UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-09645
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: April 30
Date of reporting period: April 30, 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
April 30, 2020
April 30, 2020
Columbia California
Intermediate Municipal Bond 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 Federally Insured • No
Financial Institution Guarantee • May Lose Value
Table of Contents
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Columbia California Intermediate
Municipal Bond 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 California Intermediate Municipal Bond
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks current income exempt from U.S. federal income tax and California individual income tax, consistent with moderate fluctuation of principal.
Portfolio management
Paul Fuchs, CFA
Lead Portfolio Manager
Managed Fund since 2012
Anders Myhran, CFA
Portfolio Manager
Managed Fund since 2019
Deborah Vargo
Portfolio Manager
Managed Fund since 2017
Returns for Class A shares are shown
with and without the maximum initial sales charge of 3.00%. 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 Bloomberg Barclays California
3-15 Year Blend Municipal Bond Index is an unmanaged index that tracks the performance of investment-grade bonds issued from the state of California and its municipalities.
The Bloomberg Barclays 3–15
Year Blend Municipal Bond Index is an unmanaged index that tracks the performance of municipal bonds issued after December 31, 1990, with remaining maturities between 2 and 17 years and at least $7 million in
principal amount outstanding.
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.
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Columbia California Intermediate Municipal Bond Fund | Annual Report 2020
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3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (April 30, 2010 — April 30, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia California Intermediate Municipal Bond 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.
| Quality breakdown (%) (at April 30, 2020) | |
| AAA rating | 0.9 |
| AA rating | 53.9 |
| A rating | 29.6 |
| BBB rating | 11.5 |
| BB rating | 1.9 |
| Not rated | 2.2 |
| Total | 100.0 |
Percentages indicated are based
upon total fixed income investments.
Bond ratings apply to the underlying
holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the
highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not
rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily.
The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other
issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such
security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
| 4 | Columbia California Intermediate Municipal Bond Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
During the 12-month period that
ended April 30, 2020, the Fund’s Class A shares returned 0.17% excluding sales charges. Institutional Class shares of the Fund returned 0.31%. During the same time period, the Bloomberg Barclays California 3-15
Year Blend Municipal Bond Index returned 2.64%, and the Bloomberg Barclays 3-15 Year Blend Municipal Bond Index returned 2.40%. The Fund’s underperformance was primarily the result of the relative weakness of
its positions in lower rated investment-grade issues during the sell-off late in the period.
Market overview
Despite elevated volatility late
in the period, municipal bonds posted a positive total return for the full 12 months that ended April 30, 2020. The vast majority of the gain came from income, as prices were relatively flat.
U.S. tax-exempt debt performed
reasonably well from the beginning of the period through early March 2020. During this time, the broader fixed-income market was aided by the backdrop of slow global growth and periodic “flights to
quality” brought about by headlines regarding the U.S.-China trade dispute. The U.S. Federal Reserve (Fed) also supported the market through its shift to a more accommodative policy stance, highlighted by
quarter-point interest rate cuts at its meetings in July 2019, September 2019, and December 2019. Munis were further boosted by the combination of strong investor demand and a manageable level of new-issue supply.
This favorable backdrop changed
suddenly in March 2020, when the spread of COVID-19 dramatically reshaped the investment landscape over the span of a few short months. The rapid rise of cases in Europe and the United States prompted travel
restrictions, non-essential business closures and shelter-in-place orders. The unprecedented halt to substantial portions of the economy left investors struggling to price risk assets appropriately in the new reality.
Massive selling flooded the market, with municipal funds experiencing their first outflow in 61 weeks. The tax-exempt market suffered some of the worst days in its history in March 2020 as a result.
The sell-off reached a crescendo
late in March 2020, at which point tax-exempt issues began to recover much of their lost ground. The Fed cut rates to zero and announced a number of new liquidity facilities, and Congress approved a stimulus package
of more than $2 trillion. Investors also grew increasingly hopeful about the potential for a gradual re-opening of the economy. Still, municipal bonds experienced negative price returns for the full 12 months that
ended April 30, 2020.
Within the municipal market, higher
quality issues outperformed high yield due largely to investors’ clear preference for lower risk assets in the latter part of the period. Longer term issues modestly outpaced their shorter dated counterparts.
California’s higher quality
market outperformed
California intermediate-term
municipal bonds slightly exceeded the return of the national intermediate index, primarily as a result of the state’s higher average credit quality. In particular, the national index was hurt by steep price
declines in bonds related to Illinois, the city of Chicago, and New Jersey. In contrast, the California intermediate municipal market benefited from its large weighting in state general obligation and state
appropriated debt, both of which fared well. Additionally, the repeal of state and local tax deductions provided a source of continued investor demand in high-tax states such as California. Although the state’s
already-volatile revenue streams were exacerbated by COVID-19, investors appeared confident that its economy would continue to grow at a pace above the national average once the virus subsides and activity returns to
normal.
Contributors and detractors
The Fund’s underperformance
was primarily the result of the relative weakness of its positions in lower rated investment-grade issues during the sell-off. At the sector level, overweights in the transportation and education sectors detracted
from Fund performance. Both sectors lagged due to their higher vulnerability to revenue declines stemming from efforts to mitigate COVID-19. Travel by airplane or automobile fell sharply as states implemented
stay-at-home protocols, while many colleges had to refund housing charges after closing campuses and conducting classes remotely.
On the positive side, the Fund
benefited from an overweight in special property tax related issues. Bonds with special property tax pledges continued to be well supported on expectations that tax delinquencies stay in check and property values
would remain relatively stable. Essential-service bonds in the water/sewer and public power sectors also performed well. Investors generally viewed these areas as being insulated from economic downturns and market
stress on the expectation that customers would continue to pay their water and electricity bills.
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Columbia California Intermediate Municipal Bond Fund | Annual Report 2020
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5 |
Manager Discussion of Fund Performance (continued)
Fund positioning
Our strategy remained largely
consistent throughout the period. We focused on repositioning the Fund out of short-maturity, low-yielding holdings, such as pre-refunded issues and those we believed would be refinanced. Our new purchases for the
Fund averaged maturities of 12 years and ratings of A1, and they encompassed a variety of sectors. Reflecting our goal of moving the Fund up in quality, we increased the Fund’s allocation to AA rated bonds and
reduced its weighting in those rated A and BBB. The Fund’s average maturity stood at 9.3 years at the close of the period, compared with 9.5 at the close of the previous reporting period.
We continued to be selective when
evaluating lower investment-grade and non-rated securities, as yield spreads were extremely tight for the majority of the year. Only in the last two months of the period, when COVID-19 became the primary driver of
market performance, did spreads widen. In response to the impact of COVID-19 on the market, we intensified our review of the Fund’s positioning across sectors and issuers to identify those that we believed were
most susceptible to mitigation efforts, and we reduced allocations to those we believed would suffer the largest impact. Believing the damage for many issues would likely extend beyond this temporary economic
“pause,” we think credit should generally be evaluated through a long-term lens that balances the possibility of a near-term recovery with longer term safety of principal. With this said, we are cautiously
optimistic about the prospects of a reopening of the U.S. economy, which would be very beneficial to most areas of the municipal market.
Fixed-income securities present
issuer default risk. The Fund invests substantially in municipal securities and will be affected by tax, legislative, regulatory, demographic or political changes, as well as changes impacting a state’s financial, economic or other
conditions. A relatively small number of tax-exempt issuers may necessitate the Fund investing more heavily in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly.
The value of the Fund’s portfolio may be more volatile than a more geographically diversified fund. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise
which may reduce investment opportunities and potential returns. 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. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Federal and state tax rules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state or local taxes. Liquidity risk is associated with the difficulty of selling investments at a desirable time or price. 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 California Intermediate Municipal Bond 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.
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Columbia California Intermediate Municipal Bond Fund | Annual Report 2020
|
7 |
Portfolio of Investments
April 30, 2020
April 30, 2020
(Percentages represent value of
investments compared to net assets)
Investments in securities
| Municipal Bonds (continued) | ||||
| Issue Description |
Coupon
Rate |
Principal
Amount ($) |
Value ($) | |
| Series 2014C | ||||
| 03/01/2030 | 5.000% | 2,500,000 | 2,764,500 | |
| San Diego County Regional Airport Authority | ||||
| Refunding Revenue Bonds | ||||
| Subordinated Series 2017A | ||||
| 07/01/2033 | 5.000% | 1,000,000 | 1,150,290 | |
| 07/01/2034 | 5.000% | 700,000 | 802,977 | |
| San Diego County Regional Airport Authority(c) | ||||
| Refunding Revenue Bonds | ||||
| Subordinated Series 2019B | ||||
| 07/01/2036 | 5.000% | 1,540,000 | 1,752,705 | |
| Subordinated Series 2020 | ||||
| 07/01/2036 | 5.000% | 495,000 | 569,691 | |
| 07/01/2039 | 5.000% | 400,000 | 455,724 | |
| San Francisco City & County Airport Commission - San Francisco International Airport | ||||
| Refunding Revenue Bonds | ||||
| 2nd Series 2011 | ||||
| 05/01/2026 | 5.250% | 555,000 | 575,463 | |
| 2nd Series 2016A | ||||
| 05/01/2026 | 5.000% | 1,975,000 | 2,338,775 | |
| San Francisco Airport Commission Project | ||||
| Series 2019 | ||||
| 05/01/2036 | 5.000% | 3,205,000 | 3,827,764 | |
| San Francisco City & County Airport Commission - San Francisco International Airport(c) | ||||
| Refunding Revenue Bonds | ||||
| Series 2019H | ||||
| 05/01/2026 | 5.000% | 1,140,000 | 1,320,439 | |
| Revenue Bonds | ||||
| Series 2019E | ||||
| 05/01/2037 | 5.000% | 4,000,000 | 4,594,800 | |
| Total | 41,209,647 | |||
| Charter Schools 3.7% | ||||
| California Infrastructure & Economic Development Bank | ||||
| Revenue Bonds | ||||
| Equitable School Revolving Fund | ||||
| Series 2019 | ||||
| 11/01/2039 | 5.000% | 275,000 | 323,232 | |
| California School Finance Authority(d) | ||||
| Refunding Revenue Bonds | ||||
| Aspire Public Schools | ||||
| Series 2016 | ||||
| 08/01/2029 | 5.000% | 1,100,000 | 1,148,334 | |
| 08/01/2030 | 5.000% | 1,505,000 | 1,562,310 | |
| 08/01/2031 | 5.000% | 925,000 | 955,636 | |
| Revenue Bonds | ||||
| Alliance College-Ready Public Schools | ||||
| Series 2015 | ||||
| 07/01/2030 | 5.000% | 3,400,000 | 3,543,106 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 8 | Columbia California Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia California Intermediate Municipal Bond Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia California Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia California Intermediate Municipal Bond Fund | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 12 | Columbia California Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia California Intermediate Municipal Bond Fund | Annual Report 2020
|
13 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
| Municipal Bonds (continued) | ||||
| Issue Description |
Coupon
Rate |
Principal
Amount ($) |
Value ($) | |
| California Statewide Communities Development Authority | ||||
| Prerefunded 08/15/20 Revenue Bonds | ||||
| Sutter Health | ||||
| Series 2011A | ||||
| 08/15/2026 | 5.500% | 1,000,000 | 1,013,910 | |
| City of Los Angeles | ||||
| Prerefunded 09/01/21 Unlimited General Obligation Bonds | ||||
| Series 2011A | ||||
| 09/01/2025 | 5.000% | 3,000,000 | 3,166,530 | |
| City of Newport Beach | ||||
| Prerefunded 12/01/21 Revenue Bonds | ||||
| Hoag Memorial Hospital Presbyterian | ||||
| Series 2011 | ||||
| 12/01/2030 | 5.875% | 1,000,000 | 1,082,070 | |
| City of Santa Clara Electric | ||||
| Prereunded 07/01/21 Revenue Bonds | ||||
| Series 2011A | ||||
| 07/01/2029 | 5.375% | 1,000,000 | 1,053,470 | |
| Long Beach Community College District | ||||
| Prerefunded 08/01/22 Unlimited General Obligation Bonds | ||||
| 2008 Election | ||||
| Series 2012B | ||||
| 08/01/2023 | 5.000% | 700,000 | 767,648 | |
| Pasadena Public Financing Authority | ||||
| Prerefunded 03/01/21 Revenue Bonds | ||||
| Rose Bowl Renovation | ||||
| Series 2010A | ||||
| 03/01/2026 | 5.000% | 2,500,000 | 2,589,725 | |
| San Diego County Regional Airport Authority | ||||
| Prerefunded 07/01/20 Subordinated Revenue Bonds | ||||
| Series 2010A | ||||
| 07/01/2024 | 5.000% | 1,000,000 | 1,006,090 | |
| San Francisco City & County Airport Commission - San Francisco International Airport | ||||
| Prerefunded 05/03/21 Revenue Bonds | ||||
| Series 2011-2 | ||||
| 05/01/2026 | 5.250% | 1,445,000 | 1,509,779 | |
| Semitropic Improvement District | ||||
| Prerefunded 12/01/22 Revenue Bonds | ||||
| Series 2012A | ||||
| 12/01/2023 | 5.000% | 2,850,000 | 3,150,590 | |
| Sulphur Springs Union School District | ||||
| Prerefunded 09/01/22 Special Tax Bonds | ||||
| Community Facilities District | ||||
| Series 2012 | ||||
| 09/01/2028 | 5.000% | 520,000 | 570,201 | |
| 09/01/2029 | 5.000% | 585,000 | 641,476 | |
| Total | 20,124,279 | |||
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 14 | Columbia California Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia California Intermediate Municipal Bond Fund | Annual Report 2020
|
15 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 16 | Columbia California Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia California Intermediate Municipal Bond Fund | Annual Report 2020
|
17 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
| Municipal Bonds (continued) | ||||
| Issue Description |
Coupon
Rate |
Principal
Amount ($) |
Value ($) | |
| Union Sanitary District Financing Author | ||||
| Revenue Bonds | ||||
| Series 2020A | ||||
| 09/01/2037 | 4.000% | 400,000 | 457,324 | |
| 09/01/2038 | 4.000% | 325,000 | 369,701 | |
| 09/01/2039 | 4.000% | 600,000 | 680,592 | |
| Total | 13,111,774 | |||
|
Total Municipal Bonds
(Cost $418,528,450) |
427,863,664 | |||
| Money Market Funds 2.3% | ||
| Shares | Value ($) | |
| Dreyfus AMT-Free Tax Exempt Cash Management Fund, Institutional Shares, 0.164%(g) | 147,709 | 147,694 |
| JPMorgan Institutional Tax Free Money Market Fund, Institutional Shares, 0.180%(g) | 9,968,517 | 9,968,517 |
|
Total Money Market Funds
(Cost $10,116,225) |
10,116,211 | |
|
Total Investments in Securities
(Cost: $434,429,675) |
443,764,875 | |
| Other Assets & Liabilities, Net | (804,034) | |
| Net Assets | 442,960,841 | |
Notes to Portfolio of
Investments
| (a) | The Fund is entitled to receive principal and interest from the guarantor after a day or a week’s notice or upon maturity. The maturity date disclosed represents the final maturity. |
| (b) | Represents a variable rate security where the coupon rate adjusts on specified dates (generally daily or weekly) using the prevailing money market rate. The interest rate shown was the current rate as of April 30, 2020. |
| (c) | Income from this security may be subject to alternative minimum tax. |
| (d) | 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 April 30, 2020, the total value of these securities amounted to $19,316,150, which represents 4.36% of total net assets. |
| (e) | Zero coupon bond. |
| (f) | Represents a security purchased on a when-issued basis. |
| (g) | The rate shown is the seven-day current annualized yield at April 30, 2020. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| AMBAC | Ambac Assurance Corporation |
| BAM | Build America Mutual Assurance Co. |
| BAN | Bond Anticipation Note |
| NPFGC | National Public Finance Guarantee Corporation |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 18 | Columbia California Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 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 April 30, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Floating Rate Notes | — | 5,785,000 | — | 5,785,000 |
| Municipal Bonds | — | 427,863,664 | — | 427,863,664 |
| Money Market Funds | 10,116,211 | — | — | 10,116,211 |
| Total Investments in Securities | 10,116,211 | 433,648,664 | — | 443,764,875 |
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.
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia California Intermediate Municipal Bond Fund | Annual Report 2020
|
19 |
Statement of Assets and Liabilities
April 30, 2020
April 30, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $434,429,675) | $443,764,875 |
| Cash | 6,532 |
| Receivable for: | |
| Investments sold | 210,059 |
| Capital shares sold | 588,029 |
| Interest | 4,966,137 |
| Expense reimbursement due from Investment Manager | 1,686 |
| Prepaid expenses | 823 |
| Total assets | 449,538,141 |
| Liabilities | |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 4,569,126 |
| Capital shares purchased | 1,013,195 |
| Distributions to shareholders | 861,945 |
| Management services fees | 5,664 |
| Distribution and/or service fees | 495 |
| Transfer agent fees | 48,057 |
| Compensation of board members | 72,657 |
| Other expenses | 6,161 |
| Total liabilities | 6,577,300 |
| Net assets applicable to outstanding capital stock | $442,960,841 |
| Represented by | |
| Paid in capital | 438,487,045 |
| Total distributable earnings (loss) | 4,473,796 |
| Total - representing net assets applicable to outstanding capital stock | $442,960,841 |
| Class A | |
| Net assets | $31,401,536 |
| Shares outstanding | 3,067,208 |
| Net asset value per share | $10.24 |
| Maximum sales charge | 3.00% |
| 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) | $10.56 |
| Advisor Class | |
| Net assets | $2,354,453 |
| Shares outstanding | 230,618 |
| Net asset value per share | $10.21 |
| Class C | |
| Net assets | $10,386,842 |
| Shares outstanding | 1,015,160 |
| Net asset value per share | $10.23 |
| Institutional Class | |
| Net assets | $382,664,900 |
| Shares outstanding | 37,462,233 |
| Net asset value per share | $10.21 |
| Institutional 2 Class | |
| Net assets | $10,845,788 |
| Shares outstanding | 1,064,919 |
| Net asset value per share | $10.18 |
| Institutional 3 Class | |
| Net assets | $5,307,322 |
| Shares outstanding | 519,887 |
| Net asset value per share | $10.21 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 20 | Columbia California Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Operations
Year Ended April 30, 2020
Year Ended April 30, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $121,288 |
| Interest | 13,240,922 |
| Interfund lending | 482 |
| Total income | 13,362,692 |
| Expenses: | |
| Management services fees | 2,061,046 |
| Distribution and/or service fees | |
| Class A | 79,069 |
| Class C | 110,601 |
| Transfer agent fees | |
| Class A | 37,564 |
| Advisor Class | 3,273 |
| Class C | 13,126 |
| Institutional Class | 449,899 |
| Institutional 2 Class | 7,472 |
| Institutional 3 Class | 530 |
| Compensation of board members | 7,646 |
| Custodian fees | 4,219 |
| Printing and postage fees | 17,539 |
| Registration fees | 17,875 |
| Audit fees | 27,100 |
| Legal fees | 12,260 |
| Compensation of chief compliance officer | 94 |
| Other | 12,739 |
| Total expenses | 2,862,052 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (507,174) |
| Expense reduction | (20) |
| Total net expenses | 2,354,858 |
| Net investment income | 11,007,834 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (402,775) |
| Net realized loss | (402,775) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (10,259,961) |
| Net change in unrealized appreciation (depreciation) | (10,259,961) |
| Net realized and unrealized loss | (10,662,736) |
| Net increase in net assets resulting from operations | $345,098 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia California Intermediate Municipal Bond Fund | Annual Report 2020
|
21 |
Statement of Changes in Net Assets
|
Year Ended
April 30, 2020 |
Year Ended
April 30, 2019 |
|
| Operations | ||
| Net investment income | $11,007,834 | $11,436,557 |
| Net realized gain (loss) | (402,775) | 339,238 |
| Net change in unrealized appreciation (depreciation) | (10,259,961) | 8,178,888 |
| Net increase in net assets resulting from operations | 345,098 | 19,954,683 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (725,273) | (766,498) |
| Advisor Class | (69,934) | (57,996) |
| Class C | (170,563) | (235,470) |
| Institutional Class | (9,604,298) | (10,042,410) |
| Institutional 2 Class | (323,534) | (269,809) |
| Institutional 3 Class | (114,507) | (64,374) |
| Total distributions to shareholders | (11,008,109) | (11,436,557) |
| Increase (decrease) in net assets from capital stock activity | 51,042,670 | (22,401,162) |
| Total increase (decrease) in net assets | 40,379,659 | (13,883,036) |
| Net assets at beginning of year | 402,581,182 | 416,464,218 |
| Net assets at end of year | $442,960,841 | $402,581,182 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 22 | Columbia California Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| April 30, 2020 | April 30, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 913,135 | 9,698,460 | 1,221,766 | 12,574,432 |
| Distributions reinvested | 59,744 | 635,235 | 66,432 | 684,127 |
| Redemptions | (964,067) | (10,226,058) | (902,313) | (9,277,531) |
| Net increase | 8,812 | 107,637 | 385,885 | 3,981,028 |
| Advisor Class | ||||
| Subscriptions | 140,274 | 1,492,366 | 95,131 | 974,459 |
| Distributions reinvested | 6,559 | 69,630 | 5,598 | 57,516 |
| Redemptions | (132,178) | (1,354,984) | (74,024) | (760,670) |
| Net increase | 14,655 | 207,012 | 26,705 | 271,305 |
| Class C | ||||
| Subscriptions | 87,790 | 927,960 | 121,594 | 1,247,406 |
| Distributions reinvested | 12,229 | 130,000 | 17,202 | 176,928 |
| Redemptions | (152,244) | (1,606,884) | (392,556) | (4,036,023) |
| Net decrease | (52,225) | (548,924) | (253,760) | (2,611,689) |
| Institutional Class | ||||
| Subscriptions | 10,501,340 | 110,653,165 | 11,652,199 | 119,527,666 |
| Distributions reinvested | 221,814 | 2,353,657 | 227,694 | 2,339,160 |
| Redemptions | (6,146,605) | (64,470,459) | (14,798,720) | (151,356,387) |
| Net increase (decrease) | 4,576,549 | 48,536,363 | (2,918,827) | (29,489,561) |
| Institutional 2 Class | ||||
| Subscriptions | 417,161 | 4,431,416 | 962,491 | 9,856,030 |
| Distributions reinvested | 30,536 | 323,277 | 26,300 | 269,512 |
| Redemptions | (407,144) | (4,270,053) | (687,725) | (6,997,453) |
| Net increase | 40,553 | 484,640 | 301,066 | 3,128,089 |
| Institutional 3 Class | ||||
| Subscriptions | 288,319 | 3,069,271 | 355,216 | 3,652,149 |
| Distributions reinvested | 10,782 | 114,233 | 6,236 | 64,072 |
| Redemptions | (88,923) | (927,562) | (136,640) | (1,396,555) |
| Net increase | 210,178 | 2,255,942 | 224,812 | 2,319,666 |
| Total net increase (decrease) | 4,798,522 | 51,042,670 | (2,234,119) | (22,401,162) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia California Intermediate Municipal Bond 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 |
Total
distributions to shareholders |
|
| Class A | ||||||
| Year Ended 4/30/2020 | $10.46 | 0.24 | (0.22) | 0.02 | (0.24) | (0.24) |
| Year Ended 4/30/2019 | $10.23 | 0.27 | 0.23 | 0.50 | (0.27) | (0.27) |
| Year Ended 4/30/2018 | $10.38 | 0.27 | (0.15) | 0.12 | (0.27) | (0.27) |
| Year Ended 4/30/2017 | $10.72 | 0.26 | (0.34) | (0.08) | (0.26) | (0.26) |
| Year Ended 4/30/2016 | $10.50 | 0.27 | 0.22 | 0.49 | (0.27) | (0.27) |
| Advisor Class | ||||||
| Year Ended 4/30/2020 | $10.43 | 0.27 | (0.22) | 0.05 | (0.27) | (0.27) |
| Year Ended 4/30/2019 | $10.20 | 0.30 | 0.23 | 0.53 | (0.30) | (0.30) |
| Year Ended 4/30/2018 | $10.36 | 0.29 | (0.16) | 0.13 | (0.29) | (0.29) |
| Year Ended 4/30/2017 | $10.69 | 0.29 | (0.33) | (0.04) | (0.29) | (0.29) |
| Year Ended 4/30/2016 | $10.46 | 0.29 | 0.24 | 0.53 | (0.30) | (0.30) |
| Class C | ||||||
| Year Ended 4/30/2020 | $10.46 | 0.16 | (0.23) | (0.07) | (0.16) | (0.16) |
| Year Ended 4/30/2019 | $10.22 | 0.20 | 0.24 | 0.44 | (0.20) | (0.20) |
| Year Ended 4/30/2018 | $10.38 | 0.19 | (0.16) | 0.03 | (0.19) | (0.19) |
| Year Ended 4/30/2017 | $10.72 | 0.18 | (0.34) | (0.16) | (0.18) | (0.18) |
| Year Ended 4/30/2016 | $10.49 | 0.19 | 0.23 | 0.42 | (0.19) | (0.19) |
| Institutional Class | ||||||
| Year Ended 4/30/2020 | $10.44 | 0.27 | (0.23) | 0.04 | (0.27) | (0.27) |
| Year Ended 4/30/2019 | $10.21 | 0.30 | 0.23 | 0.53 | (0.30) | (0.30) |
| Year Ended 4/30/2018 | $10.36 | 0.29 | (0.15) | 0.14 | (0.29) | (0.29) |
| Year Ended 4/30/2017 | $10.70 | 0.28 | (0.33) | (0.05) | (0.29) | (0.29) |
| Year Ended 4/30/2016 | $10.47 | 0.30 | 0.23 | 0.53 | (0.30) | (0.30) |
| Institutional 2 Class | ||||||
| Year Ended 4/30/2020 | $10.41 | 0.27 | (0.22) | 0.05 | (0.28) | (0.28) |
| Year Ended 4/30/2019 | $10.18 | 0.30 | 0.23 | 0.53 | (0.30) | (0.30) |
| Year Ended 4/30/2018 | $10.33 | 0.30 | (0.15) | 0.15 | (0.30) | (0.30) |
| Year Ended 4/30/2017 | $10.67 | 0.29 | (0.34) | (0.05) | (0.29) | (0.29) |
| Year Ended 4/30/2016 | $10.44 | 0.31 | 0.23 | 0.54 | (0.31) | (0.31) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 24 | Columbia California Intermediate Municipal Bond 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 4/30/2020 | $10.24 | 0.17% | 0.86% | 0.75%(c) | 2.30% | 6% | $31,402 |
| Year Ended 4/30/2019 | $10.46 | 5.00% | 0.87% | 0.74%(c) | 2.67% | 17% | $31,998 |
| Year Ended 4/30/2018 | $10.23 | 1.10% | 0.88% | 0.74%(c) | 2.56% | 5% | $27,341 |
| Year Ended 4/30/2017 | $10.38 | (0.75%) | 0.92% | 0.74%(c) | 2.45% | 17% | $31,273 |
| Year Ended 4/30/2016 | $10.72 | 4.76% | 0.94% | 0.74%(c) | 2.58% | 8% | $51,869 |
| Advisor Class | |||||||
| Year Ended 4/30/2020 | $10.21 | 0.41% | 0.61% | 0.50%(c) | 2.54% | 6% | $2,354 |
| Year Ended 4/30/2019 | $10.43 | 5.28% | 0.62% | 0.49%(c) | 2.92% | 17% | $2,254 |
| Year Ended 4/30/2018 | $10.20 | 1.25% | 0.63% | 0.49%(c) | 2.83% | 5% | $1,931 |
| Year Ended 4/30/2017 | $10.36 | (0.42%) | 0.67% | 0.49%(c) | 2.71% | 17% | $903 |
| Year Ended 4/30/2016 | $10.69 | 5.13% | 0.69% | 0.49%(c) | 2.81% | 8% | $1,457 |
| Class C | |||||||
| Year Ended 4/30/2020 | $10.23 | (0.68%) | 1.61% | 1.50%(c) | 1.54% | 6% | $10,387 |
| Year Ended 4/30/2019 | $10.46 | 4.32% | 1.62% | 1.49%(c) | 1.92% | 17% | $11,161 |
| Year Ended 4/30/2018 | $10.22 | 0.25% | 1.63% | 1.49%(c) | 1.81% | 5% | $13,508 |
| Year Ended 4/30/2017 | $10.38 | (1.49%) | 1.67% | 1.49%(c) | 1.71% | 17% | $15,503 |
| Year Ended 4/30/2016 | $10.72 | 4.08% | 1.69% | 1.49%(c) | 1.83% | 8% | $14,549 |
| Institutional Class | |||||||
| Year Ended 4/30/2020 | $10.21 | 0.31% | 0.61% | 0.50%(c) | 2.54% | 6% | $382,665 |
| Year Ended 4/30/2019 | $10.44 | 5.27% | 0.62% | 0.49%(c) | 2.92% | 17% | $343,276 |
| Year Ended 4/30/2018 | $10.21 | 1.35% | 0.63% | 0.49%(c) | 2.82% | 5% | $365,455 |
| Year Ended 4/30/2017 | $10.36 | (0.51%) | 0.67% | 0.49%(c) | 2.71% | 17% | $371,130 |
| Year Ended 4/30/2016 | $10.70 | 5.12% | 0.69% | 0.49%(c) | 2.83% | 8% | $378,630 |
| Institutional 2 Class | |||||||
| Year Ended 4/30/2020 | $10.18 | 0.37% | 0.55% | 0.44% | 2.60% | 6% | $10,846 |
| Year Ended 4/30/2019 | $10.41 | 5.34% | 0.56% | 0.43% | 2.98% | 17% | $10,662 |
| Year Ended 4/30/2018 | $10.18 | 1.42% | 0.56% | 0.42% | 2.89% | 5% | $7,363 |
| Year Ended 4/30/2017 | $10.33 | (0.42%) | 0.55% | 0.41% | 2.80% | 17% | $4,867 |
| Year Ended 4/30/2016 | $10.67 | 5.23% | 0.55% | 0.39% | 2.93% | 8% | $2,829 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia California Intermediate Municipal Bond Fund | Annual Report 2020
|
25 |
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 |
Total
distributions to shareholders |
|
| Institutional 3 Class | ||||||
| Year Ended 4/30/2020 | $10.43 | 0.28 | (0.22) | 0.06 | (0.28) | (0.28) |
| Year Ended 4/30/2019 | $10.20 | 0.31 | 0.23 | 0.54 | (0.31) | (0.31) |
| Year Ended 4/30/2018 | $10.35 | 0.30 | (0.15) | 0.15 | (0.30) | (0.30) |
| Year Ended 4/30/2017(d) | $10.27 | 0.05 | 0.08 | 0.13 | (0.05) | (0.05) |
| 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) | Institutional 3 Class shares commenced operations on March 1, 2017. 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.
| 26 | Columbia California Intermediate Municipal Bond 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) |
|
| Institutional 3 Class | |||||||
| Year Ended 4/30/2020 | $10.21 | 0.52% | 0.50% | 0.39% | 2.64% | 6% | $5,307 |
| Year Ended 4/30/2019 | $10.43 | 5.39% | 0.51% | 0.38% | 3.02% | 17% | $3,231 |
| Year Ended 4/30/2018 | $10.20 | 1.46% | 0.52% | 0.38% | 2.95% | 5% | $866 |
| Year Ended 4/30/2017(d) | $10.35 | 1.27% | 0.52%(e) | 0.36%(e) | 2.98%(e) | 17% | $10 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia California Intermediate Municipal Bond Fund | Annual Report 2020
|
27 |
Notes to Financial Statements
April 30, 2020
April 30, 2020
Note 1. Organization
Columbia California Intermediate
Municipal Bond 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 net investment income 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
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.
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.
| 28 | Columbia California Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
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.
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.
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.
Dividend income is recorded on the
ex-dividend date.
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 net tax-exempt and 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 daily and paid monthly. 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.
|
Columbia California Intermediate Municipal Bond Fund | Annual Report 2020
|
29 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
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 0.47% to 0.31% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30, 2020 was 0.47% 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. The expense for the Deferred Plan, which includes trustees’ fees deferred during the current period as well as any
gains or losses on the Trustees’ deferred compensation balances as a result of market fluctuations, is included in "Compensation of board members" on the Statement of Operations.
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.
| 30 | Columbia California Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
For the year ended April 30, 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 | 0.06 |
| 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 April 30, 2020, these minimum account balance fees reduced total expenses of
the Fund by $20.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays a
monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class C shares of the Fund and a monthly distribution fee to the Distributor at the maximum
annual rate of 0.75% of the average daily net assets attributable to Class C shares of the Fund.
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended April 30, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 3.00 | 0.75(a) | 40,116 |
| Class C | — | 1.00(b) | 545 |
| (a) | This charge is imposed on certain investments of $500,000 or more if redeemed within 12 months after purchase. |
| (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.
|
Columbia California Intermediate Municipal Bond Fund | Annual Report 2020
|
31 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 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 April 30, 2020, these
differences were primarily due to differing treatment for trustees’ deferred compensation, distributions, and capital loss carryforward. 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 April 30, 2020 | Year Ended April 30, 2019 | ||||||
|
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 65,502 | 10,942,607 | — | 11,008,109 | 57,658 | 11,378,899 | — | 11,436,557 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At April 30, 2020, the components
of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed tax-
exempt income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| — | 881,578 | — | (4,809,244) | 9,335,200 |
| 32 | Columbia California Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
At April 30, 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) ($) |
Net unrealized
appreciation ($) |
| 434,429,675 | 14,639,536 | (5,304,336) | 9,335,200 |
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 April 30, 2020, may be available to reduce future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code. In addition, for the year ended April 30,
2020, capital loss carryforwards utilized, if any, were as follows:
|
No expiration
short-term ($) |
No expiration
long-term ($) |
Total ($) | Utilized ($) |
| (4,407,034) | (402,210) | (4,809,244) | — |
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 $79,546,330 and $25,190,723, respectively, for the year ended April 30, 2020. The amount of purchase and sale
activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the
Interfund Program during the year ended April 30, 2020 was as follows:
| Borrower or lender |
Average loan
balance ($) |
Weighted average
interest rate (%) |
Number of days
with outstanding loans |
| Lender | 6,600,000 | 2.63 | 1 |
Interest income earned by the Fund
is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at April 30, 2020.
Note 7. 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
|
Columbia California Intermediate Municipal Bond Fund | Annual Report 2020
|
33 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
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 April 30, 2020.
Note 8. Significant
risks
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.
Geographic concentration risk
Because the Fund invests
substantially in municipal securities issued by the state identified in the Fund’s name and political sub-divisions of that state, the Fund will be particularly affected by adverse tax, legislative, regulatory,
demographic or political changes as well as changes impacting the state’s financial, economic or other condition and prospects. In addition, because of the relatively small number of issuers of tax-exempt
securities in the state, the Fund may invest a higher percentage of assets in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of municipal and other
securities owned by the Fund also may be adversely affected by future changes in federal or state income tax laws.
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.
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 the 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
| 34 | Columbia California Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
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 its investment objective. 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 its employees and to assure the continuity of its
business operations, the Investment Manager and its affiliates have implemented a work from home protocol for virtually all of its 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. The Investment Manager’s operations teams seek to operate without significant disruptions in service.
Its 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. The Fund cannot,
however, predict the impact that natural or man-made disasters, including the COVID-19 pandemic, may have on the ability of the Investment Manager, its employees and third-party service providers to continue ordinary
business operations and technology functions over near- or longer-term periods.
Shareholder concentration risk
At April 30, 2020, one unaffiliated
shareholder of record owned 66.3% 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. 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 9. 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 10. 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 California Intermediate Municipal Bond Fund | Annual Report 2020
|
35 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 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.
| 36 | Columbia California Intermediate Municipal Bond 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 California Intermediate Municipal Bond Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia California Intermediate Municipal Bond Fund (one of the funds constituting Columbia Funds Series Trust, referred to hereafter as
the "Fund") as of April 30, 2020, the related statement of operations for the year ended April 30, 2020, the statement of changes in net assets for each of the two years in the period ended April 30, 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 April 30, 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
April 30, 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 April 30, 2020 by correspondence with the custodian 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
June 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
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Columbia California Intermediate Municipal Bond Fund | Annual Report 2020
|
37 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended April 30, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Exempt-
interest dividends |
|
| 99.40% |
Exempt-interest dividends. The
percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes. A portion of the income may be subject to federal alternative minimum
tax.
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 California Intermediate Municipal Bond 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 California Intermediate Municipal Bond 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 | 117 | Director, NAPE Education Foundation since October 2016 |
| 40 | Columbia California Intermediate Municipal Bond Fund | 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 California Intermediate Municipal Bond 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 |
|
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. |
Liquidity Risk
Management Program
Pursuant to Rule 22e-4 under the
1940 Act, the Fund has adopted a liquidity risk management program (“Program”). The Program’s principal objectives include assessing, managing and periodically reviewing the Fund’s liquidity
risk. Liquidity risk is defined as the risk that the Fund could not meet redemption requests without significant dilution of remaining investors’ interests in the Fund.
The Board has appointed the
Investment Manager as the program administrator for the Fund’s Program. The Investment Manager has delegated oversight of the Program to its Liquidity Risk Management Committee (the “Committee”). At
a board meeting during the fiscal period, the Committee provided the Board with a report addressing the operations of the program and assessing its adequacy and effectiveness of implementation for the period December
1, 2018, through December 31, 2019, including:
| • | the Fund had sufficient liquidity to both meet redemptions and operate effectively on behalf of shareholders; |
| • | there were no material changes to the Program during the period; |
| 42 | Columbia California Intermediate Municipal Bond Fund | Annual Report 2020 |
Liquidity Risk Management Program (continued)
| • | the implementation of the Program was effective to manage the Fund’s liquidity risk; and |
| • | the Program operated adequately during the period. |
There can be no assurance that the
Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an
investment in the Fund may be subject.
|
Columbia California Intermediate Municipal Bond Fund | Annual Report 2020
|
43 |
Columbia California Intermediate Municipal Bond
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/
ANN122_04_K01_(06/20)
Annual Report
April 30, 2020
April 30, 2020
Columbia Short Term
Municipal Bond 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 Federally Insured • No
Financial Institution Guarantee • May Lose Value
Table of Contents
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Columbia Short Term Municipal Bond
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 Short Term Municipal Bond
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks current income exempt from federal income tax, consistent with minimal fluctuation of principal.
Portfolio management
Catherine Stienstra
Co-Portfolio Manager
Managed Fund since 2012
Anders Myhran, CFA
Co-Portfolio Manager
Managed Fund since 2015
Returns for Class A shares are shown
with and without the maximum initial sales charge of 1.00%. 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 Bloomberg Barclays 1-3 Year
Municipal Bond Index is an unmanaged index which consists of a broad selection of investment-grade general obligation and revenue bonds of maturities ranging from one year to three years.
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 Short Term Municipal Bond Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (April 30, 2010 — April 30, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Short Term Municipal Bond 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.
| Quality breakdown (%) (at April 30, 2020) | |
| AAA rating | 4.6 |
| AA rating | 23.9 |
| A rating | 37.4 |
| BBB rating | 15.0 |
| BB rating | 0.8 |
| Not rated | 18.3 |
| Total | 100.0 |
Percentages indicated are based
upon total fixed income investments.
Bond ratings apply to the underlying
holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the
highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not
rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily.
The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other
issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such
security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
|
Top Ten States/Territories (%)
(at April 30, 2020) |
|
| New York | 21.2 |
| Illinois | 13.4 |
| New Jersey | 6.3 |
| Massachusetts | 5.2 |
| Connecticut | 4.6 |
| Texas | 4.3 |
| Pennsylvania | 4.1 |
| Georgia | 3.5 |
| Indiana | 3.2 |
| Florida | 3.1 |
Percentages indicated are based
upon total investments excluding Money Market Funds and investments in derivatives, if any.
For further detail about these
holdings, please refer to the section entitled “Portfolio of Investments.”
Fund holdings are as of the date
given, are subject to change at any time, and are not recommendations to buy or sell any security.
| 4 | Columbia Short Term Municipal Bond Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that
ended April 30, 2020, the Fund’s Class A shares returned 0.63% excluding sales charges. Institutional Class shares of the Fund returned 0.89%. The Fund underperformed its benchmark, the Bloomberg Barclays 1-3
Year Municipal Bond Index, which returned 1.95% for the same period. Credit quality, sector positioning, security selection and duration positioning overall detracted from the Fund’s relative results,
attributable primarily to March and April 2020.
Short-term tax-exempt bond market
experienced an annual period cleaved in two
As the annual period began,
strong municipal bond mutual fund inflows, fueled by heightened demand as a result of state and local tax deductions, combined with meager new issue supply to propel municipal bonds to post solid gains through the
spring and summer months of 2019. For the third calendar quarter, short-term municipal bond yields ended near where they started, as the yield on the two-year AAA general obligation bond was lower by only three basis
points, while longer term bond yields declined more substantially. (A basis point is 1/100th of a percentage point. There is usually an inverse relationship between bond prices and yield movements, so that bond prices
rise when yields decrease and vice versa.) The fourth quarter of 2019 brought three consecutive months of positive performance for the municipal bond market, erasing the September drawdown. Short-term municipal bond
yields were lower, while longer term yields moved modestly higher. New issue supply picked up considerably in the fourth quarter, bringing the full-year 2019 total to $329.6 billion, 11.6% higher than the previous
year. The additional supply, however, was readily absorbed, as municipal bond mutual fund inflows eclipsed $24 billion for the quarter and set a record high of $93.6 billion for 2019. The backdrop of persistent fund
inflows was aided by the emergence of more issuers completing taxable refunding deals, reducing supply that would have otherwise come into the tax-exempt market. The fourth quarter of 2019 saw $42.7 billion of taxable
municipal supply, a 281% increase from the same period one year prior.
Though 2020 began with economic
prospects looking relatively positive, the spread of COVID-19 dramatically and quickly re-shaped global markets, cleaving the annual period in two. The abrupt halt to substantial portions of the economy left markets
struggling to appropriately price risk assets in this new reality. Against this backdrop, higher quality areas of the fixed-income market performed best during the first quarter of 2020, especially U.S. Treasuries.
Most other fixed-income sectors saw significant repricing. The U.S. Federal Reserve (Fed) took a series of unprecedented steps in March 2020 to shore up liquidity, backstop important sectors and provide stimulus. The
Fed slashed the federal funds target rate to near zero, relaunched quantitative easing and started numerous credit facilities to support various markets, including new measures to buy investment-grade corporate bonds
and to help buoy the municipal bond market. Congress and the White House also passed three phases of fiscal stimulus totaling more than $2 trillion. The net effect of these measures provided a bit of calm to markets,
sparking a performance recovery for many non-Treasury fixed-income sectors. Still, municipal bonds were not immune to the volatility, as the positive total returns experienced through February 2020 gave way in March
to some of the worst days in municipal bond market history. In early March, outflow pressure on municipal bond mutual funds for the first time in 61 weeks prompted massive selling. Yields across the municipal curve
moved higher. However, almost as quickly as yields increased, the lure of historically inexpensive valuations, coupled with Fed support, brought buyers back into the market, recovering a substantial portion of the
negative performance. After being down as much as 7.62% year-to-date 2020 in mid-March, the Bloomberg Barclays Municipal Bond Index ended the first quarter down only 0.63%. The short-term portion of the municipal bond
market, as measured by the benchmark, similarly ended the quarter down 0.75%. While the new-issue market had yet to fully come back online by quarter end, the initial signs of stabilization were a welcome reprieve
from volatility.
While monetary and fiscal policy
action in March 2020 was swift, and expanded with additional stimulus in April 2020, relatively little was viewed as directly targeted toward the municipal bond market. With state and local governments requiring
assistance and a number of municipal bond sectors directly in the crosshairs of the COVID-19 economic fallout, municipal bonds broadly underperformed U.S. Treasuries and significantly lagged corporate bonds in April.
Still, the short-term municipal bond market outperformed the broader municipal bond market, with the benchmark gaining 0.20% for the month as compared to a -1.26% return for the Bloomberg Barclays Municipal Bond
Index.
|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
Credit quality, sector
positioning and security selection overall dampened results
For the first 10 months of the
annual period, the Fund posted positive absolute returns that outpaced the benchmark. Virtually all of the Fund’s relative underperformance for the annual period overall can be attributed to the abrupt change in
market conditions beginning mid-March 2020. Importantly, though, during the turmoil of March 2020, when the municipal bond market was seized with near-panic selling, the Fund consistently maintained ample liquidity
and was never stressed for cash.
On an absolute basis, a primary
challenge during most of the annual period for investors in the short-term tax-exempt bond market, in addition to the generally low absolute yields and historically tight spreads (yield differentials to
duration-equivalent U.S. Treasuries), was the dramatic flattening of the one- to five-year portion of the municipal bond yield curve, or spectrum of maturities. This narrowing of the differential between yields of
different maturities made finding incremental yield and total return opportunities more difficult.
Relative to the benchmark, having
an underweighted allocation to bonds rated AAA and overweighted allocations to lower rated (A and BBB) investment-grade bonds detracted from the Fund’s results. Higher quality securities overall outperformed
lower quality securities during the annual period.
From a sector perspective, having
an underweight to pre-refunded bonds detracted from the Fund’s relative results. The pre-refunded sector is generally a higher quality one, which outperformed lower quality sectors during the annual period.
Having overweights to the weaker transportation (mostly airports), prepaid gas and hospital sectors also dampened the Fund’s results. Security selection among transportation, industry development
revenue/pollution control revenue, and hospital sector bonds hurt as well. From a state perspective, having an overweight to Illinois-based credits, which generally underperformed the benchmark during the annual
period, also hampered the Fund’s results during the annual period.
Further, the Fund’s yield
curve and duration positioning detracted from its relative results during the annual period. The Fund had an emphasis on securities with greater than three-year maturities, which are not part of the benchmark and
which underperformed the benchmark during the annual period. At the same time, the Fund had a shorter duration stance than that of the benchmark for most of the annual period, which hurt as interest rates fell for the
annual period overall.
Partially offsetting these
detractors was the positive contribution made by the Fund’s exposure to select non-rated securities that outperformed the benchmark during the annual period, including specific New York-based credits and certain
local general obligation bonds. Security selection among Illinois-based credits and having an overweight to the housing sector also added value.
Market conditions and fundamental
analysis drove portfolio changes
As discussed above, we adjusted
the Fund’s duration during the annual period, though it was shorter to neutral compared to the benchmark throughout. From a credit quality perspective, the Fund’s allocation to bonds rated A increased,
while its allocations to bonds rated AA and BBB decreased as did its exposure to non-rated bonds. All told, the Fund’s average quality moved slightly higher, as we maintained our broad up-in-quality bias
throughout.
We reduced the Fund’s
exposure to local general obligation bonds and housing bonds and increased its allocations to airport and hospital bonds, largely due to trades made in the first ten months of the annual period. We reduced the
Fund’s allocation to New York- and Illinois-based credits and increased exposure to Connecticut-based credits. Overall, purchases for the Fund were focused on finding bonds offering attractive yield for reasons
not linked or due to lower quality. We also adjusted the Fund’s yield curve positioning, shortening the average maturity of securities held in an attempt to reduce exposure to maturities beyond those within the
benchmark.
Fixed-income securities present
issuer default risk. The Fund invests substantially in municipal securities and will be affected by tax, legislative, regulatory, demographic or political changes, as well as changes impacting a state’s financial, economic or other
conditions. A relatively small number of tax-exempt issuers may necessitate the Fund investing more heavily in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly.
Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise
which may reduce investment opportunities and potential returns. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. A rise in interest rates may result in a price decline of fixed-income instruments held by the Fund, negatively
| 6 | Columbia Short Term Municipal Bond Fund | Annual Report 2020 |
Manager Discussion of Fund Performance (continued)
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. Federal and state tax rules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state, local or alternative minimum taxes. 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.
|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
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 Short Term Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments
April 30, 2020
April 30, 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.
|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
| Municipal Bonds (continued) | ||||
| Issue Description |
Coupon
Rate |
Principal
Amount ($) |
Value ($) | |
| County of Riverside(d) | ||||
| Revenue Bonds | ||||
| Series 1989A Escrowed to Maturity (GNMA) | ||||
| 05/01/2021 | 7.800% | 1,500,000 | 1,599,000 | |
| Palomar Health | ||||
| Refunding Revenue Bonds | ||||
| Series 2016 | ||||
| 11/01/2020 | 5.000% | 2,235,000 | 2,269,173 | |
| San Francisco City & County Airport Commission - San Francisco International Airport(d) | ||||
| Refunding Revenue Bonds | ||||
| Series 2019H | ||||
| 05/01/2021 | 5.000% | 2,570,000 | 2,652,780 | |
| Total | 11,664,694 | |||
| Colorado 1.1% | ||||
| City & County of Denver Airport System(d) | ||||
| Refunding Revenue Bonds | ||||
| Series 2017A | ||||
| 11/15/2030 | 5.000% | 1,925,000 | 2,258,545 | |
| Colorado Health Facilities Authority | ||||
| Refunding Revenue Bonds | ||||
| CommonSpirit Health | ||||
| Series 2019B (Mandatory Put 08/01/26) | ||||
| 08/01/2049 | 5.000% | 2,000,000 | 2,260,040 | |
| University of Colorado Hospital Authority | ||||
| Revenue Bonds | ||||
| Obligation Group | ||||
| Series 2017 (Mandatory Put 03/01/22) | ||||
| 11/15/2038 | 5.000% | 3,650,000 | 3,815,929 | |
| Total | 8,334,514 | |||
| Connecticut 4.3% | ||||
| City of Bridgeport | ||||
| Unlimited General Obligation Refunding Bonds | ||||
| Series 2017B | ||||
| 08/15/2026 | 5.000% | 3,250,000 | 3,828,370 | |
| City of Waterbury | ||||
| Unlimited General Obligation Bonds | ||||
| Series 2017A | ||||
| 11/15/2020 | 4.000% | 350,000 | 355,841 | |
| 11/15/2021 | 5.000% | 500,000 | 530,380 | |
| Unlimited General Obligation Refunding Bonds | ||||
| Series 2017B | ||||
| 09/01/2020 | 4.000% | 330,000 | 333,373 | |
| 09/01/2021 | 5.000% | 425,000 | 447,372 | |
| Connecticut Housing Finance Authority(d) | ||||
| Refunding Revenue Bonds | ||||
| Series 2019F-4 (Mandatory Put 11/15/20) | ||||
| 11/15/2041 | 1.450% | 2,000,000 | 2,000,380 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Short Term Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 12 | Columbia Short Term Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
13 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 14 | Columbia Short Term Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
15 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 16 | Columbia Short Term Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
17 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
| Municipal Bonds (continued) | ||||
| Issue Description |
Coupon
Rate |
Principal
Amount ($) |
Value ($) | |
| South Carolina Jobs-Economic Development Authority(e) | ||||
| Revenue Bonds | ||||
| Royal Live Oaks Academy Project | ||||
| Series 2018 | ||||
| 08/01/2020 | 3.000% | 2,700,000 | 2,700,513 | |
| South Carolina Ports Authority(d) | ||||
| Revenue Bonds | ||||
| Series 2018 | ||||
| 07/01/2020 | 5.000% | 500,000 | 503,230 | |
| South Carolina State Housing Finance & Development Authority | ||||
| Revenue Bonds | ||||
| Series 2020A | ||||
| 01/01/2024 | 1.500% | 1,090,000 | 1,085,923 | |
| 07/01/2024 | 1.550% | 575,000 | 573,022 | |
| Total | 6,866,228 | |||
| Texas 4.0% | ||||
| City of Houston Airport System(d) | ||||
| Refunding Revenue Bonds | ||||
| Subordinated Series 2018 Class C | ||||
| 07/01/2027 | 5.000% | 1,890,000 | 2,182,232 | |
| City of San Antonio Airport System(d) | ||||
| Refunding Revenue Bonds | ||||
| Lien | ||||
| Subordinated Series 2019A | ||||
| 07/01/2024 | 5.000% | 1,000,000 | 1,099,550 | |
| Dallas/Fort Worth International Airport(d) | ||||
| Refunding Revenue Bonds | ||||
| Series 2013E AMT | ||||
| 11/01/2020 | 5.000% | 4,975,000 | 5,044,202 | |
| Harris County Cultural Education Facilities Finance Corp. | ||||
| Revenue Bonds | ||||
| National Western Life Group | ||||
| Series 2019A (Mandatory Put 12/01/26) | ||||
| 07/01/2049 | 5.000% | 2,500,000 | 3,009,400 | |
| Harris County Cultural Education Facilities Finance Corp.(c) | ||||
| Revenue Bonds | ||||
| Natus Medical, Inc. | ||||
| Series 2019 (Mandatory Put 12/04/24) | ||||
|
Muni Swap Index Yield + 0.570%
12/01/2049 |
0.790% | 2,000,000 | 1,950,460 | |
| Houston Independent School District Public Facility Corp.(f) | ||||
| Revenue Bonds | ||||
| Capital Appreciation-Cesar E. Chavez | ||||
| Series 1998A (AMBAC) | ||||
| 09/15/2020 | 0.000% | 2,685,000 | 2,674,770 | |
| Lewisville Independent School District(f) | ||||
| Unlimited General Obligation Refunding Bonds | ||||
| Series 2014B | ||||
| 08/15/2022 | 0.000% | 3,175,000 | 3,087,942 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 18 | Columbia Short Term Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
19 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 20 | Columbia Short Term Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
| Money Market Funds 1.6% | ||
| Shares | Value ($) | |
| Dreyfus AMT-Free Tax Exempt Cash Management Fund, Institutional Shares, 0.164%(i) | 87,946 | 87,937 |
| JPMorgan Institutional Tax Free Money Market Fund, Institutional Shares, 0.180%(i) | 12,029,656 | 12,029,656 |
|
Total Money Market Funds
(Cost $12,117,594) |
12,117,593 | |
|
Total Investments in Securities
(Cost $697,950,556) |
694,633,580 | |
| Other Assets & Liabilities, Net | 41,844,916 | |
| Net Assets | $736,478,496 | |
Notes to Portfolio of
Investments
| (a) | The Fund is entitled to receive principal and interest from the guarantor after a day or a week’s notice or upon maturity. The maturity date disclosed represents the final maturity. |
| (b) | Represents a variable rate security where the coupon rate adjusts on specified dates (generally daily or weekly) using the prevailing money market rate. The interest rate shown was the current rate as of April 30, 2020. |
| (c) | Variable rate security. The interest rate shown was the current rate as of April 30, 2020. |
| (d) | Income from this security may be subject to alternative minimum tax. |
| (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 April 30, 2020, the total value of these securities amounted to $10,696,106, which represents 1.45% of total net assets. |
| (f) | Zero coupon bond. |
| (g) | Municipal obligations include debt obligations issued by or on behalf of territories, possessions, or sovereign nations within the territorial boundaries of the United States. At April 30, 2020, the total value of these securities amounted to $751,853, which represents 0.10% of total net assets. |
| (h) | Represents a security purchased on a when-issued basis. |
| (i) | The rate shown is the seven-day current annualized yield at April 30, 2020. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| AMBAC | Ambac Assurance Corporation |
| AMT | Alternative Minimum Tax |
| BAN | Bond Anticipation Note |
| FHA | Federal Housing Authority |
| FNMA | Federal National Mortgage Association |
| GNMA | Government National Mortgage Association |
| LIBOR | London Interbank Offered Rate |
| NPFGC | National Public Finance Guarantee Corporation |
| RAN | Revenue Anticipation Note |
| TAN | Tax Anticipation Note |
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 Short Term Municipal Bond Fund | Annual Report 2020
|
21 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 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.
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 April 30, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Floating Rate Notes | — | 3,650,000 | — | 3,650,000 |
| Municipal Bonds | — | 599,457,307 | — | 599,457,307 |
| Municipal Short Term | — | 79,408,680 | — | 79,408,680 |
| Money Market Funds | 12,117,593 | — | — | 12,117,593 |
| Total Investments in Securities | 12,117,593 | 682,515,987 | — | 694,633,580 |
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.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 22 | Columbia Short Term Municipal Bond Fund | Annual Report 2020 |
Statement of Assets and Liabilities
April 30, 2020
April 30, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $697,950,556) | $694,633,580 |
| Cash | 14,688 |
| Receivable for: | |
| Investments sold | 424,030 |
| Capital shares sold | 40,813,871 |
| Interest | 7,802,314 |
| Expense reimbursement due from Investment Manager | 2,713 |
| Prepaid expenses | 1,131 |
| Total assets | 743,692,327 |
| Liabilities | |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 4,951,221 |
| Capital shares purchased | 1,103,373 |
| Distributions to shareholders | 988,129 |
| Management services fees | 8,173 |
| Distribution and/or service fees | 517 |
| Transfer agent fees | 17,599 |
| Compensation of board members | 137,503 |
| Other expenses | 7,316 |
| Total liabilities | 7,213,831 |
| Net assets applicable to outstanding capital stock | $736,478,496 |
| Represented by | |
| Paid in capital | 746,641,736 |
| Total distributable earnings (loss) | (10,163,240) |
| Total - representing net assets applicable to outstanding capital stock | $736,478,496 |
| Class A | |
| Net assets | $61,986,673 |
| Shares outstanding | 6,043,641 |
| Net asset value per share | $10.26 |
| Maximum sales charge | 1.00% |
| 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 | $1,700,929 |
| Shares outstanding | 165,590 |
| Net asset value per share | $10.27 |
| Class C | |
| Net assets | $3,463,867 |
| Shares outstanding | 337,963 |
| Net asset value per share | $10.25 |
| Institutional Class | |
| Net assets | $86,869,540 |
| Shares outstanding | 8,469,719 |
| Net asset value per share | $10.26 |
| Institutional 2 Class | |
| Net assets | $71,372,182 |
| Shares outstanding | 6,961,992 |
| Net asset value per share | $10.25 |
| Institutional 3 Class | |
| Net assets | $511,085,305 |
| Shares outstanding | 49,850,247 |
| Net asset value per share | $10.25 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
23 |
Statement of Operations
Year Ended April 30, 2020
Year Ended April 30, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $71,053 |
| Interest | 17,439,134 |
| Total income | 17,510,187 |
| Expenses: | |
| Management services fees | 3,511,060 |
| Distribution and/or service fees | |
| Class A | 173,156 |
| Class C | 45,117 |
| Transfer agent fees | |
| Class A | 64,230 |
| Advisor Class | 3,094 |
| Class C | 4,212 |
| Institutional Class | 96,919 |
| Institutional 2 Class | 15,546 |
| Institutional 3 Class | 47,410 |
| Compensation of board members | 6,567 |
| Custodian fees | 7,882 |
| Printing and postage fees | 18,517 |
| Registration fees | 96,977 |
| Audit fees | 33,100 |
| Legal fees | 16,085 |
| Interest on interfund lending | 1,869 |
| Compensation of chief compliance officer | 170 |
| Other | 19,526 |
| Total expenses | 4,161,437 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (1,121,225) |
| Fees waived by transfer agent | |
| Institutional 2 Class | (852) |
| Institutional 3 Class | (30,458) |
| Expense reduction | (20) |
| Total net expenses | 3,008,882 |
| Net investment income | 14,501,305 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (1,298,712) |
| Net realized loss | (1,298,712) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (4,774,105) |
| Net change in unrealized appreciation (depreciation) | (4,774,105) |
| Net realized and unrealized loss | (6,072,817) |
| Net increase in net assets resulting from operations | $8,428,488 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 24 | Columbia Short Term Municipal Bond Fund | Annual Report 2020 |
Statement of Changes in Net Assets
|
Year Ended
April 30, 2020 |
Year Ended
April 30, 2019 |
|
| Operations | ||
| Net investment income | $14,501,305 | $17,461,341 |
| Net realized loss | (1,298,712) | (3,463,090) |
| Net change in unrealized appreciation (depreciation) | (4,774,105) | 12,199,546 |
| Net increase in net assets resulting from operations | 8,428,488 | 26,197,797 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (1,041,153) | (1,100,433) |
| Advisor Class | (58,538) | (25,479) |
| Class C | (34,487) | (57,844) |
| Institutional Class | (1,829,256) | (1,850,159) |
| Institutional 2 Class | (502,315) | (351,280) |
| Institutional 3 Class | (11,276,477) | (14,457,188) |
| Total distributions to shareholders | (14,742,226) | (17,842,383) |
| Decrease in net assets from capital stock activity | (135,972,060) | (267,210,033) |
| Total decrease in net assets | (142,285,798) | (258,854,619) |
| Net assets at beginning of year | 878,764,294 | 1,137,618,913 |
| Net assets at end of year | $736,478,496 | $878,764,294 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
25 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| April 30, 2020 | April 30, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 2,227,206 | 23,116,765 | 5,549,430 | 57,137,206 |
| Distributions reinvested | 84,604 | 880,458 | 91,113 | 938,366 |
| Redemptions | (2,872,681) | (29,722,450) | (7,183,034) | (73,938,052) |
| Net decrease | (560,871) | (5,725,227) | (1,542,491) | (15,862,480) |
| Advisor Class | ||||
| Subscriptions | 240,454 | 2,503,382 | 341,970 | 3,523,934 |
| Distributions reinvested | 1,549 | 16,145 | 1,462 | 15,076 |
| Redemptions | (272,017) | (2,782,359) | (206,901) | (2,134,146) |
| Net increase (decrease) | (30,014) | (262,832) | 136,531 | 1,404,864 |
| Class C | ||||
| Subscriptions | 87,760 | 902,703 | 196,085 | 2,012,868 |
| Distributions reinvested | 2,621 | 27,260 | 3,945 | 40,613 |
| Redemptions | (363,677) | (3,778,224) | (595,991) | (6,136,830) |
| Net decrease | (273,296) | (2,848,261) | (395,961) | (4,083,349) |
| Institutional Class | ||||
| Subscriptions | 5,057,825 | 52,680,566 | 4,294,471 | 44,184,155 |
| Distributions reinvested | 149,034 | 1,551,336 | 145,824 | 1,502,190 |
| Redemptions | (6,814,884) | (70,140,596) | (5,347,389) | (55,060,061) |
| Net decrease | (1,608,025) | (15,908,694) | (907,094) | (9,373,716) |
| Institutional 2 Class | ||||
| Subscriptions | 5,574,378 | 57,391,600 | 1,969,551 | 20,327,164 |
| Distributions reinvested | 28,124 | 292,438 | 17,250 | 177,688 |
| Redemptions | (1,281,861) | (13,315,497) | (1,179,839) | (12,137,714) |
| Net increase | 4,320,641 | 44,368,541 | 806,962 | 8,367,138 |
| Institutional 3 Class | ||||
| Subscriptions | 2,422,041 | 25,185,200 | 3,780,277 | 38,902,377 |
| Distributions reinvested | 6,035 | 62,744 | 5,028 | 51,775 |
| Redemptions | (17,384,087) | (180,843,531) | (27,872,296) | (286,616,642) |
| Net decrease | (14,956,011) | (155,595,587) | (24,086,991) | (247,662,490) |
| Total net decrease | (13,107,576) | (135,972,060) | (25,989,044) | (267,210,033) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 26 | Columbia Short Term Municipal Bond Fund | Annual Report 2020 |
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|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
27 |
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 4/30/2020 | $10.35 | 0.15 | (0.08) | 0.07 | (0.16) | (0.16) |
| Year Ended 4/30/2019 | $10.26 | 0.15 | 0.09 | 0.24 | (0.15) | (0.15) |
| Year Ended 4/30/2018 | $10.36 | 0.11 | (0.09) | 0.02 | (0.12) | (0.12) |
| Year Ended 4/30/2017 | $10.43 | 0.09 | (0.06) | 0.03 | (0.10) | (0.10) |
| Year Ended 4/30/2016 | $10.42 | 0.07 | 0.01 | 0.08 | (0.07) | (0.07) |
| Advisor Class | ||||||
| Year Ended 4/30/2020 | $10.36 | 0.18 | (0.09) | 0.09 | (0.18) | (0.18) |
| Year Ended 4/30/2019 | $10.27 | 0.18 | 0.09 | 0.27 | (0.18) | (0.18) |
| Year Ended 4/30/2018 | $10.36 | 0.14 | (0.09) | 0.05 | (0.14) | (0.14) |
| Year Ended 4/30/2017 | $10.43 | 0.12 | (0.07) | 0.05 | (0.12) | (0.12) |
| Year Ended 4/30/2016 | $10.41 | 0.09 | 0.02 | 0.11 | (0.09) | (0.09) |
| Class C | ||||||
| Year Ended 4/30/2020 | $10.34 | 0.08 | (0.09) | (0.01) | (0.08) | (0.08) |
| Year Ended 4/30/2019 | $10.25 | 0.07 | 0.10 | 0.17 | (0.08) | (0.08) |
| Year Ended 4/30/2018 | $10.35 | 0.03 | (0.09) | (0.06) | (0.04) | (0.04) |
| Year Ended 4/30/2017 | $10.42 | 0.01 | (0.06) | (0.05) | (0.02) | (0.02) |
| Year Ended 4/30/2016 | $10.42 | (0.01) | 0.01 | 0.00(e) | (0.00)(e) | (0.00)(e) |
| Institutional Class | ||||||
| Year Ended 4/30/2020 | $10.35 | 0.18 | (0.09) | 0.09 | (0.18) | (0.18) |
| Year Ended 4/30/2019 | $10.26 | 0.18 | 0.09 | 0.27 | (0.18) | (0.18) |
| Year Ended 4/30/2018 | $10.36 | 0.13 | (0.09) | 0.04 | (0.14) | (0.14) |
| Year Ended 4/30/2017 | $10.43 | 0.12 | (0.07) | 0.05 | (0.12) | (0.12) |
| Year Ended 4/30/2016 | $10.42 | 0.09 | 0.01 | 0.10 | (0.09) | (0.09) |
| Institutional 2 Class | ||||||
| Year Ended 4/30/2020 | $10.35 | 0.18 | (0.09) | 0.09 | (0.19) | (0.19) |
| Year Ended 4/30/2019 | $10.26 | 0.18 | 0.09 | 0.27 | (0.18) | (0.18) |
| Year Ended 4/30/2018 | $10.35 | 0.15 | (0.09) | 0.06 | (0.15) | (0.15) |
| Year Ended 4/30/2017 | $10.42 | 0.13 | (0.07) | 0.06 | (0.13) | (0.13) |
| Year Ended 4/30/2016 | $10.41 | 0.10 | 0.01 | 0.11 | (0.10) | (0.10) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 28 | Columbia Short Term Municipal Bond 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 4/30/2020 | $10.26 | 0.63% | 0.80%(c) | 0.66%(c),(d) | 1.48% | 58% | $61,987 |
| Year Ended 4/30/2019 | $10.35 | 2.39% | 0.81% | 0.66%(d) | 1.44% | 55% | $68,355 |
| Year Ended 4/30/2018 | $10.26 | 0.16% | 0.81% | 0.67%(d) | 1.08% | 36% | $83,580 |
| Year Ended 4/30/2017 | $10.36 | 0.26% | 0.86% | 0.71%(d) | 0.86% | 46% | $106,751 |
| Year Ended 4/30/2016 | $10.43 | 0.74% | 0.89% | 0.72%(d) | 0.64% | 37% | $127,769 |
| Advisor Class | |||||||
| Year Ended 4/30/2020 | $10.27 | 0.89% | 0.55%(c) | 0.41%(c),(d) | 1.72% | 58% | $1,701 |
| Year Ended 4/30/2019 | $10.36 | 2.64% | 0.56% | 0.41%(d) | 1.74% | 55% | $2,027 |
| Year Ended 4/30/2018 | $10.27 | 0.51% | 0.56% | 0.42%(d) | 1.33% | 36% | $607 |
| Year Ended 4/30/2017 | $10.36 | 0.51% | 0.62% | 0.45%(d) | 1.15% | 46% | $1,041 |
| Year Ended 4/30/2016 | $10.43 | 1.09% | 0.64% | 0.47%(d) | 0.89% | 37% | $544 |
| Class C | |||||||
| Year Ended 4/30/2020 | $10.25 | (0.12%) | 1.55%(c) | 1.41%(c),(d) | 0.74% | 58% | $3,464 |
| Year Ended 4/30/2019 | $10.34 | 1.62% | 1.55% | 1.41%(d) | 0.69% | 55% | $6,322 |
| Year Ended 4/30/2018 | $10.25 | (0.59%) | 1.56% | 1.42%(d) | 0.33% | 36% | $10,327 |
| Year Ended 4/30/2017 | $10.35 | (0.48%) | 1.61% | 1.46%(d) | 0.11% | 46% | $14,630 |
| Year Ended 4/30/2016 | $10.42 | 0.00%(e) | 1.64% | 1.47%(d) | (0.10%) | 37% | $19,074 |
| Institutional Class | |||||||
| Year Ended 4/30/2020 | $10.26 | 0.89% | 0.55%(c) | 0.41%(c),(d) | 1.72% | 58% | $86,870 |
| Year Ended 4/30/2019 | $10.35 | 2.64% | 0.56% | 0.41%(d) | 1.70% | 55% | $104,300 |
| Year Ended 4/30/2018 | $10.26 | 0.40% | 0.58% | 0.44%(d) | 1.21% | 36% | $112,699 |
| Year Ended 4/30/2017 | $10.36 | 0.51% | 0.61% | 0.46%(d) | 1.11% | 46% | $1,366,779 |
| Year Ended 4/30/2016 | $10.43 | 0.99% | 0.64% | 0.47%(d) | 0.89% | 37% | $1,623,807 |
| Institutional 2 Class | |||||||
| Year Ended 4/30/2020 | $10.25 | 0.83% | 0.51%(c) | 0.37%(c) | 1.77% | 58% | $71,372 |
| Year Ended 4/30/2019 | $10.35 | 2.69% | 0.51% | 0.36% | 1.76% | 55% | $27,329 |
| Year Ended 4/30/2018 | $10.26 | 0.55% | 0.51% | 0.37% | 1.41% | 36% | $18,813 |
| Year Ended 4/30/2017 | $10.35 | 0.61% | 0.50% | 0.36% | 1.21% | 46% | $14,452 |
| Year Ended 4/30/2016 | $10.42 | 1.10% | 0.49% | 0.37% | 1.00% | 37% | $22,159 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
29 |
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 4/30/2020 | $10.35 | 0.19 | (0.10) | 0.09 | (0.19) | (0.19) |
| Year Ended 4/30/2019 | $10.25 | 0.18 | 0.11 | 0.29 | (0.19) | (0.19) |
| Year Ended 4/30/2018 | $10.36 | 0.15 | (0.11) | 0.04 | (0.15) | (0.15) |
| Year Ended 4/30/2017(f) | $10.35 | 0.02 | 0.01(g) | 0.03 | (0.02) | (0.02) |
| 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) | Rounds to zero. |
| (f) | Institutional 3 Class shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (g) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized gain (loss) presented in the Statement of Operations due to the timing of subscriptions and redemptions of Fund shares in relation to fluctuations in the market value of the portfolio. |
| (h) | Annualized. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 30 | Columbia Short Term Municipal Bond 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 4/30/2020 | $10.25 | 0.88% | 0.46%(c) | 0.32%(c) | 1.82% | 58% | $511,085 |
| Year Ended 4/30/2019 | $10.35 | 2.84% | 0.46% | 0.32% | 1.78% | 55% | $670,432 |
| Year Ended 4/30/2018 | $10.25 | 0.41% | 0.46% | 0.33% | 1.50% | 36% | $911,594 |
| Year Ended 4/30/2017(f) | $10.36 | 0.33% | 0.50%(h) | 0.31%(h) | 1.42%(h) | 46% | $10 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
31 |
Notes to Financial Statements
April 30, 2020
April 30, 2020
Note 1. Organization
Columbia Short Term Municipal
Bond 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 net investment income 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
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.
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.
| 32 | Columbia Short Term Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
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.
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.
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.
Dividend income is recorded on the
ex-dividend date.
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 net tax-exempt and 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 daily and paid monthly. 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.
|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
33 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
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 0.43% to 0.28% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30, 2020 was 0.43% 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. The expense for the Deferred Plan, which includes trustees’ fees deferred during the current period as well as any
gains or losses on the Trustees’ deferred compensation balances as a result of market fluctuations, is included in "Compensation of board members" on the Statement of Operations.
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
| 34 | Columbia Short Term Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
share class. In addition, effective September 1,
2019 through August 31, 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 April 30, 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 | 0.09 |
| Advisor Class | 0.09 |
| Class C | 0.09 |
| Institutional Class | 0.09 |
| Institutional 2 Class | 0.05 |
| Institutional 3 Class | 0.00 |
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 April 30, 2020, these minimum account balance fees reduced total expenses of
the Fund by $20.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays a
monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class C shares of the Fund and a monthly distribution fee to the Distributor at the maximum
annual rate of 0.75% of the average daily net assets attributable to Class C shares of the Fund.
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended April 30, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 1.00 | 0.50(a) | 49,520 |
| Class C | — | 1.00(b) | 585 |
| (a) | This charge is imposed on certain investments of $500,000 or more if redeemed within 12 months after purchase. |
| (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.
|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
35 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 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, effective September 1, 2019 through August 31, 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.
At April 30, 2020, these
differences were primarily due to differing treatment for trustees’ deferred compensation, tax straddles, distributions, and capital loss carryforward. 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 April 30, 2020 | Year Ended April 30, 2019 | ||||||
|
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 9,270 | 14,732,956 | — | 14,742,226 | — | 17,842,383 | — | 17,842,383 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
| 36 | Columbia Short Term Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
At April 30, 2020, the components
of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed tax-
exempt income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
(depreciation) ($) |
| — | 1,230,105 | — | (6,949,256) | (3,319,559) |
At April 30, 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) ($) |
Net unrealized
(depreciation) ($) |
| 697,953,139 | 2,421,951 | (5,741,510) | (3,319,559) |
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 April 30, 2020, may be available to reduce future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code. In addition, for the year ended April 30,
2020, capital loss carryforwards utilized, if any, were as follows:
|
No expiration
short-term ($) |
No expiration
long-term ($) |
Total ($) | Utilized ($) |
| (2,416,275) | (4,532,981) | (6,949,256) | — |
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 $413,394,638 and $577,497,180, respectively, for the year ended April 30, 2020. The amount of purchase and
sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the
Interfund Program during the year ended April 30, 2020 was as follows:
| Borrower or lender |
Average loan
balance ($) |
Weighted average
interest rate (%) |
Number of days
with outstanding loans |
| Borrower | 6,480,000 | 2.08 | 5 |
Interest expense incurred by the
Fund is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at April 30, 2020.
|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
37 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
Note 7. 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 April 30, 2020.
Note 8. Significant
risks
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.
New York geographic concentration
risk
To the extent that the Fund
concentrates its investments in the municipal securities issued by a particular state and political sub-divisions of the state, the Fund will be particularly affected by political and economic conditions and
developments in such state in which it invests. The Fund may, therefore, have a greater risk than that of a municipal bond fund which is more geographically diversified. The value of the municipal securities owned by
the Fund also may be adversely affected by future changes in federal or state income tax laws.
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.
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
| 38 | Columbia Short Term Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
liquidity in equity, credit and/or fixed income
markets may negatively affect many issuers, which could adversely affect the 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 its investment objective. 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 its employees and to assure the continuity of its
business operations, the Investment Manager and its affiliates have implemented a work from home protocol for virtually all of its 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. The Investment Manager’s operations teams seek to operate without significant disruptions in service.
Its 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. The Fund cannot,
however, predict the impact that natural or man-made disasters, including the COVID-19 pandemic, may have on the ability of the Investment Manager, its employees and third-party service providers to continue ordinary
business operations and technology functions over near- or longer-term periods.
Municipal securities risk
Securities issued by a particular
state and its instrumentalities are subject to the risk of unfavorable developments in such state. A municipal security can be significantly affected by adverse tax, legislative, regulatory, demographic or political
changes as well as changes in a particular state’s (state and its instrumentalities’) financial, economic or other condition and prospects.
Shareholder concentration risk
At April 30, 2020, one unaffiliated
shareholder of record owned 75.9% 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. 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.
|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
39 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
Note 9. 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 10. 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.
| 40 | Columbia Short Term Municipal Bond 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 Short Term Municipal Bond Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Short Term Municipal Bond Fund (one of the funds constituting Columbia Funds Series Trust, referred to hereafter as the "Fund")
as of April 30, 2020, the related statement of operations for the year ended April 30, 2020, the statement of changes in net assets for each of the two years in the period ended April 30, 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 April 30, 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 April 30,
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 April 30, 2020 by correspondence with the custodian, 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
June 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
|
Columbia Short Term Municipal Bond Fund | Annual Report 2020
|
41 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended April 30, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Exempt-
interest dividends |
|
| 99.94% |
Exempt-interest dividends. The
percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes. A portion of the income may be subject to federal alternative minimum
tax.
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 |
| 42 | Columbia Short Term Municipal Bond 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 Short Term Municipal Bond Fund | Annual Report 2020
|
43 |
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 | 117 | Director, NAPE Education Foundation since October 2016 |
| 44 | Columbia Short Term Municipal Bond Fund | 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 Short Term Municipal Bond Fund | Annual Report 2020
|
45 |
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. |
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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). |
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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. |
Liquidity Risk
Management Program
Pursuant to Rule 22e-4 under the
1940 Act, the Fund has adopted a liquidity risk management program (“Program”). The Program’s principal objectives include assessing, managing and periodically reviewing the Fund’s liquidity
risk. Liquidity risk is defined as the risk that the Fund could not meet redemption requests without significant dilution of remaining investors’ interests in the Fund.
The Board has appointed the
Investment Manager as the program administrator for the Fund’s Program. The Investment Manager has delegated oversight of the Program to its Liquidity Risk Management Committee (the “Committee”). At
a board meeting during the fiscal period, the Committee provided the Board with a report addressing the operations of the program and assessing its adequacy and effectiveness of implementation for the period December
1, 2018, through December 31, 2019, including:
| • | the Fund had sufficient liquidity to both meet redemptions and operate effectively on behalf of shareholders; |
| • | there were no material changes to the Program during the period; |
| 46 | Columbia Short Term Municipal Bond Fund | Annual Report 2020 |
Liquidity Risk Management Program (continued)
| • | the implementation of the Program was effective to manage the Fund’s liquidity risk; and |
| • | the Program operated adequately during the period. |
There can be no assurance that the
Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an
investment in the Fund may be subject.
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Columbia Short Term Municipal Bond Fund | Annual Report 2020
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47 |
Columbia Short Term Municipal Bond 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/
ANN223_04_K01_(06/20)
Annual Report
April 30, 2020
April 30, 2020
Columbia Virginia
Intermediate Municipal Bond 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 Federally Insured • No
Financial Institution Guarantee • May Lose Value
Table of Contents
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Columbia Virginia Intermediate
Municipal Bond 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 Virginia Intermediate Municipal Bond
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks current income exempt from U.S. federal income tax and Virginia individual income tax, consistent with moderate fluctuation of principal.
Portfolio management
Paul Fuchs, CFA
Lead Portfolio Manager
Managed Fund since 2016
Anders Myhran, CFA
Portfolio Manager
Managed Fund since May 2019
Deborah Vargo
Portfolio Manager
Managed Fund since 2017
Returns for Class A shares are shown
with and without the maximum initial sales charge of 3.00%. 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 Bloomberg Barclays 3–15
Year Blend Municipal Bond Index is an unmanaged index that tracks the performance of municipal bonds issued after December 31, 1990, with remaining maturities between 2 and 17 years and at least $7 million in
principal amount outstanding.
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.
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Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020
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3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (April 30, 2010 — April 30, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Virginia Intermediate Municipal Bond 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.
| Quality breakdown (%) (at April 30, 2020) | |
| AAA rating | 10.1 |
| AA rating | 61.7 |
| A rating | 15.3 |
| BBB rating | 7.1 |
| BB rating | 0.6 |
| Not rated | 5.2 |
| Total | 100.0 |
Percentages indicated are based
upon total fixed income investments.
Bond ratings apply to the underlying
holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the
highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not
rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily.
The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other
issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such
security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
| 4 | Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that
ended April 30, 2020, the Fund’s Class A shares returned 1.35% excluding sales charges. Institutional Class shares of the Fund returned 1.70%. The Fund’s benchmark, the Bloomberg Barclays 3-15 Year Blend
Municipal Bond Index, returned 2.40% for the same time period. The Fund underperformed its benchmark, which is national in scope, during the reporting period, as a small number of issues with specific credit
challenges outweighed the benefit from the higher quality core of the portfolio.
Market overview
Despite elevated volatility late
in the period, municipal bonds posted a positive total return for the full 12 months that ended April 30, 2020. The vast majority of the gain came from income, as prices were relatively flat.
U.S. tax-exempt debt performed
reasonably well from the beginning of the period through early March 2020. During this time, the broader fixed-income market was aided by the backdrop of slow global growth and periodic “flights to
quality” brought about by headlines regarding the U.S.-China trade dispute. The U.S. Federal Reserve (Fed) also supported the market through its shift to a more accommodative policy stance, highlighted by
quarter-point interest rate cuts at its meetings in July 2019, September 2019, and December 2019. Municipal bonds were further boosted by the combination of strong investor demand and a manageable level of new-issue
supply.
This favorable backdrop changed
suddenly in March 2020, when the spread of COVID-19 dramatically reshaped the investment landscape over the span of a few short months. The rapid rise of cases in Europe and the United States prompted travel
restrictions, non-essential business closures and shelter-in-place orders. The unprecedented halt to substantial portions of the economy left investors struggling to price risk assets appropriately in the new reality.
Massive selling flooded the market, with municipal funds experiencing their first outflow in 61 weeks. The tax-exempt market suffered some of the worst days in its history in March 2020 as a result.
The sell-off reached a crescendo
late in March 2020, at which point tax-exempt issues began to recover much of their lost ground. The Fed cut rates to zero and announced a number of new liquidity facilities, and Congress approved a stimulus package
of more than $2 trillion. Investors also grew increasingly hopeful about the potential for a gradual re-opening of the economy. Still, municipal bonds experienced negative price returns for the full 12 months that
ended April 30, 2020.
Within the municipal market, higher
quality issues outperformed high yield due largely to investors’ clear preference for lower risk assets in the latter part of the period. Longer term issues modestly outpaced their shorter dated counterparts.
Virginia’s above-average
credit quality helped its relative performance
Virginia municipal securities
outperformed the benchmark, which is national in scope. The state’s above-average credit quality was a tailwind for returns given the relative strength for higher rated issues. More than 90% of Virginia’s
market is rated in the top two categories (AAA and AA), versus less than 70% nationally. The state has a weighting of only 7% in lower rated A and BBB securities, whereas the national benchmark holds over 30% in this
area. This high-quality tilt provided Virginia with a return advantage at a time in which AAAs exceeded the returns of BBBs by a wide margin. AA rated bonds in the national benchmark were weighed down by a number of
specific issuers in the transportation and hospital sectors, as well as those backed by sales taxes. In addition, the state’s leasing and education sectors performed well compared to their U.S. peers.
Prior to the March 2020 downturn,
Virginia’s municipal market reflected the state’s healthy underlying fundamentals. Virginia benefited from the combination of above-average growth, robust fiscal management and low debt. The state was hit
hard by the pandemic, however, with one of the largest increases in unemployment claims since the beginning of the COVID-19 crisis. In addition, income and sales are the state’s two leading sources of revenue,
and both were significantly affected by the shutdowns associated with the virus.
Contributors and detractors
The Fund underperformed the
national benchmark during the reporting period, as a small number of issues with specific credit challenges outweighed the benefit from the higher quality core of the portfolio. Exposure to high yield and non-rated
credits in the special tax and continuing care retirement community sectors detracted given that certain issues in these areas struggled. Security selection in the AA and BBB credit tiers also hurt results. An
overweight in the hospitals, leasing,
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Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020
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5 |
Manager Discussion of Fund Performance (continued)
and transportation sectors, which experienced the
largest impact from COVID-19, was a further impediment. The portfolio’s duration (interest-rate sensitivity) was slightly below that of the benchmark for the bulk of the period, which detracted at a time in
which yields declined considerably.
On the positive side, the Fund
benefited from an overweight in higher rated investment-grade issues (those rated AAA and AA) and a corresponding underweight in those rated A and BBB. An overweight in pre-refunded bonds added value, as did security
selection in the leasing and transportation sectors.
Fund positioning
Our strategy remained largely
consistent throughout the year. We focused on repositioning the Fund out of short-maturity, low-yielding holdings, such as pre-refunded issues and those we believed would be refinanced. Our purchase activity for the
Fund was geared toward adding incremental yield without moving down in credit quality. The vast majority of our new purchases for the Fund were in the AA category, with a high representation of airports, hospitals,
and continuing care retirement communities. While we were comfortable with the credit prospects for all of these acquisitions, our timing was unfortunate given that these were some of the hardest-hit areas of the muni
market in the March 2020 sell-off.
The portfolio’s broader
profile was relatively stable over the course of the reporting period. The Fund finished April 2020 with slightly lower weightings in the education and water/sewer sectors and a larger allocation to pre-refunded
issues. The latter change primarily reflected issuers’ continued efforts to take advantage of near record low yields to refinance debt whenever possible. The Fund’s average credit quality rose somewhat as
a result of the refunding activity, with its weighting in AAAs rising while its allocations to those rated AA and A declined. The Fund’s average maturity declined modestly, from 9.0 years to 8.7. We favored
interest-rate risk over credit risk once market volatility increased, and we looked to the longer end of the maturity range for the most promising total return opportunities. As a result, the portfolio’s
duration (interest-rate sensitivity) moved slightly above the benchmark by the end of April 2020.
We continued to be selective when
evaluating lower investment-grade and non-rated securities, as yield spreads were extremely tight for the majority of the year. Only in the last two months of the period, when COVID-19 became the primary driver of
market performance, did spreads widen. In response to the impact of COVID-19 on the market, we intensified our review of the Fund’s positioning across sectors and issuers to identify those that we believed were
most susceptible to mitigation efforts, and we reduced allocations to those that we believed would suffer the largest impact. Believing the damage for many issues would likely extend beyond this temporary economic
“pause,” we think credit should generally be evaluated through a long-term lens that balances the possibility of a near-term recovery with longer term safety of principal. With this said, we are cautiously
optimistic about the prospects of a reopening of the U.S. economy, which would be very beneficial to most areas of the municipal market.
Fixed-income securities present
issuer default risk. The Fund invests substantially in municipal securities and will be affected by tax, legislative, regulatory, demographic or political changes, as well as changes impacting a state’s financial, economic or other
conditions. A relatively small number of tax-exempt issuers may necessitate the Fund investing more heavily in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly.
The value of the Fund’s portfolio may be more volatile than a more geographically diversified fund. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise
which may reduce investment opportunities and potential returns. 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. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Federal and state tax rules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state or local taxes. Liquidity risk is associated with the difficulty of selling underlying investments at a desirable time or price. 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 Virginia Intermediate Municipal Bond 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.
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Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020
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7 |
Portfolio of Investments
April 30, 2020
April 30, 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 Virginia Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
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Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020
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9 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
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Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
| Municipal Bonds (continued) | ||||
| Issue Description |
Coupon
Rate |
Principal
Amount ($) |
Value ($) | |
| Water & Sewer 1.8% | ||||
| Fairfax County Water Authority | ||||
| Refunding Revenue Bonds | ||||
| Series 2017 | ||||
| 04/01/2029 | 5.000% | 2,000,000 | 2,490,640 | |
|
Total Municipal Bonds
(Cost $136,357,756) |
138,565,111 | |||
| Money Market Funds 1.2% | ||
| Shares | Value ($) | |
| Dreyfus AMT-Free Tax Exempt Cash Management Fund, Institutional Shares, 0.164%(g) | 108,353 | 108,342 |
| JPMorgan Institutional Tax Free Money Market Fund, Institutional Shares, 0.180%(g) | 1,607,814 | 1,607,814 |
|
Total Money Market Funds
(Cost $1,716,167) |
1,716,156 | |
|
Total Investments in Securities
(Cost: $138,573,923) |
140,781,267 | |
| Other Assets & Liabilities, Net | (1,752,604) | |
| Net Assets | 139,028,663 | |
Notes to Portfolio of
Investments
| (a) | The Fund is entitled to receive principal and interest from the guarantor after a day or a week’s notice or upon maturity. The maturity date disclosed represents the final maturity. |
| (b) | Represents a variable rate security where the coupon rate adjusts on specified dates (generally daily or weekly) using the prevailing money market rate. The interest rate shown was the current rate as of April 30, 2020. |
| (c) | Income from this security may be subject to alternative minimum tax. |
| (d) | Represents a security purchased on a when-issued basis. |
| (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 April 30, 2020, the total value of these securities amounted to $344,212, which represents 0.25% of total net assets. |
| (f) | Zero coupon bond. |
| (g) | The rate shown is the seven-day current annualized yield at April 30, 2020. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| HUD | Department of Housing and Urban Development |
| NPFGC | National Public Finance Guarantee Corporation |
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 Virginia Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 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.
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 April 30, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Floating Rate Notes | — | 500,000 | — | 500,000 |
| Municipal Bonds | — | 138,565,111 | — | 138,565,111 |
| Money Market Funds | 1,716,156 | — | — | 1,716,156 |
| Total Investments in Securities | 1,716,156 | 139,065,111 | — | 140,781,267 |
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.
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020
|
13 |
Statement of Assets and Liabilities
April 30, 2020
April 30, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $138,573,923) | $140,781,267 |
| Receivable for: | |
| Capital shares sold | 107,830 |
| Interest | 1,648,509 |
| Expense reimbursement due from Investment Manager | 285 |
| Prepaid expenses | 633 |
| Total assets | 142,538,524 |
| Liabilities | |
| Due to custodian | 306 |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 2,495,900 |
| Capital shares purchased | 591,601 |
| Distributions to shareholders | 313,175 |
| Management services fees | 1,793 |
| Distribution and/or service fees | 220 |
| Transfer agent fees | 4,786 |
| Compensation of board members | 98,090 |
| Other expenses | 3,990 |
| Total liabilities | 3,509,861 |
| Net assets applicable to outstanding capital stock | $139,028,663 |
| Represented by | |
| Paid in capital | 136,825,904 |
| Total distributable earnings (loss) | 2,202,759 |
| Total - representing net assets applicable to outstanding capital stock | $139,028,663 |
| Class A | |
| Net assets | $24,035,761 |
| Shares outstanding | 2,305,095 |
| Net asset value per share | $10.43 |
| Maximum sales charge | 3.00% |
| 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) | $10.75 |
| Advisor Class | |
| Net assets | $665,936 |
| Shares outstanding | 63,833 |
| Net asset value per share | $10.43 |
| Class C | |
| Net assets | $1,976,312 |
| Shares outstanding | 189,379 |
| Net asset value per share | $10.44 |
| Institutional Class | |
| Net assets | $24,546,370 |
| Shares outstanding | 2,354,550 |
| Net asset value per share | $10.43 |
| Institutional 3 Class | |
| Net assets | $87,804,284 |
| Shares outstanding | 8,401,717 |
| Net asset value per share | $10.45 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 14 | Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Operations
Year Ended April 30, 2020
Year Ended April 30, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $31,447 |
| Interest | 4,630,199 |
| Total income | 4,661,646 |
| Expenses: | |
| Management services fees | 669,613 |
| Distribution and/or service fees | |
| Class A | 60,878 |
| Class C | 24,513 |
| Transfer agent fees | |
| Class A | 23,107 |
| Advisor Class | 517 |
| Class C | 2,328 |
| Institutional Class | 22,919 |
| Institutional 3 Class | 7,131 |
| Compensation of board members | 389 |
| Custodian fees | 1,808 |
| Printing and postage fees | 14,932 |
| Registration fees | 11,856 |
| Audit fees | 27,100 |
| Legal fees | 9,290 |
| Compensation of chief compliance officer | 30 |
| Other | 9,512 |
| Total expenses | 885,923 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (90,867) |
| Total net expenses | 795,056 |
| Net investment income | 3,866,590 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 172,217 |
| Net realized gain | 172,217 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (1,850,197) |
| Net change in unrealized appreciation (depreciation) | (1,850,197) |
| Net realized and unrealized loss | (1,677,980) |
| Net increase in net assets resulting from operations | $2,188,610 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020
|
15 |
Statement of Changes in Net Assets
|
Year Ended
April 30, 2020 |
Year Ended
April 30, 2019 |
|
| Operations | ||
| Net investment income | $3,866,590 | $4,301,554 |
| Net realized gain | 172,217 | 461,192 |
| Net change in unrealized appreciation (depreciation) | (1,850,197) | 2,118,163 |
| Net increase in net assets resulting from operations | 2,188,610 | 6,880,909 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (604,645) | (892,767) |
| Advisor Class | (14,886) | (58,206) |
| Class C | (42,554) | (87,303) |
| Institutional Class | (660,100) | (921,381) |
| Institutional 3 Class | (2,564,324) | (3,674,814) |
| Total distributions to shareholders | (3,886,509) | (5,634,471) |
| Increase (decrease) in net assets from capital stock activity | 2,841,294 | (27,282,627) |
| Total increase (decrease) in net assets | 1,143,395 | (26,036,189) |
| Net assets at beginning of year | 137,885,268 | 163,921,457 |
| Net assets at end of year | $139,028,663 | $137,885,268 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 16 | Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| April 30, 2020 | April 30, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 339,312 | 3,629,435 | 210,015 | 2,191,456 |
| Distributions reinvested | 30,965 | 331,285 | 49,361 | 513,621 |
| Redemptions | (313,177) | (3,337,602) | (598,724) | (6,209,541) |
| Net increase (decrease) | 57,100 | 623,118 | (339,348) | (3,504,464) |
| Advisor Class | ||||
| Subscriptions | 57,672 | 622,442 | 13,021 | 136,213 |
| Distributions reinvested | 1,365 | 14,619 | 5,563 | 57,838 |
| Redemptions | (21,158) | (223,181) | (167,258) | (1,751,805) |
| Net increase (decrease) | 37,879 | 413,880 | (148,674) | (1,557,754) |
| Class C | ||||
| Subscriptions | 31,779 | 341,570 | 35,389 | 369,924 |
| Distributions reinvested | 3,512 | 37,612 | 7,457 | 77,614 |
| Redemptions | (109,857) | (1,169,786) | (144,956) | (1,504,859) |
| Net decrease | (74,566) | (790,604) | (102,110) | (1,057,321) |
| Institutional Class | ||||
| Subscriptions | 542,873 | 5,783,235 | 271,829 | 2,831,932 |
| Distributions reinvested | 46,011 | 492,237 | 69,807 | 726,441 |
| Redemptions | (387,225) | (4,122,582) | (986,787) | (10,268,044) |
| Net increase (decrease) | 201,659 | 2,152,890 | (645,151) | (6,709,671) |
| Institutional 3 Class | ||||
| Subscriptions | 1,330,228 | 14,289,173 | 1,793,759 | 18,748,298 |
| Distributions reinvested | 6,808 | 73,014 | 9,905 | 103,267 |
| Redemptions | (1,301,241) | (13,920,177) | (3,194,814) | (33,304,982) |
| Net increase (decrease) | 35,795 | 442,010 | (1,391,150) | (14,453,417) |
| Total net increase (decrease) | 257,867 | 2,841,294 | (2,626,433) | (27,282,627) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Virginia Intermediate Municipal Bond 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 4/30/2020 | $10.55 | 0.26 | (0.11) | 0.15 | (0.27) | (0.00)(c) | (0.27) |
| Year Ended 4/30/2019 | $10.44 | 0.27 | 0.21 | 0.48 | (0.29) | (0.08) | (0.37) |
| Year Ended 4/30/2018 | $10.79 | 0.27 | (0.31) | (0.04) | (0.28) | (0.03) | (0.31) |
| Year Ended 4/30/2017 | $11.18 | 0.28 | (0.34) | (0.06) | (0.30) | (0.03) | (0.33) |
| Year Ended 4/30/2016 | $11.13 | 0.30 | 0.10 | 0.40 | (0.32) | (0.03) | (0.35) |
| Advisor Class | |||||||
| Year Ended 4/30/2020 | $10.55 | 0.29 | (0.12) | 0.17 | (0.29) | (0.00)(c) | (0.29) |
| Year Ended 4/30/2019 | $10.44 | 0.30 | 0.20 | 0.50 | (0.31) | (0.08) | (0.39) |
| Year Ended 4/30/2018 | $10.79 | 0.30 | (0.31) | (0.01) | (0.31) | (0.03) | (0.34) |
| Year Ended 4/30/2017 | $11.18 | 0.31 | (0.34) | (0.03) | (0.33) | (0.03) | (0.36) |
| Year Ended 4/30/2016 | $11.12 | 0.33 | 0.11 | 0.44 | (0.35) | (0.03) | (0.38) |
| Class C | |||||||
| Year Ended 4/30/2020 | $10.55 | 0.18 | (0.10) | 0.08 | (0.19) | (0.00)(c) | (0.19) |
| Year Ended 4/30/2019 | $10.45 | 0.20 | 0.19 | 0.39 | (0.21) | (0.08) | (0.29) |
| Year Ended 4/30/2018 | $10.80 | 0.19 | (0.31) | (0.12) | (0.20) | (0.03) | (0.23) |
| Year Ended 4/30/2017 | $11.19 | 0.20 | (0.34) | (0.14) | (0.22) | (0.03) | (0.25) |
| Year Ended 4/30/2016 | $11.13 | 0.22 | 0.10 | 0.32 | (0.23) | (0.03) | (0.26) |
| Institutional Class | |||||||
| Year Ended 4/30/2020 | $10.54 | 0.29 | (0.11) | 0.18 | (0.29) | (0.00)(c) | (0.29) |
| Year Ended 4/30/2019 | $10.44 | 0.30 | 0.20 | 0.50 | (0.32) | (0.08) | (0.40) |
| Year Ended 4/30/2018 | $10.79 | 0.30 | (0.31) | (0.01) | (0.31) | (0.03) | (0.34) |
| Year Ended 4/30/2017 | $11.18 | 0.31 | (0.34) | (0.03) | (0.33) | (0.03) | (0.36) |
| Year Ended 4/30/2016 | $11.13 | 0.33 | 0.10 | 0.43 | (0.35) | (0.03) | (0.38) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 18 | Columbia Virginia Intermediate Municipal Bond 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 4/30/2020 | $10.43 | 1.35% | 0.87% | 0.81% | 2.47% | 12% | $24,036 |
| Year Ended 4/30/2019 | $10.55 | 4.69% | 0.88% | 0.81%(d) | 2.63% | 13% | $23,706 |
| Year Ended 4/30/2018 | $10.44 | (0.39%) | 0.89% | 0.81%(d) | 2.55% | 14% | $27,005 |
| Year Ended 4/30/2017 | $10.79 | (0.51%) | 0.95% | 0.81% | 2.56% | 7% | $28,168 |
| Year Ended 4/30/2016 | $11.18 | 3.65% | 0.96% | 0.81%(d) | 2.72% | 12% | $42,046 |
| Advisor Class | |||||||
| Year Ended 4/30/2020 | $10.43 | 1.60% | 0.61% | 0.55% | 2.70% | 12% | $666 |
| Year Ended 4/30/2019 | $10.55 | 4.95% | 0.63% | 0.56%(d) | 2.87% | 13% | $274 |
| Year Ended 4/30/2018 | $10.44 | (0.14%) | 0.63% | 0.56%(d) | 2.80% | 14% | $1,823 |
| Year Ended 4/30/2017 | $10.79 | (0.26%) | 0.70% | 0.56% | 2.81% | 7% | $812 |
| Year Ended 4/30/2016 | $11.18 | 4.00% | 0.72% | 0.56%(d) | 2.97% | 12% | $506 |
| Class C | |||||||
| Year Ended 4/30/2020 | $10.44 | 0.69% | 1.62% | 1.56% | 1.73% | 12% | $1,976 |
| Year Ended 4/30/2019 | $10.55 | 3.81% | 1.63% | 1.56%(d) | 1.88% | 13% | $2,786 |
| Year Ended 4/30/2018 | $10.45 | (1.13%) | 1.64% | 1.56%(d) | 1.79% | 14% | $3,824 |
| Year Ended 4/30/2017 | $10.80 | (1.25%) | 1.70% | 1.56% | 1.82% | 7% | $4,938 |
| Year Ended 4/30/2016 | $11.19 | 2.97% | 1.72% | 1.56%(d) | 1.97% | 12% | $5,141 |
| Institutional Class | |||||||
| Year Ended 4/30/2020 | $10.43 | 1.70% | 0.62% | 0.55% | 2.72% | 12% | $24,546 |
| Year Ended 4/30/2019 | $10.54 | 4.86% | 0.63% | 0.56%(d) | 2.88% | 13% | $22,698 |
| Year Ended 4/30/2018 | $10.44 | (0.15%) | 0.65% | 0.56%(d) | 2.76% | 14% | $29,199 |
| Year Ended 4/30/2017 | $10.79 | (0.26%) | 0.70% | 0.56% | 2.82% | 7% | $161,853 |
| Year Ended 4/30/2016 | $11.18 | 3.91% | 0.71% | 0.56%(d) | 2.97% | 12% | $173,677 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Virginia Intermediate Municipal Bond 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 |
|
| Institutional 3 Class | |||||||
| Year Ended 4/30/2020 | $10.57 | 0.30 | (0.12) | 0.18 | (0.30) | (0.00)(c) | (0.30) |
| Year Ended 4/30/2019 | $10.46 | 0.31 | 0.21 | 0.52 | (0.33) | (0.08) | (0.41) |
| Year Ended 4/30/2018 | $10.82 | 0.31 | (0.32) | (0.01) | (0.32) | (0.03) | (0.35) |
| Year Ended 4/30/2017(e) | $10.75 | 0.05 | 0.08(f) | 0.13 | (0.06) | — | (0.06) |
| 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) | Rounds to zero. |
| (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. |
| (f) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized gain (loss) presented in the Statement of Operations due to the timing of subscriptions and redemptions of Fund shares in relation to fluctuations in the market value of the portfolio. |
| (g) | Annualized. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 20 | Columbia Virginia Intermediate Municipal Bond 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) |
|
| Institutional 3 Class | |||||||
| Year Ended 4/30/2020 | $10.45 | 1.69% | 0.53% | 0.47% | 2.81% | 12% | $87,804 |
| Year Ended 4/30/2019 | $10.57 | 5.04% | 0.54% | 0.47% | 2.97% | 13% | $88,421 |
| Year Ended 4/30/2018 | $10.46 | (0.13%) | 0.54% | 0.48% | 2.91% | 14% | $102,071 |
| Year Ended 4/30/2017(e) | $10.82 | 1.17% | 0.55%(g) | 0.42%(g) | 3.04%(g) | 7% | $10 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020
|
21 |
Notes to Financial Statements
April 30, 2020
April 30, 2020
Note 1. Organization
Columbia Virginia Intermediate
Municipal Bond 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 net investment income 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 and Institutional 3
Class shares are available 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
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.
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.
| 22 | Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
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.
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.
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.
Dividend income is recorded on the
ex-dividend date.
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 net tax-exempt and 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 daily and paid monthly. 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.
|
Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020
|
23 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
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 0.47% to 0.31% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30, 2020 was 0.47% 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. The expense for the Deferred Plan, which includes trustees’ fees deferred during the current period as well as any
gains or losses on the Trustees’ deferred compensation balances as a result of market fluctuations, is included in "Compensation of board members" on the Statement of Operations.
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 3 Class shares are subject to an annual limitation of not
more than 0.02% of the average daily net assets attributable to Institutional 3 Class shares.
| 24 | Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
For the year ended April 30, 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 | 0.10 |
| Advisor Class | 0.09 |
| Class C | 0.10 |
| Institutional Class | 0.10 |
| Institutional 3 Class | 0.01 |
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended April 30, 2020, no minimum account balance fees were charged by the Fund.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays a
monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class C shares of the Fund and a monthly distribution fee to the Distributor at the maximum
annual rate of 0.75% of the average daily net assets attributable to Class C shares of the Fund.
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended April 30, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 3.00 | 0.75(a) | 14,469 |
| Class C | — | 1.00(b) | 583 |
| (a) | This charge is imposed on certain investments of $500,000 or more if redeemed within 12 months after purchase. |
| (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.
|
Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 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
August 31, 2020 |
|
| Class A | 0.81% |
| Advisor Class | 0.56 |
| Class C | 1.56 |
| Institutional Class | 0.56 |
| Institutional 3 Class | 0.47 |
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. 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 April 30, 2020, these
differences were primarily due to differing treatment for trustees’ deferred compensation, and distributions. 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 April 30, 2020 | Year Ended April 30, 2019 | ||||||
|
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 46,176 | 3,820,413 | 19,920 | 3,886,509 | 44,111 | 4,469,928 | 1,120,432 | 5,634,471 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
| 26 | Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
At April 30, 2020, the components
of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed tax-
exempt income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| 21,002 | 320,204 | 64,845 | — | 2,207,344 |
At April 30, 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) ($) |
Net unrealized
appreciation ($) |
| 138,573,923 | 5,720,327 | (3,512,983) | 2,207,344 |
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 $22,474,656 and $16,689,388, respectively, for the year ended April 30, 2020. The amount of purchase and sale
activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. 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 April 30, 2020.
Note 7. 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 April 30, 2020.
|
Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
Note 8. Significant
risks
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.
Geographic concentration risk
Because the Fund invests
substantially in municipal securities issued by the state identified in the Fund’s name and political sub-divisions of that state, the Fund will be particularly affected by adverse tax, legislative, regulatory,
demographic or political changes as well as changes impacting the state’s financial, economic or other condition and prospects. In addition, because of the relatively small number of issuers of tax-exempt
securities in the state, the Fund may invest a higher percentage of assets in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of municipal and other
securities owned by the Fund also may be adversely affected by future changes in federal or state income tax laws.
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.
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 the 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
| 28 | Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
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 its investment objective. 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 its employees and to assure the continuity of its
business operations, the Investment Manager and its affiliates have implemented a work from home protocol for virtually all of its 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. The Investment Manager’s operations teams seek to operate without significant disruptions in service.
Its 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. The Fund cannot,
however, predict the impact that natural or man-made disasters, including the COVID-19 pandemic, may have on the ability of the Investment Manager, its employees and third-party service providers to continue ordinary
business operations and technology functions over near- or longer-term periods.
Shareholder concentration risk
At April 30, 2020, one unaffiliated
shareholder of record owned 72.6% 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 9. 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 10. 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 Virginia Intermediate Municipal Bond Fund | Annual Report 2020
|
29 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 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.
| 30 | Columbia Virginia Intermediate Municipal Bond 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 Virginia Intermediate Municipal Bond Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Virginia Intermediate Municipal Bond Fund (one of the funds constituting Columbia Funds Series Trust, referred to hereafter as
the "Fund") as of April 30, 2020, the related statement of operations for the year ended April 30, 2020, the statement of changes in net assets for each of the two years in the period ended April 30, 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 April 30, 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
April 30, 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 April 30, 2020 by correspondence with the custodian 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
June 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
|
Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020
|
31 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended April 30, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Capital
gain dividend |
Exempt-
interest dividends |
| $89,003 | 98.81% |
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.
Exempt-interest dividends. The
percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes. A portion of the income may be subject to federal alternative minimum
tax.
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 Virginia Intermediate Municipal Bond 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 Virginia Intermediate Municipal Bond 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 |
|
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 | 117 | Director, NAPE Education Foundation since October 2016 |
| 34 | Columbia Virginia Intermediate Municipal Bond Fund | 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 Virginia Intermediate Municipal Bond Fund | 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. |
Liquidity Risk
Management Program
Pursuant to Rule 22e-4 under the
1940 Act, the Fund has adopted a liquidity risk management program (“Program”). The Program’s principal objectives include assessing, managing and periodically reviewing the Fund’s liquidity
risk. Liquidity risk is defined as the risk that the Fund could not meet redemption requests without significant dilution of remaining investors’ interests in the Fund.
The Board has appointed the
Investment Manager as the program administrator for the Fund’s Program. The Investment Manager has delegated oversight of the Program to its Liquidity Risk Management Committee (the “Committee”). At
a board meeting during the fiscal period, the Committee provided the Board with a report addressing the operations of the program and assessing its adequacy and effectiveness of implementation for the period December
1, 2018, through December 31, 2019, including:
| • | the Fund had sufficient liquidity to both meet redemptions and operate effectively on behalf of shareholders; |
| • | there were no material changes to the Program during the period; |
| 36 | Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020 |
Liquidity Risk Management Program (continued)
| • | the implementation of the Program was effective to manage the Fund’s liquidity risk; and |
| • | the Program operated adequately during the period. |
There can be no assurance that the
Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an
investment in the Fund may be subject.
|
Columbia Virginia Intermediate Municipal Bond Fund | Annual Report 2020
|
37 |
[THIS PAGE INTENTIONALLY LEFT
BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia Virginia Intermediate Municipal Bond
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/
ANN239_04_K01_(06/20)
Annual Report
April 30, 2020
April 30, 2020
Columbia South
Carolina Intermediate Municipal Bond 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 Federally Insured • No
Financial Institution Guarantee • May Lose Value
Table of Contents
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Columbia South Carolina
Intermediate Municipal Bond 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 South Carolina Intermediate Municipal Bond
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks current income exempt from U.S. federal income tax and South Carolina individual income tax, consistent with moderate fluctuation of principal.
Portfolio management
Paul Fuchs, CFA
Lead Portfolio Manager
Managed Fund since 2016
Anders Myhran, CFA
Portfolio Manager
Managed Fund since 2019
Deborah Vargo
Portfolio Manager
Managed Fund since 2017
Returns for Class A shares are shown
with and without the maximum initial sales charge of 3.00%. 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 Bloomberg Barclays 3–15
Year Blend Municipal Bond Index is an unmanaged index that tracks the performance of municipal bonds issued after December 31, 1990, with remaining maturities between 2 and 17 years and at least $7 million in
principal amount outstanding.
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 South Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (April 30, 2010 — April 30, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia South Carolina Intermediate Municipal Bond 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.
| Quality breakdown (%) (at April 30, 2020) | |
| AAA rating | 4.0 |
| AA rating | 40.8 |
| A rating | 50.9 |
| BBB rating | 2.2 |
| BB rating | 0.9 |
| Not rated | 1.2 |
| Total | 100.0 |
Percentages indicated are based
upon total fixed income investments.
Bond ratings apply to the underlying
holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the
highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not
rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily.
The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other
issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such
security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
| 4 | Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that
ended April 30, 2020, the Fund’s Class A shares returned 1.46% excluding sales charges. Institutional Class shares of the Fund returned 1.72%. The Fund’s benchmark, the Bloomberg Barclays 3-15 Year Blend
Municipal Bond Index, returned 2.40%. The Fund’s underperformance was primarily the result of the relative weakness of its positions in lower rated investment-grade issues during the sell-off late in the
period.
Market overview
Despite elevated volatility late
in the period, municipal bonds posted a positive total return for the full 12 months that ended April 30, 2020. The vast majority of the gain came from income, as prices were relatively flat.
U.S. tax-exempt debt performed
reasonably well from the beginning of the period through early March 2020. During this time, the broader fixed-income market was aided by the backdrop of slow global growth and periodic “flights to
quality” brought about by headlines regarding the U.S.-China trade dispute. The U.S. Federal Reserve (Fed) also supported the market through its shift to a more accommodative policy stance, highlighted by
quarter-point interest rate cuts at its meetings in July 2019, September 2019, and December 2019. Munis were further boosted by the combination of strong investor demand and a manageable level of new-issue supply.
This favorable backdrop changed
suddenly in March 2020, when the spread of COVID-19 dramatically reshaped the investment landscape over the span of a few short months. The rapid rise of cases in Europe and the United States prompted travel
restrictions, non-essential business closures and shelter-in-place orders. The unprecedented halt to substantial portions of the economy left investors struggling to price risk assets appropriately in the new reality.
Massive selling flooded the market, with municipal funds experiencing their first outflow in 61 weeks. The tax-exempt market suffered some of the worst days in its history in March 2020 as a result.
The sell-off reached a crescendo
late in March 2020, at which point tax-exempt issues began to recover much of their lost ground. The Fed cut rates to zero and announced a number of new liquidity facilities, and Congress approved a stimulus package
of more than $2 trillion. Investors also grew increasingly hopeful about the potential for a gradual re-opening of the economy. Still, municipal bonds experienced negative price returns for the full 12 months that
ended April 30, 2020.
Within the municipal market, higher
quality issues outperformed high yield due largely to investors’ clear preference for lower risk assets in the latter part of the period. Longer term issues modestly outpaced their shorter dated counterparts.
South Carolina outpaced the
broader U.S. municipal market
South Carolina intermediate-term
bonds outperformed the national index behind strong returns for several sectors and a zero weighting in the underperforming BBB credit tier. A larger relative weighting in high-quality pre-refunded bonds and local
general obligation debt was a further positive. The state’s transportation sector also outperformed, as the largest issuer in this area features revenues that are less affected by COVID-19 than the
transportation-related debt in the national index. South Carolina’s public power sector, which is viewed as being relatively insulated from economic stress, was another area of strength. The state’s higher
average credit quality (AA+ for state general obligation debt) further aided relative performance at a time in which lower quality issuers such as Illinois, the city of Chicago, and New Jersey lagged. In terms of
fundamentals, South Carolina continued to benefit from the combination of robust population growth, strong fiscal management, economic diversity, and low debt.
Contributors and detractors
The Fund’s underperformance
was primarily the result of the relative weakness of its positions in lower rated investment-grade issues during the sell-off. An overweight in the education sector hurt results, as well. Colleges were particularly
vulnerable to revenue declines due to COVID-19 mitigation efforts as stay-at-home protocols resulted in campuses closing and students attending classes remotely, forcing many institutions to refund housing charges.
The Fund also experienced underperformance from holdings in areas most adversely affected by COVID-19, including retirement communities, charter schools, and ports. An underweight in state and local general
obligations further weighed on relative performance.
The Fund benefited from its
holdings in local appropriation, water/sewer, and resource-recovery related issues. Roughly a quarter of the portfolio is allocated to local appropriation-backed bonds, the most common form of public finance in the
state. These tend to be higher quality securities, which helped their performance once the market turned lower in March. Holdings
|
Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
in highly rated essential service debt in the
water/sewer sector also performed well due to their relative insulation from economic weakness. Lastly, a holding in Three Rivers Solid Waste Authority supported performance on expectations that operations for this
landfill project should be relatively stable through the economic contraction.
Fund positioning
Our strategy remained largely
consistent throughout the period. We focused on repositioning the Fund out of short-maturity, low-yielding holdings, such as pre-refunded issues and those we believed would be refinanced. Our new purchases averaged
maturities of 13 years and ratings of A1, and they encompassed a variety of sectors. The Fund’s average maturity rose to 9.07 years from 8.60 at the end of April 2019. We increased the portfolio’s
weighting in bonds with maturities of 17 to 18 years and above, and we reduced its holdings in bonds maturing in one to two years. The Fund’s average credit quality was unchanged.
We continued to be selective when
evaluating lower investment-grade and non-rated securities, as yield spreads were extremely tight for the majority of the year. Only in the last two months of the period, when COVID-19 became the primary driver of
market performance, did spreads widen. In response to the impact of COVID-19 on the market, we intensified our review of the Fund’s positioning across sectors and issuers to identify those that we believed were
most susceptible to mitigation efforts, and we reduced allocations to those we believed would suffer the largest impact. Believing the damage for many issues would likely extend beyond this temporary economic
“pause,” we think credit should generally be evaluated through a long-term lens that balances the possibility of a near-term recovery with longer term safety of principal. With this said, we are cautiously
optimistic about the prospects of a reopening of the U.S. economy, which would be very beneficial to most areas of the municipal market.
Fixed-income securities present
issuer default risk. The Fund invests substantially in municipal securities and will be affected by tax, legislative, regulatory, demographic or political changes, as well as changes impacting a state’s financial, economic or other
conditions. A relatively small number of tax-exempt issuers may necessitate the Fund investing more heavily in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly.
The value of the Fund’s portfolio may be more volatile than a more geographically diversified fund. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise
which may reduce investment opportunities and potential returns. 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. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Federal and state tax rules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state or local taxes. Liquidity risk is associated with the difficulty of selling underlying investments at a desirable time or price. 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 South Carolina Intermediate Municipal Bond 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 South Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
7 |
Portfolio of Investments
April 30, 2020
April 30, 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 South Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
| Money Market Funds 0.9% | ||
| Shares | Value ($) | |
| Dreyfus AMT-Free Tax Exempt Cash Management Fund, Institutional Shares, 0.164%(d) | 113,547 | 113,536 |
| JPMorgan Institutional Tax Free Money Market Fund, Institutional Shares, 0.180%(d) | 866,948 | 866,948 |
|
Total Money Market Funds
(Cost $980,495) |
980,484 | |
|
Total Investments in Securities
(Cost: $103,070,733) |
106,155,036 | |
| Other Assets & Liabilities, Net | 1,272,992 | |
| Net Assets | 107,428,028 | |
Notes to Portfolio of
Investments
| (a) | 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 April 30, 2020, the total value of these securities amounted to $1,718,823, which represents 1.60% of total net assets. |
| (b) | Income from this security may be subject to alternative minimum tax. |
| (c) | Zero coupon bond. |
| (d) | The rate shown is the seven-day current annualized yield at April 30, 2020. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| AMBAC | Ambac Assurance Corporation |
| BAM | Build America Mutual Assurance Co. |
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.
| 12 | Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 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 April 30, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Municipal Bonds | — | 105,174,552 | — | 105,174,552 |
| Money Market Funds | 980,484 | — | — | 980,484 |
| Total Investments in Securities | 980,484 | 105,174,552 | — | 106,155,036 |
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.
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
13 |
Statement of Assets and Liabilities
April 30, 2020
April 30, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $103,070,733) | $106,155,036 |
| Receivable for: | |
| Capital shares sold | 222,898 |
| Interest | 1,399,125 |
| Expense reimbursement due from Investment Manager | 382 |
| Prepaid expenses | 609 |
| Total assets | 107,778,050 |
| Liabilities | |
| Due to custodian | 2,979 |
| Payable for: | |
| Capital shares purchased | 30,610 |
| Distributions to shareholders | 206,834 |
| Management services fees | 1,377 |
| Distribution and/or service fees | 304 |
| Transfer agent fees | 13,113 |
| Compensation of board members | 91,132 |
| Other expenses | 3,673 |
| Total liabilities | 350,022 |
| Net assets applicable to outstanding capital stock | $107,428,028 |
| Represented by | |
| Paid in capital | 104,876,145 |
| Total distributable earnings (loss) | 2,551,883 |
| Total - representing net assets applicable to outstanding capital stock | $107,428,028 |
| Class A | |
| Net assets | $24,421,202 |
| Shares outstanding | 2,420,336 |
| Net asset value per share | $10.09 |
| Maximum sales charge | 3.00% |
| 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) | $10.40 |
| Advisor Class | |
| Net assets | $2,322,314 |
| Shares outstanding | 230,217 |
| Net asset value per share | $10.09 |
| Class C | |
| Net assets | $5,039,487 |
| Shares outstanding | 499,041 |
| Net asset value per share | $10.10 |
| Institutional Class | |
| Net assets | $69,732,514 |
| Shares outstanding | 6,907,853 |
| Net asset value per share | $10.09 |
| Institutional 3 Class | |
| Net assets | $5,912,511 |
| Shares outstanding | 583,659 |
| Net asset value per share | $10.13 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 14 | Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Operations
Year Ended April 30, 2020
Year Ended April 30, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $23,425 |
| Interest | 3,257,191 |
| Total income | 3,280,616 |
| Expenses: | |
| Management services fees | 521,691 |
| Distribution and/or service fees | |
| Class A | 61,064 |
| Class C | 63,397 |
| Transfer agent fees | |
| Class A | 30,122 |
| Advisor Class | 2,824 |
| Class C | 7,817 |
| Institutional Class | 90,899 |
| Institutional 3 Class | 460 |
| Compensation of board members | 704 |
| Custodian fees | 1,572 |
| Printing and postage fees | 14,685 |
| Registration fees | 5,786 |
| Audit fees | 27,100 |
| Legal fees | 8,979 |
| Compensation of chief compliance officer | 24 |
| Other | 9,051 |
| Total expenses | 846,175 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (108,181) |
| Expense reduction | (20) |
| Total net expenses | 737,974 |
| Net investment income | 2,542,642 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (166,150) |
| Net realized loss | (166,150) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (760,029) |
| Net change in unrealized appreciation (depreciation) | (760,029) |
| Net realized and unrealized loss | (926,179) |
| Net increase in net assets resulting from operations | $1,616,463 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
15 |
Statement of Changes in Net Assets
|
Year Ended
April 30, 2020 |
Year Ended
April 30, 2019 |
|
| Operations | ||
| Net investment income | $2,542,642 | $2,699,589 |
| Net realized loss | (166,150) | (6,786) |
| Net change in unrealized appreciation (depreciation) | (760,029) | 2,501,025 |
| Net increase in net assets resulting from operations | 1,616,463 | 5,193,828 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (547,432) | (551,729) |
| Advisor Class | (56,833) | (50,398) |
| Class C | (95,183) | (171,766) |
| Institutional Class | (1,836,066) | (2,078,507) |
| Institutional 3 Class | (107,127) | (22,190) |
| Total distributions to shareholders | (2,642,641) | (2,874,590) |
| Increase (decrease) in net assets from capital stock activity | 4,736,181 | (12,914,590) |
| Total increase (decrease) in net assets | 3,710,003 | (10,595,352) |
| Net assets at beginning of year | 103,718,025 | 114,313,377 |
| Net assets at end of year | $107,428,028 | $103,718,025 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 16 | Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| April 30, 2020 | April 30, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 499,378 | 5,166,255 | 532,295 | 5,316,491 |
| Distributions reinvested | 41,951 | 433,746 | 43,259 | 432,321 |
| Redemptions | (284,998) | (2,932,367) | (730,792) | (7,277,167) |
| Net increase (decrease) | 256,331 | 2,667,634 | (155,238) | (1,528,355) |
| Advisor Class | ||||
| Subscriptions | 75,561 | 782,030 | 28,762 | 285,176 |
| Distributions reinvested | 5,474 | 56,585 | 5,016 | 50,131 |
| Redemptions | (33,204) | (340,632) | (51,123) | (506,948) |
| Net increase (decrease) | 47,831 | 497,983 | (17,345) | (171,641) |
| Class C | ||||
| Subscriptions | 61,831 | 640,505 | 44,787 | 447,851 |
| Distributions reinvested | 6,986 | 72,272 | 13,014 | 130,026 |
| Redemptions | (421,944) | (4,360,019) | (287,479) | (2,874,005) |
| Net decrease | (353,127) | (3,647,242) | (229,678) | (2,296,128) |
| Institutional Class | ||||
| Subscriptions | 2,157,574 | 22,334,115 | 1,636,464 | 16,352,511 |
| Distributions reinvested | 38,534 | 398,592 | 51,777 | 517,362 |
| Redemptions | (2,204,369) | (22,741,142) | (2,594,063) | (25,878,074) |
| Net decrease | (8,261) | (8,435) | (905,822) | (9,008,201) |
| Institutional 3 Class | ||||
| Subscriptions | 552,912 | 5,767,081 | 34,450 | 348,027 |
| Distributions reinvested | 3,937 | 40,852 | 2,183 | 21,904 |
| Redemptions | (56,695) | (581,692) | (27,986) | (280,196) |
| Net increase | 500,154 | 5,226,241 | 8,647 | 89,735 |
| Total net increase (decrease) | 442,928 | 4,736,181 | (1,299,436) | (12,914,590) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia South Carolina Intermediate Municipal Bond 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 4/30/2020 | $10.17 | 0.22 | (0.07) | 0.15 | (0.23) | — | (0.23) |
| Year Ended 4/30/2019 | $9.94 | 0.24 | 0.24 | 0.48 | (0.25) | — | (0.25) |
| Year Ended 4/30/2018 | $10.16 | 0.25 | (0.20) | 0.05 | (0.27) | — | (0.27) |
| Year Ended 4/30/2017 | $10.55 | 0.25 | (0.35) | (0.10) | (0.28) | (0.01) | (0.29) |
| Year Ended 4/30/2016 | $10.44 | 0.28 | 0.16 | 0.44 | (0.30) | (0.03) | (0.33) |
| Advisor Class | |||||||
| Year Ended 4/30/2020 | $10.16 | 0.25 | (0.06) | 0.19 | (0.26) | — | (0.26) |
| Year Ended 4/30/2019 | $9.94 | 0.26 | 0.24 | 0.50 | (0.28) | — | (0.28) |
| Year Ended 4/30/2018 | $10.15 | 0.27 | (0.19) | 0.08 | (0.29) | — | (0.29) |
| Year Ended 4/30/2017 | $10.54 | 0.28 | (0.36) | (0.08) | (0.30) | (0.01) | (0.31) |
| Year Ended 4/30/2016 | $10.43 | 0.30 | 0.17 | 0.47 | (0.33) | (0.03) | (0.36) |
| Class C | |||||||
| Year Ended 4/30/2020 | $10.17 | 0.15 | (0.07) | 0.08 | (0.15) | — | (0.15) |
| Year Ended 4/30/2019 | $9.94 | 0.16 | 0.25 | 0.41 | (0.18) | — | (0.18) |
| Year Ended 4/30/2018 | $10.16 | 0.17 | (0.20) | (0.03) | (0.19) | — | (0.19) |
| Year Ended 4/30/2017 | $10.56 | 0.18 | (0.37) | (0.19) | (0.20) | (0.01) | (0.21) |
| Year Ended 4/30/2016 | $10.44 | 0.20 | 0.18 | 0.38 | (0.23) | (0.03) | (0.26) |
| Institutional Class | |||||||
| Year Ended 4/30/2020 | $10.17 | 0.25 | (0.07) | 0.18 | (0.26) | — | (0.26) |
| Year Ended 4/30/2019 | $9.94 | 0.26 | 0.25 | 0.51 | (0.28) | — | (0.28) |
| Year Ended 4/30/2018 | $10.16 | 0.27 | (0.20) | 0.07 | (0.29) | — | (0.29) |
| Year Ended 4/30/2017 | $10.56 | 0.28 | (0.37) | (0.09) | (0.30) | (0.01) | (0.31) |
| Year Ended 4/30/2016 | $10.44 | 0.31 | 0.17 | 0.48 | (0.33) | (0.03) | (0.36) |
| Institutional 3 Class | |||||||
| Year Ended 4/30/2020 | $10.21 | 0.26 | (0.07) | 0.19 | (0.27) | — | (0.27) |
| Year Ended 4/30/2019 | $9.98 | 0.27 | 0.25 | 0.52 | (0.29) | — | (0.29) |
| Year Ended 4/30/2018 | $10.19 | 0.28 | (0.19) | 0.09 | (0.30) | — | (0.30) |
| Year Ended 4/30/2017(d) | $10.13 | 0.05 | 0.06(e) | 0.11 | (0.05) | — | (0.05) |
| 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) | Institutional 3 Class shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (e) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized gain (loss) presented in the Statement of Operations due to the timing of subscriptions and redemptions of Fund shares in relation to fluctuations in the market value of the portfolio. |
| (f) | Annualized. |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 18 | Columbia South Carolina Intermediate Municipal Bond 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 4/30/2020 | $10.09 | 1.46% | 0.91% | 0.81%(c) | 2.15% | 9% | $24,421 |
| Year Ended 4/30/2019 | $10.17 | 4.93% | 0.93% | 0.81%(c) | 2.37% | 9% | $21,999 |
| Year Ended 4/30/2018 | $9.94 | 0.43% | 0.93% | 0.81%(c) | 2.41% | 7% | $23,050 |
| Year Ended 4/30/2017 | $10.16 | (0.98%) | 0.98% | 0.81%(c) | 2.45% | 11% | $21,486 |
| Year Ended 4/30/2016 | $10.55 | 4.33% | 0.99% | 0.81% | 2.69% | 16% | $21,972 |
| Advisor Class | |||||||
| Year Ended 4/30/2020 | $10.09 | 1.82% | 0.65% | 0.56%(c) | 2.40% | 9% | $2,322 |
| Year Ended 4/30/2019 | $10.16 | 5.09% | 0.68% | 0.56%(c) | 2.62% | 9% | $1,854 |
| Year Ended 4/30/2018 | $9.94 | 0.78% | 0.68% | 0.56%(c) | 2.66% | 7% | $1,984 |
| Year Ended 4/30/2017 | $10.15 | (0.74%) | 0.73% | 0.56%(c) | 2.71% | 11% | $1,205 |
| Year Ended 4/30/2016 | $10.54 | 4.59% | 0.74% | 0.56% | 2.93% | 16% | $758 |
| Class C | |||||||
| Year Ended 4/30/2020 | $10.10 | 0.80% | 1.66% | 1.56%(c) | 1.41% | 9% | $5,039 |
| Year Ended 4/30/2019 | $10.17 | 4.14% | 1.68% | 1.56%(c) | 1.62% | 9% | $8,669 |
| Year Ended 4/30/2018 | $9.94 | (0.32%) | 1.68% | 1.56%(c) | 1.66% | 7% | $10,759 |
| Year Ended 4/30/2017 | $10.16 | (1.81%) | 1.73% | 1.56%(c) | 1.70% | 11% | $13,698 |
| Year Ended 4/30/2016 | $10.56 | 3.65% | 1.74% | 1.56% | 1.94% | 16% | $15,051 |
| Institutional Class | |||||||
| Year Ended 4/30/2020 | $10.09 | 1.72% | 0.66% | 0.56%(c) | 2.40% | 9% | $69,733 |
| Year Ended 4/30/2019 | $10.17 | 5.19% | 0.68% | 0.56%(c) | 2.62% | 9% | $70,343 |
| Year Ended 4/30/2018 | $9.94 | 0.68% | 0.68% | 0.56%(c) | 2.66% | 7% | $77,773 |
| Year Ended 4/30/2017 | $10.16 | (0.83%) | 0.73% | 0.56%(c) | 2.70% | 11% | $83,743 |
| Year Ended 4/30/2016 | $10.56 | 4.69% | 0.74% | 0.56% | 2.93% | 16% | $105,200 |
| Institutional 3 Class | |||||||
| Year Ended 4/30/2020 | $10.13 | 1.83% | 0.53% | 0.45% | 2.50% | 9% | $5,913 |
| Year Ended 4/30/2019 | $10.21 | 5.30% | 0.57% | 0.45% | 2.73% | 9% | $852 |
| Year Ended 4/30/2018 | $9.98 | 0.91% | 0.56% | 0.45% | 2.79% | 7% | $747 |
| Year Ended 4/30/2017(d) | $10.19 | 1.09% | 0.57%(f) | 0.43%(f) | 2.85%(f) | 11% | $10 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
19 |
Notes to Financial Statements
April 30, 2020
April 30, 2020
Note 1. Organization
Columbia South Carolina
Intermediate Municipal Bond 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 net investment income 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 and Institutional 3
Class shares are available 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
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.
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.
| 20 | Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
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
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.
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.
Dividend income is recorded on the
ex-dividend date.
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 net tax-exempt and 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 daily and paid monthly. 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.
|
Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
21 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 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 0.47% to 0.31% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30, 2020 was 0.47% 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. The expense for the Deferred Plan, which includes trustees’ fees deferred during the current period as well as any
gains or losses on the Trustees’ deferred compensation balances as a result of market fluctuations, is included in "Compensation of board members" on the Statement of Operations.
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 3 Class shares are subject to an annual limitation of not
more than 0.02% of the average daily net assets attributable to Institutional 3 Class shares.
| 22 | Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
For the year ended April 30, 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 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 April 30, 2020, these minimum account balance fees reduced total expenses of
the Fund by $20.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays a
monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class C shares of the Fund and a monthly distribution fee to the Distributor at the maximum
annual rate of 0.75% of the average daily net assets attributable to Class C shares of the Fund.
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended April 30, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 3.00 | 0.75(a) | 13,930 |
| Class C | — | 1.00(b) | 492 |
| (a) | This charge is imposed on certain investments of $500,000 or more if redeemed within 12 months after purchase. |
| (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.
|
Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
23 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 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:
|
September 1, 2019
through August 31, 2020 |
Prior to
September 1, 2019 |
|
| Class A | 0.81% | 0.81% |
| Advisor Class | 0.56 | 0.56 |
| Class C | 1.56 | 1.56 |
| Institutional Class | 0.56 | 0.56 |
| Institutional 3 Class | 0.46 | 0.45 |
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 April 30, 2020, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, trustees’ deferred compensation, distributions, and capital loss carryforward. 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 April 30, 2020 | Year Ended April 30, 2019 | ||||||
|
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 119 | 2,642,522 | — | 2,642,641 | — | 2,874,590 | — | 2,874,590 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At April 30, 2020, the components
of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed tax-
exempt income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| — | 267,995 | — | (436,641) | 3,017,888 |
| 24 | Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
At April 30, 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) ($) |
Net unrealized
appreciation ($) |
| 103,137,148 | 3,746,333 | (728,445) | 3,017,888 |
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 April 30, 2020, may be available to reduce future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code. In addition, for the year ended April 30,
2020, capital loss carryforwards utilized, if any, were as follows:
|
No expiration
short-term ($) |
No expiration
long-term ($) |
Total ($) | Utilized ($) |
| (436,641) | — | (436,641) | — |
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 $17,449,702 and $10,253,498, respectively, for the year ended April 30, 2020. The amount of purchase and sale
activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. 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 April 30, 2020.
Note 7. 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.
|
Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
The Fund had no borrowings during
the year ended April 30, 2020.
Note 8. Significant
risks
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.
Geographic concentration risk
Because the Fund invests
substantially in municipal securities issued by the state identified in the Fund’s name and political sub-divisions of that state, the Fund will be particularly affected by adverse tax, legislative, regulatory,
demographic or political changes as well as changes impacting the state’s financial, economic or other condition and prospects. In addition, because of the relatively small number of issuers of tax-exempt
securities in the state, the Fund may invest a higher percentage of assets in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of municipal and other
securities owned by the Fund also may be adversely affected by future changes in federal or state income tax laws.
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.
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 the 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.
| 26 | Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 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 its investment objective. 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 its employees and to assure the continuity of its
business operations, the Investment Manager and its affiliates have implemented a work from home protocol for virtually all of its 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. The Investment Manager’s operations teams seek to operate without significant disruptions in service.
Its 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. The Fund cannot,
however, predict the impact that natural or man-made disasters, including the COVID-19 pandemic, may have on the ability of the Investment Manager, its employees and third-party service providers to continue ordinary
business operations and technology functions over near- or longer-term periods.
Shareholder concentration risk
At April 30, 2020, one unaffiliated
shareholder of record owned 55.9% 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. 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 9. 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 10. 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
|
Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 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.
| 28 | Columbia South Carolina Intermediate Municipal Bond 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 South Carolina Intermediate Municipal Bond Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia South Carolina Intermediate Municipal Bond Fund (one of the funds constituting Columbia Funds Series Trust, referred to
hereafter as the "Fund") as of April 30, 2020, the related statement of operations for the year ended April 30, 2020, the statement of changes in net assets for each of the two years in the period ended April 30,
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 April 30, 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 April 30, 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 April 30, 2020 by correspondence with the custodian and broker. We believe that our audits provide a
reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
June 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
|
Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
29 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended April 30, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Exempt-
interest dividends |
|
| 99.99% |
Exempt-interest dividends. The
percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes. A portion of the income may be subject to federal alternative minimum
tax.
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 |
| 30 | Columbia South Carolina Intermediate Municipal Bond 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) |
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Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020
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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 |
|
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 | 117 | Director, NAPE Education Foundation since October 2016 |
| 32 | Columbia South Carolina Intermediate Municipal Bond Fund | 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). |
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Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020
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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 |
|
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. |
Liquidity Risk
Management Program
Pursuant to Rule 22e-4 under the
1940 Act, the Fund has adopted a liquidity risk management program (“Program”). The Program’s principal objectives include assessing, managing and periodically reviewing the Fund’s liquidity
risk. Liquidity risk is defined as the risk that the Fund could not meet redemption requests without significant dilution of remaining investors’ interests in the Fund.
The Board has appointed the
Investment Manager as the program administrator for the Fund’s Program. The Investment Manager has delegated oversight of the Program to its Liquidity Risk Management Committee (the “Committee”). At
a board meeting during the fiscal period, the Committee provided the Board with a report addressing the operations of the program and assessing its adequacy and effectiveness of implementation for the period December
1, 2018, through December 31, 2019, including:
| • | the Fund had sufficient liquidity to both meet redemptions and operate effectively on behalf of shareholders; |
| • | there were no material changes to the Program during the period; |
| 34 | Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Liquidity Risk Management Program (continued)
| • | the implementation of the Program was effective to manage the Fund’s liquidity risk; and |
| • | the Program operated adequately during the period. |
There can be no assurance that the
Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an
investment in the Fund may be subject.
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Columbia South Carolina Intermediate Municipal Bond Fund | Annual Report 2020
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35 |
Columbia South Carolina Intermediate Municipal Bond
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/
ANN231_04_K01_(06/20)
Annual Report
April 30, 2020
April 30, 2020
Columbia North
Carolina Intermediate Municipal Bond 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 Federally Insured • No
Financial Institution Guarantee • May Lose Value
Table of Contents
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Columbia North Carolina
Intermediate Municipal Bond 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 North Carolina Intermediate Municipal Bond
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks current income exempt from U.S. federal income tax and North Carolina individual income tax, consistent with moderate fluctuation of principal.
Portfolio management
Paul Fuchs, CFA
Lead Portfolio Manager
Managed Fund since 2016
Anders Myhran, CFA
Portfolio Manager
Managed Fund since 2019
Deborah Vargo
Portfolio Manager
Managed Fund since 2017
Returns for Class A shares are shown
with and without the maximum initial sales charge of 3.00%. 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 Bloomberg Barclays 3–15
Year Blend Municipal Bond Index is an unmanaged index that tracks the performance of municipal bonds issued after December 31, 1990, with remaining maturities between 2 and 17 years and at least $7 million in
principal amount outstanding.
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.
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Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020
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3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (April 30, 2010 — April 30, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia North Carolina Intermediate Municipal Bond 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.
| Quality breakdown (%) (at April 30, 2020) | |
| AAA rating | 18.6 |
| AA rating | 45.0 |
| A rating | 25.3 |
| BBB rating | 7.6 |
| Not rated | 3.5 |
| Total | 100.0 |
Percentages indicated are based
upon total fixed income investments.
Bond ratings apply to the underlying
holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the
highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not
rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily.
The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other
issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such
security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
| 4 | Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that
ended April 30, 2020, the Fund’s Class A shares returned 1.43% excluding sales charges and its Institutional Class shares returned 1.69%. The Fund’s benchmark, the Bloomberg Barclays 3-15 Year Blend
Municipal Bond Index, returned 2.40% for the same time period. The portfolio’s duration (interest-rate sensitivity) was slightly below that of the benchmark for the bulk of the period, which detracted from
performance at a time in which yields declined considerably.
Market Overview
Despite elevated volatility late
in the period, municipal bonds posted a positive total return for the full 12 months that ended April 30, 2020. The vast majority of the gain came from income, as prices were relatively flat.
U.S. tax-exempt debt performed
reasonably well from the beginning of the period through early March 2020. During this time, the broader fixed-income market was aided by the backdrop of slow global growth and periodic “flights to
quality” brought about by headlines regarding the U.S.-China trade dispute. The U.S. Federal Reserve (Fed) also supported the market through its shift to a more accommodative policy stance, highlighted by
quarter-point interest rate cuts at its meetings in July 2019, September 2019, and December 2019. Municipal bonds were further boosted by the combination of strong investor demand and a manageable level of new-issue
supply.
This favorable backdrop changed
suddenly in March 2020, when the spread of COVID-19 dramatically reshaped the investment landscape over the span of a few short months. The rapid rise of cases in Europe and the United States prompted travel
restrictions, non-essential business closures and shelter-in-place orders. The unprecedented halt to substantial portions of the economy left investors struggling to price risk assets appropriately in the new reality.
Massive selling flooded the market, with municipal funds experiencing their first outflow in 61 weeks. The tax-exempt market suffered some of the worst days in its history in March 2020 as a result.
The sell-off reached a crescendo
late in March 2020, at which point tax-exempt issues began to recover much of their lost ground. The Fed cut rates to zero and announced a number of new liquidity facilities, and Congress approved a stimulus package
of more than $2 trillion. Investors also grew increasingly hopeful about the potential for a gradual re-opening of the economy. Still, municipal bonds experienced negative price returns for the full 12 months that
ended April 30, 2020.
Within the municipal market, higher
quality issues outperformed high yield due largely to investors’ clear preference for lower risk assets in the latter part of the period. Longer term issues modestly outpaced their shorter dated counterparts.
North Carolina’s higher
quality market outperformed
North Carolina tax-exempt issues
outpaced the national municipal index over the 12 months that ended April 30, 2020. The state’s higher credit quality, with a larger weighting in AAA rated issues and a lower representation of those rated BBB,
was beneficial in the challenging environment. North Carolina’s AAA tier also has a number of issuers with very strong credit fundamentals, such as Mecklenburg County and Charlotte Water and Sewer, a positive
given that the highest quality securities outperformed in the sell-off. Further, bonds in the middle investment-grade credit tiers (AA and A) generally outperformed their national counterparts. The state did have some
exposure to sectors that struggled nationally, such as hospitals and leasing, but these areas performed well on a relative basis. North Carolina’s hospitals avoided the pricing pressures that were prevalent
across the nation, while the leasing sector benefited from its higher average credit quality. The general obligation sector, both state and local, was another area in which North Carolina was relatively insulated from
the challenges that existed elsewhere in the national market.
Prior to the March 2020 downturn,
North Carolina’s market performance reflected the state’s healthy underlying fundamentals. In addition to producing above-average economic growth, North Carolina featured the combination of low debt, high
reserves, and robust fiscal management. The state was hit hard by the pandemic, however, with a significant increase in unemployment claims since the beginning of the COVID-19 crisis.
Contributors and detractors
The portfolio’s duration
(interest-rate sensitivity) was slightly below that of the benchmark for the bulk of the period, which detracted from performance at a time in which yields declined considerably. (Prices rise as yields fall.) In
addition, a small number of issues with specific credit challenges outweighed the benefit from the higher quality core of the portfolio. At the
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Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020
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5 |
Manager Discussion of Fund Performance (continued)
sector level, the Fund was hurt by an overweight
in the underperforming hospital sector, as well as holdings in continuing care retirement communities, such as Galloway Ridge. Our security selection in electric utilities and the BBB rated segment of the
transportation sector was an additional detractor.
On the positive side, the Fund
benefited from many of the themes that helped the state overall. For instance, the Fund’s higher average credit quality and an absence of the poor-performing, lower quality bonds that weighed on the benchmark,
which is national in scope, were both positives for relative performance. Overweights in AAA debt and the higher quality, pre-refunded and water/sewer categories also added value. An underweight in the transportation
sector was a further plus for the Fund. Security selection in the AA and A credit tiers aided returns, primarily as a result of an overweight in general obligation debt. Selection in the leasing sector, where higher
quality county appropriation credits performed well in the sell-off, was another bright spot.
Fund positioning
Our strategy remained largely
consistent throughout the period. We focused on repositioning the Fund out of short-maturity, low-yielding holdings, such as pre-refunded issues and those we believed would be refinanced. Given the state’s
generally high credit quality, finding compelling yield opportunities was a challenge. Our new purchases for the Fund emphasized health care (hospitals and continuing care retirement communities), transportation
(airports, toll roads), housing, and high-quality issues with coupons below 5%. Nearly half of our buys for the Fund were the types of AAA and AA rated general obligation and utility issuers which have continued to
form the core of the portfolio. The Fund’s allocation to pre-refunded bonds rose, as issuers have taken advantage of near record low yields to refinance debt where they can. The Fund’s overall credit
quality was unchanged overall at AA, although the underlying composition featured more AAAs and BBBs and fewer AAs and As. The portfolio’s average maturity was steady at 9.0 years. However, we reduced Fund
exposure to the three- to nine-year maturity range on the belief that this area lacked adequate current yield or total return prospects.
We continued to be selective when
evaluating lower investment-grade and non-rated securities, as yield spreads were extremely tight for the majority of the year. Only in the last two months of the period, when COVID-19 became the primary driver of
market performance, did spreads widen. In response to the impact of COVID-19 on the market, we intensified our review of the Fund’s positioning across sectors and issuers to identify those that we believed were
most susceptible to mitigation efforts, and we reduced allocations to those we believed would suffer the largest impact. Believing the damage for many issues would likely extend beyond this temporary economic
“pause,” we think credit should generally be evaluated through a long-term lens that balances the possibility of a near-term recovery with longer term safety of principal. With this said, we are cautiously
optimistic about the prospects of a reopening of the U.S. economy, which would be very beneficial to most areas of the municipal market.
Fixed-income securities present
issuer default risk. The Fund invests substantially in municipal securities and will be affected by tax, legislative, regulatory, demographic or political changes, as well as changes impacting a state’s financial, economic or other
conditions. A relatively small number of tax-exempt issuers may necessitate the Fund investing more heavily in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly.
The value of the Fund’s portfolio may be more volatile than a more geographically diversified fund. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise
which may reduce investment opportunities and potential returns. 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. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Federal and state tax rules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state or local taxes. Liquidity risk is associated with the difficulty of selling underlying investments at a desirable time or price. 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 North Carolina Intermediate Municipal Bond 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 North Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
7 |
Portfolio of Investments
April 30, 2020
April 30, 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 North Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
| Municipal Bonds (continued) | ||||
| Issue Description |
Coupon
Rate |
Principal
Amount ($) |
Value ($) | |
| County of Davidson | ||||
| Revenue Bonds | ||||
| Series 2020 | ||||
| 06/01/2037 | 4.000% | 400,000 | 456,336 | |
| County of Gaston | ||||
| Revenue Bonds | ||||
| Series 2019A | ||||
| 04/01/2034 | 5.000% | 250,000 | 309,775 | |
| 04/01/2035 | 5.000% | 300,000 | 370,050 | |
| County of Harnett | ||||
| Revenue Bonds | ||||
| Series 2019 | ||||
| 10/01/2037 | 4.000% | 955,000 | 1,069,256 | |
| County of Henderson(d) | ||||
| Revenue Bonds | ||||
| Series 2020 | ||||
| 06/01/2029 | 5.000% | 525,000 | 670,089 | |
| County of Johnston | ||||
| Revenue Bonds | ||||
| Series 2014 | ||||
| 06/01/2028 | 5.000% | 1,000,000 | 1,139,570 | |
| County of Lee | ||||
| Revenue Bonds | ||||
| Series 2018 | ||||
| 05/01/2036 | 4.000% | 500,000 | 561,095 | |
| County of Martin | ||||
| Refunding Revenue Bonds | ||||
| Water & Sewer District | ||||
| Series 2014 | ||||
| 06/01/2030 | 4.000% | 730,000 | 794,649 | |
| County of Onslow | ||||
| Revenue Bonds | ||||
| Series 2015 | ||||
| 06/01/2027 | 4.000% | 405,000 | 456,362 | |
| Series 2016 | ||||
| 10/01/2028 | 5.000% | 1,000,000 | 1,213,960 | |
| County of Pender | ||||
| Revenue Bonds | ||||
| Series 2015 | ||||
| 04/01/2027 | 5.000% | 1,165,000 | 1,373,570 | |
| 04/01/2028 | 5.000% | 1,290,000 | 1,517,582 | |
| County of Randolph | ||||
| Refunding Revenue Bonds | ||||
| Series 2013C | ||||
| 10/01/2026 | 5.000% | 1,500,000 | 1,827,900 | |
| Revenue Bonds | ||||
| Series 2019B | ||||
| 10/01/2034 | 5.000% | 500,000 | 620,335 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 12 | Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
| Money Market Funds 2.2% | ||
| Shares | Value ($) | |
| Dreyfus AMT-Free Tax Exempt Cash Management Fund, Institutional Shares, 0.164%(f) | 512,424 | 512,373 |
| JPMorgan Institutional Tax Free Money Market Fund, Institutional Shares, 0.180%(f) | 3,768,816 | 3,768,816 |
|
Total Money Market Funds
(Cost $4,281,240) |
4,281,189 | |
|
Total Investments in Securities
(Cost: $187,634,139) |
191,713,504 | |
| Other Assets & Liabilities, Net | (1,389,354) | |
| Net Assets | 190,324,150 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
13 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
Notes to Portfolio of
Investments
| (a) | The Fund is entitled to receive principal and interest from the guarantor after a day or a week’s notice or upon maturity. The maturity date disclosed represents the final maturity. |
| (b) | Represents a variable rate security where the coupon rate adjusts on specified dates (generally daily or weekly) using the prevailing money market rate. The interest rate shown was the current rate as of April 30, 2020. |
| (c) | Income from this security may be subject to alternative minimum tax. |
| (d) | Represents a security purchased on a when-issued basis. |
| (e) | Zero coupon bond. |
| (f) | The rate shown is the seven-day current annualized yield at April 30, 2020. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| GNMA | Government National Mortgage Association |
| IBC | Insurance Bond Certificate |
| NPFGC | National Public Finance Guarantee Corporation |
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 April 30, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Floating Rate Notes | — | 2,000,000 | — | 2,000,000 |
| Municipal Bonds | — | 185,432,315 | — | 185,432,315 |
| Money Market Funds | 4,281,189 | — | — | 4,281,189 |
| Total Investments in Securities | 4,281,189 | 187,432,315 | — | 191,713,504 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 14 | Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
Fair value measurements (continued)
See the Portfolio of Investments for all investment classifications not indicated in the table.
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.
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
15 |
Statement of Assets and Liabilities
April 30, 2020
April 30, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $187,634,139) | $191,713,504 |
| Cash | 209 |
| Receivable for: | |
| Capital shares sold | 90,813 |
| Interest | 2,123,593 |
| Expense reimbursement due from Investment Manager | 260 |
| Prepaid expenses | 656 |
| Total assets | 193,929,035 |
| Liabilities | |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 3,102,302 |
| Capital shares purchased | 43,988 |
| Distributions to shareholders | 355,416 |
| Management services fees | 2,459 |
| Distribution and/or service fees | 201 |
| Transfer agent fees | 3,806 |
| Compensation of board members | 92,840 |
| Other expenses | 3,873 |
| Total liabilities | 3,604,885 |
| Net assets applicable to outstanding capital stock | $190,324,150 |
| Represented by | |
| Paid in capital | 186,683,163 |
| Total distributable earnings (loss) | 3,640,987 |
| Total - representing net assets applicable to outstanding capital stock | $190,324,150 |
| Class A | |
| Net assets | $17,175,741 |
| Shares outstanding | 1,672,127 |
| Net asset value per share | $10.27 |
| Maximum sales charge | 3.00% |
| 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) | $10.59 |
| Advisor Class | |
| Net assets | $4,928,352 |
| Shares outstanding | 480,479 |
| Net asset value per share | $10.26 |
| Class C | |
| Net assets | $3,070,431 |
| Shares outstanding | 298,999 |
| Net asset value per share | $10.27 |
| Institutional Class | |
| Net assets | $23,699,987 |
| Shares outstanding | 2,309,636 |
| Net asset value per share | $10.26 |
| Institutional 3 Class | |
| Net assets | $141,449,639 |
| Shares outstanding | 13,742,681 |
| Net asset value per share | $10.29 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 16 | Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Operations
Year Ended April 30, 2020
Year Ended April 30, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $89,951 |
| Interest | 5,134,615 |
| Total income | 5,224,566 |
| Expenses: | |
| Management services fees | 873,346 |
| Distribution and/or service fees | |
| Class A | 43,209 |
| Class C | 35,293 |
| Transfer agent fees | |
| Class A | 15,503 |
| Advisor Class | 4,784 |
| Class C | 3,168 |
| Institutional Class | 21,429 |
| Institutional 3 Class | 10,466 |
| Compensation of board members | 1,512 |
| Custodian fees | 2,150 |
| Printing and postage fees | 13,687 |
| Registration fees | 10,485 |
| Audit fees | 27,100 |
| Legal fees | 9,728 |
| Compensation of chief compliance officer | 40 |
| Other | 9,978 |
| Total expenses | 1,081,878 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (76,868) |
| Total net expenses | 1,005,010 |
| Net investment income | 4,219,556 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 12,145 |
| Net realized gain | 12,145 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (1,750,607) |
| Net change in unrealized appreciation (depreciation) | (1,750,607) |
| Net realized and unrealized loss | (1,738,462) |
| Net increase in net assets resulting from operations | $2,481,094 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
17 |
Statement of Changes in Net Assets
|
Year Ended
April 30, 2020 |
Year Ended
April 30, 2019 |
|
| Operations | ||
| Net investment income | $4,219,556 | $4,228,606 |
| Net realized gain (loss) | 12,145 | (664,012) |
| Net change in unrealized appreciation (depreciation) | (1,750,607) | 3,650,732 |
| Net increase in net assets resulting from operations | 2,481,094 | 7,215,326 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (346,307) | (386,015) |
| Advisor Class | (120,443) | (129,125) |
| Class C | (44,538) | (70,245) |
| Institutional Class | (538,584) | (571,853) |
| Institutional 3 Class | (3,169,684) | (3,071,183) |
| Total distributions to shareholders | (4,219,556) | (4,228,421) |
| Increase (decrease) in net assets from capital stock activity | 22,545,674 | (2,156,711) |
| Total increase in net assets | 20,807,212 | 830,194 |
| Net assets at beginning of year | 169,516,938 | 168,686,744 |
| Net assets at end of year | $190,324,150 | $169,516,938 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 18 | Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| April 30, 2020 | April 30, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 231,609 | 2,434,674 | 169,543 | 1,722,915 |
| Distributions reinvested | 26,913 | 282,955 | 29,827 | 303,721 |
| Redemptions | (179,902) | (1,879,023) | (385,171) | (3,908,966) |
| Net increase (decrease) | 78,620 | 838,606 | (185,801) | (1,882,330) |
| Advisor Class | ||||
| Subscriptions | 106,117 | 1,108,584 | 114,600 | 1,168,726 |
| Distributions reinvested | 11,449 | 120,217 | 12,673 | 128,868 |
| Redemptions | (170,461) | (1,788,005) | (47,243) | (480,310) |
| Net increase (decrease) | (52,895) | (559,204) | 80,030 | 817,284 |
| Class C | ||||
| Subscriptions | 39,046 | 405,324 | 45,784 | 466,230 |
| Distributions reinvested | 3,446 | 36,217 | 6,105 | 62,119 |
| Redemptions | (139,939) | (1,461,158) | (182,233) | (1,848,463) |
| Net decrease | (97,447) | (1,019,617) | (130,344) | (1,320,114) |
| Institutional Class | ||||
| Subscriptions | 338,485 | 3,564,792 | 565,144 | 5,744,822 |
| Distributions reinvested | 44,280 | 465,058 | 47,597 | 484,185 |
| Redemptions | (290,871) | (3,041,926) | (664,773) | (6,742,706) |
| Net increase (decrease) | 91,894 | 987,924 | (52,032) | (513,699) |
| Institutional 3 Class | ||||
| Subscriptions | 3,716,277 | 39,209,742 | 4,940,478 | 50,489,350 |
| Distributions reinvested | 7,323 | 77,188 | 9,489 | 96,796 |
| Redemptions | (1,621,857) | (16,988,965) | (4,901,368) | (49,843,998) |
| Net increase | 2,101,743 | 22,297,965 | 48,599 | 742,148 |
| Total net increase (decrease) | 2,121,915 | 22,545,674 | (239,548) | (2,156,711) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia North Carolina Intermediate Municipal Bond 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 |
Total
distributions to shareholders |
|
| Class A | ||||||
| Year Ended 4/30/2020 | $10.33 | 0.21 | (0.06) | 0.15 | (0.21) | (0.21) |
| Year Ended 4/30/2019 | $10.14 | 0.24 | 0.19 | 0.43 | (0.24) | (0.24) |
| Year Ended 4/30/2018 | $10.33 | 0.24 | (0.19) | 0.05 | (0.24) | (0.24) |
| Year Ended 4/30/2017 | $10.70 | 0.25 | (0.37) | (0.12) | (0.25) | (0.25) |
| Year Ended 4/30/2016 | $10.58 | 0.27 | 0.12 | 0.39 | (0.27) | (0.27) |
| Advisor Class | ||||||
| Year Ended 4/30/2020 | $10.32 | 0.24 | (0.06) | 0.18 | (0.24) | (0.24) |
| Year Ended 4/30/2019 | $10.12 | 0.26 | 0.20 | 0.46 | (0.26) | (0.26) |
| Year Ended 4/30/2018 | $10.32 | 0.27 | (0.20) | 0.07 | (0.27) | (0.27) |
| Year Ended 4/30/2017 | $10.69 | 0.28 | (0.37) | (0.09) | (0.28) | (0.28) |
| Year Ended 4/30/2016 | $10.57 | 0.30 | 0.12 | 0.42 | (0.30) | (0.30) |
| Class C | ||||||
| Year Ended 4/30/2020 | $10.33 | 0.13 | (0.06) | 0.07 | (0.13) | (0.13) |
| Year Ended 4/30/2019 | $10.13 | 0.16 | 0.20 | 0.36 | (0.16) | (0.16) |
| Year Ended 4/30/2018 | $10.33 | 0.16 | (0.20) | (0.04) | (0.16) | (0.16) |
| Year Ended 4/30/2017 | $10.70 | 0.17 | (0.37) | (0.20) | (0.17) | (0.17) |
| Year Ended 4/30/2016 | $10.58 | 0.19 | 0.12 | 0.31 | (0.19) | (0.19) |
| Institutional Class | ||||||
| Year Ended 4/30/2020 | $10.32 | 0.24 | (0.06) | 0.18 | (0.24) | (0.24) |
| Year Ended 4/30/2019 | $10.13 | 0.26 | 0.19 | 0.45 | (0.26) | (0.26) |
| Year Ended 4/30/2018 | $10.32 | 0.27 | (0.19) | 0.08 | (0.27) | (0.27) |
| Year Ended 4/30/2017 | $10.69 | 0.28 | (0.37) | (0.09) | (0.28) | (0.28) |
| Year Ended 4/30/2016 | $10.57 | 0.30 | 0.12 | 0.42 | (0.30) | (0.30) |
| Institutional 3 Class | ||||||
| Year Ended 4/30/2020 | $10.36 | 0.25 | (0.07) | 0.18 | (0.25) | (0.25) |
| Year Ended 4/30/2019 | $10.16 | 0.27 | 0.20 | 0.47 | (0.27) | (0.27) |
| Year Ended 4/30/2018 | $10.35 | 0.28 | (0.19) | 0.09 | (0.28) | (0.28) |
| Year Ended 4/30/2017(d) | $10.28 | 0.05 | 0.07(e) | 0.12 | (0.05) | (0.05) |
| 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 line of credit interest expense which is less than 0.01%. |
| (d) | Institutional 3 Class shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (e) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized gain (loss) presented in the Statement of Operations due to the timing of subscriptions and redemptions of Fund shares in relation to fluctuations in the market value of the portfolio. |
| (f) | Annualized. |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 20 | Columbia North Carolina Intermediate Municipal Bond 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 4/30/2020 | $10.27 | 1.43% | 0.85% | 0.81% | 2.01% | 7% | $17,176 |
| Year Ended 4/30/2019 | $10.33 | 4.26% | 0.87%(c) | 0.81%(c) | 2.32% | 23% | $16,469 |
| Year Ended 4/30/2018 | $10.14 | 0.48% | 0.88% | 0.81% | 2.33% | 10% | $18,035 |
| Year Ended 4/30/2017 | $10.33 | (1.11%) | 0.96% | 0.81% | 2.39% | 12% | $18,246 |
| Year Ended 4/30/2016 | $10.70 | 3.77% | 0.97% | 0.81% | 2.57% | 11% | $27,616 |
| Advisor Class | |||||||
| Year Ended 4/30/2020 | $10.26 | 1.69% | 0.60% | 0.56% | 2.26% | 7% | $4,928 |
| Year Ended 4/30/2019 | $10.32 | 4.62% | 0.62%(c) | 0.56%(c) | 2.57% | 23% | $5,505 |
| Year Ended 4/30/2018 | $10.12 | 0.63% | 0.63% | 0.56% | 2.57% | 10% | $4,589 |
| Year Ended 4/30/2017 | $10.32 | (0.86%) | 0.71% | 0.56% | 2.64% | 12% | $2,236 |
| Year Ended 4/30/2016 | $10.69 | 4.03% | 0.72% | 0.56% | 2.83% | 11% | $3,458 |
| Class C | |||||||
| Year Ended 4/30/2020 | $10.27 | 0.68% | 1.60% | 1.56% | 1.26% | 7% | $3,070 |
| Year Ended 4/30/2019 | $10.33 | 3.58% | 1.62%(c) | 1.56%(c) | 1.57% | 23% | $4,096 |
| Year Ended 4/30/2018 | $10.13 | (0.38%) | 1.63% | 1.56% | 1.58% | 10% | $5,338 |
| Year Ended 4/30/2017 | $10.33 | (1.85%) | 1.71% | 1.56% | 1.65% | 12% | $6,682 |
| Year Ended 4/30/2016 | $10.70 | 3.00% | 1.73% | 1.56% | 1.82% | 11% | $8,023 |
| Institutional Class | |||||||
| Year Ended 4/30/2020 | $10.26 | 1.69% | 0.60% | 0.56% | 2.26% | 7% | $23,700 |
| Year Ended 4/30/2019 | $10.32 | 4.52% | 0.62%(c) | 0.56%(c) | 2.57% | 23% | $22,897 |
| Year Ended 4/30/2018 | $10.13 | 0.72% | 0.65% | 0.56% | 2.55% | 10% | $22,984 |
| Year Ended 4/30/2017 | $10.32 | (0.86%) | 0.71% | 0.56% | 2.65% | 12% | $158,327 |
| Year Ended 4/30/2016 | $10.69 | 4.03% | 0.73% | 0.56% | 2.82% | 11% | $191,661 |
| Institutional 3 Class | |||||||
| Year Ended 4/30/2020 | $10.29 | 1.67% | 0.52% | 0.48% | 2.34% | 7% | $141,450 |
| Year Ended 4/30/2019 | $10.36 | 4.70% | 0.53%(c) | 0.48%(c) | 2.65% | 23% | $120,551 |
| Year Ended 4/30/2018 | $10.16 | 0.83% | 0.54% | 0.48% | 2.68% | 10% | $117,741 |
| Year Ended 4/30/2017(d) | $10.35 | 1.15% | 0.55%(f) | 0.42%(f) | 2.87%(f) | 12% | $10 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
21 |
Notes to Financial Statements
April 30, 2020
April 30, 2020
Note 1. Organization
Columbia North Carolina
Intermediate Municipal Bond 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 net investment income 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 and Institutional 3
Class shares are available 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
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.
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.
| 22 | Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
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.
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.
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.
Dividend income is recorded on the
ex-dividend date.
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 net tax-exempt and 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 daily and paid monthly. 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.
|
Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
23 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
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 0.47% to 0.31% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30, 2020 was 0.47% 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. The expense for the Deferred Plan, which includes trustees’ fees deferred during the current period as well as any
gains or losses on the Trustees’ deferred compensation balances as a result of market fluctuations, is included in "Compensation of board members" on the Statement of Operations.
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 3 Class shares are subject to an annual limitation of not
more than 0.02% of the average daily net assets attributable to Institutional 3 Class shares.
| 24 | Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
For the year ended April 30, 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 | 0.09 |
| Advisor Class | 0.09 |
| Class C | 0.09 |
| Institutional Class | 0.09 |
| Institutional 3 Class | 0.01 |
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended April 30, 2020, no minimum account balance fees were charged by the Fund.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays a
monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class C shares of the Fund and a monthly distribution fee to the Distributor at the maximum
annual rate of 0.75% of the average daily net assets attributable to Class C shares of the Fund.
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended April 30, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 3.00 | 0.75(a) | 10,676 |
| Class C | — | 1.00(b) | — |
| (a) | This charge is imposed on certain investments of $500,000 or more if redeemed within 12 months after purchase. |
| (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.
|
Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 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
August 31, 2020 |
|
| Class A | 0.81% |
| Advisor Class | 0.56 |
| Class C | 1.56 |
| Institutional Class | 0.56 |
| Institutional 3 Class | 0.48 |
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 April 30, 2020, these
differences were primarily due to differing treatment for trustees’ deferred compensation, distributions, principal and/or interest of fixed income securities, and capital loss carryforward. 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 April 30, 2020 | Year Ended April 30, 2019 | ||||||
|
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 2,596 | 4,216,960 | — | 4,219,556 | 22 | 4,228,399 | — | 4,228,421 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At April 30, 2020, the components
of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed tax-
exempt income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| — | 1,161,415 | — | (1,175,031) | 4,102,191 |
| 26 | Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
At April 30, 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) ($) |
Net unrealized
appreciation ($) |
| 187,611,313 | 6,530,870 | (2,428,679) | 4,102,191 |
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 April 30, 2020, may be available to reduce future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code. In addition, for the year ended April 30,
2020, capital loss carryforwards utilized, if any, were as follows:
|
No expiration
short-term ($) |
No expiration
long-term ($) |
Total ($) | Utilized ($) |
| (528,605) | (646,426) | (1,175,031) | 12,145 |
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 $36,318,533 and $11,647,628, respectively, for the year ended April 30, 2020. The amount of purchase and sale
activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. 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 April 30, 2020.
Note 7. 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.
|
Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
The Fund had no borrowings during
the year ended April 30, 2020.
Note 8. Significant
risks
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.
Geographic concentration risk
Because the Fund invests
substantially in municipal securities issued by the state identified in the Fund’s name and political sub-divisions of that state, the Fund will be particularly affected by adverse tax, legislative, regulatory,
demographic or political changes as well as changes impacting the state’s financial, economic or other condition and prospects. In addition, because of the relatively small number of issuers of tax-exempt
securities in the state, the Fund may invest a higher percentage of assets in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of municipal and other
securities owned by the Fund also may be adversely affected by future changes in federal or state income tax laws.
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.
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 the 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.
| 28 | Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 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 its investment objective. 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 its employees and to assure the continuity of its
business operations, the Investment Manager and its affiliates have implemented a work from home protocol for virtually all of its 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. The Investment Manager’s operations teams seek to operate without significant disruptions in service.
Its 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. The Fund cannot,
however, predict the impact that natural or man-made disasters, including the COVID-19 pandemic, may have on the ability of the Investment Manager, its employees and third-party service providers to continue ordinary
business operations and technology functions over near- or longer-term periods.
Shareholder concentration risk
At April 30, 2020, two unaffiliated
shareholders of record owned 87.1% 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.
Note 9. 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 10. 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
|
Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
29 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 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.
| 30 | Columbia North Carolina Intermediate Municipal Bond 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 North Carolina Intermediate Municipal Bond Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia North Carolina Intermediate Municipal Bond Fund (one of the funds constituting Columbia Funds Series Trust, referred to
hereafter as the "Fund") as of April 30, 2020, the related statement of operations for the year ended April 30, 2020, the statement of changes in net assets for each of the two years in the period ended April 30,
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 April 30, 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 April 30, 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 April 30, 2020 by correspondence with the custodian 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
June 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
|
Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
31 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended April 30, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Exempt-
interest dividends |
|
| 99.94% |
Exempt-interest dividends. The
percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes. A portion of the income may be subject to federal alternative minimum
tax.
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 North Carolina Intermediate Municipal Bond 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 North Carolina Intermediate Municipal Bond 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 |
|
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 | 117 | Director, NAPE Education Foundation since October 2016 |
| 34 | Columbia North Carolina Intermediate Municipal Bond Fund | 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. |
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 North Carolina Intermediate Municipal Bond Fund | 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 |
|
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. |
Liquidity Risk
Management Program
Pursuant to Rule 22e-4 under the
1940 Act, the Fund has adopted a liquidity risk management program (“Program”). The Program’s principal objectives include assessing, managing and periodically reviewing the Fund’s liquidity
risk. Liquidity risk is defined as the risk that the Fund could not meet redemption requests without significant dilution of remaining investors’ interests in the Fund.
The Board has appointed the
Investment Manager as the program administrator for the Fund’s Program. The Investment Manager has delegated oversight of the Program to its Liquidity Risk Management Committee (the “Committee”). At
a board meeting during the fiscal period, the Committee provided the Board with a report addressing the operations of the program and assessing its adequacy and effectiveness of implementation for the period December
1, 2018, through December 31, 2019, including:
| • | the Fund had sufficient liquidity to both meet redemptions and operate effectively on behalf of shareholders; |
| • | there were no material changes to the Program during the period; |
| • | the implementation of the Program was effective to manage the Fund’s liquidity risk; and |
| • | the Program operated adequately during the period. |
| 36 | Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020 |
Liquidity Risk Management Program (continued)
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
|
Columbia North Carolina Intermediate Municipal Bond Fund | Annual Report 2020
|
37 |
[THIS PAGE INTENTIONALLY LEFT
BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia North Carolina Intermediate Municipal Bond
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/
ANN206_04_K01_(06/20)
Annual Report
April 30, 2020
April 30, 2020
Columbia Maryland
Intermediate Municipal Bond 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 Federally Insured • No
Financial Institution Guarantee • May Lose Value
Table of Contents
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Columbia Maryland Intermediate
Municipal Bond 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 Maryland Intermediate Municipal Bond
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks current income exempt from U.S. federal income tax and Maryland individual income tax, consistent with moderate fluctuation of principal.
Portfolio management
Paul Fuchs, CFA
Lead Portfolio Manager
Managed Fund since 2016
Anders Myhran, CFA
Portfolio Manager
Managed Fund since 2019
Deborah Vargo
Portfolio Manager
Managed Fund since 2017
Returns for Class A shares are shown
with and without the maximum initial sales charge of 3.00%. 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 Bloomberg Barclays 3–15
Year Blend Municipal Bond Index is an unmanaged index that tracks the performance of municipal bonds issued after December 31, 1990, with remaining maturities between 2 and 17 years and at least $7 million in
principal amount outstanding.
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 Maryland Intermediate Municipal Bond Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (April 30, 2010 — April 30, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Maryland Intermediate Municipal Bond 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.
| Quality breakdown (%) (at April 30, 2020) | |
| AAA rating | 10.7 |
| AA rating | 38.3 |
| A rating | 32.6 |
| BBB rating | 12.3 |
| BB rating | 1.4 |
| Not rated | 4.7 |
| Total | 100.0 |
Percentages indicated are based
upon total fixed income investments.
Bond ratings apply to the underlying
holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the
highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not
rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily.
The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other
issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such
security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
| 4 | Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that
ended April 30, 2020, the Fund’s Class A shares returned 1.11% excluding sales charges, and its Institutional Class shares returned 1.46%. The Fund’s benchmark, the Bloomberg Barclays 3-15 Year Blend
Municipal Bond Index, returned 2.40% for the same time period. The Fund’s underperformance was primarily the result of its quality profile, which featured overweights in lower rated investment-grade and
non-rated issues.
Market overview
Despite elevated volatility late
in the period, municipal bonds posted a positive total return for the full 12 months that ended April 30, 2020. The vast majority of the gain came from income, as prices were relatively flat.
U.S. tax-exempt debt performed
reasonably well from the beginning of the period through early March 2020. During this time, the broader fixed-income market was aided by the backdrop of slow global growth and periodic “flights to
quality” brought about by headlines regarding the U.S.-China trade dispute. The U.S. Federal Reserve (Fed) also supported the market through its shift to a more accommodative policy stance, highlighted by
quarter-point interest rate cuts at its meetings in July 2019, September 2019, and December 2019. Municipal bonds were further boosted by the combination of strong investor demand and a manageable level of new-issue
supply.
This favorable backdrop changed
suddenly in March 2020, when the spread of COVID-19 dramatically reshaped the investment landscape over the span of a few short months. The rapid rise of cases in Europe and the United States prompted travel
restrictions, non-essential business closures and shelter-in-place orders. The unprecedented halt to substantial portions of the economy left investors struggling to price risk assets appropriately in the new reality.
Massive selling flooded the market, with municipal funds experiencing their first outflow in 61 weeks. The tax-exempt market suffered some of the worst days in its history in March 2020 as a result.
The sell-off reached a crescendo
late in March 2020, at which point tax-exempt issues began to recover much of their lost ground. The Fed cut rates to zero and announced a number of new liquidity facilities, and Congress approved a stimulus package
of more than $2 trillion. Investors also grew increasingly hopeful about the potential for a gradual re-opening of the economy. Still, municipal bonds experienced negative price returns for the full 12 months that
ended April 30, 2020.
Within the municipal market, higher
quality issues outperformed high yield due largely to investors’ clear preference for lower risk assets in the latter part of the period. Longer term issues modestly outpaced their shorter dated counterparts.
Maryland’s high credit
quality was a tailwind
Maryland intermediate-term
municipal bonds outpaced the benchmark, which is national in scope. Maryland’s intermediate municipal market is dominated by high-quality state and local general obligation debt. While approximately 70% of the
fund’s national benchmark is rated AAA, and state & local general obligations have a similar weighting, 95% of Maryland’s municipal market is rated AAA or AA, which is exceedingly high quality. This
high-quality profile worked to the state’s advantage, during investors’ flight to quality in March 2020. Maryland had the added benefit of a very low weighting in the transportation sector, which was hard
hit throughout the U.S. market. Similarly, the national benchmark suffered from steep price declines for bonds related to Illinois, the city of Chicago, and New Jersey. Maryland also remained well supported by strong
fiscal management and a relatively high percentage of workforce in government jobs, both of which should help cushion the effect of an economic downturn.
Contributors and detractors
The Fund’s underperformance
was primarily the result of its quality profile, which featured overweights in lower rated investment-grade and non-rated issues. Among bonds rated below investment grade, positions in the continuing care retirement
center, hotel/convention center, and parking sectors hurt performance as valuations suffered from the impact of COVID-19 on the markets. Infections and deaths at retirement communities raised investor concerns about
their ability to mitigate the effects of the virus, while the convention center and parking sectors sold off as travel came to a standstill. An underweight in state and local general obligations, which outperformed,
further detracted.
|
Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
On the plus side, the Fund
benefited from the strong returns of its investments in housing, hospitals and leasing-related issues. With the exception of bonds issued by Bowie State University, where our purchase was unfavorably timed, the
positions in college student housing also performed well. Similarly, the Fund’s holdings in the health care sector, where several issuers refinanced outstanding debt, outperformed the national benchmark.
Positions in high-quality state and local appropriation bonds added value, as well.
Fund positioning
Our strategy remained largely
consistent throughout the period. We focused on repositioning the Fund out of short-maturity, low-yielding holdings, such as pre-refunded issues and those that we believed would be refinanced. Our new purchases
averaged maturities of 14 years and ratings of AA, and they encompassed a variety of sectors. While we worked to lengthen the portfolio’s average maturity, this was offset by the shortening effects of refunding
activity. The Fund’s average maturity therefore finished the period at 8.50 years, down slightly from its level at the close of the previous reporting period. We raised the portfolio’s weighting in bonds
with maturities of 15 years and above, and we increased its average credit quality from A+ to AA-.
We continued to be selective when
evaluating lower investment-grade and non-rated securities, as yield spreads were extremely tight for the majority of the year. Only in the last two months of the period, when COVID-19 became the primary driver of
market performance, did spreads widen. In response to the impact of COVID-19 on the market, we intensified our review of the Fund’s positioning across sectors and issuers to identify those that were most
susceptible to mitigation efforts, and we reduced allocations to those we believed would suffer the largest impact. Believing the damage for many issues would likely extend beyond this temporary economic
“pause,” we think credit should generally be evaluated through a long-term lens that balances the possibility of a near-term recovery with longer term safety of principal. With this said, we are cautiously
optimistic about the prospects of a reopening of the U.S. economy, which would be very beneficial to most areas of the municipal market.
Fixed-income securities present
issuer default risk. The Fund invests substantially in municipal securities and will be affected by tax, legislative, regulatory, demographic or political changes, as well as changes impacting a state’s financial, economic or other
conditions. A relatively small number of tax-exempt issuers may necessitate the Fund investing more heavily in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly.
The value of the Fund’s portfolio may be more volatile than a more geographically diversified fund. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise
which may reduce investment opportunities and potential returns. 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. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Federal and state tax rules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state or local taxes. Liquidity risk is associated with the difficulty of selling underlying investments at a desirable time or price. 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 Maryland Intermediate Municipal Bond 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 Maryland Intermediate Municipal Bond Fund | Annual Report 2020
|
7 |
Portfolio of Investments
April 30, 2020
April 30, 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 Maryland Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
| Money Market Funds 2.7% | ||
| Shares | Value ($) | |
| Dreyfus AMT-Free Tax Exempt Cash Management Fund, Institutional Shares, 0.164%(b) | 54,914 | 54,908 |
| JPMorgan Institutional Tax Free Money Market Fund, Institutional Shares, 0.180%(b) | 1,233,758 | 1,233,758 |
|
Total Money Market Funds
(Cost $1,288,671) |
1,288,666 | |
|
Total Investments in Securities
(Cost: $47,485,267) |
48,681,940 | |
| Other Assets & Liabilities, Net | (140,308) | |
| Net Assets | 48,541,632 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
Notes to Portfolio of
Investments
| (a) | Represents a security purchased on a when-issued basis. |
| (b) | The rate shown is the seven-day current annualized yield at April 30, 2020. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| FGIC | Financial Guaranty Insurance Corporation |
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 April 30, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Municipal Bonds | — | 47,393,274 | — | 47,393,274 |
| Money Market Funds | 1,288,666 | — | — | 1,288,666 |
| Total Investments in Securities | 1,288,666 | 47,393,274 | — | 48,681,940 |
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.
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020
|
11 |
Statement of Assets and Liabilities
April 30, 2020
April 30, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $47,485,267) | $48,681,940 |
| Cash | 882 |
| Receivable for: | |
| Capital shares sold | 39,767 |
| Interest | 676,976 |
| Expense reimbursement due from Investment Manager | 261 |
| Prepaid expenses | 571 |
| Total assets | 49,400,397 |
| Liabilities | |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 636,335 |
| Capital shares purchased | 26,941 |
| Distributions to shareholders | 99,263 |
| Management services fees | 623 |
| Distribution and/or service fees | 131 |
| Transfer agent fees | 2,156 |
| Compensation of board members | 90,418 |
| Other expenses | 2,898 |
| Total liabilities | 858,765 |
| Net assets applicable to outstanding capital stock | $48,541,632 |
| Represented by | |
| Paid in capital | 47,027,236 |
| Total distributable earnings (loss) | 1,514,396 |
| Total - representing net assets applicable to outstanding capital stock | $48,541,632 |
| Class A | |
| Net assets | $11,895,734 |
| Shares outstanding | 1,150,082 |
| Net asset value per share | $10.34 |
| Maximum sales charge | 3.00% |
| 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) | $10.66 |
| Advisor Class | |
| Net assets | $1,156,242 |
| Shares outstanding | 111,733 |
| Net asset value per share | $10.35 |
| Class C | |
| Net assets | $1,829,650 |
| Shares outstanding | 176,810 |
| Net asset value per share | $10.35 |
| Institutional Class | |
| Net assets | $7,458,297 |
| Shares outstanding | 721,212 |
| Net asset value per share | $10.34 |
| Institutional 3 Class | |
| Net assets | $26,201,709 |
| Shares outstanding | 2,525,168 |
| Net asset value per share | $10.38 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 12 | Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Operations
Year Ended April 30, 2020
Year Ended April 30, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $17,912 |
| Interest | 1,586,051 |
| Total income | 1,603,963 |
| Expenses: | |
| Management services fees | 238,872 |
| Distribution and/or service fees | |
| Class A | 30,716 |
| Class C | 16,915 |
| Transfer agent fees | |
| Class A | 12,223 |
| Advisor Class | 889 |
| Class C | 1,686 |
| Institutional Class | 7,919 |
| Institutional 3 Class | 2,197 |
| Compensation of board members | (23) |
| Custodian fees | 1,178 |
| Printing and postage fees | 13,222 |
| Registration fees | 13,534 |
| Audit fees | 27,100 |
| Legal fees | 8,378 |
| Compensation of chief compliance officer | 11 |
| Other | 8,292 |
| Total expenses | 383,109 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (79,409) |
| Fees waived by transfer agent | |
| Institutional 3 Class | (725) |
| Expense reduction | (20) |
| Total net expenses | 302,955 |
| Net investment income | 1,301,008 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 174,925 |
| Net realized gain | 174,925 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (817,014) |
| Net change in unrealized appreciation (depreciation) | (817,014) |
| Net realized and unrealized loss | (642,089) |
| Net increase in net assets resulting from operations | $658,919 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020
|
13 |
Statement of Changes in Net Assets
|
Year Ended
April 30, 2020 |
Year Ended
April 30, 2019 |
|
| Operations | ||
| Net investment income | $1,301,008 | $1,619,985 |
| Net realized gain (loss) | 174,925 | (80,673) |
| Net change in unrealized appreciation (depreciation) | (817,014) | 853,131 |
| Net increase in net assets resulting from operations | 658,919 | 2,392,443 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (289,199) | (424,672) |
| Advisor Class | (23,107) | (20,573) |
| Class C | (27,009) | (45,672) |
| Institutional Class | (207,095) | (253,653) |
| Institutional 3 Class | (754,598) | (1,205,166) |
| Total distributions to shareholders | (1,301,008) | (1,949,736) |
| Decrease in net assets from capital stock activity | (105,143) | (13,683,248) |
| Total decrease in net assets | (747,232) | (13,240,541) |
| Net assets at beginning of year | 49,288,864 | 62,529,405 |
| Net assets at end of year | $48,541,632 | $49,288,864 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 14 | Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| April 30, 2020 | April 30, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 146,952 | 1,563,187 | 149,568 | 1,546,307 |
| Distributions reinvested | 13,926 | 147,757 | 19,602 | 202,774 |
| Redemptions | (155,005) | (1,644,938) | (327,638) | (3,399,000) |
| Net increase (decrease) | 5,873 | 66,006 | (158,468) | (1,649,919) |
| Advisor Class | ||||
| Subscriptions | 54,890 | 580,892 | 44,498 | 461,529 |
| Distributions reinvested | 2,153 | 22,848 | 1,955 | 20,231 |
| Redemptions | (16,080) | (170,737) | (2,170) | (22,644) |
| Net increase | 40,963 | 433,003 | 44,283 | 459,116 |
| Class C | ||||
| Subscriptions | 67,811 | 720,493 | 30,814 | 318,902 |
| Distributions reinvested | 2,115 | 22,453 | 3,620 | 37,439 |
| Redemptions | (40,234) | (430,318) | (128,253) | (1,332,227) |
| Net increase (decrease) | 29,692 | 312,628 | (93,819) | (975,886) |
| Institutional Class | ||||
| Subscriptions | 140,089 | 1,485,111 | 259,897 | 2,687,032 |
| Distributions reinvested | 15,596 | 165,487 | 19,867 | 205,464 |
| Redemptions | (159,889) | (1,679,723) | (244,492) | (2,527,902) |
| Net increase (decrease) | (4,204) | (29,125) | 35,272 | 364,594 |
| Institutional 3 Class | ||||
| Subscriptions | 567,947 | 6,056,950 | 747,049 | 7,772,372 |
| Distributions reinvested | 1,229 | 13,085 | 1,104 | 11,449 |
| Redemptions | (657,508) | (6,957,690) | (1,898,700) | (19,664,974) |
| Net decrease | (88,332) | (887,655) | (1,150,547) | (11,881,153) |
| Total net decrease | (16,008) | (105,143) | (1,323,279) | (13,683,248) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Maryland Intermediate Municipal Bond 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 |
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 4/30/2020 | $10.47 | 0.25 | (0.13) | 0.12 | (0.25) | — | (0.25) |
| Year Ended 4/30/2019 | $10.36 | 0.28 | 0.17 | 0.45 | (0.28) | (0.06) | (0.34) |
| Year Ended 4/30/2018 | $10.61 | 0.27 | (0.20) | 0.07 | (0.27) | (0.05) | (0.32) |
| Year Ended 4/30/2017 | $10.90 | 0.27 | (0.29) | (0.02) | (0.27) | — | (0.27) |
| Year Ended 4/30/2016 | $10.81 | 0.29 | 0.09 | 0.38 | (0.29) | — | (0.29) |
| Advisor Class | |||||||
| Year Ended 4/30/2020 | $10.47 | 0.28 | (0.12) | 0.16 | (0.28) | — | (0.28) |
| Year Ended 4/30/2019 | $10.36 | 0.30 | 0.18 | 0.48 | (0.31) | (0.06) | (0.37) |
| Year Ended 4/30/2018 | $10.61 | 0.30 | (0.20) | 0.10 | (0.30) | (0.05) | (0.35) |
| Year Ended 4/30/2017 | $10.90 | 0.30 | (0.29) | 0.01 | (0.30) | — | (0.30) |
| Year Ended 4/30/2016 | $10.81 | 0.32 | 0.09 | 0.41 | (0.32) | — | (0.32) |
| Class C | |||||||
| Year Ended 4/30/2020 | $10.47 | 0.17 | (0.12) | 0.05 | (0.17) | — | (0.17) |
| Year Ended 4/30/2019 | $10.36 | 0.20 | 0.17 | 0.37 | (0.20) | (0.06) | (0.26) |
| Year Ended 4/30/2018 | $10.61 | 0.19 | (0.20) | (0.01) | (0.19) | (0.05) | (0.24) |
| Year Ended 4/30/2017 | $10.90 | 0.19 | (0.29) | (0.10) | (0.19) | — | (0.19) |
| Year Ended 4/30/2016 | $10.81 | 0.21 | 0.09 | 0.30 | (0.21) | — | (0.21) |
| Institutional Class | |||||||
| Year Ended 4/30/2020 | $10.46 | 0.28 | (0.12) | 0.16 | (0.28) | — | (0.28) |
| Year Ended 4/30/2019 | $10.36 | 0.30 | 0.16 | 0.46 | (0.30) | (0.06) | (0.36) |
| Year Ended 4/30/2018 | $10.61 | 0.30 | (0.20) | 0.10 | (0.30) | (0.05) | (0.35) |
| Year Ended 4/30/2017 | $10.90 | 0.29 | (0.28) | 0.01 | (0.30) | — | (0.30) |
| Year Ended 4/30/2016 | $10.81 | 0.32 | 0.09 | 0.41 | (0.32) | — | (0.32) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 16 | Columbia Maryland Intermediate Municipal Bond 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 4/30/2020 | $10.34 | 1.11% | 0.96% | 0.81%(c) | 2.36% | 15% | $11,896 |
| Year Ended 4/30/2019 | $10.47 | 4.42% | 0.98%(d) | 0.79%(c),(d) | 2.67% | 4% | $11,976 |
| Year Ended 4/30/2018 | $10.36 | 0.65% | 0.98% | 0.79%(c) | 2.55% | 9% | $13,494 |
| Year Ended 4/30/2017 | $10.61 | (0.19%) | 1.01% | 0.81% | 2.50% | 20% | $15,125 |
| Year Ended 4/30/2016 | $10.90 | 3.60% | 1.04% | 0.81%(c) | 2.72% | 13% | $18,362 |
| Advisor Class | |||||||
| Year Ended 4/30/2020 | $10.35 | 1.46% | 0.70% | 0.56%(c) | 2.60% | 15% | $1,156 |
| Year Ended 4/30/2019 | $10.47 | 4.68% | 0.73%(d) | 0.55%(c),(d) | 2.94% | 4% | $741 |
| Year Ended 4/30/2018 | $10.36 | 0.90% | 0.72% | 0.54%(c) | 2.79% | 9% | $274 |
| Year Ended 4/30/2017 | $10.61 | 0.07% | 0.72% | 0.54% | 2.87% | 20% | $86 |
| Year Ended 4/30/2016 | $10.90 | 3.86% | 0.77% | 0.56%(c) | 2.97% | 13% | $10 |
| Class C | |||||||
| Year Ended 4/30/2020 | $10.35 | 0.45% | 1.71% | 1.56%(c) | 1.60% | 15% | $1,830 |
| Year Ended 4/30/2019 | $10.47 | 3.64% | 1.73%(d) | 1.54%(c),(d) | 1.91% | 4% | $1,540 |
| Year Ended 4/30/2018 | $10.36 | (0.10%) | 1.73% | 1.54%(c) | 1.80% | 9% | $2,497 |
| Year Ended 4/30/2017 | $10.61 | (0.93%) | 1.76% | 1.56% | 1.76% | 20% | $2,807 |
| Year Ended 4/30/2016 | $10.90 | 2.83% | 1.79% | 1.56%(c) | 1.97% | 13% | $2,638 |
| Institutional Class | |||||||
| Year Ended 4/30/2020 | $10.34 | 1.46% | 0.71% | 0.56%(c) | 2.60% | 15% | $7,458 |
| Year Ended 4/30/2019 | $10.46 | 4.58% | 0.73%(d) | 0.54%(c),(d) | 2.92% | 4% | $7,591 |
| Year Ended 4/30/2018 | $10.36 | 0.89% | 0.74% | 0.55%(c) | 2.76% | 9% | $7,148 |
| Year Ended 4/30/2017 | $10.61 | 0.06% | 0.76% | 0.56% | 2.75% | 20% | $57,704 |
| Year Ended 4/30/2016 | $10.90 | 3.86% | 0.79% | 0.56%(c) | 2.97% | 13% | $72,405 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020
|
17 |
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 4/30/2020 | $10.50 | 0.29 | (0.12) | 0.17 | (0.29) | — | (0.29) |
| Year Ended 4/30/2019 | $10.39 | 0.31 | 0.18 | 0.49 | (0.32) | (0.06) | (0.38) |
| Year Ended 4/30/2018 | $10.64 | 0.31 | (0.20) | 0.11 | (0.31) | (0.05) | (0.36) |
| Year Ended 4/30/2017(e) | $10.55 | 0.05 | 0.09(f) | 0.14 | (0.05) | — | (0.05) |
| 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) | Institutional 3 Class shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (f) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized gain (loss) presented in the Statement of Operations due to the timing of subscriptions and redemptions of Fund shares in relation to fluctuations in the market value of the portfolio. |
| (g) | Annualized. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 18 | Columbia Maryland Intermediate Municipal Bond 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) |
|
| Institutional 3 Class | |||||||
| Year Ended 4/30/2020 | $10.38 | 1.56% | 0.62% | 0.46% | 2.70% | 15% | $26,202 |
| Year Ended 4/30/2019 | $10.50 | 4.78% | 0.63%(d) | 0.44%(d) | 3.01% | 4% | $27,441 |
| Year Ended 4/30/2018 | $10.39 | 1.02% | 0.62% | 0.43% | 2.93% | 9% | $39,116 |
| Year Ended 4/30/2017(e) | $10.64 | 1.35% | 0.58%(g) | 0.42%(g) | 3.05%(g) | 20% | $10 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020
|
19 |
Notes to Financial Statements
April 30, 2020
April 30, 2020
Note 1. Organization
Columbia Maryland Intermediate
Municipal Bond Fund (the Fund), a series of Columbia Funds Series Trust (the Trust), is a non-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 net investment income 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 and Institutional 3
Class shares are available 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
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.
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.
| 20 | Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
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.
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.
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.
Dividend income is recorded on the
ex-dividend date.
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 net tax-exempt and 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 daily and paid monthly. 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.
|
Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020
|
21 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
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 0.47% to 0.31% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30, 2020 was 0.47% 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. The expense for the Deferred Plan, which includes trustees’ fees deferred during the current period as well as any
gains or losses on the Trustees’ deferred compensation balances as a result of market fluctuations, is included in "Compensation of board members" on the Statement of Operations.
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 3 Class shares are subject to an annual limitation of not
more than 0.02% of the average daily net assets attributable to Institutional 3 Class shares. In addition, prior to September 1, 2019, 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 Institutional 3 Class shares.
| 22 | Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
For the year ended April 30, 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 | 0.10 |
| Advisor Class | 0.10 |
| Class C | 0.10 |
| Institutional Class | 0.10 |
| 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 April 30, 2020, these minimum account balance fees reduced total expenses of
the Fund by $20.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays a
monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class C shares of the Fund and a monthly distribution fee to the Distributor at the maximum
annual rate of 0.75% of the average daily net assets attributable to Class C shares of the Fund.
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended April 30, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 3.00 | 0.75(a) | 7,293 |
| Class C | — | 1.00(b) | — |
| (a) | This charge is imposed on certain investments of $500,000 or more if redeemed within 12 months after purchase. |
| (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.
|
Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020
|
23 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 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:
|
September 1, 2019
through August 31, 2020 |
Prior to
September 1, 2019 |
|
| Class A | 0.81% | 0.81% |
| Advisor Class | 0.56 | 0.56 |
| Class C | 1.56 | 1.56 |
| Institutional Class | 0.56 | 0.56 |
| Institutional 3 Class | 0.47 | 0.45 |
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 September 1, 2019, is the Transfer Agent’s contractual agreement to limit total transfer agency fees to an annual rate of not more than 0.00% for Institutional 3 Class of the
average daily net assets attributable to Institutional 3 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 April 30, 2020, these
differences were primarily due to differing treatment for trustees’ deferred compensation, and distributions. 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 April 30, 2020 | Year Ended April 30, 2019 | ||||||
|
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 102 | 1,300,906 | — | 1,301,008 | — | 1,634,965 | 314,771 | 1,949,736 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
| 24 | Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
At April 30, 2020, the components
of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed tax-
exempt income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| 20 | 412,594 | 94,232 | — | 1,196,673 |
At April 30, 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) ($) |
Net unrealized
appreciation ($) |
| 47,485,267 | 1,701,539 | (504,866) | 1,196,673 |
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 April 30, 2020, may be available to reduce future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code. In addition, for the year ended April 30,
2020, capital loss carryforwards utilized, if any, were as follows:
|
No expiration
short-term ($) |
No expiration
long-term ($) |
Total ($) | Utilized ($) |
| — | — | — | 80,673 |
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 $7,589,184 and $7,437,673, respectively, for the year ended April 30, 2020. The amount of purchase and sale
activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. 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 April 30, 2020.
Note 7. 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
|
Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
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 April 30, 2020.
Note 8. Significant
risks
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.
Geographic concentration risk
Because the Fund invests
substantially in municipal securities issued by the state identified in the Fund’s name and political sub-divisions of that state, the Fund will be particularly affected by adverse tax, legislative, regulatory,
demographic or political changes as well as changes impacting the state’s financial, economic or other condition and prospects. In addition, because of the relatively small number of issuers of tax-exempt
securities in the state, the Fund may invest a higher percentage of assets in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of municipal and other
securities owned by the Fund also may be adversely affected by future changes in federal or state income tax laws.
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.
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 the 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
| 26 | Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
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 its investment objective. 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 its employees and to assure the continuity of its
business operations, the Investment Manager and its affiliates have implemented a work from home protocol for virtually all of its 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. The Investment Manager’s operations teams seek to operate without significant disruptions in service.
Its 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. The Fund cannot,
however, predict the impact that natural or man-made disasters, including the COVID-19 pandemic, may have on the ability of the Investment Manager, its employees and third-party service providers to continue ordinary
business operations and technology functions over near- or longer-term periods.
Non-diversification risk
A non-diversified fund is permitted
to invest a greater percentage of its total assets in fewer issuers than a diversified fund. This increases the risk that a change in the value of any one investment held by the Fund could affect the overall value of
the Fund more than it would affect that of a diversified fund holding a greater number of investments. Accordingly, the Fund’s value will likely be more volatile than the value of a more diversified fund.
Shareholder concentration risk
At April 30, 2020, one unaffiliated
shareholder of record owned 66.5% 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 9. 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.
|
Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
Note 10. 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 Maryland Intermediate Municipal Bond 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 Maryland Intermediate Municipal Bond Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Maryland Intermediate Municipal Bond Fund (one of the funds constituting Columbia Funds Series Trust, referred to hereafter as
the "Fund") as of April 30, 2020, the related statement of operations for the year ended April 30, 2020, the statement of changes in net assets for each of the two years in the period ended April 30, 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 April 30, 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
April 30, 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 April 30, 2020 by correspondence with the custodian 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
June 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
|
Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020
|
29 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended April 30, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Capital
gain dividend |
Exempt-
interest dividends |
| $98,944 | 99.99% |
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.
Exempt-interest dividends. The
percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes. A portion of the income may be subject to federal alternative minimum
tax.
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 |
| 30 | Columbia Maryland Intermediate Municipal Bond 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 Maryland Intermediate Municipal Bond 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 |
|
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 | 117 | Director, NAPE Education Foundation since October 2016 |
| 32 | Columbia Maryland Intermediate Municipal Bond Fund | 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 Maryland Intermediate Municipal Bond 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 |
|
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. |
Liquidity Risk
Management Program
Pursuant to Rule 22e-4 under the
1940 Act, the Fund has adopted a liquidity risk management program (“Program”). The Program’s principal objectives include assessing, managing and periodically reviewing the Fund’s liquidity
risk. Liquidity risk is defined as the risk that the Fund could not meet redemption requests without significant dilution of remaining investors’ interests in the Fund.
The Board has appointed the
Investment Manager as the program administrator for the Fund’s Program. The Investment Manager has delegated oversight of the Program to its Liquidity Risk Management Committee (the “Committee”). At
a board meeting during the fiscal period, the Committee provided the Board with a report addressing the operations of the program and assessing its adequacy and effectiveness of implementation for the period December
1, 2018, through December 31, 2019, including:
| • | the Fund had sufficient liquidity to both meet redemptions and operate effectively on behalf of shareholders; |
| • | there were no material changes to the Program during the period; |
| 34 | Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020 |
Liquidity Risk Management Program (continued)
| • | the implementation of the Program was effective to manage the Fund’s liquidity risk; and |
| • | the Program operated adequately during the period. |
There can be no assurance that the
Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an
investment in the Fund may be subject.
|
Columbia Maryland Intermediate Municipal Bond Fund | Annual Report 2020
|
35 |
Columbia Maryland Intermediate Municipal Bond
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/
ANN190_04_K01_(06/20)
Annual Report
April 30, 2020
April 30, 2020
Columbia Georgia
Intermediate Municipal Bond 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 Federally Insured • No
Financial Institution Guarantee • May Lose Value
Table of Contents
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Columbia Georgia Intermediate
Municipal Bond 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 Georgia Intermediate Municipal Bond
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks current income exempt from U.S. federal income tax and Georgia individual income tax, consistent with moderate fluctuation of principal.
Portfolio management
Paul Fuchs, CFA
Lead Portfolio Manager
Managed Fund since 2016
Anders Myhran, CFA
Portfolio Manager
Managed Fund since 2019
Deborah Vargo
Portfolio Manager
Managed Fund since 2017
Returns for Class A shares are shown
with and without the maximum initial sales charge of 3.00%. 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 Bloomberg Barclays 3–15
Year Blend Municipal Bond Index is an unmanaged index that tracks the performance of municipal bonds issued after December 31, 1990, with remaining maturities between 2 and 17 years and at least $7 million in
principal amount outstanding.
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 Georgia Intermediate Municipal Bond Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (April 30, 2010 — April 30, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Georgia Intermediate Municipal Bond 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.
| Quality breakdown (%) (at April 30, 2020) | |
| AAA rating | 10.1 |
| AA rating | 53.2 |
| A rating | 28.3 |
| BBB rating | 5.3 |
| BB rating | 1.1 |
| Not rated | 2.0 |
| Total | 100.0 |
Percentages indicated are based
upon total fixed income investments.
Bond ratings apply to the underlying
holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the
highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not
rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily.
The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other
issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such
security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
| 4 | Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that
ended April 30, 2020, the Fund’s Class A shares returned 2.02% excluding sales charges, and its Institutional Class shares returned 2.27%. The Fund’s benchmark, the Bloomberg Barclays 3-15 Year Blend
Municipal Bond Index, returned 2.40% for the same time period. The Fund’s duration (interest-rate sensitivity) was slightly below that of the benchmark for most of the period, which detracted from performance
given that yields declined considerably.
Market overview
Despite elevated volatility late
in the period, municipal bonds posted a positive total return for the full 12 months that ended April 30, 2020. The vast majority of the gain came from income, as prices were relatively flat.
U.S. tax-exempt debt performed
reasonably well from the beginning of the period through early March 2020. During this time, the broader fixed-income market was aided by the backdrop of slow global growth and periodic “flights to
quality” brought about by headlines regarding the U.S.-China trade dispute. The U.S. Federal Reserve (Fed) also supported the market through its shift to a more accommodative policy stance, highlighted by
quarter-point interest rate cuts at its meetings in July 2019, September 2019, and December 2019. Municipal Bonds were further boosted by the combination of strong investor demand and a manageable level of new-issue
supply.
This favorable backdrop changed
suddenly in March 2020, when the spread of COVID-19 dramatically reshaped the investment landscape over the span of a few short months. The rapid rise of cases in Europe and the United States prompted travel
restrictions, non-essential business closures and shelter-in-place orders. The unprecedented halt to substantial portions of the economy left investors struggling to price risk assets appropriately in the new reality.
Massive selling flooded the market, with municipal funds experiencing their first outflow in 61 weeks. The tax-exempt market suffered some of the worst days in its history in March 2020 as a result.
The sell-off reached a crescendo
late in March 2020, at which point tax-exempt issues began to recover much of their lost ground. The Fed cut rates to zero and announced a number of new liquidity facilities, and Congress approved a stimulus package
of more than $2 trillion. Investors also grew increasingly hopeful about the potential for a gradual re-opening of the economy. Still, municipal bonds experienced negative price returns for the full 12 months that
ended April 30, 2020.
Within the municipal market, higher
quality issues outperformed high yield due largely to investors’ clear preference for lower risk assets in the latter part of the period. Longer term issues modestly outpaced their shorter dated counterparts.
Georgia’s higher credit
quality was a plus
Georgia municipal bonds
registered a positive absolute return and exceeded the gain for the U.S. municipal market. The state’s higher credit quality, with a larger weighting in AAA rated issues and a lower weighting in bonds rated
below investment grade as compared to the benchmark, was beneficial in the challenging environment. Additionally, the relatively few BBB rated issues in Georgia generally performed better than their national peers. A
lower weighting in the poor-performing transportation sector was an additional tailwind for the state, with a small subset of Atlanta airport bonds among the few to suffer from the COVID-19-related shutdown.
Despite the late downturn,
Georgia’s municipal market reflected the state’s healthy underlying fundamentals for the majority of the period. In addition to producing above-average economic growth, Georgia featured the combination of
low debt, high reserves, and robust fiscal management. The state was hit hard by the pandemic, however, with one of the largest increases in unemployment claims since the beginning of the COVID-19 crisis. Already,
this trend had begun to have an effect on the state’s revenue collections. Governor Brian Kemp’s fiscal 2021 budget proposal assumes a 1.9% revenue increase over the original 2020 budget, but that
assumption likely will need to be revisited in light of recent developments. The governor was one of the first to relax social distancing regulations and reopen a broad variety of business in an effort to mitigate the
economic impact of COVID-19, although the effect of these measures remained to be seen at the close of the reporting period.
|
Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
Contributors and detractors
The Fund’s duration
(interest-rate sensitivity) was slightly below that of the benchmark for most of the period, which detracted from performance given that yields declined considerably. (Prices rise as yields fall.) The Fund’s
modestly higher risk profile, highlighted by an underweight in AAA-rated and pre-refunded bonds, detracted. An overweight in the underperforming hospital sector also hurt relative performance, as did security
selection in electric utilities and education.
On the positive side, the Fund
benefited from many of the themes that helped the state overall. Most notably, the Fund did not have positions in many of the worst-performing securities in the national index. Sector allocations were additive, with
overweights in local general obligation debt, education, and water & sewer issues adding value. Underweights in transportation and leasing contributed, as well. Security selection was a positive overall,
particularly in longer maturity issues, A-rated debt, and the local general obligation, transportation, special tax, and hospital sectors.
Fund positioning
Our strategy remained largely
consistent throughout the period. We focused on repositioning the Fund out of short-maturity, low-yielding holdings, such as pre-refunded issues and those we believed would be refinanced. Our purchase activity was
focused on adding incremental yield without moving down in credit quality. Nearly 90% of our purchases were in the AA or A rating category, and almost half had coupons below 5%, an area where we saw compelling value.
We took advantage of opportunities in the hospital sector, where many securities offered yield premiums to other, similarly rated, sectors. We increased the Fund’s average maturity from 8.5 years to 9.7 years
over the course of the reporting period by raising its weighting in bonds maturing in 15 to 18 years and reducing its allocation to bonds with maturities of one to two years. The portfolio’s duration rose as a
result of these changes, and it finished April 2020 at a roughly neutral level compared to the benchmark. The Fund’s overall credit quality was unchanged.
We continued to be selective when
evaluating lower investment-grade and non-rated securities, as yield spreads were extremely tight for the majority of the period. Only in the last two months of the period, when COVID-19 became the primary driver of
market performance, did spreads widen. In response to the impact of COVID-19 on the market, we intensified our review of the Fund’s positioning across sectors and issuers to identify those that we believed were
most susceptible to mitigation efforts, and we reduced allocations to those that we believed would suffer the largest impact. Believing the damage for many issues would likely extend beyond this temporary economic
“pause,” we think credit should generally be evaluated through a long-term lens that balances the possibility of a near-term recovery with longer term safety of principal. With this said, we are cautiously
optimistic about the prospects of a reopening of the U.S. economy, which would be very beneficial to most areas of the municipal market.
Fixed-income securities present
issuer default risk. The Fund invests substantially in municipal securities and will be affected by tax, legislative, regulatory, demographic or political changes, as well as changes impacting a state’s financial, economic or other
conditions. A relatively small number of tax-exempt issuers may necessitate the Fund investing more heavily in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly.
The value of the Fund’s portfolio may be more volatile than a more geographically diversified fund. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise
which may reduce investment opportunities and potential returns. 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. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Federal and state tax rules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state or local taxes. Liquidity risk is associated with the difficulty of selling underlying investments at a desirable time or price. 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 Georgia Intermediate Municipal Bond 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 Georgia Intermediate Municipal Bond Fund | Annual Report 2020
|
7 |
Portfolio of Investments
April 30, 2020
April 30, 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 Georgia Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
| Money Market Funds 2.1% | ||
| Shares | Value ($) | |
| Dreyfus AMT-Free Tax Exempt Cash Management Fund, Institutional Shares, 0.164%(e) | 207,094 | 207,074 |
| JPMorgan Institutional Tax Free Money Market Fund, Institutional Shares, 0.180%(e) | 646,258 | 646,258 |
|
Total Money Market Funds
(Cost $853,352) |
853,332 | |
|
Total Investments in Securities
(Cost: $38,847,106) |
39,919,571 | |
| Other Assets & Liabilities, Net | 311,025 | |
| Net Assets | 40,230,596 | |
Notes to Portfolio of
Investments
| (a) | The Fund is entitled to receive principal and interest from the guarantor after a day or a week’s notice or upon maturity. The maturity date disclosed represents the final maturity. |
| (b) | Represents a variable rate security where the coupon rate adjusts on specified dates (generally daily or weekly) using the prevailing money market rate. The interest rate shown was the current rate as of April 30, 2020. |
| (c) | 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 April 30, 2020, the total value of these securities amounted to $778,180, which represents 1.93% of total net assets. |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 10 | Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
April 30, 2020
April 30, 2020
Notes to Portfolio of Investments (continued)
| (d) | Zero coupon bond. |
| (e) | The rate shown is the seven-day current annualized yield at April 30, 2020. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| BAM | Build America Mutual Assurance Co. |
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 April 30, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Floating Rate Notes | — | 400,000 | — | 400,000 |
| Municipal Bonds | — | 38,666,239 | — | 38,666,239 |
| Money Market Funds | 853,332 | — | — | 853,332 |
| Total Investments in Securities | 853,332 | 39,066,239 | — | 39,919,571 |
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.
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020
|
11 |
Statement of Assets and Liabilities
April 30, 2020
April 30, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $38,847,106) | $39,919,571 |
| Cash | 568 |
| Receivable for: | |
| Capital shares sold | 62,363 |
| Interest | 449,595 |
| Expense reimbursement due from Investment Manager | 292 |
| Prepaid expenses | 566 |
| Total assets | 40,432,955 |
| Liabilities | |
| Payable for: | |
| Capital shares purchased | 27,706 |
| Distributions to shareholders | 77,451 |
| Management services fees | 516 |
| Distribution and/or service fees | 100 |
| Transfer agent fees | 5,307 |
| Compensation of board members | 88,773 |
| Other expenses | 2,506 |
| Total liabilities | 202,359 |
| Net assets applicable to outstanding capital stock | $40,230,596 |
| Represented by | |
| Paid in capital | 38,856,463 |
| Total distributable earnings (loss) | 1,374,133 |
| Total - representing net assets applicable to outstanding capital stock | $40,230,596 |
| Class A | |
| Net assets | $9,013,560 |
| Shares outstanding | 873,083 |
| Net asset value per share | $10.32 |
| Maximum sales charge | 3.00% |
| 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) | $10.64 |
| Advisor Class | |
| Net assets | $185,595 |
| Shares outstanding | 18,000 |
| Net asset value per share | $10.31 |
| Class C | |
| Net assets | $1,409,672 |
| Shares outstanding | 136,510 |
| Net asset value per share | $10.33 |
| Institutional Class | |
| Net assets | $28,950,838 |
| Shares outstanding | 2,804,928 |
| Net asset value per share | $10.32 |
| Institutional 3 Class | |
| Net assets | $670,931 |
| Shares outstanding | 64,828 |
| Net asset value per share | $10.35 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 12 | Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Operations
Year Ended April 30, 2020
Year Ended April 30, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $21,097 |
| Interest | 1,313,354 |
| Total income | 1,334,451 |
| Expenses: | |
| Management services fees | 203,104 |
| Distribution and/or service fees | |
| Class A | 25,783 |
| Class C | 16,468 |
| Transfer agent fees | |
| Class A | 13,191 |
| Advisor Class | 369 |
| Class C | 2,104 |
| Institutional Class | 39,244 |
| Institutional 3 Class | 72 |
| Compensation of board members | 57 |
| Custodian fees | 1,363 |
| Printing and postage fees | 12,213 |
| Registration fees | 3,287 |
| Audit fees | 27,100 |
| Legal fees | 8,299 |
| Compensation of chief compliance officer | 9 |
| Other | 8,182 |
| Total expenses | 360,845 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (78,775) |
| Total net expenses | 282,070 |
| Net investment income | 1,052,381 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 234,741 |
| Net realized gain | 234,741 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (350,656) |
| Net change in unrealized appreciation (depreciation) | (350,656) |
| Net realized and unrealized loss | (115,915) |
| Net increase in net assets resulting from operations | $936,466 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020
|
13 |
Statement of Changes in Net Assets
|
Year Ended
April 30, 2020 |
Year Ended
April 30, 2019 |
|
| Operations | ||
| Net investment income | $1,052,381 | $1,287,208 |
| Net realized gain | 234,741 | 93,167 |
| Net change in unrealized appreciation (depreciation) | (350,656) | 640,826 |
| Net increase in net assets resulting from operations | 936,466 | 2,021,201 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (236,754) | (295,340) |
| Advisor Class | (7,357) | (4,771) |
| Class C | (25,660) | (49,659) |
| Institutional Class | (773,158) | (933,187) |
| Institutional 3 Class | (9,452) | (4,251) |
| Total distributions to shareholders | (1,052,381) | (1,287,208) |
| Increase (decrease) in net assets from capital stock activity | 2,939 | (13,240,681) |
| Total decrease in net assets | (112,976) | (12,506,688) |
| Net assets at beginning of year | 40,343,572 | 52,850,260 |
| Net assets at end of year | $40,230,596 | $40,343,572 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 14 | Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| April 30, 2020 | April 30, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 122,112 | 1,282,512 | 44,293 | 453,254 |
| Distributions reinvested | 16,668 | 175,433 | 20,918 | 213,594 |
| Redemptions | (264,922) | (2,779,330) | (228,582) | (2,328,654) |
| Net decrease | (126,142) | (1,321,385) | (163,371) | (1,661,806) |
| Advisor Class | ||||
| Subscriptions | — | — | 17,365 | 178,354 |
| Distributions reinvested | 676 | 7,108 | 438 | 4,483 |
| Redemptions | (12,703) | (131,503) | (208) | (2,112) |
| Net increase (decrease) | (12,027) | (124,395) | 17,595 | 180,725 |
| Class C | ||||
| Subscriptions | 798 | 8,397 | 3,011 | 30,985 |
| Distributions reinvested | 2,062 | 21,708 | 4,193 | 42,825 |
| Redemptions | (76,549) | (803,060) | (98,717) | (1,007,682) |
| Net decrease | (73,689) | (772,955) | (91,513) | (933,872) |
| Institutional Class | ||||
| Subscriptions | 940,996 | 9,942,581 | 473,710 | 4,837,555 |
| Distributions reinvested | 14,441 | 151,993 | 17,602 | 179,759 |
| Redemptions | (794,305) | (8,416,377) | (1,556,250) | (15,837,065) |
| Net increase (decrease) | 161,132 | 1,678,197 | (1,064,938) | (10,819,751) |
| Institutional 3 Class | ||||
| Subscriptions | 54,386 | 571,199 | 856 | 8,755 |
| Distributions reinvested | 870 | 9,185 | 386 | 3,952 |
| Redemptions | (3,541) | (36,907) | (1,821) | (18,684) |
| Net increase (decrease) | 51,715 | 543,477 | (579) | (5,977) |
| Total net increase (decrease) | 989 | 2,939 | (1,302,806) | (13,240,681) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Georgia Intermediate Municipal Bond 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 |
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 4/30/2020 | $10.35 | 0.24 | (0.03) | 0.21 | (0.24) | — | (0.24) |
| Year Ended 4/30/2019 | $10.17 | 0.27 | 0.18 | 0.45 | (0.27) | — | (0.27) |
| Year Ended 4/30/2018 | $10.45 | 0.26 | (0.24) | 0.02 | (0.26) | (0.04) | (0.30) |
| Year Ended 4/30/2017 | $10.88 | 0.27 | (0.37) | (0.10) | (0.27) | (0.06) | (0.33) |
| Year Ended 4/30/2016 | $10.81 | 0.29 | 0.11 | 0.40 | (0.29) | (0.04) | (0.33) |
| Advisor Class | |||||||
| Year Ended 4/30/2020 | $10.34 | 0.27 | (0.03) | 0.24 | (0.27) | — | (0.27) |
| Year Ended 4/30/2019 | $10.15 | 0.30 | 0.19 | 0.49 | (0.30) | — | (0.30) |
| Year Ended 4/30/2018 | $10.44 | 0.28 | (0.25) | 0.03 | (0.28) | (0.04) | (0.32) |
| Year Ended 4/30/2017 | $10.87 | 0.30 | (0.38) | (0.08) | (0.29) | (0.06) | (0.35) |
| Year Ended 4/30/2016 | $10.79 | 0.32 | 0.12 | 0.44 | (0.32) | (0.04) | (0.36) |
| Class C | |||||||
| Year Ended 4/30/2020 | $10.36 | 0.16 | (0.03) | 0.13 | (0.16) | — | (0.16) |
| Year Ended 4/30/2019 | $10.17 | 0.20 | 0.19 | 0.39 | (0.20) | — | (0.20) |
| Year Ended 4/30/2018 | $10.46 | 0.18 | (0.25) | (0.07) | (0.18) | (0.04) | (0.22) |
| Year Ended 4/30/2017 | $10.88 | 0.19 | (0.36) | (0.17) | (0.19) | (0.06) | (0.25) |
| Year Ended 4/30/2016 | $10.81 | 0.21 | 0.11 | 0.32 | (0.21) | (0.04) | (0.25) |
| Institutional Class | |||||||
| Year Ended 4/30/2020 | $10.35 | 0.27 | (0.03) | 0.24 | (0.27) | — | (0.27) |
| Year Ended 4/30/2019 | $10.16 | 0.30 | 0.19 | 0.49 | (0.30) | — | (0.30) |
| Year Ended 4/30/2018 | $10.45 | 0.28 | (0.25) | 0.03 | (0.28) | (0.04) | (0.32) |
| Year Ended 4/30/2017 | $10.88 | 0.30 | (0.37) | (0.07) | (0.30) | (0.06) | (0.36) |
| Year Ended 4/30/2016 | $10.81 | 0.32 | 0.11 | 0.43 | (0.32) | (0.04) | (0.36) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 16 | Columbia Georgia Intermediate Municipal Bond 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 4/30/2020 | $10.32 | 2.02% | 0.99% | 0.81% | 2.30% | 21% | $9,014 |
| Year Ended 4/30/2019 | $10.35 | 4.53% | 1.02%(c) | 0.81%(c) | 2.68% | 3% | $10,347 |
| Year Ended 4/30/2018 | $10.17 | 0.12% | 0.98% | 0.81% | 2.45% | 12% | $11,819 |
| Year Ended 4/30/2017 | $10.45 | (0.93%) | 1.03% | 0.81% | 2.54% | 14% | $18,934 |
| Year Ended 4/30/2016 | $10.88 | 3.78% | 1.04% | 0.81% | 2.73% | 13% | $20,377 |
| Advisor Class | |||||||
| Year Ended 4/30/2020 | $10.31 | 2.27% | 0.75% | 0.56% | 2.55% | 21% | $186 |
| Year Ended 4/30/2019 | $10.34 | 4.90% | 0.79%(c) | 0.56%(c) | 2.95% | 3% | $311 |
| Year Ended 4/30/2018 | $10.15 | 0.27% | 0.73% | 0.56% | 2.69% | 12% | $126 |
| Year Ended 4/30/2017 | $10.44 | (0.68%) | 0.77% | 0.56% | 2.79% | 14% | $275 |
| Year Ended 4/30/2016 | $10.87 | 4.14% | 0.79% | 0.56% | 2.98% | 13% | $250 |
| Class C | |||||||
| Year Ended 4/30/2020 | $10.33 | 1.25% | 1.74% | 1.56% | 1.56% | 21% | $1,410 |
| Year Ended 4/30/2019 | $10.36 | 3.85% | 1.77%(c) | 1.56%(c) | 1.93% | 3% | $2,177 |
| Year Ended 4/30/2018 | $10.17 | (0.72%) | 1.73% | 1.56% | 1.70% | 12% | $3,068 |
| Year Ended 4/30/2017 | $10.46 | (1.57%) | 1.78% | 1.56% | 1.78% | 14% | $3,733 |
| Year Ended 4/30/2016 | $10.88 | 3.01% | 1.79% | 1.56% | 1.98% | 13% | $4,996 |
| Institutional Class | |||||||
| Year Ended 4/30/2020 | $10.32 | 2.27% | 0.74% | 0.56% | 2.53% | 21% | $28,951 |
| Year Ended 4/30/2019 | $10.35 | 4.90% | 0.76%(c) | 0.56%(c) | 2.93% | 3% | $27,373 |
| Year Ended 4/30/2018 | $10.16 | 0.28% | 0.73% | 0.56% | 2.70% | 12% | $37,698 |
| Year Ended 4/30/2017 | $10.45 | (0.68%) | 0.78% | 0.56% | 2.79% | 14% | $46,421 |
| Year Ended 4/30/2016 | $10.88 | 4.04% | 0.79% | 0.56% | 2.98% | 13% | $52,315 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020
|
17 |
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 4/30/2020 | $10.38 | 0.27 | (0.02) | 0.25 | (0.28) | — | (0.28) |
| Year Ended 4/30/2019 | $10.19 | 0.31 | 0.19 | 0.50 | (0.31) | — | (0.31) |
| Year Ended 4/30/2018 | $10.48 | 0.29 | (0.25) | 0.04 | (0.29) | (0.04) | (0.33) |
| Year Ended 4/30/2017(d) | $10.41 | 0.05 | 0.07 | 0.12 | (0.05) | — | (0.05) |
| 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) | Institutional 3 Class shares commenced operations on March 1, 2017. 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.
| 18 | Columbia Georgia Intermediate Municipal Bond 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) |
|
| Institutional 3 Class | |||||||
| Year Ended 4/30/2020 | $10.35 | 2.38% | 0.61% | 0.46% | 2.61% | 21% | $671 |
| Year Ended 4/30/2019 | $10.38 | 5.00% | 0.66%(c) | 0.45%(c) | 3.04% | 3% | $136 |
| Year Ended 4/30/2018 | $10.19 | 0.39% | 0.61% | 0.46% | 2.82% | 12% | $140 |
| Year Ended 4/30/2017(d) | $10.48 | 1.17% | 0.64%(e) | 0.43%(e) | 3.04%(e) | 14% | $10 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020
|
19 |
Notes to Financial Statements
April 30, 2020
April 30, 2020
Note 1. Organization
Columbia Georgia Intermediate
Municipal Bond 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 net investment income 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 and Institutional 3
Class shares are available 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
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.
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.
| 20 | Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
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
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.
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.
Dividend income is recorded on the
ex-dividend date.
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 net tax-exempt and 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 daily and paid monthly. 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.
|
Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020
|
21 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 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 0.47% to 0.31% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30, 2020 was 0.47% 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. The expense for the Deferred Plan, which includes trustees’ fees deferred during the current period as well as any
gains or losses on the Trustees’ deferred compensation balances as a result of market fluctuations, is included in "Compensation of board members" on the Statement of Operations.
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 3 Class shares are subject to an annual limitation of not
more than 0.02% of the average daily net assets attributable to Institutional 3 Class shares.
| 22 | Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
For the year ended April 30, 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 | 0.13 |
| Advisor Class | 0.13 |
| Class C | 0.13 |
| Institutional Class | 0.13 |
| Institutional 3 Class | 0.02 |
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended April 30, 2020, no minimum account balance fees were charged by the Fund.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays a
monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class C shares of the Fund and a monthly distribution fee to the Distributor at the maximum
annual rate of 0.75% of the average daily net assets attributable to Class C shares of the Fund.
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended April 30, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 3.00 | 0.75(a) | 820 |
| Class C | — | 1.00(b) | — |
| (a) | This charge is imposed on certain investments of $500,000 or more if redeemed within 12 months after purchase. |
| (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.
|
Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020
|
23 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 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:
|
September 1, 2019
through August 31, 2020 |
Prior to
September 1, 2019 |
|
| Class A | 0.81% | 0.81% |
| Advisor Class | 0.56 | 0.56 |
| Class C | 1.56 | 1.56 |
| Institutional Class | 0.56 | 0.56 |
| Institutional 3 Class | 0.46 | 0.45 |
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 April 30, 2020, these
differences were primarily due to differing treatment for trustees’ deferred compensation, and distributions. 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 April 30, 2020 | Year Ended April 30, 2019 | ||||||
|
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 108 | 1,052,273 | — | 1,052,381 | — | 1,287,208 | — | 1,287,208 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At April 30, 2020, the components
of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed tax-
exempt income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| — | 261,438 | 205,903 | — | 1,072,465 |
| 24 | Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
At April 30, 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) ($) |
Net unrealized
appreciation ($) |
| 38,847,106 | 1,334,647 | (262,182) | 1,072,465 |
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 April 30, 2020, may be available to reduce future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code. In addition, for the year ended April 30,
2020, capital loss carryforwards utilized, if any, were as follows:
|
No expiration
short-term ($) |
No expiration
long-term ($) |
Total ($) | Utilized ($) |
| — | — | — | 28,838 |
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 $9,517,470 and $8,862,431, respectively, for the year ended April 30, 2020. The amount of purchase and sale
activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. 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 April 30, 2020.
Note 7. 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.
|
Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 2020
The Fund had no borrowings during
the year ended April 30, 2020.
Note 8. Significant
risks
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.
Geographic concentration risk
Because the Fund invests
substantially in municipal securities issued by the state identified in the Fund’s name and political sub-divisions of that state, the Fund will be particularly affected by adverse tax, legislative, regulatory,
demographic or political changes as well as changes impacting the state’s financial, economic or other condition and prospects. In addition, because of the relatively small number of issuers of tax-exempt
securities in the state, the Fund may invest a higher percentage of assets in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of municipal and other
securities owned by the Fund also may be adversely affected by future changes in federal or state income tax laws.
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.
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 the 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.
| 26 | Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 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 its investment objective. 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 its employees and to assure the continuity of its
business operations, the Investment Manager and its affiliates have implemented a work from home protocol for virtually all of its 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. The Investment Manager’s operations teams seek to operate without significant disruptions in service.
Its 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. The Fund cannot,
however, predict the impact that natural or man-made disasters, including the COVID-19 pandemic, may have on the ability of the Investment Manager, its employees and third-party service providers to continue ordinary
business operations and technology functions over near- or longer-term periods.
Shareholder concentration risk
At April 30, 2020, one unaffiliated
shareholder of record owned 63.8% 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. 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 9. 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 10. 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
|
Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
April 30, 2020
April 30, 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.
| 28 | Columbia Georgia Intermediate Municipal Bond 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 Georgia Intermediate Municipal Bond Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Georgia Intermediate Municipal Bond Fund (one of the funds constituting Columbia Funds Series Trust, referred to hereafter as
the "Fund") as of April 30, 2020, the related statement of operations for the year ended April 30, 2020, the statement of changes in net assets for each of the two years in the period ended April 30, 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 April 30, 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
April 30, 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 April 30, 2020 by correspondence with the custodian and broker. We believe that our audits provide a
reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
June 22, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
|
Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020
|
29 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended April 30, 2020. Shareholders will be notified in early 2021 of the amounts for use in preparing 2020 income tax returns.
|
Capital
gain dividend |
Exempt-
interest dividends |
| $216,198 | 99.99% |
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.
Exempt-interest dividends. The
percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes. A portion of the income may be subject to federal alternative minimum
tax.
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 |
| 30 | Columbia Georgia Intermediate Municipal Bond 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 Georgia Intermediate Municipal Bond 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 |
|
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 | 117 | Director, NAPE Education Foundation since October 2016 |
| 32 | Columbia Georgia Intermediate Municipal Bond 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 | 171 | 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 Georgia Intermediate Municipal Bond 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 |
|
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. |
Liquidity Risk
Management Program
Pursuant to Rule 22e-4 under the
1940 Act, the Fund has adopted a liquidity risk management program (“Program”). The Program’s principal objectives include assessing, managing and periodically reviewing the Fund’s liquidity
risk. Liquidity risk is defined as the risk that the Fund could not meet redemption requests without significant dilution of remaining investors’ interests in the Fund.
The Board has appointed the
Investment Manager as the program administrator for the Fund’s Program. The Investment Manager has delegated oversight of the Program to its Liquidity Risk Management Committee (the “Committee”). At
a board meeting during the fiscal period, the Committee provided the Board with a report addressing the operations of the program and assessing its adequacy and effectiveness of implementation for the period December
1, 2018, through December 31, 2019, including:
| • | the Fund had sufficient liquidity to both meet redemptions and operate effectively on behalf of shareholders; |
| • | there were no material changes to the Program during the period; |
| • | the implementation of the Program was effective to manage the Fund’s liquidity risk; and |
| • | the Program operated adequately during the period. |
| 34 | Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020 |
Liquidity Risk Management Program (continued)
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
|
Columbia Georgia Intermediate Municipal Bond Fund | Annual Report 2020
|
35 |
Columbia Georgia Intermediate Municipal Bond 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/
ANN152_04_K01_(06/20)
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 seven 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 April 30, 2020 and April 30, 2019 are approximately as follows:
20202019
$209,000 $222,000
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 April 30, 2020 and April 30, 2019 are approximately as follows:
|
2020 |
2019 |
|
$0 |
$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 April 30, 2020 and April 30, 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 April 30, 2020 and April 30,
2019 are approximately as follows:
|
2020 |
2019 |
|
$0 |
$20,300 |
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.
During the fiscal years ended April 30, 2020 and April 30, 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 April 30, 2020 and April 30, 2019 are approximately as follows:
|
2020 |
2019 |
|
$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 April 30,
2020 and April 30, 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.
*****
(e)(2) None, or 0%, of the Audit-Related Fees, Tax Fees and All Other Fees paid by the Fund or affiliated entities relating directly to the operations and financial reporting of the Registrant disclosed above were approved by the audit committee pursuant to paragraphs (c)(7)(i)(C) of Rule 2-01 of Regulation S-X (which permits audit committee approval after the start of the engagement with respect to services other than audit, review or attest services, if certain conditions are satisfied).
(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 April 30, 2020 and April 30,
2019 are approximately as follows:
20202019
$225,000 $245,300
(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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June 22, 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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June 22, 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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June 22, 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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June 22, 2020 |
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