend
income are generally recorded net of any non-reclaimable tax withholdings, on the ex-dividend date or upon receipt of ex-dividend notification in the case of certain foreign securities.
The Fund may receive distributions
from holdings in equity securities, business development companies (BDCs), exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment companies (RICs), and real estate investment trusts
(REITs), which report information as to the tax character of their distributions annually. These distributions are allocated to dividend income, capital gain and return of capital based on actual information reported.
Return of capital is recorded as a reduction of the cost basis of securities held. If the Fund no longer owns the applicable securities, return of capital is recorded as a realized gain. With respect to REITs, to the
extent actual information has not yet been reported, estimates for return of capital are made by Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise
Financial, Inc. (Ameriprise Financial). The Investment Manager’s estimates are subsequently adjusted when the actual character of the distributions is disclosed by the REITs, which could result in a
proportionate change in return of capital to shareholders.
|
Columbia Small Cap Index Fund | Annual Report 2020
|
31 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Awards from class action litigation
are recorded as a reduction of cost basis if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities on the payment date, the proceeds are recorded as
realized gains.
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable income and net capital gain, if any, for its
tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net income and certain other
amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Foreign taxes
The Fund may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules
and regulations that exist in the markets in which it invests.
Realized gains in certain countries
may be subject to foreign taxes at the Fund level, based on statutory rates. The Fund accrues for such foreign taxes on realized and unrealized gains at the appropriate rate for each jurisdiction, as applicable. The
amount, if any, is disclosed as a liability on the Statement of Assets and Liabilities.
Distributions to shareholders
Distributions from net investment
income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Note 3. Fees and other
transactions with affiliates
Management services fees
The Fund has entered into a
Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the
Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to 0.20% of the Fund’s
daily net assets.
| 32 | Columbia Small Cap Index Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
The Investment Manager, from the
management services fee it receives from the Fund, pays all operating expenses of the Fund, with the exception of brokerage fees and commissions, taxes, interest, fees and expenses of Board of Trustees who are not
officers, directors or employees of the Investment Manager or its affiliates, distribution and/or shareholder servicing and any extraordinary non-recurring expenses that may arise, including litigation fees.
Compensation of board members
Members of the Board of Trustees
who are not officers or employees of the Investment Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the
Deferred Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of
certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All
amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. A portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other allocations to
affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets. The expenses of the Chief Compliance Officer allocated to the Fund are payable by the
Investment Manager.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent.
The transfer agency fees are
payable by the Investment Manager. The Transfer Agent pays the fees of DST for services as sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund. The Transfer Agent also receives
compensation from the Investment Manager for various shareholder services and reimbursements for certain out-of-pocket expenses.
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended February 29, 2020, these minimum account balance fees reduced total expenses
of the Fund by $1,700.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund.
|
Columbia Small Cap Index Fund | Annual Report 2020
|
33 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Expenses waived/reimbursed by the
Investment Manager and its affiliates
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) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, 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 following annual rate(s) as a percentage of the class’ average daily net assets:
|
Fee rate(s) contractual
June 30, 2020 |
|
| Class A | 0.45% |
| Institutional Class | 0.20 |
| Institutional 2 Class | 0.20 |
| Institutional 3 Class | 0.20 |
Under the agreement governing
these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes
(including foreign transaction taxes), expenses associated with investments 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, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from
the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or
its affiliates in future periods.
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At February 29, 2020, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, trustees’ deferred compensation, derivative investments, and re-characterization of distributions for investments.
To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
The Fund did not have any permanent
differences; therefore, no reclassifications were made.
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended February 29, 2020 | Year Ended February 28, 2019 | ||||
|
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 46,969,508 | 204,471,569 | 251,441,077 | 52,441,457 | 347,242,994 | 399,684,451 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At February 29, 2020, the
components of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| 1,367,980 | 40,962,000 | — | 551,240,606 |
| 34 | Columbia Small Cap Index Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
At February 29, 2020, the cost of
all investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
|
Federal
tax cost ($) |
Gross unrealized
appreciation ($) |
Gross unrealized
(depreciation) ($) |
Net unrealized
appreciation ($) |
| 2,813,020,691 | 1,072,210,133 | (520,969,527) | 551,240,606 |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
Management of the Fund has
concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at
a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the
prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio
information
The cost of purchases and
proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $651,010,694 and $1,146,510,032, respectively, for the year ended February 29, 2020. The amount of purchase
and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes referred to
as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
Note 7. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the
Interfund Program during the year ended February 29, 2020 was as follows:
| Borrower or lender |
Average loan
balance ($) |
Weighted average
interest rate (%) |
Number of days
with outstanding loans |
| Borrower | 3,828,571 | 2.55 | 7 |
Interest expense incurred by the
Fund is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at February 29, 2020.
|
Columbia Small Cap Index Fund | Annual Report 2020
|
35 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Note 8. Line of credit
The Fund has access to a
revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. The credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager or an affiliated investment manager, severally and
not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the federal funds effective rate, (ii) the
one-month LIBOR rate and (iii) the overnight bank funding rate, plus in each case, 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a
commitment fee equal to its pro rata share of the unused amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations. This agreement
expires annually in December unless extended or renewed.
The Fund had no borrowings during
the year ended February 29, 2020.
Note 9. Significant
risks
Market and environment risk
The Fund may incur losses due to
declines in the value of one or more securities in which it invests. These declines may be due to factors affecting a particular issuer, or the result of, among other things, political, regulatory, market, economic or
social developments affecting the relevant market(s) more generally. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers,
which could adversely affect Fund, including causing difficulty in assigning prices to hard-to-value assets in thinly traded and closed markets, significant redemptions and operational challenges. Global economies and
financial markets are increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may
be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional or global events
such as terrorism, war, natural disasters, disease/virus outbreaks and epidemics or other public health issues, recessions, depressions or other events – or the potential for such events – could have a
significant negative impact on global economic and market conditions.
The coronavirus disease 2019
(COVID-19) public health crisis has become a pandemic that has resulted in, and may continue to result in, significant global economic and societal disruption and market volatility due to disruptions in market access,
resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. Such disruptions may be caused, or exacerbated by, quarantines and travel restrictions,
workforce displacement and loss in human and other resources. The uncertainty surrounding the magnitude, duration, reach, costs and effects of the global pandemic, as well as actions that have been or could be taken
by governmental authorities or other third parties, present unknowns that are yet to unfold. The impacts, as well as the uncertainty over impacts to come, of COVID-19 – and any other infectious illness
outbreaks, epidemics and pandemics that may arise in the future – could negatively affect global economies and markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illness
outbreaks and epidemics in emerging market countries may be greater due to generally less established healthcare systems, governments and financial markets. Public health crises caused by the COVID-19 outbreak may
exacerbate other pre-existing political, social and economic risks in certain countries or globally. The disruptions caused by COVID-19 could prevent the Fund from executing advantageous investment decisions in a
timely manner and negatively impact the Fund’s ability to achieve their investment objectives. Any such event(s) could have a significant adverse impact on the value and risk profile of the Fund.
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting
| 36 | Columbia Small Cap Index Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
different communities at different times with
varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to
continue ordinary business operations and technology functions over near- or longer-term periods.
Passive investment risk
The Fund is not
“actively” managed and may be affected by a general decline in market segments related to its underlying index. The Fund invests in securities or instruments included in, or believed by the Investment
Manager to be representative of, its underlying index, regardless of their investment merits. The Fund does not seek temporary defensive positions when markets decline or appear overvalued. The decision of whether to
remove a security from an index is made by an independent index provider who is not affiliated with the Fund or the Investment Manager.
Shareholder concentration risk
At February 29, 2020, one
unaffiliated shareholder of record owned 16.7% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Affiliated
shareholders of record owned 17.6% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the
Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of
less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Small- and mid-cap company 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.
Note 10. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 11. Information
regarding pending and settled legal proceedings
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. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to
Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that
these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe
proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines,
penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.
|
Columbia Small Cap Index Fund | Annual Report 2020
|
37 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust and Shareholders of Columbia Small Cap Index Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Small Cap Index Fund (one of the funds constituting Columbia Funds Series Trust, referred to hereafter as the "Fund") as of
February 29, 2020, the related statement of operations for the year ended February 29, 2020, the statement of changes in net assets for each of the two years in the period ended February 29, 2020, including the
related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in
all material respects, the financial position of the Fund as of February 29, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended
February 29, 2020 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the
responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these
financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of February 29, 2020 by correspondence with the custodian, transfer agent and brokers; when replies
were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
April 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
| 38 | Columbia Small Cap Index Fund | Annual Report 2020 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended February 29, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Qualified
dividend income |
Dividends
received deduction |
Capital
gain dividend |
| 92.19% | 91.27% | $160,521,263 |
Qualified dividend income. For
taxable, non-corporate shareholders, the percentage of ordinary income distributed during the fiscal year that represents qualified dividend income subject to reduced tax rates.
Dividends received deduction. The
percentage of ordinary income distributed during the fiscal year that qualifies for the corporate dividends received deduction.
Capital gain dividend. The Fund
designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
TRUSTEES AND
OFFICERS
The Board oversees the Fund’s
operations and 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 Fund’s Trustees as
of the printing of this report, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not
affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach the mandatory retirement age established by the Board.
Independent trustees
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
George S. Batejan
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1953 |
Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 117 | Former Chairman of the Board, NICSA (National Investment Company Services Association) (Executive Committee, Nominating Committee and Governance Committee), 2014-2016; former Director, Intech Investment Management, 2011-2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016; former Advisory Board Member, University of Colorado Business School, 2015-2018 |
|
Columbia Small Cap Index Fund | Annual Report 2020
|
39 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Kathleen Blatz
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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; Member and Interim Chair, Minnesota Sports Facilities Authority, January 2017-July 2017; Interim President and Chief Executive Officer, Blue Cross and Blue Shield of Minnesota (health care insurance), February-July 2018 | 117 | Trustee, BlueCross BlueShield of Minnesota since 2009 (Chair of the Business Development Committee, 2014-2017; Chair of the Governance Committee since 2017); Chair of the Robina Foundation since August 2013; former Member and Chair of the Board, Minnesota Sports Facilities Authority, January 2017-July 2017 |
|
Pamela G. Carlton
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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 | 117 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996; Director, DR Bank (Audit Committee) since 2017; Director, Evercore Inc. (Audit Committee, Nominating and Governance Committee) since 2019 |
|
Patricia M. Flynn
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1950 |
Trustee 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 | 117 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010; Board of Directors, The MA Business Roundtable 2003-2019 |
|
Brian J. Gallagher
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee since 12/17 | Retired; Partner with Deloitte & Touche LLP and its predecessors, 1977-2016 | 117 | Trustee, Catholic Schools Foundation since 2004 |
|
Catherine James Paglia
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Chair of the Board since 1/20; Trustee 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. | 117 | 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) |
| 40 | Columbia Small Cap Index Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Anthony M. Santomero
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1946 |
Trustee 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 | 117 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; former Director, Citigroup Inc. and Citibank, N.A., 2009-2019; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
|
Minor M. Shaw
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1947 |
Trustee 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 | 117 | Director, BlueCross BlueShield of South Carolina since April 2008; Trustee, Hollingsworth Funds since 2016 (previously Board Chair from 2016-2019); Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016; former Director, National Association of Corporate Directors, Carolinas Chapter, 2013-2018 |
|
Sandra Yeager
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1964 |
Trustee since 12/17 | Retired; President and founder, Hanoverian Capital, LLC (SEC registered investment advisor firm), 2008-2016; Managing Director, DuPont Capital, 2006-2008; Managing Director, Morgan Stanley Investment Management, 2004-2006; Senior Vice President, Alliance Bernstein, 1990-2004 | 115 | Director, NAPE Education Foundation since October 2016 |
|
Columbia Small Cap Index Fund | Annual Report 2020
|
41 |
TRUSTEES AND OFFICERS (continued)
Interested trustee affiliated with Investment Manager*
Interested trustee affiliated with Investment Manager*
| * | 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. |
Nations Funds refer to the Funds
within the Columbia Funds Complex that historically bore the Nations brand and includes series of Columbia Funds Series Trust. RiverSource Funds refer to the Funds within the Columbia Funds Complex that historically
bore the RiverSource brand and includes series of Columbia Funds Series Trust II.
The Statement of Additional
Information has additional information about the Fund’s Board members and is available, without charge, upon request by calling 800.345.6611, visiting columbiathreadneedleus.com/investor/ or contacting your
financial intermediary.
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 of the
Fund as of the printing of this report, 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 Fund’s other officers are:
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); officer of Columbia Funds and affiliated funds since 2007. |
|
Michael G. Clarke
225 Franklin Street Boston, MA 02110 Born 1969 |
Chief Financial Officer, Principal Financial Officer (2009), and Senior Vice President (2019) | Vice President, Head of North American Operations, and Co-Head of Global Operations, – Accounting and Tax, Columbia Management Investment Advisers, LLC, since June 2019 (previously Vice President – Accounting and Tax, May 2010 – May 2019); senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009 – January 2019 and December 2015 – January 2019, respectively). |
|
Joseph Beranek
5890 Ameriprise Financial Center Minneapolis, MN 55474 Born 1965 |
Treasurer, Chief Accounting Officer (Principal Accounting Officer) (2019), and Principal Financial Officer (2020) | Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and March 2017, respectively (previously Vice President — Pricing and Corporate Actions, May 2010 - March 2017). |
| 42 | Columbia Small Cap Index Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Fund officers (continued)
Fund officers (continued)
|
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 |
|
Paul B. Goucher
485 Lexington Avenue New York, NY 10017 Born 1968 |
Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since March 2015 (previously Vice President and Assistant Secretary, May 2010 – March 2015). |
|
Thomas P. McGuire
225 Franklin Street Boston, MA 02110 Born 1972 |
Senior 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; Chief Compliance Officer, Columbia Acorn/Wanger Funds since December 2015. |
|
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; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013. |
|
Ryan C. Larrenaga
225 Franklin Street Boston, MA 02110 Born 1970 |
Senior Vice President (2017), Chief Legal Officer (2017), and Secretary (2015) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously Vice President and Group Counsel, August 2011 - August 2018); officer of Columbia Funds and affiliated funds since 2005. |
|
Daniel J. Beckman
225 Franklin Street Boston, MA 02110 Born 1962 |
Senior Vice President (2020) | Vice President – Head of North America Product, Columbia Management Investment Advisers, LLC (since April 2015); previously, Senior Vice President of Investment Product Management, Fidelity Financial Advisor Solutions, a division of Fidelity Investments (January 2012 – March 2015). |
|
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. |
|
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. |
|
Columbia Small Cap Index Fund | Annual Report 2020
|
43 |
Columbia Small Cap Index Fund
P.O. Box 219104
Kansas City, MO 64121-9104
Please read and consider the
investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments
(Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved.
© 2020 Columbia Management Investment
Advisers, LLC.
columbiathreadneedleus.com/investor/
ANN228_02_K01_(04/20)
Annual Report
February 29, 2020
February 29, 2020
Columbia Small Cap
Value Fund II
Beginning on January 1, 2021, as
permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports like this one will no longer be sent by mail, unless you
specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (columbiathreadneedleus.com/investor/), and each time a report is posted you will be notified
by mail and provided with a website address to access the report.
If you have already elected to
receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically
at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with the Fund, by calling 800.345.6611 or by enrolling in “eDelivery” by logging
into your account at columbiathreadneedleus.com/investor/.
You may elect to receive all future
reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you
invest directly with the Fund, you can call 800.345.6611 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive paper reports will apply to all Columbia
Funds held in your account if you invest through a financial intermediary or all Columbia Funds held with the fund complex if you invest directly with the Fund.
Not FDIC Insured • No bank
guarantee • May lose value
Table of Contents
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Columbia Small Cap Value Fund II
(the Fund) mails one shareholder report to each shareholder address, unless such shareholder elected to receive shareholder reports from the Fund electronically. If you would like more than one report, please call
shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and
procedures
The policy of the Board of Trustees
is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by
calling 800.345.6611; contacting your financial intermediary; visiting columbiathreadneedleus.com/investor/; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding
how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting
columbiathreadneedleus.com/investor/, or searching the website of the SEC at sec.gov.
Quarterly schedule of
investments
The Fund files a complete schedule
of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT, and for reporting periods ended prior to March 31, 2019, on Form N-Q. The Fund’s Form N-Q and Form N-PORT
filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q or Form N-PORT, can also be obtained without charge, upon request, by calling
800.345.6611.
Additional Fund information
For more information about the
Fund, please visit columbiathreadneedleus.com/investor/ or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC (the
Investment Manager)
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors,
Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 219104
Kansas City, MO 64121-9104
Columbia Small Cap Value Fund
II | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks long-term capital appreciation.
Portfolio management
Christian Stadlinger, Ph.D., CFA
Co-Portfolio Manager
Managed Fund since 2002
Jarl Ginsberg, CFA, CAIA
Co-Portfolio Manager
Managed Fund since 2003
Morningstar style boxTM
The Morningstar Style Box is based on a fund’s portfolio holdings. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows
investment style (value, blend, or growth). Information shown is based on the most recent data provided by Morningstar.
© 2020 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or
distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
Returns for Class A shares are shown
with and without the maximum initial sales charge of 5.75%. Returns for Class C shares are shown with and without the 1.00% contingent deferred sales charge for the first year only. The Fund’s other share
classes are not subject to sales charges and have limited eligibility. Please see the Fund’s prospectus for details. Performance for different share classes will vary based on differences in sales charges and
fees associated with each share class. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the
redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee
waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown
represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than
their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial
intermediary, visiting columbiathreadneedleus.com/investor/ or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. Since the Fund launched more than one share class at its inception, Class A shares were used. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investor/investment-products/mutual-funds/appended-performance for more information. |
The Russell 2000 Value Index, an
unmanaged index, tracks the performance of those Russell 2000 Index companies with lower price-to-book ratios and lower forecasted growth values.
Indices are not available for
investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Fund performance may be significantly
negatively impacted by the economic impact of the COVID-19 pandemic. The COVID-19 pandemic has adversely impacted economies and capital markets around the world in ways that will likely continue and may change in
unforeseen ways for an indeterminate period. The COVID-19 pandemic may exacerbate pre-existing political, social and economic risks in certain countries and globally.
|
Columbia Small Cap Value Fund II | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (February 28, 2010 — February 29, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Small Cap Value Fund II during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund
distributions or on the redemption of Fund shares.
| Portfolio breakdown (%) (at February 29, 2020) | |
| Common Stocks | 97.9 |
| Money Market Funds | 2.1 |
| Total | 100.0 |
Percentages indicated are based
upon total investments excluding investments in derivatives, if any. The Fund’s portfolio composition is subject to change.
Percentages indicated are based
upon total equity investments. The Fund’s portfolio composition is subject to change.
| 4 | Columbia Small Cap Value Fund II | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that ended
February 29, 2020, the Fund’s Class A shares returned -11.58% excluding sales charges. The Fund lagged its benchmark, the Russell 2000 Value Index, which returned -9.29% for the same time period. Year-end
volatility, related to the spread of the coronavirus and its potential impact on global economies, brought share prices of small-cap value stocks down sharply. Security selection within the financials, materials and
real estate sectors figured into the Fund’s performance shortfall relative to the benchmark, much of which occurred during the first two weeks of September 2019, when smaller and more volatile names
outperformed. The Fund has benefited over the longer term by avoiding these microcap names, even if it has meant giving up some upside in certain short term periods.
Global uncertainty curbed stock
market gains, boosted bonds
Optimism prevailed early in 2019,
buoyed by solid economic growth and a recovery from significant stock market losses in 2018. Strong job gains drove the unemployment rate down to 3.5%, annualized. Consumer spending and export trade supported U.S.
economic growth. However, the pace of growth slowed to an estimated 2.1% for the year. In Europe, economic growth slowed as trade tensions and uncertainty mounted regarding Brexit (the U.K.’s departure from the
European Union), which was finally resolved late in the period. At the same time, emerging markets came under pressure, driven by trade and tariff concerns. China’s economic conditions weakened and the spread of
the coronavirus introduced enough global uncertainty to drive stock markets around the world down sharply in the final weeks of the period, raising concerns about the impact on global economic growth going forward.
Shares of large companies and
growth-oriented companies weathered the year-end volatility better than small-cap value stocks. The S&P 500 Index returned 8.19% for the 12-month period, giving up substantial gains during the last few trading
days of February. The Bloomberg Barclays U.S. Aggregate Bond Index gained 11.68%, as the yield on the 10-year U.S. Treasury fell to 1.10%. (Bond yields and prices move in opposite directions.)
Contributors and detractors
Strong stock selection within the
information technology, communication services and health care sectors aided relative performance in this difficult year. Although sector weights are primarily a function of our bottom-up selection process, an
overweight in the information technology sector and an underweight in the energy sector also aided relative returns.
Evoqua Water Technologies Corp.,
SYNNEX Corp. and Entegris, Inc. were top individual contributors to Fund performance. Shares of Evoqua, an industrial company that engages in water treatment solutions, climbed steadily higher during the 12-month
period. After a disappointing 2018, the company reported quarterly results throughout 2019 that repeatedly beat expectations and showed increased predictability in earnings, increasing investor confidence. Shares of
SYNNEX, which provides business-to-business technology solutions, rose after the company reported quarterly results during the period that beat expectations on both the top and bottom line and raised forward earnings
guidance. Near the end of the period, the company announced that it would be spinning off one of its business lines into a new public company, a move that was well regarded by investors.
Shares of Entegris, which makes
specialty materials for the semiconductor industry, rose over the summer despite earnings that were slightly below expectations, buoyed by management’s favorable outlook for its end markets. Investors also
responded positively to the company’s acquisition of a specialty chemical company and an increased dividend. The Fund continued to own all three strong performers but trimmed exposure to Entegris.
Security selection within the
financials, real estate, materials and utilities sectors, as well as an underweight in the real estate sector, detracted from relative results. Many of the period’s detractors were in the energy sector. Drilling
service company Patterson-UTI Energy, Inc. and oil exploration and production company Callon Petroleum Co. were both hurt by the decline in oil prices during the period. Shares of children’s apparel company,
Children’s Place, Inc., declined as higher competitor promotions and weaker mall traffic hurt earnings. However, we believe the acquisition of certain Gymboree assets as part of Gymboree’s bankruptcy
agreement, has the potential to provide a tailwind going forward. Despite these disappointments, the Fund continued to own all three stocks at period’s end.
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Columbia Small Cap Value Fund II | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
At period’s end
Regardless of the economic
environment, we continue to focus on bottom-up stock selection. We look for undervalued companies with strong underlying earnings prospects that are exhibiting evidence of an upward inflection. In doing so, we believe
we have the potential to avoid value traps and the potential to deliver attractive returns for our clients. As of the end of the period, the Fund was overweight in the information technology and materials sectors and
underweight in the real estate and financials sectors.
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Foreign investments subject the Fund to risks, including political, economic, market, social and others within a particular country, as well as to currency instabilities and less stringent
financial and accounting standards generally applicable to U.S. issuers. Investments in small-cap companies involve risks and volatility greater than investments in larger, more established companies. Value securities may be unprofitable if the market fails to recognize their intrinsic worth or the portfolio manager misgauged that worth. The Fund may invest significantly in issuers within a
particular sector, which may be negatively affected by market, economic or other conditions, making the Fund more vulnerable to unfavorable developments in the sector. See the Fund’s prospectus for
more information on these and other risks.
The views expressed in this report
reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and
results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update
such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf
of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
| 6 | Columbia Small Cap Value Fund II | Annual Report 2020 |
Understanding Your Fund’s
Expenses
(Unaudited)
(Unaudited)
As an investor, you incur two types
of costs. There are shareholder transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing fund costs, which generally include management fees,
distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with
the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s
expenses
To illustrate these ongoing
costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment
of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the
“Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the
expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under
the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the
Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or
the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are
required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the
hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are
meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in
comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
Expenses paid during the period
are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal
half year and divided by 366.
Expenses do not include fees and
expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment
Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
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Columbia Small Cap Value Fund II | Annual Report 2020
|
7 |
Portfolio of Investments
February 29, 2020
February 29, 2020
(Percentages represent value of
investments compared to net assets)
Investments in securities
| Common Stocks 97.1% | ||
| Issuer | Shares | Value ($) |
| Communication Services 2.4% | ||
| Diversified Telecommunication Services 0.9% | ||
| Vonage Holdings Corp.(a) | 1,127,034 | 10,098,225 |
| Media 1.5% | ||
| Nexstar Media Group, Inc., Class A | 134,759 | 15,494,590 |
| Total Communication Services | 25,592,815 | |
| Consumer Discretionary 8.0% | ||
| Auto Components 0.9% | ||
| Visteon Corp.(a) | 140,275 | 9,123,486 |
| Hotels, Restaurants & Leisure 3.0% | ||
| Brinker International, Inc. | 266,039 | 9,138,440 |
| Dine Brands Global, Inc. | 135,438 | 11,085,600 |
| Penn National Gaming, Inc.(a) | 243,014 | 7,185,924 |
| PlayAGS, Inc.(a) | 445,010 | 4,312,147 |
| Total | 31,722,111 | |
| Household Durables 2.1% | ||
| KB Home | 334,725 | 10,908,688 |
| TopBuild Corp.(a) | 115,122 | 11,627,322 |
| Total | 22,536,010 | |
| Specialty Retail 2.0% | ||
| Aaron’s, Inc. | 102,000 | 4,011,660 |
| Children’s Place, Inc. (The) | 97,709 | 5,628,039 |
| Genesco, Inc.(a) | 197,393 | 6,792,293 |
| Sally Beauty Holdings, Inc.(a) | 338,594 | 4,212,109 |
| Total | 20,644,101 | |
| Total Consumer Discretionary | 84,025,708 | |
| Consumer Staples 3.0% | ||
| Food & Staples Retailing 1.0% | ||
| BJ’s Wholesale Club Holdings, Inc.(a) | 512,728 | 9,875,141 |
| Food Products 0.9% | ||
| TreeHouse Foods, Inc.(a) | 246,690 | 9,401,356 |
| Personal Products 1.1% | ||
| BellRing Brands, Inc., Class A(a) | 599,795 | 11,785,972 |
| Total Consumer Staples | 31,062,469 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Energy 3.3% | ||
| Energy Equipment & Services 0.5% | ||
| Patterson-UTI Energy, Inc. | 916,139 | 5,249,476 |
| Oil, Gas & Consumable Fuels 2.8% | ||
| Callon Petroleum Co.(a) | 1,637,150 | 3,716,330 |
| Delek U.S. Holdings, Inc. | 324,083 | 6,928,894 |
| Matador Resources Co.(a) | 314,409 | 3,030,903 |
| Oasis Petroleum, Inc.(a) | 2,157,327 | 3,527,230 |
| Scorpio Tankers, Inc. | 414,106 | 8,191,017 |
| SM Energy Co. | 580,447 | 3,813,537 |
| Total | 29,207,911 | |
| Total Energy | 34,457,387 | |
| Financials 28.6% | ||
| Banks 17.3% | ||
| Ameris Bancorp | 352,828 | 12,059,661 |
| Atlantic Union Bankshares Corp. | 503,054 | 14,960,826 |
| Bancorp, Inc. (The)(a) | 551,308 | 6,709,418 |
| Cathay General Bancorp | 424,347 | 13,061,401 |
| Community Bank System, Inc. | 309,572 | 18,825,073 |
| Hancock Whitney Corp. | 377,291 | 12,639,249 |
| Heritage Commerce Corp. | 580,447 | 5,955,386 |
| Heritage Financial Corp. | 376,668 | 8,734,931 |
| Independent Bank Corp. | 231,404 | 15,626,712 |
| Pacific Premier Bancorp, Inc. | 445,010 | 11,494,608 |
| Renasant Corp. | 428,562 | 12,141,162 |
| Sandy Spring Bancorp, Inc. | 457,722 | 14,079,529 |
| TCF Financial Corp. | 445,010 | 16,216,164 |
| Triumph Bancorp, Inc.(a) | 170,000 | 5,757,900 |
| UMB Financial Corp. | 236,491 | 13,751,952 |
| Total | 182,013,972 | |
| Capital Markets 1.6% | ||
| Houlihan Lokey, Inc. | 324,221 | 16,606,600 |
| Consumer Finance 0.7% | ||
| SLM Corp. | 754,581 | 7,825,005 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 8 | Columbia Small Cap Value Fund II | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Insurance 3.2% | ||
| American Equity Investment Life Holding Co. | 242,461 | 6,129,414 |
| AMERISAFE, Inc. | 224,094 | 14,604,206 |
| Argo Group International Holdings Ltd. | 226,375 | 12,735,857 |
| Total | 33,469,477 | |
| Mortgage Real Estate Investment Trusts (REITS) 1.5% | ||
| Blackstone Mortgage Trust, Inc. | 306,006 | 11,034,576 |
| Invesco Mortgage Capital, Inc. | 286,077 | 4,600,118 |
| Total | 15,634,694 | |
| Thrifts & Mortgage Finance 4.3% | ||
| Axos Financial, Inc.(a) | 390,972 | 9,739,113 |
| MGIC Investment Corp. | 1,247,961 | 15,012,971 |
| OceanFirst Financial Corp. | 351,589 | 7,186,479 |
| WSFS Financial Corp. | 376,668 | 12,979,979 |
| Total | 44,918,542 | |
| Total Financials | 300,468,290 | |
| Health Care 5.7% | ||
| Biotechnology 0.5% | ||
| Immunomedics, Inc.(a) | 333,757 | 5,340,112 |
| Health Care Equipment & Supplies 0.6% | ||
| Merit Medical Systems, Inc.(a) | 176,069 | 6,340,244 |
| Health Care Providers & Services 2.5% | ||
| LHC Group, Inc.(a) | 116,090 | 14,100,292 |
| R1 RCM, Inc.(a) | 967,412 | 11,879,819 |
| Total | 25,980,111 | |
| Life Sciences Tools & Services 1.3% | ||
| Syneos Health, Inc.(a) | 211,000 | 13,366,850 |
| Pharmaceuticals 0.8% | ||
| Horizon Therapeutics PLC(a) | 251,527 | 8,607,254 |
| Total Health Care | 59,634,571 | |
| Industrials 11.6% | ||
| Airlines 1.5% | ||
| Skywest, Inc. | 257,469 | 11,689,093 |
| Spirit Airlines, Inc.(a) | 135,000 | 3,840,750 |
| Total | 15,529,843 | |
| Building Products 0.7% | ||
| Masonite International Corp.(a) | 94,420 | 6,939,870 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Construction & Engineering 1.1% | ||
| MasTec, Inc.(a) | 227,342 | 11,157,945 |
| Electrical Equipment 1.8% | ||
| Bloom Energy Corp., Class A(a) | 790,000 | 7,165,300 |
| Sunrun, Inc.(a) | 609,000 | 11,778,060 |
| Total | 18,943,360 | |
| Machinery 1.5% | ||
| Evoqua Water Technologies Corp.(a) | 662,677 | 13,896,337 |
| Navistar International Corp.(a) | 56,279 | 2,043,490 |
| Total | 15,939,827 | |
| Professional Services 2.9% | ||
| ICF International, Inc. | 185,950 | 14,128,481 |
| Kforce, Inc. | 326,127 | 9,933,828 |
| Korn/Ferry International | 198,320 | 6,937,234 |
| Total | 30,999,543 | |
| Road & Rail 0.5% | ||
| Hertz Global Holdings, Inc.(a) | 410,000 | 5,243,900 |
| Trading Companies & Distributors 1.6% | ||
| NOW, Inc.(a) | 749,744 | 6,620,240 |
| Triton International Ltd. | 285,387 | 9,808,751 |
| Total | 16,428,991 | |
| Total Industrials | 121,183,279 | |
| Information Technology 14.7% | ||
| Communications Equipment 2.8% | ||
| Ciena Corp.(a) | 244,000 | 9,381,800 |
| Lumentum Holdings, Inc.(a) | 129,000 | 10,038,780 |
| Viavi Solutions, Inc.(a) | 734,340 | 9,685,945 |
| Total | 29,106,525 | |
| Electronic Equipment, Instruments & Components 1.4% | ||
| SYNNEX Corp. | 113,188 | 14,151,896 |
| IT Services 2.3% | ||
| KBR, Inc. | 476,795 | 12,377,598 |
| Science Applications International Corp. | 150,917 | 12,092,979 |
| Total | 24,470,577 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Small Cap Value Fund II | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Semiconductors & Semiconductor Equipment 5.7% | ||
| Cohu, Inc. | 561,099 | 11,485,696 |
| Diodes, Inc.(a) | 138,050 | 6,075,580 |
| Entegris, Inc. | 183,000 | 9,757,560 |
| Kulicke & Soffa Industries, Inc. | 372,454 | 8,503,125 |
| MACOM Technology Solutions Holdings, Inc.(a) | 353,106 | 8,922,989 |
| Photronics, Inc.(a) | 599,602 | 7,465,045 |
| Ultra Clean Holdings, Inc.(a) | 366,338 | 7,660,128 |
| Total | 59,870,123 | |
| Software 2.5% | ||
| Avaya Holdings Corp.(a) | 851,322 | 11,033,133 |
| Cerence, Inc.(a) | 149,000 | 3,234,790 |
| Verint Systems, Inc.(a) | 222,505 | 12,211,074 |
| Total | 26,478,997 | |
| Total Information Technology | 154,078,118 | |
| Materials 5.4% | ||
| Chemicals 1.3% | ||
| Livent Corp.(a) | 662,677 | 5,917,705 |
| Orion Engineered Carbons SA | 580,447 | 8,248,152 |
| Total | 14,165,857 | |
| Construction Materials 1.0% | ||
| Summit Materials, Inc., Class A(a) | 532,077 | 10,396,785 |
| Metals & Mining 2.3% | ||
| Carpenter Technology Corp. | 245,702 | 9,029,549 |
| Cleveland-Cliffs, Inc. | 1,018,975 | 5,920,245 |
| Materion Corp. | 201,222 | 9,123,405 |
| Total | 24,073,199 | |
| Paper & Forest Products 0.8% | ||
| Boise Cascade Co. | 228,309 | 8,100,403 |
| Total Materials | 56,736,244 | |
| Real Estate 8.8% | ||
| Equity Real Estate Investment Trusts (REITS) 8.8% | ||
| American Assets Trust, Inc. | 268,304 | 11,121,201 |
| First Industrial Realty Trust, Inc. | 503,054 | 19,367,579 |
| Hannon Armstrong Sustainable Infrastructure Capital, Inc. | 210,025 | 7,130,349 |
| Hudson Pacific Properties, Inc. | 234,570 | 7,571,918 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Investors Real Estate Trust | 110,000 | 7,749,500 |
| Mack-Cali Realty Corp. | 640,000 | 12,147,200 |
| PS Business Parks, Inc. | 94,807 | 14,083,580 |
| Sabra Health Care REIT, Inc. | 325,000 | 6,353,750 |
| Sunstone Hotel Investors, Inc. | 655,000 | 7,172,250 |
| Total | 92,697,327 | |
| Total Real Estate | 92,697,327 | |
| Utilities 5.6% | ||
| Electric Utilities 2.3% | ||
| PNM Resources, Inc. | 242,784 | 11,430,271 |
| Portland General Electric Co. | 237,016 | 12,896,040 |
| Total | 24,326,311 | |
| Gas Utilities 3.3% | ||
| New Jersey Resources Corp. | 261,201 | 9,223,007 |
| ONE Gas, Inc. | 140,275 | 11,522,189 |
| South Jersey Industries, Inc. | 328,920 | 8,897,286 |
| Southwest Gas Holdings, Inc. | 73,911 | 4,780,564 |
| Total | 34,423,046 | |
| Total Utilities | 58,749,357 | |
|
Total Common Stocks
(Cost $899,017,628) |
1,018,685,565 | |
| Money Market Funds 2.1% | ||
| Shares | Value ($) | |
| Columbia Short-Term Cash Fund, 1.641%(b),(c) | 22,340,097 | 22,340,097 |
|
Total Money Market Funds
(Cost $22,339,975) |
22,340,097 | |
|
Total Investments in Securities
(Cost: $921,357,603) |
1,041,025,662 | |
| Other Assets & Liabilities, Net | 8,643,378 | |
| Net Assets | 1,049,669,040 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Small Cap Value Fund II | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Notes to Portfolio of
Investments
| (a) | Non-income producing investment. |
| (b) | The rate shown is the seven-day current annualized yield at February 29, 2020. |
| (c) | As defined in the Investment Company Act of 1940, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. Holdings and transactions in these affiliated companies during the year ended February 29, 2020 are as follows: |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
Under the direction of the
Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of
voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly
to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of
Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third
party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale
pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to
discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members
of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of
the inputs used to value the Fund’s investments at February 29, 2020:
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Small Cap Value Fund II | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Fair value measurements (continued)
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Industrials | 121,183,279 | — | — | 121,183,279 |
| Information Technology | 154,078,118 | — | — | 154,078,118 |
| Materials | 56,736,244 | — | — | 56,736,244 |
| Real Estate | 92,697,327 | — | — | 92,697,327 |
| Utilities | 58,749,357 | — | — | 58,749,357 |
| Total Common Stocks | 1,018,685,565 | — | — | 1,018,685,565 |
| Money Market Funds | 22,340,097 | — | — | 22,340,097 |
| Total Investments in Securities | 1,041,025,662 | — | — | 1,041,025,662 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 12 | Columbia Small Cap Value Fund II | Annual Report 2020 |
Statement of Assets and Liabilities
February 29, 2020
February 29, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $899,017,628) | $1,018,685,565 |
| Affiliated issuers (cost $22,339,975) | 22,340,097 |
| Receivable for: | |
| Investments sold | 14,483,498 |
| Capital shares sold | 2,027,213 |
| Dividends | 680,172 |
| Expense reimbursement due from Investment Manager | 1,034 |
| Prepaid expenses | 2,866 |
| Total assets | 1,058,220,445 |
| Liabilities | |
| Payable for: | |
| Investments purchased | 4,411,625 |
| Capital shares purchased | 3,691,740 |
| Management services fees | 24,591 |
| Distribution and/or service fees | 767 |
| Transfer agent fees | 195,522 |
| Compensation of board members | 146,455 |
| Compensation of chief compliance officer | 14 |
| Other expenses | 80,691 |
| Total liabilities | 8,551,405 |
| Net assets applicable to outstanding capital stock | $1,049,669,040 |
| Represented by | |
| Paid in capital | 926,759,654 |
| Total distributable earnings (loss) | 122,909,386 |
| Total - representing net assets applicable to outstanding capital stock | $1,049,669,040 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Small Cap Value Fund II | Annual Report 2020
|
13 |
Statement of Assets and Liabilities (continued)
February 29, 2020
February 29, 2020
| Class A | |
| Net assets | $99,355,933 |
| Shares outstanding | 7,709,113 |
| Net asset value per share | $12.89 |
| Maximum sales charge | 5.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $13.68 |
| Advisor Class | |
| Net assets | $57,399,510 |
| Shares outstanding | 4,265,571 |
| Net asset value per share | $13.46 |
| Class C | |
| Net assets | $314,553 |
| Shares outstanding | 28,602 |
| Net asset value per share | $11.00 |
| Institutional Class | |
| Net assets | $350,469,431 |
| Shares outstanding | 26,715,496 |
| Net asset value per share | $13.12 |
| Institutional 2 Class | |
| Net assets | $144,260,256 |
| Shares outstanding | 10,699,132 |
| Net asset value per share | $13.48 |
| Institutional 3 Class | |
| Net assets | $393,073,806 |
| Shares outstanding | 29,042,715 |
| Net asset value per share | $13.53 |
| Class R | |
| Net assets | $4,795,551 |
| Shares outstanding | 379,966 |
| Net asset value per share | $12.62 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 14 | Columbia Small Cap Value Fund II | Annual Report 2020 |
Statement of Operations
Year Ended February 29, 2020
Year Ended February 29, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $21,154,878 |
| Dividends — affiliated issuers | 698,303 |
| Interfund lending | 196 |
| Foreign taxes withheld | (63,450) |
| Total income | 21,789,927 |
| Expenses: | |
| Management services fees | 10,746,861 |
| Distribution and/or service fees | |
| Class A | 323,344 |
| Class C | 4,406 |
| Class R | 28,313 |
| Transfer agent fees | |
| Class A | 322,505 |
| Advisor Class | 189,704 |
| Class C | 1,099 |
| Institutional Class | 1,195,637 |
| Institutional 2 Class | 80,506 |
| Institutional 3 Class | 38,779 |
| Class R | 14,107 |
| Compensation of board members | 45,201 |
| Custodian fees | 11,754 |
| Printing and postage fees | 135,738 |
| Registration fees | 117,059 |
| Audit fees | 32,738 |
| Legal fees | 19,547 |
| Compensation of chief compliance officer | 277 |
| Other | 28,036 |
| Total expenses | 13,335,611 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (690,475) |
| Fees waived by transfer agent | |
| Institutional 2 Class | (9,320) |
| Institutional 3 Class | (26,236) |
| Expense reduction | (40) |
| Total net expenses | 12,609,540 |
| Net investment income | 9,180,387 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 36,402,934 |
| Investments — affiliated issuers | 4,779 |
| Net realized gain | 36,407,713 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (180,738,508) |
| Investments — affiliated issuers | 122 |
| Net change in unrealized appreciation (depreciation) | (180,738,386) |
| Net realized and unrealized loss | (144,330,673) |
| Net decrease in net assets resulting from operations | $(135,150,286) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Small Cap Value Fund II | Annual Report 2020
|
15 |
Statement of Changes in Net Assets
|
Year Ended
February 29, 2020 |
Year Ended
February 28, 2019 |
|
| Operations | ||
| Net investment income | $9,180,387 | $6,894,195 |
| Net realized gain | 36,407,713 | 158,223,581 |
| Net change in unrealized appreciation (depreciation) | (180,738,386) | (164,833,875) |
| Net increase (decrease) in net assets resulting from operations | (135,150,286) | 283,901 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (4,629,633) | (17,596,407) |
| Advisor Class | (2,829,163) | (7,879,792) |
| Class C | (14,654) | (300,544) |
| Institutional Class | (18,063,603) | (70,660,938) |
| Institutional 2 Class | (5,168,504) | (12,427,431) |
| Institutional 3 Class | (17,932,579) | (56,205,124) |
| Class R | (193,575) | (864,604) |
| Total distributions to shareholders | (48,831,711) | (165,934,840) |
| Increase (decrease) in net assets from capital stock activity | (154,699,888) | 16,604,536 |
| Total decrease in net assets | (338,681,885) | (149,046,403) |
| Net assets at beginning of year | 1,388,350,925 | 1,537,397,328 |
| Net assets at end of year | $1,049,669,040 | $1,388,350,925 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 16 | Columbia Small Cap Value Fund II | Annual Report 2020 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| February 29, 2020 | February 28, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 1,128,509 | 16,444,144 | 1,331,515 | 22,116,175 |
| Distributions reinvested | 302,813 | 4,394,997 | 1,103,156 | 16,608,769 |
| Redemptions | (3,263,115) | (47,746,037) | (2,559,206) | (42,125,435) |
| Net decrease | (1,831,793) | (26,906,896) | (124,535) | (3,400,491) |
| Advisor Class | ||||
| Subscriptions | 1,364,084 | 20,859,626 | 2,606,896 | 39,029,354 |
| Distributions reinvested | 166,033 | 2,514,893 | 433,584 | 6,788,417 |
| Redemptions | (2,723,530) | (40,250,402) | (1,604,189) | (25,365,268) |
| Net increase (decrease) | (1,193,413) | (16,875,883) | 1,436,291 | 20,452,503 |
| Class C | ||||
| Subscriptions | 9,012 | 112,200 | 3,709 | 57,670 |
| Distributions reinvested | 1,135 | 14,077 | 20,220 | 294,553 |
| Redemptions | (28,744) | (357,291) | (493,683) | (7,628,683) |
| Net decrease | (18,597) | (231,014) | (469,754) | (7,276,460) |
| Institutional Class | ||||
| Subscriptions | 3,109,684 | 46,141,517 | 8,443,028 | 144,567,967 |
| Distributions reinvested | 1,027,977 | 15,180,360 | 3,881,352 | 59,496,740 |
| Redemptions | (12,918,930) | (193,587,184) | (18,696,763) | (316,199,177) |
| Net decrease | (8,781,269) | (132,265,307) | (6,372,383) | (112,134,470) |
| Institutional 2 Class | ||||
| Subscriptions | 5,180,994 | 79,089,210 | 4,194,743 | 73,022,362 |
| Distributions reinvested | 340,860 | 5,167,220 | 805,098 | 12,427,168 |
| Redemptions | (2,341,608) | (35,677,107) | (1,894,410) | (33,103,868) |
| Net increase | 3,180,246 | 48,579,323 | 3,105,431 | 52,345,662 |
| Institutional 3 Class | ||||
| Subscriptions | 7,724,688 | 118,282,901 | 8,040,754 | 141,437,234 |
| Distributions reinvested | 1,031,813 | 15,703,907 | 3,004,316 | 47,178,276 |
| Redemptions | (10,480,149) | (160,516,189) | (7,105,243) | (120,780,201) |
| Net increase (decrease) | (1,723,648) | (26,529,381) | 3,939,827 | 67,835,309 |
| Class R | ||||
| Subscriptions | 45,723 | 653,463 | 132,413 | 2,218,597 |
| Distributions reinvested | 13,615 | 193,575 | 56,605 | 838,813 |
| Redemptions | (91,649) | (1,317,768) | (269,677) | (4,274,927) |
| Net decrease | (32,311) | (470,730) | (80,659) | (1,217,517) |
| Total net increase (decrease) | (10,400,785) | (154,699,888) | 1,434,218 | 16,604,536 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Small Cap Value Fund II | Annual Report 2020
|
17 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. 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.
|
Net asset value,
beginning of period |
Net
investment income (loss) |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $15.11 | 0.06 | (1.76) | (1.70) | (0.09) | (0.43) | (0.52) |
| Year Ended 2/28/2019 | $17.11 | 0.03 | (0.10) | (0.07) | (0.01) | (1.92) | (1.93) |
| Year Ended 2/28/2018 | $18.01 | 0.01 | 0.75 | 0.76 | (0.01) | (1.65) | (1.66) |
| Year Ended 2/28/2017 | $14.07 | 0.01 | 4.85 | 4.86 | (0.03) | (0.89) | (0.92) |
| Year Ended 2/29/2016 | $17.60 | 0.02 | (1.65) | (1.63) | — | (1.90) | (1.90) |
| Advisor Class | |||||||
| Year Ended 2/29/2020 | $15.75 | 0.10 | (1.83) | (1.73) | (0.13) | (0.43) | (0.56) |
| Year Ended 2/28/2019 | $17.75 | 0.07 | (0.11) | (0.04) | (0.04) | (1.92) | (1.96) |
| Year Ended 2/28/2018 | $18.61 | 0.05 | 0.79 | 0.84 | (0.05) | (1.65) | (1.70) |
| Year Ended 2/28/2017 | $14.52 | 0.05 | 5.00 | 5.05 | (0.07) | (0.89) | (0.96) |
| Year Ended 2/29/2016 | $18.08 | 0.07 | (1.70) | (1.63) | (0.03) | (1.90) | (1.93) |
| Class C | |||||||
| Year Ended 2/29/2020 | $12.96 | (0.04) | (1.51) | (1.55) | — | (0.41) | (0.41) |
| Year Ended 2/28/2019 | $15.06 | (0.11) | (0.07) | (0.18) | — | (1.92) | (1.92) |
| Year Ended 2/28/2018 | $16.13 | (0.11) | 0.68 | 0.57 | — | (1.64) | (1.64) |
| Year Ended 2/28/2017 | $12.75 | (0.10) | 4.37 | 4.27 | (0.00)(d) | (0.89) | (0.89) |
| Year Ended 2/29/2016 | $16.25 | (0.09) | (1.51) | (1.60) | — | (1.90) | (1.90) |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $15.37 | 0.10 | (1.79) | (1.69) | (0.13) | (0.43) | (0.56) |
| Year Ended 2/28/2019 | $17.37 | 0.07 | (0.11) | (0.04) | (0.04) | (1.92) | (1.96) |
| Year Ended 2/28/2018 | $18.25 | 0.05 | 0.77 | 0.82 | (0.05) | (1.65) | (1.70) |
| Year Ended 2/28/2017 | $14.25 | 0.05 | 4.91 | 4.96 | (0.07) | (0.89) | (0.96) |
| Year Ended 2/29/2016 | $17.78 | 0.07 | (1.67) | (1.60) | (0.03) | (1.90) | (1.93) |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $15.78 | 0.12 | (1.84) | (1.72) | (0.15) | (0.43) | (0.58) |
| Year Ended 2/28/2019 | $17.78 | 0.10 | (0.11) | (0.01) | (0.07) | (1.92) | (1.99) |
| Year Ended 2/28/2018 | $18.63 | 0.08 | 0.79 | 0.87 | (0.07) | (1.65) | (1.72) |
| Year Ended 2/28/2017 | $14.53 | 0.07 | 5.01 | 5.08 | (0.09) | (0.89) | (0.98) |
| Year Ended 2/29/2016 | $18.09 | 0.10 | (1.71) | (1.61) | (0.05) | (1.90) | (1.95) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 18 | Columbia Small Cap Value Fund II | Annual Report 2020 |
Financial Highlights (continued)
|
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income (loss) ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $12.89 | (11.58%) | 1.36% | 1.28%(c) | 0.40% | 27% | $99,356 |
| Year Ended 2/28/2019 | $15.11 | (0.15%) | 1.35% | 1.27%(c) | 0.17% | 38% | $144,155 |
| Year Ended 2/28/2018 | $17.11 | 4.45% | 1.33% | 1.29%(c) | 0.04% | 45% | $165,419 |
| Year Ended 2/28/2017 | $18.01 | 34.98% | 1.30% | 1.30%(c) | 0.06% | 58% | $201,649 |
| Year Ended 2/29/2016 | $14.07 | (10.48%) | 1.30% | 1.30%(c) | 0.15% | 57% | $197,263 |
| Advisor Class | |||||||
| Year Ended 2/29/2020 | $13.46 | (11.34%) | 1.11% | 1.03%(c) | 0.64% | 27% | $57,400 |
| Year Ended 2/28/2019 | $15.75 | 0.09% | 1.10% | 1.02%(c) | 0.42% | 38% | $85,978 |
| Year Ended 2/28/2018 | $17.75 | 4.73% | 1.08% | 1.04%(c) | 0.30% | 45% | $71,415 |
| Year Ended 2/28/2017 | $18.61 | 35.21% | 1.05% | 1.05%(c) | 0.28% | 58% | $69,709 |
| Year Ended 2/29/2016 | $14.52 | (10.22%) | 1.05% | 1.05%(c) | 0.41% | 57% | $26,487 |
| Class C | |||||||
| Year Ended 2/29/2020 | $11.00 | (12.27%) | 2.11% | 2.03%(c) | (0.33%) | 27% | $315 |
| Year Ended 2/28/2019 | $12.96 | (0.93%) | 2.09% | 2.02%(c) | (0.71%) | 38% | $611 |
| Year Ended 2/28/2018 | $15.06 | 3.72% | 2.07% | 2.04%(c) | (0.72%) | 45% | $7,785 |
| Year Ended 2/28/2017 | $16.13 | 33.93% | 2.04% | 2.04%(c) | (0.70%) | 58% | $11,926 |
| Year Ended 2/29/2016 | $12.75 | (11.18%) | 2.05% | 2.05%(c) | (0.60%) | 57% | $11,325 |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $13.12 | (11.36%) | 1.11% | 1.03%(c) | 0.66% | 27% | $350,469 |
| Year Ended 2/28/2019 | $15.37 | 0.09% | 1.10% | 1.02%(c) | 0.42% | 38% | $545,568 |
| Year Ended 2/28/2018 | $17.37 | 4.71% | 1.07% | 1.04%(c) | 0.28% | 45% | $727,418 |
| Year Ended 2/28/2017 | $18.25 | 35.26% | 1.05% | 1.05%(c) | 0.31% | 58% | $1,098,979 |
| Year Ended 2/29/2016 | $14.25 | (10.22%) | 1.05% | 1.05%(c) | 0.40% | 57% | $1,007,843 |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $13.48 | (11.26%) | 0.92% | 0.89% | 0.79% | 27% | $144,260 |
| Year Ended 2/28/2019 | $15.78 | 0.22% | 0.91% | 0.88% | 0.60% | 38% | $118,654 |
| Year Ended 2/28/2018 | $17.78 | 4.90% | 0.90% | 0.89% | 0.44% | 45% | $78,479 |
| Year Ended 2/28/2017 | $18.63 | 35.42% | 0.90% | 0.90% | 0.39% | 58% | $78,330 |
| Year Ended 2/29/2016 | $14.53 | (10.10%) | 0.89% | 0.89% | 0.59% | 57% | $19,298 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Small Cap Value Fund II | Annual Report 2020
|
19 |
Financial Highlights (continued)
|
Net asset value,
beginning of period |
Net
investment income (loss) |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $15.84 | 0.13 | (1.85) | (1.72) | (0.16) | (0.43) | (0.59) |
| Year Ended 2/28/2019 | $17.84 | 0.11 | (0.12) | (0.01) | (0.07) | (1.92) | (1.99) |
| Year Ended 2/28/2018 | $18.68 | 0.09 | 0.80 | 0.89 | (0.08) | (1.65) | (1.73) |
| Year Ended 2/28/2017 | $14.56 | 0.08 | 5.03 | 5.11 | (0.10) | (0.89) | (0.99) |
| Year Ended 2/29/2016 | $18.12 | 0.11 | (1.71) | (1.60) | (0.06) | (1.90) | (1.96) |
| Class R | |||||||
| Year Ended 2/29/2020 | $14.80 | 0.02 | (1.71) | (1.69) | (0.06) | (0.43) | (0.49) |
| Year Ended 2/28/2019 | $16.84 | (0.01) | (0.11) | (0.12) | — | (1.92) | (1.92) |
| Year Ended 2/28/2018 | $17.77 | (0.04) | 0.75 | 0.71 | — | (1.64) | (1.64) |
| Year Ended 2/28/2017 | $13.91 | (0.03) | 4.79 | 4.76 | (0.01) | (0.89) | (0.90) |
| Year Ended 2/29/2016 | $17.47 | (0.02) | (1.64) | (1.66) | — | (1.90) | (1.90) |
| 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%. |
| (d) | Rounds to zero. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 20 | Columbia Small Cap Value Fund II | Annual Report 2020 |
Financial Highlights (continued)
|
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income (loss) ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $13.53 | (11.23%) | 0.87% | 0.84% | 0.84% | 27% | $393,074 |
| Year Ended 2/28/2019 | $15.84 | 0.27% | 0.85% | 0.83% | 0.62% | 38% | $487,282 |
| Year Ended 2/28/2018 | $17.84 | 4.98% | 0.86% | 0.84% | 0.52% | 45% | $478,580 |
| Year Ended 2/28/2017 | $18.68 | 35.55% | 0.84% | 0.84% | 0.50% | 58% | $203,778 |
| Year Ended 2/29/2016 | $14.56 | (10.05%) | 0.84% | 0.84% | 0.62% | 57% | $133,139 |
| Class R | |||||||
| Year Ended 2/29/2020 | $12.62 | (11.79%) | 1.61% | 1.53%(c) | 0.15% | 27% | $4,796 |
| Year Ended 2/28/2019 | $14.80 | (0.46%) | 1.60% | 1.52%(c) | (0.08%) | 38% | $6,104 |
| Year Ended 2/28/2018 | $16.84 | 4.19% | 1.58% | 1.54%(c) | (0.21%) | 45% | $8,302 |
| Year Ended 2/28/2017 | $17.77 | 34.67% | 1.55% | 1.55%(c) | (0.19%) | 58% | $11,042 |
| Year Ended 2/29/2016 | $13.91 | (10.73%) | 1.55% | 1.55%(c) | (0.10%) | 57% | $10,109 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Small Cap Value Fund II | Annual Report 2020
|
21 |
Notes to Financial Statements
February 29, 2020
February 29, 2020
Note 1. Organization
Columbia Small Cap Value Fund II
(the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a liquidation will be
proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A and Class C shares are offered to the general public for investment. Class C shares automatically convert to Class A shares after 10 years. Advisor Class, Institutional Class, Institutional 2
Class, Institutional 3 Class and Class R shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional investors and to certain other investors as also
described in the Fund’s prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
All equity securities are valued at
the close of business of the New York Stock Exchange. Equity securities are valued at the official closing price on the principal exchange or market on which they trade. Unlisted securities or listed securities for
which there were no sales during the day are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets.
Foreign equity securities are
valued based on the closing price on the foreign exchange in which such securities are primarily traded. If any foreign equity security closing prices are not readily available, the securities are valued at the mean
of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are determined at the scheduled closing time of the New York Stock Exchange. Many securities markets and exchanges
outside the U.S. close prior to the close of the New York Stock Exchange; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but
before the close of the New York Stock Exchange. In those situations, foreign securities will be fair valued pursuant to a policy adopted by the Board of Trustees. Under the policy, the Fund may utilize a third-party
pricing service to determine these fair values. The third-party pricing service takes into account multiple factors, including, but not limited to, movements in the U.S. securities markets, certain depositary
receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that reasonably reflects the current market
conditions as of the close of the New York Stock Exchange. The fair value of a security is likely to be different from the quoted or published price, if available.
Investments in open-end investment
companies, including money market funds, are valued at their latest net asset value.
| 22 | Columbia Small Cap Value Fund II | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published
price for the security, if available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Corporate actions and dividend
income are generally recorded net of any non-reclaimable tax withholdings, on the ex-dividend date or upon receipt of ex-dividend notification in the case of certain foreign securities.
The Fund may receive distributions
from holdings in equity securities, business development companies (BDCs), exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment companies (RICs), and real estate investment trusts
(REITs), which report information as to the tax character of their distributions annually. These distributions are allocated to dividend income, capital gain and return of capital based on actual information reported.
Return of capital is recorded as a reduction of the cost basis of securities held. If the Fund no longer owns the applicable securities, return of capital is recorded as a realized gain. With respect to REITs, to the
extent actual information has not yet been reported, estimates for return of capital are made by Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise
Financial, Inc. (Ameriprise Financial). The Investment Manager’s estimates are subsequently adjusted when the actual character of the distributions is disclosed by the REITs, which could result in a
proportionate change in return of capital to shareholders.
Awards from class action litigation
are recorded as a reduction of cost basis if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities on the payment date, the proceeds are recorded as
realized gains.
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable income and net capital gain, if any, for its
tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net income and certain other
amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
|
Columbia Small Cap Value Fund II | Annual Report 2020
|
23 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Foreign taxes
The Fund may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules
and regulations that exist in the markets in which it invests.
Realized gains in certain countries
may be subject to foreign taxes at the Fund level, based on statutory rates. The Fund accrues for such foreign taxes on realized and unrealized gains at the appropriate rate for each jurisdiction, as applicable. The
amount, if any, is disclosed as a liability on the Statement of Assets and Liabilities.
Distributions to shareholders
Distributions from net investment
income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Note 3. Fees and other
transactions with affiliates
Management services fees
The Fund has entered into a
Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the
Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the
Fund’s daily net assets that declines from 0.87% to 0.75% as the Fund’s net assets increase. The effective management services fee rate for the year ended February 29, 2020 was 0.83% of the Fund’s
average daily net assets.
Compensation of board members
Members of the Board of Trustees
who are not officers or employees of the Investment Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the
Deferred Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of
certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All
amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
| 24 | Columbia Small Cap Value Fund II | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as
sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class. In addition, effective July 1, 2019 through June 30, 2020, Institutional 2 Class
shares are subject to a contractual transfer agency fee annual limitation of not more than 0.05% and Institutional 3 Class shares are subject to a contractual transfer agency fee annual limitation of not more than
0.00% of the average daily net assets attributable to each share class.
For the year ended February 29,
2020, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| Effective rate (%) | |
| Class A | 0.25 |
| Advisor Class | 0.25 |
| Class C | 0.25 |
| Institutional Class | 0.25 |
| Institutional 2 Class | 0.05 |
| Institutional 3 Class | 0.00 |
| Class R | 0.25 |
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended February 29, 2020, these minimum account balance fees reduced total expenses
of the Fund by $40.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays
a monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class C shares of the Fund and a monthly distribution fee to the Distributor at the
maximum annual rates of 0.75% and 0.50% of the average daily net assets attributable to Class C and Class R shares of the Fund, respectively.
|
Columbia Small Cap Value Fund II | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended February 29, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 5.75 | 0.50 - 1.00(a) | 17,739 |
| Class C | — | 1.00(b) | — |
| (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 applies to redemptions within 12 months after purchase, with certain limited exceptions. |
The Fund’s other share
classes are not subject to sales charges.
Expenses waived/reimbursed by the
Investment Manager and its affiliates
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) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, 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 following annual rate(s) as a percentage of the class’ average daily net assets:
Under the agreement governing
these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes
(including foreign transaction taxes), expenses associated with investments 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, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from
the Investment Manager, certain of its affiliates and the Fund. Reflected in the contractual cap commitment, effective July 1, 2019 through June 30, 2020, is the Transfer Agent’s contractual agreement to limit
total transfer agency fees to an annual rate of not more than 0.05% for Institutional 2 Class and 0.00% for Institutional 3 Class of the average daily net assets attributable to each share class, unless sooner
terminated at the sole discretion of the Board of Trustees. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its
affiliates in future periods.
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
| 26 | Columbia Small Cap Value Fund II | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
At February 29, 2020, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, trustees’ deferred compensation, distribution reclassifications, earnings and profits distributed to shareholders
on the redemption of shares, and redemption in kind. To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences do not
require reclassifications.
The following reclassifications
were made:
|
Excess of distributions
over net investment income ($) |
Accumulated
net realized gain ($) |
Paid in
capital ($) |
| 2,042,109 | (16,299,524) | 14,257,415 |
Net investment income (loss) and
net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended February 29, 2020 | Year Ended February 28, 2019 | ||||
|
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 11,239,368 | 37,592,343 | 48,831,711 | 4,506,412 | 161,428,428 | 165,934,840 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At February 29, 2020, the
components of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| — | 4,401,262 | — | 118,652,746 |
At February 29, 2020, the cost of
all investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
|
Federal
tax cost ($) |
Gross unrealized
appreciation ($) |
Gross unrealized
(depreciation) ($) |
Net unrealized
appreciation ($) |
| 922,372,916 | 240,988,074 | (122,335,328) | 118,652,746 |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
Management of the Fund has
concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at
a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the
prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio
information
The cost of purchases and
proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $343,230,587 and $543,604,715, respectively, for the year ended February 29, 2020. The amount of purchase and
sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
|
Columbia Small Cap Value Fund II | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Note
6. Redemption-in-kind
Proceeds from the sales of
securities for Columbia Small Cap Value Fund II include the value of securities delivered through in-kind redemptions of certain fund shares. During the year ended February 29, 2020, securities and other assets with a
value of $60,606,626 were distributed to shareholders to satisfy their redemption requests. The net realized gain on these securities was $13,223,752, which is not taxable to remaining shareholders in the Fund.
Note 7. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes referred to
as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
Note 8. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the
Interfund Program during the year ended February 29, 2020 was as follows:
| Borrower or lender |
Average loan
balance ($) |
Weighted average
interest rate (%) |
Number of days
with outstanding loans |
| Lender | 650,000 | 2.57 | 4 |
Interest income earned by the Fund
is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at February 29, 2020.
Note 9. Line of credit
The Fund has access to a
revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. The credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager or an affiliated investment manager, severally and
not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the federal funds effective rate, (ii) the
one-month LIBOR rate and (iii) the overnight bank funding rate, plus in each case, 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a
commitment fee equal to its pro rata share of the unused amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations. This agreement
expires annually in December unless extended or renewed.
The Fund had no borrowings during
the year ended February 29, 2020.
| 28 | Columbia Small Cap Value Fund II | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Note 10. Significant
risks
Financial sector risk
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.
Market and environment risk
The Fund may incur losses due to
declines in the value of one or more securities in which it invests. These declines may be due to factors affecting a particular issuer, or the result of, among other things, political, regulatory, market, economic or
social developments affecting the relevant market(s) more generally. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers,
which could adversely affect Fund, including causing difficulty in assigning prices to hard-to-value assets in thinly traded and closed markets, significant redemptions and operational challenges. Global economies and
financial markets are increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may
be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional or global events
such as terrorism, war, natural disasters, disease/virus outbreaks and epidemics or other public health issues, recessions, depressions or other events – or the potential for such events – could have a
significant negative impact on global economic and market conditions.
The coronavirus disease 2019
(COVID-19) public health crisis has become a pandemic that has resulted in, and may continue to result in, significant global economic and societal disruption and market volatility due to disruptions in market access,
resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. Such disruptions may be caused, or exacerbated by, quarantines and travel restrictions,
workforce displacement and loss in human and other resources. The uncertainty surrounding the magnitude, duration, reach, costs and effects of the global pandemic, as well as actions that have been or could be taken
by governmental authorities or other third parties, present unknowns that are yet to unfold. The impacts, as well as the uncertainty over impacts to come, of COVID-19 – and any other infectious illness
outbreaks, epidemics and pandemics that may arise in the future – could negatively affect global economies and markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illness
outbreaks and epidemics in emerging market countries may be greater due to generally less established healthcare systems, governments and financial markets. Public health crises caused by the COVID-19 outbreak may
exacerbate other pre-existing political, social and economic risks in certain countries or globally. The disruptions caused by COVID-19 could prevent the Fund from executing advantageous investment decisions in a
timely manner and negatively impact the Fund’s ability to achieve their investment objectives. Any such event(s) could have a significant adverse impact on the value and risk profile of the Fund.
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting different communities at different times with varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including
the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to continue ordinary business operations and technology functions over near- or longer-term periods.
|
Columbia Small Cap Value Fund II | Annual Report 2020
|
29 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Shareholder concentration risk
At February 29, 2020, two
unaffiliated shareholders of record owned 42.1% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Subscription
and redemption activity by concentrated accounts may have a significant effect on the operations of the Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times,
including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of less liquid positions. Large redemptions could result in decreased economies of scale and increased operating
expenses for non-redeeming Fund shareholders.
Small- and mid-cap company 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.
Note 11. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 12. Information
regarding pending and settled legal proceedings
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. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to
Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that
these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe
proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines,
penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.
| 30 | Columbia Small Cap Value Fund II | Annual Report 2020 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust and Shareholders of Columbia Small Cap Value Fund II
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Small Cap Value Fund II (one of the funds constituting Columbia Funds Series Trust, referred to hereafter as the "Fund") as of
February 29, 2020, the related statement of operations for the year ended February 29, 2020, the statement of changes in net assets for each of the two years in the period ended February 29, 2020, including the
related notes, and the financial highlights for each of the five years in the period ended February 29, 2020 (collectively referred to as the “financial statements”). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Fund as of February 29, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two
years in the period ended February 29, 2020 and the financial highlights for each of the five years in the period ended February 29, 2020 in conformity with accounting principles generally accepted in the United
States of America.
Basis for Opinion
These financial statements are the
responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these
financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of February 29, 2020 by correspondence with the custodian, transfer agent and brokers; when replies
were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
April 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
|
Columbia Small Cap Value Fund II | Annual Report 2020
|
31 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended February 29, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Qualified
dividend income |
Dividends
received deduction |
Capital
gain dividend |
| 100.00% | 100.00% | $19,873,438 |
Qualified dividend income. For
taxable, non-corporate shareholders, the percentage of ordinary income distributed during the fiscal year that represents qualified dividend income subject to reduced tax rates.
Dividends received deduction. The
percentage of ordinary income distributed during the fiscal year that qualifies for the corporate dividends received deduction.
Capital gain dividend. The Fund
designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
TRUSTEES AND
OFFICERS
The Board oversees the Fund’s
operations and 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 Fund’s Trustees as
of the printing of this report, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not
affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach the mandatory retirement age established by the Board.
Independent trustees
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
George S. Batejan
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1953 |
Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 117 | Former Chairman of the Board, NICSA (National Investment Company Services Association) (Executive Committee, Nominating Committee and Governance Committee), 2014-2016; former Director, Intech Investment Management, 2011-2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016; former Advisory Board Member, University of Colorado Business School, 2015-2018 |
| 32 | Columbia Small Cap Value Fund II | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Kathleen Blatz
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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; Member and Interim Chair, Minnesota Sports Facilities Authority, January 2017-July 2017; Interim President and Chief Executive Officer, Blue Cross and Blue Shield of Minnesota (health care insurance), February-July 2018 | 117 | Trustee, BlueCross BlueShield of Minnesota since 2009 (Chair of the Business Development Committee, 2014-2017; Chair of the Governance Committee since 2017); Chair of the Robina Foundation since August 2013; former Member and Chair of the Board, Minnesota Sports Facilities Authority, January 2017-July 2017 |
|
Pamela G. Carlton
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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 | 117 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996; Director, DR Bank (Audit Committee) since 2017; Director, Evercore Inc. (Audit Committee, Nominating and Governance Committee) since 2019 |
|
Patricia M. Flynn
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1950 |
Trustee 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 | 117 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010; Board of Directors, The MA Business Roundtable 2003-2019 |
|
Brian J. Gallagher
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee since 12/17 | Retired; Partner with Deloitte & Touche LLP and its predecessors, 1977-2016 | 117 | Trustee, Catholic Schools Foundation since 2004 |
|
Catherine James Paglia
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Chair of the Board since 1/20; Trustee 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. | 117 | 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) |
|
Columbia Small Cap Value Fund II | Annual Report 2020
|
33 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Anthony M. Santomero
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1946 |
Trustee 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 | 117 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; former Director, Citigroup Inc. and Citibank, N.A., 2009-2019; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
|
Minor M. Shaw
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1947 |
Trustee 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 | 117 | Director, BlueCross BlueShield of South Carolina since April 2008; Trustee, Hollingsworth Funds since 2016 (previously Board Chair from 2016-2019); Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016; former Director, National Association of Corporate Directors, Carolinas Chapter, 2013-2018 |
|
Sandra Yeager
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1964 |
Trustee since 12/17 | Retired; President and founder, Hanoverian Capital, LLC (SEC registered investment advisor firm), 2008-2016; Managing Director, DuPont Capital, 2006-2008; Managing Director, Morgan Stanley Investment Management, 2004-2006; Senior Vice President, Alliance Bernstein, 1990-2004 | 115 | Director, NAPE Education Foundation since October 2016 |
| 34 | Columbia Small Cap Value Fund II | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Interested trustee affiliated with Investment Manager*
Interested trustee affiliated with Investment Manager*
| * | 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. |
Nations Funds refer to the Funds
within the Columbia Funds Complex that historically bore the Nations brand and includes series of Columbia Funds Series Trust. RiverSource Funds refer to the Funds within the Columbia Funds Complex that historically
bore the RiverSource brand and includes series of Columbia Funds Series Trust II.
The Statement of Additional
Information has additional information about the Fund’s Board members and is available, without charge, upon request by calling 800.345.6611, visiting columbiathreadneedleus.com/investor/ or contacting your
financial intermediary.
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 of the
Fund as of the printing of this report, 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 Fund’s other officers are:
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); officer of Columbia Funds and affiliated funds since 2007. |
|
Michael G. Clarke
225 Franklin Street Boston, MA 02110 Born 1969 |
Chief Financial Officer, Principal Financial Officer (2009), and Senior Vice President (2019) | Vice President, Head of North American Operations, and Co-Head of Global Operations, – Accounting and Tax, Columbia Management Investment Advisers, LLC, since June 2019 (previously Vice President – Accounting and Tax, May 2010 – May 2019); senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009 – January 2019 and December 2015 – January 2019, respectively). |
|
Joseph Beranek
5890 Ameriprise Financial Center Minneapolis, MN 55474 Born 1965 |
Treasurer, Chief Accounting Officer (Principal Accounting Officer) (2019), and Principal Financial Officer (2020) | Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and March 2017, respectively (previously Vice President — Pricing and Corporate Actions, May 2010 - March 2017). |
|
Columbia Small Cap Value Fund II | Annual Report 2020
|
35 |
TRUSTEES AND OFFICERS (continued)
Fund officers (continued)
Fund officers (continued)
|
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 |
|
Paul B. Goucher
485 Lexington Avenue New York, NY 10017 Born 1968 |
Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since March 2015 (previously Vice President and Assistant Secretary, May 2010 – March 2015). |
|
Thomas P. McGuire
225 Franklin Street Boston, MA 02110 Born 1972 |
Senior 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; Chief Compliance Officer, Columbia Acorn/Wanger Funds since December 2015. |
|
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; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013. |
|
Ryan C. Larrenaga
225 Franklin Street Boston, MA 02110 Born 1970 |
Senior Vice President (2017), Chief Legal Officer (2017), and Secretary (2015) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously Vice President and Group Counsel, August 2011 - August 2018); officer of Columbia Funds and affiliated funds since 2005. |
|
Daniel J. Beckman
225 Franklin Street Boston, MA 02110 Born 1962 |
Senior Vice President (2020) | Vice President – Head of North America Product, Columbia Management Investment Advisers, LLC (since April 2015); previously, Senior Vice President of Investment Product Management, Fidelity Financial Advisor Solutions, a division of Fidelity Investments (January 2012 – March 2015). |
|
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. |
|
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. |
| 36 | Columbia Small Cap Value Fund II | Annual Report 2020 |
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Columbia Small Cap Value Fund II
P.O. Box 219104
Kansas City, MO 64121-9104
Please read and consider the
investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments
(Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved.
© 2020 Columbia Management Investment
Advisers, LLC.
columbiathreadneedleus.com/investor/
ANN230_02_K01_(04/20)
Annual Report
February 29, 2020
February 29, 2020
Columbia Select
International Equity Fund
Beginning on January 1, 2021, as
permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports like this one will no longer be sent by mail, unless you
specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (columbiathreadneedleus.com/investor/), and each time a report is posted you will be notified
by mail and provided with a website address to access the report.
If you have already elected to
receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically
at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with the Fund, by calling 800.345.6611 or by enrolling in “eDelivery” by logging
into your account at columbiathreadneedleus.com/investor/.
You may elect to receive all future
reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you
invest directly with the Fund, you can call 800.345.6611 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive paper reports will apply to all Columbia
Funds held in your account if you invest through a financial intermediary or all Columbia Funds held with the fund complex if you invest directly with the Fund.
Not FDIC Insured • No bank
guarantee • May lose value
Table of Contents
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Columbia Select International
Equity Fund (the Fund) mails one shareholder report to each shareholder address, unless such shareholder elected to receive shareholder reports from the Fund electronically. If you would like more than one report,
please call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and
procedures
The policy of the Board of Trustees
is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by
calling 800.345.6611; contacting your financial intermediary; visiting columbiathreadneedleus.com/investor/; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding
how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting
columbiathreadneedleus.com/investor/, or searching the website of the SEC at sec.gov.
Quarterly schedule of
investments
The Fund files a complete schedule
of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT, and for reporting periods ended prior to March 31, 2019, on Form N-Q. The Fund’s Form N-Q and Form N-PORT
filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q or Form N-PORT, can also be obtained without charge, upon request, by calling
800.345.6611.
Additional Fund information
For more information about the
Fund, please visit columbiathreadneedleus.com/investor/ or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC (the
Investment Manager)
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors,
Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 219104
Kansas City, MO 64121-9104
Columbia Select International Equity
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks long-term capital growth.
Portfolio management
Threadneedle International Limited
Simon Haines, CFA
William Davies
David Dudding, CFA
Morningstar style boxTM
The Morningstar Style Box is based on a fund’s portfolio holdings. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows
investment style (value, blend, or growth). Information shown is based on the most recent data provided by Morningstar.
© 2020 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or
distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
Returns for Class A shares are shown
with and without the maximum initial sales charge of 5.75%. Returns for Class C shares are shown with and without the 1.00% contingent deferred sales charge for the first year only. The Fund’s other share
classes are not subject to sales charges and have limited eligibility. Please see the Fund’s prospectus for details. Performance for different share classes will vary based on differences in sales charges and
fees associated with each share class. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the
redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee
waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown
represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than
their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial
intermediary, visiting columbiathreadneedleus.com/investor/ or calling 800.345.6611.
The Fund’s performance prior
to May 2015 reflects returns achieved pursuant to different principal investment strategies. If the Fund’s current strategies had been in place for the prior periods, results shown may have been different.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investor/investment-products/mutual-funds/appended-performance for more information. |
The MSCI EAFE Index (Net) is a free
float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. The index is compiled from a composite of securities markets of
Europe, Australasia and the Far East and is widely recognized by investors in foreign markets as the measurement index for portfolios of non-North American securities.
Indices are not available for
investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes (except the MSCI EAFE Index (Net), which reflects reinvested dividends net of withholding taxes) or other
expenses of investing. Securities in the Fund may not match those in an index.
Fund performance may be significantly
negatively impacted by the economic impact of the COVID-19 pandemic. The COVID-19 pandemic has adversely impacted economies and capital markets around the world in ways that will likely continue and may change in
unforeseen ways for an indeterminate period. The COVID-19 pandemic may exacerbate pre-existing political, social and economic risks in certain countries and globally.
|
Columbia Select International Equity Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (February 28, 2010 — February 29, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Select International Equity Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund
distributions or on the redemption of Fund shares.
| Equity sector breakdown (%) (at February 29, 2020) | |
| Communication Services | 6.3 |
| Consumer Discretionary | 12.0 |
| Consumer Staples | 7.8 |
| Energy | 5.0 |
| Financials | 15.8 |
| Health Care | 15.7 |
| Industrials | 18.8 |
| Information Technology | 9.7 |
| Materials | 7.4 |
| Utilities | 1.5 |
| Total | 100.0 |
Percentages indicated are based
upon total equity investments. The Fund’s portfolio composition is subject to change.
| (a) | Rounds to zero. |
| (b) | Includes investments in Money Market Funds. |
Country breakdown is based
primarily on issuer’s place of organization/incorporation. Percentages indicated are based upon total investments excluding investments in derivatives, if any. The Fund’s portfolio composition is subject
to change.
| 4 | Columbia Select International Equity Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that ended
February 29, 2020, Class A shares of the Fund returned 4.49% excluding sales charges, outperforming the Fund’s benchmark, the MSCI EAFE Index (Net), which returned -0.57%. The Fund benefited from security
selection at both the regional and sector levels, with strongest contributions coming from positions in the health care and materials sectors.
A strong market in 2019, but a
reversal in 2020
Global stock market performance
was generally strong through 2019, as markets were supported by the Federal Reserve’s dovish policy shift, Chinese economic stimulus measures, and reduced concern about trade tensions with the U.S. and China
signing an interim deal. However, the benchmark reversed its gains in the first two months of 2020, as a newly discovered coronavirus spread throughout China and beyond, sparking concern that the outbreak might weigh
on an already slowing global economy. Central banks and governments across the world pledged to implement supportive measures, which have subsequently materialized.
Europe ex-U.K. stocks outperformed,
despite concerns over the region’s political and economic backdrop. Stocks were supported by relatively undemanding valuations and the European Central Bank’s (ECB’s) stimulus measures to spur growth
in the autumn of 2019. These included lowering interest rates further into negative territory, restarting its bond-purchase program, and outlining more generous terms for long-term cheap financing for banks. The U.K.
market trailed the benchmark markedly. Brexit-related uncertainty and fears of a hard-left government hobbled U.K. shares for much of the review period but eased in December as the ruling Conservatives decisively won
a snap general election and legislators approved a Brexit deal.
Japanese stocks outperformed in
dollar terms, though the return was inflated by currency moves. The Japanese market had a volatile 2019, driven by U.S.-China trade tensions and periods of attendant yen strength. Japanese stocks staged a rebound in
the final months of 2019, reflecting optimism about the U.S.-China trade deal and news of Japan’s first fiscal stimulus since 2016. Markets fell in 2020 however, amid concerns about slowing exports – a key
driver of Japan’s GDP – in the wake of the coronavirus, and evidence that the consumption-tax hike in October had impacted Japanese growth more negatively than anticipated after citizens increased their
spending before the tax increase went into effect.
In the Far East, Australian markets
fared well, hitting record highs in January 2020 following the signing of the U.S.-China trade deal despite worries about the economic fallout from bushfires which swept the country. Gains were later eroded in the
coronavirus-induced sell-off and the similtaneous slump in commodity prices. Hong Kong equities struggled amid concerns about widespread street protests, slowing growth in the region and the economic toll of the
coronavirus. However, stocks outperformed towards the end of the period on optimism over China’s stimulus measures in response to the epidemic.
At the sector level, the relatively
defensive utilities and health care sectors led gains as investors favored their stable growth profiles. Technology also performed well, owing to strong earnings from sector heavyweights, the U.S.-China trade deal and
a more favorable outlook for smartphone and 5G demand. Energy stocks lagged most, mirroring the decline in crude oil prices on concerns about the hit to demand from trade tensions and, later, the coronavirus. These
worries also weighed on prices of industrial commodities, which resulted in the materials sector struggling over the year.
Contributors and detractors
The Fund’s outperformance
was driven by security selection at both the regional and sector levels. In terms of the latter, the strongest contributions came from health care, materials and industrials. By sector, the positive effects from our
relative overweights in health care and technology were offset by our overweight in energy and underweight in utilities. In health care, CSL Ltd., Hoya Corp. and Roche Holding AG were notable contributors. Specialty
biotechnology company CSL contributed based on optimism around prospects for its plasma product’s revenue growth. Japanese optical-product maker Hoya performed strongly on a string of impressive results. Healthy
growth and positive outlooks for its life-care business and its information and technology segment buoyed sentiment, as did the announcement of a larger-than-expected share-buyback program. ASML Holding NV, a
developer of semiconductor manufacturing equipment, also outperformed, helped by optimism around its efforts in 5G, its leading market position, and the rising barriers to entry in its industry. The strong
contribution of materials was also a function of security selection, driven by the holdings in Sika AG and CRH PLC. Industrials also contributed, driven by Nihon M&A Center, Inc., Ferguson PLC and Daikin
Industries Ltd.
|
Columbia Select International Equity Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
The energy, financials and consumer
staples sectors were the largest detractors in relative terms. Our overweight to energy detracted, in no small measure due to pressure on oil prices and worries about global demand. Financials also weighed slightly on
returns, with the detraction split between selection and allocation effects. Our underweight to consumer staples also detracted, as the sector held up relatively well amid a flight to more defensive stocks.
Among holdings, the three largest
detractors over the review period were TechnipFMC PLC, Nestlé SA and ING Groep NV. Oil and gas business TechnipFMC was the weakest holding, falling with the rest of the energy sector. Global oil prices finished
the reporting period on a volatile note, driven by concerns about the global coronavirus outbreak and its impact on demand. That said, given the company’s leadership in both the subsea and liquefied natural gas
(LNG) segments, a strong balance sheet and growing free cash flow, we feel that the competitive moat is sustainable and should benefit market share. Nestlé was a new holding during the period, but the stock came
under pressure soon after our purchase as some concerns around pricing were expressed by investors. The stock held up well thereafter, buoyed by its stable growth profile. Global financial institution ING lagged
against the backdrop of monetary easing by central banks. Despite a weaker interest-rate environment, we view ING positively for its portfolio, which is well diversified by geography as well as by lending type.
Portfolio positioning
The biggest increases in relative
weights over the period were to Japan, Switzerland and Denmark. In Japan, the Fund’s weighting was broadly in line with the benchmark at the start of the year, but by the end of the year, we were overweight.
This change materialized through new purchases including Toyota Motor Corp., SCSK Corp. and Rohm Co. Ltd. The biggest decline in relative weights over the year were in the U.K. and Sweden. In the U.K., we moved from
an overweight at the start of the year to an underweight by the end, brought about by the sales of Unilever PLC and Prudential PLC, and the reduction of holdings in RELX PLC and Rio Tinto PLC.
In addition to Toyota and
Nestlé, Novo Nordisk AS was added to the portfolio. We believe Nestlé boasts a diverse portfolio of standout businesses, and has the potential to improve its returns under new management. Its scale and
strong brand support customer loyalty and act as robust barriers to entry by others. Toyota had been demonstrating strong earnings stability and margin improvement, despite adverse external conditions. Novo Nordisk is
a global healthcare company specializing in diabetes care. Its products include insulin and insulin-delivery devices. We believe the company is on a path of sustainable growth, which may exceed that of its wider
sector. Our most significant sale was Unilever, which reflected concerns around its growth outlook, related to a growing consumer shift towards niche products and retailers’ private labels. Swedish commercial
vehicle and construction equipment manufacturer Volvo AB had delivered strong results, driven by both the truck and construction equipment segments, but reported declining orders. We also sold Japanese sporting
equipment manufacturer Shimano, Inc. The company has a strong brand and a significant share of the global bicycle components market. However, sentiment has been hurt by concerns around a lack of cost savings due to
falling production efficiency and the slow automation of the disc-brake-assembly process.
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. 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. Value securities may be unprofitable if the market fails to recognize their intrinsic worth or the portfolio manager misgauged that worth. International investing involves certain risks and volatility due to potential political, economic or currency instabilities and different financial and accounting standards. Risks are enhanced for
emerging market issuers. Investing in derivatives is a specialized activity that involves special risks that subject the Fund to significant loss potential, including when used as leverage, and may result in greater fluctuation in fund
value. The value of the Fund’s portfolio may be more volatile due to concentrated investments in similar industries, sectors or geographical regions. Investments in a limited number of companies subject the Fund to greater risk of loss. See the Fund’s prospectus for more information on these and other risks.
The views expressed in this report
reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and
results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update
such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf
of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
| 6 | Columbia Select International Equity Fund | Annual Report 2020 |
Understanding Your Fund’s
Expenses
(Unaudited)
(Unaudited)
As an investor, you incur two types
of costs. There are shareholder transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing fund costs, which generally include management fees,
distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with
the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s
expenses
To illustrate these ongoing
costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment
of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the
“Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the
expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under
the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the
Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or
the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are
required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the
hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are
meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in
comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
Expenses paid during the period
are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal
half year and divided by 366.
Expenses do not include fees and
expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment
Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
|
Columbia Select International Equity Fund | Annual Report 2020
|
7 |
Portfolio of Investments
February 29, 2020
February 29, 2020
(Percentages represent value of
investments compared to net assets)
Investments in securities
| Common Stocks 95.6% | ||
| Issuer | Shares | Value ($) |
| Australia 3.2% | ||
| CSL Ltd. | 37,205 | 7,599,932 |
| Canada 2.0% | ||
| Suncor Energy, Inc. | 171,741 | 4,732,874 |
| China 0.0% | ||
| China Milk Products Group Ltd.(a),(b),(c) | 7,426,000 | 5 |
| Denmark 4.2% | ||
| Novo Nordisk A/S, Class B | 113,070 | 6,624,654 |
| Ørsted A/S | 33,201 | 3,427,632 |
| Total | 10,052,286 | |
| France 9.8% | ||
| Airbus Group SE | 42,559 | 5,136,813 |
| BNP Paribas SA | 49,209 | 2,388,620 |
| EssilorLuxottica SA | 34,993 | 4,796,832 |
| L’Oreal SA | 13,770 | 3,701,161 |
| Pernod Ricard SA | 25,444 | 4,149,258 |
| Total SA | 70,766 | 3,058,675 |
| Total | 23,231,359 | |
| Germany 4.2% | ||
| Adidas AG | 7,564 | 2,129,631 |
| Deutsche Telekom AG, Registered Shares | 365,030 | 5,979,739 |
| Knorr-Bremse AG | 17,983 | 1,826,217 |
| Total | 9,935,587 | |
| Hong Kong 1.3% | ||
| AIA Group Ltd. | 316,400 | 3,171,102 |
| India 1.1% | ||
| HDFC Bank Ltd. | 156,000 | 2,560,565 |
| Indonesia 1.7% | ||
| PT Bank Rakyat Indonesia Persero Tbk | 13,851,700 | 4,139,262 |
| Ireland 3.6% | ||
| CRH PLC | 250,410 | 8,447,879 |
| Japan 29.4% | ||
| Bridgestone Corp. | 91,400 | 3,029,055 |
| Capcom Co., Ltd. | 221,700 | 6,028,382 |
| Daikin Industries Ltd. | 22,600 | 3,044,766 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Hoya Corp. | 47,300 | 4,194,028 |
| Keyence Corp. | 8,600 | 2,746,028 |
| Koito Manufacturing Co., Ltd. | 69,700 | 2,730,477 |
| Kubota Corp. | 377,200 | 5,289,010 |
| Nidec Corp. | 25,900 | 3,050,329 |
| Nihon M&A Center, Inc. | 182,400 | 5,618,920 |
| Nintendo Co., Ltd. | 7,100 | 2,380,165 |
| Pigeon Corp. | 60,100 | 2,030,770 |
| Recruit Holdings Co., Ltd. | 88,400 | 3,091,595 |
| Rohm Co., Ltd. | 49,800 | 3,254,740 |
| SCSK Corp. | 82,000 | 4,265,384 |
| Sony Corp. | 43,800 | 2,700,177 |
| Terumo Corp. | 174,100 | 5,590,139 |
| Toyota Motor Corp. | 109,800 | 7,209,986 |
| Yaskawa Electric Corp. | 113,700 | 3,542,141 |
| Total | 69,796,092 | |
| Malta 0.0% | ||
| BGP Holdings PLC(a),(b),(c) | 2,232,232 | 2 |
| Netherlands 4.8% | ||
| ASML Holding NV | 20,250 | 5,615,187 |
| ING Groep NV | 597,887 | 5,725,271 |
| Total | 11,340,458 | |
| Singapore 1.4% | ||
| DBS Group Holdings Ltd. | 194,100 | 3,393,686 |
| South Korea 0.9% | ||
| Samsung Electronics Co., Ltd. | 47,743 | 2,148,978 |
| Spain 1.1% | ||
| Industria de Diseno Textil SA | 83,703 | 2,611,447 |
| Sweden 1.6% | ||
| Hexagon AB, Class B | 72,652 | 3,913,700 |
| Switzerland 10.6% | ||
| Nestlé SA, Registered Shares | 76,372 | 7,859,123 |
| Roche Holding AG, Genusschein Shares | 36,073 | 11,598,688 |
| Sika AG | 32,021 | 5,731,874 |
| Total | 25,189,685 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 8 | Columbia Select International Equity Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| United Kingdom 14.7% | ||
| 3i Group PLC | 247,747 | 3,261,140 |
| DCC PLC | 31,689 | 2,269,663 |
| Ferguson PLC | 48,304 | 4,208,713 |
| HSBC Holdings PLC | 804,701 | 5,435,148 |
| Legal & General Group PLC | 1,705,927 | 5,779,467 |
| RELX PLC | 230,473 | 5,544,880 |
| Rio Tinto PLC | 56,943 | 2,680,855 |
| TechnipFMC PLC | 239,589 | 3,654,809 |
| Whitbread PLC | 43,117 | 2,174,605 |
| Total | 35,009,280 | |
|
Total Common Stocks
(Cost $200,035,638) |
227,274,179 | |
| Money Market Funds 4.4% | ||
| Shares | Value ($) | |
| Columbia Short-Term Cash Fund, 1.641%(d),(e) | 10,342,696 | 10,342,696 |
|
Total Money Market Funds
(Cost $10,342,568) |
10,342,696 | |
|
Total Investments in Securities
(Cost $210,378,206) |
237,616,875 | |
| Other Assets & Liabilities, Net | 107,187 | |
| Net Assets | $237,724,062 | |
Notes to Portfolio of
Investments
| (a) | Represents fair value as determined in good faith under procedures approved by the Board of Trustees. At February 29, 2020, the total value of these securities amounted to $7, which represents less than 0.01% of total net assets. |
| (b) | Non-income producing investment. |
| (c) | Valuation based on significant unobservable inputs. |
| (d) | The rate shown is the seven-day current annualized yield at February 29, 2020. |
| (e) | As defined in the Investment Company Act of 1940, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. Holdings and transactions in these affiliated companies during the year ended February 29, 2020 are as follows: |
Fair value
measurements
The Fund categorizes
its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that
reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input
that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For
example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active
market.
Fair value inputs are
summarized in the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Select International Equity Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Fair value measurements (continued)
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Foreign equity securities actively
traded in markets where there is a significant delay in the local close relative to the New York Stock Exchange are classified as Level 2. The values of these securities may include an adjustment to reflect the impact
of market movements following the close of local trading, as described in Note 2 to the financial statements – Security valuation.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
Under the direction of the
Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of
voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly
to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of
Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third
party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale
pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to
discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members
of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of
the inputs used to value the Fund’s investments at February 29, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Common Stocks | ||||
| Australia | — | 7,599,932 | — | 7,599,932 |
| Canada | 4,732,874 | — | — | 4,732,874 |
| China | — | — | 5 | 5 |
| Denmark | — | 10,052,286 | — | 10,052,286 |
| France | — | 23,231,359 | — | 23,231,359 |
| Germany | — | 9,935,587 | — | 9,935,587 |
| Hong Kong | — | 3,171,102 | — | 3,171,102 |
| India | — | 2,560,565 | — | 2,560,565 |
| Indonesia | — | 4,139,262 | — | 4,139,262 |
| Ireland | — | 8,447,879 | — | 8,447,879 |
| Japan | — | 69,796,092 | — | 69,796,092 |
| Malta | — | — | 2 | 2 |
| Netherlands | — | 11,340,458 | — | 11,340,458 |
| Singapore | — | 3,393,686 | — | 3,393,686 |
| South Korea | — | 2,148,978 | — | 2,148,978 |
| Spain | — | 2,611,447 | — | 2,611,447 |
| Sweden | — | 3,913,700 | — | 3,913,700 |
| Switzerland | — | 25,189,685 | — | 25,189,685 |
| United Kingdom | — | 35,009,280 | — | 35,009,280 |
| Total Common Stocks | 4,732,874 | 222,541,298 | 7 | 227,274,179 |
| Money Market Funds | 10,342,696 | — | — | 10,342,696 |
| Total Investments in Securities | 15,075,570 | 222,541,298 | 7 | 237,616,875 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The Fund’s assets assigned to
the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical
assets. These assets include certain foreign securities for which a third party statistical pricing service may be employed for purposes of fair market valuation. The model utilized by such third party statistical
pricing service takes into account a security’s correlation to available market data including, but not limited to, intraday index, ADR, and exchange-traded fund movements.
The Fund does not hold any
significant investments (greater than one percent of net assets) categorized as Level 3.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 10 | Columbia Select International Equity Fund | Annual Report 2020 |
Statement of Assets and Liabilities
February 29, 2020
February 29, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $200,035,638) | $227,274,179 |
| Affiliated issuers (cost $10,342,568) | 10,342,696 |
| Cash | 37,655 |
| Foreign currency (cost $1,595) | 1,422 |
| Receivable for: | |
| Investments sold | 1,197,344 |
| Capital shares sold | 24,995 |
| Dividends | 472,078 |
| Foreign tax reclaims | 570,507 |
| Expense reimbursement due from Investment Manager | 464 |
| Prepaid expenses | 1,443 |
| Total assets | 239,922,783 |
| Liabilities | |
| Payable for: | |
| Investments purchased | 1,495,661 |
| Capital shares purchased | 334,775 |
| Foreign capital gains taxes deferred | 10,955 |
| Management services fees | 5,676 |
| Distribution and/or service fees | 1,159 |
| Transfer agent fees | 32,206 |
| Compensation of board members | 255,084 |
| Compensation of chief compliance officer | 3 |
| Other expenses | 63,202 |
| Total liabilities | 2,198,721 |
| Net assets applicable to outstanding capital stock | $237,724,062 |
| Represented by | |
| Paid in capital | 211,013,713 |
| Total distributable earnings (loss) | 26,710,349 |
| Total - representing net assets applicable to outstanding capital stock | $237,724,062 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Select International Equity Fund | Annual Report 2020
|
11 |
Statement of Assets and Liabilities (continued)
February 29, 2020
February 29, 2020
| Class A | |
| Net assets | $161,393,264 |
| Shares outstanding | 11,388,707 |
| Net asset value per share | $14.17 |
| Maximum sales charge | 5.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $15.03 |
| Advisor Class | |
| Net assets | $436,183 |
| Shares outstanding | 29,892 |
| Net asset value per share | $14.59 |
| Class C | |
| Net assets | $1,597,012 |
| Shares outstanding | 129,388 |
| Net asset value per share | $12.34 |
| Institutional Class | |
| Net assets | $68,830,041 |
| Shares outstanding | 4,745,295 |
| Net asset value per share | $14.50 |
| Institutional 2 Class | |
| Net assets | $694,348 |
| Shares outstanding | 47,314 |
| Net asset value per share | $14.68 |
| Institutional 3 Class | |
| Net assets | $4,230,111 |
| Shares outstanding | 288,947 |
| Net asset value per share | $14.64 |
| Class R | |
| Net assets | $543,103 |
| Shares outstanding | 38,655 |
| Net asset value per share | $14.05 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 12 | Columbia Select International Equity Fund | Annual Report 2020 |
Statement of Operations
Year Ended February 29, 2020
Year Ended February 29, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $7,093,506 |
| Dividends — affiliated issuers | 116,882 |
| Interfund lending | 116 |
| Foreign taxes withheld | (500,208) |
| Total income | 6,710,296 |
| Expenses: | |
| Management services fees | 2,278,089 |
| Distribution and/or service fees | |
| Class A | 440,752 |
| Class C | 20,681 |
| Class R | 3,338 |
| Transfer agent fees | |
| Class A | 398,202 |
| Advisor Class | 1,186 |
| Class C | 4,718 |
| Institutional Class | 172,534 |
| Institutional 2 Class | 436 |
| Institutional 3 Class | 129 |
| Class R | 1,520 |
| Compensation of board members | 46,727 |
| Custodian fees | 37,749 |
| Printing and postage fees | 49,102 |
| Registration fees | 88,334 |
| Audit fees | 48,582 |
| Legal fees | 9,785 |
| Interest on interfund lending | 256 |
| Compensation of chief compliance officer | 56 |
| Other | 7,342 |
| Total expenses | 3,609,518 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (347,310) |
| Expense reduction | (11,238) |
| Total net expenses | 3,250,970 |
| Net investment income | 3,459,326 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 17,040,963 |
| Investments — affiliated issuers | 315 |
| Foreign currency translations | (10,689) |
| Net realized gain | 17,030,589 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (7,539,190) |
| Investments — affiliated issuers | 128 |
| Foreign currency translations | (89) |
| Foreign capital gains tax | (10,955) |
| Net change in unrealized appreciation (depreciation) | (7,550,106) |
| Net realized and unrealized gain | 9,480,483 |
| Net increase in net assets resulting from operations | $12,939,809 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Select International Equity Fund | Annual Report 2020
|
13 |
Statement of Changes in Net Assets
|
Year Ended
February 29, 2020 |
Year Ended
February 28, 2019 |
|
| Operations | ||
| Net investment income | $3,459,326 | $3,998,278 |
| Net realized gain | 17,030,589 | 17,782,687 |
| Net change in unrealized appreciation (depreciation) | (7,550,106) | (37,568,948) |
| Net increase (decrease) in net assets resulting from operations | 12,939,809 | (15,787,983) |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (2,419,796) | (4,252,126) |
| Advisor Class | (8,354) | (14,568) |
| Class C | (15,837) | (156,921) |
| Institutional Class | (1,221,997) | (2,057,724) |
| Institutional 2 Class | (10,834) | (9,218) |
| Institutional 3 Class | (94,523) | (180,777) |
| Class R | (7,838) | (15,845) |
| Class T | — | (16,886) |
| Total distributions to shareholders | (3,779,179) | (6,704,065) |
| Decrease in net assets from capital stock activity | (34,760,318) | (33,108,125) |
| Total decrease in net assets | (25,599,688) | (55,600,173) |
| Net assets at beginning of year | 263,323,750 | 318,923,923 |
| Net assets at end of year | $237,724,062 | $263,323,750 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 14 | Columbia Select International Equity Fund | Annual Report 2020 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| February 29, 2020 | February 28, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 128,070 | 1,856,298 | 679,422 | 9,697,135 |
| Distributions reinvested | 153,255 | 2,167,024 | 264,619 | 3,794,637 |
| Redemptions | (1,621,614) | (23,620,631) | (2,135,188) | (29,745,464) |
| Net decrease | (1,340,289) | (19,597,309) | (1,191,147) | (16,253,692) |
| Advisor Class | ||||
| Subscriptions | 7,102 | 102,724 | 26,548 | 386,581 |
| Distributions reinvested | 570 | 8,289 | 982 | 14,469 |
| Redemptions | (14,399) | (212,854) | (21,240) | (288,452) |
| Net increase (decrease) | (6,727) | (101,841) | 6,290 | 112,598 |
| Class C | ||||
| Subscriptions | 10,178 | 132,572 | 21,702 | 257,763 |
| Distributions reinvested | 1,201 | 14,867 | 12,251 | 153,987 |
| Redemptions | (98,011) | (1,228,816) | (690,771) | (8,714,365) |
| Net decrease | (86,632) | (1,081,377) | (656,818) | (8,302,615) |
| Institutional Class | ||||
| Subscriptions | 404,028 | 6,108,036 | 440,167 | 6,235,639 |
| Distributions reinvested | 73,704 | 1,064,287 | 120,748 | 1,768,962 |
| Redemptions | (1,196,076) | (17,971,616) | (1,079,645) | (15,248,429) |
| Net decrease | (718,344) | (10,799,293) | (518,730) | (7,243,828) |
| Institutional 2 Class | ||||
| Subscriptions | 30,030 | 449,809 | 10,412 | 149,581 |
| Distributions reinvested | 739 | 10,789 | 618 | 9,151 |
| Redemptions | (12,162) | (186,475) | (6,042) | (86,429) |
| Net increase | 18,607 | 274,123 | 4,988 | 72,303 |
| Institutional 3 Class | ||||
| Subscriptions | 5,019 | 75,948 | 25,132 | 363,159 |
| Distributions reinvested | 6,439 | 93,751 | 12,243 | 180,709 |
| Redemptions | (226,362) | (3,352,329) | (70,777) | (1,091,406) |
| Net decrease | (214,904) | (3,182,630) | (33,402) | (547,538) |
| Class K | ||||
| Redemptions | — | — | (2,577) | (39,476) |
| Net decrease | — | — | (2,577) | (39,476) |
| Class R | ||||
| Subscriptions | 13,276 | 186,770 | 12,544 | 176,778 |
| Distributions reinvested | 528 | 7,407 | 1,055 | 15,036 |
| Redemptions | (32,528) | (466,168) | (13,263) | (184,271) |
| Net increase (decrease) | (18,724) | (271,991) | 336 | 7,543 |
| Class T | ||||
| Distributions reinvested | — | — | 1,173 | 16,826 |
| Redemptions | — | — | (71,130) | (930,246) |
| Net decrease | — | — | (69,957) | (913,420) |
| Total net decrease | (2,367,013) | (34,760,318) | (2,461,017) | (33,108,125) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Select International Equity Fund | Annual Report 2020
|
15 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. 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.
|
Net asset value,
beginning of period |
Net
investment income (loss) |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Total
distributions to shareholders |
|
| Class A | ||||||
| Year Ended 2/29/2020 | $13.75 | 0.18 | 0.44 | 0.62 | (0.20) | (0.20) |
| Year Ended 2/28/2019 | $14.81 | 0.18 | (0.92) | (0.74) | (0.32) | (0.32) |
| Year Ended 2/28/2018 | $12.30 | 0.12 | 2.62 | 2.74 | (0.23) | (0.23) |
| Year Ended 2/28/2017 | $11.41 | 0.12 | 0.90 | 1.02 | (0.13) | (0.13) |
| Year Ended 2/29/2016 | $13.69 | 0.10 | (2.44) | (2.34) | — | — |
| Advisor Class | ||||||
| Year Ended 2/29/2020 | $14.15 | 0.23 | 0.44 | 0.67 | (0.23) | (0.23) |
| Year Ended 2/28/2019 | $15.24 | 0.22 | (0.96) | (0.74) | (0.35) | (0.35) |
| Year Ended 2/28/2018 | $12.64 | 0.10 | 2.76 | 2.86 | (0.26) | (0.26) |
| Year Ended 2/28/2017 | $11.73 | 0.07 | 1.00 | 1.07 | (0.16) | (0.16) |
| Year Ended 2/29/2016 | $14.04 | 0.15 | (2.52) | (2.37) | — | — |
| Class C | ||||||
| Year Ended 2/29/2020 | $11.99 | 0.09 | 0.35 | 0.44 | (0.09) | (0.09) |
| Year Ended 2/28/2019 | $12.94 | 0.18 | (0.92) | (0.74) | (0.21) | (0.21) |
| Year Ended 2/28/2018 | $10.77 | 0.03 | 2.28 | 2.31 | (0.14) | (0.14) |
| Year Ended 2/28/2017 | $10.00 | (0.01) | 0.81 | 0.80 | (0.03) | (0.03) |
| Year Ended 2/29/2016 | $12.08 | 0.00(h) | (2.13) | (2.13) | — | — |
| Institutional Class | ||||||
| Year Ended 2/29/2020 | $14.07 | 0.22 | 0.44 | 0.66 | (0.23) | (0.23) |
| Year Ended 2/28/2019 | $15.14 | 0.23 | (0.95) | (0.72) | (0.35) | (0.35) |
| Year Ended 2/28/2018 | $12.57 | 0.16 | 2.67 | 2.83 | (0.26) | (0.26) |
| Year Ended 2/28/2017 | $11.66 | 0.15 | 0.92 | 1.07 | (0.16) | (0.16) |
| Year Ended 2/29/2016 | $13.96 | 0.16 | (2.52) | (2.36) | — | — |
| Institutional 2 Class | ||||||
| Year Ended 2/29/2020 | $14.23 | 0.21 | 0.49 | 0.70 | (0.25) | (0.25) |
| Year Ended 2/28/2019 | $15.31 | 0.23 | (0.94) | (0.71) | (0.37) | (0.37) |
| Year Ended 2/28/2018 | $12.70 | 0.12 | 2.77 | 2.89 | (0.28) | (0.28) |
| Year Ended 2/28/2017 | $11.79 | 0.16 | 0.94 | 1.10 | (0.19) | (0.19) |
| Year Ended 2/29/2016 | $14.08 | 0.17 | (2.52) | (2.35) | — | — |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 16 | Columbia Select International Equity Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Proceeds from
regulatory settlements |
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income (loss) ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Class A | ||||||||
| Year Ended 2/29/2020 | — | $14.17 | 4.49% | 1.46%(c) | 1.32%(c),(d) | 1.23% | 31% | $161,393 |
| Year Ended 2/28/2019 | — | $13.75 | (5.10%) | 1.48%(c) | 1.36%(c),(d) | 1.31% | 34% | $175,021 |
| Year Ended 2/28/2018 | — | $14.81 | 22.50% | 1.50% | 1.40%(d) | 0.89% | 34% | $206,109 |
| Year Ended 2/28/2017 | — | $12.30 | 8.98% | 1.44%(e),(f) | 1.33%(d),(e),(f) | 1.02% | 103% | $220,357 |
| Year Ended 2/29/2016 | 0.06 | $11.41 | (16.65%)(g) | 1.45%(e) | 1.42%(d),(e) | 0.78% | 131% | $210,841 |
| Advisor Class | ||||||||
| Year Ended 2/29/2020 | — | $14.59 | 4.75% | 1.21%(c) | 1.07%(c),(d) | 1.56% | 31% | $436 |
| Year Ended 2/28/2019 | — | $14.15 | (4.93%) | 1.23%(c) | 1.12%(c),(d) | 1.51% | 34% | $518 |
| Year Ended 2/28/2018 | — | $15.24 | 22.89% | 1.24% | 1.15%(d) | 0.70% | 34% | $462 |
| Year Ended 2/28/2017 | — | $12.64 | 9.18% | 1.18%(e),(f) | 1.06%(d),(e),(f) | 0.57% | 103% | $182 |
| Year Ended 2/29/2016 | 0.06 | $11.73 | (16.45%)(g) | 1.21%(e) | 1.18%(d),(e) | 1.16% | 131% | $22 |
| Class C | ||||||||
| Year Ended 2/29/2020 | — | $12.34 | 3.67% | 2.21%(c) | 2.07%(c),(d) | 0.71% | 31% | $1,597 |
| Year Ended 2/28/2019 | — | $11.99 | (5.77%) | 2.23%(c) | 2.12%(c),(d) | 1.47% | 34% | $2,589 |
| Year Ended 2/28/2018 | — | $12.94 | 21.62% | 2.25% | 2.15%(d) | 0.22% | 34% | $11,296 |
| Year Ended 2/28/2017 | — | $10.77 | 8.02% | 2.18%(e),(f) | 2.07%(d),(e),(f) | (0.06%) | 103% | $13,673 |
| Year Ended 2/29/2016 | 0.05 | $10.00 | (17.22%)(g) | 2.20%(e) | 2.18%(d),(e) | 0.02% | 131% | $7,886 |
| Institutional Class | ||||||||
| Year Ended 2/29/2020 | — | $14.50 | 4.71% | 1.21%(c) | 1.07%(c),(d) | 1.50% | 31% | $68,830 |
| Year Ended 2/28/2019 | — | $14.07 | (4.83%) | 1.23%(c) | 1.12%(c),(d) | 1.57% | 34% | $76,853 |
| Year Ended 2/28/2018 | — | $15.14 | 22.76% | 1.25% | 1.15%(d) | 1.14% | 34% | $90,578 |
| Year Ended 2/28/2017 | — | $12.57 | 9.25% | 1.19%(e),(f) | 1.08%(d),(e),(f) | 1.20% | 103% | $69,419 |
| Year Ended 2/29/2016 | 0.06 | $11.66 | (16.48%)(g) | 1.19%(e) | 1.17%(d),(e) | 1.20% | 131% | $64,631 |
| Institutional 2 Class | ||||||||
| Year Ended 2/29/2020 | — | $14.68 | 4.92% | 1.05%(c) | 0.94%(c) | 1.37% | 31% | $694 |
| Year Ended 2/28/2019 | — | $14.23 | (4.72%) | 1.05%(c) | 0.99%(c) | 1.62% | 34% | $408 |
| Year Ended 2/28/2018 | — | $15.31 | 23.00% | 1.08% | 1.02% | 0.81% | 34% | $363 |
| Year Ended 2/28/2017 | — | $12.70 | 9.33% | 0.96%(e),(f) | 0.93%(e),(f) | 1.33% | 103% | $117 |
| Year Ended 2/29/2016 | 0.06 | $11.79 | (16.26%)(g) | 1.01%(e) | 1.01%(e) | 1.23% | 131% | $59 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Select International Equity Fund | Annual Report 2020
|
17 |
Financial Highlights (continued)
|
Net asset value,
beginning of period |
Net
investment income (loss) |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Total
distributions to shareholders |
|
| Institutional 3 Class | ||||||
| Year Ended 2/29/2020 | $14.19 | 0.29 | 0.42 | 0.71 | (0.26) | (0.26) |
| Year Ended 2/28/2019 | $15.27 | 0.25 | (0.95) | (0.70) | (0.38) | (0.38) |
| Year Ended 2/28/2018 | $12.67 | 0.19 | 2.70 | 2.89 | (0.29) | (0.29) |
| Year Ended 2/28/2017 | $11.76 | 0.19 | 0.91 | 1.10 | (0.19) | (0.19) |
| Year Ended 2/29/2016 | $14.04 | 0.17 | (2.51) | (2.34) | — | — |
| Class R | ||||||
| Year Ended 2/29/2020 | $13.63 | 0.16 | 0.42 | 0.58 | (0.16) | (0.16) |
| Year Ended 2/28/2019 | $14.69 | 0.14 | (0.92) | (0.78) | (0.28) | (0.28) |
| Year Ended 2/28/2018 | $12.20 | 0.09 | 2.60 | 2.69 | (0.20) | (0.20) |
| Year Ended 2/28/2017 | $11.32 | 0.07 | 0.91 | 0.98 | (0.10) | (0.10) |
| Year Ended 2/29/2016 | $13.62 | 0.07 | (2.43) | (2.36) | — | — |
| 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) | Ratios include interfund lending expense which is less than 0.01%. |
| (d) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (e) | Ratios include line of credit interest expense which is less than 0.01%. |
| (f) | Expenses have been reduced due to a reimbursement of expenses overbilled by a third party. If the reimbursement had been excluded, the expense ratios would have been higher by the percentages shown for each class in the table below. All fee waivers and expense reimbursements by the Investment Manager and its affiliates were applied before giving effect to this third party reimbursement. |
| Year Ended | Class A |
Advisor
Class |
Class C |
Institutional
Class |
Institutional 2
Class |
Institutional 3
Class |
Class R |
| 02/28/2017 | 0.08% | 0.10% | 0.09% | 0.08% | 0.08% | 0.08% | 0.08% |
| (g) | The Fund received proceeds from regulatory settlements. Had the Fund not received these proceeds, the total return would have been lower by 0.44%. |
| (h) | Rounds to zero. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 18 | Columbia Select International Equity Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Proceeds from
regulatory settlements |
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income (loss) ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Institutional 3 Class | ||||||||
| Year Ended 2/29/2020 | — | $14.64 | 5.01% | 0.98%(c) | 0.87%(c) | 1.94% | 31% | $4,230 |
| Year Ended 2/28/2019 | — | $14.19 | (4.68%) | 0.98%(c) | 0.92%(c) | 1.73% | 34% | $7,151 |
| Year Ended 2/28/2018 | — | $15.27 | 23.03% | 1.00% | 0.95% | 1.36% | 34% | $8,203 |
| Year Ended 2/28/2017 | — | $12.67 | 9.42% | 0.90%(e),(f) | 0.88%(e),(f) | 1.56% | 103% | $10,108 |
| Year Ended 2/29/2016 | 0.06 | $11.76 | (16.24%)(g) | 0.95%(e) | 0.95%(e) | 1.26% | 131% | $11,312 |
| Class R | ||||||||
| Year Ended 2/29/2020 | — | $14.05 | 4.26% | 1.71%(c) | 1.57%(c),(d) | 1.13% | 31% | $543 |
| Year Ended 2/28/2019 | — | $13.63 | (5.37%) | 1.73%(c) | 1.62%(c),(d) | 1.02% | 34% | $782 |
| Year Ended 2/28/2018 | — | $14.69 | 22.24% | 1.75% | 1.65%(d) | 0.68% | 34% | $838 |
| Year Ended 2/28/2017 | — | $12.20 | 8.66% | 1.68%(e),(f) | 1.58%(d),(e),(f) | 0.55% | 103% | $1,014 |
| Year Ended 2/29/2016 | 0.06 | $11.32 | (16.89%)(g) | 1.70%(e) | 1.67%(d),(e) | 0.54% | 131% | $808 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Select International Equity Fund | Annual Report 2020
|
19 |
Notes to Financial Statements
February 29, 2020
February 29, 2020
Note 1. Organization
Columbia Select International
Equity Fund (the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end
management investment company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a liquidation will be
proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A and Class C shares are offered to the general public for investment. Class C shares automatically convert to Class A shares after 10 years. Advisor Class, Institutional Class, Institutional 2
Class, Institutional 3 Class and Class R shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional investors and to certain other investors as also
described in the Fund’s prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
All equity securities are valued at
the close of business of the New York Stock Exchange. Equity securities are valued at the official closing price on the principal exchange or market on which they trade. Unlisted securities or listed securities for
which there were no sales during the day are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets.
Foreign equity securities are
valued based on the closing price on the foreign exchange in which such securities are primarily traded. If any foreign equity security closing prices are not readily available, the securities are valued at the mean
of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are determined at the scheduled closing time of the New York Stock Exchange. Many securities markets and exchanges
outside the U.S. close prior to the close of the New York Stock Exchange; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but
before the close of the New York Stock Exchange. In those situations, foreign securities will be fair valued pursuant to a policy adopted by the Board of Trustees. Under the policy, the Fund may utilize a third-party
pricing service to determine these fair values. The third-party pricing service takes into account multiple factors, including, but not limited to, movements in the U.S. securities markets, certain depositary
receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that reasonably reflects the current market
conditions as of the close of the New York Stock Exchange. The fair value of a security is likely to be different from the quoted or published price, if available.
Investments in open-end investment
companies, including money market funds, are valued at their latest net asset value.
| 20 | Columbia Select International Equity Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published
price for the security, if available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Foreign currency transactions and
translations
The values of all assets and
liabilities denominated in foreign currencies are generally translated into U.S. dollars at exchange rates determined at the close of regular trading on the New York Stock Exchange. Net realized and unrealized gains
(losses) on foreign currency transactions and translations include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising
from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes,
the Fund does not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations
are included with the net realized and unrealized gains (losses) on investments in the Statement of Operations.
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Corporate actions and dividend
income are generally recorded net of any non-reclaimable tax withholdings, on the ex-dividend date or upon receipt of ex-dividend notification in the case of certain foreign securities.
The Fund may receive distributions
from holdings in equity securities, business development companies (BDCs), exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment companies (RICs), and real estate investment trusts
(REITs), which report information as to the tax character of their distributions annually. These distributions are allocated to dividend income, capital gain and return of capital based on actual information reported.
Return of capital is recorded as a reduction of the cost basis of securities held. If the Fund no longer owns the applicable securities, return of capital is recorded as a realized gain. With respect to REITs, to the
extent actual information has not yet been reported, estimates for return of capital are made by Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise
Financial, Inc. (Ameriprise Financial). The Investment Manager’s estimates are subsequently adjusted when the actual character of the distributions is disclosed by the REITs, which could result in a
proportionate change in return of capital to shareholders.
Awards from class action litigation
are recorded as a reduction of cost basis if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities on the payment date, the proceeds are recorded as
realized gains.
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
|
Columbia Select International Equity Fund | Annual Report 2020
|
21 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable income and net capital gain, if any, for its
tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net income and certain other
amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Foreign taxes
The Fund may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules
and regulations that exist in the markets in which it invests.
Realized gains in certain countries
may be subject to foreign taxes at the Fund level, based on statutory rates. The Fund accrues for such foreign taxes on realized and unrealized gains at the appropriate rate for each jurisdiction, as applicable. The
amount, if any, is disclosed as a liability on the Statement of Assets and Liabilities.
Distributions to shareholders
Distributions from net investment
income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Note 3. Fees and other
transactions with affiliates
Management services fees
The Fund has entered into a
Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the
Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the
Fund’s daily net assets that declines from 0.87% to 0.67% as the Fund’s net assets increase. The effective management services fee rate for the year ended February 29, 2020 was 0.87% of the Fund’s
average daily net assets.
Subadvisory agreement
The Investment Manager has entered
into a Subadvisory Agreement with Threadneedle International Limited (Threadneedle), an affiliate of the Investment Manager and an indirect wholly-owned subsidiary of Ameriprise Financial, to serve as the subadviser
to the Fund. The Investment Manager compensates Threadneedle to manage the investment of the Fund’s assets.
| 22 | Columbia Select International Equity Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Compensation of board members
Members of the Board of Trustees
who are not officers or employees of the Investment Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the
Deferred Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of
certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All
amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as
sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class.
For the year ended February 29,
2020, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| Effective rate (%) | |
| Class A | 0.23 |
| Advisor Class | 0.23 |
| Class C | 0.23 |
| Institutional Class | 0.23 |
| Institutional 2 Class | 0.07 |
| Institutional 3 Class | 0.00 |
| Class R | 0.23 |
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended February 29, 2020, these minimum account balance fees reduced total expenses
of the Fund by $11,238.
|
Columbia Select International Equity Fund | Annual Report 2020
|
23 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays
a monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class C shares of the Fund and a monthly distribution fee to the Distributor at the
maximum annual rates of 0.75% and 0.50% of the average daily net assets attributable to Class C and Class R shares of the Fund, respectively.
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended February 29, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 5.75 | 0.50 - 1.00(a) | 10,149 |
| Class C | — | 1.00(b) | 6 |
| (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 applies to redemptions within 12 months after purchase, with certain limited exceptions. |
The Fund’s other share
classes are not subject to sales charges.
Expenses waived/reimbursed by the
Investment Manager and its affiliates
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) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, 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 following annual rate(s) as a percentage of the class’ average daily net assets:
Under the agreement governing
these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes
(including foreign transaction taxes), expenses associated with investments 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, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This
| 24 | Columbia Select International Equity Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
agreement may be modified or amended only with
approval from the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the
Investment Manager or its affiliates in future periods.
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At February 29, 2020, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, trustees’ deferred compensation, capital loss carryforward, foreign currency transactions, passive foreign
investment company (PFIC) holdings, and former PFIC holdings. To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences do
not require reclassifications.
The following reclassifications
were made:
|
Undistributed net
investment income ($) |
Accumulated
net realized (loss) ($) |
Paid in
capital ($) |
| 1,081,278 | (1,081,278) | — |
Net investment income (loss) and
net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended February 29, 2020 | Year Ended February 28, 2019 | ||||
|
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 3,779,179 | — | 3,779,179 | 6,704,065 | — | 6,704,065 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At February 29, 2020, the
components of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| 3,759,119 | — | (2,017,794) | 25,243,920 |
At February 29, 2020, the cost of
all investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
|
Federal
tax cost ($) |
Gross unrealized
appreciation ($) |
Gross unrealized
(depreciation) ($) |
Net unrealized
appreciation ($) |
| 212,372,955 | 45,524,736 | (20,280,816) | 25,243,920 |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
|
Columbia Select International Equity Fund | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
The following capital loss
carryforwards, determined at February 29, 2020, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code. Capital
loss carryforwards with no expiration are required to be utilized prior to any capital losses which carry an expiration date. As a result of this ordering rule, capital loss carryforwards which carry an expiration
date may be more likely to expire unused. In addition, for the year ended February 29, 2020, capital loss carryforwards utilized and expired unused, if any, were as follows:
|
No expiration
short-term ($) |
No expiration
long-term ($) |
Total ($) | Utilized ($) | Expired ($) |
| (2,017,794) | — | (2,017,794) | 15,757,509 | — |
Management of the Fund has
concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at
a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the
prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio
information
The cost of purchases and
proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $77,782,337 and $120,870,885, respectively, for the year ended February 29, 2020. The amount of purchase and
sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes referred to
as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
Note 7. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the
Interfund Program during the year ended February 29, 2020 was as follows:
| Borrower or lender |
Average loan
balance ($) |
Weighted average
interest rate (%) |
Number of days
with outstanding loans |
| Borrower | 614,286 | 2.14 | 7 |
| Lender | 400,000 | 2.61 | 4 |
Interest income earned and
interest expense incurred by the Fund is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at February 29, 2020.
| 26 | Columbia Select International Equity Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Note 8. Line of credit
The Fund has access to a
revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. The credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager or an affiliated investment manager, severally and
not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the federal funds effective rate, (ii) the
one-month LIBOR rate and (iii) the overnight bank funding rate, plus in each case, 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a
commitment fee equal to its pro rata share of the unused amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations. This agreement
expires annually in December unless extended or renewed.
The Fund had no borrowings during
the year ended February 29, 2020.
Note 9. Significant
risks
Foreign securities and emerging
market countries risk
Investing in foreign securities may
involve certain risks not typically associated with investing in U.S. securities, such as increased currency volatility and risks associated with political, regulatory, economic, social, diplomatic and other
conditions or events occurring in the country or region, which may result in significant market volatility. In addition, certain foreign securities may not be as liquid as U.S. securities. Investing in emerging
markets may increase these risks and expose the Fund to elevated risks associated with increased inflation, deflation or currency devaluation. To the extent that the Fund concentrates its investment exposure to any
one or a few specific countries, the Fund will be particularly susceptible to the risks associated with the conditions, events or other factors impacting those countries or regions and may, therefore, have a greater
risk than that of a fund that is more geographically diversified.
Market and environment risk
The Fund may incur losses due to
declines in the value of one or more securities in which it invests. These declines may be due to factors affecting a particular issuer, or the result of, among other things, political, regulatory, market, economic or
social developments affecting the relevant market(s) more generally. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers,
which could adversely affect Fund, including causing difficulty in assigning prices to hard-to-value assets in thinly traded and closed markets, significant redemptions and operational challenges. Global economies and
financial markets are increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may
be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional or global events
such as terrorism, war, natural disasters, disease/virus outbreaks and epidemics or other public health issues, recessions, depressions or other events – or the potential for such events – could have a
significant negative impact on global economic and market conditions.
The coronavirus disease 2019
(COVID-19) public health crisis has become a pandemic that has resulted in, and may continue to result in, significant global economic and societal disruption and market volatility due to disruptions in market access,
resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. Such disruptions may be caused, or exacerbated by, quarantines and travel restrictions,
workforce displacement and loss in human and other resources. The uncertainty surrounding the magnitude, duration, reach, costs and effects of the global pandemic, as well as actions that have been or could be taken
by governmental authorities or other third parties, present unknowns that are yet to unfold. The impacts, as well as the uncertainty over impacts to come, of COVID-19 – and any other infectious illness
outbreaks, epidemics and pandemics that may arise in the future – could negatively affect global economies and markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illness
outbreaks and epidemics in emerging market countries may be greater due to generally less established healthcare systems, governments and financial markets. Public health crises caused by the COVID-19 outbreak may
exacerbate other pre-existing
|
Columbia Select International Equity Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
political, social and economic risks in certain
countries or globally. The disruptions caused by COVID-19 could prevent the Fund from executing advantageous investment decisions in a timely manner and negatively impact the Fund’s ability to achieve their
investment objectives. Any such event(s) could have a significant adverse impact on the value and risk profile of the Fund.
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting different communities at different times with varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including
the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to continue ordinary business operations and technology functions over near- or longer-term periods.
Shareholder concentration risk
At February 29, 2020, affiliated
shareholders of record owned 33.5% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the
Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of
less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 10. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued. Other than as noted below, there were no items requiring adjustment of the financial statements or additional
disclosure.
In February 2020, the Board of
Trustees approved a proposal to reorganize Columbia Select International Equity Fund with and into Columbia Acorn International Select (the Reorganization). The Reorganization is subject to certain conditions,
including approval by shareholders of the Fund. A proxy statement/prospectus has been distributed to shareholders, and a joint meeting of shareholders to consider the Reorganization will be held in June 2020. If
approved by shareholders, the Reorganization is expected to occur shortly thereafter and is expected to be a tax-free reorganization for U.S. federal income tax purposes. Fund shareholders will not pay any sales
charges as a result of the Reorganization.
On March 31, 2020, certain European
issuers canceled dividends following a request originating from the Bank of England, amid the economic uncertainty surrounding the COVID 19 pandemic. These financial statements include income recorded on the ex-date
of these securities, in the amount of $168,987, which was 2.52% of total income. Upon notification of the cancelation, the Fund reversed the income previously recognized.
Note 11. Information
regarding pending and settled legal proceedings
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. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to
Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that
these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe
proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to
| 28 | Columbia Select International Equity Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
perform under their contracts with the Fund, these
proceedings are subject to uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse
judgments, settlements, fines, penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.
|
Columbia Select International Equity Fund | Annual Report 2020
|
29 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust and Shareholders of Columbia Select International Equity Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Select International Equity Fund (one of the funds constituting Columbia Funds Series Trust, referred to hereafter as the
"Fund") as of February 29, 2020, the related statement of operations for the year ended February 29, 2020, the statement of changes in net assets for each of the two years in the period ended February 29, 2020,
including the related notes, and the financial highlights for each of the five years in the period ended February 29, 2020 (collectively referred to as the “financial statements”). In our opinion, the
financial statements present fairly, in all material respects, the financial position of the Fund as of February 29, 2020, the results of its operations for the year then ended, the changes in its net assets for each
of the two years in the period ended February 29, 2020 and the financial highlights for each of the five years in the period ended February 29, 2020 in conformity with accounting principles generally accepted in the
United States of America.
Basis for Opinion
These financial statements are the
responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these
financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of February 29, 2020 by correspondence with the custodian, transfer agent and brokers; when replies
were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
April 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
| 30 | Columbia Select International Equity Fund | Annual Report 2020 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended February 29, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Qualified
dividend income |
Foreign
taxes paid to foreign countries |
Foreign
taxes paid per share to foreign countries |
Foreign
source income |
Foreign
source income per share |
| 100.00% | $500,208 | $0.03 | $7,093,506 | $0.43 |
Qualified dividend income. For
taxable, non-corporate shareholders, the percentage of ordinary income distributed during the fiscal year that represents qualified dividend income subject to reduced tax rates.
Foreign taxes. The Fund makes the
election to pass through to shareholders the foreign taxes paid. Eligible shareholders may claim a foreign tax credit. These taxes, and the corresponding foreign source income, are provided.
TRUSTEES AND
OFFICERS
The Board oversees the Fund’s
operations and 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 Fund’s Trustees as
of the printing of this report, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not
affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach the mandatory retirement age established by the Board.
Independent trustees
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
George S. Batejan
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1953 |
Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 117 | Former Chairman of the Board, NICSA (National Investment Company Services Association) (Executive Committee, Nominating Committee and Governance Committee), 2014-2016; former Director, Intech Investment Management, 2011-2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016; former Advisory Board Member, University of Colorado Business School, 2015-2018 |
|
Columbia Select International Equity Fund | Annual Report 2020
|
31 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Kathleen Blatz
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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; Member and Interim Chair, Minnesota Sports Facilities Authority, January 2017-July 2017; Interim President and Chief Executive Officer, Blue Cross and Blue Shield of Minnesota (health care insurance), February-July 2018 | 117 | Trustee, BlueCross BlueShield of Minnesota since 2009 (Chair of the Business Development Committee, 2014-2017; Chair of the Governance Committee since 2017); Chair of the Robina Foundation since August 2013; former Member and Chair of the Board, Minnesota Sports Facilities Authority, January 2017-July 2017 |
|
Pamela G. Carlton
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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 | 117 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996; Director, DR Bank (Audit Committee) since 2017; Director, Evercore Inc. (Audit Committee, Nominating and Governance Committee) since 2019 |
|
Patricia M. Flynn
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1950 |
Trustee 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 | 117 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010; Board of Directors, The MA Business Roundtable 2003-2019 |
|
Brian J. Gallagher
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee since 12/17 | Retired; Partner with Deloitte & Touche LLP and its predecessors, 1977-2016 | 117 | Trustee, Catholic Schools Foundation since 2004 |
|
Catherine James Paglia
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Chair of the Board since 1/20; Trustee 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. | 117 | 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) |
| 32 | Columbia Select International Equity Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Anthony M. Santomero
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1946 |
Trustee 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 | 117 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; former Director, Citigroup Inc. and Citibank, N.A., 2009-2019; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
|
Minor M. Shaw
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1947 |
Trustee 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 | 117 | Director, BlueCross BlueShield of South Carolina since April 2008; Trustee, Hollingsworth Funds since 2016 (previously Board Chair from 2016-2019); Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016; former Director, National Association of Corporate Directors, Carolinas Chapter, 2013-2018 |
|
Sandra Yeager
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1964 |
Trustee since 12/17 | Retired; President and founder, Hanoverian Capital, LLC (SEC registered investment advisor firm), 2008-2016; Managing Director, DuPont Capital, 2006-2008; Managing Director, Morgan Stanley Investment Management, 2004-2006; Senior Vice President, Alliance Bernstein, 1990-2004 | 115 | Director, NAPE Education Foundation since October 2016 |
|
Columbia Select International Equity Fund | Annual Report 2020
|
33 |
TRUSTEES AND OFFICERS (continued)
Interested trustee affiliated with Investment Manager*
Interested trustee affiliated with Investment Manager*
| * | 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. |
Nations Funds refer to the Funds
within the Columbia Funds Complex that historically bore the Nations brand and includes series of Columbia Funds Series Trust. RiverSource Funds refer to the Funds within the Columbia Funds Complex that historically
bore the RiverSource brand and includes series of Columbia Funds Series Trust II.
The Statement of Additional
Information has additional information about the Fund’s Board members and is available, without charge, upon request by calling 800.345.6611, visiting columbiathreadneedleus.com/investor/ or contacting your
financial intermediary.
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 of the
Fund as of the printing of this report, 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 Fund’s other officers are:
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); officer of Columbia Funds and affiliated funds since 2007. |
|
Michael G. Clarke
225 Franklin Street Boston, MA 02110 Born 1969 |
Chief Financial Officer, Principal Financial Officer (2009), and Senior Vice President (2019) | Vice President, Head of North American Operations, and Co-Head of Global Operations, – Accounting and Tax, Columbia Management Investment Advisers, LLC, since June 2019 (previously Vice President – Accounting and Tax, May 2010 – May 2019); senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009 – January 2019 and December 2015 – January 2019, respectively). |
|
Joseph Beranek
5890 Ameriprise Financial Center Minneapolis, MN 55474 Born 1965 |
Treasurer, Chief Accounting Officer (Principal Accounting Officer) (2019), and Principal Financial Officer (2020) | Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and March 2017, respectively (previously Vice President — Pricing and Corporate Actions, May 2010 - March 2017). |
| 34 | Columbia Select International Equity Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Fund officers (continued)
Fund officers (continued)
|
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 |
|
Paul B. Goucher
485 Lexington Avenue New York, NY 10017 Born 1968 |
Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since March 2015 (previously Vice President and Assistant Secretary, May 2010 – March 2015). |
|
Thomas P. McGuire
225 Franklin Street Boston, MA 02110 Born 1972 |
Senior 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; Chief Compliance Officer, Columbia Acorn/Wanger Funds since December 2015. |
|
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; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013. |
|
Ryan C. Larrenaga
225 Franklin Street Boston, MA 02110 Born 1970 |
Senior Vice President (2017), Chief Legal Officer (2017), and Secretary (2015) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously Vice President and Group Counsel, August 2011 - August 2018); officer of Columbia Funds and affiliated funds since 2005. |
|
Daniel J. Beckman
225 Franklin Street Boston, MA 02110 Born 1962 |
Senior Vice President (2020) | Vice President – Head of North America Product, Columbia Management Investment Advisers, LLC (since April 2015); previously, Senior Vice President of Investment Product Management, Fidelity Financial Advisor Solutions, a division of Fidelity Investments (January 2012 – March 2015). |
|
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. |
|
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. |
|
Columbia Select International Equity Fund | Annual Report 2020
|
35 |
Columbia Select International Equity Fund
P.O. Box 219104
Kansas City, MO 64121-9104
Please read and consider the
investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments
(Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved.
© 2020 Columbia Management Investment
Advisers, LLC.
columbiathreadneedleus.com/investor/
ANN201_02_K01_(04/20)
Annual Report
February 29, 2020
February 29, 2020
Columbia Select
Global Growth Fund
Beginning on January 1, 2021, as
permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports like this one will no longer be sent by mail, unless you
specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (columbiathreadneedleus.com/investor/), and each time a report is posted you will be notified
by mail and provided with a website address to access the report.
If you have already elected to
receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically
at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with the Fund, by calling 800.345.6611 or by enrolling in “eDelivery” by logging
into your account at columbiathreadneedleus.com/investor/.
You may elect to receive all future
reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you
invest directly with the Fund, you can call 800.345.6611 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive paper reports will apply to all Columbia
Funds held in your account if you invest through a financial intermediary or all Columbia Funds held with the fund complex if you invest directly with the Fund.
Not FDIC Insured • No bank
guarantee • May lose value
Table of Contents
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Columbia Select Global Growth Fund
(the Fund) mails one shareholder report to each shareholder address, unless such shareholder elected to receive shareholder reports from the Fund electronically. If you would like more than one report, please call
shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and
procedures
The policy of the Board of Trustees
is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by
calling 800.345.6611; contacting your financial intermediary; visiting columbiathreadneedleus.com/investor/; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding
how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting
columbiathreadneedleus.com/investor/, or searching the website of the SEC at sec.gov.
Quarterly schedule of
investments
The Fund files a complete schedule
of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT, and for reporting periods ended prior to March 31, 2019, on Form N-Q. The Fund’s Form N-Q and Form N-PORT
filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q or Form N-PORT, can also be obtained without charge, upon request, by calling
800.345.6611.
Additional Fund information
For more information about the
Fund, please visit columbiathreadneedleus.com/investor/ or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC (the
Investment Manager)
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors,
Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 219104
Kansas City, MO 64121-9104
Columbia Select Global Growth
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks long-term growth of capital.
Portfolio management
Thomas Galvin, CFA
Lead Portfolio Manager
Managed Fund since 2015
Richard Carter
Portfolio Manager
Managed Fund since 2015
Todd Herget
Portfolio Manager
Managed Fund since 2015
Morningstar style boxTM
The Morningstar Style Box is based on a fund’s portfolio holdings. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows
investment style (value, blend, or growth). Information shown is based on the most recent data provided by Morningstar.
© 2020 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or
distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
Returns for Class A shares are shown
with and without the maximum initial sales charge of 5.75%. Returns for Class C shares are shown with and without the 1.00% contingent deferred sales charge for the first year only. The Fund’s other share
classes are not subject to sales charges and have limited eligibility. Please see the Fund’s prospectus for details. Performance for different share classes will vary based on differences in sales charges and
fees associated with each share class. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the
redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee
waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown
represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than
their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial
intermediary, visiting columbiathreadneedleus.com/investor/ or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. Since the Fund launched more than one class of shares at its inception, Class A shares were used. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investor/investment-products/mutual-funds/appended-performance for more information. |
The MSCI ACWI (Net) is a free
float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The index consists of 46 country indices comprising 23 developed and 23
emerging market country indices.
The MSCI ACWI Growth Index (Net)
captures large and mid-cap securities exhibiting overall growth style characteristics across 23 developed markets countries and 23 emerging markets countries. The growth investment style characteristics for index
construction are defined using five variables: long-term forward EPS growth rate, short-term forward EPS growth rate, current internal growth rate and long-term historical EPS growth trend and long-term historical
sales per share growth trend.
Indices are not available for
investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes (except the MSCI ACWI (Net) and the MSCI ACWI Growth Index (Net), which reflect reinvested dividends net
of withholding taxes) or other expenses of investing. Securities in the Fund may not match those in an index.
Fund performance may be significantly
negatively impacted by the economic impact of the COVID-19 pandemic. The COVID-19 pandemic has adversely impacted economies and capital markets around the world in ways that will likely continue and may change in
unforeseen ways for an indeterminate period. The COVID-19 pandemic may exacerbate pre-existing political, social and economic risks in certain countries and globally.
|
Columbia Select Global Growth Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (February 28, 2010 — February 29, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Select Global Growth Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund
distributions or on the redemption of Fund shares.
| Equity sector breakdown (%) (at February 29, 2020) | |
| Communication Services | 11.3 |
| Consumer Discretionary | 22.3 |
| Energy | 1.1 |
| Financials | 4.8 |
| Health Care | 23.2 |
| Industrials | 4.3 |
| Information Technology | 33.0 |
| Total | 100.0 |
Percentages indicated are based
upon total equity investments. The Fund’s portfolio composition is subject to change.
Country breakdown is based
primarily on issuer’s place of organization/incorporation. Percentages indicated are based upon total investments excluding investments in derivatives, if any. The Fund’s portfolio composition is subject
to change.
The Fund may use place of
organization/incorporation or other factors in determining whether an issuer is domestic (U.S.) or foreign for purposes of its investment policies. At February 29, 2020, the Fund invested at least 40% of its net
assets in foreign companies in accordance with its principal investment strategy.
| 4 | Columbia Select Global Growth Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that ended
February 29, 2020, the Fund’s Class A shares returned 12.22% excluding sales charges, significantly outperforming its benchmark, the MSCI ACWI (Net), which returned 3.89%. The Fund also outperformed the MSCI
ACWI Growth Index (Net), which returned 11.59%. Stock selection contributed to the Fund’s performance relative to its benchmark in most sectors. The Fund’s biggest gains against the benchmark were from the
consumer discretionary, health care and information technology sectors.
Global uncertainty cut into stock
market gains, economic growth
Optimism prevailed early in 2019,
buoyed by dovish signals from the U.S. Federal Reserve, signs of possible progress in U.S.-China trade talks and a recovery from meaningful stock market losses in 2018. However, the pace of U.S. growth slowed to an
estimated 2.1% for the year. In Europe, economic growth slowed as trade tensions and uncertainty mounted regarding Brexit (the U.K.’s departure from the European Union), which was finally resolved late in 2019.
At the same time, emerging markets came under pressure, driven by trade and tariff concerns. China’s economic conditions weakened and the spread of the coronavirus introduced enough global uncertainty to drive
stock markets around the world down sharply in the final week of the period, raising concerns about the impact on global economic growth going forward.
Contributors and detractors
Stock selection aided Fund
results relative to the benchmark across most sectors. In the consumer discretionary sector, stock selection combined with a significant overweight led to the Fund’s performance advantage over the benchmark.
Positions in Evolution Gaming Group AB, New Oriental Education & Technology Group, Inc. and MercadoLibre, Inc. were top performers. Evolution Gaming, a leading provider of Live Casino solutions, rose on continued
announcements of new partnerships, market share gains and significant operating leverage. The company has benefited from investment in and expansion of its U.S. sites, increased European market share and expanded
operating margins. New Oriental Education shares climbed as the company delivered better-than-expected revenues, margins and earnings guidance. New Oriental expanded the number of its learning centers by 14% year over
year. Shares of South American e-commerce leader MercadoLibre rallied as the firm reported better-than-expected gross merchandise volumes in Brazil. MercadoLibre also noted impressive growth in its payments business
and further good news when it was announced that payment processor PayPal would make a strategic investment in the company. We took profits and exited the position.
In the health care sector,
positions in Lonza Group AG and Wuxi Biologics Cayman, Inc. made significant contributions to Fund gains. Lonza is a market leader in higher value biologics businesses, including antibody, antibody-drug conjugate,
gene-viral therapy and cell therapy. The company has pruned its portfolio to help shed its conglomerate past and has focused future returns on higher yielding business units. Results to date have generally exceeded
expectations and we believe that future capital spending projects have the potential to bear fruit over the next two years. Wuxi is a China-based contract development and manufacturing organization, the only biologics
technology platform that provides end-to-end solutions to discover, develop or manufacture biologics, a global market that has grown an estimated average of 15% annually over the past four years. China’s top
seven firms hold 80% of the industry’s global market share. Wuxi accounts for half of that.
In the information technology
sector, semiconductor equipment manufacturer NVIDIA Corp. rebounded from a challenging end of 2018, as it laid out its plans in the large, growing markets of gaming, professional visualization, data center and
autonomous driving.
In the software industry,
significant positions in ServiceNow, Inc., Splunk, Inc. and Adobe, Inc. aided relative performance. However, the relative gains created by holding these positions were somewhat offset by lack of exposure to mega-cap
Microsoft Corp., which detracted from relative results, given its weight in the benchmark. ServiceNow shares got off to a fast start to the year when it reported accelerating billings growth and better-than-expected
earnings guidance. Splunk exceeded revenue expectations as the company transitioned its business model to more renewable contracts. Adobe benefited from strength in its digital media and improvement in its digital
experience business lines.
In the communication services
sector, Activision Blizzard, Inc. and Facebook, Inc. were notable contributors and accounted for the majority of the Fund’s relative outperformance in the sector. Shares of Activision, with a stable of
historically dependable franchises and new ones on the way, bounced back strongly after a weak 2018. The company beat both revenue and earnings forecasts in the 2019 fourth-quarter holiday season. Facebook continued
to navigate challenging media headlines delivering better-than-anticipated user engagement, strong fundamentals and growth throughout the year.
|
Columbia Select Global Growth Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
In a period of few disappointments,
the Fund lagged its benchmark in the financials sector where Burford Capital Ltd., a litigation finance company, lost ground. Buford shares declined after a highly negative report accused the company of financial
irregularities, including inflating returns from legal cases it had funded. We exited the Fund’s position.
At period’s end
We believe recent volatility has
presented buying opportunities; and while many investors navigate the day-to-day headlines, we continue to take the long-term view that many of the companies in the portfolio have strong underlying fundamentals and we
believe their long-term secular growth stories remain intact.
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. 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. International investing involves certain risks and volatility due to potential political, economic or currency instabilities and different financial and accounting standards. Risks are enhanced for
emerging market issuers. Investing in derivatives is a specialized activity that involves special risks, which may result in significant losses. Investments in a limited number of companies subject the Fund to greater risk of loss. See the Fund’s prospectus for more information on these and other risks. See the Fund’s prospectus for more
information on these and other risks.
The views expressed in this report
reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and
results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update
such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf
of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
| 6 | Columbia Select Global Growth Fund | Annual Report 2020 |
Understanding Your Fund’s
Expenses
(Unaudited)
(Unaudited)
As an investor, you incur two types
of costs. There are shareholder transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing fund costs, which generally include management fees,
distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with
the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s
expenses
To illustrate these ongoing
costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment
of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the
“Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the
expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under
the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the
Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or
the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are
required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the
hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are
meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in
comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
Expenses paid during the period
are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal
half year and divided by 366.
Expenses do not include fees and
expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment
Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
|
Columbia Select Global Growth Fund | Annual Report 2020
|
7 |
Portfolio of Investments
February 29, 2020
February 29, 2020
(Percentages represent value of
investments compared to net assets)
Investments in securities
| Common Stocks 99.7% | ||
| Issuer | Shares | Value ($) |
| Brazil 2.3% | ||
| Pagseguro Digital Ltd., Class A(a) | 46,877 | 1,470,532 |
| Canada 1.0% | ||
| Canada Goose Holdings, Inc.(a) | 22,380 | 617,017 |
| China 14.1% | ||
| Alibaba Group Holding Ltd., ADR(a) | 14,197 | 2,952,976 |
| New Oriental Education & Technology Group, Inc., ADR(a) | 15,827 | 2,024,115 |
| Tencent Holdings Ltd. | 37,500 | 1,901,426 |
| Wuxi Biologics Cayman, Inc.(a) | 134,500 | 2,003,340 |
| Total | 8,881,857 | |
| Denmark 1.9% | ||
| Novo Nordisk A/S, Class B | 21,003 | 1,230,544 |
| Germany 1.5% | ||
| Infineon Technologies AG | 43,626 | 931,137 |
| India 2.6% | ||
| HDFC Bank Ltd., ADR | 29,680 | 1,627,948 |
| Japan 3.0% | ||
| Keyence Corp. | 6,000 | 1,915,833 |
| Russian Federation 1.6% | ||
| Yandex NV, Class A(a) | 24,245 | 984,589 |
| Sweden 3.0% | ||
| Evolution Gaming Group AB | 52,306 | 1,906,137 |
| Switzerland 3.7% | ||
| Lonza Group AG, Registered Shares(a) | 5,920 | 2,362,304 |
| United Kingdom 5.0% | ||
| Ashtead Group PLC | 61,685 | 1,933,919 |
| AstraZeneca PLC | 13,650 | 1,197,991 |
| Total | 3,131,910 | |
| United States 60.0% | ||
| Activision Blizzard, Inc. | 32,827 | 1,908,233 |
| Adobe, Inc.(a) | 7,646 | 2,638,787 |
| Alexion Pharmaceuticals, Inc.(a) | 9,347 | 878,898 |
| Align Technology, Inc.(a) | 3,282 | 716,625 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Amazon.com, Inc.(a) | 1,513 | 2,850,114 |
| Bio-Rad Laboratories, Inc., Class A(a) | 4,652 | 1,637,597 |
| Booking Holdings, Inc.(a) | 1,161 | 1,968,661 |
| Bristol-Myers Squibb Co. | 14,689 | 867,532 |
| Edwards Lifesciences Corp.(a) | 4,524 | 926,696 |
| Exact Sciences Corp.(a) | 10,415 | 843,094 |
| Facebook, Inc., Class A(a) | 12,179 | 2,344,092 |
| Illumina, Inc.(a) | 3,774 | 1,002,639 |
| Lyft, Inc., Class A(a) | 20,630 | 786,416 |
| MSCI, Inc. | 4,658 | 1,376,159 |
| Nike, Inc., Class B | 19,349 | 1,729,414 |
| NVIDIA Corp. | 8,112 | 2,190,808 |
| PayPal Holdings, Inc.(a) | 14,394 | 1,554,408 |
| Pioneer Natural Resources Co. | 5,684 | 697,882 |
| Salesforce.com, Inc.(a) | 13,720 | 2,337,888 |
| Sarepta Therapeutics, Inc.(a) | 8,176 | 935,907 |
| ServiceNow, Inc.(a) | 7,599 | 2,477,958 |
| Splunk, Inc.(a) | 12,663 | 1,865,640 |
| Square, Inc., Class A(a) | 15,837 | 1,319,697 |
| Visa, Inc., Class A | 11,384 | 2,069,156 |
| Total | 37,924,301 | |
|
Total Common Stocks
(Cost $41,407,892) |
62,984,109 | |
| Money Market Funds 0.8% | ||
| Shares | Value ($) | |
| Columbia Short-Term Cash Fund, 1.641%(b),(c) | 469,373 | 469,373 |
|
Total Money Market Funds
(Cost $469,373) |
469,373 | |
|
Total Investments in Securities
(Cost $41,877,265) |
63,453,482 | |
| Other Assets & Liabilities, Net | (299,246) | |
| Net Assets | $63,154,236 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 8 | Columbia Select Global Growth Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Investments in derivatives
| Forward foreign currency exchange contracts | |||||
|
Currency to
be sold |
Currency to
be purchased |
Counterparty |
Settlement
date |
Unrealized
appreciation ($) |
Unrealized
depreciation ($) |
| 9,734,000 SEK | 1,013,798 USD | Morgan Stanley | 03/26/2020 | — | (357) |
| 1,015,781 USD | 1,503,000 AUD | Morgan Stanley | 03/26/2020 | — | (36,098) |
| 537,845 USD | 2,281,000 BRL | Morgan Stanley | 03/26/2020 | — | (28,543) |
| 1,283,429 USD | 1,695,000 CAD | Morgan Stanley | 03/26/2020 | — | (20,588) |
| 2,848,217 USD | 2,582,000 EUR | Morgan Stanley | 03/26/2020 | 6,398 | — |
| 473,190 USD | 51,460,000 JPY | Morgan Stanley | 03/26/2020 | 4,537 | — |
| 1,013,789 USD | 1,194,975,000 KRW | Morgan Stanley | 03/26/2020 | — | (21,386) |
| 473,250 USD | 644,000 SGD | Morgan Stanley | 03/26/2020 | — | (10,832) |
| 1,017,647 USD | 30,436,000 TWD | Morgan Stanley | 03/26/2020 | — | (6,412) |
| Total | 10,935 | (124,216) | |||
Notes to Portfolio of
Investments
| (a) | Non-income producing investment. |
| (b) | The rate shown is the seven-day current annualized yield at February 29, 2020. |
| (c) | As defined in the Investment Company Act of 1940, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. Holdings and transactions in these affiliated companies during the year ended February 29, 2020 are as follows: |
Abbreviation Legend
| ADR | American Depositary Receipt |
Currency Legend
| AUD | Australian Dollar |
| BRL | Brazilian Real |
| CAD | Canada Dollar |
| EUR | Euro |
| JPY | Japanese Yen |
| KRW | South Korean Won |
| SEK | Swedish Krona |
| SGD | Singapore Dollar |
| TWD | New Taiwan Dollar |
| USD | US Dollar |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Select Global Growth Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Fair value measurements (continued)
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
Foreign equity securities actively
traded in markets where there is a significant delay in the local close relative to the New York Stock Exchange are classified as Level 2. The values of these securities may include an adjustment to reflect the impact
of market movements following the close of local trading, as described in Note 2 to the financial statements – Security valuation.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
Under the direction of the
Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of
voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly
to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of
Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third
party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale
pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to
discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members
of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of
the inputs used to value the Fund’s investments at February 29, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Common Stocks | ||||
| Brazil | 1,470,532 | — | — | 1,470,532 |
| Canada | 617,017 | — | — | 617,017 |
| China | 4,977,091 | 3,904,766 | — | 8,881,857 |
| Denmark | — | 1,230,544 | — | 1,230,544 |
| Germany | — | 931,137 | — | 931,137 |
| India | 1,627,948 | — | — | 1,627,948 |
| Japan | — | 1,915,833 | — | 1,915,833 |
| Russian Federation | 984,589 | — | — | 984,589 |
| Sweden | — | 1,906,137 | — | 1,906,137 |
| Switzerland | — | 2,362,304 | — | 2,362,304 |
| United Kingdom | — | 3,131,910 | — | 3,131,910 |
| United States | 37,924,301 | — | — | 37,924,301 |
| Total Common Stocks | 47,601,478 | 15,382,631 | — | 62,984,109 |
| Money Market Funds | 469,373 | — | — | 469,373 |
| Total Investments in Securities | 48,070,851 | 15,382,631 | — | 63,453,482 |
| Investments in Derivatives | ||||
| Asset | ||||
| Forward Foreign Currency Exchange Contracts | — | 10,935 | — | 10,935 |
| Liability | ||||
| Forward Foreign Currency Exchange Contracts | — | (124,216) | — | (124,216) |
| Total | 48,070,851 | 15,269,350 | — | 63,340,201 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 10 | Columbia Select Global Growth Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Fair value measurements (continued)
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets. These assets include certain foreign securities for which a third party statistical pricing service may be employed for purposes of fair market valuation. The model utilized by such third party statistical pricing service takes into account a security’s correlation to available market data including, but not limited to, intraday index, ADR, and exchange-traded fund movements.
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets. These assets include certain foreign securities for which a third party statistical pricing service may be employed for purposes of fair market valuation. The model utilized by such third party statistical pricing service takes into account a security’s correlation to available market data including, but not limited to, intraday index, ADR, and exchange-traded fund movements.
Derivative instruments are valued at
unrealized appreciation (depreciation).
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Select Global Growth Fund | Annual Report 2020
|
11 |
Statement of Assets and Liabilities
February 29, 2020
February 29, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $41,407,892) | $62,984,109 |
| Affiliated issuers (cost $469,373) | 469,373 |
| Unrealized appreciation on forward foreign currency exchange contracts | 10,935 |
| Receivable for: | |
| Investments sold | 23,611 |
| Capital shares sold | 54,101 |
| Dividends | 39,086 |
| Foreign tax reclaims | 17,671 |
| Prepaid expenses | 1,172 |
| Total assets | 63,600,058 |
| Liabilities | |
| Unrealized depreciation on forward foreign currency exchange contracts | 124,216 |
| Payable for: | |
| Capital shares purchased | 223,396 |
| Management services fees | 1,502 |
| Distribution and/or service fees | 390 |
| Transfer agent fees | 5,589 |
| Compensation of board members | 48,272 |
| Compensation of chief compliance officer | 1 |
| Audit fees | 29,000 |
| Other expenses | 13,456 |
| Total liabilities | 445,822 |
| Net assets applicable to outstanding capital stock | $63,154,236 |
| Represented by | |
| Paid in capital | 41,644,877 |
| Total distributable earnings (loss) | 21,509,359 |
| Total - representing net assets applicable to outstanding capital stock | $63,154,236 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 12 | Columbia Select Global Growth Fund | Annual Report 2020 |
Statement of Assets and Liabilities (continued)
February 29, 2020
February 29, 2020
| Class A | |
| Net assets | $29,069,042 |
| Shares outstanding | 1,767,255 |
| Net asset value per share | $16.45 |
| Maximum sales charge | 5.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $17.45 |
| Advisor Class | |
| Net assets | $2,271,268 |
| Shares outstanding | 134,361 |
| Net asset value per share | $16.90 |
| Class C | |
| Net assets | $6,850,333 |
| Shares outstanding | 452,704 |
| Net asset value per share | $15.13 |
| Institutional Class | |
| Net assets | $20,551,838 |
| Shares outstanding | 1,215,399 |
| Net asset value per share | $16.91 |
| Institutional 2 Class | |
| Net assets | $542,863 |
| Shares outstanding | 31,992 |
| Net asset value per share | $16.97 |
| Institutional 3 Class | |
| Net assets | $3,364,801 |
| Shares outstanding | 200,026 |
| Net asset value per share | $16.82 |
| Class R | |
| Net assets | $504,091 |
| Shares outstanding | 31,493 |
| Net asset value per share | $16.01 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Select Global Growth Fund | Annual Report 2020
|
13 |
Statement of Operations
Year Ended February 29, 2020
Year Ended February 29, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $288,772 |
| Dividends — affiliated issuers | 35,725 |
| Foreign taxes withheld | (10,236) |
| Total income | 314,261 |
| Expenses: | |
| Management services fees | 575,674 |
| Distribution and/or service fees | |
| Class A | 74,564 |
| Class C | 75,544 |
| Class R | 3,502 |
| Transfer agent fees | |
| Class A | 36,618 |
| Advisor Class | 2,877 |
| Class C | 9,291 |
| Institutional Class | 26,043 |
| Institutional 2 Class | 365 |
| Institutional 3 Class | 376 |
| Class R | 863 |
| Compensation of board members | 16,782 |
| Custodian fees | 18,947 |
| Printing and postage fees | 15,882 |
| Registration fees | 86,692 |
| Audit fees | 34,109 |
| Legal fees | 7,971 |
| Interest on interfund lending | 533 |
| Compensation of chief compliance officer | 14 |
| Other | 11,998 |
| Total expenses | 998,645 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (154,023) |
| Expense reduction | (20) |
| Total net expenses | 844,602 |
| Net investment loss | (530,341) |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 3,359,951 |
| Investments — affiliated issuers | (38) |
| Foreign currency translations | 4,818 |
| Forward foreign currency exchange contracts | (363,589) |
| Net realized gain | 3,001,142 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | 5,352,272 |
| Foreign currency translations | (29) |
| Forward foreign currency exchange contracts | (84,562) |
| Net change in unrealized appreciation (depreciation) | 5,267,681 |
| Net realized and unrealized gain | 8,268,823 |
| Net increase in net assets resulting from operations | $7,738,482 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 14 | Columbia Select Global Growth Fund | Annual Report 2020 |
Statement of Changes in Net Assets
|
Year Ended
February 29, 2020 |
Year Ended
February 28, 2019 |
|
| Operations | ||
| Net investment loss | $(530,341) | $(660,287) |
| Net realized gain (loss) | 3,001,142 | (868,337) |
| Net change in unrealized appreciation (depreciation) | 5,267,681 | (2,618,331) |
| Net increase (decrease) in net assets resulting from operations | 7,738,482 | (4,146,955) |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (891,478) | (423,326) |
| Advisor Class | (68,944) | (28,921) |
| Class C | (230,837) | (138,792) |
| Institutional Class | (617,992) | (268,712) |
| Institutional 2 Class | (15,205) | (7,040) |
| Institutional 3 Class | (107,639) | (59,867) |
| Class R | (24,567) | (10,481) |
| Total distributions to shareholders | (1,956,662) | (937,139) |
| Increase (decrease) in net assets from capital stock activity | (12,364,347) | 7,274,607 |
| Total increase (decrease) in net assets | (6,582,527) | 2,190,513 |
| Net assets at beginning of year | 69,736,763 | 67,546,250 |
| Net assets at end of year | $63,154,236 | $69,736,763 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Select Global Growth Fund | Annual Report 2020
|
15 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| February 29, 2020 | February 28, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 143,915 | 2,286,710 | 983,343 | 15,734,358 |
| Distributions reinvested | 50,916 | 848,765 | 29,579 | 403,233 |
| Redemptions | (383,974) | (6,174,055) | (878,204) | (13,747,889) |
| Net increase (decrease) | (189,143) | (3,038,580) | 134,718 | 2,389,702 |
| Advisor Class | ||||
| Subscriptions | 46,127 | 752,305 | 83,522 | 1,267,634 |
| Distributions reinvested | 4,022 | 68,854 | 2,044 | 28,885 |
| Redemptions | (76,781) | (1,243,610) | (160,653) | (2,614,768) |
| Net decrease | (26,632) | (422,451) | (75,087) | (1,318,249) |
| Class C | ||||
| Subscriptions | 30,406 | 450,694 | 138,157 | 2,098,462 |
| Distributions reinvested | 14,480 | 222,417 | 10,422 | 132,600 |
| Redemptions | (194,133) | (2,854,213) | (309,247) | (4,468,074) |
| Net decrease | (149,247) | (2,181,102) | (160,668) | (2,237,012) |
| Institutional Class | ||||
| Subscriptions | 232,089 | 3,802,093 | 832,225 | 13,083,574 |
| Distributions reinvested | 32,255 | 552,530 | 17,575 | 243,368 |
| Redemptions | (581,767) | (9,476,570) | (367,086) | (5,615,850) |
| Net increase (decrease) | (317,423) | (5,121,947) | 482,714 | 7,711,092 |
| Institutional 2 Class | ||||
| Subscriptions | 26,308 | 429,639 | 31,966 | 540,045 |
| Distributions reinvested | 880 | 15,115 | 500 | 7,004 |
| Redemptions | (13,559) | (226,379) | (29,151) | (453,364) |
| Net increase | 13,629 | 218,375 | 3,315 | 93,685 |
| Institutional 3 Class | ||||
| Subscriptions | 25,389 | 414,100 | 130,022 | 2,126,582 |
| Distributions reinvested | 6,236 | 106,207 | 4,348 | 59,826 |
| Redemptions | (125,193) | (2,049,857) | (112,257) | (1,760,265) |
| Net increase (decrease) | (93,568) | (1,529,550) | 22,113 | 426,143 |
| Class R | ||||
| Subscriptions | 8,802 | 141,159 | 20,515 | 308,630 |
| Distributions reinvested | 1,505 | 24,419 | 792 | 10,421 |
| Redemptions | (28,217) | (454,670) | (8,536) | (109,805) |
| Net increase (decrease) | (17,910) | (289,092) | 12,771 | 209,246 |
| Total net increase (decrease) | (780,294) | (12,364,347) | 419,876 | 7,274,607 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 16 | Columbia Select Global Growth Fund | Annual Report 2020 |
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BLANK]
|
Columbia Select Global Growth Fund | Annual Report 2020
|
17 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. 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.
|
Net asset value,
beginning of period |
Net
investment income (loss) |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class A | ||||||
| Year Ended 2/29/2020 | $15.10 | (0.13) | 1.98 | 1.85 | (0.50) | (0.50) |
| Year Ended 2/28/2019 | $16.17 | (0.14) | (0.73) | (0.87) | (0.20) | (0.20) |
| Year Ended 2/28/2018 | $12.44 | (0.12) | 3.85 | 3.73 | — | — |
| Year Ended 2/28/2017 | $11.14 | (0.10) | 2.16 | 2.06 | (0.76) | (0.76) |
| Year Ended 2/29/2016 | $13.58 | (0.09) | (2.12) | (2.21) | (0.23) | (0.23) |
| Advisor Class | ||||||
| Year Ended 2/29/2020 | $15.47 | (0.10) | 2.03 | 1.93 | (0.50) | (0.50) |
| Year Ended 2/28/2019 | $16.52 | (0.10) | (0.75) | (0.85) | (0.20) | (0.20) |
| Year Ended 2/28/2018 | $12.67 | (0.10) | 3.95 | 3.85 | — | — |
| Year Ended 2/28/2017 | $11.31 | (0.07) | 2.19 | 2.12 | (0.76) | (0.76) |
| Year Ended 2/29/2016 | $13.75 | (0.03) | (2.18) | (2.21) | (0.23) | (0.23) |
| Class C | ||||||
| Year Ended 2/29/2020 | $14.03 | (0.23) | 1.83 | 1.60 | (0.50) | (0.50) |
| Year Ended 2/28/2019 | $15.16 | (0.24) | (0.69) | (0.93) | (0.20) | (0.20) |
| Year Ended 2/28/2018 | $11.74 | (0.21) | 3.63 | 3.42 | — | — |
| Year Ended 2/28/2017 | $10.64 | (0.18) | 2.04 | 1.86 | (0.76) | (0.76) |
| Year Ended 2/29/2016 | $13.07 | (0.18) | (2.02) | (2.20) | (0.23) | (0.23) |
| Institutional Class | ||||||
| Year Ended 2/29/2020 | $15.48 | (0.09) | 2.02 | 1.93 | (0.50) | (0.50) |
| Year Ended 2/28/2019 | $16.52 | (0.10) | (0.74) | (0.84) | (0.20) | (0.20) |
| Year Ended 2/28/2018 | $12.67 | (0.08) | 3.93 | 3.85 | — | — |
| Year Ended 2/28/2017 | $11.31 | (0.07) | 2.19 | 2.12 | (0.76) | (0.76) |
| Year Ended 2/29/2016 | $13.75 | (0.05) | (2.16) | (2.21) | (0.23) | (0.23) |
| Institutional 2 Class | ||||||
| Year Ended 2/29/2020 | $15.52 | (0.09) | 2.04 | 1.95 | (0.50) | (0.50) |
| Year Ended 2/28/2019 | $16.57 | (0.10) | (0.75) | (0.85) | (0.20) | (0.20) |
| Year Ended 2/28/2018 | $12.70 | (0.08) | 3.95 | 3.87 | — | — |
| Year Ended 2/28/2017 | $11.33 | (0.06) | 2.19 | 2.13 | (0.76) | (0.76) |
| Year Ended 2/29/2016 | $13.76 | (0.06) | (2.14) | (2.20) | (0.23) | (0.23) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 18 | Columbia Select Global Growth Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income (loss) ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $16.45 | 12.22% | 1.54%(c) | 1.30%(c),(d) | (0.83%) | 20% | $29,069 |
| Year Ended 2/28/2019 | $15.10 | (5.21%) | 1.60%(c) | 1.37%(c) | (0.90%) | 46% | $29,548 |
| Year Ended 2/28/2018 | $16.17 | 29.98% | 1.67% | 1.38%(d) | (0.83%) | 48% | $29,457 |
| Year Ended 2/28/2017 | $12.44 | 18.89% | 1.60% | 1.42% | (0.80%) | 27% | $35,911 |
| Year Ended 2/29/2016 | $11.14 | (16.49%) | 1.57% | 1.47% | (0.71%) | 154% | $40,252 |
| Advisor Class | |||||||
| Year Ended 2/29/2020 | $16.90 | 12.45% | 1.29%(c) | 1.05%(c),(d) | (0.58%) | 20% | $2,271 |
| Year Ended 2/28/2019 | $15.47 | (4.98%) | 1.34%(c) | 1.12%(c) | (0.63%) | 46% | $2,491 |
| Year Ended 2/28/2018 | $16.52 | 30.39% | 1.44% | 1.13%(d) | (0.65%) | 48% | $3,899 |
| Year Ended 2/28/2017 | $12.67 | 19.15% | 1.35% | 1.17% | (0.53%) | 27% | $1,484 |
| Year Ended 2/29/2016 | $11.31 | (16.28%) | 1.32% | 1.22% | (0.26%) | 154% | $1,451 |
| Class C | |||||||
| Year Ended 2/29/2020 | $15.13 | 11.37% | 2.29%(c) | 2.06%(c),(d) | (1.58%) | 20% | $6,850 |
| Year Ended 2/28/2019 | $14.03 | (5.95%) | 2.34%(c) | 2.12%(c) | (1.64%) | 46% | $8,448 |
| Year Ended 2/28/2018 | $15.16 | 29.13% | 2.43% | 2.13%(d) | (1.58%) | 48% | $11,558 |
| Year Ended 2/28/2017 | $11.74 | 17.86% | 2.35% | 2.17% | (1.55%) | 27% | $10,718 |
| Year Ended 2/29/2016 | $10.64 | (17.06%) | 2.32% | 2.22% | (1.45%) | 154% | $13,111 |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $16.91 | 12.44% | 1.29%(c) | 1.05%(c),(d) | (0.58%) | 20% | $20,552 |
| Year Ended 2/28/2019 | $15.48 | (4.91%) | 1.35%(c) | 1.12%(c) | (0.65%) | 46% | $23,722 |
| Year Ended 2/28/2018 | $16.52 | 30.39% | 1.44% | 1.13%(d) | (0.58%) | 48% | $17,349 |
| Year Ended 2/28/2017 | $12.67 | 19.14% | 1.35% | 1.17% | (0.57%) | 27% | $6,079 |
| Year Ended 2/29/2016 | $11.31 | (16.29%) | 1.32% | 1.22% | (0.39%) | 154% | $5,950 |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $16.97 | 12.54% | 1.23%(c) | 1.00%(c) | (0.53%) | 20% | $543 |
| Year Ended 2/28/2019 | $15.52 | (4.96%) | 1.28%(c) | 1.08%(c) | (0.60%) | 46% | $285 |
| Year Ended 2/28/2018 | $16.57 | 30.47% | 1.37% | 1.09% | (0.54%) | 48% | $249 |
| Year Ended 2/28/2017 | $12.70 | 19.20% | 1.26% | 1.10% | (0.48%) | 27% | $223 |
| Year Ended 2/29/2016 | $11.33 | (16.20%) | 1.21% | 1.14% | (0.47%) | 154% | $194 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Select Global Growth Fund | Annual Report 2020
|
19 |
Financial Highlights (continued)
|
Net asset value,
beginning of period |
Net
investment income (loss) |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Institutional 3 Class | ||||||
| Year Ended 2/29/2020 | $15.38 | (0.08) | 2.02 | 1.94 | (0.50) | (0.50) |
| Year Ended 2/28/2019 | $16.41 | (0.09) | (0.74) | (0.83) | (0.20) | (0.20) |
| Year Ended 2/28/2018(e) | $12.70 | (0.11) | 3.82 | 3.71 | — | — |
| Class R | ||||||
| Year Ended 2/29/2020 | $14.75 | (0.17) | 1.93 | 1.76 | (0.50) | (0.50) |
| Year Ended 2/28/2019 | $15.83 | (0.17) | (0.71) | (0.88) | (0.20) | (0.20) |
| Year Ended 2/28/2018 | $12.21 | (0.15) | 3.77 | 3.62 | — | — |
| Year Ended 2/28/2017 | $10.97 | (0.13) | 2.13 | 2.00 | (0.76) | (0.76) |
| Year Ended 2/29/2016 | $13.41 | (0.12) | (2.09) | (2.21) | (0.23) | (0.23) |
| 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) | Ratios include interfund lending expense which is less than 0.01%. |
| (d) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (e) | Institutional 3 Class shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 20 | Columbia Select Global Growth Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income (loss) ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $16.82 | 12.59% | 1.18%(c) | 0.94%(c) | (0.46%) | 20% | $3,365 |
| Year Ended 2/28/2019 | $15.38 | (4.89%) | 1.23%(c) | 1.02%(c) | (0.55%) | 46% | $4,516 |
| Year Ended 2/28/2018(e) | $16.41 | 29.21% | 1.32% | 1.03% | (0.71%) | 48% | $4,454 |
| Class R | |||||||
| Year Ended 2/29/2020 | $16.01 | 11.90% | 1.80%(c) | 1.55%(c),(d) | (1.09%) | 20% | $504 |
| Year Ended 2/28/2019 | $14.75 | (5.38%) | 1.85%(c) | 1.62%(c) | (1.16%) | 46% | $728 |
| Year Ended 2/28/2018 | $15.83 | 29.65% | 1.93% | 1.63%(d) | (1.08%) | 48% | $580 |
| Year Ended 2/28/2017 | $12.21 | 18.63% | 1.85% | 1.67% | (1.08%) | 27% | $647 |
| Year Ended 2/29/2016 | $10.97 | (16.70%) | 1.82% | 1.72% | (0.93%) | 154% | $543 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Select Global Growth Fund | Annual Report 2020
|
21 |
Notes to Financial Statements
February 29, 2020
February 29, 2020
Note 1. Organization
Columbia Select Global Growth
Fund (the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a liquidation will be
proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A and Class C shares are offered to the general public for investment. Class C shares automatically convert to Class A shares after 10 years. Advisor Class, Institutional Class, Institutional 2
Class, Institutional 3 Class and Class R shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional investors and to certain other investors as also
described in the Fund’s prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
All equity securities are valued at
the close of business of the New York Stock Exchange. Equity securities are valued at the official closing price on the principal exchange or market on which they trade. Unlisted securities or listed securities for
which there were no sales during the day are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets.
Foreign equity securities are
valued based on the closing price on the foreign exchange in which such securities are primarily traded. If any foreign equity security closing prices are not readily available, the securities are valued at the mean
of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are determined at the scheduled closing time of the New York Stock Exchange. Many securities markets and exchanges
outside the U.S. close prior to the close of the New York Stock Exchange; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but
before the close of the New York Stock Exchange. In those situations, foreign securities will be fair valued pursuant to a policy adopted by the Board of Trustees. Under the policy, the Fund may utilize a third-party
pricing service to determine these fair values. The third-party pricing service takes into account multiple factors, including, but not limited to, movements in the U.S. securities markets, certain depositary
receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that reasonably reflects the current market
conditions as of the close of the New York Stock Exchange. The fair value of a security is likely to be different from the quoted or published price, if available.
Investments in open-end investment
companies, including money market funds, are valued at their latest net asset value.
| 22 | Columbia Select Global Growth Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Forward foreign currency exchange
contracts are marked-to-market based upon foreign currency exchange rates provided by a pricing service.
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published
price for the security, if available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Foreign currency transactions and
translations
The values of all assets and
liabilities denominated in foreign currencies are generally translated into U.S. dollars at exchange rates determined at the close of regular trading on the New York Stock Exchange. Net realized and unrealized gains
(losses) on foreign currency transactions and translations include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising
from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes,
the Fund does not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations
are included with the net realized and unrealized gains (losses) on investments in the Statement of Operations.
Derivative instruments
The Fund invests in certain
derivative instruments, as detailed below, to meet its investment objectives. Derivatives are instruments whose values depend on, or are derived from, in whole or in part, the value of one or more securities,
currencies, commodities, indices, or other assets or instruments. Derivatives may be used to increase investment flexibility (including to maintain cash reserves while maintaining desired exposure to certain assets),
for risk management (hedging) purposes, to facilitate trading, to reduce transaction costs and to pursue higher investment returns. The Fund may also use derivative instruments to mitigate certain investment risks,
such as foreign currency exchange rate risk, interest rate risk and credit risk. Derivatives may involve various risks, including the potential inability of the counterparty to fulfill its obligations under the terms
of the contract, the potential for an illiquid secondary market (making it difficult for the Fund to sell or terminate, including at favorable prices) and the potential for market movements which may expose the Fund
to gains or losses in excess of the amount shown in the Statement of Assets and Liabilities. The notional amounts of derivative instruments, if applicable, are not recorded in the financial statements.
A derivative instrument may suffer
a marked-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform its
obligations under the contract. The Fund’s risk of loss from counterparty credit risk on over-the-counter derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by
the Fund and the amount of any variation margin held by the counterparty, plus any replacement costs or related amounts. With exchange-traded or centrally cleared derivatives, there is reduced counterparty credit risk
to the Fund since the clearinghouse or central counterparty (CCP) provides some protection in the case of clearing member default. The clearinghouse or CCP stands between the buyer and the seller of the contract;
therefore, additional counterparty credit risk is failure of the clearinghouse or CCP. However, credit risk still exists in exchange-traded or centrally cleared derivatives with respect to initial and variation margin
that is held in a broker’s customer account. While brokers are required to segregate customer margin from their own assets, in the event that a broker becomes insolvent or goes into bankruptcy and at that time
there is a shortfall in the aggregate amount of margin held by the broker for all its clients, U.S. bankruptcy laws will typically allocate that shortfall on a pro-rata basis across all the broker’s customers
(including the Fund), potentially resulting in losses to the Fund.
|
Columbia Select Global Growth Fund | Annual Report 2020
|
23 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
In order to better define its
contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement)
or similar agreement with its derivatives contract counterparties. An ISDA Master Agreement is an agreement between the Fund and a counterparty that governs over-the-counter derivatives and typically contains, among
other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty
certain derivative instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment
in the event of default (close-out netting), including the bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or
prohibitions against the right of offset or netting in bankruptcy, insolvency or other events.
Collateral (margin) requirements
differ by type of derivative. Margin requirements are established by the clearinghouse or CCP for exchange-traded and centrally cleared derivatives. Brokers can ask for margin in excess of the minimum in certain
circumstances. Collateral terms are contract specific for over-the-counter derivatives. For over-the-counter derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by
netting the marked-to-market amount for each transaction under such agreement and comparing that amount to the value of any variation margin currently pledged by the Fund and/or the counterparty. Generally, the amount
of collateral due from or to a party has to exceed a minimum transfer amount threshold (e.g., $250,000) before a transfer has to be made. To the extent amounts due to the Fund from its counterparties are not fully
collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty nonperformance. The Fund may also pay interest expense on cash collateral received from the broker. Any interest expense
paid by the Fund is shown on the Statement of Operations. The Fund attempts to mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor
their obligations and by monitoring the financial stability of those counterparties.
Certain ISDA Master Agreements
allow counterparties of over-the-counter derivatives transactions to terminate derivatives contracts prior to maturity in the event the Fund’s net asset value declines by a stated percentage over a specified
time period or if the Fund fails to meet certain terms of the ISDA Master Agreement, which would cause the Fund to accelerate payment of any net liability owed to the counterparty. The Fund also has termination rights
if the counterparty fails to meet certain terms of the ISDA Master Agreement. In determining whether to exercise such termination rights, the Fund would consider, in addition to counterparty credit risk, whether
termination would result in a net liability owed from the counterparty.
For financial reporting purposes,
the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.
Forward foreign currency exchange
contracts
Forward foreign currency exchange
contracts are over-the-counter agreements between two parties to buy and sell a currency at a set price on a future date. The Fund utilized forward foreign currency exchange contracts to hedge the currency exposure
associated with some or all of the Fund’s securities. These instruments may be used for other purposes in future periods.
The values of forward foreign
currency exchange contracts fluctuate daily with changes in foreign currency exchange rates. Changes in the value of these contracts are recorded as unrealized appreciation or depreciation until the contract is
exercised or has expired. The Fund will realize a gain or loss when the forward foreign currency exchange contract is closed or expires. Non-deliverable forward foreign currency exchange contracts are settled with the
counterparty in U.S. dollars without delivery of foreign currency.
The use of forward foreign currency
exchange contracts does not eliminate fluctuations in the prices of the Fund’s portfolio securities. The risks of forward foreign currency exchange contracts include movement in the values of the foreign
currencies relative to the U.S. dollar (or other foreign currencies) and the possibility that counterparties will not complete their contractual obligations, which may be in excess of the amount reflected, if any, in
the Statement of Assets and Liabilities.
| 24 | Columbia Select Global Growth Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Effects of derivative transactions in
the financial statements
The following tables are intended
to provide additional information about the effect of derivatives on the financial statements of the Fund, including: the fair value of derivatives by risk category and the location of those fair values in the
Statement of Assets and Liabilities; and the impact of derivative transactions over the period in the Statement of Operations, including realized and unrealized gains (losses). The derivative instrument schedules
following the Portfolio of Investments present additional information regarding derivative instruments outstanding at the end of the period, if any.
The following table is a summary of
the fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) at February 29, 2020:
The following table indicates the
effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended February 29, 2020:
The following table is a summary
of the average outstanding volume by derivative instrument for the year ended February 29, 2020:
| Derivative instrument |
Average unrealized
appreciation ($)* |
Average unrealized
depreciation ($)* |
| Forward foreign currency exchange contracts | 11,591 | (112,191) |
| * | Based on the ending quarterly outstanding amounts for the year ended February 29, 2020. |
|
Columbia Select Global Growth Fund | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Offsetting of assets and
liabilities
The following table presents the
Fund’s gross and net amount of assets and liabilities available for offset under netting arrangements as well as any related collateral received or pledged by the Fund as of February 29, 2020:
|
Morgan
Stanley ($) |
|
| Assets | |
| Forward foreign currency exchange contracts | 10,935 |
| Liabilities | |
| Forward foreign currency exchange contracts | 124,216 |
| Total financial and derivative net assets | (113,281) |
| Total collateral received (pledged) (a) | - |
| Net amount (b) | (113,281) |
| (a) | In some instances, the actual collateral received and/or pledged may be more than the amount shown due to overcollateralization. |
| (b) | Represents the net amount due from/(to) counterparties in the event of default. |
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Corporate actions and dividend
income are generally recorded net of any non-reclaimable tax withholdings, on the ex-dividend date or upon receipt of ex-dividend notification in the case of certain foreign securities.
The Fund may receive distributions
from holdings in equity securities, business development companies (BDCs), exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment companies (RICs), and real estate investment trusts
(REITs), which report information as to the tax character of their distributions annually. These distributions are allocated to dividend income, capital gain and return of capital based on actual information reported.
Return of capital is recorded as a reduction of the cost basis of securities held. If the Fund no longer owns the applicable securities, return of capital is recorded as a realized gain. With respect to REITs, to the
extent actual information has not yet been reported, estimates for return of capital are made by Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise
Financial, Inc. (Ameriprise Financial). The Investment Manager’s estimates are subsequently adjusted when the actual character of the distributions is disclosed by the REITs, which could result in a
proportionate change in return of capital to shareholders.
Awards from class action litigation
are recorded as a reduction of cost basis if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities on the payment date, the proceeds are recorded as
realized gains.
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
| 26 | Columbia Select Global Growth Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable income and net capital gain, if any, for its
tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net income and certain other
amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Foreign taxes
The Fund may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules
and regulations that exist in the markets in which it invests.
Realized gains in certain countries
may be subject to foreign taxes at the Fund level, based on statutory rates. The Fund accrues for such foreign taxes on realized and unrealized gains at the appropriate rate for each jurisdiction, as applicable. The
amount, if any, is disclosed as a liability on the Statement of Assets and Liabilities.
Distributions to shareholders
Distributions from net investment
income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Note 3. Fees and other
transactions with affiliates
Management services fees
The Fund has entered into a
Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the
Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the
Fund’s daily net assets that declines from 0.87% to 0.67% as the Fund’s net assets increase. The effective management services fee rate for the year ended February 29, 2020 was 0.87% of the Fund’s
average daily net assets.
Compensation of board members
Members of the Board of Trustees
who are not officers or employees of the Investment Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the
Deferred Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of
certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All
amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund.
|
Columbia Select Global Growth Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as
sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class.
For the year ended February 29,
2020, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| Effective rate (%) | |
| Class A | 0.12 |
| Advisor Class | 0.12 |
| Class C | 0.12 |
| Institutional Class | 0.12 |
| Institutional 2 Class | 0.07 |
| Institutional 3 Class | 0.01 |
| Class R | 0.12 |
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended February 29, 2020, these minimum account balance fees reduced total expenses
of the Fund by $20.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
| 28 | Columbia Select Global Growth Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays
a monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class C shares of the Fund and a monthly distribution fee to the Distributor at the
maximum annual rates of 0.75% and 0.50% of the average daily net assets attributable to Class C and Class R shares of the Fund, respectively.
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended February 29, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 5.75 | 0.50 - 1.00(a) | 31,646 |
| Class C | — | 1.00(b) | 195 |
| (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 applies to redemptions within 12 months after purchase, with certain limited exceptions. |
The Fund’s other share
classes are not subject to sales charges.
Expenses waived/reimbursed by the
Investment Manager and its affiliates
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) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, 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 following annual rate(s) as a percentage of the class’ average daily net assets:
Under the agreement governing
these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes
(including foreign transaction taxes), expenses associated with investments 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, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from
the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or
its affiliates in future periods.
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
|
Columbia Select Global Growth Fund | Annual Report 2020
|
29 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
At February 29, 2020, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, trustees’ deferred compensation, derivative investments, late-year ordinary losses, net operating loss
reclassification, and foreign currency transactions. To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences do not
require reclassifications.
The following reclassifications
were made:
|
Excess of distributions
over net investment income ($) |
Accumulated
net realized gain ($) |
Paid in
capital ($) |
| 446,159 | 358,772 | (804,931) |
Net investment income (loss) and
net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by these reclassifications.
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended February 29, 2020 | Year Ended February 28, 2019 | ||||
|
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
| — | 1,956,662 | 1,956,662 | — | 937,139 | 937,139 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At February 29, 2020, the
components of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| — | 285,643 | — | 21,543,727 |
At February 29, 2020, the cost of
all investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
|
Federal
tax cost ($) |
Gross unrealized
appreciation ($) |
Gross unrealized
(depreciation) ($) |
Net unrealized
appreciation ($) |
| 41,796,474 | 22,695,992 | (1,152,265) | 21,543,727 |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
Under current tax rules, regulated
investment companies can elect to treat certain late-year ordinary losses incurred and post-October capital losses (capital losses realized after October 31) as arising on the first day of the following taxable year.
As of February 29, 2020, the Fund will elect to treat the following late-year ordinary losses and post-October capital losses as arising on March 1, 2020.
|
Late year
ordinary losses ($) |
Post-October
capital losses ($) |
| 271,924 | — |
Management of the Fund has
concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at
a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the
prior three fiscal years remain subject to examination by the Internal Revenue Service.
| 30 | Columbia Select Global Growth Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Note 5. Portfolio
information
The cost of purchases and
proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $12,882,179 and $24,373,355, respectively, for the year ended February 29, 2020. The amount of purchase and
sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes referred to
as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
Note 7. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the
Interfund Program during the year ended February 29, 2020 was as follows:
| Borrower or lender |
Average loan
balance ($) |
Weighted average
interest rate (%) |
Number of days
with outstanding loans |
| Borrower | 1,083,333 | 2.95 | 6 |
Interest expense incurred by the
Fund is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at February 29, 2020.
Note 8. Line of credit
The Fund has access to a
revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. The credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager or an affiliated investment manager, severally and
not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the federal funds effective rate, (ii) the
one-month LIBOR rate and (iii) the overnight bank funding rate, plus in each case, 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a
commitment fee equal to its pro rata share of the unused amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations. This agreement
expires annually in December unless extended or renewed.
The Fund had no borrowings during
the year ended February 29, 2020.
|
Columbia Select Global Growth Fund | Annual Report 2020
|
31 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Note 9. Significant
risks
Consumer discretionary sector
risk
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.
Foreign securities and emerging
market countries risk
Investing in foreign securities may
involve certain risks not typically associated with investing in U.S. securities, such as increased currency volatility and risks associated with political, regulatory, economic, social, diplomatic and other
conditions or events occurring in the country or region, which may result in significant market volatility. In addition, certain foreign securities may not be as liquid as U.S. securities. Investing in emerging
markets may increase these risks and expose the Fund to elevated risks associated with increased inflation, deflation or currency devaluation. To the extent that the Fund concentrates its investment exposure to any
one or a few specific countries, the Fund will be particularly susceptible to the risks associated with the conditions, events or other factors impacting those countries or regions and may, therefore, have a greater
risk than that of a fund that is more geographically diversified.
Health care sector risk
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.
Information technology sector risk
The Fund may be more susceptible to
the particular risks that may affect companies in the information technology sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the information 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 information 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.
Market and environment risk
The Fund may incur losses due to
declines in the value of one or more securities in which it invests. These declines may be due to factors affecting a particular issuer, or the result of, among other things, political, regulatory, market, economic or
social developments affecting the relevant market(s) more generally. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers,
which could adversely affect Fund, including causing difficulty in assigning prices to hard-to-value assets in thinly traded and closed markets, significant redemptions and operational challenges. Global economies and
financial markets are increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may
be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional or global
events
| 32 | Columbia Select Global Growth Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
such as terrorism, war, natural disasters,
disease/virus outbreaks and epidemics or other public health issues, recessions, depressions or other events – or the potential for such events – could have a significant negative impact on global economic
and market conditions.
The coronavirus disease 2019
(COVID-19) public health crisis has become a pandemic that has resulted in, and may continue to result in, significant global economic and societal disruption and market volatility due to disruptions in market access,
resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. Such disruptions may be caused, or exacerbated by, quarantines and travel restrictions,
workforce displacement and loss in human and other resources. The uncertainty surrounding the magnitude, duration, reach, costs and effects of the global pandemic, as well as actions that have been or could be taken
by governmental authorities or other third parties, present unknowns that are yet to unfold. The impacts, as well as the uncertainty over impacts to come, of COVID-19 – and any other infectious illness
outbreaks, epidemics and pandemics that may arise in the future – could negatively affect global economies and markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illness
outbreaks and epidemics in emerging market countries may be greater due to generally less established healthcare systems, governments and financial markets. Public health crises caused by the COVID-19 outbreak may
exacerbate other pre-existing political, social and economic risks in certain countries or globally. The disruptions caused by COVID-19 could prevent the Fund from executing advantageous investment decisions in a
timely manner and negatively impact the Fund’s ability to achieve their investment objectives. Any such event(s) could have a significant adverse impact on the value and risk profile of the Fund.
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting different communities at different times with varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including
the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to continue ordinary business operations and technology functions over near- or longer-term periods.
Shareholder concentration risk
At February 29, 2020, affiliated
shareholders of record owned 59.6% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the
Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of
less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 10. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued. Other than as noted below, there were no items requiring adjustment of the financial statements or additional
disclosure.
In February 2020, the Board of
Trustees approved an Agreement and Plan of Reorganization to reorganize Columbia Select Global Growth Fund with and into Columbia Select Global Equity Fund. Pursuant to applicable law (including the 1940 Act) the
reorganization may be implemented without shareholder approval. The reorganization is expected to occur in the third quarter of 2020 and is expected to be a tax-free reorganization for U.S. federal income tax
purposes.
Note 11. Information
regarding pending and settled legal proceedings
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
|
Columbia Select Global Growth Fund | Annual Report 2020
|
33 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
that neither Ameriprise Financial nor any of its
affiliates are the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Fund. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory
matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that
these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe
proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines,
penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.
| 34 | Columbia Select Global Growth Fund | Annual Report 2020 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust and Shareholders of Columbia Select Global Growth Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Select Global Growth Fund (one of the funds constituting Columbia Funds Series Trust, referred to hereafter as the "Fund") as of
February 29, 2020, the related statement of operations for the year ended February 29, 2020, the statement of changes in net assets for each of the two years in the period ended February 29, 2020, including the
related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in
all material respects, the financial position of the Fund as of February 29, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended
February 29, 2020 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the
responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these
financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of February 29, 2020 by correspondence with the custodian, transfer agent and brokers. We believe that
our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
April 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
|
Columbia Select Global Growth Fund | Annual Report 2020
|
35 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended February 29, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Capital
gain dividend |
|
| $2,354,420 |
Capital gain dividend. The Fund
designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
TRUSTEES AND
OFFICERS
The Board oversees the Fund’s
operations and 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 Fund’s Trustees as
of the printing of this report, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not
affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach the mandatory retirement age established by the Board.
Independent trustees
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
George S. Batejan
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1953 |
Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 117 | Former Chairman of the Board, NICSA (National Investment Company Services Association) (Executive Committee, Nominating Committee and Governance Committee), 2014-2016; former Director, Intech Investment Management, 2011-2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016; former Advisory Board Member, University of Colorado Business School, 2015-2018 |
|
Kathleen Blatz
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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; Member and Interim Chair, Minnesota Sports Facilities Authority, January 2017-July 2017; Interim President and Chief Executive Officer, Blue Cross and Blue Shield of Minnesota (health care insurance), February-July 2018 | 117 | Trustee, BlueCross BlueShield of Minnesota since 2009 (Chair of the Business Development Committee, 2014-2017; Chair of the Governance Committee since 2017); Chair of the Robina Foundation since August 2013; former Member and Chair of the Board, Minnesota Sports Facilities Authority, January 2017-July 2017 |
| 36 | Columbia Select Global Growth Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Pamela G. Carlton
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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 | 117 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996; Director, DR Bank (Audit Committee) since 2017; Director, Evercore Inc. (Audit Committee, Nominating and Governance Committee) since 2019 |
|
Patricia M. Flynn
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1950 |
Trustee 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 | 117 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010; Board of Directors, The MA Business Roundtable 2003-2019 |
|
Brian J. Gallagher
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee since 12/17 | Retired; Partner with Deloitte & Touche LLP and its predecessors, 1977-2016 | 117 | Trustee, Catholic Schools Foundation since 2004 |
|
Catherine James Paglia
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Chair of the Board since 1/20; Trustee 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. | 117 | 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) |
|
Anthony M. Santomero
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1946 |
Trustee 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 | 117 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; former Director, Citigroup Inc. and Citibank, N.A., 2009-2019; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
|
Columbia Select Global Growth Fund | Annual Report 2020
|
37 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Minor M. Shaw
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1947 |
Trustee 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 | 117 | Director, BlueCross BlueShield of South Carolina since April 2008; Trustee, Hollingsworth Funds since 2016 (previously Board Chair from 2016-2019); Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016; former Director, National Association of Corporate Directors, Carolinas Chapter, 2013-2018 |
|
Sandra Yeager
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1964 |
Trustee since 12/17 | Retired; President and founder, Hanoverian Capital, LLC (SEC registered investment advisor firm), 2008-2016; Managing Director, DuPont Capital, 2006-2008; Managing Director, Morgan Stanley Investment Management, 2004-2006; Senior Vice President, Alliance Bernstein, 1990-2004 | 115 | Director, NAPE Education Foundation since October 2016 |
Interested trustee affiliated
with Investment Manager*
| * | 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. |
Nations Funds refer to the Funds
within the Columbia Funds Complex that historically bore the Nations brand and includes series of Columbia Funds Series Trust. RiverSource Funds refer to the Funds within the Columbia Funds Complex that historically
bore the RiverSource brand and includes series of Columbia Funds Series Trust II.
| 38 | Columbia Select Global Growth Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
The Statement of Additional Information has additional information about the Fund’s Board members and is available, without charge, upon request by calling 800.345.6611, visiting columbiathreadneedleus.com/investor/ or contacting your financial intermediary.
The Statement of Additional Information has additional information about the Fund’s Board members and is available, without charge, upon request by calling 800.345.6611, visiting columbiathreadneedleus.com/investor/ or contacting your financial intermediary.
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 of the
Fund as of the printing of this report, 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 Fund’s other officers are:
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); officer of Columbia Funds and affiliated funds since 2007. |
|
Michael G. Clarke
225 Franklin Street Boston, MA 02110 Born 1969 |
Chief Financial Officer, Principal Financial Officer (2009), and Senior Vice President (2019) | Vice President, Head of North American Operations, and Co-Head of Global Operations, – Accounting and Tax, Columbia Management Investment Advisers, LLC, since June 2019 (previously Vice President – Accounting and Tax, May 2010 – May 2019); senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009 – January 2019 and December 2015 – January 2019, respectively). |
|
Joseph Beranek
5890 Ameriprise Financial Center Minneapolis, MN 55474 Born 1965 |
Treasurer, Chief Accounting Officer (Principal Accounting Officer) (2019), and Principal Financial Officer (2020) | Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and March 2017, respectively (previously Vice President — Pricing and Corporate Actions, May 2010 - March 2017). |
|
Paul B. Goucher
485 Lexington Avenue New York, NY 10017 Born 1968 |
Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since March 2015 (previously Vice President and Assistant Secretary, May 2010 – March 2015). |
|
Thomas P. McGuire
225 Franklin Street Boston, MA 02110 Born 1972 |
Senior 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; Chief Compliance Officer, Columbia Acorn/Wanger Funds since December 2015. |
|
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; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013. |
|
Ryan C. Larrenaga
225 Franklin Street Boston, MA 02110 Born 1970 |
Senior Vice President (2017), Chief Legal Officer (2017), and Secretary (2015) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously Vice President and Group Counsel, August 2011 - August 2018); officer of Columbia Funds and affiliated funds since 2005. |
|
Daniel J. Beckman
225 Franklin Street Boston, MA 02110 Born 1962 |
Senior Vice President (2020) | Vice President – Head of North America Product, Columbia Management Investment Advisers, LLC (since April 2015); previously, Senior Vice President of Investment Product Management, Fidelity Financial Advisor Solutions, a division of Fidelity Investments (January 2012 – March 2015). |
|
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. |
|
Columbia Select Global Growth Fund | Annual Report 2020
|
39 |
TRUSTEES AND OFFICERS (continued)
Fund officers (continued)
Fund officers (continued)
|
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 |
|
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. |
| 40 | Columbia Select Global Growth Fund | Annual Report 2020 |
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BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia Select Global Growth Fund
P.O. Box 219104
Kansas City, MO 64121-9104
Please read and consider the
investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments
(Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved.
© 2020 Columbia Management Investment
Advisers, LLC.
columbiathreadneedleus.com/investor/
ANN187_02_K01_(04/20)
Annual Report
February 29, 2020
February 29, 2020
Columbia Large Cap
Enhanced Core Fund
Beginning on January 1, 2021, as
permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports like this one will no longer be sent by mail, unless you
specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (columbiathreadneedleus.com/investor/), and each time a report is posted you will be notified
by mail and provided with a website address to access the report.
If you have already elected to
receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically
at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with the Fund, by calling 800.345.6611 or by enrolling in “eDelivery” by logging
into your account at columbiathreadneedleus.com/investor/.
You may elect to receive all future
reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you
invest directly with the Fund, you can call 800.345.6611 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive paper reports will apply to all Columbia
Funds held in your account if you invest through a financial intermediary or all Columbia Funds held with the fund complex if you invest directly with the Fund.
Not FDIC Insured • No bank
guarantee • May lose value
Table of Contents
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Columbia Large Cap Enhanced Core
Fund (the Fund) mails one shareholder report to each shareholder address, unless such shareholder elected to receive shareholder reports from the Fund electronically. If you would like more than one report, please
call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and
procedures
The policy of the Board of Trustees
is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by
calling 800.345.6611; contacting your financial intermediary; visiting columbiathreadneedleus.com/investor/; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding
how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting
columbiathreadneedleus.com/investor/, or searching the website of the SEC at sec.gov.
Quarterly schedule of
investments
The Fund files a complete schedule
of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT, and for reporting periods ended prior to March 31, 2019, on Form N-Q. The Fund’s Form N-Q and Form N-PORT
filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q or Form N-PORT, can also be obtained without charge, upon request, by calling
800.345.6611.
Additional Fund information
For more information about the
Fund, please visit columbiathreadneedleus.com/investor/ or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC (the
Investment Manager)
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors,
Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 219104
Kansas City, MO 64121-9104
Columbia Large Cap Enhanced Core
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks total return before fees and expenses that exceeds the total return of the Standard & Poor’s (S&P) 500 Index.
Portfolio management
Brian Condon, CFA*
Co-Portfolio Manager
Managed Fund since 2009
* Brian Condon has announced that he plans to retire from the Investment Manager, on May 31, 2020. Until then, Mr. Condon will continue to serve as a Co-Portfolio Manager of the Fund.
Peter Albanese
Co-Portfolio Manager
Managed Fund since 2014
Raghavendran Sivaraman, Ph.D., CFA
Co-Portfolio Manager
Managed Fund since December 2019
Morningstar style boxTM
The Morningstar Style Box is based on a fund’s portfolio holdings. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows
investment style (value, blend, or growth). Information shown is based on the most recent data provided by Morningstar.
© 2020 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or
distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
All results shown assume
reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the
effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance
results would have been lower.
The performance information shown
represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than
their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial
intermediary, visiting columbiathreadneedleus.com/investor/ or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. Since the Fund launched more than one share class at its inception, Class A shares were used. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investor/investment-products/mutual-funds/appended-performance for more information. |
The S&P 500 Index, an unmanaged
index, measures the performance of 500 widely held, large-capitalization U.S. stocks and is frequently used as a general measure of market performance.
Indices are not available for
investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Fund performance may be significantly
negatively impacted by the economic impact of the COVID-19 pandemic. The COVID-19 pandemic has adversely impacted economies and capital markets around the world in ways that will likely continue and may change in
unforeseen ways for an indeterminate period. The COVID-19 pandemic may exacerbate pre-existing political, social and economic risks in certain countries and globally.
|
Columbia Large Cap Enhanced Core Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (February 28, 2010 — February 29, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Large Cap Enhanced Core Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund
distributions or on the redemption of Fund shares.
| Portfolio breakdown (%) (at February 29, 2020) | |
| Common Stocks | 99.0 |
| Money Market Funds | 1.0 |
| Total | 100.0 |
Percentages indicated are based
upon total investments excluding investments in derivatives, if any. The Fund’s portfolio composition is subject to change.
Percentages indicated are based
upon total equity investments. The Fund’s portfolio composition is subject to change.
| 4 | Columbia Large Cap Enhanced Core Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that ended
February 29, 2020, the Fund’s Class A shares returned 2.33%, underperforming its benchmark, the S&P 500 Index, which returned 8.19%. The Fund’s strategy is to keep sector weights generally in line with
the benchmark, so relative performance was primarily driven by stock selection. During the period, the Fund outperformed the benchmark in the communication services sector. Consumer discretionary, financials and
consumer staples sectors were the biggest areas of detraction for the Fund.
Global uncertainty cut into strong
stock market gains, solid economic growth
Optimism prevailed early in 2019,
buoyed by solid economic growth and a recovery from meaningful stock market losses in 2018. Strong job gains drove the unemployment rate down to 3.5%. Consumer spending and export trade supported U.S. economic growth.
However, the pace of growth slowed to an estimated 2.1% for the year. In Europe, economic growth slowed as trade tensions and uncertainty mounted regarding Brexit (the U.K.’s departure from the European Union),
which was finally resolved late in the year. At the same time, emerging markets came under pressure, driven by trade and tariff concerns. China’s economic conditions weakened and the spread of the coronavirus
introduced enough global uncertainty to drive stock markets around the world down sharply in the final week of the period, raising concerns about the impact on global economic growth going forward.
Against this backdrop, the S&P
500 Index returned 8.19% for the 12-month period, giving up substantial gains during the last few trading days of February. The Bloomberg Barclays U.S. Aggregate Bond Index gained 11.68%, as the yield on the 10-year
U.S. Treasury fell to 1.10%. (Bond yields and prices move in opposite directions.)
Stock selection models delivered
mixed results
We divide the metrics for our
stock selection model into three broad categories: value (fundamental measures, such as earnings and cash flow, relative to market values), catalyst (price momentum and business momentum) and quality (quality of
earnings and financial strength). We then rank the securities within a sector/industry from 1 (most attractive) to 5 (least attractive) based upon the metrics within these categories. For the period, the Fund’s
quality factors were the best performing category while the catalyst and value themes fell short of expectations. Many of the factors favored by the Fund’s value and quality themes were out of favor during the
period.
The value component of the
Fund’s systematic framework remained ineffectual for most of 2019, during which conservative market sentiment was reflected in depressed yields and sustained rallies in bullion markets. The value component was
least effective in the consumer discretionary and real estate sectors. A high level of consumer spending inflated consumer discretionary stock prices relative to our quantitative measures of valuation. The real estate
sector generally followed these same investor trends for the period. During the year, the Fund’s quantitative measure of quality became increasingly connected to proxies of value, which helped explain challenges
in certain industry groups, including technology hardware and industrial services. In the technology hardware industry, overweight exposure to Cisco Systems, Inc. and an underweight in Apple, Inc. detracted from
results.
Contributors and detractors
The Fund outperformed the
benchmark return in the communication services sector. Lam Research Corp., Exxon Mobil Corp. and Qorvo, Inc. were top individual contributors. Investors continued to be attracted to semiconductor capital equipment
company Lam Research for the high-growth potential associated with the chip memory market. The company has been aggressive in buying back its shares, and it pays a modest dividend. Qorvo has benefited from its
positioning in mobile phones. But even as the coronavirus-led supply chain disruption in smartphones has hurt that end market, the company remains strong in defense and connectivity applications, such as the advance
of 5G, the fifth generation of wireless technology. We exited the Fund’s position in Qorvo, taking profits. The Fund was underweight in integrated energy producer Exxon Mobil, which also aided relative results
for the period.
Underperformance in the consumer
discretionary, financials and consumer staples sectors were the biggest detractors from relative performance for the period. In the energy sector, an overweight in Marathon Oil Corp. weighed on results. In the
consumer discretionary sector, an overweight in Under Armour, Inc. detracted from relative returns. An overweight in Walgreens Boots Alliance, Inc. hampered returns in the consumer staples sector. Shares of
Houston-based Marathon Oil dropped as oil prices plunged. The company made a significant cut to its 2020 capital spending budget. Athletic brand Under
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Columbia Large Cap Enhanced Core Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
Armour has struggled to boost sluggish sales,
particularly in the United States, its largest market. In November, the company confirmed that the U.S. Securities and Exchange Commission and the Justice Department were investigating its accounting methods, which
was a further drag on performance. Walgreens Boots Alliance struggled throughout the period and missed both revenue and earnings estimates in the first quarter of 2020, which disappointed investors and drove shares
downward.
Investment discipline based on
stock selection model
Regardless of the economic
environment, we maintain our investment discipline, which is linked to the Fund’s quantitative stock selection model. Consequently, we do not rely on macroeconomic scenarios or market outlooks to choose
securities. We also seek to minimize sector weight differences between the Fund and its investment benchmark. We continue to favor stocks of companies with attributes considered most important in our quantitative
stock selection model — companies with attractive valuations relative to their peers, strong business and market momentum and good quality of earnings and financial strength. Over the long term, we have found
that stocks with these characteristics have had the potential to outperform their peers in various macroeconomic conditions.
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Investing in derivatives is a specialized activity that involves special risks, which may result in significant losses. The Fund’s net value will generally decline when the performance of its targeted
index declines. See the Fund’s prospectus for more information on these and other risks.
The views expressed in this report
reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and
results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update
such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf
of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
| 6 | Columbia Large Cap Enhanced Core Fund | Annual Report 2020 |
Understanding Your Fund’s
Expenses
(Unaudited)
(Unaudited)
As an investor, you incur two types
of costs. There are shareholder transaction costs, which may include redemption fees. There are also ongoing fund costs, which generally include management fees, distribution and/or service fees, and other fund
expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual
funds.
Analyzing your Fund’s
expenses
To illustrate these ongoing
costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment
of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the
“Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the
expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under
the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the
Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or
the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are
required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the
hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are
meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
Expenses paid during the period
are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal
half year and divided by 366.
Expenses do not include fees and
expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment
Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
|
Columbia Large Cap Enhanced Core Fund | Annual Report 2020
|
7 |
Portfolio of Investments
February 29, 2020
February 29, 2020
(Percentages represent value of
investments compared to net assets)
Investments in securities
| Common Stocks 98.9% | ||
| Issuer | Shares | Value ($) |
| Communication Services 11.0% | ||
| Diversified Telecommunication Services 3.0% | ||
| AT&T, Inc. | 170,100 | 5,990,922 |
| Verizon Communications, Inc. | 113,300 | 6,136,328 |
| Total | 12,127,250 | |
| Entertainment 1.3% | ||
| Electronic Arts, Inc.(a) | 31,500 | 3,193,155 |
| Take-Two Interactive Software, Inc.(a) | 10,400 | 1,117,792 |
| Walt Disney Co. (The) | 8,700 | 1,023,555 |
| Total | 5,334,502 | |
| Interactive Media & Services 6.6% | ||
| Alphabet, Inc., Class A(a) | 11,920 | 15,963,860 |
| Facebook, Inc., Class A(a) | 54,600 | 10,508,862 |
| Total | 26,472,722 | |
| Media 0.1% | ||
| Comcast Corp., Class A | 12,600 | 509,418 |
| Total Communication Services | 44,443,892 | |
| Consumer Discretionary 9.5% | ||
| Distributors 0.6% | ||
| LKQ Corp.(a) | 82,900 | 2,452,182 |
| Diversified Consumer Services 0.2% | ||
| H&R Block, Inc. | 42,600 | 880,542 |
| Hotels, Restaurants & Leisure 1.0% | ||
| Hilton Worldwide Holdings, Inc. | 16,700 | 1,623,240 |
| MGM Resorts International | 100,300 | 2,463,368 |
| Total | 4,086,608 | |
| Household Durables 0.8% | ||
| PulteGroup, Inc. | 77,000 | 3,095,400 |
| Internet & Direct Marketing Retail 3.3% | ||
| Amazon.com, Inc.(a) | 5,530 | 10,417,137 |
| eBay, Inc. | 84,000 | 2,909,760 |
| Total | 13,326,897 | |
| Multiline Retail 0.8% | ||
| Target Corp. | 30,400 | 3,131,200 |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Specialty Retail 1.7% | ||
| AutoZone, Inc.(a) | 2,525 | 2,607,088 |
| Best Buy Co., Inc. | 34,100 | 2,579,665 |
| Home Depot, Inc. (The) | 8,100 | 1,764,504 |
| Total | 6,951,257 | |
| Textiles, Apparel & Luxury Goods 1.1% | ||
| Hanesbrands, Inc. | 169,200 | 2,240,208 |
| Under Armour, Inc., Class A(a) | 138,800 | 1,969,572 |
| Total | 4,209,780 | |
| Total Consumer Discretionary | 38,133,866 | |
| Consumer Staples 7.4% | ||
| Beverages 0.2% | ||
| Coca-Cola Co. (The) | 11,800 | 631,182 |
| PepsiCo, Inc. | 2,400 | 316,872 |
| Total | 948,054 | |
| Food & Staples Retailing 1.2% | ||
| Walgreens Boots Alliance, Inc. | 60,700 | 2,777,632 |
| Walmart, Inc. | 19,100 | 2,056,688 |
| Total | 4,834,320 | |
| Food Products 1.2% | ||
| General Mills, Inc. | 58,900 | 2,886,100 |
| Hershey Co. (The) | 13,900 | 2,001,461 |
| Total | 4,887,561 | |
| Household Products 2.6% | ||
| Kimberly-Clark Corp. | 26,100 | 3,424,059 |
| Procter & Gamble Co. (The) | 63,300 | 7,167,459 |
| Total | 10,591,518 | |
| Tobacco 2.2% | ||
| Altria Group, Inc. | 90,900 | 3,669,633 |
| Philip Morris International, Inc. | 60,900 | 4,985,883 |
| Total | 8,655,516 | |
| Total Consumer Staples | 29,916,969 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 8 | Columbia Large Cap Enhanced Core Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Energy 3.6% | ||
| Oil, Gas & Consumable Fuels 3.6% | ||
| Chevron Corp. | 56,400 | 5,264,376 |
| ConocoPhillips Co. | 68,100 | 3,297,402 |
| Exxon Mobil Corp. | 20,000 | 1,028,800 |
| HollyFrontier Corp. | 19,400 | 653,392 |
| Marathon Oil Corp. | 191,900 | 1,588,932 |
| Valero Energy Corp. | 41,600 | 2,756,000 |
| Total | 14,588,902 | |
| Total Energy | 14,588,902 | |
| Financials 11.8% | ||
| Banks 4.2% | ||
| Bank of America Corp. | 174,300 | 4,967,550 |
| Citigroup, Inc. | 75,500 | 4,791,230 |
| JPMorgan Chase & Co. | 61,400 | 7,129,154 |
| Wells Fargo & Co. | 3,300 | 134,805 |
| Total | 17,022,739 | |
| Capital Markets 3.5% | ||
| Bank of New York Mellon Corp. (The) | 77,400 | 3,088,260 |
| Intercontinental Exchange, Inc. | 39,800 | 3,550,956 |
| Moody’s Corp. | 14,600 | 3,504,438 |
| S&P Global, Inc. | 14,500 | 3,855,695 |
| Total | 13,999,349 | |
| Consumer Finance 0.9% | ||
| Capital One Financial Corp. | 37,900 | 3,345,054 |
| Synchrony Financial | 16,700 | 485,970 |
| Total | 3,831,024 | |
| Diversified Financial Services 1.0% | ||
| Berkshire Hathaway, Inc., Class B(a) | 18,700 | 3,858,558 |
| Insurance 2.2% | ||
| Allstate Corp. (The) | 30,900 | 3,252,225 |
| MetLife, Inc. | 43,300 | 1,849,776 |
| Prudential Financial, Inc. | 30,200 | 2,278,590 |
| Unum Group | 64,400 | 1,501,164 |
| Total | 8,881,755 | |
| Total Financials | 47,593,425 | |
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Health Care 14.4% | ||
| Biotechnology 2.4% | ||
| AbbVie, Inc. | 36,500 | 3,128,415 |
| Alexion Pharmaceuticals, Inc.(a) | 15,500 | 1,457,465 |
| Amgen, Inc. | 2,300 | 459,379 |
| Gilead Sciences, Inc. | 14,800 | 1,026,528 |
| Regeneron Pharmaceuticals, Inc.(a) | 2,350 | 1,044,740 |
| Vertex Pharmaceuticals, Inc.(a) | 11,800 | 2,643,554 |
| Total | 9,760,081 | |
| Health Care Equipment & Supplies 3.2% | ||
| Dentsply Sirona, Inc. | 52,600 | 2,590,024 |
| Hologic, Inc.(a) | 54,800 | 2,582,176 |
| Medtronic PLC | 45,700 | 4,600,619 |
| STERIS PLC | 20,500 | 3,251,710 |
| Total | 13,024,529 | |
| Health Care Providers & Services 2.7% | ||
| AmerisourceBergen Corp. | 34,600 | 2,917,472 |
| DaVita, Inc.(a) | 40,700 | 3,159,134 |
| Humana, Inc. | 1,350 | 431,568 |
| McKesson Corp. | 22,100 | 3,090,906 |
| UnitedHealth Group, Inc. | 4,800 | 1,223,808 |
| Total | 10,822,888 | |
| Pharmaceuticals 6.1% | ||
| Bristol-Myers Squibb Co. | 80,100 | 4,730,706 |
| Eli Lilly & Co. | 13,500 | 1,702,755 |
| Johnson & Johnson | 63,100 | 8,485,688 |
| Merck & Co., Inc. | 75,700 | 5,795,592 |
| Mylan NV(a) | 108,500 | 1,865,115 |
| Perrigo Co. PLC | 5,200 | 263,588 |
| Pfizer, Inc. | 46,600 | 1,557,372 |
| Total | 24,400,816 | |
| Total Health Care | 58,008,314 | |
| Industrials 8.6% | ||
| Aerospace & Defense 1.1% | ||
| Huntington Ingalls Industries, Inc. | 1,800 | 369,954 |
| Lockheed Martin Corp. | 11,100 | 4,105,557 |
| Total | 4,475,511 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Large Cap Enhanced Core Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Airlines 1.2% | ||
| Delta Air Lines, Inc. | 49,200 | 2,269,596 |
| Southwest Airlines Co. | 56,600 | 2,614,354 |
| Total | 4,883,950 | |
| Building Products 0.7% | ||
| Masco Corp. | 63,700 | 2,632,084 |
| Commercial Services & Supplies 0.2% | ||
| Waste Management, Inc. | 9,100 | 1,008,371 |
| Electrical Equipment 1.6% | ||
| AMETEK, Inc. | 32,800 | 2,820,800 |
| Eaton Corp. PLC | 38,500 | 3,492,720 |
| Total | 6,313,520 | |
| Industrial Conglomerates 0.6% | ||
| Honeywell International, Inc. | 15,500 | 2,513,635 |
| Machinery 2.4% | ||
| Cummins, Inc. | 20,600 | 3,116,574 |
| Illinois Tool Works, Inc. | 21,500 | 3,607,270 |
| Parker-Hannifin Corp. | 15,500 | 2,863,935 |
| Total | 9,587,779 | |
| Road & Rail 0.8% | ||
| CSX Corp. | 43,300 | 3,050,485 |
| Total Industrials | 34,465,335 | |
| Information Technology 24.4% | ||
| Communications Equipment 1.3% | ||
| Cisco Systems, Inc. | 125,700 | 5,019,201 |
| IT Services 4.5% | ||
| MasterCard, Inc., Class A | 24,350 | 7,067,587 |
| VeriSign, Inc.(a) | 16,600 | 3,149,850 |
| Visa, Inc., Class A | 43,900 | 7,979,264 |
| Total | 18,196,701 | |
| Semiconductors & Semiconductor Equipment 4.6% | ||
| Broadcom, Inc. | 16,450 | 4,484,599 |
| Intel Corp. | 115,500 | 6,412,560 |
| Lam Research Corp. | 12,400 | 3,638,532 |
| QUALCOMM, Inc. | 51,600 | 4,040,280 |
| Total | 18,575,971 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Large Cap Enhanced Core Fund | Annual Report 2020 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
| Common Stocks (continued) | ||
| Issuer | Shares | Value ($) |
| Independent Power and Renewable Electricity Producers 0.7% | ||
| AES Corp. (The) | 158,800 | 2,656,724 |
| Multi-Utilities 0.3% | ||
| Sempra Energy | 9,800 | 1,369,844 |
| Total Utilities | 13,475,587 | |
|
Total Common Stocks
(Cost $310,819,199) |
398,273,030 | |
| Money Market Funds 1.0% | ||
| Shares | Value ($) | |
| Columbia Short-Term Cash Fund, 1.641%(c),(d) | 3,972,793 | 3,972,793 |
|
Total Money Market Funds
(Cost $3,972,536) |
3,972,793 | |
|
Total Investments in Securities
(Cost: $314,791,735) |
402,245,823 | |
| Other Assets & Liabilities, Net | 219,061 | |
| Net Assets | 402,464,884 | |
At February 29, 2020,
securities and/or cash totaling $453,628 were pledged as collateral.
Investments in
derivatives
| Long futures contracts | ||||||
| Description |
Number of
contracts |
Expiration
date |
Trading
currency |
Notional
amount |
Value/Unrealized
appreciation ($) |
Value/Unrealized
depreciation ($) |
| S&P 500 Index E-mini | 33 | 03/2020 | USD | 4,869,315 | — | (425,034) |
Notes to Portfolio of
Investments
| (a) | Non-income producing investment. |
| (b) | This security or a portion of this security has been pledged as collateral in connection with derivative contracts. |
| (c) | The rate shown is the seven-day current annualized yield at February 29, 2020. |
| (d) | As defined in the Investment Company Act of 1940, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. Holdings and transactions in these affiliated companies during the year ended February 29, 2020 are as follows: |
Currency Legend
| USD | US Dollar |
Fair value
measurements
The Fund categorizes
its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that
reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input
that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For
example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active
market.
Fair value inputs are
summarized in the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Large Cap Enhanced Core Fund | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
February 29, 2020
February 29, 2020
Fair value measurements (continued)
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
Under the direction of the
Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of
voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly
to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of
Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third
party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale
pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to
discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members
of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of
the inputs used to value the Fund’s investments at February 29, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Common Stocks | ||||
| Communication Services | 44,443,892 | — | — | 44,443,892 |
| Consumer Discretionary | 38,133,866 | — | — | 38,133,866 |
| Consumer Staples | 29,916,969 | — | — | 29,916,969 |
| Energy | 14,588,902 | — | — | 14,588,902 |
| Financials | 47,593,425 | — | — | 47,593,425 |
| Health Care | 58,008,314 | — | — | 58,008,314 |
| Industrials | 34,465,335 | — | — | 34,465,335 |
| Information Technology | 98,339,148 | — | — | 98,339,148 |
| Materials | 7,952,378 | — | — | 7,952,378 |
| Real Estate | 11,355,214 | — | — | 11,355,214 |
| Utilities | 13,475,587 | — | — | 13,475,587 |
| Total Common Stocks | 398,273,030 | — | — | 398,273,030 |
| Money Market Funds | 3,972,793 | — | — | 3,972,793 |
| Total Investments in Securities | 402,245,823 | — | — | 402,245,823 |
| Investments in Derivatives | ||||
| Liability | ||||
| Futures Contracts | (425,034) | — | — | (425,034) |
| Total | 401,820,789 | — | — | 401,820,789 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
Derivative instruments are valued at
unrealized appreciation (depreciation).
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 12 | Columbia Large Cap Enhanced Core Fund | Annual Report 2020 |
Statement of Assets and Liabilities
February 29, 2020
February 29, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $310,819,199) | $398,273,030 |
| Affiliated issuers (cost $3,972,536) | 3,972,793 |
| Receivable for: | |
| Capital shares sold | 445,908 |
| Dividends | 791,389 |
| Foreign tax reclaims | 2,189 |
| Expense reimbursement due from Investment Manager | 3,649 |
| Prepaid expenses | 1,841 |
| Total assets | 403,490,799 |
| Liabilities | |
| Payable for: | |
| Capital shares purchased | 775,389 |
| Variation margin for futures contracts | 40,392 |
| Management services fees | 8,343 |
| Distribution and/or service fees | 1,104 |
| Transfer agent fees | 40,465 |
| Compensation of board members | 116,523 |
| Compensation of chief compliance officer | 10 |
| Other expenses | 43,689 |
| Total liabilities | 1,025,915 |
| Net assets applicable to outstanding capital stock | $402,464,884 |
| Represented by | |
| Paid in capital | 287,651,174 |
| Total distributable earnings (loss) | 114,813,710 |
| Total - representing net assets applicable to outstanding capital stock | $402,464,884 |
| Class A | |
| Net assets | $56,438,737 |
| Shares outstanding | 2,441,826 |
| Net asset value per share | $23.11 |
| Advisor Class | |
| Net assets | $12,021,298 |
| Shares outstanding | 526,592 |
| Net asset value per share | $22.83 |
| Institutional Class | |
| Net assets | $97,348,108 |
| Shares outstanding | 4,219,888 |
| Net asset value per share | $23.07 |
| Institutional 2 Class | |
| Net assets | $11,537,631 |
| Shares outstanding | 502,299 |
| Net asset value per share | $22.97 |
| Institutional 3 Class | |
| Net assets | $173,757,428 |
| Shares outstanding | 7,529,396 |
| Net asset value per share | $23.08 |
| Class R | |
| Net assets | $51,361,682 |
| Shares outstanding | 2,227,792 |
| Net asset value per share | $23.05 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Large Cap Enhanced Core Fund | Annual Report 2020
|
13 |
Statement of Operations
Year Ended February 29, 2020
Year Ended February 29, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $10,366,239 |
| Dividends — affiliated issuers | 206,897 |
| Total income | 10,573,136 |
| Expenses: | |
| Management services fees | 3,964,615 |
| Distribution and/or service fees | |
| Class A | 170,921 |
| Class R | 285,194 |
| Transfer agent fees | |
| Class A | 104,918 |
| Advisor Class | 18,309 |
| Institutional Class | 427,343 |
| Institutional 2 Class | 15,120 |
| Institutional 3 Class | 8,335 |
| Class R | 87,785 |
| Compensation of board members | 31,713 |
| Custodian fees | 16,333 |
| Printing and postage fees | 28,532 |
| Registration fees | 97,112 |
| Audit fees | 33,088 |
| Legal fees | 12,456 |
| Compensation of chief compliance officer | 115 |
| Other | 15,573 |
| Total expenses | 5,317,462 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (1,665,918) |
| Expense reduction | (20) |
| Total net expenses | 3,651,524 |
| Net investment income | 6,921,612 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 45,416,442 |
| Investments — affiliated issuers | 707 |
| Futures contracts | 1,348,230 |
| Net realized gain | 46,765,379 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (25,772,028) |
| Investments — affiliated issuers | 257 |
| Futures contracts | (1,439,004) |
| Net change in unrealized appreciation (depreciation) | (27,210,775) |
| Net realized and unrealized gain | 19,554,604 |
| Net increase in net assets resulting from operations | $26,476,216 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 14 | Columbia Large Cap Enhanced Core Fund | Annual Report 2020 |
Statement of Changes in Net Assets
|
Year Ended
February 29, 2020 |
Year Ended
February 28, 2019 |
|
| Operations | ||
| Net investment income | $6,921,612 | $5,789,214 |
| Net realized gain | 46,765,379 | 27,051,754 |
| Net change in unrealized appreciation (depreciation) | (27,210,775) | (7,673,370) |
| Net increase in net assets resulting from operations | 26,476,216 | 25,167,598 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (2,721,479) | (6,770,212) |
| Advisor Class | (540,497) | (433,283) |
| Institutional Class | (12,448,896) | (27,350,744) |
| Institutional 2 Class | (1,215,314) | (1,476,257) |
| Institutional 3 Class | (3,428,701) | (4,260,470) |
| Class R | (2,226,779) | (4,770,255) |
| Total distributions to shareholders | (22,581,666) | (45,061,221) |
| Increase (decrease) in net assets from capital stock activity | (146,905,062) | 165,302,223 |
| Total increase (decrease) in net assets | (143,010,512) | 145,408,600 |
| Net assets at beginning of year | 545,475,396 | 400,066,796 |
| Net assets at end of year | $402,464,884 | $545,475,396 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Large Cap Enhanced Core Fund | Annual Report 2020
|
15 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| February 29, 2020 | February 28, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 467,778 | 11,427,290 | 1,222,867 | 28,928,382 |
| Distributions reinvested | 93,223 | 2,274,192 | 241,051 | 5,644,252 |
| Redemptions | (1,328,844) | (32,787,695) | (662,483) | (15,851,999) |
| Net increase (decrease) | (767,843) | (19,086,213) | 801,435 | 18,720,635 |
| Advisor Class | ||||
| Subscriptions | 398,796 | 9,400,025 | 309,941 | 7,487,315 |
| Distributions reinvested | 22,389 | 540,374 | 19,095 | 432,974 |
| Redemptions | (119,401) | (2,865,633) | (130,912) | (2,830,909) |
| Net increase | 301,784 | 7,074,766 | 198,124 | 5,089,380 |
| Institutional Class | ||||
| Subscriptions | 1,044,900 | 25,106,388 | 6,180,535 | 140,039,331 |
| Distributions reinvested | 252,722 | 6,140,053 | 451,353 | 10,534,985 |
| Redemptions | (11,122,218) | (279,640,754) | (2,996,785) | (69,994,395) |
| Net increase (decrease) | (9,824,596) | (248,394,313) | 3,635,103 | 80,579,921 |
| Institutional 2 Class | ||||
| Subscriptions | 204,608 | 4,869,879 | 831,351 | 18,729,881 |
| Distributions reinvested | 50,090 | 1,215,180 | 63,602 | 1,475,923 |
| Redemptions | (880,128) | (22,044,902) | (227,104) | (5,194,636) |
| Net increase (decrease) | (625,430) | (15,959,843) | 667,849 | 15,011,168 |
| Institutional 3 Class | ||||
| Subscriptions | 7,232,472 | 181,696,892 | 3,355,471 | 79,354,896 |
| Distributions reinvested | 140,369 | 3,420,127 | 183,442 | 4,255,865 |
| Redemptions | (2,216,533) | (54,491,429) | (2,289,680) | (55,563,737) |
| Net increase | 5,156,308 | 130,625,590 | 1,249,233 | 28,047,024 |
| Class R | ||||
| Subscriptions | 1,133,833 | 27,391,983 | 1,262,838 | 30,559,259 |
| Distributions reinvested | 75,523 | 1,841,533 | 136,826 | 3,180,125 |
| Redemptions | (1,244,666) | (30,398,565) | (661,854) | (15,885,289) |
| Net increase (decrease) | (35,310) | (1,165,049) | 737,810 | 17,854,095 |
| Total net increase (decrease) | (5,795,087) | (146,905,062) | 7,289,554 | 165,302,223 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 16 | Columbia Large Cap Enhanced Core Fund | Annual Report 2020 |
[THIS PAGE INTENTIONALLY LEFT
BLANK]
|
Columbia Large Cap Enhanced Core Fund | Annual Report 2020
|
17 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. 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.
|
Net asset value,
beginning of period |
Net
investment income |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $23.52 | 0.27 | 0.32 | 0.59 | (0.24) | (0.76) | (1.00) |
| Year Ended 2/28/2019 | $25.12 | 0.28 | 0.69 | 0.97 | (0.24) | (2.33) | (2.57) |
| Year Ended 2/28/2018 | $23.81 | 0.32 | 4.16 | 4.48 | (0.32) | (2.85) | (3.17) |
| Year Ended 2/28/2017 | $19.69 | 0.29 | 4.14 | 4.43 | (0.31) | — | (0.31) |
| Year Ended 2/29/2016 | $22.05 | 0.27 | (2.20) | (1.93) | (0.43) | — | (0.43) |
| Advisor Class | |||||||
| Year Ended 2/29/2020 | $23.23 | 0.33 | 0.32 | 0.65 | (0.29) | (0.76) | (1.05) |
| Year Ended 2/28/2019 | $24.85 | 0.36 | 0.65 | 1.01 | (0.30) | (2.33) | (2.63) |
| Year Ended 2/28/2018 | $23.58 | 0.37 | 4.13 | 4.50 | (0.38) | (2.85) | (3.23) |
| Year Ended 2/28/2017 | $19.49 | 0.36 | 4.09 | 4.45 | (0.36) | — | (0.36) |
| Year Ended 2/29/2016(d) | $21.32 | 0.20 | (1.74) | (1.54) | (0.29) | — | (0.29) |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $23.47 | 0.32 | 0.33 | 0.65 | (0.29) | (0.76) | (1.05) |
| Year Ended 2/28/2019 | $25.07 | 0.34 | 0.69 | 1.03 | (0.30) | (2.33) | (2.63) |
| Year Ended 2/28/2018 | $23.77 | 0.38 | 4.15 | 4.53 | (0.38) | (2.85) | (3.23) |
| Year Ended 2/28/2017 | $19.65 | 0.34 | 4.14 | 4.48 | (0.36) | — | (0.36) |
| Year Ended 2/29/2016 | $22.01 | 0.34 | (2.22) | (1.88) | (0.48) | — | (0.48) |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $23.37 | 0.35 | 0.32 | 0.67 | (0.31) | (0.76) | (1.07) |
| Year Ended 2/28/2019 | $24.98 | 0.37 | 0.68 | 1.05 | (0.33) | (2.33) | (2.66) |
| Year Ended 2/28/2018 | $23.69 | 0.40 | 4.14 | 4.54 | (0.40) | (2.85) | (3.25) |
| Year Ended 2/28/2017 | $19.58 | 0.36 | 4.13 | 4.49 | (0.38) | — | (0.38) |
| Year Ended 2/29/2016 | $21.93 | 0.37 | (2.22) | (1.85) | (0.50) | — | (0.50) |
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $23.47 | 0.38 | 0.31 | 0.69 | (0.32) | (0.76) | (1.08) |
| Year Ended 2/28/2019 | $25.07 | 0.38 | 0.69 | 1.07 | (0.34) | (2.33) | (2.67) |
| Year Ended 2/28/2018 | $23.77 | 0.44 | 4.13 | 4.57 | (0.42) | (2.85) | (3.27) |
| Year Ended 2/28/2017 | $19.65 | 0.37 | 4.14 | 4.51 | (0.39) | — | (0.39) |
| Year Ended 2/29/2016 | $22.01 | 0.38 | (2.23) | (1.85) | (0.51) | — | (0.51) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 18 | Columbia Large Cap Enhanced Core Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Class A | |||||||
| Year Ended 2/29/2020 | $23.11 | 2.33% | 1.20% | 0.88%(c) | 1.11% | 77% | $56,439 |
| Year Ended 2/28/2019 | $23.52 | 4.14% | 1.21% | 0.89% | 1.17% | 99% | $75,497 |
| Year Ended 2/28/2018 | $25.12 | 19.81% | 1.23% | 0.89% | 1.31% | 70% | $60,502 |
| Year Ended 2/28/2017 | $23.81 | 22.62% | 1.24% | 0.89%(c) | 1.32% | 79% | $79,005 |
| Year Ended 2/29/2016 | $19.69 | (8.94%) | 1.25% | 0.90% | 1.27% | 89% | $75,126 |
| Advisor Class | |||||||
| Year Ended 2/29/2020 | $22.83 | 2.60% | 0.95% | 0.63%(c) | 1.38% | 77% | $12,021 |
| Year Ended 2/28/2019 | $23.23 | 4.38% | 0.96% | 0.64% | 1.53% | 99% | $5,222 |
| Year Ended 2/28/2018 | $24.85 | 20.12% | 0.98% | 0.64% | 1.48% | 70% | $663 |
| Year Ended 2/28/2017 | $23.58 | 22.98% | 0.99% | 0.64%(c) | 1.64% | 79% | $260 |
| Year Ended 2/29/2016(d) | $19.49 | (7.31%) | 1.01%(e) | 0.65%(e) | 1.49%(e) | 89% | $120 |
| Institutional Class | |||||||
| Year Ended 2/29/2020 | $23.07 | 2.58% | 0.94% | 0.63%(c) | 1.34% | 77% | $97,348 |
| Year Ended 2/28/2019 | $23.47 | 4.42% | 0.96% | 0.64% | 1.41% | 99% | $329,587 |
| Year Ended 2/28/2018 | $25.07 | 20.08% | 0.98% | 0.64% | 1.56% | 70% | $260,985 |
| Year Ended 2/28/2017 | $23.77 | 22.94% | 0.99% | 0.64%(c) | 1.57% | 79% | $256,195 |
| Year Ended 2/29/2016 | $19.65 | (8.73%) | 1.00% | 0.65% | 1.61% | 89% | $299,136 |
| Institutional 2 Class | |||||||
| Year Ended 2/29/2020 | $22.97 | 2.66% | 0.85% | 0.54% | 1.46% | 77% | $11,538 |
| Year Ended 2/28/2019 | $23.37 | 4.50% | 0.87% | 0.54% | 1.56% | 99% | $26,349 |
| Year Ended 2/28/2018 | $24.98 | 20.20% | 0.87% | 0.55% | 1.63% | 70% | $11,486 |
| Year Ended 2/28/2017 | $23.69 | 23.08% | 0.86% | 0.56% | 1.66% | 79% | $7,078 |
| Year Ended 2/29/2016 | $19.58 | (8.62%) | 0.84% | 0.55% | 1.78% | 89% | $2,969 |
| Institutional 3 Class | |||||||
| Year Ended 2/29/2020 | $23.08 | 2.73% | 0.81% | 0.49% | 1.59% | 77% | $173,757 |
| Year Ended 2/28/2019 | $23.47 | 4.58% | 0.81% | 0.49% | 1.61% | 99% | $55,689 |
| Year Ended 2/28/2018 | $25.07 | 20.24% | 0.82% | 0.50% | 1.77% | 70% | $28,180 |
| Year Ended 2/28/2017 | $23.77 | 23.11% | 0.81% | 0.51% | 1.71% | 79% | $5,016 |
| Year Ended 2/29/2016 | $19.65 | (8.59%) | 0.80% | 0.50% | 1.79% | 89% | $2,520 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Large Cap Enhanced Core Fund | Annual Report 2020
|
19 |
Financial Highlights (continued)
|
Net asset value,
beginning of period |
Net
investment income |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class R | |||||||
| Year Ended 2/29/2020 | $23.48 | 0.21 | 0.31 | 0.52 | (0.19) | (0.76) | (0.95) |
| Year Ended 2/28/2019 | $25.08 | 0.22 | 0.69 | 0.91 | (0.18) | (2.33) | (2.51) |
| Year Ended 2/28/2018 | $23.78 | 0.26 | 4.15 | 4.41 | (0.26) | (2.85) | (3.11) |
| Year Ended 2/28/2017 | $19.66 | 0.23 | 4.15 | 4.38 | (0.26) | — | (0.26) |
| Year Ended 2/29/2016 | $22.02 | 0.25 | (2.24) | (1.99) | (0.37) | — | (0.37) |
| 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%. |
| (d) | Advisor Class shares commenced operations on July 1, 2015. Per share data and total return reflect activity from that date. |
| (e) | Annualized. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 20 | Columbia Large Cap Enhanced Core Fund | Annual Report 2020 |
Financial Highlights (continued)
|
Net
asset value, end of period |
Total
return |
Total gross
expense ratio to average net assets(a) |
Total net
expense ratio to average net assets(a),(b) |
Net investment
income ratio to average net assets |
Portfolio
turnover |
Net
assets, end of period (000’s) |
|
| Class R | |||||||
| Year Ended 2/29/2020 | $23.05 | 2.04% | 1.45% | 1.13%(c) | 0.86% | 77% | $51,362 |
| Year Ended 2/28/2019 | $23.48 | 3.88% | 1.46% | 1.14% | 0.93% | 99% | $53,131 |
| Year Ended 2/28/2018 | $25.08 | 19.51% | 1.48% | 1.14% | 1.06% | 70% | $38,251 |
| Year Ended 2/28/2017 | $23.78 | 22.36% | 1.49% | 1.14%(c) | 1.08% | 79% | $37,996 |
| Year Ended 2/29/2016 | $19.66 | (9.18%) | 1.51% | 1.15% | 1.20% | 89% | $29,687 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Large Cap Enhanced Core Fund | Annual Report 2020
|
21 |
Notes to Financial Statements
February 29, 2020
February 29, 2020
Note 1. Organization
Columbia Large Cap Enhanced Core
Fund (the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a liquidation will be
proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A shares are offered to the general public for investment. Advisor Class, Institutional Class, Institutional 2 Class, Institutional 3 Class and Class R shares are available for purchase through
authorized investment professionals to omnibus retirement plans or to institutional investors and to certain other investors as also described in the Fund’s prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
All equity securities are valued at
the close of business of the New York Stock Exchange. Equity securities are valued at the official closing price on the principal exchange or market on which they trade. Unlisted securities or listed securities for
which there were no sales during the day are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets.
Foreign equity securities are
valued based on the closing price on the foreign exchange in which such securities are primarily traded. If any foreign equity security closing prices are not readily available, the securities are valued at the mean
of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are determined at the scheduled closing time of the New York Stock Exchange. Many securities markets and exchanges
outside the U.S. close prior to the close of the New York Stock Exchange; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but
before the close of the New York Stock Exchange. In those situations, foreign securities will be fair valued pursuant to a policy adopted by the Board of Trustees. Under the policy, the Fund may utilize a third-party
pricing service to determine these fair values. The third-party pricing service takes into account multiple factors, including, but not limited to, movements in the U.S. securities markets, certain depositary
receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that reasonably reflects the current market
conditions as of the close of the New York Stock Exchange. The fair value of a security is likely to be different from the quoted or published price, if available.
Investments in open-end investment
companies, including money market funds, are valued at their latest net asset value.
| 22 | Columbia Large Cap Enhanced Core Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Futures and options on futures
contracts are valued based upon the settlement price at the close of regular trading on their principal exchanges or, in the absence of transactions, at the mean of the latest quoted bid and ask prices.
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published
price for the security, if available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Derivative instruments
The Fund invests in certain
derivative instruments, as detailed below, to meet its investment objectives. Derivatives are instruments whose values depend on, or are derived from, in whole or in part, the value of one or more securities,
currencies, commodities, indices, or other assets or instruments. Derivatives may be used to increase investment flexibility (including to maintain cash reserves while maintaining desired exposure to certain assets),
for risk management (hedging) purposes, to facilitate trading, to reduce transaction costs and to pursue higher investment returns. The Fund may also use derivative instruments to mitigate certain investment risks,
such as foreign currency exchange rate risk, interest rate risk and credit risk. Derivatives may involve various risks, including the potential inability of the counterparty to fulfill its obligations under the terms
of the contract, the potential for an illiquid secondary market (making it difficult for the Fund to sell or terminate, including at favorable prices) and the potential for market movements which may expose the Fund
to gains or losses in excess of the amount shown in the Statement of Assets and Liabilities. The notional amounts of derivative instruments, if applicable, are not recorded in the financial statements.
A derivative instrument may suffer
a marked-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform its
obligations under the contract. The Fund’s risk of loss from counterparty credit risk on over-the-counter derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by
the Fund and the amount of any variation margin held by the counterparty, plus any replacement costs or related amounts. With exchange-traded or centrally cleared derivatives, there is reduced counterparty credit risk
to the Fund since the clearinghouse or central counterparty (CCP) provides some protection in the case of clearing member default. The clearinghouse or CCP stands between the buyer and the seller of the contract;
therefore, additional counterparty credit risk is failure of the clearinghouse or CCP. However, credit risk still exists in exchange-traded or centrally cleared derivatives with respect to initial and variation margin
that is held in a broker’s customer account. While brokers are required to segregate customer margin from their own assets, in the event that a broker becomes insolvent or goes into bankruptcy and at that time
there is a shortfall in the aggregate amount of margin held by the broker for all its clients, U.S. bankruptcy laws will typically allocate that shortfall on a pro-rata basis across all the broker’s customers
(including the Fund), potentially resulting in losses to the Fund.
In order to better define its
contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement)
or similar agreement with its derivatives contract counterparties. An ISDA Master Agreement is an agreement between the Fund and a counterparty that governs over-the-counter derivatives and typically contains, among
other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty
certain derivative instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment
in the event of default (close-out netting), including the bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or
prohibitions against the right of offset or netting in bankruptcy, insolvency or other events.
|
Columbia Large Cap Enhanced Core Fund | Annual Report 2020
|
23 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Collateral (margin) requirements
differ by type of derivative. Margin requirements are established by the clearinghouse or CCP for exchange-traded and centrally cleared derivatives. Brokers can ask for margin in excess of the minimum in certain
circumstances. Collateral terms are contract specific for over-the-counter derivatives. For over-the-counter derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by
netting the marked-to-market amount for each transaction under such agreement and comparing that amount to the value of any variation margin currently pledged by the Fund and/or the counterparty. Generally, the amount
of collateral due from or to a party has to exceed a minimum transfer amount threshold (e.g., $250,000) before a transfer has to be made. To the extent amounts due to the Fund from its counterparties are not fully
collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty nonperformance. The Fund may also pay interest expense on cash collateral received from the broker. Any interest expense
paid by the Fund is shown on the Statement of Operations. The Fund attempts to mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor
their obligations and by monitoring the financial stability of those counterparties.
Certain ISDA Master Agreements
allow counterparties of over-the-counter derivatives transactions to terminate derivatives contracts prior to maturity in the event the Fund’s net asset value declines by a stated percentage over a specified
time period or if the Fund fails to meet certain terms of the ISDA Master Agreement, which would cause the Fund to accelerate payment of any net liability owed to the counterparty. The Fund also has termination rights
if the counterparty fails to meet certain terms of the ISDA Master Agreement. In determining whether to exercise such termination rights, the Fund would consider, in addition to counterparty credit risk, whether
termination would result in a net liability owed from the counterparty.
For financial reporting purposes,
the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.
Futures contracts
Futures contracts are
exchange-traded and represent commitments for the future purchase or sale of an asset at a specified price on a specified date. The Fund bought and sold futures contracts to maintain appropriate equity market exposure
while keeping sufficient cash to accommodate daily redemptions. These instruments may be used for other purposes in future periods. Upon entering into futures contracts, the Fund bears risks that it may not achieve
the anticipated benefits of the futures contracts and may realize a loss. Additional risks include counterparty credit risk, the possibility of an illiquid market, and that a change in the value of the contract or
option may not correlate with changes in the value of the underlying asset.
Upon entering into a futures
contract, the Fund deposits cash or securities with the broker, known as a futures commission merchant (FCM), in an amount sufficient to meet the initial margin requirement. The initial margin deposit must be
maintained at an established level over the life of the contract. Cash deposited as initial margin is recorded in the Statement of Assets and Liabilities as margin deposits. Securities deposited as initial margin are
designated in the Portfolio of Investments. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily change in the contract value and are
recorded as variation margin receivable or payable and are offset in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed or expires. Futures contracts involve, to
varying degrees, risk of loss in excess of the variation margin disclosed in the Statement of Assets and Liabilities.
Effects of derivative transactions in
the financial statements
The following tables are intended
to provide additional information about the effect of derivatives on the financial statements of the Fund, including: the fair value of derivatives by risk category and the location of those fair values in the
Statement of Assets and Liabilities; and the impact of derivative transactions over the period in the Statement of Operations, including realized and unrealized gains (losses). The derivative instrument schedules
following the Portfolio of Investments present additional information regarding derivative instruments outstanding at the end of the period, if any.
| 24 | Columbia Large Cap Enhanced Core Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
The following table is a summary of
the fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) at February 29, 2020:
| Liability derivatives | ||
|
Risk exposure
category |
Statement
of assets and liabilities location |
Fair value ($) |
| Equity risk | Component of total distributable earnings (loss) — unrealized depreciation on futures contracts | 425,034* |
| * | Includes cumulative appreciation (depreciation) as reported in the tables following the Portfolio of Investments. Only the current day’s variation margin is reported in receivables or payables in the Statement of Assets and Liabilities. |
The following table indicates the
effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended February 29, 2020:
The following table is a summary
of the average outstanding volume by derivative instrument for the year ended February 29, 2020:
| Derivative instrument |
Average notional
amounts ($)* |
| Futures contracts — long | 9,367,588 |
| * | Based on the ending quarterly outstanding amounts for the year ended February 29, 2020. |
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Corporate actions and dividend
income are generally recorded net of any non-reclaimable tax withholdings, on the ex-dividend date or upon receipt of ex-dividend notification in the case of certain foreign securities.
The Fund may receive distributions
from holdings in equity securities, business development companies (BDCs), exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment companies (RICs), and real estate investment trusts
(REITs), which report information as to the tax character of their distributions annually. These distributions are allocated to dividend income, capital gain and return of capital based on actual information reported.
Return of capital is recorded as a reduction of the cost basis of securities held. If the Fund no longer owns the applicable securities, return of capital is recorded as a realized gain. With respect to REITs, to the
extent actual information has not yet been reported, estimates for return of capital are made by Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise
Financial, Inc. (Ameriprise Financial). The Investment Manager’s estimates are subsequently adjusted when the actual character of the distributions is disclosed by the REITs, which could result in a
proportionate change in return of capital to shareholders.
|
Columbia Large Cap Enhanced Core Fund | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Awards from class action litigation
are recorded as a reduction of cost basis if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities on the payment date, the proceeds are recorded as
realized gains.
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable income and net capital gain, if any, for its
tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net income and certain other
amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to shareholders
Distributions from net investment
income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Note 3. Fees and other
transactions with affiliates
Management services fees
The Fund has entered into a
Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the
Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the
Fund’s daily net assets that declines from 0.75% to 0.55% as the Fund’s net assets increase. The effective management services fee rate for the year ended February 29, 2020 was 0.75% of the Fund’s
average daily net assets.
Compensation of board members
Members of the Board of Trustees
who are not officers or employees of the Investment Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the
Deferred Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of
certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All
amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund.
| 26 | Columbia Large Cap Enhanced Core Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as
sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class.
For the year ended February 29,
2020, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| Effective rate (%) | |
| Class A | 0.15 |
| Advisor Class | 0.16 |
| Institutional Class | 0.15 |
| Institutional 2 Class | 0.06 |
| Institutional 3 Class | 0.01 |
| Class R | 0.15 |
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended February 29, 2020, these minimum account balance fees reduced total expenses
of the Fund by $20.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays
a monthly distribution fee to the Distributor at the maximum annual rate of 0.50% of the average daily net assets attributable to Class R shares of the Fund.
|
Columbia Large Cap Enhanced Core Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Expenses waived/reimbursed by the
Investment Manager and its affiliates
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) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, 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 following annual rate(s) as a percentage of the class’ average daily net assets:
Under the agreement governing
these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes
(including foreign transaction taxes), expenses associated with investments 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, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from
the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or
its affiliates in future periods.
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At February 29, 2020, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, trustees’ deferred compensation, derivative investments, tax straddles, re-characterization of distributions for
investments, and earnings and profits distributed to shareholders on the redemption of shares. To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net
assets. Temporary differences do not require reclassifications.
The following reclassifications
were made:
|
Undistributed net
investment income ($) |
Accumulated
net realized gain ($) |
Paid in
capital ($) |
| (144,725) | (3,943,250) | 4,087,975 |
Net investment income (loss) and
net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended February 29, 2020 | Year Ended February 28, 2019 | ||||
|
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 5,789,273 | 16,792,393 | 22,581,666 | 11,622,238 | 33,438,983 | 45,061,221 |
| 28 | Columbia Large Cap Enhanced Core Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At February 29, 2020, the
components of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| 1,303,078 | 28,865,818 | — | 84,760,216 |
At February 29, 2020, the cost of
all investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
|
Federal
tax cost ($) |
Gross unrealized
appreciation ($) |
Gross unrealized
(depreciation) ($) |
Net unrealized
appreciation ($) |
| 317,060,573 | 101,023,760 | (16,263,544) | 84,760,216 |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
Management of the Fund has
concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at
a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the
prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio
information
The cost of purchases and
proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $395,342,445 and $541,886,647, respectively, for the year ended February 29, 2020. The amount of purchase and
sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes referred to
as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
Note 7. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund did not borrow or lend
money under the Interfund Program during the year ended February 29, 2020.
|
Columbia Large Cap Enhanced Core Fund | Annual Report 2020
|
29 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
Note 8. Line of credit
The Fund has access to a
revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. The credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager or an affiliated investment manager, severally and
not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the federal funds effective rate, (ii) the
one-month LIBOR rate and (iii) the overnight bank funding rate, plus in each case, 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a
commitment fee equal to its pro rata share of the unused amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations. This agreement
expires annually in December unless extended or renewed.
The Fund had no borrowings during
the year ended February 29, 2020.
Note 9. Significant
risks
Information technology sector
risk
The Fund may be more susceptible to
the particular risks that may affect companies in the information technology sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the information 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 information 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.
Market and environment risk
The Fund may incur losses due to
declines in the value of one or more securities in which it invests. These declines may be due to factors affecting a particular issuer, or the result of, among other things, political, regulatory, market, economic or
social developments affecting the relevant market(s) more generally. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers,
which could adversely affect Fund, including causing difficulty in assigning prices to hard-to-value assets in thinly traded and closed markets, significant redemptions and operational challenges. Global economies and
financial markets are increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may
be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional or global events
such as terrorism, war, natural disasters, disease/virus outbreaks and epidemics or other public health issues, recessions, depressions or other events – or the potential for such events – could have a
significant negative impact on global economic and market conditions.
The coronavirus disease 2019
(COVID-19) public health crisis has become a pandemic that has resulted in, and may continue to result in, significant global economic and societal disruption and market volatility due to disruptions in market access,
resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. Such disruptions may be caused, or exacerbated by, quarantines and travel restrictions,
workforce displacement and loss in human and other resources. The uncertainty surrounding the magnitude, duration, reach, costs and effects of the global pandemic, as well as actions that have been or could be taken
by governmental authorities or other third parties, present unknowns that are yet to unfold. The impacts, as well as the uncertainty over impacts to come, of COVID-19 – and any other infectious illness
outbreaks, epidemics and pandemics that may arise in the future – could negatively affect global economies and markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illness
outbreaks and epidemics in emerging market countries may be greater due to generally less established healthcare systems,
| 30 | Columbia Large Cap Enhanced Core Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
February 29, 2020
February 29, 2020
governments and financial markets. Public health
crises caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and economic risks in certain countries or globally. The disruptions caused by COVID-19 could prevent the Fund from executing
advantageous investment decisions in a timely manner and negatively impact the Fund’s ability to achieve their investment objectives. Any such event(s) could have a significant adverse impact on the value and
risk profile of the Fund.
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting different communities at different times with varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including
the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to continue ordinary business operations and technology functions over near- or longer-term periods.
Shareholder concentration risk
At February 29, 2020, one
unaffiliated shareholder of record owned 35.8% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Affiliated
shareholders of record owned 10.5% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the
Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of
less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 10. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 11. Information
regarding pending and settled legal proceedings
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. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to
Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that
these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe
proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines,
penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.
|
Columbia Large Cap Enhanced Core Fund | Annual Report 2020
|
31 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust and Shareholders of Columbia Large Cap Enhanced Core Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Large Cap Enhanced Core Fund (one of the funds constituting Columbia Funds Series Trust, referred to hereafter as the "Fund") as
of February 29, 2020, the related statement of operations for the year ended February 29, 2020, the statement of changes in net assets for each of the two years in the period ended February 29, 2020, including the
related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in
all material respects, the financial position of the Fund as of February 29, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended
February 29, 2020 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the
responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these
financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of February 29, 2020 by correspondence with the custodian, transfer agent and brokers. We believe that
our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
April 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
| 32 | Columbia Large Cap Enhanced Core Fund | Annual Report 2020 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended February 29, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Qualified
dividend income |
Dividends
received deduction |
Capital
gain dividend |
| 100.00% | 100.00% | $42,745,135 |
Qualified dividend income. For
taxable, non-corporate shareholders, the percentage of ordinary income distributed during the fiscal year that represents qualified dividend income subject to reduced tax rates.
Dividends received deduction. The
percentage of ordinary income distributed during the fiscal year that qualifies for the corporate dividends received deduction.
Capital gain dividend. The Fund
designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
TRUSTEES AND
OFFICERS
The Board oversees the Fund’s
operations and 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 Fund’s Trustees as
of the printing of this report, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not
affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach the mandatory retirement age established by the Board.
Independent trustees
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
George S. Batejan
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1953 |
Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 117 | Former Chairman of the Board, NICSA (National Investment Company Services Association) (Executive Committee, Nominating Committee and Governance Committee), 2014-2016; former Director, Intech Investment Management, 2011-2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016; former Advisory Board Member, University of Colorado Business School, 2015-2018 |
|
Columbia Large Cap Enhanced Core Fund | Annual Report 2020
|
33 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Kathleen Blatz
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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; Member and Interim Chair, Minnesota Sports Facilities Authority, January 2017-July 2017; Interim President and Chief Executive Officer, Blue Cross and Blue Shield of Minnesota (health care insurance), February-July 2018 | 117 | Trustee, BlueCross BlueShield of Minnesota since 2009 (Chair of the Business Development Committee, 2014-2017; Chair of the Governance Committee since 2017); Chair of the Robina Foundation since August 2013; former Member and Chair of the Board, Minnesota Sports Facilities Authority, January 2017-July 2017 |
|
Pamela G. Carlton
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee 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 | 117 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996; Director, DR Bank (Audit Committee) since 2017; Director, Evercore Inc. (Audit Committee, Nominating and Governance Committee) since 2019 |
|
Patricia M. Flynn
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1950 |
Trustee 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 | 117 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010; Board of Directors, The MA Business Roundtable 2003-2019 |
|
Brian J. Gallagher
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1954 |
Trustee since 12/17 | Retired; Partner with Deloitte & Touche LLP and its predecessors, 1977-2016 | 117 | Trustee, Catholic Schools Foundation since 2004 |
|
Catherine James Paglia
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Chair of the Board since 1/20; Trustee 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. | 117 | 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) |
| 34 | Columbia Large Cap Enhanced Core Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Independent trustees (continued)
|
Name,
address, year of birth |
Position held
with the Trust and length of service |
Principal occupation(s)
during past five years and other relevant professional experience |
Number of
Funds in the Columbia Funds Complex overseen |
Other directorships
held by Trustee during the past five years |
|
Anthony M. Santomero
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1946 |
Trustee 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 | 117 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; former Director, Citigroup Inc. and Citibank, N.A., 2009-2019; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
|
Minor M. Shaw
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1947 |
Trustee 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 | 117 | Director, BlueCross BlueShield of South Carolina since April 2008; Trustee, Hollingsworth Funds since 2016 (previously Board Chair from 2016-2019); Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016; former Director, National Association of Corporate Directors, Carolinas Chapter, 2013-2018 |
|
Sandra Yeager
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1964 |
Trustee since 12/17 | Retired; President and founder, Hanoverian Capital, LLC (SEC registered investment advisor firm), 2008-2016; Managing Director, DuPont Capital, 2006-2008; Managing Director, Morgan Stanley Investment Management, 2004-2006; Senior Vice President, Alliance Bernstein, 1990-2004 | 115 | Director, NAPE Education Foundation since October 2016 |
|
Columbia Large Cap Enhanced Core Fund | Annual Report 2020
|
35 |
TRUSTEES AND OFFICERS (continued)
Interested trustee affiliated with Investment Manager*
Interested trustee affiliated with Investment Manager*
| * | 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. |
Nations Funds refer to the Funds
within the Columbia Funds Complex that historically bore the Nations brand and includes series of Columbia Funds Series Trust. RiverSource Funds refer to the Funds within the Columbia Funds Complex that historically
bore the RiverSource brand and includes series of Columbia Funds Series Trust II.
The Statement of Additional
Information has additional information about the Fund’s Board members and is available, without charge, upon request by calling 800.345.6611, visiting columbiathreadneedleus.com/investor/ or contacting your
financial intermediary.
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 of the
Fund as of the printing of this report, 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 Fund’s other officers are:
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); officer of Columbia Funds and affiliated funds since 2007. |
|
Michael G. Clarke
225 Franklin Street Boston, MA 02110 Born 1969 |
Chief Financial Officer, Principal Financial Officer (2009), and Senior Vice President (2019) | Vice President, Head of North American Operations, and Co-Head of Global Operations, – Accounting and Tax, Columbia Management Investment Advisers, LLC, since June 2019 (previously Vice President – Accounting and Tax, May 2010 – May 2019); senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009 – January 2019 and December 2015 – January 2019, respectively). |
|
Joseph Beranek
5890 Ameriprise Financial Center Minneapolis, MN 55474 Born 1965 |
Treasurer, Chief Accounting Officer (Principal Accounting Officer) (2019), and Principal Financial Officer (2020) | Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and March 2017, respectively (previously Vice President — Pricing and Corporate Actions, May 2010 - March 2017). |
| 36 | Columbia Large Cap Enhanced Core Fund | Annual Report 2020 |
TRUSTEES AND OFFICERS (continued)
Fund officers (continued)
Fund officers (continued)
|
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 |
|
Paul B. Goucher
485 Lexington Avenue New York, NY 10017 Born 1968 |
Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since March 2015 (previously Vice President and Assistant Secretary, May 2010 – March 2015). |
|
Thomas P. McGuire
225 Franklin Street Boston, MA 02110 Born 1972 |
Senior 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; Chief Compliance Officer, Columbia Acorn/Wanger Funds since December 2015. |
|
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; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013. |
|
Ryan C. Larrenaga
225 Franklin Street Boston, MA 02110 Born 1970 |
Senior Vice President (2017), Chief Legal Officer (2017), and Secretary (2015) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously Vice President and Group Counsel, August 2011 - August 2018); officer of Columbia Funds and affiliated funds since 2005. |
|
Daniel J. Beckman
225 Franklin Street Boston, MA 02110 Born 1962 |
Senior Vice President (2020) | Vice President – Head of North America Product, Columbia Management Investment Advisers, LLC (since April 2015); previously, Senior Vice President of Investment Product Management, Fidelity Financial Advisor Solutions, a division of Fidelity Investments (January 2012 – March 2015). |
|
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. |
|
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. |
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Columbia Large Cap Enhanced Core Fund | Annual Report 2020
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37 |
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Columbia Large Cap Enhanced Core Fund
P.O. Box 219104
Kansas City, MO 64121-9104
Please read and consider the
investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments
(Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved.
© 2020 Columbia Management Investment
Advisers, LLC.
columbiathreadneedleus.com/investor/
ANN173_02_K01_(04/20)
Item 2. Code of Ethics.
(a)The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.
(b)During the period covered by this report, there were not any amendments to a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item.
(c)During the period covered by this report, there were no waivers, including any implicit waivers, from a provision of the code of ethics to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party that relates to one or more of the items set forth in paragraph (b) of this Item.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Trustees has determined that Brian J. Gallagher, Pamela G. Carlton, Anthony M. Santomero, and Sandra L. Yeager, each of whom are members of the registrant's Board of Trustees and Audit Committee, each qualify as an audit committee financial expert. Mr. Gallagher, Ms. Carlton, Mr. Santomero, and Ms. Yeager are each independent trustees, as defined in paragraph (a)(2) of this item's instructions.
Item 4. Principal Accountant Fees and Services.
Fee information below is disclosed for the twelve series of the registrant whose reports to stockholders are included in this annual filing.
(a)Audit Fees. Aggregate Audit Fees billed by the principal accountant for professional services rendered during the fiscal years ended February 29, 2020 and February 28, 2019 are approximately as follows:
20202019
$348,000 $349,800
Audit Fees include amounts related to the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.
(b)Audit-Related Fees. Aggregate Audit-Related Fees billed to the registrant by the principal accountant for professional services rendered during the fiscal years ended February 29, 2020 and February 28, 2019 are approximately as follows:
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2020 |
2019 |
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$7,500 |
$0 |
Audit-Related Fees include amounts for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported in Audit Fees above.
During the fiscal years ended February 29, 2020 and February 28, 2019 , there were no Audit-Related Fees billed by the registrant's principal accountant to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant.
(c)Tax Fees. Aggregate Tax Fees billed by the principal accountant to the registrant for professional services rendered during the fiscal years ended February 29, 2020 and February 28, 2019 are approximately as follows:
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2020 |
2019 |
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$5,820 |
$72,900 |
Tax Fees include amounts for the review of annual tax returns, the review of required shareholder distribution calculations and typically include amounts for professional services by the principal accountant for tax compliance, tax advice and tax planning. Fiscal year 2020 also includes fees paid for foreign tax services.
During the fiscal years ended February 29, 2020 and February 28, 2019 , there were no Tax Fees billed by the registrant's principal accountant to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant.
(d)All Other Fees. Aggregate All Other Fees billed by the principal accountant to the registrant for professional services rendered during the fiscal years ended February 29, 2020 and February 28, 2019 are approximately as follows:
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2020 |
2019 |
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$0 |
$0 |
All Other Fees include amounts for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) above.
Aggregate All Other Fees billed by the registrant's principal accountant to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant during the fiscal years ended February 29, 2020 and February 28, 2019 are approximately as follows:
20202019
$225,000 $225,000
In fiscal years 2020 and 2019, All Other Fees primarily consists of fees billed for internal control examinations of the registrant's transfer agent and investment adviser.
(e)(1) Audit Committee Pre-Approval Policies and Procedures
The registrant's Audit Committee is required to pre-approve the engagement of the registrant's independent auditors to provide audit and non-audit services to the registrant and non-audit services to its investment adviser (excluding any sub-adviser whose role is primarily portfolio management and is sub-contracted or overseen by another investment adviser (the "Adviser") or any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Fund (a "Control Affiliate") if the engagement relates directly to the operations and financial reporting of the registrant.
The Audit Committee has adopted a Policy for Engagement of Independent Auditors for Audit and Non-Audit Services (the "Policy"). The Policy sets forth the understanding of the Audit Committee regarding the engagement of the registrant's independent accountants to provide (i) audit and permissible audit-related, tax and other services to the registrant ("Fund Services"); (ii) non-audit services to the registrant's Adviser and any Control Affiliates, that relates directly to the operations and financial reporting of a Fund ("Fund-related Adviser Services"); and (iii) certain other audit and non-audit services to the registrant's Adviser and its Control Affiliates. A service will require specific pre-approval by the Audit Committee if it is to be provided by the Fund's independent auditor; provided, however, that pre-approval of non-audit services to the Fund, the Adviser or Control Affiliates may be waived if certain de minimis requirements set forth in the SEC's rules are met.
Under the Policy, the Audit Committee may delegate pre-approval authority to any pre- designated member or members who are independent board members. The member(s) to whom such authority is delegated must report, for informational purposes only, any pre- approval decisions to the Audit Committee at its next regular meeting. The Audit Committee's responsibilities with respect to the pre-approval of services performed by the independent auditor may not be delegated to management.
On an annual basis, at a regularly scheduled Audit Committee meeting, the Fund's Treasurer or other Fund officer shall submit to the Audit Committee a schedule of the types of Fund Services and Fund-related Adviser Services that are subject to specific pre- approval. This schedule will provide a description of each type of service that is subject to specific pre-approval, along with total projected fees for each service. The pre- approval will generally cover a one-year period. The Audit Committee will review and approve the types of services and the projected fees for the next one-year period and may add to, or subtract from, the list of pre-approved services from time to time, based on subsequent determinations. This specific approval acknowledges that the Audit Committee is in agreement with the specific types of services that the independent auditor will be permitted to perform and the projected fees for each service.
The Fund's Treasurer or other Fund officer shall report to the Audit Committee at each of its regular meetings regarding all Fund Services or Fund-related Adviser Services provided since the last such report was rendered, including a description of the services, by category, with forecasted fees for the annual reporting period, proposed changes requiring specific pre-approval and a description of services provided by the independent auditor, by category, with actual fees during the current reporting period.
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(e)(2) 100% of the services performed for items (b) through (d) above during 2020 and 2019 were pre-approved by the registrant's Audit Committee.
(f)Not applicable.
(g)The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for the fiscal years ended February 29, 2020 and February 28, 2019 are approximately as follows:
20202019
$238,300 $297,900
(h)The registrant's Audit Committee of the Board of Directors has considered whether the provision of non-audit services that were rendered to the registrant's adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible with maintaining the principal accountant's independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments
(a)The registrant's "Schedule I – Investments in securities of unaffiliated issuers" (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form N-CSR.
(b)Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors.
Item 11. Controls and Procedures.
(a)The registrant's principal executive officer and principal financial officer, based on their evaluation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant's management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
(b)There was no change in the registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable.
Item 13. Exhibits.
(a)(3) Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
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authorized. |
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(registrant) |
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Columbia Funds Series Trust |
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By (Signature and Title) |
/s/ Christopher O. Petersen |
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Christopher O. Petersen, President and Principal Executive Officer |
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Date |
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April 29, 2020 |
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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By (Signature and Title) |
/s/ Christopher O. Petersen |
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Christopher O. Petersen, President and Principal Executive Officer |
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Date |
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April 29, 2020 |
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By (Signature and Title) |
/s/ Michael G. Clarke |
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Michael G. Clarke, Chief Financial Officer, Principal Financial Officer |
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and Senior Vice President |
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Date |
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April 29, 2020 |
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By (Signature and Title) |
/s/ Joseph Beranek |
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Joseph Beranek, Treasurer, Chief Accounting Officer and Principal |
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Financial Officer |
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Date |
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April 29, 2020 |
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