UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number811-04367
Columbia Funds Series Trust I
(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: October 31
Date of reporting period: October 31, 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
October 31, 2020
October 31, 2020
Columbia
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
shareholder 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 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. The Fund’s 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-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 Intermediate Municipal Bond
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks current income exempt from federal income tax, consistent with preservation 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. Returns for Class V shares are
shown with and without the maximum initial sales charge of 4.75%. 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 Intermediate Municipal Bond Fund | Annual Report 2020
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Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (October 31, 2010 — October 31, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia 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 October 31, 2020) | |
| AAA rating | 2.6 |
| AA rating | 26.5 |
| A rating | 47.0 |
| BBB rating | 16.6 |
| BB rating | 2.1 |
| CCC rating | 0.9 |
| Not rated | 4.3 |
| 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. If a security is
Not rated but has a rating by Kroll and/or DBRS, the same methodology is applied to those bonds that would otherwise be Not rated. 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.
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 Intermediate Municipal Bond Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
During the 12-month period that
ended October 31, 2020, the Fund’s Class A shares returned 2.36% excluding sales charges. The Fund’s Institutional Class shares returned 2.47% for the same time period. The Fund’s benchmark, the
Bloomberg Barclays 3-15 Year Blend Municipal Bond Index, returned 3.84%.
Market overview
Despite significant volatility in
the first calendar quarter of 2020, the U.S. municipal bond market experienced positive returns in the 12-month period. Municipals benefited from a relatively benign environment in the first three months of the
reporting period. During this time, the U.S. economy continued its expansion and municipal yields marched toward new lows (as prices increased). These favorable conditions quickly deteriorated in the first quarter of
2020 once the COVID-19 pandemic hit the United States. Municipal bonds experienced several record down days in mid-March as investors withdrew cash from municipal funds amid concerns about the financial impact of the
COVID-19 pandemic on state and local governments. Investor worries about the prospects for bonds backed by economically sensitive revenues, such as sales taxes, hotels and air travel, further contributed to the
withdrawals from municipal funds. Managers raised cash to meet the redemptions, exacerbating the market’s decline.
The downturn abated in late March,
and the tax-exempt market embarked on an impressive rally that included several days of record price gains. Investors were encouraged by the U.S. Federal Reserve’s decision to cut interest rates to zero and
initiate a number of liquidity programs aimed at propping up financial assets. Congress also provided fiscal support with a stimulus package amounting to over $2 trillion. After pausing in April, the market’s
advance resumed in May as the Fed clarified potential support for municipal issuers and cash began to flow back into the market. So much cash came into muni funds, in fact, that year-to-date inflows had returned to
positive territory by the third week of July. Although tax receipts and other municipal revenue sources continued to slide in the COVID-19-related economic downturn, the market remained backstopped by both Fed policy
and hopes for additional fiscal stimulus.
The rally started to lose steam in
early August due to a resurgence of COVID-19 cases, waning hope for further federal support for state and local governments before the U.S. presidential election, and subsiding inflows. Still, the benchmark closed the
annual period with a healthy gain.
The Fund underperformed its
benchmark during the past 12 months, with the bulk of the shortfall occurring in March and April.
The Fund’s leading
detractors included:
| • | Lower rated investment-grade bonds, particularly sectors backed by specific revenue streams rather than general tax receipts, dramatically underperformed as the COVID-19 pandemic took hold and the economy shut down. The Fund was meaningfully overweight in this area, which hurt relative performance. |
| • | Overweight positions in healthcare, education and transportation issues. |
| • | An underweight position in local general obligation debt. |
| • | Fund positions in areas such as retirement communities, airports, college housing, and hospitals. |
The Fund’s leading
contributors included:
| • | An overweight in zero-coupon bonds, which have high sensitivity to movements in prevailing yields. |
| • | Fund holdings in the public power sector held up well through the downturn. Since power is an essential service, public power bonds are considered “safe havens” in times of market stress. |
| • | Bonds we purchased during the market sell-off in the first half of 2020 contributed to results. The rapid widening of yield spreads in the spring provided an opportunity to add new holdings at favorable levels. The additions we made in this time were strong performers over the remainder of the period, as the economy continued to open and valuations improved. |
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Columbia Intermediate Municipal Bond Fund | Annual Report 2020
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5 |
Manager Discussion of Fund Performance (continued)
Fund positioning
We were constructive on the
prospects for municipal bonds prior to the COVID-19 pandemic, prompting us to add market exposure, primarily in intermediate-term issues, with an emphasis on zero-coupon securities, and to lengthen the Fund’s
average maturity. The addition of zero-coupon bonds in this maturity range allowed us to add to the portfolio’s interest-rate sensitivity without extending the average maturity beyond the maximum level of ten
years. We funded these purchases by reducing the Fund’s allocations to short-maturity pre-refunded bonds and bonds that are callable in the next 12 months. Our decision to reduce the Fund’s weighting in
these areas was based on their lower income and our expectation that issuers would refinance callable, higher cost debt.
As the second quarter began, our
focus shifted to assessing the impact of the COVID-19 pandemic on the sectors and issuers represented in the portfolio. We reduced or exited Fund positions we identified as being susceptible to the effects of an
economic slowdown related to the COVID-19 pandemic, including various city of Chicago issuers, Austin Convention Center, a New Orleans car rental facility, and airport passenger fare charge bonds.
In the third calendar quarter, our
new purchases generally emphasized bonds with 4% coupons based on their higher income and attractive relative value. We also resumed the process of rotating out of short-maturity securities and bonds that are callable
in the next twelve months in order fund purchases of longer and intermediate-term debt.
At the end of the period, we
believed that the market environment was much improved compared to the conditions that were in place in the spring of 2020. The lower rated sectors of the investment-grade space had recovered roughly half of the
spread widening that occurred in the immediate aftermath of the COVID-19 pandemic. The economy had opened across the country to varying degrees, and the news of coronavirus vaccines was encouraging. In our view, these
factors indicated the potential for additional upside in lower rated investment-grade debt, forming the basis for the Fund’s overweight positions in revenue sectors such as toll roads, airports and hospitals.
We would like to thank shareholders
for their continuing support and trust they have placed in us.
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. 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, 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 who have contributed to the report. 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 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 Intermediate Municipal Bond Fund | Annual Report 2020
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7 |
Portfolio of Investments
October 31, 2020
October 31, 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 Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
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Columbia Intermediate Municipal Bond Fund | Annual Report 2020
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9 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
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Columbia Intermediate Municipal Bond Fund | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 12 | Columbia Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
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Columbia Intermediate Municipal Bond Fund | Annual Report 2020
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13 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 14 | Columbia Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
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Columbia Intermediate Municipal Bond Fund | Annual Report 2020
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15 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 16 | Columbia Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
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Columbia Intermediate Municipal Bond Fund | Annual Report 2020
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17 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 18 | Columbia Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
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Columbia Intermediate Municipal Bond Fund | Annual Report 2020
|
19 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
| Municipal Bonds (continued) | ||||
| Issue Description |
Coupon
Rate |
Principal
Amount ($) |
Value ($) | |
| Wisconsin Health & Educational Facilities Authority | ||||
| Refunding Revenue Bonds | ||||
| ProHealth Care, Inc. Obligated Group | ||||
| Series 2015 | ||||
| 08/15/2031 | 5.000% | 1,000,000 | 1,134,320 | |
| Rogers Memorial Hospital, Inc. | ||||
| Series 2014A | ||||
| 07/01/2034 | 5.000% | 2,500,000 | 2,789,700 | |
| Total | 4,984,780 | |||
|
Total Municipal Bonds
(Cost $1,044,141,767) |
1,121,319,789 | |||
| Money Market Funds 0.1% | ||
| Shares | Value ($) | |
| Dreyfus AMT-Free Tax Exempt Cash Management Fund, Institutional Shares, 0.010%(h) | 71,548 | 71,541 |
| JPMorgan Institutional Tax Free Money Market Fund, Institutional Shares, 0.012%(h) | 827,972 | 827,972 |
|
Total Money Market Funds
(Cost $899,520) |
899,513 | |
|
Total Investments in Securities
(Cost $1,047,706,287) |
1,124,884,302 | |
| Other Assets & Liabilities, Net | 3,776,542 | |
| Net Assets | $1,128,660,844 | |
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 October 31, 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. At October 31, 2020, the total value of these securities amounted to $16,868,183, which represents 1.49% of total net assets. |
| (e) | Zero coupon bond. |
| (f) | Represents securities that have defaulted on payment of interest. The Fund has stopped accruing interest on these securities. At October 31, 2020, the total value of these securities amounted to $82,672, which represents 0.01% of total net assets. |
| (g) | Represents a security purchased on a when-issued basis. |
| (h) | The rate shown is the seven-day current annualized yield at October 31, 2020. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| AMBAC | Ambac Assurance Corporation |
| NPFGC | National Public Finance Guarantee Corporation |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 20 | Columbia Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 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 October 31, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Floating Rate Notes | — | 2,665,000 | — | 2,665,000 |
| Municipal Bonds | — | 1,121,319,789 | — | 1,121,319,789 |
| Money Market Funds | 899,513 | — | — | 899,513 |
| Total Investments in Securities | 899,513 | 1,123,984,789 | — | 1,124,884,302 |
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 Intermediate Municipal Bond Fund | Annual Report 2020
|
21 |
Statement of Assets and Liabilities
October 31, 2020
October 31, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $1,047,706,287) | $1,124,884,302 |
| Receivable for: | |
| Capital shares sold | 1,294,883 |
| Interest | 12,997,379 |
| Expense reimbursement due from Investment Manager | 3,017 |
| Prepaid expenses | 5,502 |
| Trustees’ deferred compensation plan | 327,782 |
| Total assets | 1,139,512,865 |
| Liabilities | |
| Due to custodian | 26,578 |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 6,462,132 |
| Capital shares purchased | 910,402 |
| Distributions to shareholders | 2,658,460 |
| Management services fees | 14,603 |
| Distribution and/or service fees | 1,368 |
| Transfer agent fees | 109,069 |
| Compensation of board members | 317,022 |
| Compensation of chief compliance officer | 46 |
| Other expenses | 24,559 |
| Trustees’ deferred compensation plan | 327,782 |
| Total liabilities | 10,852,021 |
| Net assets applicable to outstanding capital stock | $1,128,660,844 |
| Represented by | |
| Paid in capital | 1,044,496,396 |
| Total distributable earnings (loss) | 84,164,448 |
| Total - representing net assets applicable to outstanding capital stock | $1,128,660,844 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 22 | Columbia Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Assets and Liabilities (continued)
October 31, 2020
October 31, 2020
| Class A | |
| Net assets | $156,864,682 |
| Shares outstanding | 14,932,269 |
| Net asset value per share | $10.51 |
| 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) | $10.84 |
| Advisor Class | |
| Net assets | $6,249,239 |
| Shares outstanding | 595,227 |
| Net asset value per share | $10.50 |
| Class C | |
| Net assets | $21,468,589 |
| Shares outstanding | 2,043,288 |
| Net asset value per share | $10.51 |
| Institutional Class | |
| Net assets | $900,641,189 |
| Shares outstanding | 85,694,209 |
| Net asset value per share | $10.51 |
| Institutional 2 Class | |
| Net assets | $30,056,077 |
| Shares outstanding | 2,864,879 |
| Net asset value per share | $10.49 |
| Institutional 3 Class | |
| Net assets | $2,494,546 |
| Shares outstanding | 237,127 |
| Net asset value per share | $10.52 |
| Class V | |
| Net assets | $10,886,522 |
| Shares outstanding | 1,036,321 |
| Net asset value per share | $10.50 |
| Maximum sales charge | 4.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class V shares) | $11.02 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Intermediate Municipal Bond Fund | Annual Report 2020
|
23 |
Statement of Operations
Year Ended October 31, 2020
Year Ended October 31, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $43,001 |
| Interest | 40,143,671 |
| Total income | 40,186,672 |
| Expenses: | |
| Management services fees | 5,537,465 |
| Distribution and/or service fees | |
| Class A | 303,104 |
| Class C | 197,165 |
| Class V | 16,781 |
| Transfer agent fees | |
| Class A | 187,797 |
| Advisor Class | 7,497 |
| Class C | 28,785 |
| Institutional Class | 1,162,827 |
| Institutional 2 Class | 22,004 |
| Institutional 3 Class | 328 |
| Class V | 13,869 |
| Compensation of board members | 46,584 |
| Custodian fees | 4,817 |
| Printing and postage fees | 27,243 |
| Registration fees | 128,539 |
| Audit fees | 29,500 |
| Legal fees | 29,327 |
| Compensation of chief compliance officer | 417 |
| Other | 31,957 |
| Total expenses | 7,776,006 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (1,034,285) |
| Fees waived by distributor | |
| Class C | (1,748) |
| Expense reduction | (300) |
| Total net expenses | 6,739,673 |
| Net investment income | 33,446,999 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 4,807,471 |
| Net realized gain | 4,807,471 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (11,848,821) |
| Net change in unrealized appreciation (depreciation) | (11,848,821) |
| Net realized and unrealized loss | (7,041,350) |
| Net increase in net assets resulting from operations | $26,405,649 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 24 | Columbia Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Changes in Net Assets
|
Year Ended
October 31, 2020 |
Year Ended
October 31, 2019 |
|
| Operations | ||
| Net investment income | $33,446,999 | $40,611,668 |
| Net realized gain | 4,807,471 | 4,904,348 |
| Net change in unrealized appreciation (depreciation) | (11,848,821) | 56,482,128 |
| Net increase in net assets resulting from operations | 26,405,649 | 101,998,144 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (4,707,382) | (4,693,722) |
| Advisor Class | (200,952) | (351,686) |
| Class C | (570,089) | (625,926) |
| Institutional Class | (31,204,877) | (34,208,884) |
| Institutional 2 Class | (1,350,901) | (889,531) |
| Institutional 3 Class | (90,301) | (79,422) |
| Class T | — | (40) |
| Class V | (354,228) | (363,570) |
| Total distributions to shareholders | (38,478,730) | (41,212,781) |
| Decrease in net assets from capital stock activity | (103,458,912) | (286,383,429) |
| Total decrease in net assets | (115,531,993) | (225,598,066) |
| Net assets at beginning of year | 1,244,192,837 | 1,469,790,903 |
| Net assets at end of year | $1,128,660,844 | $1,244,192,837 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Intermediate Municipal Bond Fund | Annual Report 2020
|
25 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| October 31, 2020 | October 31, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 2,586,579 | 27,150,318 | 1,851,275 | 19,214,102 |
| Distributions reinvested | 390,025 | 4,096,422 | 390,395 | 4,075,257 |
| Redemptions | (2,447,488) | (25,426,158) | (3,420,104) | (35,553,470) |
| Net increase (decrease) | 529,116 | 5,820,582 | (1,178,434) | (12,264,111) |
| Advisor Class | ||||
| Subscriptions | 112,982 | 1,190,568 | 282,020 | 2,873,794 |
| Distributions reinvested | 19,081 | 200,295 | 33,970 | 351,232 |
| Redemptions | (96,725) | (1,000,205) | (1,769,512) | (18,219,538) |
| Net increase (decrease) | 35,338 | 390,658 | (1,453,522) | (14,994,512) |
| Class C | ||||
| Subscriptions | 631,585 | 6,614,557 | 234,173 | 2,426,061 |
| Distributions reinvested | 46,312 | 486,507 | 49,533 | 516,386 |
| Redemptions | (854,723) | (8,970,813) | (940,107) | (9,780,101) |
| Net decrease | (176,826) | (1,869,749) | (656,401) | (6,837,654) |
| Institutional Class | ||||
| Subscriptions | 5,466,330 | 57,173,942 | 5,041,580 | 52,387,010 |
| Distributions reinvested | 498,443 | 5,237,575 | 463,688 | 4,844,138 |
| Redemptions | (15,780,931) | (164,511,056) | (31,841,094) | (327,841,315) |
| Net decrease | (9,816,158) | (102,099,539) | (26,335,826) | (270,610,167) |
| Institutional 2 Class | ||||
| Subscriptions | 1,549,645 | 16,298,646 | 2,322,152 | 24,023,898 |
| Distributions reinvested | 128,809 | 1,350,725 | 84,869 | 888,838 |
| Redemptions | (2,200,424) | (22,767,572) | (574,080) | (5,927,557) |
| Net increase (decrease) | (521,970) | (5,118,201) | 1,832,941 | 18,985,179 |
| Institutional 3 Class | ||||
| Subscriptions | 56,427 | 594,551 | 161,835 | 1,672,363 |
| Distributions reinvested | 6,502 | 68,369 | 5,954 | 62,274 |
| Redemptions | (65,419) | (683,847) | (109,443) | (1,135,693) |
| Net increase (decrease) | (2,490) | (20,927) | 58,346 | 598,944 |
| Class T | ||||
| Redemptions | — | — | (959) | (9,763) |
| Net decrease | — | — | (959) | (9,763) |
| Class V | ||||
| Subscriptions | 14,680 | 155,628 | 3,631 | 37,848 |
| Distributions reinvested | 25,184 | 264,515 | 25,535 | 266,493 |
| Redemptions | (95,033) | (981,879) | (149,920) | (1,555,686) |
| Net decrease | (55,169) | (561,736) | (120,754) | (1,251,345) |
| Total net decrease | (10,008,159) | (103,458,912) | (27,854,609) | (286,383,429) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 26 | Columbia Intermediate Municipal Bond Fund | Annual Report 2020 |
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BLANK]
|
Columbia Intermediate 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 |
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 10/31/2020 | $10.59 | 0.28 | (0.03) | 0.25 | (0.29) | (0.04) | (0.33) |
| Year Ended 10/31/2019 | $10.11 | 0.31 | 0.48 | 0.79 | (0.31) | (0.00)(d) | (0.31) |
| Year Ended 10/31/2018 | $10.54 | 0.31 | (0.43) | (0.12) | (0.31) | — | (0.31) |
| Year Ended 10/31/2017 | $10.71 | 0.31 | (0.17) | 0.14 | (0.31) | — | (0.31) |
| Year Ended 10/31/2016 | $10.68 | 0.32 | 0.03 | 0.35 | (0.32) | — | (0.32) |
| Advisor Class | |||||||
| Year Ended 10/31/2020 | $10.59 | 0.30 | (0.04) | 0.26 | (0.31) | (0.04) | (0.35) |
| Year Ended 10/31/2019 | $10.11 | 0.33 | 0.48 | 0.81 | (0.33) | (0.00)(d) | (0.33) |
| Year Ended 10/31/2018 | $10.53 | 0.33 | (0.42) | (0.09) | (0.33) | — | (0.33) |
| Year Ended 10/31/2017 | $10.71 | 0.33 | (0.18) | 0.15 | (0.33) | — | (0.33) |
| Year Ended 10/31/2016 | $10.67 | 0.34 | 0.04 | 0.38 | (0.34) | — | (0.34) |
| Class C | |||||||
| Year Ended 10/31/2020 | $10.59 | 0.21 | (0.03) | 0.18 | (0.22) | (0.04) | (0.26) |
| Year Ended 10/31/2019 | $10.12 | 0.24 | 0.48 | 0.72 | (0.25) | (0.00)(d) | (0.25) |
| Year Ended 10/31/2018 | $10.54 | 0.24 | (0.42) | (0.18) | (0.24) | — | (0.24) |
| Year Ended 10/31/2017 | $10.72 | 0.25 | (0.19) | 0.06 | (0.24) | — | (0.24) |
| Year Ended 10/31/2016 | $10.68 | 0.25 | 0.04 | 0.29 | (0.25) | — | (0.25) |
| Institutional Class | |||||||
| Year Ended 10/31/2020 | $10.60 | 0.30 | (0.04) | 0.26 | (0.31) | (0.04) | (0.35) |
| Year Ended 10/31/2019 | $10.12 | 0.33 | 0.48 | 0.81 | (0.33) | (0.00)(d) | (0.33) |
| Year Ended 10/31/2018 | $10.54 | 0.33 | (0.42) | (0.09) | (0.33) | — | (0.33) |
| Year Ended 10/31/2017 | $10.72 | 0.33 | (0.18) | 0.15 | (0.33) | — | (0.33) |
| Year Ended 10/31/2016 | $10.69 | 0.34 | 0.03 | 0.37 | (0.34) | — | (0.34) |
| Institutional 2 Class | |||||||
| Year Ended 10/31/2020 | $10.58 | 0.31 | (0.05) | 0.26 | (0.31) | (0.04) | (0.35) |
| Year Ended 10/31/2019 | $10.10 | 0.34 | 0.48 | 0.82 | (0.34) | (0.00)(d) | (0.34) |
| Year Ended 10/31/2018 | $10.53 | 0.34 | (0.44) | (0.10) | (0.33) | — | (0.33) |
| Year Ended 10/31/2017 | $10.70 | 0.34 | (0.17) | 0.17 | (0.34) | — | (0.34) |
| Year Ended 10/31/2016 | $10.66 | 0.35 | 0.04 | 0.39 | (0.35) | — | (0.35) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 28 | Columbia 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 10/31/2020 | $10.51 | 2.36% | 0.82% | 0.73%(c) | 2.70% | 9% | $156,865 |
| Year Ended 10/31/2019 | $10.59 | 7.94% | 0.82%(e) | 0.76%(c),(e) | 2.97% | 14% | $152,575 |
| Year Ended 10/31/2018 | $10.11 | (1.18%) | 0.81%(f) | 0.76%(c),(f) | 2.98% | 8% | $157,597 |
| Year Ended 10/31/2017 | $10.54 | 1.39% | 0.84%(g) | 0.77%(c),(g) | 2.99% | 11% | $189,260 |
| Year Ended 10/31/2016 | $10.71 | 3.28% | 0.86% | 0.77%(c) | 2.95% | 6% | $246,873 |
| Advisor Class | |||||||
| Year Ended 10/31/2020 | $10.50 | 2.47% | 0.62% | 0.53%(c) | 2.90% | 9% | $6,249 |
| Year Ended 10/31/2019 | $10.59 | 8.15% | 0.62%(e) | 0.56%(c),(e) | 3.22% | 14% | $5,927 |
| Year Ended 10/31/2018 | $10.11 | (0.89%) | 0.61%(f) | 0.56%(c),(f) | 3.18% | 8% | $20,349 |
| Year Ended 10/31/2017 | $10.53 | 1.50% | 0.63% | 0.58%(c) | 3.16% | 11% | $17,306 |
| Year Ended 10/31/2016 | $10.71 | 3.58% | 0.66% | 0.57%(c) | 3.15% | 6% | $8,325 |
| Class C | |||||||
| Year Ended 10/31/2020 | $10.51 | 1.71% | 1.47% | 1.38%(c) | 2.06% | 9% | $21,469 |
| Year Ended 10/31/2019 | $10.59 | 7.14% | 1.47%(e) | 1.41%(c),(e) | 2.33% | 14% | $23,522 |
| Year Ended 10/31/2018 | $10.12 | (1.72%) | 1.46%(f) | 1.41%(c),(f) | 2.32% | 8% | $29,097 |
| Year Ended 10/31/2017 | $10.54 | 0.64% | 1.49%(g) | 1.42%(c),(g) | 2.34% | 11% | $44,951 |
| Year Ended 10/31/2016 | $10.72 | 2.70% | 1.51% | 1.42%(c) | 2.29% | 6% | $59,746 |
| Institutional Class | |||||||
| Year Ended 10/31/2020 | $10.51 | 2.47% | 0.62% | 0.53%(c) | 2.90% | 9% | $900,641 |
| Year Ended 10/31/2019 | $10.60 | 8.15% | 0.62%(e) | 0.56%(c),(e) | 3.17% | 14% | $1,012,229 |
| Year Ended 10/31/2018 | $10.12 | (0.88%) | 0.61%(f) | 0.56%(c),(f) | 3.17% | 8% | $1,232,944 |
| Year Ended 10/31/2017 | $10.54 | 1.50% | 0.63%(g) | 0.57%(c),(g) | 3.18% | 11% | $1,679,211 |
| Year Ended 10/31/2016 | $10.72 | 3.48% | 0.66% | 0.57%(c) | 3.15% | 6% | $2,087,345 |
| Institutional 2 Class | |||||||
| Year Ended 10/31/2020 | $10.49 | 2.54% | 0.55% | 0.47% | 2.98% | 9% | $30,056 |
| Year Ended 10/31/2019 | $10.58 | 8.24% | 0.55%(e) | 0.49%(e) | 3.21% | 14% | $35,836 |
| Year Ended 10/31/2018 | $10.10 | (0.92%) | 0.55%(f) | 0.50%(f) | 3.25% | 8% | $15,697 |
| Year Ended 10/31/2017 | $10.53 | 1.67% | 0.54%(g) | 0.50%(g) | 3.26% | 11% | $12,401 |
| Year Ended 10/31/2016 | $10.70 | 3.68% | 0.53% | 0.48% | 3.23% | 6% | $8,895 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Intermediate Municipal Bond Fund | Annual Report 2020
|
29 |
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 10/31/2020 | $10.61 | 0.32 | (0.05) | 0.27 | (0.32) | (0.04) | (0.36) |
| Year Ended 10/31/2019 | $10.13 | 0.34 | 0.49 | 0.83 | (0.35) | (0.00)(d) | (0.35) |
| Year Ended 10/31/2018 | $10.55 | 0.34 | (0.42) | (0.08) | (0.34) | — | (0.34) |
| Year Ended 10/31/2017(h) | $10.43 | 0.22 | 0.13(i) | 0.35 | (0.23) | — | (0.23) |
| Class V | |||||||
| Year Ended 10/31/2020 | $10.59 | 0.29 | (0.05) | 0.24 | (0.29) | (0.04) | (0.33) |
| Year Ended 10/31/2019 | $10.11 | 0.32 | 0.48 | 0.80 | (0.32) | (0.00)(d) | (0.32) |
| Year Ended 10/31/2018 | $10.54 | 0.31 | (0.43) | (0.12) | (0.31) | — | (0.31) |
| Year Ended 10/31/2017 | $10.71 | 0.32 | (0.17) | 0.15 | (0.32) | — | (0.32) |
| Year Ended 10/31/2016 | $10.68 | 0.33 | 0.02 | 0.35 | (0.32) | — | (0.32) |
| Notes to Financial Highlights | |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (d) | Rounds to zero. |
| (e) | Ratios include line of credit interest expense which is less than 0.01%. |
| (f) | Ratios include interfund lending expense which is less than 0.01%. |
| (g) | Expenses have been reduced due to a reimbursement of expenses overbilled by a third party. If the reimbursement had been excluded, the expense ratios would have been higher by the percentages shown for each class in the table below. All fee waivers and expense reimbursements by the Investment Manager and its affiliates were applied before giving effect to this third party reimbursement. |
| Year Ended | Class A | Class C |
Institutional
Class |
Institutional 2
Class |
Class V |
| 10/31/2017 | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
| (h) | Institutional 3 Class shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (i) | 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. |
| (j) | Annualized. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 30 | Columbia 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 10/31/2020 | $10.52 | 2.59% | 0.51% | 0.42% | 3.01% | 9% | $2,495 |
| Year Ended 10/31/2019 | $10.61 | 8.27% | 0.51%(e) | 0.44%(e) | 3.28% | 14% | $2,542 |
| Year Ended 10/31/2018 | $10.13 | (0.76%) | 0.50%(f) | 0.45%(f) | 3.31% | 8% | $1,836 |
| Year Ended 10/31/2017(h) | $10.55 | 3.35% | 0.51%(j) | 0.47%(j) | 3.25%(j) | 11% | $1,865 |
| Class V | |||||||
| Year Ended 10/31/2020 | $10.50 | 2.31% | 0.77% | 0.68%(c) | 2.75% | 9% | $10,887 |
| Year Ended 10/31/2019 | $10.59 | 7.99% | 0.77%(e) | 0.71%(c),(e) | 3.02% | 14% | $11,562 |
| Year Ended 10/31/2018 | $10.11 | (1.13%) | 0.76%(f) | 0.71%(c),(f) | 3.03% | 8% | $12,260 |
| Year Ended 10/31/2017 | $10.54 | 1.44% | 0.79%(g) | 0.72%(c),(g) | 3.03% | 11% | $13,371 |
| Year Ended 10/31/2016 | $10.71 | 3.33% | 0.81% | 0.72%(c) | 3.00% | 6% | $14,060 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Intermediate Municipal Bond Fund | Annual Report 2020
|
31 |
Notes to Financial Statements
October 31, 2020
October 31, 2020
Note 1. Organization
Columbia Intermediate Municipal
Bond Fund (the Fund), a series of Columbia Funds Series Trust I (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 Massachusetts business 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 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. Class V shares are available only to investors who received (and who continuously held) Class V shares in connection with previous fund reorganizations.
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 market value, unless this method results in a valuation that management believes does not approximate fair value.
Investments in open-end investment
companies (other than exchange-traded funds (ETFs)), are valued at the latest net asset value reported by those companies as of the valuation time.
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 Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 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 Intermediate Municipal Bond Fund | Annual Report 2020
|
33 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 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 0.48% to 0.29% as the Fund’s net assets increase. The effective management services fee rate for the year ended October 31, 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. These members of the Board of Trustees
may participate in a Deferred Compensation Plan (the Deferred Plan) which may be terminated at any time. Obligations of the Deferred Plan will be paid solely out of the Fund’s assets, and all amounts payable
under the Deferred Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as
sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class.
| 34 | Columbia Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
For the year ended October 31,
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 |
| Class V | 0.12 |
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended October 31, 2020, these minimum account balance fees reduced total expenses
of the Fund by $300.
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 service fee to the Distributor at the maximum annual rate of 0.20% of the average daily net assets attributable to Class A and Class C shares of the Fund. Also under the Plans, the Fund pays a
monthly distribution fee to the Distributor at the maximum annual rate of 0.65% of the average daily net assets attributable to Class C shares of the Fund.
Effective September 1, 2020, the
Distributor has contractually agreed to waive a portion of the distribution fee for Class C shares through August 31, 2021 so that the distribution fee does not exceed 0.60% annually of the average daily net assets
attributable to Class C shares. This arrangement may be modified or terminated at the sole discretion of the Board of Trustees.
Shareholder services fees
The Fund has adopted a shareholder
services plan that permits it to pay for certain services provided to Class V shareholders by their selling and/or servicing agents. The Fund may pay shareholder servicing fees up to an aggregate annual rate of 0.40%
of the Fund’s average daily net assets attributable to Class V shares (comprised of up to 0.20% for shareholder services and up to 0.20% for administrative support services). These fees are currently limited to
an aggregate annual rate of not more than 0.15% of the Fund’s average daily net assets attributable to Class V shares.
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 October 31, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 3.00 | 0.75(a) | 40,254 |
| Class C | — | 1.00(b) | 1,066 |
| Class V | 4.75 | 0.50 - 1.00(c) | 139 |
|
Columbia Intermediate Municipal Bond Fund | Annual Report 2020
|
35 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
| (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. |
| (c) | This charge is imposed on certain investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with certain limited exceptions. |
The Fund’s other share
classes are not subject to sales charges.
Expenses waived/reimbursed by the
Investment Manager and its affiliates
The Investment Manager and certain
of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s
custodian, do not exceed the following annual rate(s) as a percentage of the class’ average daily net assets:
*Effective September 1, 2020, the
contractual expense reimbursement arrangement is in effect through August 31, 2021.
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. Class C distribution fees waived by the Distributor, as discussed above, are in addition to the waiver/reimbursement commitment under the agreement.
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 October 31, 2020, these
differences were primarily due to differing treatment for trustees’ deferred compensation, tax straddles 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.
| 36 | Columbia Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended October 31, 2020 | Year Ended October 31, 2019 | ||||||
|
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 135,318 | 33,414,412 | 4,929,000 | 38,478,730 | 164,305 | 40,447,363 | 601,113 | 41,212,781 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At October 31, 2020, the components
of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed tax-
exempt income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| — | 5,535,743 | 4,757,747 | — | 77,175,371 |
At October 31, 2020, the cost of
all investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
|
Federal
tax cost ($) |
Gross unrealized
appreciation ($) |
Gross unrealized
(depreciation) ($) |
Net unrealized
appreciation ($) |
| 1,047,708,931 | 82,554,799 | (5,379,428) | 77,175,371 |
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 $108,271,123 and $207,273,930, respectively, for the year ended October 31, 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 October 31, 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., Wells Fargo Bank, 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. Pursuant to a December 1, 2020 amendment, the credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager or an
affiliated investment
|
Columbia Intermediate Municipal Bond Fund | Annual Report 2020
|
37 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
manager, severally and not jointly, permits
collective borrowings up to $950 million. 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, 1.25%. 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. Prior to the December 1, 2020 amendment, 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. which
permitted collective borrowings up to 1 billion. Interest was 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%.
The Fund had no borrowings during
the year ended October 31, 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.
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.
| 38 | Columbia Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
The Fund performance may also be
significantly negatively impacted by the economic impact of the coronavirus disease 2019 (COVID-19) pandemic. The 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 objectives. Any such
event(s) could have a significant adverse impact on the value and risk profile of the Fund.
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting different communities at different times with varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including
the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to continue ordinary business operations and technology functions over near- or longer-term periods.
Municipal securities risk
Municipal securities are debt
obligations generally issued to obtain funds for various public purposes, including general financing for state and local governments, or financing for a specific project or public facility, and include obligations of
the governments of the U.S. territories, commonwealths and possessions such as Guam, Puerto Rico and the U.S. Virgin Islands to the extent such obligations are exempt from state and U.S. federal income taxes. The
value of municipal securities can be significantly affected by actual or expected political and legislative changes at the federal or state level. Municipal securities may be fully or partially backed by the taxing
authority of the local government, by the credit of a private issuer, by the current or anticipated revenues from a specific project or specific assets or by domestic or foreign entities providing credit support, such
as letters of credit, guarantees or insurance, and are generally classified into general obligation bonds and special revenue obligations. Because many municipal securities are issued to finance projects in sectors
such as education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal market.
Issuers in a state, territory,
commonwealth or possession in which the Fund invests may experience significant financial difficulties for various reasons, including as the result of events that cannot be reasonably anticipated or controlled such as
economic downturns or similar periods of economic stress, social conflict or unrest, labor disruption and other natural disasters. Such financial difficulties may lead to credit rating downgrades or defaults of such
issuers which in turn, could affect the market values and marketability of many or all municipal obligations of issuers in such state, territory, commonwealth or possession. The value of the Fund’s shares will
be negatively impacted to the extent it invests in such securities. The Fund’s annual and semiannual reports show the Fund’s investment exposures at a point in time. The risk of investing in the Fund is
directly correlated to the Fund’s investment exposures.
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.
|
Columbia Intermediate Municipal Bond Fund | Annual Report 2020
|
39 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
Shareholder concentration risk
At October 31, 2020, one
unaffiliated shareholder of record owned 64.4% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. 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 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 or one or more of its affiliates that provides services to
the Funds.
| 40 | Columbia Intermediate Municipal Bond Fund | Annual Report 2020 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust I and Shareholders of Columbia 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 Intermediate Municipal Bond Fund (one of the funds constituting Columbia Funds Series Trust I, referred to hereafter as the
"Fund") as of October 31, 2020, the related statement of operations for the year ended October 31, 2020, the statement of changes in net assets for each of the two years in the period ended October 31, 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 October 31, 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 October
31, 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 October 31, 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
December 21, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
|
Columbia Intermediate 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 October 31, 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 |
| $5,047,845 | 99.60% |
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. The year set forth beneath Length of Service
in the table below is the year in which the Trustee was first appointed or elected as Trustee to any Fund currently in the Columbia Funds Complex or a predecessor thereof. Under current Board policy, members serve
terms of indefinite duration. The Board approved the nomination of and recommended the election of 17 nominees to the Board, effecting a consolidation of the Board and the board of trustees overseeing Columbia Funds
Series Trust, Columbia Funds Series Trust II and certain affiliated trusts. At a shareholder meeting held on December 22, 2020, shareholders approved the nominees, effective January 1, 2021.
Independent trustees
| 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 Fund Complex overseen | Other directorships held by Trustee during the past five years |
|
Janet Langford Carrig
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1957 |
Trustee
1996 |
Senior Vice President, General Counsel and Corporate Secretary, ConocoPhillips (independent energy company), September 2007-October 2018 | 66 | Director, EQT Corporation (natural gas producer); Director, Whiting Petroleum Corporation (independent oil and gas company) |
|
Douglas A. Hacker
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1955 |
Trustee and Chairman of the Board
1996 |
Independent business executive since May 2006; Executive Vice President — Strategy of United Airlines, December 2002-May 2006; President of UAL Loyalty Services (airline marketing company), September 2001-December 2002; Executive Vice President and Chief Financial Officer of United Airlines, July 1999-September 2001 | 66 | Director, Spartan Nash Company (food distributor); Director, Aircastle Limited (aircraft leasing); former Director, Nash Finch Company (food distributor), 2005-2013; former Director, SeaCube Container Leasing Ltd. (container leasing), 2010-2013; and former Director, Travelport Worldwide Limited (travel information technology), 2014-2019 |
| 42 | Columbia 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 the past five years and other relevant professional experience | Number of Funds in the Columbia Fund Complex overseen | Other directorships held by Trustee during the past five years |
|
Nancy T. Lukitsh
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1956 |
Trustee
2011 |
Senior Vice President, Partner and Director of Marketing, Wellington Management Company, LLP (investment adviser), 1997-2010; Chair, Wellington Management Portfolios (commingled non-U.S. investment pools), 2007-2010; Director, Wellington Trust Company, NA and other Wellington affiliates, 1997-2010 | 66 | None |
|
David M. Moffett
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Trustee
2011 |
Retired. Consultant to Bridgewater and Associates | 66 | Director, CSX Corporation (transportation suppliers); Director, Genworth Financial, Inc. (financial and insurance products and services); Director, PayPal Holdings Inc. (payment and data processing services); Trustee, University of Oklahoma Foundation; former Director, eBay Inc. (online trading community), 2007-2015; and former Director, CIT Bank, CIT Group Inc. (commercial and consumer finance), 2010-2016 |
|
John J. Neuhauser
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1943 |
Trustee
1984 |
President, Saint Michael’s College, August 2007-June 2018; Director or Trustee of several non-profit organizations, including University of Vermont Medical Center; Academic Vice President and Dean of Faculties, Boston College, August 1999-October 2005; University Professor, Boston College, November 2005-August 2007 | 66 | Director, Liberty All-Star Equity Fund and Liberty All-Star Growth Fund (closed-end funds) |
|
Patrick J. Simpson
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1944 |
Trustee
2000 |
Of Counsel, Perkins Coie LLP (law firm) since 2015; Partner, Perkins Coie LLP, 1988-2014 | 66 | Former Director, M Fund, Inc. (M Funds mutual fund family), July 2018-July 2019 |
|
Columbia Intermediate Municipal Bond Fund | Annual Report 2020
|
43 |
TRUSTEES AND OFFICERS (continued)
Consultants to the Independent Trustees*
Consultants to the Independent Trustees*
| 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 |
|
J. Kevin Connaughton
c/o Columbia Management Investment Advisers, LLC, 225 Franklin Street Mail Drop BX32 05228, Boston, MA 02110 1964 |
Independent Trustee Consultant
2016 |
Independent Trustee Consultant, Columbia Funds since March 2016; Member, FINRA National Adjudicatory Council since January 2020; Adjunct Professor of Finance, Bentley University since January 2018; Managing Director and General Manager of Mutual Fund Products, Columbia Management Investment Advisers, LLC, May 2010-February 2015; President, Columbia Funds, 2008-2015; and senior officer of Columbia Funds and affiliated funds, 2003-2015 | 66 | Director, The Autism Project since March 2015; former Member of the Investment Committee, St. Michael’s College, November 2015-February 2020; former Trustee, St. Michael’s College, June 2017-September 2019; former Trustee, New Century Portfolios, January 2015-December 2017 |
|
Olive Darragh
c/o Columbia Management Investment Advisers, LLC, 225 Franklin Street, Mail Drop BX32 05228, Boston, MA 02110 1962 |
Independent Trustee Consultant 2019 | Independent Trustee Consultant, Columbia Funds since June 2019; Managing Director of Darragh Inc. (a strategy and talent management consulting firm) since 2010; Founder and CEO, Zolio, Inc. (investment management talent identification platform) since 2004; Partner, Tudor Investments, 2004-2010; Senior Partner, McKinsey & Company, 2001-2004 | 66 | Former Director, University of Edinburgh Business School; former Director, Boston Public Library Foundation |
|
Natalie A. Trunow
c/o Columbia Management Investment Advisers, LLC, 225 Franklin Street Mail Drop BX32 05228, Boston, MA 02110 1967 |
Independent Trustee Consultant
2016 |
Independent Trustee Consultant, Columbia Funds since September 2016; Chief Executive Officer, Millennial Portfolio Solutions LLC (asset management and consulting services) since January 2016; Non-executive Member of the Investment Committee, Sarona Asset Management, Inc. (private equity firm) since September 2019; Advisor, Horizon Investments (asset management and consulting services) since August 2018; Advisor, Paradigm Asset Management since November 2016; Director of Investments, Casey Family Programs, April 2016-September 2016; Senior Vice President and Chief Investment Officer, Calvert Investments, August 2008-January 2016; Section Head and Portfolio Manager, General Motors Asset Management, June 1997-August 2008 | 66 | Director, Health Services for Children with Special Needs, Inc.; Director, Consumer Credit Counseling Services (formerly Guidewell Financial Solutions); Independent Director, Investment Committee, Sarona Asset Management |
| * | J. Kevin Connaughton was appointed consultant to the Independent Trustees effective March 1, 2016. Natalie A. Trunow was appointed consultant to the Independent Trustees effective September 1, 2016. Olive Darragh was appointed consultant to the Independent Trustees effective June 10, 2019. |
| 44 | Columbia 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 | 162 | 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 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 — Accounting and Tax, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009-December 2018 and December 2015-December 2018, 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 May 2010. |
|
Columbia Intermediate 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 |
|
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); Chief Legal Officer, Columbia Acorn/Wanger Funds, since September 2020; 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. |
Board Consideration
and Approval of Management
Agreement
On June 17, 2020, the Board of
Trustees (the Board) and the Trustees who are not interested persons (as defined in the Investment Company Act of 1940) (the Independent Trustees) of Columbia Funds Series Trust I (the Trust) unanimously approved the
continuation of the Management Agreement (the Management Agreement) with Columbia Management Investment Advisers, LLC (the Investment Manager) with respect to Columbia Intermediate Municipal Bond Fund (the Fund), a
series of the Trust. As detailed below, the Board’s Advisory Fees and Expenses Committee (the Committee) and the Board met on multiple occasions to review and discuss, among themselves, with the management team
of the Investment Manager and with an independent fee consultant, materials provided by the Investment Manager, the independent fee consultant and others before determining to approve the continuation of the
Management Agreement.
In connection with their
deliberations regarding the continuation of the Management Agreement, the Committee and the Board evaluated materials requested from the Investment Manager regarding the Fund and the Management Agreement, and
discussed these materials with representatives of the Investment Manager at Committee meetings held on March 10, 2020, April 30, 2020 and June 17, 2020 and at Board meetings held on March 11, 2020 and June 17, 2020.
In addition, the Board and its various committees consider matters bearing on the Management Agreement at other meetings throughout the year and in prior years and meet regularly with senior management of the Trust
and the Investment Manager. Through the Board’s Investment Oversight Committees, Trustees also meet with selected portfolio managers of the funds the Trustees oversee and with other investment personnel at
various times throughout the year. The Committee and the Board also consulted with
| 46 | Columbia Intermediate Municipal Bond Fund | Annual Report 2020 |
Board Consideration and Approval of
Management
Agreement (continued)
the independent fee consultant, Fund counsel and
the Independent Trustees’ independent legal counsel, who advised on various matters with respect to the Committee’s and the Board’s considerations and otherwise assisted the Committee and the Board
in their deliberations. On June 17, 2020, the Committee recommended that the Board approve the continuation of the Management Agreement. On June 17, 2020, the Board, including the Independent Trustees, voting
separately, unanimously approved the continuation of the Management Agreement for the Fund.
The Committee and the Board
considered all information that they, their legal counsel or the Investment Manager believed reasonably necessary to evaluate and to determine whether to recommend for approval or approve the continuation of the
Management Agreement. The information and factors considered by the Committee and the Board in recommending for approval or approving the continuation of the Management Agreement for the Fund included the
following:
| • | Information on the investment performance of the Fund relative to the performance of a group of mutual funds determined to be comparable to the Fund by an independent third-party data provider, as well as performance relative to benchmarks; |
| • | Information on the Fund’s management fees and total expenses, including information comparing the Fund’s expenses to those of a group of comparable mutual funds, as determined by the independent third-party data provider; |
| • | The Investment Manager’s agreement to contractually limit or cap total operating expenses for the Fund through February 28, 2021 so that total operating expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and infrequent and/or unusual expenses) would not exceed a specified annual rate, as a percentage of the Fund’s net assets; |
| • | The terms and conditions of the Management Agreement; |
| • | The current and proposed terms and conditions of other agreements and arrangements with affiliates of the Investment Manager relating to the operations of the Fund, including agreements with respect to the provision of distribution, transfer agency and shareholder services to the Fund; |
| • | Descriptions of various functions performed by the Investment Manager under the Management Agreement, including portfolio management and portfolio trading practices; |
| • | Information regarding any recently negotiated management fees of similarly-managed portfolios of other institutional clients of the Investment Manager; |
| • | Information regarding the reputation, regulatory history and resources of the Investment Manager, including information regarding senior management, portfolio managers and other personnel; |
| • | Information regarding the capabilities of the Investment Manager with respect to compliance monitoring services, including an assessment of the Investment Manager’s compliance system by the Fund’s Chief Compliance Officer; and |
| • | The profitability to the Investment Manager and its affiliates from their relationships with the Fund. |
Nature, extent and quality of
services provided under the Management Agreement
The Committee and the Board
considered the nature, extent and quality of services provided to the Fund by the Investment Manager and its affiliates under the Management Agreement and under separate agreements for the provision of transfer agency
and shareholder services, and the resources dedicated to the Fund and the other Columbia Funds by the Investment Manager and its affiliates. The Committee and the Board considered, among other things, the Investment
Manager’s ability to attract, motivate and retain highly qualified research, advisory and supervisory investment professionals (including compensation programs for personnel involved in fund management,
reputation and other attributes), the portfolio management services provided by those investment professionals, and the quality of the Investment Manager’s investment research capabilities and trade execution
services. The Committee and the Board also considered the potential benefits to shareholders of investing in a mutual fund that is part of a fund complex offering exposure to a variety of asset classes and investment
disciplines and providing a variety of fund and shareholder services.
|
Columbia Intermediate Municipal Bond Fund | Annual Report 2020
|
47 |
Board Consideration and Approval of
Management
Agreement (continued)
The Committee and the Board also considered the
professional experience and qualifications of the senior personnel of the Investment Manager, which included consideration of the Investment Manager’s experience with funds using an investment strategy similar
to that used by the Investment Manager for the Fund. The Committee and the Board noted the compliance programs of and the compliance-related resources provided to the Fund by the Investment Manager and its affiliates
and the resources dedicated by the Investment Manager and its affiliates to risk management, and considered the Investment Manager’s ability to provide administrative services to the Fund and coordinate the
activities of the Fund’s other service providers. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the nature, extent and
quality of the services provided to the Fund under the Management Agreement supported the continuation of the Management Agreement.
Investment performance
The Committee and the Board
reviewed information about the performance of the Fund over various time periods, including performance information relative to benchmarks, information that compared the performance of the Fund to the performance of a
group of comparable mutual funds as determined by the independent third-party data provider, and information and analysis provided by the independent fee consultant. The Committee and the Board also reviewed a
description of the third party’s methodology for identifying the Fund’s peer groups for purposes of performance and expense comparisons. Although the Fund’s performance lagged that of a relevant peer
group for certain (although not necessarily all) periods, the Committee and the Board concluded that other factors relevant to performance were sufficient, in light of other considerations, to support continuation of
the Management Agreement. Those factors included one or more of the following: (i) that the Fund’s performance, although lagging in certain recent periods, was stronger over the longer term; (ii) that the
underperformance was attributable, to a significant extent, to investment decisions that were reasonable and consistent with the Fund’s investment strategy and policies and that the Fund was performing within a
reasonable range of expectations, given those investment decisions, market conditions and the Fund’s investment strategy; (iii) that the Fund’s performance was competitive when compared to other relevant
performance benchmarks or peer groups; and (iv) that the Investment Manager had taken or was taking steps designed to help improve the Fund’s investment performance, including, but not limited to, replacing
portfolio managers, enhancing the resources supporting the portfolio managers, or modifying investment strategies.
The Committee and the Board noted
that, through December 31, 2019, the Fund’s performance was in the forty-eighth, fifty-ninth and forty-fourth percentile (where the best performance would be in the first percentile) of its category selected by
the independent third-party data provider for the purposes of performance comparisons for the one-, three- and five-year periods, respectively.
The Committee and the Board also
considered the Investment Manager’s performance and reputation generally, the Investment Manager’s historical responsiveness to Board concerns about performance, and the Investment Manager’s
willingness to take steps intended to improve performance. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the performance of the
Fund and the Investment Manager was sufficient, in light of other considerations, to support the continuation of the Management Agreement.
Investment management fee rates
and other expenses
The Committee and the Board
considered the management fees charged to the Fund under the Management Agreement as well as the total expenses incurred by the Fund. In assessing the reasonableness of the fees under the Management Agreement, the
Committee and the Board considered, among other information, the Fund’s total expense ratio as a percentage of average daily net assets. The Committee and the Board considered data provided by the independent
third-party data provider and the independent fee consultant. The Committee and the Board noted that, as of December 31, 2019, the Fund’s actual management fee and net total expense ratio were both ranked in the
third quintile (where the lowest fees and expenses would be in the first quintile) against the Fund’s expense universe as determined by the independent third-party data provider for purposes of expense
comparison. The Committee and the Board also took into account the fee waiver and expense limitation arrangements agreed to by the Investment Manager, as noted above.
The Committee and the Board also
received and considered information about the management fees charged by the Investment Manager to institutional accounts. In considering the fees charged to those accounts, the Committee and the Board took into
account, among other things, the Investment Manager’s representations about the differences between managing mutual funds as compared to other types of accounts, including differences in the services provided,
differences in
| 48 | Columbia Intermediate Municipal Bond Fund | Annual Report 2020 |
Board Consideration and Approval of
Management
Agreement (continued)
the risk profile of such business for the
Investment Manager and the additional resources required to manage mutual funds effectively. The Committee and the Board also received and considered information about the fees charged by the Investment Manager for
sub-advisory services it provides to comparable unaffiliated funds. In evaluating the Fund’s management fees, the Committee and the Board also took into account the demands, complexity and quality of the
investment management of the Fund.
After reviewing these and related
factors, the Committee and the Board concluded, within the context of their overall conclusions, that the management fee rates and expenses of the Fund, in light of other considerations, supported the continuation of
the Management Agreement.
Costs of services provided and
profitability
The Committee and the Board also
took note of the costs the Investment Manager and its affiliates incur in connection with the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the
Fund, and the efforts undertaken by the Investment Manager and its affiliates to manage efficiently their costs to provide such services.
The Committee and the Board also
considered the compensation directly or indirectly received by the Investment Manager’s affiliates in connection with their relationships with the Fund. The Committee and the Board reviewed information provided
by management as to the profitability to the Investment Manager and its affiliates of their relationships with the Fund, information about the allocation of expenses used to calculate profitability, and comparisons of
profitability levels realized in 2019 to profitability levels realized in 2018. When reviewing profitability, the Committee and the Board also considered court cases in which adviser profitability was an issue in
whole or in part, the performance of similarly managed funds, the performance of the Fund, and the expense ratio of the Fund. In addition, the Committee and the Board considered information provided by the Investment
Manager regarding the Investment Manager’s financial condition and comparing its profitability to that of other asset management firms that are, or are subsidiaries of, publicly traded companies. In this regard,
the Committee and the Board also considered data provided by the independent fee consultant.
After reviewing these and related
factors, the Committee and the Board concluded, within the context of their overall conclusions, that the costs of services provided and the profitability to the Investment Manager and its affiliates from their
relationships with the Fund supported the continuation of the Management Agreement.
Economies of scale
The Committee and the Board
considered the potential existence of economies of scale in the provision by the Investment Manager of services to the Fund, to groups of related funds, and to the Investment Manager’s investment advisory
clients as a whole, and whether those economies of scale were shared with the Fund through breakpoints in investment management fees or other means, such as expense limitation arrangements and additional investments
by the Investment Manager in investment, trading, compliance and other resources. The Committee and the Board noted that the management fee schedules for the Fund contained breakpoints that would reduce the fee rate
on assets above specified threshold levels.
In considering these matters, the
Committee and the Board also considered the costs of the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund, as noted above. After reviewing
these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the extent to which any economies of scale were expected to be shared with the Fund supported the
continuation of the Management Agreement.
Other benefits to the Investment
Manager
The Committee and the Board
received and considered information regarding “fall-out” or ancillary benefits received by the Investment Manager and its affiliates as a result of their relationships with the Fund, such as the engagement
of the Investment Manager’s affiliates to provide distribution, transfer agency and shareholder services to the Fund. In this regard, among other matters, the Committee and the Board considered that the
Fund’s distributor retains a portion of the distribution fees from the Fund and receives a portion of the sales charges on sales or redemptions of certain classes of shares of the Fund. The Committee and the
Board also considered the benefits of research made available to the Investment Manager by
|
Columbia Intermediate Municipal Bond Fund | Annual Report 2020
|
49 |
Board Consideration and Approval of
Management
Agreement (continued)
reason of brokerage commissions generated by the
Fund’s securities transactions, and reviewed information about the Investment Manager’s practices with respect to considering brokerage and research services when allocating portfolio transactions. In this
connection, the Board also noted that the amount of research made available to the Investment Manager by reason of brokerage commissions had been declining over time, and may decline further. The Committee and the
Board recognized that the Investment Manager’s profitability would be somewhat lower without these benefits.
Conclusion
The Committee and the Board
reviewed all of the above considerations in reaching their decisions to recommend or approve the continuation of the Management Agreement. In their deliberations, the Trustees did not identify any particular
information that was all-important or controlling, and individual Trustees may have attributed different weights to the various factors. Based on their evaluation of all factors that they deemed to be material,
including those factors described above, and assisted by the advice of independent legal counsel, the Board, including the Independent Trustees, voting separately, unanimously approved the continuation of the
Management Agreement.
| 50 | Columbia Intermediate Municipal Bond Fund | Annual Report 2020 |
Columbia 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/
ANN167_10_K01_(12/20)
Annual Report
October 31, 2020
October 31, 2020
Columbia Strategic
California Municipal Income 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
shareholder 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 Strategic California
Municipal Income 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. The Fund’s 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-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 Strategic California Municipal Income
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks total return, with a focus on income exempt from federal income tax and California individual income tax and capital appreciation.
Portfolio management
Douglas White, CFA
Lead Portfolio Manager
Managed Fund since 2018
Catherine Stienstra
Portfolio Manager
Managed Fund since 2010
Anders Myhran, CFA
Portfolio Manager
Managed Fund since 2016
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
Municipal Bond Index is a subset of the Bloomberg Barclays Municipal Bond Index consisting solely of bonds issued by obligors located in the state of California.
The Bloomberg Barclays Municipal
Bond Index is an unmanaged index considered representative of the broad market for investment-grade, tax-exempt bonds with a maturity of at least one year.
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 Strategic California Municipal Income Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (October 31, 2010 — October 31, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Strategic California Municipal Income 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 October 31, 2020) | |
| AA rating | 42.9 |
| A rating | 25.5 |
| BBB rating | 19.7 |
| BB rating | 1.5 |
| Not rated | 10.4 |
| 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. If a security is
Not rated but has a rating by Kroll and/or DBRS, the same methodology is applied to those bonds that would otherwise be Not rated. 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 Strategic California Municipal Income Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that
ended October 31, 2020, the Fund’s Class A shares returned 2.69%, excluding sales charges. The Fund’s Institutional Class shares returned 3.00% for the same period. The Fund underperformed the 3.65% return
of its benchmark, the Bloomberg Barclays California Municipal Bond Index, as well as the 3.59% gain for the broader Bloomberg Barclays Municipal Bond Index.
Market overview
Despite significant volatility in
the first calendar quarter of 2020, the U.S. municipal bond market produced positive returns in the 12 months that ended October 31, 2020.
The annual period began on an
upbeat note, as strong inflows into the market, fueled by heightened demand stemming from the capping of state and local tax deductions in the Tax Cuts and Jobs Act of 2017, more than offset an increase in new-issue
supply. In the final two months of 2019, short-term bond yields moved lower, while longer term yields climbed modestly. (Prices and yields move in opposite directions.)
Although economic prospects looked
relatively positive at the start of 2020, the spread of COVID-19 dramatically and quickly re-shaped global markets. The abrupt shutdowns of large portions of the economy left investors struggling to appropriately
price risk assets. These unusual developments sparked a flight into higher quality areas of the bond market, such as U.S. Treasuries, but led to much weaker performance for municipals. The latter category, which was
seen by some as being more vulnerable to the economic effects of the COVID-19 pandemic, experienced substantial outflows in the uncertain environment.
Investment conditions changed once
again in late March 2020, when the U.S. Federal Reserve (Fed) took a series of unprecedented steps to shore up liquidity, backstop important sectors of the economy, and provide stimulus. The Fed slashed the federal
funds target rate to near zero, restarted quantitative easing and launched numerous credit facilities to support various market segments. One such initiative was a new measure, called the Municipal Liquidity Facility,
designed to help buoy the municipal market. In addition, Congress and the White House passed three phases of fiscal stimulus totaling more than $2 trillion. The measures brought buyers back into the market, helping
the indexes quickly recapture most of the ground they had lost in the prior sell-off by the end of March.
The second quarter of 2020 began
with fragile optimism, as the late-March recovery in municipals gave way to a volatile April amid ongoing uncertainty about the COVID-19 pandemic. Still, the market moved higher, albeit in an uneven fashion, as the
compelling value of municipal bonds relative to other fixed-income sectors attracted sizable inflows despite continued concerns about the economy. The rally started to lose steam in early August due to waning hopes
that there would be further federal support for state and local governments before the U.S. presidential election. Additionally, the strong inflows that had driven performance through the spring and early summer began
to subside.
The marked rise in the issuance of
taxable municipal debt represented a significant shift over the past year. Changes resulting from the Tax Code and Jobs Act of 2017 prevent municipal issuers from refinancing their outstanding debt with new tax-exempt
debt. Issuers therefore used taxable securities to refinance their previously issued bonds. This development reduced the amount of supply that would have otherwise come into the tax-exempt market, providing a tailwind
for prices.
Even though California’s
economy suffered along with the nation as a whole in the COVID-19 pandemic-induced slowdown, the state’s municipal bonds marginally outperformed the national benchmark. In our opinion, the relative strength was
largely the result of the higher demand for tax-exempt securities in high-tax states such as California.
While the state entered the
Fund’s fiscal year in a much stronger financial position than it did the recession that followed the 2008-2009 global financial crisis, it nonetheless projected a $54 billion budget deficit by mid-2020. The
state was able to close this gap through a combination of measures that included spending cuts, reserve draws and interfund borrowing, among others. As of October 31, 2020, it was unclear if California would receive
any further stimulus money from the federal government beyond what was provided in the spring. It was also uncertain how long the economic consequences of the COVID-19 pandemic would persist and what effect it would
have on the state’s budget.
The Fund underperformed the
benchmark during the 12-month period.
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
The Fund’s leading
detractors included:
| • | security selection in 17- to 30-year maturities and the education sector |
| • | an overweight, as well as selection, in BBB rated securities |
Education and BBB rated debt were
particularly hard hit in the sell-off of February and March. We didn’t significantly reduce the Fund’s weightings in these areas, based on our belief that they featured additional recovery potential. As a
result, the Fund was positioned to benefit from their stronger relative performance in the latter half of the period.
The Fund’s leading
contributors included:
| • | security selection in AA rated securities |
| • | bonds with maturities of 30 years and above |
| • | selection in the hospital, electric utility and local general obligation sectors |
| • | an underweight in two- to four-year maturities, which lagged the broader market |
| • | an overweight in the outperforming tobacco sector |
Although the Fund was
significantly underweight in AA rated issues, the bonds it did own in this area, particularly local general obligation and utility debt with longer maturities, outperformed the corresponding benchmark components.
There was a relative abundance of new issues of local general obligation bonds, many of which came to the market at attractive prices. The Fund participated in many of these deals, aiding results. An overweight in
outperforming hospital issues was another contributor of note.
Fund positioning
The Fund’s duration
(interest-rate sensitivity) was above that of the benchmark throughout the period and the Fund maintained this positioning at the end of October 2020, reflecting the Fed’s stated intent to keep interest rates
lower for longer to facilitate a recovery from the negative impact of the COVID-19 pandemic.
Much of the Fund’s trading
activity focused on selling or reducing positions we identified as being more susceptible to financial distress or the increased risk of missing debt payments due to the COVID-19 pandemic. Examples included issues
backed by sales tax, hotel, or convention center occupancy taxes, together with those whose revenues relied on crowds or large gatherings. We also reduced the Fund’s holdings in airports and airline-backed debt
due to the slowdown in travel, as well as in smaller or financially weaker colleges and student-housing bonds. We generally reinvested the proceeds in high-quality general obligations, highly-rated hospitals, and
essential service water and electric utilities.
More broadly speaking, we continued
to use rigorous fundamental research to help uncover what we believe to be attractive, undervalued investment opportunities across the yield curve and credit spectrum, while also striving to identify potential
risks.
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.
| 6 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
Manager Discussion of Fund Performance (continued)
The views expressed in this report
reflect the current views of the respective parties who have contributed to the report. 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 Strategic California Municipal Income 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 Strategic California Municipal Income Fund | Annual Report 2020 |
Portfolio of Investments
October 31, 2020
October 31, 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 Strategic California Municipal Income Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 12 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
13 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 14 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
15 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 16 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
17 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
| Money Market Funds 4.5% | ||
| Shares | Value ($) | |
| Dreyfus AMT-Free Tax Exempt Cash Management Fund, Institutional Shares, 0.010%(j) | 262,810 | 262,784 |
| JPMorgan Institutional Tax Free Money Market Fund, Institutional Shares, 0.012%(j) | 28,278,105 | 28,278,105 |
|
Total Money Market Funds
(Cost $28,540,906) |
28,540,889 | |
|
Total Investments in Securities
(Cost: $600,296,435) |
631,045,633 | |
| Other Assets & Liabilities, Net | (2,017,818) | |
| Net Assets | 629,027,815 | |
Investments in derivatives
| Short futures contracts | ||||||
| Description |
Number of
contracts |
Expiration
date |
Trading
currency |
Notional
amount |
Value/Unrealized
appreciation ($) |
Value/Unrealized
depreciation ($) |
| U.S. Long Bond | (40) | 12/2020 | USD | (6,898,750) | 4,394 | — |
| U.S. Treasury 10-Year Note | (80) | 12/2020 | USD | (11,057,500) | 4,811 | — |
| Total | 9,205 | — | ||||
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 October 31, 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. At October 31, 2020, the total value of these securities amounted to $35,828,509, which represents 5.70% of total net assets. |
| (e) | Represents a security purchased on a when-issued basis. |
| (f) | Zero coupon bond. |
| (g) | Inverse floating rate security issued by a tender option bond (TOB) trust, the interest rate on which varies inversely with the Securities Industry Financial Markets Association (SIFMA) short-term rate, which resets weekly, or a similar short-term rate, and is reduced by the expenses related to the TOB trust. The interest rate shown was the current rate as of October 31, 2020. |
| (h) | Represents securities that have defaulted on payment of interest. The Fund has stopped accruing interest on these securities. At October 31, 2020, the total value of these securities amounted to $54,900, which represents 0.01% of total net assets. |
| (i) | 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 October 31, 2020, the total value of these securities amounted to $3,164,700, which represents 0.50% of total net assets. |
| (j) | The rate shown is the seven-day current annualized yield at October 31, 2020. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| AMBAC | Ambac Assurance Corporation |
| BAM | Build America Mutual Assurance Co. |
| BAN | Bond Anticipation Note |
| FHLMC | Federal Home Loan Mortgage Corporation |
| GNMA | Government National Mortgage Association |
| NPFGC | National Public Finance Guarantee Corporation |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 18 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 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 October 31, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Floating Rate Notes | — | 1,855,000 | — | 1,855,000 |
| Municipal Bonds | — | 600,649,744 | — | 600,649,744 |
| Money Market Funds | 28,540,889 | — | — | 28,540,889 |
| Total Investments in Securities | 28,540,889 | 602,504,744 | — | 631,045,633 |
| Investments in Derivatives | ||||
| Asset | ||||
| Futures Contracts | 9,205 | — | — | 9,205 |
| Total | 28,550,094 | 602,504,744 | — | 631,054,838 |
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.
Derivative instruments are valued at
unrealized appreciation (depreciation).
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
19 |
Statement of Assets and Liabilities
October 31, 2020
October 31, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $600,296,435) | $631,045,633 |
| Cash | 38,799 |
| Receivable for: | |
| Investments sold | 948,025 |
| Capital shares sold | 1,205,441 |
| Interest | 6,146,108 |
| Variation margin for futures contracts | 9,205 |
| Expense reimbursement due from Investment Manager | 323 |
| Prepaid expenses | 2,892 |
| Trustees’ deferred compensation plan | 121,916 |
| Total assets | 639,518,342 |
| Liabilities | |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 6,779,925 |
| Capital shares purchased | 2,123,383 |
| Distributions to shareholders | 1,362,720 |
| Management services fees | 7,859 |
| Distribution and/or service fees | 2,257 |
| Transfer agent fees | 42,826 |
| Compensation of board members | 27,538 |
| Compensation of chief compliance officer | 18 |
| Other expenses | 22,085 |
| Trustees’ deferred compensation plan | 121,916 |
| Total liabilities | 10,490,527 |
| Net assets applicable to outstanding capital stock | $629,027,815 |
| Represented by | |
| Paid in capital | 596,727,566 |
| Total distributable earnings (loss) | 32,300,249 |
| Total - representing net assets applicable to outstanding capital stock | $629,027,815 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 20 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
Statement of Assets and Liabilities (continued)
October 31, 2020
October 31, 2020
| Class A | |
| Net assets | $329,728,227 |
| Shares outstanding | 10,693,627 |
| Net asset value per share | $30.83 |
| 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) | $31.78 |
| Advisor Class | |
| Net assets | $4,505,988 |
| Shares outstanding | 146,022 |
| Net asset value per share | $30.86 |
| Class C | |
| Net assets | $23,783,383 |
| Shares outstanding | 771,313 |
| Net asset value per share | $30.83 |
| Institutional Class | |
| Net assets | $260,443,429 |
| Shares outstanding | 8,443,319 |
| Net asset value per share | $30.85 |
| Institutional 2 Class | |
| Net assets | $2,283,123 |
| Shares outstanding | 73,915 |
| Net asset value per share | $30.89 |
| Institutional 3 Class | |
| Net assets | $8,283,665 |
| Shares outstanding | 267,154 |
| Net asset value per share | $31.01 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
21 |
Statement of Operations
Year Ended October 31, 2020
Year Ended October 31, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $50,639 |
| Interest | 20,535,691 |
| Total income | 20,586,330 |
| Expenses: | |
| Management services fees | 2,762,671 |
| Distribution and/or service fees | |
| Class A | 843,059 |
| Class C | 289,026 |
| Transfer agent fees | |
| Class A | 260,566 |
| Advisor Class | 3,900 |
| Class C | 22,336 |
| Institutional Class | 170,356 |
| Institutional 2 Class | 1,863 |
| Institutional 3 Class | 694 |
| Compensation of board members | 23,325 |
| Custodian fees | 4,500 |
| Printing and postage fees | 28,790 |
| Registration fees | 11,918 |
| Audit fees | 29,500 |
| Legal fees | 15,191 |
| Compensation of chief compliance officer | 214 |
| Other | 22,551 |
| Total expenses | 4,490,460 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (128,278) |
| Fees waived by distributor | |
| Class A | (27,159) |
| Class C | (86,677) |
| Expense reduction | (260) |
| Total net expenses | 4,248,086 |
| Net investment income | 16,338,244 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 2,718,441 |
| Futures contracts | (92,079) |
| Net realized gain | 2,626,362 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (4,877,502) |
| Futures contracts | 9,205 |
| Net change in unrealized appreciation (depreciation) | (4,868,297) |
| Net realized and unrealized loss | (2,241,935) |
| Net increase in net assets resulting from operations | $14,096,309 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 22 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
Statement of Changes in Net Assets
|
Year Ended
October 31, 2020 |
Year Ended
October 31, 2019 |
|
| Operations | ||
| Net investment income | $16,338,244 | $17,690,601 |
| Net realized gain | 2,626,362 | 5,082,534 |
| Net change in unrealized appreciation (depreciation) | (4,868,297) | 24,321,471 |
| Net increase in net assets resulting from operations | 14,096,309 | 47,094,606 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (12,245,624) | (11,667,135) |
| Advisor Class | (208,014) | (105,641) |
| Class C | (937,701) | (997,548) |
| Institutional Class | (8,232,710) | (5,895,137) |
| Institutional 2 Class | (127,101) | (36,037) |
| Institutional 3 Class | (287,563) | (198,531) |
| Total distributions to shareholders | (22,038,713) | (18,900,029) |
| Increase in net assets from capital stock activity | 49,494,870 | 51,791,541 |
| Total increase in net assets | 41,552,466 | 79,986,118 |
| Net assets at beginning of year | 587,475,349 | 507,489,231 |
| Net assets at end of year | $629,027,815 | $587,475,349 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
23 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| October 31, 2020 | October 31, 2019 | |||
| Shares(a) | Dollars ($) | Shares(a) | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 1,166,360 | 36,105,850 | 1,650,857 | 50,368,103 |
| Distributions reinvested | 331,128 | 10,203,525 | 317,011 | 9,637,698 |
| Redemptions | (1,982,048) | (60,373,410) | (1,768,945) | (53,717,867) |
| Net increase (decrease) | (484,560) | (14,064,035) | 198,923 | 6,287,934 |
| Advisor Class | ||||
| Subscriptions | 97,249 | 3,005,338 | 164,223 | 5,048,896 |
| Distributions reinvested | 6,721 | 207,624 | 3,417 | 105,265 |
| Redemptions | (157,248) | (4,473,630) | (14,548) | (437,121) |
| Net increase (decrease) | (53,278) | (1,260,668) | 153,092 | 4,717,040 |
| Class C | ||||
| Subscriptions | 205,489 | 6,325,231 | 201,170 | 6,140,955 |
| Distributions reinvested | 21,835 | 672,864 | 21,594 | 655,595 |
| Redemptions | (465,276) | (14,280,915) | (405,360) | (12,279,875) |
| Net decrease | (237,952) | (7,282,820) | (182,596) | (5,483,325) |
| Institutional Class | ||||
| Subscriptions | 4,262,955 | 131,703,795 | 2,932,501 | 89,434,865 |
| Distributions reinvested | 167,277 | 5,157,922 | 115,333 | 3,516,101 |
| Redemptions | (2,156,268) | (65,475,173) | (1,731,865) | (52,227,871) |
| Net increase | 2,273,964 | 71,386,544 | 1,315,969 | 40,723,095 |
| Institutional 2 Class | ||||
| Subscriptions | 16,612 | 511,648 | 98,974 | 3,066,598 |
| Distributions reinvested | 4,106 | 126,727 | 1,147 | 35,677 |
| Redemptions | (52,707) | (1,656,606) | (865) | (26,729) |
| Net increase (decrease) | (31,989) | (1,018,231) | 99,256 | 3,075,546 |
| Institutional 3 Class | ||||
| Subscriptions | 108,450 | 3,356,620 | 110,181 | 3,359,946 |
| Distributions reinvested | 9,252 | 286,718 | 6,466 | 198,148 |
| Redemptions | (63,021) | (1,909,258) | (35,879) | (1,086,843) |
| Net increase | 54,681 | 1,734,080 | 80,768 | 2,471,251 |
| Total net increase | 1,520,866 | 49,494,870 | 1,665,412 | 51,791,541 |
| (a) | Share activity has been adjusted on a retroactive basis to reflect a 4 to 1 reverse stock split completed after the close of business on September 11, 2020. |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 24 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
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|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
25 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total
return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain
derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
|
Net asset value,
beginning of period |
Net
investment income |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class A(c) | |||||||
| Year Ended 10/31/2020 | $31.12 | 0.81 | 0.01(d) | 0.82 | (0.81) | (0.30) | (1.11) |
| Year Ended 10/31/2019 | $29.49 | 1.00 | 1.71 | 2.71 | (1.00) | (0.08) | (1.08) |
| Year Ended 10/31/2018 | $30.87 | 1.08 | (1.26) | (0.18) | (1.04) | (0.16) | (1.20) |
| Year Ended 10/31/2017 | $31.74 | 1.12 | (0.67) | 0.45 | (1.12) | (0.20) | (1.32) |
| Year Ended 10/31/2016 | $31.59 | 1.16 | 0.31 | 1.47 | (1.16) | (0.16) | (1.32) |
| Advisor Class(c) | |||||||
| Year Ended 10/31/2020 | $31.14 | 0.89 | 0.01(d) | 0.90 | (0.88) | (0.30) | (1.18) |
| Year Ended 10/31/2019 | $29.50 | 1.04 | 1.72 | 2.76 | (1.04) | (0.08) | (1.12) |
| Year Ended 10/31/2018 | $30.88 | 1.16 | (1.26) | (0.10) | (1.12) | (0.16) | (1.28) |
| Year Ended 10/31/2017 | $31.75 | 1.16 | (0.63) | 0.53 | (1.20) | (0.20) | (1.40) |
| Year Ended 10/31/2016 | $31.60 | 1.24 | 0.31 | 1.55 | (1.24) | (0.16) | (1.40) |
| Class C(c) | |||||||
| Year Ended 10/31/2020 | $31.12 | 0.67 | 0.01(d) | 0.68 | (0.67) | (0.30) | (0.97) |
| Year Ended 10/31/2019 | $29.49 | 0.84 | 1.71 | 2.55 | (0.84) | (0.08) | (0.92) |
| Year Ended 10/31/2018 | $30.87 | 0.92 | (1.22) | (0.30) | (0.92) | (0.16) | (1.08) |
| Year Ended 10/31/2017 | $31.75 | 0.96 | (0.68) | 0.28 | (0.96) | (0.20) | (1.16) |
| Year Ended 10/31/2016 | $31.60 | 1.00 | 0.35 | 1.35 | (1.04) | (0.16) | (1.20) |
| Institutional Class(c) | |||||||
| Year Ended 10/31/2020 | $31.13 | 0.88 | 0.02(d) | 0.90 | (0.88) | (0.30) | (1.18) |
| Year Ended 10/31/2019 | $29.50 | 1.08 | 1.67 | 2.75 | (1.04) | (0.08) | (1.12) |
| Year Ended 10/31/2018 | $30.88 | 1.12 | (1.22) | (0.10) | (1.12) | (0.16) | (1.28) |
| Year Ended 10/31/2017 | $31.76 | 1.20 | (0.68) | 0.52 | (1.20) | (0.20) | (1.40) |
| Year Ended 10/31/2016 | $31.60 | 1.24 | 0.32 | 1.56 | (1.24) | (0.16) | (1.40) |
| Institutional 2 Class(c) | |||||||
| Year Ended 10/31/2020 | $31.18 | 0.90 | 0.00(d),(h) | 0.90 | (0.89) | (0.30) | (1.19) |
| Year Ended 10/31/2019 | $29.54 | 1.00 | 1.80 | 2.80 | (1.08) | (0.08) | (1.16) |
| Year Ended 10/31/2018 | $30.92 | 1.16 | (1.22) | (0.06) | (1.16) | (0.16) | (1.32) |
| Year Ended 10/31/2017 | $31.80 | 1.20 | (0.68) | 0.52 | (1.20) | (0.20) | (1.40) |
| Year Ended 10/31/2016(i) | $31.84 | 0.84 | (0.04)(d) | 0.80 | (0.84) | — | (0.84) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 26 | Columbia Strategic California Municipal Income 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(c) | |||||||
| Year Ended 10/31/2020 | $30.83 | 2.69% | 0.81% | 0.78%(e) | 2.64% | 30% | $329,728 |
| Year Ended 10/31/2019 | $31.12 | 9.31% | 0.82%(f) | 0.80%(e),(f) | 3.26% | 37% | $347,854 |
| Year Ended 10/31/2018 | $29.49 | (0.62%) | 0.82% | 0.82%(e) | 3.52% | 13% | $323,725 |
| Year Ended 10/31/2017 | $30.87 | 1.49% | 0.82%(g) | 0.81%(e),(g) | 3.61% | 17% | $339,354 |
| Year Ended 10/31/2016 | $31.74 | 4.78% | 0.87% | 0.81%(e) | 3.62% | 13% | $385,410 |
| Advisor Class(c) | |||||||
| Year Ended 10/31/2020 | $30.86 | 3.03% | 0.56% | 0.54%(e) | 2.88% | 30% | $4,506 |
| Year Ended 10/31/2019 | $31.14 | 9.59% | 0.57%(f) | 0.54%(e),(f) | 3.37% | 37% | $6,206 |
| Year Ended 10/31/2018 | $29.50 | (0.38%) | 0.57% | 0.57%(e) | 3.76% | 13% | $1,363 |
| Year Ended 10/31/2017 | $30.88 | 1.75% | 0.57% | 0.56%(e) | 3.82% | 17% | $3,231 |
| Year Ended 10/31/2016 | $31.75 | 5.04% | 0.63% | 0.57%(e) | 3.87% | 13% | $1,021 |
| Class C(c) | |||||||
| Year Ended 10/31/2020 | $30.83 | 2.22% | 1.56% | 1.24%(e) | 2.19% | 30% | $23,783 |
| Year Ended 10/31/2019 | $31.12 | 8.82% | 1.57%(f) | 1.25%(e),(f) | 2.82% | 37% | $31,410 |
| Year Ended 10/31/2018 | $29.49 | (1.07%) | 1.57% | 1.27%(e) | 3.07% | 13% | $35,145 |
| Year Ended 10/31/2017 | $30.87 | 1.03% | 1.57%(g) | 1.26%(e),(g) | 3.16% | 17% | $46,521 |
| Year Ended 10/31/2016 | $31.75 | 4.31% | 1.62% | 1.26%(e) | 3.16% | 13% | $54,502 |
| Institutional Class(c) | |||||||
| Year Ended 10/31/2020 | $30.85 | 3.00% | 0.56% | 0.54%(e) | 2.87% | 30% | $260,443 |
| Year Ended 10/31/2019 | $31.13 | 9.58% | 0.57%(f) | 0.55%(e),(f) | 3.49% | 37% | $192,055 |
| Year Ended 10/31/2018 | $29.50 | (0.37%) | 0.57% | 0.57%(e) | 3.77% | 13% | $143,156 |
| Year Ended 10/31/2017 | $30.88 | 1.74% | 0.57%(g) | 0.56%(e),(g) | 3.86% | 17% | $120,839 |
| Year Ended 10/31/2016 | $31.76 | 5.04% | 0.62% | 0.56%(e) | 3.87% | 13% | $120,169 |
| Institutional 2 Class(c) | |||||||
| Year Ended 10/31/2020 | $30.89 | 2.89% | 0.54% | 0.52% | 2.92% | 30% | $2,283 |
| Year Ended 10/31/2019 | $31.18 | 9.59% | 0.56%(f) | 0.53%(f) | 3.29% | 37% | $3,302 |
| Year Ended 10/31/2018 | $29.54 | (0.21%) | 0.56% | 0.55% | 3.80% | 13% | $196 |
| Year Ended 10/31/2017 | $30.92 | 1.75% | 0.55%(g) | 0.53%(g) | 3.95% | 17% | $78 |
| Year Ended 10/31/2016(i) | $31.80 | 2.45% | 0.55%(j) | 0.52%(j) | 4.01%(j) | 13% | $1,349 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
27 |
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(c) | |||||||
| Year Ended 10/31/2020 | $31.29 | 0.91 | 0.02(d) | 0.93 | (0.91) | (0.30) | (1.21) |
| Year Ended 10/31/2019 | $29.65 | 1.08 | 1.72 | 2.80 | (1.08) | (0.08) | (1.16) |
| Year Ended 10/31/2018 | $31.03 | 1.16 | (1.22) | (0.06) | (1.16) | (0.16) | (1.32) |
| Year Ended 10/31/2017(k) | $30.52 | 0.80 | 0.51(d) | 1.31 | (0.80) | — | (0.80) |
| 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) | Per share amounts have been adjusted on a retroactive basis to reflect a 4 to 1 reverse stock split completed after the close of business on September 11, 2020. |
| (d) | 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. |
| (e) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (f) | Ratios include interfund lending expense which is less than 0.01%. |
| (g) | Expenses have been reduced due to a reimbursement of expenses overbilled by a third party. If the reimbursement had been excluded, the expense ratios would have been higher by the percentages shown for each class in the table below. All fee waivers and expense reimbursements by the Investment Manager and its affiliates were applied before giving effect to this third party reimbursement. |
| Year Ended | Class A | Class C |
Institutional
Class |
Institutional 2
Class |
| 10/31/2017 | 0.01% | 0.01% | 0.01% | 0.01% |
| (h) | Rounds to zero. |
| (i) | Institutional 2 Class shares commenced operations on March 1, 2016. Per share data and total return reflect activity from that date. |
| (j) | Annualized. |
| (k) | Institutional 3 Class shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 28 | Columbia Strategic California Municipal Income 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(c) | |||||||
| Year Ended 10/31/2020 | $31.01 | 3.07% | 0.49% | 0.47% | 2.94% | 30% | $8,284 |
| Year Ended 10/31/2019 | $31.29 | 9.63% | 0.50%(f) | 0.48%(f) | 3.55% | 37% | $6,648 |
| Year Ended 10/31/2018 | $29.65 | (0.28%) | 0.50% | 0.50% | 3.85% | 13% | $3,905 |
| Year Ended 10/31/2017(k) | $31.03 | 4.34% | 0.52%(j) | 0.51%(j) | 3.93%(j) | 17% | $3,187 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
29 |
Notes to Financial Statements
October 31, 2020
October 31, 2020
Note 1. Organization
Columbia Strategic California
Municipal Income Fund (the Fund), a series of Columbia Funds Series Trust I (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 Massachusetts business trust.
The Fund’s Board of Trustees
approved reverse stock splits of the issued and outstanding shares of the Fund (the “Reverse Stock Split”). The Reverse Stock Split was completed after the close of business on September 11, 2020. The
impact of the Reverse Stock Split was to decrease the number of shares outstanding and increase the net asset value per share for each share class of the Fund by the ratio of 4 to 1, resulting in no effect on the net
assets of each share class or the value of each affected shareholder’s investment. Capital stock share activity reflected in the Statement of Changes in Net Assets and per share data in the Financial Highlights
have been adjusted on a retroactive basis to reflect the impact of the Reverse Stock Split.
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 market value, unless this method results in a valuation that management believes does not approximate fair value.
Investments in open-end investment
companies (other than exchange-traded funds (ETFs)), are valued at the latest net asset value reported by those companies as of the valuation time.
Futures and options on futures
contracts are valued based upon the settlement price at the close of regular trading on their principal exchanges or, in the absence of a settlement price, at the mean of the latest quoted bid and ask prices.
| 30 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published
price for the security, if available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Derivative instruments
The Fund invests in certain
derivative instruments, as detailed below, in seeking to meet its investment objectives. Derivatives are instruments whose values depend on, or are derived from, in whole or in part, the value of one or more
securities, currencies, commodities, indices, or other assets or instruments. Derivatives may be used to increase investment flexibility (including to maintain cash reserves while maintaining desired exposure to
certain assets), for risk management (hedging) purposes, to facilitate trading, to reduce transaction costs and to pursue higher investment returns. The Fund may also use derivative instruments to mitigate certain
investment risks, such as foreign currency exchange rate risk, interest rate risk and credit risk. Derivatives may involve various risks, including the potential inability of the counterparty to fulfill its
obligations under the terms of the contract, the potential for an illiquid secondary market (making it difficult for the Fund to sell or terminate, including at favorable prices) and the potential for market movements
which may expose the Fund to gains or losses in excess of the amount shown in the Statement of Assets and Liabilities. The notional amounts of derivative instruments, if applicable, are not recorded in the financial
statements.
A derivative instrument may suffer
a marked-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform its
obligations under the contract. The Fund’s risk of loss from counterparty credit risk on over-the-counter derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by
the Fund and the amount of any variation margin held by the counterparty, plus any replacement costs or related amounts. With exchange-traded or centrally cleared derivatives, there is reduced counterparty credit risk
to the Fund since the clearinghouse or central counterparty (CCP) provides some protection in the case of clearing member default. The clearinghouse or CCP stands between the buyer and the seller of the contract;
therefore, additional counterparty credit risk is failure of the clearinghouse or CCP. However, credit risk still exists in exchange-traded or centrally cleared derivatives with respect to initial and variation margin
that is held in a broker’s customer account. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy
and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, U.S. bankruptcy laws will typically allocate that shortfall on a pro-rata basis across all the
clearing broker’s customers (including the Fund), potentially resulting in losses to the Fund.
In order to better define its
contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement)
or similar agreement with its derivatives counterparties. An ISDA Master Agreement is an agreement between the Fund and a counterparty that governs over-the-counter derivatives and foreign exchange forward contracts
and contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset
with the counterparty certain derivative instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically
permit a single net payment in the event of default (close-out netting), including the bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may
impose restrictions on or prohibitions against the right of offset or netting in bankruptcy, insolvency or other events.
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
31 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
Collateral (margin) requirements
differ by type of derivative. Margin requirements are established by the clearinghouse or CCP for exchange-traded and centrally cleared derivatives. Brokers can ask for margin in excess of the minimum in certain
circumstances. Collateral terms for most over-the-counter derivatives are subject to regulatory requirements to exchange variation margin with trading counterparties and may have contract specific margin terms as
well. For over-the-counter derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the marked-to-market amount for each transaction under such agreement and
comparing that amount to the value of any variation margin currently pledged by the Fund and/or the counterparty. Generally, the amount of collateral due from or to a party has to exceed a minimum transfer amount
threshold (e.g., $250,000) before a transfer has to be made. To the extent amounts due to the Fund from its counterparties are not fully collateralized, contractually or otherwise, the Fund bears the risk of loss from
counterparty nonperformance. The Fund may also pay interest expense on cash collateral received from the broker. Any interest expense paid by the Fund is shown on the Statement of Operations. The Fund attempts to
mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those
counterparties.
Certain ISDA Master Agreements
allow counterparties of over-the-counter derivatives transactions to terminate derivatives contracts prior to maturity in the event the Fund’s net asset value declines by a stated percentage over a specified
time period or if the Fund fails to meet certain terms of the ISDA Master Agreement, which would cause the Fund to accelerate payment of any net liability owed to the counterparty. The Fund also has termination rights
if the counterparty fails to meet certain terms of the ISDA Master Agreement. In determining whether to exercise such termination rights, the Fund would consider, in addition to counterparty credit risk, whether
termination would result in a net liability owed from the counterparty.
For financial reporting purposes,
the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.
Futures contracts
Futures contracts are
exchange-traded and represent commitments for the future purchase or sale of an asset at a specified price on a specified date. The Fund bought and sold futures contracts to manage the duration and yield curve
exposure of the Fund versus the benchmark and to manage exposure to movements in interest rates. These instruments may be used for other purposes in future periods. Upon entering into futures contracts, the Fund bears
risks that it may not achieve the anticipated benefits of the futures contracts and may realize a loss. Additional risks include counterparty credit risk, the possibility of an illiquid market, and that a change in
the value of the contract or option may not correlate with changes in the value of the underlying asset.
Upon entering into a futures
contract, the Fund deposits cash or securities with the broker, known as a futures commission merchant (FCM), in an amount sufficient to meet the initial margin requirement. The initial margin deposit must be
maintained at an established level over the life of the contract. Cash deposited as initial margin is recorded in the Statement of Assets and Liabilities as margin deposits. Securities deposited as initial margin are
designated in the Portfolio of Investments. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily change in the contract value and are
recorded as variation margin receivable or payable and are offset in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed or expires. Futures contracts involve, to
varying degrees, risk of loss in excess of the variation margin disclosed in the Statement of Assets and Liabilities.
Effects of derivative transactions in
the financial statements
The following tables are intended
to provide additional information about the effect of derivatives on the financial statements of the Fund, including: the fair value of derivatives by risk category and the location of those fair values in the
Statement of Assets and Liabilities; and the impact of derivative transactions over the period in the Statement of Operations, including realized and unrealized gains (losses). The derivative instrument schedules
following the Portfolio of Investments present additional information regarding derivative instruments outstanding at the end of the period, if any.
| 32 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
The following table is a summary of
the fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) at October 31, 2020:
| Asset derivatives | ||
|
Risk exposure
category |
Statement
of assets and liabilities location |
Fair value ($) |
| Interest rate risk | Component of total distributable earnings (loss) — unrealized appreciation on futures contracts | 9,205* |
| * | Includes cumulative appreciation (depreciation) as reported in the tables following the Portfolio of Investments. Only the current day’s variation margin is reported in receivables or payables in the Statement of Assets and Liabilities. |
The following table indicates the
effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended October 31, 2020:
The following table is a summary
of the average outstanding volume by derivative instrument for the year ended October 31, 2020:
| Derivative instrument |
Average notional
amounts ($)* |
| Futures contracts — short | 1,834,512 |
| * | Based on the ending daily outstanding amounts for the year ended October 31, 2020. |
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.
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
33 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its 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.
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 October 31, 2020 was 0.46% 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. These members of the Board of Trustees
may participate in a Deferred Compensation Plan (the Deferred Plan) which may be terminated at any time. Obligations of the Deferred Plan will be paid solely out of the Fund’s assets, and all amounts payable
under the Deferred Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
| 34 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as
sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class.
For the year ended October 31,
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 | 0.08 |
| Advisor Class | 0.08 |
| Class C | 0.08 |
| Institutional Class | 0.08 |
| 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 October 31, 2020, these minimum account balance fees reduced total expenses
of the Fund by $260.
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 service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A and Class C shares of the Fund. Also under the Plans, the Fund pays a monthly
distribution fee to the Distributor at the maximum annual rate of 0.75% of the average daily net assets attributable to Class C shares of the Fund.
Effective September 1, 2020, the
Distributor has contractually agreed to waive a portion of the service fee for Class A shares through February 28, 2022 so that the service fee does not exceed 0.20% annually of the average daily net assets
attributable to Class A shares. This arrangement may be modified or terminated at the sole discretion of the Board of Trustees.
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
35 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
Effective September 1, 2020, the
Distributor has contractually agreed to waive a portion of the distribution fee for Class C shares through February 28, 2022 so that the distribution fee does not exceed 0.45% annually of the average daily net assets
attributable to Class C shares. This arrangement may be modified or terminated at the sole discretion of the Board of Trustees. Prior to September 1, 2020, this was a voluntary arrangement.
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 October 31, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 3.00 | 0.75(a) | 108,444 |
| Class C | — | 1.00(b) | 5,912 |
| (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.
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:
*Effective September 1, 2020, the
contractual expense reimbursement arrangement is in effect through February 28, 2022.
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. Class A and Class C distribution and service fees waived by the Distributor, as discussed above, are in addition to the waiver/reimbursement commitment under the agreement.
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.
| 36 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
At October 31, 2020, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, trustees’ deferred compensation, tax straddles, distributions and principal and/or interest of fixed income
securities. To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
The 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 October 31, 2020 | Year Ended October 31, 2019 | ||||||
|
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 1,837,011 | 16,387,762 | 3,813,940 | 22,038,713 | 742 | 17,689,857 | 1,209,430 | 18,900,029 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At October 31, 2020, the components
of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed tax-
exempt income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| 1,098,907 | 2,671,495 | 1,167,176 | — | 28,875,619 |
At October 31, 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) ($) |
Net unrealized
appreciation ($) |
| 602,179,219 | 33,322,616 | (4,446,997) | 28,875,619 |
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 $199,770,992 and $176,866,065, respectively, for the year ended October 31, 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 October 31, 2020.
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
37 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 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., Wells Fargo Bank, 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. Pursuant to a December 1, 2020 amendment, 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 $950 million. 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, 1.25%. 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. Prior to the December 1, 2020 amendment, 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. which permitted collective borrowings up to 1 billion. Interest was 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%.
The Fund had no borrowings during
the year ended October 31, 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.
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
| 38 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
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 Fund performance may also be
significantly negatively impacted by the economic impact of the coronavirus disease 2019 (COVID-19) pandemic. The 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 objectives. Any such
event(s) could have a significant adverse impact on the value and risk profile of the Fund.
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting different communities at different times with varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including
the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to continue ordinary business operations and technology functions over near- or longer-term periods.
Municipal securities risk
Municipal securities are debt
obligations generally issued to obtain funds for various public purposes, including general financing for state and local governments, or financing for a specific project or public facility, and include obligations of
the governments of the U.S. territories, commonwealths and possessions such as Guam, Puerto Rico and the U.S. Virgin Islands to the extent such obligations are exempt from state and U.S. federal income taxes. The
value of municipal securities can be significantly affected by actual or expected political and legislative changes at the federal or state level. Municipal securities may be fully or partially backed by the taxing
authority of the local government, by the credit of a private issuer, by the current or anticipated revenues from a specific project or specific assets or by domestic or foreign entities providing credit support, such
as letters of credit, guarantees or insurance, and are generally classified into general obligation bonds and special revenue obligations. Because many municipal securities are issued to finance projects in sectors
such as education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal market.
Issuers in a state, territory,
commonwealth or possession in which the Fund invests may experience significant financial difficulties for various reasons, including as the result of events that cannot be reasonably anticipated or controlled such as
economic downturns or similar periods of economic stress, social conflict or unrest, labor disruption and other natural disasters. Such financial difficulties may lead to credit rating downgrades or defaults of such
issuers which in turn, could
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
39 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
affect the market values and marketability of many
or all municipal obligations of issuers in such state, territory, commonwealth or possession. The value of the Fund’s shares will be negatively impacted to the extent it invests in such securities. The
Fund’s annual and semiannual reports show the Fund’s investment exposures at a point in time. The risk of investing in the Fund is directly correlated to the Fund’s investment exposures.
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.
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 October 31, 2020, one
unaffiliated shareholder of record owned 23.3% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Affiliated
shareholders of record owned 30.7% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the
Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of
less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 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 or one or more of its affiliates that provides services to
the Funds.
| 40 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust I and Shareholders of Columbia Strategic California Municipal Income Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Strategic California Municipal Income Fund (one of the funds constituting Columbia Funds Series Trust I, referred to hereafter
as the "Fund") as of October 31, 2020, the related statement of operations for the year ended October 31, 2020, the statement of changes in net assets for each of the two years in the period ended October 31, 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 October 31, 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
October 31, 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 October 31, 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
December 21, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
41 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended October 31, 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 |
| $1,404,191 | 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. The year set forth beneath Length of Service
in the table below is the year in which the Trustee was first appointed or elected as Trustee to any Fund currently in the Columbia Funds Complex or a predecessor thereof. Under current Board policy, members serve
terms of indefinite duration. The Board approved the nomination of and recommended the election of 17 nominees to the Board, effecting a consolidation of the Board and the board of trustees overseeing Columbia Funds
Series Trust, Columbia Funds Series Trust II and certain affiliated trusts. At a shareholder meeting held on December 22, 2020, shareholders approved the nominees, effective January 1, 2021.
Independent trustees
| 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 Fund Complex overseen | Other directorships held by Trustee during the past five years |
|
Janet Langford Carrig
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1957 |
Trustee
1996 |
Senior Vice President, General Counsel and Corporate Secretary, ConocoPhillips (independent energy company), September 2007-October 2018 | 66 | Director, EQT Corporation (natural gas producer); Director, Whiting Petroleum Corporation (independent oil and gas company) |
|
Douglas A. Hacker
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1955 |
Trustee and Chairman of the Board
1996 |
Independent business executive since May 2006; Executive Vice President — Strategy of United Airlines, December 2002-May 2006; President of UAL Loyalty Services (airline marketing company), September 2001-December 2002; Executive Vice President and Chief Financial Officer of United Airlines, July 1999-September 2001 | 66 | Director, Spartan Nash Company (food distributor); Director, Aircastle Limited (aircraft leasing); former Director, Nash Finch Company (food distributor), 2005-2013; former Director, SeaCube Container Leasing Ltd. (container leasing), 2010-2013; and former Director, Travelport Worldwide Limited (travel information technology), 2014-2019 |
| 42 | Columbia Strategic California Municipal Income 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 the past five years and other relevant professional experience | Number of Funds in the Columbia Fund Complex overseen | Other directorships held by Trustee during the past five years |
|
Nancy T. Lukitsh
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1956 |
Trustee
2011 |
Senior Vice President, Partner and Director of Marketing, Wellington Management Company, LLP (investment adviser), 1997-2010; Chair, Wellington Management Portfolios (commingled non-U.S. investment pools), 2007-2010; Director, Wellington Trust Company, NA and other Wellington affiliates, 1997-2010 | 66 | None |
|
David M. Moffett
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Trustee
2011 |
Retired. Consultant to Bridgewater and Associates | 66 | Director, CSX Corporation (transportation suppliers); Director, Genworth Financial, Inc. (financial and insurance products and services); Director, PayPal Holdings Inc. (payment and data processing services); Trustee, University of Oklahoma Foundation; former Director, eBay Inc. (online trading community), 2007-2015; and former Director, CIT Bank, CIT Group Inc. (commercial and consumer finance), 2010-2016 |
|
John J. Neuhauser
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1943 |
Trustee
1984 |
President, Saint Michael’s College, August 2007-June 2018; Director or Trustee of several non-profit organizations, including University of Vermont Medical Center; Academic Vice President and Dean of Faculties, Boston College, August 1999-October 2005; University Professor, Boston College, November 2005-August 2007 | 66 | Director, Liberty All-Star Equity Fund and Liberty All-Star Growth Fund (closed-end funds) |
|
Patrick J. Simpson
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1944 |
Trustee
2000 |
Of Counsel, Perkins Coie LLP (law firm) since 2015; Partner, Perkins Coie LLP, 1988-2014 | 66 | Former Director, M Fund, Inc. (M Funds mutual fund family), July 2018-July 2019 |
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
43 |
TRUSTEES AND OFFICERS (continued)
Consultants to the Independent Trustees*
Consultants to the Independent Trustees*
| * | J. Kevin Connaughton was appointed consultant to the Independent Trustees effective March 1, 2016. Natalie A. Trunow was appointed consultant to the Independent Trustees effective September 1, 2016. Olive Darragh was appointed consultant to the Independent Trustees effective June 10, 2019. |
| 44 | Columbia Strategic California Municipal Income 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 | 162 | 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 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 — Accounting and Tax, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009-December 2018 and December 2015-December 2018, 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 May 2010. |
|
Columbia Strategic California Municipal Income 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 |
|
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); Chief Legal Officer, Columbia Acorn/Wanger Funds, since September 2020; 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. |
Board Consideration
and Approval of Management
Agreement
On June 17, 2020, the Board of
Trustees (the Board) and the Trustees who are not interested persons (as defined in the Investment Company Act of 1940) (the Independent Trustees) of Columbia Funds Series Trust I (the Trust) unanimously approved the
continuation of the Management Agreement (the Management Agreement) with Columbia Management Investment Advisers, LLC (the Investment Manager) with respect to Columbia Strategic California Municipal Income Fund (the
Fund), a series of the Trust. As detailed below, the Board’s Advisory Fees and Expenses Committee (the Committee) and the Board met on multiple occasions to review and discuss, among themselves, with the
management team of the Investment Manager and with an independent fee consultant, materials provided by the Investment Manager, the independent fee consultant and others before determining to approve the continuation
of the Management Agreement.
In connection with their
deliberations regarding the continuation of the Management Agreement, the Committee and the Board evaluated materials requested from the Investment Manager regarding the Fund and the Management Agreement, and
discussed these materials with representatives of the Investment Manager at Committee meetings held on March 10, 2020, April 30, 2020 and June 17, 2020 and at Board meetings held on March 11, 2020 and June 17, 2020.
In addition, the Board and its various committees consider matters bearing on the Management Agreement at other meetings throughout the year and in prior years and meet regularly with senior management of the Trust
and the Investment Manager. Through the Board’s Investment Oversight Committees, Trustees also meet with selected portfolio managers of the funds the Trustees oversee and with other investment personnel at
various times throughout the year. The Committee and the Board also consulted with
| 46 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
Board Consideration and Approval of
Management
Agreement (continued)
the independent fee consultant, Fund counsel and
the Independent Trustees’ independent legal counsel, who advised on various matters with respect to the Committee’s and the Board’s considerations and otherwise assisted the Committee and the Board
in their deliberations. On June 17, 2020, the Committee recommended that the Board approve the continuation of the Management Agreement. On June 17, 2020, the Board, including the Independent Trustees, voting
separately, unanimously approved the continuation of the Management Agreement for the Fund.
The Committee and the Board
considered all information that they, their legal counsel or the Investment Manager believed reasonably necessary to evaluate and to determine whether to recommend for approval or approve the continuation of the
Management Agreement. The information and factors considered by the Committee and the Board in recommending for approval or approving the continuation of the Management Agreement for the Fund included the
following:
| • | Information on the investment performance of the Fund relative to the performance of a group of mutual funds determined to be comparable to the Fund by an independent third-party data provider, as well as performance relative to benchmarks; |
| • | Information on the Fund’s management fees and total expenses, including information comparing the Fund’s expenses to those of a group of comparable mutual funds, as determined by the independent third-party data provider; |
| • | The Investment Manager’s agreement to contractually limit or cap total operating expenses for the Fund through February 28, 2021 so that total operating expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and infrequent and/or unusual expenses) would not exceed a specified annual rate, as a percentage of the Fund’s net assets; |
| • | The terms and conditions of the Management Agreement; |
| • | The current and proposed terms and conditions of other agreements and arrangements with affiliates of the Investment Manager relating to the operations of the Fund, including agreements with respect to the provision of distribution, transfer agency and shareholder services to the Fund; |
| • | Descriptions of various functions performed by the Investment Manager under the Management Agreement, including portfolio management and portfolio trading practices; |
| • | Information regarding any recently negotiated management fees of similarly-managed portfolios of other institutional clients of the Investment Manager; |
| • | Information regarding the reputation, regulatory history and resources of the Investment Manager, including information regarding senior management, portfolio managers and other personnel; |
| • | Information regarding the capabilities of the Investment Manager with respect to compliance monitoring services, including an assessment of the Investment Manager’s compliance system by the Fund’s Chief Compliance Officer; and |
| • | The profitability to the Investment Manager and its affiliates from their relationships with the Fund. |
Nature, extent and quality of
services provided under the Management Agreement
The Committee and the Board
considered the nature, extent and quality of services provided to the Fund by the Investment Manager and its affiliates under the Management Agreement and under separate agreements for the provision of transfer agency
and shareholder services, and the resources dedicated to the Fund and the other Columbia Funds by the Investment Manager and its affiliates. The Committee and the Board considered, among other things, the Investment
Manager’s ability to attract, motivate and retain highly qualified research, advisory and supervisory investment professionals (including compensation programs for personnel involved in fund management,
reputation and other attributes), the portfolio management services provided by those investment professionals, and the quality of the Investment Manager’s investment research capabilities and trade execution
services. The Committee and the Board also considered the potential benefits to shareholders of investing in a mutual fund that is part of a fund complex offering exposure to a variety of asset classes and investment
disciplines and providing a variety of fund and shareholder services.
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
|
47 |
Board Consideration and Approval of
Management
Agreement (continued)
The Committee and the Board also considered the
professional experience and qualifications of the senior personnel of the Investment Manager, which included consideration of the Investment Manager’s experience with funds using an investment strategy similar
to that used by the Investment Manager for the Fund. The Committee and the Board noted the compliance programs of and the compliance-related resources provided to the Fund by the Investment Manager and its affiliates
and the resources dedicated by the Investment Manager and its affiliates to risk management, and considered the Investment Manager’s ability to provide administrative services to the Fund and coordinate the
activities of the Fund’s other service providers. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the nature, extent and
quality of the services provided to the Fund under the Management Agreement supported the continuation of the Management Agreement.
Investment performance
The Committee and the Board
reviewed information about the performance of the Fund over various time periods, including performance information relative to benchmarks, information that compared the performance of the Fund to the performance of a
group of comparable mutual funds as determined by the independent third-party data provider, and information and analysis provided by the independent fee consultant. The Committee and the Board also reviewed a
description of the third party’s methodology for identifying the Fund’s peer groups for purposes of performance and expense comparisons. Although the Fund’s performance lagged that of a relevant peer
group for certain (although not necessarily all) periods, the Committee and the Board concluded that other factors relevant to performance were sufficient, in light of other considerations, to support continuation of
the Management Agreement. Those factors included one or more of the following: (i) that the Fund’s performance, although lagging in certain recent periods, was stronger over the longer term; (ii) that the
underperformance was attributable, to a significant extent, to investment decisions that were reasonable and consistent with the Fund’s investment strategy and policies and that the Fund was performing within a
reasonable range of expectations, given those investment decisions, market conditions and the Fund’s investment strategy; (iii) that the Fund’s performance was competitive when compared to other relevant
performance benchmarks or peer groups; and (iv) that the Investment Manager had taken or was taking steps designed to help improve the Fund’s investment performance, including, but not limited to, replacing
portfolio managers, enhancing the resources supporting the portfolio managers, or modifying investment strategies.
The Committee and the Board noted
that, through December 31, 2019, the Fund’s performance was in the fifty-eighth, fifty-eighth and sixtieth percentile (where the best performance would be in the first percentile) of its category selected by the
independent third-party data provider for the purposes of performance comparisons for the one-, three- and five-year periods, respectively.
The Committee and the Board also
considered the Investment Manager’s performance and reputation generally, the Investment Manager’s historical responsiveness to Board concerns about performance, and the Investment Manager’s
willingness to take steps intended to improve performance. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the performance of the
Fund and the Investment Manager was sufficient, in light of other considerations, to support the continuation of the Management Agreement.
Investment management fee rates
and other expenses
The Committee and the Board
considered the management fees charged to the Fund under the Management Agreement as well as the total expenses incurred by the Fund. In assessing the reasonableness of the fees under the Management Agreement, the
Committee and the Board considered, among other information, the Fund’s total expense ratio as a percentage of average daily net assets. The Committee and the Board considered data provided by the independent
third-party data provider and the independent fee consultant. The Committee and the Board noted that, as of December 31, 2019, the Fund’s actual management fee and net total expense ratio were ranked in the
second and third quintiles, respectively, (where the lowest fees and expenses would be in the first quintile) against the Fund’s expense universe as determined by the independent third-party data provider for
purposes of expense comparison. The Committee and the Board also took into account the fee waiver and expense limitation arrangements agreed to by the Investment Manager, as noted above.
The Committee and the Board also
received and considered information about the management fees charged by the Investment Manager to institutional accounts. In considering the fees charged to those accounts, the Committee and the Board took into
account, among other things, the Investment Manager’s representations about the differences between
| 48 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
Board Consideration and Approval of
Management
Agreement (continued)
managing mutual funds as compared to other types
of accounts, including differences in the services provided, differences in the risk profile of such business for the Investment Manager and the additional resources required to manage mutual funds effectively. The
Committee and the Board also received and considered information about the fees charged by the Investment Manager for sub-advisory services it provides to comparable unaffiliated funds. In evaluating the Fund’s
management fees, the Committee and the Board also took into account the demands, complexity and quality of the investment management of the Fund.
After reviewing these and related
factors, the Committee and the Board concluded, within the context of their overall conclusions, that the management fee rates and expenses of the Fund, in light of other considerations, supported the continuation of
the Management Agreement.
Costs of services provided and
profitability
The Committee and the Board also
took note of the costs the Investment Manager and its affiliates incur in connection with the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the
Fund, and the efforts undertaken by the Investment Manager and its affiliates to manage efficiently their costs to provide such services.
The Committee and the Board also
considered the compensation directly or indirectly received by the Investment Manager’s affiliates in connection with their relationships with the Fund. The Committee and the Board reviewed information provided
by management as to the profitability to the Investment Manager and its affiliates of their relationships with the Fund, information about the allocation of expenses used to calculate profitability, and comparisons of
profitability levels realized in 2019 to profitability levels realized in 2018. When reviewing profitability, the Committee and the Board also considered court cases in which adviser profitability was an issue in
whole or in part, the performance of similarly managed funds, the performance of the Fund, and the expense ratio of the Fund. In addition, the Committee and the Board considered information provided by the Investment
Manager regarding the Investment Manager’s financial condition and comparing its profitability to that of other asset management firms that are, or are subsidiaries of, publicly traded companies. In this regard,
the Committee and the Board also considered data provided by the independent fee consultant.
After reviewing these and related
factors, the Committee and the Board concluded, within the context of their overall conclusions, that the costs of services provided and the profitability to the Investment Manager and its affiliates from their
relationships with the Fund supported the continuation of the Management Agreement.
Economies of scale
The Committee and the Board
considered the potential existence of economies of scale in the provision by the Investment Manager of services to the Fund, to groups of related funds, and to the Investment Manager’s investment advisory
clients as a whole, and whether those economies of scale were shared with the Fund through breakpoints in investment management fees or other means, such as expense limitation arrangements and additional investments
by the Investment Manager in investment, trading, compliance and other resources. The Committee and the Board noted that the management fee schedules for the Fund contained breakpoints that would reduce the fee rate
on assets above specified threshold levels.
In considering these matters, the
Committee and the Board also considered the costs of the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund, as noted above. After reviewing
these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the extent to which any economies of scale were expected to be shared with the Fund supported the
continuation of the Management Agreement.
Other benefits to the Investment
Manager
The Committee and the Board
received and considered information regarding “fall-out” or ancillary benefits received by the Investment Manager and its affiliates as a result of their relationships with the Fund, such as the engagement
of the Investment Manager’s affiliates to provide distribution, transfer agency and shareholder services to the Fund. In this regard, among other matters, the Committee and the Board considered that the
Fund’s distributor retains a portion of the distribution fees from the Fund and receives a portion of the sales charges on sales or redemptions of certain classes of shares of the
|
Columbia Strategic California Municipal Income Fund | Annual Report 2020
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49 |
Board Consideration and Approval of
Management
Agreement (continued)
Fund. The Committee and the Board also considered
the benefits of research made available to the Investment Manager by reason of brokerage commissions generated by the Fund’s securities transactions, and reviewed information about the Investment Manager’s
practices with respect to considering brokerage and research services when allocating portfolio transactions. In this connection, the Board also noted that the amount of research made available to the Investment
Manager by reason of brokerage commissions had been declining over time, and may decline further. The Committee and the Board recognized that the Investment Manager’s profitability would be somewhat lower
without these benefits.
Conclusion
The Committee and the Board
reviewed all of the above considerations in reaching their decisions to recommend or approve the continuation of the Management Agreement. In their deliberations, the Trustees did not identify any particular
information that was all-important or controlling, and individual Trustees may have attributed different weights to the various factors. Based on their evaluation of all factors that they deemed to be material,
including those factors described above, and assisted by the advice of independent legal counsel, the Board, including the Independent Trustees, voting separately, unanimously approved the continuation of the
Management Agreement.
| 50 | Columbia Strategic California Municipal Income Fund | Annual Report 2020 |
Columbia Strategic California Municipal Income
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/
ANN123_10_K01_(12/20)
Annual Report
October 31, 2020
October 31, 2020
Columbia
Massachusetts 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
shareholder 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 Massachusetts 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. The Fund’s 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-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 Massachusetts Intermediate Municipal Bond
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks as high a level of current interest income exempt from federal income tax and, to the extent possible, from Massachusetts individual income tax, as is consistent with relative stability 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. Returns for Class V shares are
shown with and without the maximum initial sales charge of 4.75%. 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 Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (October 31, 2010 — October 31, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Massachusetts 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 October 31, 2020) | |
| AAA rating | 4.4 |
| AA rating | 53.2 |
| A rating | 23.1 |
| BBB rating | 15.3 |
| BB rating | 3.0 |
| Not rated | 1.0 |
| 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. If a security is
Not rated but has a rating by Kroll and/or DBRS, the same methodology is applied to those bonds that would otherwise be Not rated. 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 Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
During the 12-month period that
ended October 31, 2020, the Fund’s Class A shares returned 2.02% excluding sales charges. The Fund’s Institutional Class shares returned 2.27% for the same time period. By comparison, the Fund’s
benchmark, the Bloomberg Barclays 3-15 Year Blend Municipal Bond Index, which is national in scope, returned 3.84%.
Market overview
Despite significant volatility in
the first calendar quarter of 2020, the U.S. municipal bond market experienced positive returns in the 12-month period. Municipals benefited from a relatively benign environment in the first three months of the
reporting period. During this time, the U.S. economy continued its expansion and municipal yields marched toward new lows (as prices increased). These favorable conditions quickly deteriorated in the first quarter of
2020 once the COVID-19 pandemic hit the United States. Municipal bonds experienced several record down days in mid-March as investors withdrew cash from municipal funds amid concerns about the financial impact of the
COVID-19 pandemic on state and local governments. Investor worries about the prospects for bonds backed by economically sensitive revenues, such as sales taxes, hotels and air travel, further contributed to the
withdrawals from municipal funds. Managers raised cash to meet the redemptions, exacerbating the market’s decline.
The downturn abated in late March,
and the tax-exempt market embarked on an impressive rally that included several days of record price gains. Investors were encouraged by the U.S. Federal Reserve’s decision to cut interest rates to zero and
initiate a number of liquidity programs aimed at propping up financial assets. Congress also provided fiscal support with a stimulus package amounting to over $2 trillion. After pausing in April, the market’s
advance resumed in May as the Fed clarified potential support for municipal issuers and cash began to flow back into the market. So much cash came into muni funds, in fact, that year-to-date inflows had returned to
positive territory by the third week of July. Although tax receipts and other municipal revenue sources continued to slide in the COVID-19-related economic downturn, the market remained backstopped by both Fed policy
and hopes for additional fiscal stimulus.
The rally started to lose steam in
early August due to a resurgence of COVID-19 cases, waning hope for further federal support for state and local governments before the U.S. presidential election, and subsiding inflows. Still, the benchmark closed the
annual period with a healthy gain.
Massachusetts outpaced the national
market thanks to its higher quality profile and longer duration (interest-rate sensitivity). A larger concentration in state general obligations, which outperformed most other sectors, was an additional positive.
As was the case with most states,
the Commonwealth’s revenues were greatly affected by the COVID-19 pandemic and the resulting mitigation efforts. However, federal intervention by way of the CARES Act, which included both direct support for
COVID-19-related expenses and general economic activity, allowed Massachusetts to avoid the worst-case scenario. The state continued to face revenue pressure, which we believe is likely to require a draw on reserves
to cover shortfalls. We believe that the magnitude of reserve draws will rely in part on whether there is additional federal fiscal support.
The Fund underperformed its
benchmark during the past 12 months, with the bulk of the shortfall occurring in April and May.
The Fund’s leading
detractors included:
| • | Lower rated investment-grade bonds, particularly sectors backed by specific revenue streams rather than general tax receipts, dramatically underperformed as the COVID-19 pandemic took hold and the economy shut down. The Fund was meaningfully overweight in this area, which hurt relative performance. |
| • | Overweight positions in healthcare and education issues, both of which have higher weightings in Massachusetts than they do in the national index, pressured results. These areas were especially vulnerable to COVID-19 mitigation measures. Hospitals had to suspend elective surgeries, while schools sent students home to learn remotely. A position in University of Massachusetts Boston housing project was the Fund’s weakest performing holding for the year. We maintained the position as of October 31, 2020, based on our view on the issuer’s prospects. |
| • | A position in the bonds of the physician group Atrius Health also lagged on concerns about its ability to successfully navigate diminished patient volumes. In this case, we chose to sell the position. |
|
Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
The Fund’s leading
contributors included:
| • | An overweight position in zero-coupon bonds, which have high sensitivity to movements in prevailing yields. |
| • | Fund positions in state general obligation debt, which outperformed due to their higher quality. |
| • | An investment in Massachusetts Port Authority issues did well despite the downturn in travel, reflecting the vital role of Logan Airport and Boston Harbor in the Commonwealth’s economy. |
Fund positioning
We were constructive on the
prospects for municipal bonds prior to the COVID-19 pandemic, prompting us to make Fund purchases across a variety of sectors to lengthen the Fund’s average maturity. We funded these purchases by reducing the
Fund’s allocations to short-maturity, pre-refunded bonds and bonds that are callable in the next 12 months. Our decision to reduce the Fund’s weighting in these areas was based on their lower income and
our expectation that issuers would refinance callable, higher cost debt. As the second quarter began, our focus shifted to assessing the impact of the COVID-19 pandemic on the sectors and issuers represented in the
portfolio. We reduced or exited positions we identified as being susceptible to the effects of a COVID-19-related economic slowdown. Our portfolio activity in the third quarter was limited, as issuance was light in
this time.
At the end of the period, we
believed that the market environment was much improved compared to the conditions that were in place in the spring. The economy had opened across the country to varying degrees, and the news of coronavirus vaccines
was encouraging. In addition, the lower rated revenue sectors of the investment-grade space had recovered roughly half of the spread widening that occurred in the immediate aftermath of the COVID-19 pandemic.
Believing there was room for additional upside in this area, we maintained the Fund’s overweight position.
We would like to thank shareholders
for their continuing support and trust they have placed in us.
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 who have contributed to the report. 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 Massachusetts 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 Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
7 |
Portfolio of Investments
October 31, 2020
October 31, 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 Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
| Money Market Funds 3.3% | ||
| Shares | Value ($) | |
| Dreyfus AMT-Free Tax Exempt Cash Management Fund, Institutional Shares, 0.010%(e) | 122,380 | 122,367 |
| JPMorgan Institutional Tax Free Money Market Fund, Institutional Shares, 0.012%(e) | 7,477,048 | 7,477,048 |
|
Total Money Market Funds
(Cost $7,599,428) |
7,599,415 | |
|
Total Investments in Securities
(Cost: $214,695,569) |
227,666,032 | |
| Other Assets & Liabilities, Net | 1,901,874 | |
| Net Assets | 229,567,906 | |
Notes to Portfolio of
Investments
| (a) | Income from this security may be subject to alternative minimum tax. |
| (b) | Zero coupon bond. |
| (c) | 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 October 31, 2020, the total value of these securities amounted to $1,161,226, which represents 0.51% of total net assets. |
| (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. At October 31, 2020, the total value of these securities amounted to $3,159,495, which represents 1.38% of total net assets. |
| (e) | The rate shown is the seven-day current annualized yield at October 31, 2020. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| AMBAC | Ambac Assurance Corporation |
| BAM | Build America Mutual Assurance Co. |
| NPFGC | National Public Finance Guarantee Corporation |
| TCRS | Transferable Custody Receipts |
Fair value
measurements
The Fund categorizes
its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that
reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input
that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For
example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active
market.
Fair value inputs are
summarized in the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 12 | Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
Fair value measurements (continued)
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
Under the direction of the
Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of
voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly
to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of
Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third
party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale
pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to
discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members
of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of
the inputs used to value the Fund’s investments at October 31, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Municipal Bonds | — | 220,066,617 | — | 220,066,617 |
| Money Market Funds | 7,599,415 | — | — | 7,599,415 |
| Total Investments in Securities | 7,599,415 | 220,066,617 | — | 227,666,032 |
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 Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
13 |
Statement of Assets and Liabilities
October 31, 2020
October 31, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $214,695,569) | $227,666,032 |
| Receivable for: | |
| Capital shares sold | 110,544 |
| Interest | 2,364,091 |
| Expense reimbursement due from Investment Manager | 540 |
| Prepaid expenses | 1,128 |
| Trustees’ deferred compensation plan | 90,755 |
| Total assets | 230,233,090 |
| Liabilities | |
| Due to custodian | 10,213 |
| Payable for: | |
| Capital shares purchased | 72,925 |
| Distributions to shareholders | 448,517 |
| Management services fees | 2,948 |
| Distribution and/or service fees | 292 |
| Transfer agent fees | 23,328 |
| Compensation of chief compliance officer | 9 |
| Other expenses | 16,197 |
| Trustees’ deferred compensation plan | 90,755 |
| Total liabilities | 665,184 |
| Net assets applicable to outstanding capital stock | $229,567,906 |
| Represented by | |
| Paid in capital | 216,500,342 |
| Total distributable earnings (loss) | 13,067,564 |
| Total - representing net assets applicable to outstanding capital stock | $229,567,906 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 14 | Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Assets and Liabilities (continued)
October 31, 2020
October 31, 2020
| Class A | |
| Net assets | $28,012,234 |
| Shares outstanding | 2,637,104 |
| Net asset value per share | $10.62 |
| 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) | $10.95 |
| Advisor Class | |
| Net assets | $3,834,255 |
| Shares outstanding | 361,240 |
| Net asset value per share | $10.61 |
| Class C | |
| Net assets | $2,616,643 |
| Shares outstanding | 246,415 |
| Net asset value per share | $10.62 |
| Institutional Class | |
| Net assets | $182,343,184 |
| Shares outstanding | 17,165,197 |
| Net asset value per share | $10.62 |
| Institutional 2 Class | |
| Net assets | $226,244 |
| Shares outstanding | 21,258 |
| Net asset value per share | $10.64 |
| Institutional 3 Class | |
| Net assets | $172,684 |
| Shares outstanding | 16,177 |
| Net asset value per share | $10.67 |
| Class V | |
| Net assets | $12,362,662 |
| Shares outstanding | 1,163,817 |
| Net asset value per share | $10.62 |
| Maximum sales charge | 4.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class V shares) | $11.15 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
15 |
Statement of Operations
Year Ended October 31, 2020
Year Ended October 31, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $39,425 |
| Interest | 6,936,282 |
| Total income | 6,975,707 |
| Expenses: | |
| Management services fees | 1,077,751 |
| Distribution and/or service fees | |
| Class A | 66,571 |
| Class C | 29,656 |
| Class V | 18,562 |
| Transfer agent fees | |
| Class A | 34,784 |
| Advisor Class | 4,528 |
| Class C | 3,872 |
| Institutional Class | 239,643 |
| Institutional 2 Class | 190 |
| Institutional 3 Class | 32 |
| Class V | 16,163 |
| Compensation of board members | 16,472 |
| Custodian fees | 1,634 |
| Printing and postage fees | 14,170 |
| Registration fees | 29,251 |
| Audit fees | 29,500 |
| Legal fees | 5,750 |
| Compensation of chief compliance officer | 82 |
| Other | 14,384 |
| Total expenses | 1,602,995 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (213,438) |
| Fees waived by distributor | |
| Class C | (8,893) |
| Expense reduction | (80) |
| Total net expenses | 1,380,584 |
| Net investment income | 5,595,123 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 32,131 |
| Net realized gain | 32,131 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (590,122) |
| Net change in unrealized appreciation (depreciation) | (590,122) |
| Net realized and unrealized loss | (557,991) |
| Net increase in net assets resulting from operations | $5,037,132 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 16 | Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Changes in Net Assets
|
Year Ended
October 31, 2020 |
Year Ended
October 31, 2019 |
|
| Operations | ||
| Net investment income | $5,595,123 | $6,373,698 |
| Net realized gain | 32,131 | 135,560 |
| Net change in unrealized appreciation (depreciation) | (590,122) | 10,274,380 |
| Net increase in net assets resulting from operations | 5,037,132 | 16,783,638 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (607,373) | (605,638) |
| Advisor Class | (87,381) | (94,143) |
| Class C | (54,989) | (124,550) |
| Institutional Class | (4,649,852) | (5,585,067) |
| Institutional 2 Class | (7,304) | (7,633) |
| Institutional 3 Class | (4,177) | (3,827) |
| Class V | (296,003) | (486,871) |
| Total distributions to shareholders | (5,707,079) | (6,907,729) |
| Increase in net assets from capital stock activity | 8,569,308 | 2,136,522 |
| Total increase in net assets | 7,899,361 | 12,012,431 |
| Net assets at beginning of year | 221,668,545 | 209,656,114 |
| Net assets at end of year | $229,567,906 | $221,668,545 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
17 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| October 31, 2020 | October 31, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 510,066 | 5,433,137 | 718,754 | 7,578,798 |
| Distributions reinvested | 52,804 | 560,859 | 53,157 | 556,718 |
| Redemptions | (177,221) | (1,889,957) | (393,920) | (4,102,662) |
| Net increase | 385,649 | 4,104,039 | 377,991 | 4,032,854 |
| Advisor Class | ||||
| Subscriptions | 100,929 | 1,060,437 | 95,742 | 995,390 |
| Distributions reinvested | 8,211 | 87,133 | 8,966 | 93,827 |
| Redemptions | (47,585) | (490,564) | (57,794) | (600,647) |
| Net increase | 61,555 | 657,006 | 46,914 | 488,570 |
| Class C | ||||
| Subscriptions | 19,488 | 207,144 | 51,432 | 533,573 |
| Distributions reinvested | 4,683 | 49,738 | 10,287 | 107,255 |
| Redemptions | (104,031) | (1,109,475) | (304,166) | (3,186,747) |
| Net decrease | (79,860) | (852,593) | (242,447) | (2,545,919) |
| Institutional Class | ||||
| Subscriptions | 2,998,862 | 31,902,192 | 2,953,295 | 30,814,296 |
| Distributions reinvested | 30,524 | 324,242 | 37,995 | 397,613 |
| Redemptions | (2,552,449) | (26,987,236) | (2,660,096) | (27,672,739) |
| Net increase | 476,937 | 5,239,198 | 331,194 | 3,539,170 |
| Institutional 2 Class | ||||
| Subscriptions | 20,351 | 216,419 | 33,721 | 352,716 |
| Distributions reinvested | 661 | 7,039 | 689 | 7,317 |
| Redemptions | (38,020) | (402,206) | (145) | (1,538) |
| Net increase (decrease) | (17,008) | (178,748) | 34,265 | 358,495 |
| Institutional 3 Class | ||||
| Subscriptions | 3,929 | 42,117 | 1,073 | 11,497 |
| Distributions reinvested | 367 | 3,910 | 332 | 3,492 |
| Redemptions | (51) | (543) | (41) | (429) |
| Net increase | 4,245 | 45,484 | 1,364 | 14,560 |
| Class V | ||||
| Subscriptions | 21,356 | 227,156 | 30,690 | 320,390 |
| Distributions reinvested | 15,989 | 169,826 | 23,185 | 242,624 |
| Redemptions | (79,541) | (842,060) | (404,470) | (4,314,222) |
| Net decrease | (42,196) | (445,078) | (350,595) | (3,751,208) |
| Total net increase | 789,322 | 8,569,308 | 198,686 | 2,136,522 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 18 | Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020 |
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|
Columbia Massachusetts 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 |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class A | |||||||
| Year Ended 10/31/2020 | $10.65 | 0.24 | (0.03) | 0.21 | (0.23) | (0.01) | (0.24) |
| Year Ended 10/31/2019 | $10.17 | 0.29 | 0.51 | 0.80 | (0.29) | (0.03) | (0.32) |
| Year Ended 10/31/2018 | $10.62 | 0.28 | (0.42) | (0.14) | (0.28) | (0.03) | (0.31) |
| Year Ended 10/31/2017 | $10.88 | 0.29 | (0.19) | 0.10 | (0.29) | (0.07) | (0.36) |
| Year Ended 10/31/2016 | $10.93 | 0.31 | (0.05) | 0.26 | (0.31) | (0.00)(e) | (0.31) |
| Advisor Class | |||||||
| Year Ended 10/31/2020 | $10.64 | 0.26 | (0.02) | 0.24 | (0.26) | (0.01) | (0.27) |
| Year Ended 10/31/2019 | $10.16 | 0.31 | 0.51 | 0.82 | (0.31) | (0.03) | (0.34) |
| Year Ended 10/31/2018 | $10.61 | 0.31 | (0.43) | (0.12) | (0.30) | (0.03) | (0.33) |
| Year Ended 10/31/2017 | $10.87 | 0.32 | (0.20) | 0.12 | (0.31) | (0.07) | (0.38) |
| Year Ended 10/31/2016 | $10.92 | 0.33 | (0.05) | 0.28 | (0.33) | (0.00)(e) | (0.33) |
| Class C | |||||||
| Year Ended 10/31/2020 | $10.64 | 0.19 | (0.02) | 0.17 | (0.18) | (0.01) | (0.19) |
| Year Ended 10/31/2019 | $10.16 | 0.24 | 0.51 | 0.75 | (0.24) | (0.03) | (0.27) |
| Year Ended 10/31/2018 | $10.62 | 0.24 | (0.44) | (0.20) | (0.23) | (0.03) | (0.26) |
| Year Ended 10/31/2017 | $10.88 | 0.24 | (0.19) | 0.05 | (0.24) | (0.07) | (0.31) |
| Year Ended 10/31/2016 | $10.93 | 0.26 | (0.05) | 0.21 | (0.26) | (0.00)(e) | (0.26) |
| Institutional Class | |||||||
| Year Ended 10/31/2020 | $10.65 | 0.26 | (0.02) | 0.24 | (0.26) | (0.01) | (0.27) |
| Year Ended 10/31/2019 | $10.17 | 0.31 | 0.51 | 0.82 | (0.31) | (0.03) | (0.34) |
| Year Ended 10/31/2018 | $10.62 | 0.31 | (0.43) | (0.12) | (0.30) | (0.03) | (0.33) |
| Year Ended 10/31/2017 | $10.88 | 0.32 | (0.20) | 0.12 | (0.31) | (0.07) | (0.38) |
| Year Ended 10/31/2016 | $10.93 | 0.33 | (0.05) | 0.28 | (0.33) | (0.00)(e) | (0.33) |
| Institutional 2 Class | |||||||
| Year Ended 10/31/2020 | $10.66 | 0.28 | (0.02) | 0.26 | (0.27) | (0.01) | (0.28) |
| Year Ended 10/31/2019 | $10.18 | 0.32 | 0.51 | 0.83 | (0.32) | (0.03) | (0.35) |
| Year Ended 10/31/2018 | $10.64 | 0.31 | (0.43) | (0.12) | (0.31) | (0.03) | (0.34) |
| Year Ended 10/31/2017 | $10.90 | 0.32 | (0.19) | 0.13 | (0.32) | (0.07) | (0.39) |
| Year Ended 10/31/2016(f) | $11.03 | 0.23 | (0.13) | 0.10 | (0.23) | — | (0.23) |
| Institutional 3 Class | |||||||
| Year Ended 10/31/2020 | $10.70 | 0.27 | (0.02) | 0.25 | (0.27) | (0.01) | (0.28) |
| Year Ended 10/31/2019 | $10.22 | 0.33 | 0.50 | 0.83 | (0.32) | (0.03) | (0.35) |
| Year Ended 10/31/2018 | $10.67 | 0.32 | (0.42) | (0.10) | (0.32) | (0.03) | (0.35) |
| Year Ended 10/31/2017(h) | $10.56 | 0.22 | 0.11(i) | 0.33 | (0.22) | — | (0.22) |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 20 | Columbia Massachusetts 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 10/31/2020 | $10.62 | 2.02% | 0.90% | 0.81%(c) | 2.23% | 13% | $28,012 |
| Year Ended 10/31/2019 | $10.65 | 7.92% | 0.90% | 0.80%(c) | 2.75% | 15% | $23,968 |
| Year Ended 10/31/2018 | $10.17 | (1.36%) | 0.90% | 0.81%(c) | 2.72% | 13% | $19,046 |
| Year Ended 10/31/2017 | $10.62 | 0.95% | 0.90%(d) | 0.78%(c),(d) | 2.74% | 5% | $18,512 |
| Year Ended 10/31/2016 | $10.88 | 2.34% | 0.96% | 0.81%(c) | 2.77% | 16% | $27,398 |
| Advisor Class | |||||||
| Year Ended 10/31/2020 | $10.61 | 2.27% | 0.65% | 0.56%(c) | 2.48% | 13% | $3,834 |
| Year Ended 10/31/2019 | $10.64 | 8.19% | 0.65% | 0.55%(c) | 3.00% | 15% | $3,188 |
| Year Ended 10/31/2018 | $10.16 | (1.12%) | 0.65% | 0.56%(c) | 2.97% | 13% | $2,568 |
| Year Ended 10/31/2017 | $10.61 | 1.20% | 0.66%(d) | 0.54%(c),(d) | 2.98% | 5% | $3,502 |
| Year Ended 10/31/2016 | $10.87 | 2.60% | 0.71% | 0.56%(c) | 3.02% | 16% | $3,804 |
| Class C | |||||||
| Year Ended 10/31/2020 | $10.62 | 1.65% | 1.65% | 1.26%(c) | 1.80% | 13% | $2,617 |
| Year Ended 10/31/2019 | $10.64 | 7.44% | 1.65% | 1.25%(c) | 2.32% | 15% | $3,472 |
| Year Ended 10/31/2018 | $10.16 | (1.90%) | 1.65% | 1.26%(c) | 2.27% | 13% | $5,780 |
| Year Ended 10/31/2017 | $10.62 | 0.50% | 1.66%(d) | 1.24%(c),(d) | 2.29% | 5% | $7,470 |
| Year Ended 10/31/2016 | $10.88 | 1.88% | 1.71% | 1.26%(c) | 2.32% | 16% | $10,315 |
| Institutional Class | |||||||
| Year Ended 10/31/2020 | $10.62 | 2.27% | 0.65% | 0.56%(c) | 2.49% | 13% | $182,343 |
| Year Ended 10/31/2019 | $10.65 | 8.19% | 0.65% | 0.55%(c) | 3.01% | 15% | $177,665 |
| Year Ended 10/31/2018 | $10.17 | (1.11%) | 0.65% | 0.56%(c) | 2.97% | 13% | $166,289 |
| Year Ended 10/31/2017 | $10.62 | 1.20% | 0.66%(d) | 0.54%(c),(d) | 2.98% | 5% | $199,199 |
| Year Ended 10/31/2016 | $10.88 | 2.60% | 0.71% | 0.56%(c) | 3.03% | 16% | $235,472 |
| Institutional 2 Class | |||||||
| Year Ended 10/31/2020 | $10.64 | 2.43% | 0.59% | 0.49% | 2.61% | 13% | $226 |
| Year Ended 10/31/2019 | $10.66 | 8.25% | 0.59% | 0.49% | 3.03% | 15% | $408 |
| Year Ended 10/31/2018 | $10.18 | (1.15%) | 0.57% | 0.50% | 3.01% | 13% | $41 |
| Year Ended 10/31/2017 | $10.64 | 1.28% | 0.56%(d) | 0.47%(d) | 3.05% | 5% | $10 |
| Year Ended 10/31/2016(f) | $10.90 | 0.86% | 0.59%(g) | 0.47%(g) | 3.07%(g) | 16% | $10 |
| Institutional 3 Class | |||||||
| Year Ended 10/31/2020 | $10.67 | 2.38% | 0.54% | 0.45% | 2.58% | 13% | $173 |
| Year Ended 10/31/2019 | $10.70 | 8.28% | 0.54% | 0.44% | 3.12% | 15% | $128 |
| Year Ended 10/31/2018 | $10.22 | (0.99%) | 0.54% | 0.45% | 3.08% | 13% | $108 |
| Year Ended 10/31/2017(h) | $10.67 | 3.10% | 0.55%(g) | 0.45%(g) | 3.21%(g) | 5% | $110 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
21 |
Financial Highlights (continued)
|
Net asset value,
beginning of period |
Net
investment income |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class V | |||||||
| Year Ended 10/31/2020 | $10.65 | 0.25 | (0.03) | 0.22 | (0.24) | (0.01) | (0.25) |
| Year Ended 10/31/2019 | $10.17 | 0.30 | 0.51 | 0.81 | (0.30) | (0.03) | (0.33) |
| Year Ended 10/31/2018 | $10.62 | 0.29 | (0.42) | (0.13) | (0.29) | (0.03) | (0.32) |
| Year Ended 10/31/2017 | $10.88 | 0.30 | (0.19) | 0.11 | (0.30) | (0.07) | (0.37) |
| Year Ended 10/31/2016 | $10.93 | 0.32 | (0.05) | 0.27 | (0.32) | (0.00)(e) | (0.32) |
| Notes to Financial Highlights | |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (d) | Expenses have been reduced due to a reimbursement of expenses overbilled by a third party. If the reimbursement had been excluded, the expense ratios would have been higher by the percentages shown for each class in the table below. All fee waivers and expense reimbursements by the Investment Manager and its affiliates were applied before giving effect to this third party reimbursement. |
| Year Ended | Class A |
Advisor
Class |
Class C |
Institutional
Class |
Institutional 2
Class |
Class V |
| 10/31/2017 | 0.03% | 0.02% | 0.02% | 0.02% | 0.02% | 0.02% |
| (e) | Rounds to zero. |
| (f) | Institutional 2 Class shares commenced operations on March 1, 2016. Per share data and total return reflect activity from that date. |
| (g) | Annualized. |
| (h) | Institutional 3 Class shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (i) | 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. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 22 | Columbia Massachusetts 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 V | |||||||
| Year Ended 10/31/2020 | $10.62 | 2.12% | 0.80% | 0.71%(c) | 2.34% | 13% | $12,363 |
| Year Ended 10/31/2019 | $10.65 | 8.03% | 0.80% | 0.70%(c) | 2.86% | 15% | $12,839 |
| Year Ended 10/31/2018 | $10.17 | (1.26%) | 0.80% | 0.71%(c) | 2.82% | 13% | $15,825 |
| Year Ended 10/31/2017 | $10.62 | 1.05% | 0.81%(d) | 0.69%(c),(d) | 2.83% | 5% | $17,934 |
| Year Ended 10/31/2016 | $10.88 | 2.45% | 0.86% | 0.71%(c) | 2.88% | 16% | $18,697 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
23 |
Notes to Financial Statements
October 31, 2020
October 31, 2020
Note 1. Organization
Columbia Massachusetts
Intermediate Municipal Bond Fund (the Fund), a series of Columbia Funds Series Trust I (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 Massachusetts business 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 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. Class V shares are available only to investors who received (and who continuously held) Class V shares in connection with previous fund reorganizations.
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 market value, unless this method results in a valuation that management believes does not approximate fair value.
Investments in open-end investment
companies (other than exchange-traded funds (ETFs)), are valued at the latest net asset value reported by those companies as of the valuation time.
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.
| 24 | Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 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 Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 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 October 31, 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. These members of the Board of Trustees
may participate in a Deferred Compensation Plan (the Deferred Plan) which may be terminated at any time. Obligations of the Deferred Plan will be paid solely out of the Fund’s assets, and all amounts payable
under the Deferred Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as
sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class.
For the year ended October 31,
2020, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| 26 | Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended October 31, 2020, these minimum account balance fees reduced total expenses
of the Fund by $80.
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 service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A and Class C shares of the Fund. Also under the Plans, the Fund pays a monthly
distribution fee to the Distributor at the maximum annual rate of 0.75% of the average daily net assets attributable to Class C shares of the Fund.
Effective September 1, 2020, the
Distributor has contractually agreed to waive a portion of the distribution fee for Class C shares through February 28, 2022 so that the distribution fee does not exceed 0.45% annually of the average daily net assets
attributable to Class C shares. This arrangement may be modified or terminated at the sole discretion of the Board of Trustees. Prior to September 1, 2020, this was a voluntary arrangement.
Shareholder services fees
The Fund has adopted a shareholder
services plan that permits it to pay for certain services provided to Class V shareholders by their selling and/or servicing agents. The Fund may pay shareholder servicing fees up to an aggregate annual rate of 0.40%
of the Fund’s average daily net assets attributable to Class V shares (comprised of up to 0.20% for shareholder services and up to 0.20% for administrative support services). These fees are currently limited to
an aggregate annual rate of not more than 0.15% of the Fund’s average daily net assets attributable to Class V shares.
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 October 31, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 3.00 | 0.75(a) | 2,864 |
| Class C | — | 1.00(b) | — |
| Class V | 4.75 | 0.50 - 1.00(c) | — |
| (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. |
| (c) | This charge is imposed on certain investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with certain limited exceptions. |
The Fund’s other share
classes are not subject to sales charges.
|
Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 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:
*Effective September 1, 2020, the
contractual expense reimbursement arrangement is in effect through February 28, 2022.
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. 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. Class C distribution and service fees waived by the Distributor, as discussed above, are in addition to the waiver/reimbursement commitment under the agreement.
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 October 31, 2020, these
differences were primarily due to differing treatment for trustees’ deferred compensation, principal and/or interest of fixed income securities 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 October 31, 2020 | Year Ended October 31, 2019 | ||||||
|
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 552 | 5,571,514 | 135,013 | 5,707,079 | 36 | 6,329,722 | 577,971 | 6,907,729 |
| 28 | Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At October 31, 2020, the components
of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed tax-
exempt income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| — | 500,639 | 12,325 | — | 13,093,872 |
At October 31, 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) ($) |
Net unrealized
appreciation ($) |
| 214,572,160 | 13,418,054 | (324,182) | 13,093,872 |
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 $35,280,583 and $28,000,706, respectively, for the year ended October 31, 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 October 31, 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., Wells Fargo Bank, 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. Pursuant to a December 1, 2020 amendment, 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 $950 million. 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, 1.25%. 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. Prior to the
|
Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
29 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
December 1, 2020 amendment, 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. which permitted collective borrowings up to 1 billion. Interest was 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%.
The Fund had no borrowings during
the year ended October 31, 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.
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 Fund performance may also be
significantly negatively impacted by the economic impact of the coronavirus disease 2019 (COVID-19) pandemic. The 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
| 30 | Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
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 objectives. Any such event(s) could have a significant adverse impact on the value and risk profile of the Fund.
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting different communities at different times with varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including
the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to continue ordinary business operations and technology functions over near- or longer-term periods.
Municipal securities risk
Municipal securities are debt
obligations generally issued to obtain funds for various public purposes, including general financing for state and local governments, or financing for a specific project or public facility, and include obligations of
the governments of the U.S. territories, commonwealths and possessions such as Guam, Puerto Rico and the U.S. Virgin Islands to the extent such obligations are exempt from state and U.S. federal income taxes. The
value of municipal securities can be significantly affected by actual or expected political and legislative changes at the federal or state level. Municipal securities may be fully or partially backed by the taxing
authority of the local government, by the credit of a private issuer, by the current or anticipated revenues from a specific project or specific assets or by domestic or foreign entities providing credit support, such
as letters of credit, guarantees or insurance, and are generally classified into general obligation bonds and special revenue obligations. Because many municipal securities are issued to finance projects in sectors
such as education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal market.
Issuers in a state, territory,
commonwealth or possession in which the Fund invests may experience significant financial difficulties for various reasons, including as the result of events that cannot be reasonably anticipated or controlled such as
economic downturns or similar periods of economic stress, social conflict or unrest, labor disruption and other natural disasters. Such financial difficulties may lead to credit rating downgrades or defaults of such
issuers which in turn, could affect the market values and marketability of many or all municipal obligations of issuers in such state, territory, commonwealth or possession. The value of the Fund’s shares will
be negatively impacted to the extent it invests in such securities. The Fund’s annual and semiannual reports show the Fund’s investment exposures at a point in time. The risk of investing in the Fund is
directly correlated to the Fund’s investment exposures.
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.
|
Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
31 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
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 October 31, 2020, one
unaffiliated shareholder of record owned 75.6% 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 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 or one or more of its affiliates that provides services to
the Funds.
| 32 | Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust I and Shareholders of Columbia Massachusetts 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 Massachusetts Intermediate Municipal Bond Fund (one of the funds constituting Columbia Funds Series Trust I, referred to
hereafter as the "Fund") as of October 31, 2020, the related statement of operations for the year ended October 31, 2020, the statement of changes in net assets for each of the two years in the period ended October
31, 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 October 31, 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 October 31, 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 October 31, 2020 by correspondence with the custodian and brokers. We believe that our audits
provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
December 21, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
|
Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
33 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended October 31, 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 |
| $33,738 | 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. The year set forth beneath Length of Service
in the table below is the year in which the Trustee was first appointed or elected as Trustee to any Fund currently in the Columbia Funds Complex or a predecessor thereof. Under current Board policy, members serve
terms of indefinite duration. The Board approved the nomination of and recommended the election of 17 nominees to the Board, effecting a consolidation of the Board and the board of trustees overseeing Columbia Funds
Series Trust, Columbia Funds Series Trust II and certain affiliated trusts. At a shareholder meeting held on December 22, 2020, shareholders approved the nominees, effective January 1, 2021.
Independent trustees
| 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 Fund Complex overseen | Other directorships held by Trustee during the past five years |
|
Janet Langford Carrig
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1957 |
Trustee
1996 |
Senior Vice President, General Counsel and Corporate Secretary, ConocoPhillips (independent energy company), September 2007-October 2018 | 66 | Director, EQT Corporation (natural gas producer); Director, Whiting Petroleum Corporation (independent oil and gas company) |
|
Douglas A. Hacker
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1955 |
Trustee and Chairman of the Board
1996 |
Independent business executive since May 2006; Executive Vice President — Strategy of United Airlines, December 2002-May 2006; President of UAL Loyalty Services (airline marketing company), September 2001-December 2002; Executive Vice President and Chief Financial Officer of United Airlines, July 1999-September 2001 | 66 | Director, Spartan Nash Company (food distributor); Director, Aircastle Limited (aircraft leasing); former Director, Nash Finch Company (food distributor), 2005-2013; former Director, SeaCube Container Leasing Ltd. (container leasing), 2010-2013; and former Director, Travelport Worldwide Limited (travel information technology), 2014-2019 |
| 34 | Columbia Massachusetts 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 the past five years and other relevant professional experience | Number of Funds in the Columbia Fund Complex overseen | Other directorships held by Trustee during the past five years |
|
Nancy T. Lukitsh
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1956 |
Trustee
2011 |
Senior Vice President, Partner and Director of Marketing, Wellington Management Company, LLP (investment adviser), 1997-2010; Chair, Wellington Management Portfolios (commingled non-U.S. investment pools), 2007-2010; Director, Wellington Trust Company, NA and other Wellington affiliates, 1997-2010 | 66 | None |
|
David M. Moffett
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Trustee
2011 |
Retired. Consultant to Bridgewater and Associates | 66 | Director, CSX Corporation (transportation suppliers); Director, Genworth Financial, Inc. (financial and insurance products and services); Director, PayPal Holdings Inc. (payment and data processing services); Trustee, University of Oklahoma Foundation; former Director, eBay Inc. (online trading community), 2007-2015; and former Director, CIT Bank, CIT Group Inc. (commercial and consumer finance), 2010-2016 |
|
John J. Neuhauser
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1943 |
Trustee
1984 |
President, Saint Michael’s College, August 2007-June 2018; Director or Trustee of several non-profit organizations, including University of Vermont Medical Center; Academic Vice President and Dean of Faculties, Boston College, August 1999-October 2005; University Professor, Boston College, November 2005-August 2007 | 66 | Director, Liberty All-Star Equity Fund and Liberty All-Star Growth Fund (closed-end funds) |
|
Patrick J. Simpson
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1944 |
Trustee
2000 |
Of Counsel, Perkins Coie LLP (law firm) since 2015; Partner, Perkins Coie LLP, 1988-2014 | 66 | Former Director, M Fund, Inc. (M Funds mutual fund family), July 2018-July 2019 |
|
Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
35 |
TRUSTEES AND OFFICERS (continued)
Consultants to the Independent Trustees*
Consultants to the Independent Trustees*
| 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 |
|
J. Kevin Connaughton
c/o Columbia Management Investment Advisers, LLC, 225 Franklin Street Mail Drop BX32 05228, Boston, MA 02110 1964 |
Independent Trustee Consultant
2016 |
Independent Trustee Consultant, Columbia Funds since March 2016; Member, FINRA National Adjudicatory Council since January 2020; Adjunct Professor of Finance, Bentley University since January 2018; Managing Director and General Manager of Mutual Fund Products, Columbia Management Investment Advisers, LLC, May 2010-February 2015; President, Columbia Funds, 2008-2015; and senior officer of Columbia Funds and affiliated funds, 2003-2015 | 66 | Director, The Autism Project since March 2015; former Member of the Investment Committee, St. Michael’s College, November 2015-February 2020; former Trustee, St. Michael’s College, June 2017-September 2019; former Trustee, New Century Portfolios, January 2015-December 2017 |
|
Olive Darragh
c/o Columbia Management Investment Advisers, LLC, 225 Franklin Street, Mail Drop BX32 05228, Boston, MA 02110 1962 |
Independent Trustee Consultant 2019 | Independent Trustee Consultant, Columbia Funds since June 2019; Managing Director of Darragh Inc. (a strategy and talent management consulting firm) since 2010; Founder and CEO, Zolio, Inc. (investment management talent identification platform) since 2004; Partner, Tudor Investments, 2004-2010; Senior Partner, McKinsey & Company, 2001-2004 | 66 | Former Director, University of Edinburgh Business School; former Director, Boston Public Library Foundation |
|
Natalie A. Trunow
c/o Columbia Management Investment Advisers, LLC, 225 Franklin Street Mail Drop BX32 05228, Boston, MA 02110 1967 |
Independent Trustee Consultant
2016 |
Independent Trustee Consultant, Columbia Funds since September 2016; Chief Executive Officer, Millennial Portfolio Solutions LLC (asset management and consulting services) since January 2016; Non-executive Member of the Investment Committee, Sarona Asset Management, Inc. (private equity firm) since September 2019; Advisor, Horizon Investments (asset management and consulting services) since August 2018; Advisor, Paradigm Asset Management since November 2016; Director of Investments, Casey Family Programs, April 2016-September 2016; Senior Vice President and Chief Investment Officer, Calvert Investments, August 2008-January 2016; Section Head and Portfolio Manager, General Motors Asset Management, June 1997-August 2008 | 66 | Director, Health Services for Children with Special Needs, Inc.; Director, Consumer Credit Counseling Services (formerly Guidewell Financial Solutions); Independent Director, Investment Committee, Sarona Asset Management |
| * | J. Kevin Connaughton was appointed consultant to the Independent Trustees effective March 1, 2016. Natalie A. Trunow was appointed consultant to the Independent Trustees effective September 1, 2016. Olive Darragh was appointed consultant to the Independent Trustees effective June 10, 2019. |
| 36 | Columbia Massachusetts 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 | 162 | 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 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 — Accounting and Tax, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009-December 2018 and December 2015-December 2018, 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 May 2010. |
|
Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
37 |
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); Chief Legal Officer, Columbia Acorn/Wanger Funds, since September 2020; 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. |
Board Consideration
and Approval of Management
Agreement
On June 17, 2020, the Board of
Trustees (the Board) and the Trustees who are not interested persons (as defined in the Investment Company Act of 1940) (the Independent Trustees) of Columbia Funds Series Trust I (the Trust) unanimously approved the
continuation of the Management Agreement (the Management Agreement) with Columbia Management Investment Advisers, LLC (the Investment Manager) with respect to Columbia Massachusetts Intermediate Municipal Bond Fund
(the Fund), a series of the Trust. As detailed below, the Board’s Advisory Fees and Expenses Committee (the Committee) and the Board met on multiple occasions to review and discuss, among themselves, with the
management team of the Investment Manager and with an independent fee consultant, materials provided by the Investment Manager, the independent fee consultant and others before determining to approve the continuation
of the Management Agreement.
In connection with their
deliberations regarding the continuation of the Management Agreement, the Committee and the Board evaluated materials requested from the Investment Manager regarding the Fund and the Management Agreement, and
discussed these materials with representatives of the Investment Manager at Committee meetings held on March 10, 2020, April 30, 2020 and June 17, 2020 and at Board meetings held on March 11, 2020 and June 17, 2020.
In addition, the Board and its various committees consider matters bearing on the Management Agreement at other meetings throughout the year and in prior years and meet regularly with senior management of the Trust
and the Investment Manager. Through the Board’s Investment Oversight Committees, Trustees also meet with selected portfolio managers of the funds the Trustees oversee and with other investment personnel at
various times throughout the year. The Committee and the Board also consulted with
| 38 | Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020 |
Board Consideration and Approval of
Management
Agreement (continued)
the independent fee consultant, Fund counsel and
the Independent Trustees’ independent legal counsel, who advised on various matters with respect to the Committee’s and the Board’s considerations and otherwise assisted the Committee and the Board
in their deliberations. On June 17, 2020, the Committee recommended that the Board approve the continuation of the Management Agreement. On June 17, 2020, the Board, including the Independent Trustees, voting
separately, unanimously approved the continuation of the Management Agreement for the Fund.
The Committee and the Board
considered all information that they, their legal counsel or the Investment Manager believed reasonably necessary to evaluate and to determine whether to recommend for approval or approve the continuation of the
Management Agreement. The information and factors considered by the Committee and the Board in recommending for approval or approving the continuation of the Management Agreement for the Fund included the
following:
| • | Information on the investment performance of the Fund relative to the performance of a group of mutual funds determined to be comparable to the Fund by an independent third-party data provider, as well as performance relative to benchmarks; |
| • | Information on the Fund’s management fees and total expenses, including information comparing the Fund’s expenses to those of a group of comparable mutual funds, as determined by the independent third-party data provider; |
| • | The Investment Manager’s agreement to contractually limit or cap total operating expenses for the Fund through February 28, 2021 so that total operating expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and infrequent and/or unusual expenses) would not exceed a specified annual rate, as a percentage of the Fund’s net assets; |
| • | The terms and conditions of the Management Agreement; |
| • | The current and proposed terms and conditions of other agreements and arrangements with affiliates of the Investment Manager relating to the operations of the Fund, including agreements with respect to the provision of distribution, transfer agency and shareholder services to the Fund; |
| • | Descriptions of various functions performed by the Investment Manager under the Management Agreement, including portfolio management and portfolio trading practices; |
| • | Information regarding any recently negotiated management fees of similarly-managed portfolios of other institutional clients of the Investment Manager; |
| • | Information regarding the reputation, regulatory history and resources of the Investment Manager, including information regarding senior management, portfolio managers and other personnel; |
| • | Information regarding the capabilities of the Investment Manager with respect to compliance monitoring services, including an assessment of the Investment Manager’s compliance system by the Fund’s Chief Compliance Officer; and |
| • | The profitability to the Investment Manager and its affiliates from their relationships with the Fund. |
Nature, extent and quality of
services provided under the Management Agreement
The Committee and the Board
considered the nature, extent and quality of services provided to the Fund by the Investment Manager and its affiliates under the Management Agreement and under separate agreements for the provision of transfer agency
and shareholder services, and the resources dedicated to the Fund and the other Columbia Funds by the Investment Manager and its affiliates. The Committee and the Board considered, among other things, the Investment
Manager’s ability to attract, motivate and retain highly qualified research, advisory and supervisory investment professionals (including compensation programs for personnel involved in fund management,
reputation and other attributes), the portfolio management services provided by those investment professionals, and the quality of the Investment Manager’s investment research capabilities and trade execution
services. The Committee and the Board also considered the potential benefits to shareholders of investing in a mutual fund that is part of a fund complex offering exposure to a variety of asset classes and investment
disciplines and providing a variety of fund and shareholder services.
|
Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
39 |
Board Consideration and Approval of
Management
Agreement (continued)
The Committee and the Board also considered the
professional experience and qualifications of the senior personnel of the Investment Manager, which included consideration of the Investment Manager’s experience with funds using an investment strategy similar
to that used by the Investment Manager for the Fund. The Committee and the Board noted the compliance programs of and the compliance-related resources provided to the Fund by the Investment Manager and its affiliates
and the resources dedicated by the Investment Manager and its affiliates to risk management, and considered the Investment Manager’s ability to provide administrative services to the Fund and coordinate the
activities of the Fund’s other service providers. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the nature, extent and
quality of the services provided to the Fund under the Management Agreement supported the continuation of the Management Agreement.
Investment performance
The Committee and the Board
reviewed information about the performance of the Fund over various time periods, including performance information relative to benchmarks, information that compared the performance of the Fund to the performance of a
group of comparable mutual funds as determined by the independent third-party data provider, and information and analysis provided by the independent fee consultant. The Committee and the Board also reviewed a
description of the third party’s methodology for identifying the Fund’s peer groups for purposes of performance and expense comparisons.
The Committee and the Board noted
that, through December 31, 2019, the Fund’s performance was in the twenty-second, twenty-second and forty-fourth percentile (where the best performance would be in the first percentile) of its category selected
by the independent third-party data provider for the purposes of performance comparisons for the one-, three- and five-year periods, respectively.
The Committee and the Board also
considered the Investment Manager’s performance and reputation generally, the Investment Manager’s historical responsiveness to Board concerns about performance, and the Investment Manager’s
willingness to take steps intended to improve performance. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the performance of the
Fund and the Investment Manager was sufficient, in light of other considerations, to support the continuation of the Management Agreement.
Investment management fee rates
and other expenses
The Committee and the Board
considered the management fees charged to the Fund under the Management Agreement as well as the total expenses incurred by the Fund. In assessing the reasonableness of the fees under the Management Agreement, the
Committee and the Board considered, among other information, the Fund’s total expense ratio as a percentage of average daily net assets. The Committee and the Board considered data provided by the independent
third-party data provider and the independent fee consultant. The Committee and the Board noted that, as of December 31, 2019, the Fund’s actual management fee and net total expense ratio were ranked in the
second and third quintiles, respectively, (where the lowest fees and expenses would be in the first quintile) against the Fund’s expense universe as determined by the independent third-party data provider for
purposes of expense comparison. The Committee and the Board also took into account the fee waiver and expense limitation arrangements agreed to by the Investment Manager, as noted above.
The Committee and the Board also
received and considered information about the management fees charged by the Investment Manager to institutional accounts. In considering the fees charged to those accounts, the Committee and the Board took into
account, among other things, the Investment Manager’s representations about the differences between managing mutual funds as compared to other types of accounts, including differences in the services provided,
differences in the risk profile of such business for the Investment Manager and the additional resources required to manage mutual funds effectively. The Committee and the Board also received and considered
information about the fees charged by the Investment Manager for sub-advisory services it provides to comparable unaffiliated funds. In evaluating the Fund’s management fees, the Committee and the Board also
took into account the demands, complexity and quality of the investment management of the Fund.
After reviewing these and related
factors, the Committee and the Board concluded, within the context of their overall conclusions, that the management fee rates and expenses of the Fund, in light of other considerations, supported the continuation of
the Management Agreement.
| 40 | Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020 |
Board Consideration and Approval of
Management
Agreement (continued)
Costs of services provided and profitability
The Committee and the Board also
took note of the costs the Investment Manager and its affiliates incur in connection with the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the
Fund, and the efforts undertaken by the Investment Manager and its affiliates to manage efficiently their costs to provide such services.
The Committee and the Board also
considered the compensation directly or indirectly received by the Investment Manager’s affiliates in connection with their relationships with the Fund. The Committee and the Board reviewed information provided
by management as to the profitability to the Investment Manager and its affiliates of their relationships with the Fund, information about the allocation of expenses used to calculate profitability, and comparisons of
profitability levels realized in 2019 to profitability levels realized in 2018. When reviewing profitability, the Committee and the Board also considered court cases in which adviser profitability was an issue in
whole or in part, the performance of similarly managed funds, the performance of the Fund, and the expense ratio of the Fund. In addition, the Committee and the Board considered information provided by the Investment
Manager regarding the Investment Manager’s financial condition and comparing its profitability to that of other asset management firms that are, or are subsidiaries of, publicly traded companies. In this regard,
the Committee and the Board also considered data provided by the independent fee consultant.
After reviewing these and related
factors, the Committee and the Board concluded, within the context of their overall conclusions, that the costs of services provided and the profitability to the Investment Manager and its affiliates from their
relationships with the Fund supported the continuation of the Management Agreement.
Economies of scale
The Committee and the Board
considered the potential existence of economies of scale in the provision by the Investment Manager of services to the Fund, to groups of related funds, and to the Investment Manager’s investment advisory
clients as a whole, and whether those economies of scale were shared with the Fund through breakpoints in investment management fees or other means, such as expense limitation arrangements and additional investments
by the Investment Manager in investment, trading, compliance and other resources. The Committee and the Board noted that the management fee schedules for the Fund contained breakpoints that would reduce the fee rate
on assets above specified threshold levels.
In considering these matters, the
Committee and the Board also considered the costs of the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund, as noted above. After reviewing
these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the extent to which any economies of scale were expected to be shared with the Fund supported the
continuation of the Management Agreement.
Other benefits to the Investment
Manager
The Committee and the Board
received and considered information regarding “fall-out” or ancillary benefits received by the Investment Manager and its affiliates as a result of their relationships with the Fund, such as the engagement
of the Investment Manager’s affiliates to provide distribution, transfer agency and shareholder services to the Fund. In this regard, among other matters, the Committee and the Board considered that the
Fund’s distributor retains a portion of the distribution fees from the Fund and receives a portion of the sales charges on sales or redemptions of certain classes of shares of the Fund. The Committee and the
Board also considered the benefits of research made available to the Investment Manager by reason of brokerage commissions generated by the Fund’s securities transactions, and reviewed information about the
Investment Manager’s practices with respect to considering brokerage and research services when allocating portfolio transactions. In this connection, the Board also noted that the amount of research made
available to the Investment Manager by reason of brokerage commissions had been declining over time, and may decline further. The Committee and the Board recognized that the Investment Manager’s profitability
would be somewhat lower without these benefits.
Conclusion
The Committee and the Board
reviewed all of the above considerations in reaching their decisions to recommend or approve the continuation of the Management Agreement. In their deliberations, the Trustees did not identify any particular
information that was all-important or controlling, and individual Trustees may have attributed different weights to the various factors.
|
Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020
|
41 |
Board Consideration and Approval of
Management
Agreement (continued)
Based on their evaluation of all factors that they
deemed to be material, including those factors described above, and assisted by the advice of independent legal counsel, the Board, including the Independent Trustees, voting separately, unanimously approved the
continuation of the Management Agreement.
| 42 | Columbia Massachusetts Intermediate Municipal Bond Fund | Annual Report 2020 |
Columbia Massachusetts 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/
ANN191_10_K01_(12/20)
Annual Report
October 31, 2020
October 31, 2020
Columbia Strategic
New York Municipal Income 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
shareholder 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 Strategic New York
Municipal Income 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. The Fund’s 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-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 Strategic New York Municipal Income
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks total return, with a focus on income exempt from federal income tax and New York individual income tax and capital appreciation.
Portfolio management
Douglas White, CFA
Lead Portfolio Manager
Managed Fund since 2018
Catherine Stienstra
Portfolio Manager
Managed Fund since 2010
Anders Myhran, CFA
Portfolio Manager
Managed Fund since 2016
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 New York
Municipal Bond Index is a subset of the Barclays Municipal Bond Index consisting solely of bonds issued by obligors located in the state of New York.
The Bloomberg Barclays Municipal
Bond Index is an unmanaged index considered representative of the broad market for investment-grade, tax-exempt bonds with a maturity of at least one year.
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 Strategic New York Municipal Income Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (October 31, 2010 — October 31, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Strategic New York Municipal Income 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 October 31, 2020) | |
| AAA rating | 3.8 |
| AA rating | 39.5 |
| A rating | 35.0 |
| BBB rating | 13.5 |
| BB rating | 0.8 |
| B rating | 1.0 |
| Not rated | 6.4 |
| 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. If a security is
Not rated but has a rating by Kroll and/or DBRS, the same methodology is applied to those bonds that would otherwise be Not rated. 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 Strategic New York Municipal Income Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that
ended October 31, 2020, the Fund’s Class A shares returned 1.59%, excluding sales charges. The Fund’s Institutional Class shares returned 1.77% for the same period. During the 12-month period, the
Fund’s benchmark, the Bloomberg Barclays New York Municipal Bond Index, returned 2.25% and the broader Bloomberg Barclays Municipal Bond Index gained 3.59%.
Market overview
Despite significant volatility in
the first calendar quarter of 2020, the U.S. municipal bond market produced positive returns in the past 12 months. The annual period began on an upbeat note, as strong inflows into the market, fueled by heightened
demand stemming from the capping of state and local tax deductions in the Tax Cuts and Jobs Act of 2017, more than offset an increase in new-issue supply. In the final two months of 2019, short-term municipal bond
yields moved lower, while longer term yields climbed modestly. (Prices and yields move in opposite directions.)
Although economic prospects looked
relatively positive at the start of 2020, the spread of COVID-19 dramatically and quickly re-shaped global markets. The abrupt shutdowns of large portions of the economy left investors struggling to appropriately
price risk assets. These unusual developments sparked a flight into higher quality areas of the bond market, such as U.S. Treasuries, but led to much weaker performance for municipals. The latter category, which was
seen by some as being more vulnerable to the economic effects of the COVID-19 pandemic, experienced substantial outflows in the uncertain environment.
Investment conditions changed once
again in late March, when the U.S. Federal Reserve (Fed) took a series of unprecedented steps to shore up liquidity, backstop important sectors of the economy, and provide stimulus. The Fed slashed the federal funds
target rate to near zero, restarted quantitative easing and launched numerous credit facilities to support various market segments. One such initiative was a new measure, called the Municipal Liquidity Facility,
designed to help buoy the municipal market. In addition, Congress and the White House passed three phases of fiscal stimulus totaling more than $2 trillion. The measures brought buyers back into the market, helping
the indexes quickly recapture most of the ground they had lost in the prior sell-off by the end of March.
The second quarter of 2020 began
with fragile optimism, as the late-March recovery in municipals gave way to a volatile April amid ongoing uncertainty about the COVID-19 pandemic. Still, the market moved higher, albeit in an uneven fashion, as the
compelling value of municipal bonds relative to other fixed-income sectors attracted sizable inflows despite continued concerns about the economy. The rally started to lose steam in early August due to waning hopes
that there would be further federal support for state and local governments before the U.S. presidential election. Additionally, the strong inflows that had driven performance through the spring and early summer began
to subside.
New York municipal bonds trailed
the national benchmark. A key reason for the shortfall was the large representation of New York Metropolitan Transportation Authority (MTA) bonds in the state index. The bonds were negatively impacted by the
substantial decrease in ridership of subways, buses, and ferries due to lockdowns and work-from-home orders in response to the COVID-19 pandemic.
New York City was the epicenter of
the first wave of the COVID-19 pandemic in the spring of 2020, and the severe slowdown in the city’s business activity had a major negative impact on the state as a whole. While the city recovered somewhat
during the summer months as business restrictions were eased and much of the economy reopened as of the date of this report, it remained to be seen whether the resurgence in COVID-19 cases in the autumn would result
in a significant setback. On the brighter side, recent revenue reports from the city and the state showed shallower declines than had been originally feared.
The Fund’s leading
detractors included:
| • | security selection in 22- to 25-year maturities and local general obligation bonds |
| • | special tax bonds also proved to be a challenging area for the Fund due to the combined impact of selection and an underweight position |
| • | overweight positions in single A and BBB rated bonds |
| • | an underweight position in AAA rated debt |
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Columbia Strategic New York Municipal Income Fund | Annual Report 2020
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5 |
Manager Discussion of Fund Performance (continued)
Higher quality and more defensive
issues, such as AAA rated securities and general obligations, performed relatively well for much of the period. We didn’t significantly reduce the Fund’s weightings in the lower rated credit tiers, based
on our belief that they featured additional recovery potential. As a result, the Fund was positioned to benefit from their stronger relative performance in the latter half of the period.
The Fund’s leading
contributors included:
| • | security selection in bonds with maturities of 30 years and above |
| • | selection in the A and BBB categories, and in the transportation and toll road sectors |
| • | an overweight position in housing issues, together with favorable selection in the sector |
| • | underweight positions in MTA bonds and airports, which finished as the worst performers in the benchmark due to the contraction in travel |
Fund positioning
The Fund’s duration
(interest-rate sensitivity) was above that of the benchmark throughout the period and the Fund maintained this positioning at the end of October 2020, reflecting the Fed’s stated intent to keep interest rates
lower for longer to facilitate a recovery from the negative impact of the COVID-19 pandemic.
Much of the Fund’s trading
activity focused on removing or reducing positions we identified as being more susceptible to financial distress or the increased risk of missing debt payments due to the pandemic. Examples include holdings in
airports and airline-backed bonds that were affected by the slowdown in travel, as well as smaller or financially weaker colleges. We generally reinvested the proceeds in high-quality, broad-based revenue bonds and
utilities. We also added some MTA bonds to the Fund’s portfolio, where yield spreads moved to what we believed were compelling levels after the debt was downgraded by the credit rating agencies. Given that the
MTA is the largest transportation system in the United States and is vital to the operation of New York City, we saw a very low likelihood that the entity would be unable to make its debt payments.
More broadly speaking, we continued
to use rigorous fundamental research to help uncover what we believed to be attractive, undervalued investment opportunities across the yield curve and credit spectrum, while also striving to identify potential
risks.
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. Investing in derivatives is a specialized activity that involves special risks, which may result in significant losses. See the Fund’s prospectus for more information on these and other
risks.
The views expressed in this report
reflect the current views of the respective parties who have contributed to the report. 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 Strategic New York Municipal Income 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 Strategic New York Municipal Income Fund | Annual Report 2020
|
7 |
Portfolio of Investments
October 31, 2020
October 31, 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 Strategic New York Municipal Income Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Strategic New York Municipal Income Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
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Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 12 | Columbia Strategic New York Municipal Income Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
13 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
| Municipal Bonds (continued) | ||||
| Issue Description |
Coupon
Rate |
Principal
Amount ($) |
Value ($) | |
| Water & Sewer 3.1% | ||||
| New York City Water & Sewer System | ||||
| Revenue Bonds | ||||
| Series 2017 | ||||
| 06/15/2048 | 5.000% | 2,000,000 | 2,379,140 | |
| Series 2019DD-1 | ||||
| 06/15/2049 | 5.000% | 2,000,000 | 2,409,660 | |
| Niagara Falls Public Water Authority | ||||
| Revenue Bonds | ||||
| Series 2013A | ||||
| 07/15/2029 | 5.000% | 1,000,000 | 1,117,000 | |
| Total | 5,905,800 | |||
|
Total Municipal Bonds
(Cost $179,729,973) |
187,417,702 | |||
| Money Market Funds 3.8% | ||
| Shares | Value ($) | |
| JPMorgan Institutional Tax Free Money Market Fund, Institutional Shares, 0.012%(f) | 7,348,077 | 7,348,077 |
|
Total Money Market Funds
(Cost $7,348,077) |
7,348,077 | |
|
Total Investments in Securities
(Cost: $187,078,050) |
194,765,779 | |
| Other Assets & Liabilities, Net | (1,575,541) | |
| Net Assets | 193,190,238 | |
| Short futures contracts | ||||||
| Description |
Number of
contracts |
Expiration
date |
Trading
currency |
Notional
amount |
Value/Unrealized
appreciation ($) |
Value/Unrealized
depreciation ($) |
| U.S. Long Bond | (15) | 12/2020 | USD | (2,587,031) | 1,648 | — |
| U.S. Treasury 10-Year Note | (25) | 12/2020 | USD | (3,455,469) | 1,503 | — |
| Total | 3,151 | — | ||||
Notes to Portfolio of
Investments
| (a) | Income from this security may be subject to alternative minimum tax. |
| (b) | 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. At October 31, 2020, the total value of these securities amounted to $7,213,208, which represents 3.73% of total net assets. |
| (c) | Represents a security purchased on a when-issued basis. |
| (d) | 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 October 31, 2020, the total value of these securities amounted to $647,325, which represents 0.34% of total net assets. |
| (e) | Zero coupon bond. |
| (f) | The rate shown is the seven-day current annualized yield at October 31, 2020. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| AMBAC | Ambac Assurance Corporation |
| BAN | Bond Anticipation Note |
| GNMA | Government National Mortgage Association |
| 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.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 14 | Columbia Strategic New York Municipal Income Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
Fair value measurements (continued)
Fair value inputs are summarized in the three broad levels listed below:
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 October 31, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Municipal Bonds | — | 187,417,702 | — | 187,417,702 |
| Money Market Funds | 7,348,077 | — | — | 7,348,077 |
| Total Investments in Securities | 7,348,077 | 187,417,702 | — | 194,765,779 |
| Investments in Derivatives | ||||
| Asset | ||||
| Futures Contracts | 3,151 | — | — | 3,151 |
| Total | 7,351,228 | 187,417,702 | — | 194,768,930 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The Fund’s assets assigned to
the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical
assets.
Derivative instruments are valued at
unrealized appreciation (depreciation).
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
15 |
Statement of Assets and Liabilities
October 31, 2020
October 31, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $187,078,050) | $194,765,779 |
| Cash | 5,881 |
| Receivable for: | |
| Capital shares sold | 443,412 |
| Interest | 2,473,007 |
| Variation margin for futures contracts | 3,151 |
| Expense reimbursement due from Investment Manager | 287 |
| Prepaid expenses | 937 |
| Trustees’ deferred compensation plan | 79,540 |
| Total assets | 197,771,994 |
| Liabilities | |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 3,849,305 |
| Capital shares purchased | 193,065 |
| Distributions to shareholders | 425,933 |
| Management services fees | 2,477 |
| Distribution and/or service fees | 1,072 |
| Transfer agent fees | 12,642 |
| Compensation of chief compliance officer | 7 |
| Other expenses | 17,715 |
| Trustees’ deferred compensation plan | 79,540 |
| Total liabilities | 4,581,756 |
| Net assets applicable to outstanding capital stock | $193,190,238 |
| Represented by | |
| Paid in capital | 184,034,203 |
| Total distributable earnings (loss) | 9,156,035 |
| Total - representing net assets applicable to outstanding capital stock | $193,190,238 |
| Class A | |
| Net assets | $114,882,984 |
| Shares outstanding | 3,870,577 |
| Net asset value per share | $29.68 |
| 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) | $30.60 |
| Advisor Class | |
| Net assets | $9,151,426 |
| Shares outstanding | 308,791 |
| Net asset value per share | $29.64 |
| Class C | |
| Net assets | $15,102,656 |
| Shares outstanding | 509,055 |
| Net asset value per share | $29.67 |
| Institutional Class | |
| Net assets | $51,295,924 |
| Shares outstanding | 1,729,742 |
| Net asset value per share | $29.66 |
| Institutional 2 Class | |
| Net assets | $1,976,787 |
| Shares outstanding | 66,823 |
| Net asset value per share | $29.58 |
| Institutional 3 Class | |
| Net assets | $780,461 |
| Shares outstanding | 26,301 |
| Net asset value per share | $29.67 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 16 | Columbia Strategic New York Municipal Income Fund | Annual Report 2020 |
Statement of Operations
Year Ended October 31, 2020
Year Ended October 31, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $15,155 |
| Interest | 6,714,636 |
| Total income | 6,729,791 |
| Expenses: | |
| Management services fees | 922,358 |
| Distribution and/or service fees | |
| Class A | 287,714 |
| Class C | 177,928 |
| Transfer agent fees | |
| Class A | 90,774 |
| Advisor Class | 5,848 |
| Class C | 14,051 |
| Institutional Class | 41,273 |
| Institutional 2 Class | 1,700 |
| Institutional 3 Class | 118 |
| Compensation of board members | 15,999 |
| Custodian fees | 1,826 |
| Printing and postage fees | 19,296 |
| Registration fees | 13,705 |
| Audit fees | 29,500 |
| Legal fees | 4,942 |
| Interest on interfund lending | 11 |
| Compensation of chief compliance officer | 70 |
| Other | 13,684 |
| Total expenses | 1,640,797 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (99,769) |
| Fees waived by distributor | |
| Class C | (53,359) |
| Expense reduction | (120) |
| Total net expenses | 1,487,549 |
| Net investment income | 5,242,242 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 1,281,242 |
| Futures contracts | (13,862) |
| Net realized gain | 1,267,380 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (4,102,186) |
| Futures contracts | 3,151 |
| Net change in unrealized appreciation (depreciation) | (4,099,035) |
| Net realized and unrealized loss | (2,831,655) |
| Net increase in net assets resulting from operations | $2,410,587 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
17 |
Statement of Changes in Net Assets
|
Year Ended
October 31, 2020 |
Year Ended
October 31, 2019 |
|
| Operations | ||
| Net investment income | $5,242,242 | $5,831,342 |
| Net realized gain | 1,267,380 | 1,972,547 |
| Net change in unrealized appreciation (depreciation) | (4,099,035) | 9,473,002 |
| Net increase in net assets resulting from operations | 2,410,587 | 17,276,891 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (4,138,805) | (3,471,161) |
| Advisor Class | (275,752) | (170,492) |
| Class C | (576,783) | (511,479) |
| Institutional Class | (2,026,365) | (1,485,753) |
| Institutional 2 Class | (123,489) | (137,065) |
| Institutional 3 Class | (29,043) | (13,587) |
| Total distributions to shareholders | (7,170,237) | (5,789,537) |
| Decrease in net assets from capital stock activity | (2,968,280) | (3,691,252) |
| Total increase (decrease) in net assets | (7,727,930) | 7,796,102 |
| Net assets at beginning of year | 200,918,168 | 193,122,066 |
| Net assets at end of year | $193,190,238 | $200,918,168 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 18 | Columbia Strategic New York Municipal Income Fund | Annual Report 2020 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| October 31, 2020 | October 31, 2019 | |||
| Shares(a) | Dollars ($) | Shares(a) | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 422,916 | 12,672,896 | 381,841 | 11,248,892 |
| Distributions reinvested | 116,953 | 3,489,501 | 96,926 | 2,869,665 |
| Redemptions | (534,228) | (15,820,061) | (844,971) | (24,683,575) |
| Net increase (decrease) | 5,641 | 342,336 | (366,204) | (10,565,018) |
| Advisor Class | ||||
| Subscriptions | 209,041 | 6,186,571 | 81,166 | 2,394,757 |
| Distributions reinvested | 9,242 | 275,335 | 5,739 | 170,161 |
| Redemptions | (123,380) | (3,539,100) | (42,327) | (1,220,921) |
| Net increase | 94,903 | 2,922,806 | 44,578 | 1,343,997 |
| Class C | ||||
| Subscriptions | 42,109 | 1,254,123 | 69,942 | 2,057,853 |
| Distributions reinvested | 14,678 | 438,106 | 13,262 | 392,243 |
| Redemptions | (198,188) | (5,882,829) | (173,581) | (5,090,282) |
| Net decrease | (141,401) | (4,190,600) | (90,377) | (2,640,186) |
| Institutional Class | ||||
| Subscriptions | 447,925 | 13,390,822 | 622,877 | 18,346,332 |
| Distributions reinvested | 46,458 | 1,386,415 | 34,501 | 1,022,144 |
| Redemptions | (507,541) | (14,892,044) | (356,235) | (10,373,641) |
| Net increase (decrease) | (13,158) | (114,807) | 301,143 | 8,994,835 |
| Institutional 2 Class | ||||
| Subscriptions | — | — | 41,861 | 1,215,560 |
| Distributions reinvested | 4,125 | 123,089 | 4,638 | 136,733 |
| Redemptions | (76,658) | (2,101,812) | (99,164) | (2,858,245) |
| Net decrease | (72,533) | (1,978,723) | (52,665) | (1,505,952) |
| Institutional 3 Class | ||||
| Subscriptions | 2,947 | 85,595 | 23,548 | 693,242 |
| Distributions reinvested | 960 | 28,647 | 441 | 13,255 |
| Redemptions | (2,076) | (63,534) | (840) | (25,425) |
| Net increase | 1,831 | 50,708 | 23,149 | 681,072 |
| Total net decrease | (124,717) | (2,968,280) | (140,376) | (3,691,252) |
| (a) | Share activity has been adjusted on a retroactive basis to reflect a 4 to 1 reverse stock split completed after the close of business on September 11, 2020. |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
19 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total
return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain
derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
|
Net asset value,
beginning of period |
Net
investment income |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class A(c) | |||||||
| Year Ended 10/31/2020 | $30.29 | 0.78 | (0.32) | 0.46 | (0.78) | (0.29) | (1.07) |
| Year Ended 10/31/2019 | $28.51 | 0.88 | 1.78 | 2.66 | (0.88) | — | (0.88) |
| Year Ended 10/31/2018 | $29.81 | 0.92 | (1.22) | (0.30) | (0.96) | (0.04) | (1.00) |
| Year Ended 10/31/2017 | $30.33 | 0.96 | (0.52) | 0.44 | (0.92) | (0.04) | (0.96) |
| Year Ended 10/31/2016 | $30.01 | 0.96 | 0.40 | 1.36 | (0.96) | (0.08) | (1.04) |
| Advisor Class(c) | |||||||
| Year Ended 10/31/2020 | $30.25 | 0.85 | (0.32) | 0.53 | (0.85) | (0.29) | (1.14) |
| Year Ended 10/31/2019 | $28.47 | 0.96 | 1.78 | 2.74 | (0.96) | — | (0.96) |
| Year Ended 10/31/2018 | $29.77 | 1.00 | (1.26) | (0.26) | (1.00) | (0.04) | (1.04) |
| Year Ended 10/31/2017 | $30.27 | 1.04 | (0.50) | 0.54 | (1.00) | (0.04) | (1.04) |
| Year Ended 10/31/2016 | $29.97 | 1.00 | 0.42 | 1.42 | (1.04) | (0.08) | (1.12) |
| Class C(c) | |||||||
| Year Ended 10/31/2020 | $30.28 | 0.65 | (0.33) | 0.32 | (0.64) | (0.29) | (0.93) |
| Year Ended 10/31/2019 | $28.50 | 0.76 | 1.78 | 2.54 | (0.76) | — | (0.76) |
| Year Ended 10/31/2018 | $29.80 | 0.80 | (1.26) | (0.46) | (0.80) | (0.04) | (0.84) |
| Year Ended 10/31/2017 | $30.31 | 0.80 | (0.47) | 0.33 | (0.80) | (0.04) | (0.84) |
| Year Ended 10/31/2016 | $30.00 | 0.84 | 0.35 | 1.19 | (0.80) | (0.08) | (0.88) |
| Institutional Class(c) | |||||||
| Year Ended 10/31/2020 | $30.26 | 0.85 | (0.31) | 0.54 | (0.85) | (0.29) | (1.14) |
| Year Ended 10/31/2019 | $28.49 | 0.96 | 1.77 | 2.73 | (0.96) | — | (0.96) |
| Year Ended 10/31/2018 | $29.79 | 1.00 | (1.26) | (0.26) | (1.00) | (0.04) | (1.04) |
| Year Ended 10/31/2017 | $30.30 | 1.04 | (0.51) | 0.53 | (1.00) | (0.04) | (1.04) |
| Year Ended 10/31/2016 | $29.99 | 1.04 | 0.39 | 1.43 | (1.04) | (0.08) | (1.12) |
| Institutional 2 Class(c) | |||||||
| Year Ended 10/31/2020 | $30.19 | 0.86 | (0.32) | 0.54 | (0.86) | (0.29) | (1.15) |
| Year Ended 10/31/2019 | $28.42 | 0.96 | 1.77 | 2.73 | (0.96) | — | (0.96) |
| Year Ended 10/31/2018 | $29.72 | 1.00 | (1.26) | (0.26) | (1.00) | (0.04) | (1.04) |
| Year Ended 10/31/2017 | $30.22 | 1.04 | (0.50) | 0.54 | (1.00) | (0.04) | (1.04) |
| Year Ended 10/31/2016 | $29.92 | 1.00 | 0.42 | 1.42 | (1.04) | (0.08) | (1.12) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 20 | Columbia Strategic New York Municipal Income 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(c) | |||||||
| Year Ended 10/31/2020 | $29.68 | 1.59% | 0.85%(d) | 0.80%(d),(e) | 2.63% | 26% | $114,883 |
| Year Ended 10/31/2019 | $30.29 | 9.37% | 0.85% | 0.80%(e) | 3.00% | 46% | $117,062 |
| Year Ended 10/31/2018 | $28.51 | (1.02%) | 0.85% | 0.80%(e) | 3.21% | 19% | $120,625 |
| Year Ended 10/31/2017 | $29.81 | 1.59% | 0.85% | 0.79%(e) | 3.21% | 7% | $134,602 |
| Year Ended 10/31/2016 | $30.33 | 4.53% | 0.91% | 0.80%(e) | 3.17% | 9% | $179,419 |
| Advisor Class(c) | |||||||
| Year Ended 10/31/2020 | $29.64 | 1.84% | 0.60%(d) | 0.55%(d),(e) | 2.88% | 26% | $9,151 |
| Year Ended 10/31/2019 | $30.25 | 9.66% | 0.60% | 0.55%(e) | 3.23% | 46% | $6,470 |
| Year Ended 10/31/2018 | $28.47 | (0.78%) | 0.60% | 0.55%(e) | 3.48% | 19% | $4,821 |
| Year Ended 10/31/2017 | $29.77 | 1.84% | 0.59% | 0.55%(e) | 3.46% | 7% | $2,518 |
| Year Ended 10/31/2016 | $30.27 | 4.80% | 0.66% | 0.56%(e) | 3.32% | 9% | $291 |
| Class C(c) | |||||||
| Year Ended 10/31/2020 | $29.67 | 1.10% | 1.60%(d) | 1.25%(d),(e) | 2.18% | 26% | $15,103 |
| Year Ended 10/31/2019 | $30.28 | 9.04% | 1.60% | 1.25%(e) | 2.56% | 46% | $19,693 |
| Year Ended 10/31/2018 | $28.50 | (1.60%) | 1.60% | 1.25%(e) | 2.76% | 19% | $21,111 |
| Year Ended 10/31/2017 | $29.80 | 1.13% | 1.60% | 1.24%(e) | 2.76% | 7% | $27,972 |
| Year Ended 10/31/2016 | $30.31 | 4.07% | 1.66% | 1.25%(e) | 2.69% | 9% | $30,350 |
| Institutional Class(c) | |||||||
| Year Ended 10/31/2020 | $29.66 | 1.77% | 0.60%(d) | 0.55%(d),(e) | 2.88% | 26% | $51,296 |
| Year Ended 10/31/2019 | $30.26 | 9.80% | 0.60% | 0.55%(e) | 3.24% | 46% | $52,745 |
| Year Ended 10/31/2018 | $28.49 | (0.91%) | 0.60% | 0.55%(e) | 3.46% | 19% | $41,072 |
| Year Ended 10/31/2017 | $29.79 | 1.84% | 0.60% | 0.55%(e) | 3.48% | 7% | $46,257 |
| Year Ended 10/31/2016 | $30.30 | 4.79% | 0.66% | 0.55%(e) | 3.40% | 9% | $25,827 |
| Institutional 2 Class(c) | |||||||
| Year Ended 10/31/2020 | $29.58 | 1.78% | 0.58%(d) | 0.53%(d) | 2.89% | 26% | $1,977 |
| Year Ended 10/31/2019 | $30.19 | 9.84% | 0.58% | 0.53% | 3.28% | 46% | $4,207 |
| Year Ended 10/31/2018 | $28.42 | (0.91%) | 0.58% | 0.54% | 3.46% | 19% | $5,457 |
| Year Ended 10/31/2017 | $29.72 | 1.98% | 0.59% | 0.54% | 3.46% | 7% | $6,497 |
| Year Ended 10/31/2016 | $30.22 | 4.71% | 0.60% | 0.51% | 3.33% | 9% | $390 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
21 |
Financial Highlights (continued)
|
Net asset value,
beginning of period |
Net
investment income |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Institutional 3 Class(c) | |||||||
| Year Ended 10/31/2020 | $30.28 | 0.87 | (0.32) | 0.55 | (0.87) | (0.29) | (1.16) |
| Year Ended 10/31/2019 | $28.50 | 0.96 | 1.78 | 2.74 | (0.96) | — | (0.96) |
| Year Ended 10/31/2018 | $29.80 | 1.04 | (1.26) | (0.22) | (1.04) | (0.04) | (1.08) |
| Year Ended 10/31/2017(f) | $29.32 | 0.68 | 0.48(g) | 1.16 | (0.68) | — | (0.68) |
| 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) | Per share amounts have been adjusted on a retroactive basis to reflect a 4 to 1 reverse stock split completed after the close of business on September 11, 2020. |
| (d) | Ratios include interfund lending expense which is less than 0.01%. |
| (e) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (f) | Institutional 3 Class shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (g) | 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.
| 22 | Columbia Strategic New York Municipal Income 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(c) | |||||||
| Year Ended 10/31/2020 | $29.67 | 1.87% | 0.54%(d) | 0.49%(d) | 2.95% | 26% | $780 |
| Year Ended 10/31/2019 | $30.28 | 9.71% | 0.54% | 0.49% | 3.17% | 46% | $741 |
| Year Ended 10/31/2018 | $28.50 | (0.72%) | 0.54% | 0.50% | 3.49% | 19% | $38 |
| Year Ended 10/31/2017(f) | $29.80 | 4.00% | 0.54%(h) | 0.50%(h) | 3.62%(h) | 7% | $105 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
23 |
Notes to Financial Statements
October 31, 2020
October 31, 2020
Note 1. Organization
Columbia Strategic New York
Municipal Income Fund (the Fund), a series of Columbia Funds Series Trust I (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 Massachusetts business trust.
The Fund’s Board of Trustees
approved reverse stock splits of the issued and outstanding shares of the Fund (the “Reverse Stock Split”). The Reverse Stock Split was completed after the close of business on September 11, 2020. The
impact of the Reverse Stock Split was to decrease the number of shares outstanding and increase the net asset value per share for each share class of the Fund by the ratio of 4 to 1, resulting in no effect on the net
assets of each share class or the value of each affected shareholder’s investment. Capital stock share activity reflected in the Statement of Changes in Net Assets and per share data in the Financial Highlights
have been adjusted on a retroactive basis to reflect the impact of the Reverse Stock Split.
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 market value, unless this method results in a valuation that management believes does not approximate fair value.
Futures and options on futures
contracts are valued based upon the settlement price at the close of regular trading on their principal exchanges or, in the absence of a settlement price, at the mean of the latest quoted bid and ask prices.
| 24 | Columbia Strategic New York Municipal Income Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published
price for the security, if available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Derivative instruments
The Fund invests in certain
derivative instruments, as detailed below, in seeking to meet its investment objectives. Derivatives are instruments whose values depend on, or are derived from, in whole or in part, the value of one or more
securities, currencies, commodities, indices, or other assets or instruments. Derivatives may be used to increase investment flexibility (including to maintain cash reserves while maintaining desired exposure to
certain assets), for risk management (hedging) purposes, to facilitate trading, to reduce transaction costs and to pursue higher investment returns. The Fund may also use derivative instruments to mitigate certain
investment risks, such as foreign currency exchange rate risk, interest rate risk and credit risk. Derivatives may involve various risks, including the potential inability of the counterparty to fulfill its
obligations under the terms of the contract, the potential for an illiquid secondary market (making it difficult for the Fund to sell or terminate, including at favorable prices) and the potential for market movements
which may expose the Fund to gains or losses in excess of the amount shown in the Statement of Assets and Liabilities. The notional amounts of derivative instruments, if applicable, are not recorded in the financial
statements.
A derivative instrument may suffer
a marked-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform its
obligations under the contract. The Fund’s risk of loss from counterparty credit risk on over-the-counter derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by
the Fund and the amount of any variation margin held by the counterparty, plus any replacement costs or related amounts. With exchange-traded or centrally cleared derivatives, there is reduced counterparty credit risk
to the Fund since the clearinghouse or central counterparty (CCP) provides some protection in the case of clearing member default. The clearinghouse or CCP stands between the buyer and the seller of the contract;
therefore, additional counterparty credit risk is failure of the clearinghouse or CCP. However, credit risk still exists in exchange-traded or centrally cleared derivatives with respect to initial and variation margin
that is held in a broker’s customer account. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy
and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, U.S. bankruptcy laws will typically allocate that shortfall on a pro-rata basis across all the
clearing broker’s customers (including the Fund), potentially resulting in losses to the Fund.
In order to better define its
contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement)
or similar agreement with its derivatives counterparties. An ISDA Master Agreement is an agreement between the Fund and a counterparty that governs over-the-counter derivatives and foreign exchange forward contracts
and contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset
with the counterparty certain derivative instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically
permit a single net payment in the event of default (close-out netting), including the bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may
impose restrictions on or prohibitions against the right of offset or netting in bankruptcy, insolvency or other events.
|
Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
Collateral (margin) requirements
differ by type of derivative. Margin requirements are established by the clearinghouse or CCP for exchange-traded and centrally cleared derivatives. Brokers can ask for margin in excess of the minimum in certain
circumstances. Collateral terms for most over-the-counter derivatives are subject to regulatory requirements to exchange variation margin with trading counterparties and may have contract specific margin terms as
well. For over-the-counter derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the marked-to-market amount for each transaction under such agreement and
comparing that amount to the value of any variation margin currently pledged by the Fund and/or the counterparty. Generally, the amount of collateral due from or to a party has to exceed a minimum transfer amount
threshold (e.g., $250,000) before a transfer has to be made. To the extent amounts due to the Fund from its counterparties are not fully collateralized, contractually or otherwise, the Fund bears the risk of loss from
counterparty nonperformance. The Fund may also pay interest expense on cash collateral received from the broker. Any interest expense paid by the Fund is shown on the Statement of Operations. The Fund attempts to
mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those
counterparties.
Certain ISDA Master Agreements
allow counterparties of over-the-counter derivatives transactions to terminate derivatives contracts prior to maturity in the event the Fund’s net asset value declines by a stated percentage over a specified
time period or if the Fund fails to meet certain terms of the ISDA Master Agreement, which would cause the Fund to accelerate payment of any net liability owed to the counterparty. The Fund also has termination rights
if the counterparty fails to meet certain terms of the ISDA Master Agreement. In determining whether to exercise such termination rights, the Fund would consider, in addition to counterparty credit risk, whether
termination would result in a net liability owed from the counterparty.
For financial reporting purposes,
the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.
Futures contracts
Futures contracts are
exchange-traded and represent commitments for the future purchase or sale of an asset at a specified price on a specified date. The Fund bought and sold futures contracts to manage the duration and yield curve
exposure of the Fund versus the benchmark and to manage exposure to movements in interest rates. These instruments may be used for other purposes in future periods. Upon entering into futures contracts, the Fund bears
risks that it may not achieve the anticipated benefits of the futures contracts and may realize a loss. Additional risks include counterparty credit risk, the possibility of an illiquid market, and that a change in
the value of the contract or option may not correlate with changes in the value of the underlying asset.
Upon entering into a futures
contract, the Fund deposits cash or securities with the broker, known as a futures commission merchant (FCM), in an amount sufficient to meet the initial margin requirement. The initial margin deposit must be
maintained at an established level over the life of the contract. Cash deposited as initial margin is recorded in the Statement of Assets and Liabilities as margin deposits. Securities deposited as initial margin are
designated in the Portfolio of Investments. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily change in the contract value and are
recorded as variation margin receivable or payable and are offset in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed or expires. Futures contracts involve, to
varying degrees, risk of loss in excess of the variation margin disclosed in the Statement of Assets and Liabilities.
Effects of derivative transactions in
the financial statements
The following tables are intended
to provide additional information about the effect of derivatives on the financial statements of the Fund, including: the fair value of derivatives by risk category and the location of those fair values in the
Statement of Assets and Liabilities; and the impact of derivative transactions over the period in the Statement of Operations, including realized and unrealized gains (losses). The derivative instrument schedules
following the Portfolio of Investments present additional information regarding derivative instruments outstanding at the end of the period, if any.
| 26 | Columbia Strategic New York Municipal Income Fund | Annual Report 2020 |
| Asset derivatives | ||
|
Risk exposure
category |
Statement
of assets and liabilities location |
Fair value ($) |
| Interest rate risk | Component of total distributable earnings (loss) — unrealized appreciation on futures contracts | 3,151* |
| * | Includes cumulative appreciation (depreciation) as reported in the tables following the Portfolio of Investments. Only the current day’s variation margin is reported in receivables or payables in the Statement of Assets and Liabilities. |
The following table indicates the
effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended October 31, 2020:
The following table is a summary
of the average outstanding volume by derivative instrument for the year ended October 31, 2020:
| Derivative instrument |
Average notional
amounts ($)* |
| Futures contracts — long | 7,441 |
| Futures contracts — short | 592,366 |
| * | Based on the ending daily outstanding amounts for the year ended October 31, 2020. |
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.
|
Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its 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.
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 October 31, 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. These members of the Board of Trustees
may participate in a Deferred Compensation Plan (the Deferred Plan) which may be terminated at any time. Obligations of the Deferred Plan will be paid solely out of the Fund’s assets, and all amounts payable
under the Deferred Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
| 28 | Columbia Strategic New York Municipal Income Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as
sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class.
For the year ended October 31,
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 | 0.08 |
| Advisor Class | 0.08 |
| Class C | 0.08 |
| Institutional Class | 0.08 |
| Institutional 2 Class | 0.06 |
| 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 October 31, 2020, these minimum account balance fees reduced total expenses
of the Fund by $120.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A and Class C shares of the Fund. Also under the Plans, the Fund pays a monthly
distribution fee to the Distributor at the maximum annual rate of 0.75% of the average daily net assets attributable to Class C shares of the Fund.
Effective September 1, 2020, the
Distributor has contractually agreed to waive a portion of the distribution fee for Class C shares through August 31, 2021 so that the distribution fee does not exceed 0.45% annually of the average daily net assets
attributable to Class C shares. This arrangement may be modified or terminated at the sole discretion of the Board of Trustees. Distributor at any time. Prior to September 1, 2020, this was a voluntary arrangement.
|
Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
29 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended October 31, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 3.00 | 0.75(a) | 48,874 |
| Class C | — | 1.00(b) | 1,024 |
| (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.
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
February 28, 2021 |
|
| Class A | 0.80% |
| Advisor Class | 0.55 |
| Class C | 1.55* |
| Institutional Class | 0.55 |
| Institutional 2 Class | 0.53 |
| Institutional 3 Class | 0.49 |
*Effective September 1, 2020, the
contractual expense reimbursement arrangement is in effect through August 31, 2021.
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. Class C distribution fees waived by the Distributor, as discussed above, are in addition to the waiver/reimbursement commitment under the agreement.
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 October 31, 2020, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, trustees’ deferred compensation, tax straddles, distributions and principal and/or interest of fixed income
securities. To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
The Fund did not have any permanent
differences; therefore, no reclassifications were made.
| 30 | Columbia Strategic New York Municipal Income Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended October 31, 2020 | Year Ended October 31, 2019 | ||||||
|
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 678,743 | 5,060,447 | 1,431,047 | 7,170,237 | 124,130 | 5,665,407 | — | 5,789,537 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At October 31, 2020, the components
of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed tax-
exempt income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| 92,780 | 1,090,748 | 1,010,604 | — | 7,467,376 |
At October 31, 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) ($) |
Net unrealized
appreciation ($) |
| 187,301,554 | 8,661,058 | (1,193,682) | 7,467,376 |
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 $49,835,139 and $56,083,767, respectively, for the year ended October 31, 2020. The amount of purchase and
sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the
Interfund Program during the year ended October 31, 2020 was as follows:
| Borrower or lender |
Average loan
balance ($) |
Weighted average
interest rate (%) |
Number of days
with outstanding loans |
| Borrower | 200,000 | 0.66 | 3 |
Interest expense incurred by the
Fund is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at October 31, 2020.
|
Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
31 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 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., Wells Fargo Bank, 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. Pursuant to a December 1, 2020 amendment, 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 $950 million. 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, 1.25%. 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. Prior to the December 1, 2020 amendment, 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. which permitted collective borrowings up to 1 billion. Interest was 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%.
The Fund had no borrowings during
the year ended October 31, 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.
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
| 32 | Columbia Strategic New York Municipal Income Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
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 Fund performance may also be
significantly negatively impacted by the economic impact of the coronavirus disease 2019 (COVID-19) pandemic. The 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 objectives. Any such
event(s) could have a significant adverse impact on the value and risk profile of the Fund.
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting different communities at different times with varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including
the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to continue ordinary business operations and technology functions over near- or longer-term periods.
Municipal securities risk
Municipal securities are debt
obligations generally issued to obtain funds for various public purposes, including general financing for state and local governments, or financing for a specific project or public facility, and include obligations of
the governments of the U.S. territories, commonwealths and possessions such as Guam, Puerto Rico and the U.S. Virgin Islands to the extent such obligations are exempt from state and U.S. federal income taxes. The
value of municipal securities can be significantly affected by actual or expected political and legislative changes at the federal or state level. Municipal securities may be fully or partially backed by the taxing
authority of the local government, by the credit of a private issuer, by the current or anticipated revenues from a specific project or specific assets or by domestic or foreign entities providing credit support, such
as letters of credit, guarantees or insurance, and are generally classified into general obligation bonds and special revenue obligations. Because many municipal securities are issued to finance projects in sectors
such as education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal market.
Issuers in a state, territory,
commonwealth or possession in which the Fund invests may experience significant financial difficulties for various reasons, including as the result of events that cannot be reasonably anticipated or controlled such as
economic downturns or similar periods of economic stress, social conflict or unrest, labor disruption and other natural disasters. Such financial difficulties may lead to credit rating downgrades or defaults of such
issuers which in turn, could
|
Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
33 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
affect the market values and marketability of many
or all municipal obligations of issuers in such state, territory, commonwealth or possession. The value of the Fund’s shares will be negatively impacted to the extent it invests in such securities. The
Fund’s annual and semiannual reports show the Fund’s investment exposures at a point in time. The risk of investing in the Fund is directly correlated to the Fund’s investment exposures.
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.
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 October 31, 2020, one
unaffiliated shareholder of record owned 15.6% 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. Affiliated
shareholders of record owned 24.6% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the
Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of
less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 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 or one or more of its affiliates that provides services to
the Funds.
| 34 | Columbia Strategic New York Municipal Income Fund | Annual Report 2020 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust I and Shareholders of Columbia Strategic New York Municipal Income Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Strategic New York Municipal Income Fund (one of the funds constituting Columbia Funds Series Trust I, referred to hereafter as
the "Fund") as of October 31, 2020, the related statement of operations for the year ended October 31, 2020, the statement of changes in net assets for each of the two years in the period ended October 31, 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 October 31, 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
October 31, 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 October 31, 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
December 21, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
|
Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
35 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended October 31, 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 |
| $1,155,618 | 96.77% |
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. The year set forth beneath Length of Service
in the table below is the year in which the Trustee was first appointed or elected as Trustee to any Fund currently in the Columbia Funds Complex or a predecessor thereof. Under current Board policy, members serve
terms of indefinite duration. The Board approved the nomination of and recommended the election of 17 nominees to the Board, effecting a consolidation of the Board and the board of trustees overseeing Columbia Funds
Series Trust, Columbia Funds Series Trust II and certain affiliated trusts. At a shareholder meeting held on December 22, 2020, shareholders approved the nominees, effective January 1, 2021.
Independent trustees
| 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 Fund Complex overseen | Other directorships held by Trustee during the past five years |
|
Janet Langford Carrig
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1957 |
Trustee
1996 |
Senior Vice President, General Counsel and Corporate Secretary, ConocoPhillips (independent energy company), September 2007-October 2018 | 66 | Director, EQT Corporation (natural gas producer); Director, Whiting Petroleum Corporation (independent oil and gas company) |
|
Douglas A. Hacker
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1955 |
Trustee and Chairman of the Board
1996 |
Independent business executive since May 2006; Executive Vice President — Strategy of United Airlines, December 2002-May 2006; President of UAL Loyalty Services (airline marketing company), September 2001-December 2002; Executive Vice President and Chief Financial Officer of United Airlines, July 1999-September 2001 | 66 | Director, Spartan Nash Company (food distributor); Director, Aircastle Limited (aircraft leasing); former Director, Nash Finch Company (food distributor), 2005-2013; former Director, SeaCube Container Leasing Ltd. (container leasing), 2010-2013; and former Director, Travelport Worldwide Limited (travel information technology), 2014-2019 |
| 36 | Columbia Strategic New York Municipal Income 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 the past five years and other relevant professional experience | Number of Funds in the Columbia Fund Complex overseen | Other directorships held by Trustee during the past five years |
|
Nancy T. Lukitsh
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1956 |
Trustee
2011 |
Senior Vice President, Partner and Director of Marketing, Wellington Management Company, LLP (investment adviser), 1997-2010; Chair, Wellington Management Portfolios (commingled non-U.S. investment pools), 2007-2010; Director, Wellington Trust Company, NA and other Wellington affiliates, 1997-2010 | 66 | None |
|
David M. Moffett
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Trustee
2011 |
Retired. Consultant to Bridgewater and Associates | 66 | Director, CSX Corporation (transportation suppliers); Director, Genworth Financial, Inc. (financial and insurance products and services); Director, PayPal Holdings Inc. (payment and data processing services); Trustee, University of Oklahoma Foundation; former Director, eBay Inc. (online trading community), 2007-2015; and former Director, CIT Bank, CIT Group Inc. (commercial and consumer finance), 2010-2016 |
|
John J. Neuhauser
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1943 |
Trustee
1984 |
President, Saint Michael’s College, August 2007-June 2018; Director or Trustee of several non-profit organizations, including University of Vermont Medical Center; Academic Vice President and Dean of Faculties, Boston College, August 1999-October 2005; University Professor, Boston College, November 2005-August 2007 | 66 | Director, Liberty All-Star Equity Fund and Liberty All-Star Growth Fund (closed-end funds) |
|
Patrick J. Simpson
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1944 |
Trustee
2000 |
Of Counsel, Perkins Coie LLP (law firm) since 2015; Partner, Perkins Coie LLP, 1988-2014 | 66 | Former Director, M Fund, Inc. (M Funds mutual fund family), July 2018-July 2019 |
|
Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
37 |
TRUSTEES AND OFFICERS (continued)
Consultants to the Independent Trustees*
Consultants to the Independent Trustees*
| * | J. Kevin Connaughton was appointed consultant to the Independent Trustees effective March 1, 2016. Natalie A. Trunow was appointed consultant to the Independent Trustees effective September 1, 2016. Olive Darragh was appointed consultant to the Independent Trustees effective June 10, 2019. |
| 38 | Columbia Strategic New York Municipal Income 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 | 162 | 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 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 — Accounting and Tax, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009-December 2018 and December 2015-December 2018, 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 May 2010. |
|
Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
39 |
TRUSTEES AND OFFICERS (continued)
Fund officers (continued)
Fund officers (continued)
|
Name,
address and year of birth |
Position and year
first appointed to position for any Fund in the Columbia Funds complex or a predecessor thereof |
Principal occupation(s) during past five years |
|
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); Chief Legal Officer, Columbia Acorn/Wanger Funds, since September 2020; 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. |
Board Consideration
and Approval of Management
Agreement
On June 17, 2020, the Board of
Trustees (the Board) and the Trustees who are not interested persons (as defined in the Investment Company Act of 1940) (the Independent Trustees) of Columbia Funds Series Trust I (the Trust) unanimously approved the
continuation of the Management Agreement (the Management Agreement) with Columbia Management Investment Advisers, LLC (the Investment Manager) with respect to Columbia Strategic New York Municipal Income Fund (the
Fund), a series of the Trust. As detailed below, the Board’s Advisory Fees and Expenses Committee (the Committee) and the Board met on multiple occasions to review and discuss, among themselves, with the
management team of the Investment Manager and with an independent fee consultant, materials provided by the Investment Manager, the independent fee consultant and others before determining to approve the continuation
of the Management Agreement.
In connection with their
deliberations regarding the continuation of the Management Agreement, the Committee and the Board evaluated materials requested from the Investment Manager regarding the Fund and the Management Agreement, and
discussed these materials with representatives of the Investment Manager at Committee meetings held on March 10, 2020, April 30, 2020 and June 17, 2020 and at Board meetings held on March 11, 2020 and June 17, 2020.
In addition, the Board and its various committees consider matters bearing on the Management Agreement at other meetings throughout the year and in prior years and meet regularly with senior management of the Trust
and the Investment Manager. Through the Board’s Investment Oversight Committees, Trustees also meet with selected portfolio managers of the funds the Trustees oversee and with other investment personnel at
various times throughout the year. The Committee and the Board also consulted with
| 40 | Columbia Strategic New York Municipal Income Fund | Annual Report 2020 |
Board Consideration and Approval of
Management
Agreement (continued)
the independent fee consultant, Fund counsel and
the Independent Trustees’ independent legal counsel, who advised on various matters with respect to the Committee’s and the Board’s considerations and otherwise assisted the Committee and the Board
in their deliberations. On June 17, 2020, the Committee recommended that the Board approve the continuation of the Management Agreement. On June 17, 2020, the Board, including the Independent Trustees, voting
separately, unanimously approved the continuation of the Management Agreement for the Fund.
The Committee and the Board
considered all information that they, their legal counsel or the Investment Manager believed reasonably necessary to evaluate and to determine whether to recommend for approval or approve the continuation of the
Management Agreement. The information and factors considered by the Committee and the Board in recommending for approval or approving the continuation of the Management Agreement for the Fund included the
following:
| • | Information on the investment performance of the Fund relative to the performance of a group of mutual funds determined to be comparable to the Fund by an independent third-party data provider, as well as performance relative to benchmarks; |
| • | Information on the Fund’s management fees and total expenses, including information comparing the Fund’s expenses to those of a group of comparable mutual funds, as determined by the independent third-party data provider; |
| • | The Investment Manager’s agreement to contractually limit or cap total operating expenses for the Fund through February 28, 2021 so that total operating expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and infrequent and/or unusual expenses) would not exceed a specified annual rate, as a percentage of the Fund’s net assets; |
| • | The terms and conditions of the Management Agreement; |
| • | The current and proposed terms and conditions of other agreements and arrangements with affiliates of the Investment Manager relating to the operations of the Fund, including agreements with respect to the provision of distribution, transfer agency and shareholder services to the Fund; |
| • | Descriptions of various functions performed by the Investment Manager under the Management Agreement, including portfolio management and portfolio trading practices; |
| • | Information regarding any recently negotiated management fees of similarly-managed portfolios of other institutional clients of the Investment Manager; |
| • | Information regarding the reputation, regulatory history and resources of the Investment Manager, including information regarding senior management, portfolio managers and other personnel; |
| • | Information regarding the capabilities of the Investment Manager with respect to compliance monitoring services, including an assessment of the Investment Manager’s compliance system by the Fund’s Chief Compliance Officer; and |
| • | The profitability to the Investment Manager and its affiliates from their relationships with the Fund. |
Nature, extent and quality of
services provided under the Management Agreement
The Committee and the Board
considered the nature, extent and quality of services provided to the Fund by the Investment Manager and its affiliates under the Management Agreement and under separate agreements for the provision of transfer agency
and shareholder services, and the resources dedicated to the Fund and the other Columbia Funds by the Investment Manager and its affiliates. The Committee and the Board considered, among other things, the Investment
Manager’s ability to attract, motivate and retain highly qualified research, advisory and supervisory investment professionals (including compensation programs for personnel involved in fund management,
reputation and other attributes), the portfolio management services provided by those investment professionals, and the quality of the Investment Manager’s investment research capabilities and trade execution
services. The Committee and the Board also considered the potential benefits to shareholders of investing in a mutual fund that is part of a fund complex offering exposure to a variety of asset classes and investment
disciplines and providing a variety of fund and shareholder services.
|
Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
41 |
Board Consideration and Approval of
Management
Agreement (continued)
The Committee and the Board also considered the
professional experience and qualifications of the senior personnel of the Investment Manager, which included consideration of the Investment Manager’s experience with funds using an investment strategy similar
to that used by the Investment Manager for the Fund. The Committee and the Board noted the compliance programs of and the compliance-related resources provided to the Fund by the Investment Manager and its affiliates
and the resources dedicated by the Investment Manager and its affiliates to risk management, and considered the Investment Manager’s ability to provide administrative services to the Fund and coordinate the
activities of the Fund’s other service providers. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the nature, extent and
quality of the services provided to the Fund under the Management Agreement supported the continuation of the Management Agreement.
Investment performance
The Committee and the Board
reviewed information about the performance of the Fund over various time periods, including performance information relative to benchmarks, information that compared the performance of the Fund to the performance of a
group of comparable mutual funds as determined by the independent third-party data provider, and information and analysis provided by the independent fee consultant. The Committee and the Board also reviewed a
description of the third party’s methodology for identifying the Fund’s peer groups for purposes of performance and expense comparisons.
The Committee and the Board noted
that, through December 31, 2019, the Fund’s performance was in the sixteenth, forty-fourth and forty-fourth percentile (where the best performance would be in the first percentile) of its category selected by
the independent third-party data provider for the purposes of performance comparisons for the one-, three- and five-year periods, respectively.
The Committee and the Board also
considered the Investment Manager’s performance and reputation generally, the Investment Manager’s historical responsiveness to Board concerns about performance, and the Investment Manager’s
willingness to take steps intended to improve performance. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the performance of the
Fund and the Investment Manager was sufficient, in light of other considerations, to support the continuation of the Management Agreement.
Investment management fee rates
and other expenses
The Committee and the Board
considered the management fees charged to the Fund under the Management Agreement as well as the total expenses incurred by the Fund. In assessing the reasonableness of the fees under the Management Agreement, the
Committee and the Board considered, among other information, the Fund’s total expense ratio as a percentage of average daily net assets. The Committee and the Board considered data provided by the independent
third-party data provider and the independent fee consultant. The Committee and the Board noted that, as of December 31, 2019, the Fund’s actual management fee and net total expense ratio were ranked in the
second and fourth quintiles, respectively, (where the lowest fees and expenses would be in the first quintile) against the Fund’s expense universe as determined by the independent third-party data provider for
purposes of expense comparison. The Committee and the Board also took into account the fee waiver and expense limitation arrangements agreed to by the Investment Manager, as noted above.
The Committee and the Board also
received and considered information about the management fees charged by the Investment Manager to institutional accounts. In considering the fees charged to those accounts, the Committee and the Board took into
account, among other things, the Investment Manager’s representations about the differences between managing mutual funds as compared to other types of accounts, including differences in the services provided,
differences in the risk profile of such business for the Investment Manager and the additional resources required to manage mutual funds effectively. The Committee and the Board also received and considered
information about the fees charged by the Investment Manager for sub-advisory services it provides to comparable unaffiliated funds. In evaluating the Fund’s management fees, the Committee and the Board also
took into account the demands, complexity and quality of the investment management of the Fund.
After reviewing these and related
factors, the Committee and the Board concluded, within the context of their overall conclusions, that the management fee rates and expenses of the Fund, in light of other considerations, supported the continuation of
the Management Agreement.
| 42 | Columbia Strategic New York Municipal Income Fund | Annual Report 2020 |
Board Consideration and Approval of
Management
Agreement (continued)
Costs of services provided and profitability
The Committee and the Board also
took note of the costs the Investment Manager and its affiliates incur in connection with the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the
Fund, and the efforts undertaken by the Investment Manager and its affiliates to manage efficiently their costs to provide such services.
The Committee and the Board also
considered the compensation directly or indirectly received by the Investment Manager’s affiliates in connection with their relationships with the Fund. The Committee and the Board reviewed information provided
by management as to the profitability to the Investment Manager and its affiliates of their relationships with the Fund, information about the allocation of expenses used to calculate profitability, and comparisons of
profitability levels realized in 2019 to profitability levels realized in 2018. When reviewing profitability, the Committee and the Board also considered court cases in which adviser profitability was an issue in
whole or in part, the performance of similarly managed funds, the performance of the Fund, and the expense ratio of the Fund. In addition, the Committee and the Board considered information provided by the Investment
Manager regarding the Investment Manager’s financial condition and comparing its profitability to that of other asset management firms that are, or are subsidiaries of, publicly traded companies. In this regard,
the Committee and the Board also considered data provided by the independent fee consultant.
After reviewing these and related
factors, the Committee and the Board concluded, within the context of their overall conclusions, that the costs of services provided and the profitability to the Investment Manager and its affiliates from their
relationships with the Fund supported the continuation of the Management Agreement.
Economies of scale
The Committee and the Board
considered the potential existence of economies of scale in the provision by the Investment Manager of services to the Fund, to groups of related funds, and to the Investment Manager’s investment advisory
clients as a whole, and whether those economies of scale were shared with the Fund through breakpoints in investment management fees or other means, such as expense limitation arrangements and additional investments
by the Investment Manager in investment, trading, compliance and other resources. The Committee and the Board noted that the management fee schedules for the Fund contained breakpoints that would reduce the fee rate
on assets above specified threshold levels.
In considering these matters, the
Committee and the Board also considered the costs of the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund, as noted above. After reviewing
these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the extent to which any economies of scale were expected to be shared with the Fund supported the
continuation of the Management Agreement.
Other benefits to the Investment
Manager
The Committee and the Board
received and considered information regarding “fall-out” or ancillary benefits received by the Investment Manager and its affiliates as a result of their relationships with the Fund, such as the engagement
of the Investment Manager’s affiliates to provide distribution, transfer agency and shareholder services to the Fund. In this regard, among other matters, the Committee and the Board considered that the
Fund’s distributor retains a portion of the distribution fees from the Fund and receives a portion of the sales charges on sales or redemptions of certain classes of shares of the Fund. The Committee and the
Board also considered the benefits of research made available to the Investment Manager by reason of brokerage commissions generated by the Fund’s securities transactions, and reviewed information about the
Investment Manager’s practices with respect to considering brokerage and research services when allocating portfolio transactions. In this connection, the Board also noted that the amount of research made
available to the Investment Manager by reason of brokerage commissions had been declining over time, and may decline further. The Committee and the Board recognized that the Investment Manager’s profitability
would be somewhat lower without these benefits.
Conclusion
The Committee and the Board
reviewed all of the above considerations in reaching their decisions to recommend or approve the continuation of the Management Agreement. In their deliberations, the Trustees did not identify any particular
information that was all-important or controlling, and individual Trustees may have attributed different weights to the various factors.
|
Columbia Strategic New York Municipal Income Fund | Annual Report 2020
|
43 |
Board Consideration and Approval of
Management
Agreement (continued)
Based on their evaluation of all factors that they
deemed to be material, including those factors described above, and assisted by the advice of independent legal counsel, the Board, including the Independent Trustees, voting separately, unanimously approved the
continuation of the Management Agreement.
| 44 | Columbia Strategic New York Municipal Income Fund | Annual Report 2020 |
Columbia Strategic New York Municipal Income 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/
ANN205_10_K01_(12/20)
Annual Report
October 31, 2020
October 31, 2020
Columbia New York
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
shareholder 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 New York 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. The Fund’s 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-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 New York Intermediate Municipal Bond
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks as high a level of current interest income exempt from federal income tax and, to the extent possible, from New York individual income tax, as is consistent with relative stability 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. Returns for Class V shares are
shown with and without the maximum initial sales charge of 4.75%. The Fund’s other share classes are not subject to sales charges and have limited eligibility. Please see the Fund’s prospectus for details.
Performance for different share classes will vary based on differences in sales charges and fees associated with each share class. All results shown assume reinvestment of distributions during the period. Returns do
not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by
Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown
represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than
their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial
intermediary, visiting columbiathreadneedleus.com/investor/ or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. Since the Fund launched more than one share class at its inception, Institutional Class shares were used. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investor/investment-products/mutual-funds/appended-performance for more information. |
The Bloomberg Barclays New York 3-15
Year Blend Municipal Bond Index tracks investment grade bonds from the state of New York 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.
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (October 31, 2010 — October 31, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia New York 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 October 31, 2020) | |
| AAA rating | 6.0 |
| AA rating | 33.7 |
| A rating | 48.5 |
| BBB rating | 8.2 |
| Not rated | 3.6 |
| 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. If a security is
Not rated but has a rating by Kroll and/or DBRS, the same methodology is applied to those bonds that would otherwise be Not rated. 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 New York Intermediate Municipal Bond Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
During the 12-month period that
ended October 31, 2020, the Fund’s Class A shares returned 1.47% excluding sales charges and the Fund’s Institutional Class shares returned 1.72%. During the same 12-month period, the Fund’s
benchmark, the Bloomberg Barclays New York 3-15 Year Blend Municipal Bond Index returned 2.25% and the broader Bloomberg Barclays 3-15 Year Blend Municipal Bond Index, which is national in scope, returned 3.84%.
Market overview
Despite significant volatility in
the first calendar quarter of 2020, the U.S. municipal bond market produced positive returns in the 12-month period. Municipals benefited from a relatively benign environment in the first three months of the reporting
period. During this time, the U.S. economy continued its expansion and municipal yields marched toward new lows (as prices increased). These favorable conditions quickly deteriorated in the first quarter of 2020 once
the COVID-19 pandemic hit the United States. Municipal bonds experienced several record down days in mid-March as investors withdrew cash from municipal funds amid concerns about the financial impact of the COVID-19
pandemic on state and local governments. Investor worries about the prospects for bonds backed by economically sensitive revenues, such as sales taxes, hotels and air travel, further contributed to the withdrawals
from municipal funds. Managers raised cash to meet the redemptions, exacerbating the market’s decline.
The downturn abated in late March,
and the tax-exempt market embarked on an impressive rally that included several days of record price gains. Investors were encouraged by the U.S. Federal Reserve’s (Fed’s) decision to cut interest rates to
zero and initiate a number of liquidity programs aimed at propping up financial assets. Congress also provided fiscal support with a stimulus package amounting to over $2 trillion. After pausing in April, the
market’s advance resumed in May as the Fed clarified potential support for municipal issuers and cash began to flow back into the market. So much cash came into muni funds, in fact, that year-to-date inflows had
returned to positive territory by the third week of July. Although tax receipts and other municipal revenue sources continued to slide in the COVID-19-related economic downturn, the market remained backstopped by both
Fed policy and hopes for additional fiscal stimulus.
The rally started to lose steam in
early August due to a resurgence of COVID-19 cases, waning hope for further federal support for state and local governments before the U.S. presidential election, and subsiding inflows. Still, the index closed the
annual period with a healthy gain.
New York intermediate-term
municipal bonds lagged their national peers. The benchmark was hampered by its large weighting in the transportation sector, particularly the Metropolitan Transportation Authority that serves New York City. The
state’s market was also hurt by the weak relative performance of other bonds related to New York City, which was an epicenter with respect to the virus and its economic impact, and has been affected by net
population losses. The city accounts for nearly half of the state’s overall employment.
The state, as a whole, was greatly
affected by the COVID-19 pandemic, with tax revenue for the 2021 fiscal year expected to fall 10% from the prior period. In contrast, Moody’s is estimating a decline of 7.1% for the nation. Still, collections
improved somewhat in the third calendar quarter (which encompassed the time from July to September) in comparison to the previous three months. Despite the issues that have emerged in 2020, we believed New York
continued to feature a broad and diverse economic base, well-funded pensions, manageable fixed costs, and a long track record of using state resources and budgetary tools to close budget gaps.
The Fund trailed its benchmark
during the reporting period, with the bulk of the shortfall occurring in March and April. As the COVID-19 pandemic took hold and the economy shut down, lower-rated investment-grade bonds dramatically
underperformed.
The Fund’s leading
detractors included:
| • | Fund holdings in nursing homes and continuing care retirement centers which performed poorly due to COVID-19 concerns as well as the timing of certain Fund purchases. |
| • | A hospital with a close proximity to New York City produced disappointing returns for the Fund. |
| • | Timing played a role in the underperformance of the Fund’s investments in the special non-property tax sector. |
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
| • | The Fund lost some ground from our decision to add high-quality New York City personal income tax and sales tax-backed bonds during the summer. While these holdings initially underperformed, we maintained the positions based on our positive longer-term outlook. |
The Fund’s leading
contributors included:
| • | Higher quality positions were generally the top performers for the period. The “risk-off” shift in the wake of COVID-19 led the AAA and AA rated segments of the New York market to outperform lower rated investment-grade issues. |
| • | High-quality local general obligation bonds outperformed revenue bonds since they were in a better position to withstand the virus-mitigation efforts. (Interest and principal payments on revenue bonds are derived from specific sources rather than general tax receipts.) |
| • | The public power sector, including the Fund’s holdings in Long Island Power Authority, also outperformed. The public power sector fared well through the pandemic, as it is considered one of the most essential sectors in the municipal market. |
Fund positioning
We were constructive on the
prospects for municipal bonds prior to COVID-19, prompting us to keep the portfolio’s duration and average maturity above those of the benchmark early in the period. (Duration is a measure of interest-rate
sensitivity.) During this time, we continued to pursue a strategy focused on increasing the Fund’s market exposure through additions of longer to intermediate-term securities. We funded these Fund purchases by
reducing the Fund’s allocations to shorter maturity, pre-refunded bonds and bonds that are callable in the next 12 months. Our decision to reduce the Fund’s weighting in these areas was based on their
lower income and our expectation that issuers would refinance callable, higher cost debt.
As the second quarter began, our
focus shifted to assessing the impact of COVID-19 on each of the Fund’s individual holdings. We did not make major changes as a result of this process, as we were confident the issuers represented in the
portfolio would successfully navigate COVID-19 and demonstrate improving fundamentals as the pandemic is addressed.
In the third calendar quarter of
2020, new Fund purchases generally emphasized bonds with 4% coupons, as we believed sub-5% coupons offered higher income and attractive relative value. We also resumed the process of rotating the Fund out of
short-maturity securities and bonds that are callable in the next twelve months in order fund purchases of longer and intermediate-term debt.
At the end of the period, we
believed the market environment was much improved compared to the conditions that were in place in the spring of 2020. The economy had opened across the country to varying degrees, and the news of coronavirus vaccines
was encouraging. In addition, the lower rated revenue sectors of the investment-grade space had recovered roughly half of the spread widening that occurred in the immediate aftermath of COVID-19. Believing there was
room for additional upside in this area, we maintained an overweight position in the Fund.
We would like to thank shareholders
for their continuing support and trust they have placed in us.
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 net asset value. 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.
| 6 | Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020 |
Manager Discussion of Fund Performance (continued)
The views expressed in this report
reflect the current views of the respective parties who have contributed to the report. 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 New York Intermediate 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 New York Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments
October 31, 2020
October 31, 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 New York Intermediate Municipal Bond Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
| Municipal Bonds (continued) | ||||
| Issue Description |
Coupon
Rate |
Principal
Amount ($) |
Value ($) | |
| Pool / Bond Bank 1.8% | ||||
| New York State Dormitory Authority | ||||
| Revenue Bonds | ||||
| School District Financing Program | ||||
| Series 2012B | ||||
| 10/01/2026 | 5.000% | 3,000,000 | 3,255,450 | |
| Unrefunded Revenue Bonds | ||||
| School Districts Bond Financing Program | ||||
| Series 2009 (AGM) | ||||
| 10/01/2022 | 5.000% | 180,000 | 180,612 | |
| New York State Environmental Facilities Corp. | ||||
| Refunding Revenue Bonds | ||||
| Subordinated Series 2019B | ||||
| 06/15/2029 | 5.000% | 500,000 | 670,210 | |
| Total | 4,106,272 | |||
| Ports 6.1% | ||||
| Port Authority of New York & New Jersey | ||||
| Refunding Revenue Bonds | ||||
| Consolidated 184th | ||||
| Series 2014 | ||||
| 09/01/2030 | 5.000% | 2,000,000 | 2,291,240 | |
| Consolidated 211th | ||||
| Series 2018 | ||||
| 09/01/2038 | 4.000% | 1,400,000 | 1,566,166 | |
| Series 2018-209 | ||||
| 07/15/2034 | 5.000% | 2,500,000 | 3,066,450 | |
| Series 2018-211 | ||||
| 09/01/2036 | 5.000% | 1,000,000 | 1,219,340 | |
| Port Authority of New York & New Jersey(b) | ||||
| Refunding Revenue Bonds | ||||
| Series 2015-188 | ||||
| 05/01/2023 | 5.000% | 1,055,000 | 1,169,446 | |
| Series 2018-207 | ||||
| 09/15/2024 | 5.000% | 1,985,000 | 2,303,037 | |
| Revenue Bonds | ||||
| Consolidated | ||||
| Series 2019 | ||||
| 09/01/2033 | 5.000% | 1,000,000 | 1,240,030 | |
| Consolidated Bonds | ||||
| Series 221 | ||||
| 07/15/2037 | 4.000% | 1,000,000 | 1,133,670 | |
| Total | 13,989,379 | |||
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 12 | Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
13 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 14 | Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
| Money Market Funds 1.7% | ||
| Shares | Value ($) | |
| Dreyfus AMT-Free Tax Exempt Cash Management Fund, Institutional Shares, 0.010%(f) | 250,188 | 250,163 |
| JPMorgan Institutional Tax Free Money Market Fund, Institutional Shares, 0.012%(f) | 3,665,675 | 3,665,675 |
|
Total Money Market Funds
(Cost $3,915,863) |
3,915,838 | |
|
Total Investments in Securities
(Cost: $219,150,140) |
229,835,964 | |
| Other Assets & Liabilities, Net | 1,307,759 | |
| Net Assets | 231,143,723 | |
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. At October 31, 2020, the total value of these securities amounted to $2,646,206, which represents 1.14% of total net assets. |
| (b) | Income from this security may be subject to alternative minimum tax. |
| (c) | Zero coupon bond. |
| (d) | 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 October 31, 2020, the total value of these securities amounted to $383,475, which represents 0.17% of total net assets. |
| (e) | Represents a security purchased on a when-issued basis. |
| (f) | The rate shown is the seven-day current annualized yield at October 31, 2020. |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
15 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 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 |
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 October 31, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Municipal Bonds | — | 225,920,126 | — | 225,920,126 |
| Money Market Funds | 3,915,838 | — | — | 3,915,838 |
| Total Investments in Securities | 3,915,838 | 225,920,126 | — | 229,835,964 |
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.
| 16 | Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Assets and Liabilities
October 31, 2020
October 31, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $219,150,140) | $229,835,964 |
| Receivable for: | |
| Capital shares sold | 166,958 |
| Interest | 2,871,906 |
| Expense reimbursement due from Investment Manager | 939 |
| Prepaid expenses | 1,115 |
| Trustees’ deferred compensation plan | 81,269 |
| Total assets | 232,958,151 |
| Liabilities | |
| Due to custodian | 4,629 |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 1,117,180 |
| Capital shares purchased | 120,314 |
| Distributions to shareholders | 447,010 |
| Management services fees | 2,968 |
| Distribution and/or service fees | 294 |
| Transfer agent fees | 23,981 |
| Compensation of chief compliance officer | 8 |
| Other expenses | 16,775 |
| Trustees’ deferred compensation plan | 81,269 |
| Total liabilities | 1,814,428 |
| Net assets applicable to outstanding capital stock | $231,143,723 |
| Represented by | |
| Paid in capital | 220,229,057 |
| Total distributable earnings (loss) | 10,914,666 |
| Total - representing net assets applicable to outstanding capital stock | $231,143,723 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
17 |
Statement of Assets and Liabilities (continued)
October 31, 2020
October 31, 2020
| Class A | |
| Net assets | $22,050,734 |
| Shares outstanding | 1,838,554 |
| Net asset value per share | $11.99 |
| 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) | $12.36 |
| Advisor Class | |
| Net assets | $4,154,511 |
| Shares outstanding | 346,906 |
| Net asset value per share | $11.98 |
| Class C | |
| Net assets | $6,319,378 |
| Shares outstanding | 526,790 |
| Net asset value per share | $12.00 |
| Institutional Class | |
| Net assets | $188,611,162 |
| Shares outstanding | 15,727,650 |
| Net asset value per share | $11.99 |
| Institutional 2 Class | |
| Net assets | $3,488,820 |
| Shares outstanding | 290,460 |
| Net asset value per share | $12.01 |
| Institutional 3 Class | |
| Net assets | $1,064,841 |
| Shares outstanding | 88,479 |
| Net asset value per share | $12.03 |
| Class V | |
| Net assets | $5,454,277 |
| Shares outstanding | 454,822 |
| Net asset value per share | $11.99 |
| Maximum sales charge | 4.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class V shares) | $12.59 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 18 | Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Operations
Year Ended October 31, 2020
Year Ended October 31, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $22,564 |
| Interest | 6,547,210 |
| Total income | 6,569,774 |
| Expenses: | |
| Management services fees | 1,082,482 |
| Distribution and/or service fees | |
| Class A | 51,162 |
| Class C | 84,455 |
| Class V | 8,343 |
| Transfer agent fees | |
| Class A | 26,310 |
| Advisor Class | 3,841 |
| Class C | 10,875 |
| Institutional Class | 242,292 |
| Institutional 2 Class | 2,155 |
| Institutional 3 Class | 155 |
| Class V | 7,154 |
| Compensation of board members | 16,502 |
| Custodian fees | 1,918 |
| Printing and postage fees | 15,106 |
| Registration fees | 18,879 |
| Audit fees | 29,500 |
| Legal fees | 5,771 |
| Compensation of chief compliance officer | 84 |
| Other | 13,008 |
| Total expenses | 1,619,992 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (333,253) |
| Fees waived by distributor | |
| Class C | (25,327) |
| Expense reduction | (120) |
| Total net expenses | 1,261,292 |
| Net investment income | 5,308,482 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 55,729 |
| Net realized gain | 55,729 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (1,689,731) |
| Net change in unrealized appreciation (depreciation) | (1,689,731) |
| Net realized and unrealized loss | (1,634,002) |
| Net increase in net assets resulting from operations | $3,674,480 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
19 |
Statement of Changes in Net Assets
|
Year Ended
October 31, 2020 |
Year Ended
October 31, 2019 |
|
| Operations | ||
| Net investment income | $5,308,482 | $5,756,899 |
| Net realized gain | 55,729 | 117,926 |
| Net change in unrealized appreciation (depreciation) | (1,689,731) | 10,719,015 |
| Net increase in net assets resulting from operations | 3,674,480 | 16,593,840 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (435,260) | (418,858) |
| Advisor Class | (70,536) | (22,102) |
| Class C | (142,386) | (230,180) |
| Institutional Class | (4,487,096) | (4,825,185) |
| Institutional 2 Class | (88,328) | (93,377) |
| Institutional 3 Class | (20,088) | (14,351) |
| Class V | (124,102) | (152,846) |
| Total distributions to shareholders | (5,367,796) | (5,756,899) |
| Increase in net assets from capital stock activity | 367,301 | 17,619,060 |
| Total increase (decrease) in net assets | (1,326,015) | 28,456,001 |
| Net assets at beginning of year | 232,469,738 | 204,013,737 |
| Net assets at end of year | $231,143,723 | $232,469,738 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 20 | Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| October 31, 2020 | October 31, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 525,042 | 6,273,123 | 600,175 | 7,077,877 |
| Distributions reinvested | 26,928 | 323,854 | 27,505 | 327,603 |
| Redemptions | (309,519) | (3,699,143) | (197,870) | (2,335,727) |
| Net increase | 242,451 | 2,897,834 | 429,810 | 5,069,753 |
| Advisor Class | ||||
| Subscriptions | 292,545 | 3,496,582 | 91,879 | 1,086,222 |
| Distributions reinvested | 5,861 | 70,298 | 1,834 | 21,832 |
| Redemptions | (53,864) | (635,846) | (56,450) | (655,886) |
| Net increase | 244,542 | 2,931,034 | 37,263 | 452,168 |
| Class C | ||||
| Subscriptions | 72,543 | 870,408 | 62,129 | 737,099 |
| Distributions reinvested | 8,174 | 98,319 | 13,647 | 161,897 |
| Redemptions | (381,829) | (4,589,929) | (337,572) | (4,001,905) |
| Net decrease | (301,112) | (3,621,202) | (261,796) | (3,102,909) |
| Institutional Class | ||||
| Subscriptions | 2,173,205 | 26,104,364 | 3,989,833 | 47,292,715 |
| Distributions reinvested | 58,372 | 701,951 | 63,656 | 756,979 |
| Redemptions | (2,382,265) | (28,436,761) | (2,979,678) | (34,907,978) |
| Net increase (decrease) | (150,688) | (1,630,446) | 1,073,811 | 13,141,716 |
| Institutional 2 Class | ||||
| Subscriptions | 31,024 | 371,719 | 228,297 | 2,672,431 |
| Distributions reinvested | 7,309 | 88,088 | 7,793 | 93,105 |
| Redemptions | (71,688) | (851,545) | (40,504) | (479,767) |
| Net increase (decrease) | (33,355) | (391,738) | 195,586 | 2,285,769 |
| Institutional 3 Class | ||||
| Subscriptions | 39,641 | 474,530 | 51,818 | 613,997 |
| Distributions reinvested | 1,280 | 15,453 | 760 | 9,099 |
| Redemptions | (8,399) | (103,615) | (13,121) | (157,447) |
| Net increase | 32,522 | 386,368 | 39,457 | 465,649 |
| Class V | ||||
| Subscriptions | 1,798 | 21,604 | 2,766 | 32,917 |
| Distributions reinvested | 6,300 | 75,767 | 7,786 | 92,550 |
| Redemptions | (25,150) | (301,920) | (68,927) | (818,553) |
| Net decrease | (17,052) | (204,549) | (58,375) | (693,086) |
| Total net increase | 17,308 | 367,301 | 1,455,756 | 17,619,060 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
21 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total
return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain
derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
|
Net asset value,
beginning of period |
Net
investment income |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class A | |||||||
| Year Ended 10/31/2020 | $12.07 | 0.25 | (0.07) | 0.18 | (0.26) | (0.00)(c) | (0.26) |
| Year Ended 10/31/2019 | $11.46 | 0.29 | 0.61 | 0.90 | (0.29) | — | (0.29) |
| Year Ended 10/31/2018 | $11.91 | 0.31 | (0.44) | (0.13) | (0.31) | (0.01) | (0.32) |
| Year Ended 10/31/2017 | $12.09 | 0.32 | (0.18) | 0.14 | (0.32) | (0.00)(c) | (0.32) |
| Year Ended 10/31/2016 | $12.11 | 0.34 | (0.02) | 0.32 | (0.34) | — | (0.34) |
| Advisor Class | |||||||
| Year Ended 10/31/2020 | $12.06 | 0.28 | (0.07) | 0.21 | (0.29) | (0.00)(c) | (0.29) |
| Year Ended 10/31/2019 | $11.45 | 0.32 | 0.61 | 0.93 | (0.32) | — | (0.32) |
| Year Ended 10/31/2018 | $11.90 | 0.34 | (0.44) | (0.10) | (0.34) | (0.01) | (0.35) |
| Year Ended 10/31/2017 | $12.08 | 0.35 | (0.18) | 0.17 | (0.35) | (0.00)(c) | (0.35) |
| Year Ended 10/31/2016 | $12.10 | 0.37 | (0.02) | 0.35 | (0.37) | — | (0.37) |
| Class C | |||||||
| Year Ended 10/31/2020 | $12.07 | 0.20 | (0.07) | 0.13 | (0.20) | (0.00)(c) | (0.20) |
| Year Ended 10/31/2019 | $11.46 | 0.24 | 0.61 | 0.85 | (0.24) | — | (0.24) |
| Year Ended 10/31/2018 | $11.91 | 0.26 | (0.44) | (0.18) | (0.26) | (0.01) | (0.27) |
| Year Ended 10/31/2017 | $12.09 | 0.27 | (0.18) | 0.09 | (0.27) | (0.00)(c) | (0.27) |
| Year Ended 10/31/2016 | $12.11 | 0.28 | (0.02) | 0.26 | (0.28) | — | (0.28) |
| Institutional Class | |||||||
| Year Ended 10/31/2020 | $12.07 | 0.28 | (0.07) | 0.21 | (0.29) | (0.00)(c) | (0.29) |
| Year Ended 10/31/2019 | $11.46 | 0.32 | 0.61 | 0.93 | (0.32) | — | (0.32) |
| Year Ended 10/31/2018 | $11.91 | 0.34 | (0.44) | (0.10) | (0.34) | (0.01) | (0.35) |
| Year Ended 10/31/2017 | $12.09 | 0.35 | (0.18) | 0.17 | (0.35) | (0.00)(c) | (0.35) |
| Year Ended 10/31/2016 | $12.11 | 0.37 | (0.02) | 0.35 | (0.37) | — | (0.37) |
| Institutional 2 Class | |||||||
| Year Ended 10/31/2020 | $12.09 | 0.29 | (0.08) | 0.21 | (0.29) | (0.00)(c) | (0.29) |
| Year Ended 10/31/2019 | $11.48 | 0.33 | 0.61 | 0.94 | (0.33) | — | (0.33) |
| Year Ended 10/31/2018 | $11.93 | 0.35 | (0.44) | (0.09) | (0.35) | (0.01) | (0.36) |
| Year Ended 10/31/2017 | $12.11 | 0.36 | (0.18) | 0.18 | (0.36) | (0.00)(c) | (0.36) |
| Year Ended 10/31/2016(f) | $12.23 | 0.25 | (0.12) | 0.13 | (0.25) | — | (0.25) |
| Institutional 3 Class | |||||||
| Year Ended 10/31/2020 | $12.12 | 0.29 | (0.08) | 0.21 | (0.30) | (0.00)(c) | (0.30) |
| Year Ended 10/31/2019 | $11.50 | 0.33 | 0.63 | 0.96 | (0.34) | — | (0.34) |
| Year Ended 10/31/2018 | $11.95 | 0.36 | (0.45) | (0.09) | (0.35) | (0.01) | (0.36) |
| Year Ended 10/31/2017(h) | $11.81 | 0.24 | 0.14(i) | 0.38 | (0.24) | — | (0.24) |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 22 | Columbia New York 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 10/31/2020 | $11.99 | 1.47% | 0.89% | 0.75%(d) | 2.10% | 7% | $22,051 |
| Year Ended 10/31/2019 | $12.07 | 7.96% | 0.90% | 0.75%(d) | 2.46% | 19% | $19,270 |
| Year Ended 10/31/2018 | $11.46 | (1.11%) | 0.89% | 0.75%(d) | 2.68% | 15% | $13,368 |
| Year Ended 10/31/2017 | $11.91 | 1.24% | 0.91%(e) | 0.74%(d),(e) | 2.70% | 9% | $15,639 |
| Year Ended 10/31/2016 | $12.09 | 2.63% | 0.95% | 0.75%(d) | 2.76% | 13% | $29,857 |
| Advisor Class | |||||||
| Year Ended 10/31/2020 | $11.98 | 1.72% | 0.65% | 0.50%(d) | 2.34% | 7% | $4,155 |
| Year Ended 10/31/2019 | $12.06 | 8.23% | 0.65% | 0.50%(d) | 2.71% | 19% | $1,234 |
| Year Ended 10/31/2018 | $11.45 | (0.87%) | 0.64% | 0.50%(d) | 2.91% | 15% | $745 |
| Year Ended 10/31/2017 | $11.90 | 1.49% | 0.66%(e) | 0.49%(d),(e) | 2.96% | 9% | $1,296 |
| Year Ended 10/31/2016 | $12.08 | 2.89% | 0.71% | 0.50%(d) | 3.00% | 13% | $1,611 |
| Class C | |||||||
| Year Ended 10/31/2020 | $12.00 | 1.09% | 1.64% | 1.20%(d) | 1.66% | 7% | $6,319 |
| Year Ended 10/31/2019 | $12.07 | 7.47% | 1.65% | 1.20%(d) | 2.05% | 19% | $9,996 |
| Year Ended 10/31/2018 | $11.46 | (1.56%) | 1.64% | 1.20%(d) | 2.23% | 15% | $12,491 |
| Year Ended 10/31/2017 | $11.91 | 0.78% | 1.66%(e) | 1.19%(d),(e) | 2.25% | 9% | $17,015 |
| Year Ended 10/31/2016 | $12.09 | 2.17% | 1.71% | 1.20%(d) | 2.31% | 13% | $24,011 |
| Institutional Class | |||||||
| Year Ended 10/31/2020 | $11.99 | 1.72% | 0.64% | 0.50%(d) | 2.36% | 7% | $188,611 |
| Year Ended 10/31/2019 | $12.07 | 8.23% | 0.65% | 0.50%(d) | 2.72% | 19% | $191,680 |
| Year Ended 10/31/2018 | $11.46 | (0.87%) | 0.64% | 0.50%(d) | 2.93% | 15% | $169,671 |
| Year Ended 10/31/2017 | $11.91 | 1.49% | 0.66%(e) | 0.49%(d),(e) | 2.95% | 9% | $197,180 |
| Year Ended 10/31/2016 | $12.09 | 2.89% | 0.71% | 0.50%(d) | 3.02% | 13% | $230,980 |
| Institutional 2 Class | |||||||
| Year Ended 10/31/2020 | $12.01 | 1.79% | 0.57% | 0.43% | 2.43% | 7% | $3,489 |
| Year Ended 10/31/2019 | $12.09 | 8.29% | 0.58% | 0.43% | 2.77% | 19% | $3,916 |
| Year Ended 10/31/2018 | $11.48 | (0.77%) | 0.58% | 0.44% | 3.03% | 15% | $1,472 |
| Year Ended 10/31/2017 | $11.93 | 1.56% | 0.58%(e) | 0.42%(e) | 3.02% | 9% | $215 |
| Year Ended 10/31/2016(f) | $12.11 | 1.08% | 0.58%(g) | 0.41%(g) | 3.19%(g) | 13% | $156 |
| Institutional 3 Class | |||||||
| Year Ended 10/31/2020 | $12.03 | 1.75% | 0.53% | 0.39% | 2.45% | 7% | $1,065 |
| Year Ended 10/31/2019 | $12.12 | 8.41% | 0.54% | 0.39% | 2.80% | 19% | $678 |
| Year Ended 10/31/2018 | $11.50 | (0.73%) | 0.54% | 0.38% | 3.05% | 15% | $190 |
| Year Ended 10/31/2017(h) | $11.95 | 3.24% | 0.52%(g) | 0.39%(g) | 3.06%(g) | 9% | $335 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
23 |
Financial Highlights (continued)
|
Net asset value,
beginning of period |
Net
investment income |
Net
realized and unrealized gain (loss) |
Total from
investment operations |
Distributions
from net investment income |
Distributions
from net realized gains |
Total
distributions to shareholders |
|
| Class V | |||||||
| Year Ended 10/31/2020 | $12.07 | 0.26 | (0.07) | 0.19 | (0.27) | (0.00)(c) | (0.27) |
| Year Ended 10/31/2019 | $11.46 | 0.31 | 0.61 | 0.92 | (0.31) | — | (0.31) |
| Year Ended 10/31/2018 | $11.91 | 0.33 | (0.45) | (0.12) | (0.32) | (0.01) | (0.33) |
| Year Ended 10/31/2017 | $12.09 | 0.33 | (0.17) | 0.16 | (0.34) | (0.00)(c) | (0.34) |
| Year Ended 10/31/2016 | $12.11 | 0.35 | (0.02) | 0.33 | (0.35) | — | (0.35) |
| 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) | Expenses have been reduced due to a reimbursement of expenses overbilled by a third party. If the reimbursement had been excluded, the expense ratios would have been higher by the percentages shown for each class in the table below. All fee waivers and expense reimbursements by the Investment Manager and its affiliates were applied before giving effect to this third party reimbursement. |
| Year Ended | Class A |
Advisor
Class |
Class C |
Institutional
Class |
Institutional 2
Class |
Class V |
| 10/31/2017 | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
| (f) | Institutional 2 Class shares commenced operations on March 1, 2016. Per share data and total return reflect activity from that date. |
| (g) | Annualized. |
| (h) | Institutional 3 Class shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (i) | 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. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 24 | Columbia New York 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 V | |||||||
| Year Ended 10/31/2020 | $11.99 | 1.57% | 0.79% | 0.65%(d) | 2.21% | 7% | $5,454 |
| Year Ended 10/31/2019 | $12.07 | 8.07% | 0.80% | 0.65%(d) | 2.59% | 19% | $5,696 |
| Year Ended 10/31/2018 | $11.46 | (1.01%) | 0.79% | 0.65%(d) | 2.78% | 15% | $6,077 |
| Year Ended 10/31/2017 | $11.91 | 1.33% | 0.81%(e) | 0.64%(d),(e) | 2.80% | 9% | $6,533 |
| Year Ended 10/31/2016 | $12.09 | 2.74% | 0.86% | 0.65%(d) | 2.87% | 13% | $7,022 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
25 |
Notes to Financial Statements
October 31, 2020
October 31, 2020
Note 1. Organization
Columbia New York Intermediate
Municipal Bond Fund (the Fund), a series of Columbia Funds Series Trust I (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 Massachusetts business 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 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. Class V shares are available only to investors who received (and who continuously held) Class V shares in connection with previous fund reorganizations.
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 market value, unless this method results in a valuation that management believes does not approximate fair value.
Investments in open-end investment
companies (other than exchange-traded funds (ETFs)), are valued at the latest net asset value reported by those companies as of the valuation time.
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.
| 26 | Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 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 New York Intermediate Municipal Bond Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 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 October 31, 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. These members of the Board of Trustees
may participate in a Deferred Compensation Plan (the Deferred Plan) which may be terminated at any time. Obligations of the Deferred Plan will be paid solely out of the Fund’s assets, and all amounts payable
under the Deferred Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as
sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class.
| 28 | Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
For the year ended October 31,
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 2 Class | 0.06 |
| Institutional 3 Class | 0.02 |
| Class V | 0.13 |
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 October 31, 2020, these minimum account balance fees reduced total expenses
of the Fund by $120.
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 service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A and Class C shares of the Fund. Also under the Plans, the Fund pays a monthly
distribution fee to the Distributor at the maximum annual rate of 0.75% of the average daily net assets attributable to Class C shares of the Fund.
Effective September 1, 2020, the
Distributor has contractually agreed to waive a portion of the distribution fee for Class C shares through February 28, 2022 so that the distribution fee does not exceed 0.45% annually of the average daily net assets
attributable to Class C shares. This arrangement may be modified or terminated at the sole discretion of the Board of Trustees. Prior to September 1, 2020, this was a voluntary arrangement.
Shareholder services fees
The Fund has adopted a shareholder
services plan that permits it to pay for certain services provided to Class V shareholders by their selling and/or servicing agents. The Fund may pay shareholder servicing fees up to an aggregate annual rate of 0.40%
of the Fund’s average daily net assets attributable to Class V shares (comprised of up to 0.20% for shareholder services and up to 0.20% for administrative support services). These fees are currently limited to
an aggregate annual rate of not more than 0.15% of the Fund’s average daily net assets attributable to Class V shares.
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 October 31, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 3.00 | 0.75(a) | 5,946 |
| Class C | — | 1.00(b) | — |
| Class V | 4.75 | 0.50 - 1.00(c) | 21 |
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
29 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
| (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. |
| (c) | This charge is imposed on certain investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with certain limited exceptions. |
The Fund’s other share
classes are not subject to sales charges.
Expenses waived/reimbursed by the
Investment Manager and its affiliates
The Investment Manager and certain
of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s
custodian, do not exceed the following annual rate(s) as a percentage of the class’ average daily net assets:
|
Fee rate(s) contractual
February 28, 2021 |
|
| Class A | 0.75% |
| Advisor Class | 0.50 |
| Class C | 1.50* |
| Institutional Class | 0.50 |
| Institutional 2 Class | 0.43 |
| Institutional 3 Class | 0.39 |
| Class V | 0.65 |
*Effective September 1, 2020, the
contractual expense reimbursement arrangement is in effect through February 28, 2022.
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. Class C distribution fees waived by the Distributor, as discussed above, are in addition to the waiver/reimbursement commitment under the agreement.
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 October 31, 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.
| 30 | Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended October 31, 2020 | Year Ended October 31, 2019 | ||||||
|
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 141 | 5,330,458 | 37,197 | 5,367,796 | 74 | 5,756,825 | — | 5,756,899 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At October 31, 2020, the components
of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed tax-
exempt income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| — | 703,304 | 53,817 | — | 10,685,824 |
At October 31, 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) ($) |
Net unrealized
appreciation ($) |
| 219,150,140 | 11,591,190 | (905,366) | 10,685,824 |
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 $21,755,315 and $15,810,313, respectively, for the year ended October 31, 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 October 31, 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., Wells Fargo Bank, 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. Pursuant to a December 1, 2020 amendment, the credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager or an
affiliated investment
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
31 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
manager, severally and not jointly, permits
collective borrowings up to $950 million. 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, 1.25%. 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. Prior to the December 1, 2020 amendment, 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. which
permitted collective borrowings up to 1 billion. Interest was 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%.
The Fund had no borrowings during
the year ended October 31, 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.
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.
| 32 | Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
The Fund performance may also be
significantly negatively impacted by the economic impact of the coronavirus disease 2019 (COVID-19) pandemic. The 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 objectives. Any such
event(s) could have a significant adverse impact on the value and risk profile of the Fund.
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting different communities at different times with varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including
the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to continue ordinary business operations and technology functions over near- or longer-term periods.
Municipal securities risk
Municipal securities are debt
obligations generally issued to obtain funds for various public purposes, including general financing for state and local governments, or financing for a specific project or public facility, and include obligations of
the governments of the U.S. territories, commonwealths and possessions such as Guam, Puerto Rico and the U.S. Virgin Islands to the extent such obligations are exempt from state and U.S. federal income taxes. The
value of municipal securities can be significantly affected by actual or expected political and legislative changes at the federal or state level. Municipal securities may be fully or partially backed by the taxing
authority of the local government, by the credit of a private issuer, by the current or anticipated revenues from a specific project or specific assets or by domestic or foreign entities providing credit support, such
as letters of credit, guarantees or insurance, and are generally classified into general obligation bonds and special revenue obligations. Because many municipal securities are issued to finance projects in sectors
such as education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal market.
Issuers in a state, territory,
commonwealth or possession in which the Fund invests may experience significant financial difficulties for various reasons, including as the result of events that cannot be reasonably anticipated or controlled such as
economic downturns or similar periods of economic stress, social conflict or unrest, labor disruption and other natural disasters. Such financial difficulties may lead to credit rating downgrades or defaults of such
issuers which in turn, could affect the market values and marketability of many or all municipal obligations of issuers in such state, territory, commonwealth or possession. The value of the Fund’s shares will
be negatively impacted to the extent it invests in such securities. The Fund’s annual and semiannual reports show the Fund’s investment exposures at a point in time. The risk of investing in the Fund is
directly correlated to the Fund’s investment exposures.
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
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
33 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
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.
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 October 31, 2020, one
unaffiliated shareholder of record owned 69.8% 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 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 or one or more of its affiliates that provides services to
the Funds.
| 34 | Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust I and Shareholders of Columbia New York 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 New York Intermediate Municipal Bond Fund (one of the funds constituting Columbia Funds Series Trust I, referred to hereafter as
the "Fund") as of October 31, 2020, the related statement of operations for the year ended October 31, 2020, the statement of changes in net assets for each of the two years in the period ended October 31, 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 October 31, 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
October 31, 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 October 31, 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
December 21, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
35 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended October 31, 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 |
| $58,515 | 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. The year set forth beneath Length of Service
in the table below is the year in which the Trustee was first appointed or elected as Trustee to any Fund currently in the Columbia Funds Complex or a predecessor thereof. Under current Board policy, members serve
terms of indefinite duration. The Board approved the nomination of and recommended the election of 17 nominees to the Board, effecting a consolidation of the Board and the board of trustees overseeing Columbia Funds
Series Trust, Columbia Funds Series Trust II and certain affiliated trusts. At a shareholder meeting held on December 22, 2020, shareholders approved the nominees, effective January 1, 2021.
Independent trustees
| 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 Fund Complex overseen | Other directorships held by Trustee during the past five years |
|
Janet Langford Carrig
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1957 |
Trustee
1996 |
Senior Vice President, General Counsel and Corporate Secretary, ConocoPhillips (independent energy company), September 2007-October 2018 | 66 | Director, EQT Corporation (natural gas producer); Director, Whiting Petroleum Corporation (independent oil and gas company) |
|
Douglas A. Hacker
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1955 |
Trustee and Chairman of the Board
1996 |
Independent business executive since May 2006; Executive Vice President — Strategy of United Airlines, December 2002-May 2006; President of UAL Loyalty Services (airline marketing company), September 2001-December 2002; Executive Vice President and Chief Financial Officer of United Airlines, July 1999-September 2001 | 66 | Director, Spartan Nash Company (food distributor); Director, Aircastle Limited (aircraft leasing); former Director, Nash Finch Company (food distributor), 2005-2013; former Director, SeaCube Container Leasing Ltd. (container leasing), 2010-2013; and former Director, Travelport Worldwide Limited (travel information technology), 2014-2019 |
| 36 | Columbia New York 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 the past five years and other relevant professional experience | Number of Funds in the Columbia Fund Complex overseen | Other directorships held by Trustee during the past five years |
|
Nancy T. Lukitsh
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1956 |
Trustee
2011 |
Senior Vice President, Partner and Director of Marketing, Wellington Management Company, LLP (investment adviser), 1997-2010; Chair, Wellington Management Portfolios (commingled non-U.S. investment pools), 2007-2010; Director, Wellington Trust Company, NA and other Wellington affiliates, 1997-2010 | 66 | None |
|
David M. Moffett
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Trustee
2011 |
Retired. Consultant to Bridgewater and Associates | 66 | Director, CSX Corporation (transportation suppliers); Director, Genworth Financial, Inc. (financial and insurance products and services); Director, PayPal Holdings Inc. (payment and data processing services); Trustee, University of Oklahoma Foundation; former Director, eBay Inc. (online trading community), 2007-2015; and former Director, CIT Bank, CIT Group Inc. (commercial and consumer finance), 2010-2016 |
|
John J. Neuhauser
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1943 |
Trustee
1984 |
President, Saint Michael’s College, August 2007-June 2018; Director or Trustee of several non-profit organizations, including University of Vermont Medical Center; Academic Vice President and Dean of Faculties, Boston College, August 1999-October 2005; University Professor, Boston College, November 2005-August 2007 | 66 | Director, Liberty All-Star Equity Fund and Liberty All-Star Growth Fund (closed-end funds) |
|
Patrick J. Simpson
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1944 |
Trustee
2000 |
Of Counsel, Perkins Coie LLP (law firm) since 2015; Partner, Perkins Coie LLP, 1988-2014 | 66 | Former Director, M Fund, Inc. (M Funds mutual fund family), July 2018-July 2019 |
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
37 |
TRUSTEES AND OFFICERS (continued)
Consultants to the Independent Trustees*
Consultants to the Independent Trustees*
| * | J. Kevin Connaughton was appointed consultant to the Independent Trustees effective March 1, 2016. Natalie A. Trunow was appointed consultant to the Independent Trustees effective September 1, 2016. Olive Darragh was appointed consultant to the Independent Trustees effective June 10, 2019. |
| 38 | Columbia New York 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 | 162 | 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 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 — Accounting and Tax, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009-December 2018 and December 2015-December 2018, 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 May 2010. |
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
39 |
TRUSTEES AND OFFICERS (continued)
Fund officers (continued)
Fund officers (continued)
|
Name,
address and year of birth |
Position and year
first appointed to position for any Fund in the Columbia Funds complex or a predecessor thereof |
Principal occupation(s) during past five years |
|
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); Chief Legal Officer, Columbia Acorn/Wanger Funds, since September 2020; 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. |
Board Consideration
and Approval of Management
Agreement
On June 17, 2020, the Board of
Trustees (the Board) and the Trustees who are not interested persons (as defined in the Investment Company Act of 1940) (the Independent Trustees) of Columbia Funds Series Trust I (the Trust) unanimously approved the
continuation of the Management Agreement (the Management Agreement) with Columbia Management Investment Advisers, LLC (the Investment Manager) with respect to Columbia New York Intermediate Municipal Bond Fund (the
Fund), a series of the Trust. As detailed below, the Board’s Advisory Fees and Expenses Committee (the Committee) and the Board met on multiple occasions to review and discuss, among themselves, with the
management team of the Investment Manager and with an independent fee consultant, materials provided by the Investment Manager, the independent fee consultant and others before determining to approve the continuation
of the Management Agreement.
In connection with their
deliberations regarding the continuation of the Management Agreement, the Committee and the Board evaluated materials requested from the Investment Manager regarding the Fund and the Management Agreement, and
discussed these materials with representatives of the Investment Manager at Committee meetings held on March 10, 2020, April 30, 2020 and June 17, 2020 and at Board meetings held on March 11, 2020 and June 17, 2020.
In addition, the Board and its various committees consider matters bearing on the Management Agreement at other meetings throughout the year and in prior years and meet regularly with senior management of the Trust
and the Investment Manager. Through the Board’s Investment Oversight Committees, Trustees also meet with selected portfolio managers of the funds the Trustees oversee and with other investment personnel at
various times throughout the year. The Committee and the Board also consulted with
| 40 | Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020 |
Board Consideration and Approval of
Management
Agreement (continued)
the independent fee consultant, Fund counsel and
the Independent Trustees’ independent legal counsel, who advised on various matters with respect to the Committee’s and the Board’s considerations and otherwise assisted the Committee and the Board
in their deliberations. On June 17, 2020, the Committee recommended that the Board approve the continuation of the Management Agreement. On June 17, 2020, the Board, including the Independent Trustees, voting
separately, unanimously approved the continuation of the Management Agreement for the Fund.
The Committee and the Board
considered all information that they, their legal counsel or the Investment Manager believed reasonably necessary to evaluate and to determine whether to recommend for approval or approve the continuation of the
Management Agreement. The information and factors considered by the Committee and the Board in recommending for approval or approving the continuation of the Management Agreement for the Fund included the
following:
| • | Information on the investment performance of the Fund relative to the performance of a group of mutual funds determined to be comparable to the Fund by an independent third-party data provider, as well as performance relative to benchmarks; |
| • | Information on the Fund’s management fees and total expenses, including information comparing the Fund’s expenses to those of a group of comparable mutual funds, as determined by the independent third-party data provider; |
| • | The Investment Manager’s agreement to contractually limit or cap total operating expenses for the Fund through February 28, 2021 so that total operating expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and infrequent and/or unusual expenses) would not exceed a specified annual rate, as a percentage of the Fund’s net assets; |
| • | The terms and conditions of the Management Agreement; |
| • | The current and proposed terms and conditions of other agreements and arrangements with affiliates of the Investment Manager relating to the operations of the Fund, including agreements with respect to the provision of distribution, transfer agency and shareholder services to the Fund; |
| • | Descriptions of various functions performed by the Investment Manager under the Management Agreement, including portfolio management and portfolio trading practices; |
| • | Information regarding any recently negotiated management fees of similarly-managed portfolios of other institutional clients of the Investment Manager; |
| • | Information regarding the reputation, regulatory history and resources of the Investment Manager, including information regarding senior management, portfolio managers and other personnel; |
| • | Information regarding the capabilities of the Investment Manager with respect to compliance monitoring services, including an assessment of the Investment Manager’s compliance system by the Fund’s Chief Compliance Officer; and |
| • | The profitability to the Investment Manager and its affiliates from their relationships with the Fund. |
Nature, extent and quality of
services provided under the Management Agreement
The Committee and the Board
considered the nature, extent and quality of services provided to the Fund by the Investment Manager and its affiliates under the Management Agreement and under separate agreements for the provision of transfer agency
and shareholder services, and the resources dedicated to the Fund and the other Columbia Funds by the Investment Manager and its affiliates. The Committee and the Board considered, among other things, the Investment
Manager’s ability to attract, motivate and retain highly qualified research, advisory and supervisory investment professionals (including compensation programs for personnel involved in fund management,
reputation and other attributes), the portfolio management services provided by those investment professionals, and the quality of the Investment Manager’s investment research capabilities and trade execution
services. The Committee and the Board also considered the potential benefits to shareholders of investing in a mutual fund that is part of a fund complex offering exposure to a variety of asset classes and investment
disciplines and providing a variety of fund and shareholder services.
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
41 |
Board Consideration and Approval of
Management
Agreement (continued)
The Committee and the Board also considered the
professional experience and qualifications of the senior personnel of the Investment Manager, which included consideration of the Investment Manager’s experience with funds using an investment strategy similar
to that used by the Investment Manager for the Fund. The Committee and the Board noted the compliance programs of and the compliance-related resources provided to the Fund by the Investment Manager and its affiliates
and the resources dedicated by the Investment Manager and its affiliates to risk management, and considered the Investment Manager’s ability to provide administrative services to the Fund and coordinate the
activities of the Fund’s other service providers. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the nature, extent and
quality of the services provided to the Fund under the Management Agreement supported the continuation of the Management Agreement.
Investment performance
The Committee and the Board
reviewed information about the performance of the Fund over various time periods, including performance information relative to benchmarks, information that compared the performance of the Fund to the performance of a
group of comparable mutual funds as determined by the independent third-party data provider, and information and analysis provided by the independent fee consultant. The Committee and the Board also reviewed a
description of the third party’s methodology for identifying the Fund’s peer groups for purposes of performance and expense comparisons.
The Committee and the Board noted
that, through December 31, 2019, the Fund’s performance was in the thirty-seventh, twenty-eighth and twenty-eighth percentile (where the best performance would be in the first percentile) of its category
selected by the independent third-party data provider for the purposes of performance comparisons for the one-, three- and five-year periods, respectively.
The Committee and the Board also
considered the Investment Manager’s performance and reputation generally, the Investment Manager’s historical responsiveness to Board concerns about performance, and the Investment Manager’s
willingness to take steps intended to improve performance. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the performance of the
Fund and the Investment Manager was sufficient, in light of other considerations, to support the continuation of the Management Agreement.
Investment management fee rates
and other expenses
The Committee and the Board
considered the management fees charged to the Fund under the Management Agreement as well as the total expenses incurred by the Fund. In assessing the reasonableness of the fees under the Management Agreement, the
Committee and the Board considered, among other information, the Fund’s total expense ratio as a percentage of average daily net assets. The Committee and the Board considered data provided by the independent
third-party data provider and the independent fee consultant. The Committee and the Board noted that, as of December 31, 2019, the Fund’s actual management fee and net total expense ratio were ranked in the
second and third quintiles, respectively, (where the lowest fees and expenses would be in the first quintile) against the Fund’s expense universe as determined by the independent third-party data provider for
purposes of expense comparison. The Committee and the Board also took into account the fee waiver and expense limitation arrangements agreed to by the Investment Manager, as noted above.
The Committee and the Board also
received and considered information about the management fees charged by the Investment Manager to institutional accounts. In considering the fees charged to those accounts, the Committee and the Board took into
account, among other things, the Investment Manager’s representations about the differences between managing mutual funds as compared to other types of accounts, including differences in the services provided,
differences in the risk profile of such business for the Investment Manager and the additional resources required to manage mutual funds effectively. The Committee and the Board also received and considered
information about the fees charged by the Investment Manager for sub-advisory services it provides to comparable unaffiliated funds. In evaluating the Fund’s management fees, the Committee and the Board also
took into account the demands, complexity and quality of the investment management of the Fund.
After reviewing these and related
factors, the Committee and the Board concluded, within the context of their overall conclusions, that the management fee rates and expenses of the Fund, in light of other considerations, supported the continuation of
the Management Agreement.
| 42 | Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020 |
Board Consideration and Approval of
Management
Agreement (continued)
Costs of services provided and profitability
The Committee and the Board also
took note of the costs the Investment Manager and its affiliates incur in connection with the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the
Fund, and the efforts undertaken by the Investment Manager and its affiliates to manage efficiently their costs to provide such services.
The Committee and the Board also
considered the compensation directly or indirectly received by the Investment Manager’s affiliates in connection with their relationships with the Fund. The Committee and the Board reviewed information provided
by management as to the profitability to the Investment Manager and its affiliates of their relationships with the Fund, information about the allocation of expenses used to calculate profitability, and comparisons of
profitability levels realized in 2019 to profitability levels realized in 2018. When reviewing profitability, the Committee and the Board also considered court cases in which adviser profitability was an issue in
whole or in part, the performance of similarly managed funds, the performance of the Fund, and the expense ratio of the Fund. In addition, the Committee and the Board considered information provided by the Investment
Manager regarding the Investment Manager’s financial condition and comparing its profitability to that of other asset management firms that are, or are subsidiaries of, publicly traded companies. In this regard,
the Committee and the Board also considered data provided by the independent fee consultant.
After reviewing these and related
factors, the Committee and the Board concluded, within the context of their overall conclusions, that the costs of services provided and the profitability to the Investment Manager and its affiliates from their
relationships with the Fund supported the continuation of the Management Agreement.
Economies of scale
The Committee and the Board
considered the potential existence of economies of scale in the provision by the Investment Manager of services to the Fund, to groups of related funds, and to the Investment Manager’s investment advisory
clients as a whole, and whether those economies of scale were shared with the Fund through breakpoints in investment management fees or other means, such as expense limitation arrangements and additional investments
by the Investment Manager in investment, trading, compliance and other resources. The Committee and the Board noted that the management fee schedules for the Fund contained breakpoints that would reduce the fee rate
on assets above specified threshold levels.
In considering these matters, the
Committee and the Board also considered the costs of the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund, as noted above. After reviewing
these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the extent to which any economies of scale were expected to be shared with the Fund supported the
continuation of the Management Agreement.
Other benefits to the Investment
Manager
The Committee and the Board
received and considered information regarding “fall-out” or ancillary benefits received by the Investment Manager and its affiliates as a result of their relationships with the Fund, such as the engagement
of the Investment Manager’s affiliates to provide distribution, transfer agency and shareholder services to the Fund. In this regard, among other matters, the Committee and the Board considered that the
Fund’s distributor retains a portion of the distribution fees from the Fund and receives a portion of the sales charges on sales or redemptions of certain classes of shares of the Fund. The Committee and the
Board also considered the benefits of research made available to the Investment Manager by reason of brokerage commissions generated by the Fund’s securities transactions, and reviewed information about the
Investment Manager’s practices with respect to considering brokerage and research services when allocating portfolio transactions. In this connection, the Board also noted that the amount of research made
available to the Investment Manager by reason of brokerage commissions had been declining over time, and may decline further. The Committee and the Board recognized that the Investment Manager’s profitability
would be somewhat lower without these benefits.
Conclusion
The Committee and the Board
reviewed all of the above considerations in reaching their decisions to recommend or approve the continuation of the Management Agreement. In their deliberations, the Trustees did not identify any particular
information that was all-important or controlling, and individual Trustees may have attributed different weights to the various factors.
|
Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020
|
43 |
Board Consideration and Approval of
Management
Agreement (continued)
Based on their evaluation of all factors that they
deemed to be material, including those factors described above, and assisted by the advice of independent legal counsel, the Board, including the Independent Trustees, voting separately, unanimously approved the
continuation of the Management Agreement.
| 44 | Columbia New York Intermediate Municipal Bond Fund | Annual Report 2020 |
Columbia New York 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/
ANN204_10_K01_(12/20)
Annual Report
October 31, 2020
October 31, 2020
Columbia
Connecticut 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
shareholder 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 Connecticut 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. The Fund’s 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-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 Connecticut Intermediate Municipal Bond
Fund | Annual Report 2020
Fund at a Glance
Investment objective
The Fund
seeks as high a level of current interest income exempt from federal income tax and, to the extent possible, from Connecticut individual income tax, as is consistent with relative stability 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. Returns for Class V shares are
shown with and without the maximum initial sales charge of 4.75%. 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 Connecticut Intermediate Municipal Bond Fund | Annual Report 2020
|
3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (October 31, 2010 — October 31, 2020)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Connecticut 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 October 31, 2020) | |
| AAA rating | 13.9 |
| AA rating | 33.6 |
| A rating | 45.9 |
| BBB rating | 4.5 |
| BB rating | 2.1 |
| 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. If a security is
Not rated but has a rating by Kroll and/or DBRS, the same methodology is applied to those bonds that would otherwise be Not rated. 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 Connecticut Intermediate Municipal Bond Fund | Annual Report 2020 |
Manager Discussion of Fund Performance
For the 12-month period that
ended October 31, 2020, the Fund’s Class A shares returned 2.87% excluding sales charges. The Fund’s Institutional Class shares returned 3.03% for the same time period. By comparison, the Fund’s
benchmark, the Bloomberg Barclays 3-15 Year Blend Municipal Bond Index, which is national in scope, returned 3.84%.
Market overview
Despite significant volatility in
the first calendar quarter of 2020, the U.S. municipal bond market produced positive returns during the 12-month period. Municipals benefited from a relatively benign environment in the first three months of the
reporting period. During this time, the U.S. economy continued its expansion and municipal yields marched toward new lows (as prices increased). These favorable conditions quickly deteriorated in the first quarter of
2020 once the COVID-19 pandemic hit the United States. Municipal bonds experienced several record down days in mid-March as investors withdrew cash from municipal funds amid concerns about the financial impact of the
COVID-19 pandemic on state and local governments. Investor worries about the prospects for bonds backed by economically sensitive revenues, such as sales taxes, hotels and air travel, further contributed to the
withdrawals from municipal funds. Managers raised cash to meet the redemptions, exacerbating the market’s decline.
The downturn abated in late March,
and the tax-exempt market embarked on an impressive rally that included several days of record price gains. Investors were encouraged by the U.S. Federal Reserve’s (Fed’s) decision to cut interest rates to
zero and initiate a number of liquidity programs aimed at propping up financial assets. Congress also provided fiscal support with a stimulus package amounting to over $2 trillion. After pausing in April, the
market’s advance resumed in May as the Fed clarified potential support for municipal issuers and cash began to flow back into the market. So much cash came into municipal funds, in fact, that year-to-date
inflows had returned to positive territory by the third week of July. Although tax receipts and other municipal revenue sources continued to slide in the COVID-19-related economic downturn, the market remained
backstopped by both Fed policy and hopes for additional fiscal stimulus.
The rally started to lose steam in
early August due to a resurgence of COVID-19 cases, waning hope for further federal support for state and local governments before the U.S. Presidential election, and subsiding inflows. Still, the benchmark closed the
annual period with a healthy gain.
Connecticut intermediate-term
municipal bonds comfortably outpaced the national intermediate market. A mixture of strong performance in short-term general obligations bonds, coupled with a lower relative weightings in transportation issues and
special tax bonds (such as convention centers and hotel-supported debt), were the primary factors in the outperformance. Still, Connecticut wasn’t immune to issuer challenges as some of its education issuers,
such as the University of Connecticut, dealt with credit stress during the period.
Since Connecticut was part of the
early wave of the COVID-19 pandemic, the impact on its revenues had the potential to be severe. However, federal intervention by way of the CARES Act, which included both direct support for COVID-19-related expenses
and general economic activity, helped Connecticut avoid the worst-case scenario. In addition, the federal aid package allowed the state to make deposits to its rainy-day fund, bringing the fund to about $3 billion.
The state continued to face revenue pressure, however, which we believe may require a draw on reserves to cover shortfalls. We believe that the magnitude of reserve draws will rely in part on whether there is
additional federal fiscal support.
The Fund’s leading
detractors during the period included:
| • | The Fund’s cash weighting. |
| • | Holdings in bonds with maturities of two years and less. |
| • | A short duration profile when yields were falling early in the period (duration is a measure of interest-rate sensitivity). |
| • | Positions in non-investment grade and non-rated bonds at a time in which higher rated issues outperformed. |
| • | The portfolio’s overweight in A and AA rated issues weighed on results compared to the national benchmark. |
| • | An overweight in the housing sector. |
| • | Security selection in a few AA issues, including Waterbury general obligations and Hartford County Water bonds, and in education, where University of New Haven debt lagged. |
|
Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020
|
5 |
Manager Discussion of Fund Performance (continued)
The Fund’s leading
contributors during the period included:
| • | The Fund’s move to a longer duration mid-way through the period, which benefited performance given that prevailing yields declined sharply in this time. |
| • | An underweight in BBB rated securities further aided results. |
| • | The portfolio’s zero weighting in the transportation sector. |
| • | Security selection in certain housing and special tax issues. |
Fund positioning
We increased the Fund’s
duration on the expectation that the Fed would maintain its “lower for longer” interest-rate policy. In addition, we sought opportunities in bonds with maturities of five to six years and above. As a
result, the Fund closed the period with both a higher duration and longer average maturity than it had at the end of October 2019.
We sought to add yield in
high-quality sectors such as housing, while also leveraging our credit research to capitalize on opportunities in the lower rated tiers of the investment-grade space. We spread the Fund’s buying activity across
multiple sectors, including healthcare, education, state and local general obligations, special tax, and water & sewer. The Fund’s sales generally focused on pre-refunded and/or short-maturity bonds, and we
redeployed the proceeds into municipal securities with longer maturities with higher yields and what we believed to be better total return prospects. After the COVID-19 pandemic became the primary factor in market
performance, we actively sold positions from the Fund that we viewed as having the highest vulnerability to the virus and its impact on the economy. Among these were holdings in the continuing care retirement
communities, multi-family housing debt and local general obligation sectors. The Fund’s overall credit quality remained largely unchanged over the fiscal year as a result of these moves.
At the end of the period, we
believe that the market environment was much improved compared to the conditions that were in place in the spring of 2020. The economy had opened across the country to varying degrees, and the news of COVID-19
vaccines was encouraging. In addition, the lower rated revenue sectors of the investment-grade space had recovered roughly half of the spread widening that occurred in the immediate aftermath of the COVID-19 pandemic.
Believing there was room for additional upside in this area, we maintained an overweight position in the Fund.
We would like to thank shareholders
for their continuing support and trust they have placed in us.
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 who have contributed to the report. 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 Connecticut 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 Connecticut Intermediate Municipal Bond Fund | Annual Report 2020
|
7 |
Portfolio of Investments
October 31, 2020
October 31, 2020
(Percentages represent value of
investments compared to net assets)
Investments in securities
| Municipal Bonds 95.6% | ||||
| Issue Description |
Coupon
Rate |
Principal
Amount ($) |
Value ($) | |
| Higher Education 8.5% | ||||
| Connecticut State Health & Educational Facilities Authority | ||||
| Refunding Revenue Bonds | ||||
| Fairfield University | ||||
| Series 2017R | ||||
| 07/01/2034 | 4.000% | 1,000,000 | 1,111,600 | |
| Quinnipiac University | ||||
| Series 2016M | ||||
| 07/01/2029 | 5.000% | 1,000,000 | 1,185,530 | |
| Sacred Heart University Issue | ||||
| Series 2017 | ||||
| 07/01/2033 | 5.000% | 300,000 | 356,958 | |
| Trinity College | ||||
| Series 2020R | ||||
| 06/01/2032 | 5.000% | 265,000 | 338,341 | |
| University of New Haven | ||||
| Series 2018 | ||||
| 07/01/2033 | 5.000% | 500,000 | 538,270 | |
| 07/01/2034 | 5.000% | 500,000 | 536,440 | |
| Revenue Bonds | ||||
| Sacred Heart University | ||||
| Series 2020K | ||||
| 07/01/2035 | 5.000% | 475,000 | 595,436 | |
| 07/01/2036 | 5.000% | 150,000 | 187,055 | |
| Trinity College | ||||
| Series 1998F (NPFGC) | ||||
| 07/01/2021 | 5.500% | 95,000 | 98,183 | |
| University of Connecticut | ||||
| Revenue Bonds | ||||
| Series 2018A | ||||
| 11/15/2035 | 5.000% | 2,700,000 | 3,332,394 | |
| Total | 8,280,207 | |||
| Hospital 11.9% | ||||
| Connecticut State Health & Educational Facilities Authority | ||||
| Refunding Revenue Bonds | ||||
| Nuvance Health Issue | ||||
| Series 2019A | ||||
| 07/01/2033 | 5.000% | 400,000 | 477,888 | |
| Revenue Bonds | ||||
| Bridgeport Hospital | ||||
| Series 2012D | ||||
| 07/01/2022 | 5.000% | 1,000,000 | 1,071,230 | |
| Hartford Healthcare | ||||
| Series 2014E | ||||
| 07/01/2034 | 5.000% | 2,360,000 | 2,655,826 | |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 8 | Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
|
Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020
|
9 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
| Municipal Bonds (continued) | ||||
| Issue Description |
Coupon
Rate |
Principal
Amount ($) |
Value ($) | |
| 32nd Series 2016B | ||||
| 08/01/2035 | 4.000% | 1,000,000 | 1,114,170 | |
| Total | 6,704,447 | |||
|
Total Municipal Bonds
(Cost $87,278,405) |
93,012,241 | |||
| Money Market Funds 3.5% | ||
| Shares | Value ($) | |
| Dreyfus AMT-Free Tax Exempt Cash Management Fund, Institutional Shares, 0.010%(d) | 229,709 | 229,686 |
| JPMorgan Institutional Tax Free Money Market Fund, Institutional Shares, 0.012%(d) | 3,234,582 | 3,234,582 |
|
Total Money Market Funds
(Cost $3,464,291) |
3,464,268 | |
|
Total Investments in Securities
(Cost: $90,742,696) |
96,476,509 | |
| Other Assets & Liabilities, Net | 838,589 | |
| Net Assets | 97,315,098 | |
Notes to Portfolio of
Investments
| (a) | 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 October 31, 2020, the total value of these securities amounted to $966,788, which represents 0.99% of total net assets. |
| (b) | 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. At October 31, 2020, the total value of these securities amounted to $1,991,250, which represents 2.05% of total net assets. |
| (c) | Income from this security may be subject to alternative minimum tax. |
| (d) | The rate shown is the seven-day current annualized yield at October 31, 2020. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| AMBAC | Ambac Assurance Corporation |
| BAM | Build America Mutual Assurance Co. |
| 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). |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020
|
11 |
Portfolio of Investments (continued)
October 31, 2020
October 31, 2020
Fair value measurements (continued)
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
Under the direction of the
Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of
voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly
to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of
Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third
party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale
pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to
discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members
of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of
the inputs used to value the Fund’s investments at October 31, 2020:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Municipal Bonds | — | 93,012,241 | — | 93,012,241 |
| Money Market Funds | 3,464,268 | — | — | 3,464,268 |
| Total Investments in Securities | 3,464,268 | 93,012,241 | — | 96,476,509 |
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.
| 12 | Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Assets and Liabilities
October 31, 2020
October 31, 2020
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $90,742,696) | $96,476,509 |
| Receivable for: | |
| Capital shares sold | 48,460 |
| Interest | 1,036,758 |
| Expense reimbursement due from Investment Manager | 288 |
| Prepaid expenses | 476 |
| Trustees’ deferred compensation plan | 75,743 |
| Total assets | 97,638,234 |
| Liabilities | |
| Due to custodian | 1,392 |
| Payable for: | |
| Capital shares purchased | 30,948 |
| Distributions to shareholders | 189,340 |
| Management services fees | 1,250 |
| Distribution and/or service fees | 122 |
| Transfer agent fees | 9,043 |
| Compensation of chief compliance officer | 4 |
| Other expenses | 15,294 |
| Trustees’ deferred compensation plan | 75,743 |
| Total liabilities | 323,136 |
| Net assets applicable to outstanding capital stock | $97,315,098 |
| Represented by | |
| Paid in capital | 91,561,801 |
| Total distributable earnings (loss) | 5,753,297 |
| Total - representing net assets applicable to outstanding capital stock | $97,315,098 |
| Class A | |
| Net assets | $7,863,587 |
| Shares outstanding | 732,440 |
| Net asset value per share | $10.74 |
| 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) | $11.07 |
| Advisor Class | |
| Net assets | $1,000,080 |
| Shares outstanding | 93,271 |
| Net asset value per share | $10.72 |
| Class C | |
| Net assets | $1,647,438 |
| Shares outstanding | 153,454 |
| Net asset value per share | $10.74 |
| Institutional Class | |
| Net assets | $77,664,457 |
| Shares outstanding | 7,236,920 |
| Net asset value per share | $10.73 |
| Institutional 3 Class | |
| Net assets | $161,035 |
| Shares outstanding | 14,967 |
| Net asset value per share | $10.76 |
| Class V | |
| Net assets | $8,978,501 |
| Shares outstanding | 837,525 |
| Net asset value per share | $10.72 |
| Maximum sales charge | 4.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class V shares) | $11.25 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020
|
13 |
Statement of Operations
Year Ended October 31, 2020
Year Ended October 31, 2020
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $18,426 |
| Interest | 3,025,413 |
| Total income | 3,043,839 |
| Expenses: | |
| Management services fees | 465,339 |
| Distribution and/or service fees | |
| Class A | 19,475 |
| Class C | 18,212 |
| Class V | 13,693 |
| Transfer agent fees | |
| Class A | 9,554 |
| Advisor Class | 1,128 |
| Class C | 2,236 |
| Institutional Class | 97,147 |
| Institutional 3 Class | 27 |
| Class V | 11,197 |
| Compensation of board members | 14,554 |
| Custodian fees | 1,111 |
| Printing and postage fees | 12,720 |
| Registration fees | 11,418 |
| Audit fees | 29,500 |
| Legal fees | 2,484 |
| Compensation of chief compliance officer | 36 |
| Other | 11,113 |
| Total expenses | 720,944 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (123,053) |
| Fees waived by distributor | |
| Class C | (5,462) |
| Expense reduction | (40) |
| Total net expenses | 592,389 |
| Net investment income | 2,451,450 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 154,608 |
| Net realized gain | 154,608 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | 186,331 |
| Net change in unrealized appreciation (depreciation) | 186,331 |
| Net realized and unrealized gain | 340,939 |
| Net increase in net assets resulting from operations | $2,792,389 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 14 | Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020 |
Statement of Changes in Net Assets
|
Year Ended
October 31, 2020 |
Year Ended
October 31, 2019 |
|
| Operations | ||
| Net investment income | $2,451,450 | $2,673,118 |
| Net realized gain | 154,608 | 76,184 |
| Net change in unrealized appreciation (depreciation) | 186,331 | 4,720,534 |
| Net increase in net assets resulting from operations | 2,792,389 | 7,469,836 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (177,500) | (206,881) |
| Advisor Class | (23,246) | (18,856) |
| Class C | (33,323) | (47,272) |
| Institutional Class | (2,005,380) | (2,213,310) |
| Institutional 3 Class | (3,567) | (301) |
| Class V | (217,200) | (261,499) |
| Total distributions to shareholders | (2,460,216) | (2,748,119) |
| Decrease in net assets from capital stock activity | (4,306,391) | (3,359,046) |
| Total increase (decrease) in net assets | (3,974,218) | 1,362,671 |
| Net assets at beginning of year | 101,289,316 | 99,926,645 |
| Net assets at end of year | $97,315,098 | $101,289,316 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020
|
15 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| October 31, 2020 | October 31, 2019 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 65,115 | 698,673 | 127,282 | 1,321,971 |
| Distributions reinvested | 11,294 | 120,957 | 13,152 | 138,360 |
| Redemptions | (84,339) | (903,163) | (85,664) | (904,494) |
| Net increase (decrease) | (7,930) | (83,533) | 54,770 | 555,837 |
| Advisor Class | ||||
| Subscriptions | 24,968 | 267,640 | 41,052 | 425,066 |
| Distributions reinvested | 2,151 | 22,997 | 1,765 | 18,573 |
| Redemptions | (8,877) | (94,189) | (2,993) | (30,939) |
| Net increase | 18,242 | 196,448 | 39,824 | 412,700 |
| Class C | ||||
| Subscriptions | 17,515 | 188,235 | 35,619 | 380,579 |
| Distributions reinvested | 2,862 | 30,640 | 4,150 | 43,569 |
| Redemptions | (57,674) | (615,595) | (76,601) | (807,446) |
| Net decrease | (37,297) | (396,720) | (36,832) | (383,298) |
| Institutional Class | ||||
| Subscriptions | 1,056,843 | 11,276,540 | 1,783,284 | 18,733,992 |
| Distributions reinvested | 20,955 | 224,322 | 19,969 | 210,214 |
| Redemptions | (1,459,769) | (15,440,660) | (2,139,366) | (22,105,242) |
| Net decrease | (381,971) | (3,939,798) | (336,113) | (3,161,036) |
| Institutional 3 Class | ||||
| Subscriptions | 14,019 | 150,000 | — | — |
| Distributions reinvested | 307 | 3,299 | — | — |
| Redemptions | (307) | (3,299) | — | — |
| Net increase | 14,019 | 150,000 | — | — |
| Class V | ||||
| Subscriptions | 2,120 | 22,671 | 3,350 | 35,102 |
| Distributions reinvested | 11,682 | 124,933 | 13,915 | 146,102 |
| Redemptions | (35,583) | (380,392) | (91,918) | (964,453) |
| Net decrease | (21,781) | (232,788) | (74,653) | (783,249) |
| Total net decrease | (416,718) | (4,306,391) | (353,004) | (3,359,046) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 16 | Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020 |
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|
Columbia Connecticut 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 10/31/2020 | $10.68 | 0.24 | 0.06 | 0.30 | (0.24) | — | (0.24) |
| Year Ended 10/31/2019 | $10.16 | 0.27 | 0.53 | 0.80 | (0.28) | — | (0.28) |
| Year Ended 10/31/2018 | $10.56 | 0.27 | (0.37) | (0.10) | (0.28) | (0.02) | (0.30) |
| Year Ended 10/31/2017 | $10.86 | 0.29 | (0.26) | 0.03 | (0.29) | (0.04) | (0.33) |
| Year Ended 10/31/2016 | $10.91 | 0.29 | (0.03) | 0.26 | (0.29) | (0.02) | (0.31) |
| Advisor Class | |||||||
| Year Ended 10/31/2020 | $10.67 | 0.27 | 0.05 | 0.32 | (0.27) | — | (0.27) |
| Year Ended 10/31/2019 | $10.15 | 0.30 | 0.53 | 0.83 | (0.31) | — | (0.31) |
| Year Ended 10/31/2018 | $10.54 | 0.30 | (0.37) | (0.07) | (0.30) | (0.02) | (0.32) |
| Year Ended 10/31/2017 | $10.84 | 0.31 | (0.26) | 0.05 | (0.31) | (0.04) | (0.35) |
| Year Ended 10/31/2016 | $10.90 | 0.32 | (0.04) | 0.28 | (0.32) | (0.02) | (0.34) |
| Class C | |||||||
| Year Ended 10/31/2020 | $10.68 | 0.19 | 0.06 | 0.25 | (0.19) | — | (0.19) |
| Year Ended 10/31/2019 | $10.16 | 0.23 | 0.52 | 0.75 | (0.23) | — | (0.23) |
| Year Ended 10/31/2018 | $10.55 | 0.23 | (0.37) | (0.14) | (0.23) | (0.02) | (0.25) |
| Year Ended 10/31/2017 | $10.86 | 0.24 | (0.27) | (0.03) | (0.24) | (0.04) | (0.28) |
| Year Ended 10/31/2016 | $10.91 | 0.24 | (0.03) | 0.21 | (0.24) | (0.02) | (0.26) |
| Institutional Class | |||||||
| Year Ended 10/31/2020 | $10.68 | 0.27 | 0.05 | 0.32 | (0.27) | — | (0.27) |
| Year Ended 10/31/2019 | $10.16 | 0.30 | 0.53 | 0.83 | (0.31) | — | (0.31) |
| Year Ended 10/31/2018 | $10.55 | 0.30 | (0.37) | (0.07) | (0.30) | (0.02) | (0.32) |
| Year Ended 10/31/2017 | $10.86 | 0.31 | (0.27) | 0.04 | (0.31) | (0.04) | (0.35) |
| Year Ended 10/31/2016 | $10.91 | 0.32 | (0.03) | 0.29 | (0.32) | (0.02) | (0.34) |
| Institutional 3 Class | |||||||
| Year Ended 10/31/2020 | $10.70 | 0.28 | 0.06 | 0.34 | (0.28) | — | (0.28) |
| Year Ended 10/31/2019 | $10.18 | 0.31 | 0.53 | 0.84 | (0.32) | — | (0.32) |
| Year Ended 10/31/2018 | $10.58 | 0.31 | (0.37) | (0.06) | (0.32) | (0.02) | (0.34) |
| Year Ended 10/31/2017(e) | $10.55 | 0.21 | 0.03(f) | 0.24 | (0.21) | — | (0.21) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 18 | Columbia Connecticut 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 10/31/2020 | $10.74 | 2.87% | 0.93% | 0.80%(c) | 2.27% | 17% | $7,864 |
| Year Ended 10/31/2019 | $10.68 | 7.95% | 0.93% | 0.80%(c) | 2.59% | 12% | $7,910 |
| Year Ended 10/31/2018 | $10.16 | (0.97%) | 0.92% | 0.81%(c) | 2.63% | 13% | $6,967 |
| Year Ended 10/31/2017 | $10.56 | 0.28% | 0.93%(d) | 0.77%(c),(d) | 2.71% | 6% | $6,424 |
| Year Ended 10/31/2016 | $10.86 | 2.40% | 0.98% | 0.81%(c) | 2.64% | 12% | $10,952 |
| Advisor Class | |||||||
| Year Ended 10/31/2020 | $10.72 | 3.03% | 0.68% | 0.55%(c) | 2.52% | 17% | $1,000 |
| Year Ended 10/31/2019 | $10.67 | 8.23% | 0.68% | 0.55%(c) | 2.84% | 12% | $801 |
| Year Ended 10/31/2018 | $10.15 | (0.63%) | 0.67% | 0.56%(c) | 2.89% | 13% | $357 |
| Year Ended 10/31/2017 | $10.54 | 0.54% | 0.66%(d) | 0.51%(c),(d) | 2.96% | 6% | $511 |
| Year Ended 10/31/2016 | $10.84 | 2.56% | 0.73% | 0.56%(c) | 2.89% | 12% | $1,376 |
| Class C | |||||||
| Year Ended 10/31/2020 | $10.74 | 2.41% | 1.68% | 1.25%(c) | 1.82% | 17% | $1,647 |
| Year Ended 10/31/2019 | $10.68 | 7.47% | 1.68% | 1.25%(c) | 2.15% | 12% | $2,038 |
| Year Ended 10/31/2018 | $10.16 | (1.32%) | 1.67% | 1.26%(c) | 2.17% | 13% | $2,312 |
| Year Ended 10/31/2017 | $10.55 | (0.27%) | 1.68%(d) | 1.23%(c),(d) | 2.26% | 6% | $3,914 |
| Year Ended 10/31/2016 | $10.86 | 1.94% | 1.73% | 1.26%(c) | 2.20% | 12% | $5,742 |
| Institutional Class | |||||||
| Year Ended 10/31/2020 | $10.73 | 3.03% | 0.68% | 0.55%(c) | 2.52% | 17% | $77,664 |
| Year Ended 10/31/2019 | $10.68 | 8.22% | 0.68% | 0.55%(c) | 2.83% | 12% | $81,364 |
| Year Ended 10/31/2018 | $10.16 | (0.63%) | 0.67% | 0.56%(c) | 2.87% | 13% | $80,804 |
| Year Ended 10/31/2017 | $10.55 | 0.44% | 0.68%(d) | 0.53%(c),(d) | 2.95% | 6% | $100,370 |
| Year Ended 10/31/2016 | $10.86 | 2.66% | 0.73% | 0.56%(c) | 2.90% | 12% | $131,129 |
| Institutional 3 Class | |||||||
| Year Ended 10/31/2020 | $10.76 | 3.23% | 0.58% | 0.45% | 2.62% | 17% | $161 |
| Year Ended 10/31/2019 | $10.70 | 8.32% | 0.57% | 0.45% | 2.94% | 12% | $10 |
| Year Ended 10/31/2018 | $10.18 | (0.61%) | 0.57% | 0.45% | 2.99% | 13% | $10 |
| Year Ended 10/31/2017(e) | $10.58 | 2.31% | 0.56%(g) | 0.45%(g) | 3.02%(g) | 6% | $10 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
|
Columbia Connecticut 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 |
|
| Class V | |||||||
| Year Ended 10/31/2020 | $10.67 | 0.25 | 0.05 | 0.30 | (0.25) | — | (0.25) |
| Year Ended 10/31/2019 | $10.15 | 0.28 | 0.53 | 0.81 | (0.29) | — | (0.29) |
| Year Ended 10/31/2018 | $10.54 | 0.28 | (0.36) | (0.08) | (0.29) | (0.02) | (0.31) |
| Year Ended 10/31/2017 | $10.85 | 0.30 | (0.27) | 0.03 | (0.30) | (0.04) | (0.34) |
| Year Ended 10/31/2016 | $10.90 | 0.30 | (0.03) | 0.27 | (0.30) | (0.02) | (0.32) |
| Notes to Financial Highlights | |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (d) | Expenses have been reduced due to a reimbursement of expenses overbilled by a third party. If the reimbursement had been excluded, the expense ratios would have been higher by the percentages shown for each class in the table below. All fee waivers and expense reimbursements by the Investment Manager and its affiliates were applied before giving effect to this third party reimbursement. |
| Year Ended | Class A |
Advisor
Class |
Class C |
Institutional
Class |
Class V |
| 10/31/2017 | 0.04% | 0.05% | 0.03% | 0.03% | 0.03% |
| (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 Connecticut 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 V | |||||||
| Year Ended 10/31/2020 | $10.72 | 2.88% | 0.83% | 0.70%(c) | 2.37% | 17% | $8,979 |
| Year Ended 10/31/2019 | $10.67 | 8.06% | 0.83% | 0.70%(c) | 2.69% | 12% | $9,167 |
| Year Ended 10/31/2018 | $10.15 | (0.78%) | 0.82% | 0.71%(c) | 2.73% | 13% | $9,477 |
| Year Ended 10/31/2017 | $10.54 | 0.28% | 0.83%(d) | 0.68%(c),(d) | 2.80% | 6% | $10,456 |
| Year Ended 10/31/2016 | $10.85 | 2.50% | 0.88% | 0.71%(c) | 2.75% | 12% | $11,536 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
|
Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020
|
21 |
Notes to Financial Statements
October 31, 2020
October 31, 2020
Note 1. Organization
Columbia Connecticut Intermediate
Municipal Bond Fund (the Fund), a series of Columbia Funds Series Trust I (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 Massachusetts business 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 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. Class V shares
are available only to investors who received (and who continuously held) Class V shares in connection with previous fund reorganizations.
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 market value, unless this method results in a valuation that management believes does not approximate fair value.
Investments in open-end investment
companies (other than exchange-traded funds (ETFs)), are valued at the latest net asset value reported by those companies as of the valuation time.
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 Connecticut Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 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 Connecticut Intermediate Municipal Bond Fund | Annual Report 2020
|
23 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 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 October 31, 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. These members of the Board of Trustees
may participate in a Deferred Compensation Plan (the Deferred Plan) which may be terminated at any time. Obligations of the Deferred Plan will be paid solely out of the Fund’s assets, and all amounts payable
under the Deferred Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as
sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 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.
For the year ended October 31,
2020, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| 24 | Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended October 31, 2020, these minimum account balance fees reduced total expenses
of the Fund by $40.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A and Class C shares of the Fund. Also under the Plans, the Fund pays a monthly
distribution fee to the Distributor at the maximum annual rate of 0.75% of the average daily net assets attributable to Class C shares of the Fund.
Effective September 1, 2020, the
Distributor has contractually agreed to waive a portion of the distribution fee for Class C shares through February 28, 2022 so that the distribution fee does not exceed 0.45% annually of the average daily net assets
attributable to Class C shares. This arrangement may be modified or terminated at the sole discretion of the Board of Trustees. Prior to September 1, 2020, this was a voluntary arrangement.
Shareholder services fees
The Fund has adopted a shareholder
services plan that permits it to pay for certain services provided to Class V shareholders by their selling and/or servicing agents. The Fund may pay shareholder servicing fees up to an aggregate annual rate of 0.40%
of the Fund’s average daily net assets attributable to Class V shares (comprised of up to 0.20% for shareholder services and up to 0.20% for administrative support services). These fees are currently limited to
an aggregate annual rate of not more than 0.15% of the Fund’s average daily net assets attributable to Class V shares.
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 October 31, 2020, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 3.00 | 0.75(a) | 4,301 |
| Class C | — | 1.00(b) | — |
| Class V | 4.75 | 0.50 - 1.00(c) | — |
| (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. |
| (c) | This charge is imposed on certain investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with certain limited exceptions. |
The Fund’s other share
classes are not subject to sales charges.
|
Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020
|
25 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 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
February 28, 2021 |
|
| Class A | 0.81% |
| Advisor Class | 0.56 |
| Class C | 1.56* |
| Institutional Class | 0.56 |
| Institutional 3 Class | 0.45 |
| Class V | 0.71 |
*Effective September 1, 2020, the
contractual expense reimbursement arrangement is in effect through February 28, 2022.
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. 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. Class C distribution fees waived by the Distributor, as discussed above, are in addition to the waiver/reimbursement commitment under the agreement.
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 October 31, 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 October 31, 2020 | Year Ended October 31, 2019 | ||||||
|
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
Ordinary
income ($) |
Tax-exempt
income ($) |
Long-term
capital gains ($) |
Total ($) |
| 75 | 2,460,141 | — | 2,460,216 | 44 | 2,748,075 | — | 2,748,119 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
| 26 | Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
At October 31, 2020, the components
of distributable earnings on a tax basis were as follows:
|
Undistributed
ordinary income ($) |
Undistributed tax-
exempt income ($) |
Undistributed
long-term capital gains ($) |
Capital loss
carryforwards ($) |
Net unrealized
appreciation ($) |
| — | 234,002 | 50,564 | — | 5,733,813 |
At October 31, 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) ($) |
Net unrealized
appreciation ($) |
| 90,742,696 | 5,830,593 | (96,780) | 5,733,813 |
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 October 31, 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 October
31, 2020, capital loss carryforwards utilized, if any, were as follows:
|
No expiration
short-term ($) |
No expiration
long-term ($) |
Total ($) | Utilized ($) |
| — | — | — | 104,044 |
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 $15,854,320 and $17,373,472, respectively, for the year ended October 31, 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 October 31, 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., Wells Fargo Bank, 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. Pursuant to a December 1, 2020 amendment, the credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager or an
affiliated investment
|
Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020
|
27 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
manager, severally and not jointly, permits
collective borrowings up to $950 million. 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, 1.25%. 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. Prior to the December 1, 2020 amendment, 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. which
permitted collective borrowings up to 1 billion. Interest was 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%.
The Fund had no borrowings during
the year ended October 31, 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.
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 Connecticut Intermediate Municipal Bond Fund | Annual Report 2020 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
The Fund performance may also be
significantly negatively impacted by the economic impact of the coronavirus disease 2019 (COVID-19) pandemic. The 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 objectives. Any such
event(s) could have a significant adverse impact on the value and risk profile of the Fund.
The Investment Manager and its
affiliates have systematically implemented strategies to address the operating environment spurred by the COVID-19 pandemic. To promote the safety and security of our employees and to assure the continuity of our
business operations, we have implemented a work from home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health
Organization, the U.S. Centers for Disease Control and governments. Our operations teams seek to operate without significant disruptions in service. Our pandemic strategy takes into consideration that a pandemic could
be widespread and may occur in multiple waves, affecting different communities at different times with varying levels of severity. We cannot, however, predict the impact that natural or man-made disasters, including
the COVID-19 pandemic, may have on the ability of our employees and third-party service providers to continue ordinary business operations and technology functions over near- or longer-term periods.
Municipal securities risk
Municipal securities are debt
obligations generally issued to obtain funds for various public purposes, including general financing for state and local governments, or financing for a specific project or public facility, and include obligations of
the governments of the U.S. territories, commonwealths and possessions such as Guam, Puerto Rico and the U.S. Virgin Islands to the extent such obligations are exempt from state and U.S. federal income taxes. The
value of municipal securities can be significantly affected by actual or expected political and legislative changes at the federal or state level. Municipal securities may be fully or partially backed by the taxing
authority of the local government, by the credit of a private issuer, by the current or anticipated revenues from a specific project or specific assets or by domestic or foreign entities providing credit support, such
as letters of credit, guarantees or insurance, and are generally classified into general obligation bonds and special revenue obligations. Because many municipal securities are issued to finance projects in sectors
such as education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal market.
Issuers in a state, territory,
commonwealth or possession in which the Fund invests may experience significant financial difficulties for various reasons, including as the result of events that cannot be reasonably anticipated or controlled such as
economic downturns or similar periods of economic stress, social conflict or unrest, labor disruption and other natural disasters. Such financial difficulties may lead to credit rating downgrades or defaults of such
issuers which in turn, could affect the market values and marketability of many or all municipal obligations of issuers in such state, territory, commonwealth or possession. The value of the Fund’s shares will
be negatively impacted to the extent it invests in such securities. The Fund’s annual and semiannual reports show the Fund’s investment exposures at a point in time. The risk of investing in the Fund is
directly correlated to the Fund’s investment exposures.
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
|
Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020
|
29 |
Notes to Financial Statements (continued)
October 31, 2020
October 31, 2020
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.
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 October 31, 2020, one
unaffiliated shareholder of record owned 72.3% 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 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 or one or more of its affiliates that provides services to
the Funds.
| 30 | Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust I and Shareholders of Columbia Connecticut 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 Connecticut Intermediate Municipal Bond Fund (one of the funds constituting Columbia Funds Series Trust I, referred to hereafter
as the "Fund") as of October 31, 2020, the related statement of operations for the year ended October 31, 2020, the statement of changes in net assets for each of the two years in the period ended October 31, 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 October 31, 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
October 31, 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 October 31, 2020 by correspondence with the custodian and brokers. We believe that our audits
provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
December 21, 2020
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
|
Columbia Connecticut 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 October 31, 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 |
| $53,092 | 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. The year set forth beneath Length of Service
in the table below is the year in which the Trustee was first appointed or elected as Trustee to any Fund currently in the Columbia Funds Complex or a predecessor thereof. Under current Board policy, members serve
terms of indefinite duration. The Board approved the nomination of and recommended the election of 17 nominees to the Board, effecting a consolidation of the Board and the board of trustees overseeing Columbia Funds
Series Trust, Columbia Funds Series Trust II and certain affiliated trusts. At a shareholder meeting held on December 22, 2020, shareholders approved the nominees, effective January 1, 2021.
Independent trustees
| 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 Fund Complex overseen | Other directorships held by Trustee during the past five years |
|
Janet Langford Carrig
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1957 |
Trustee
1996 |
Senior Vice President, General Counsel and Corporate Secretary, ConocoPhillips (independent energy company), September 2007-October 2018 | 66 | Director, EQT Corporation (natural gas producer); Director, Whiting Petroleum Corporation (independent oil and gas company) |
|
Douglas A. Hacker
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1955 |
Trustee and Chairman of the Board
1996 |
Independent business executive since May 2006; Executive Vice President — Strategy of United Airlines, December 2002-May 2006; President of UAL Loyalty Services (airline marketing company), September 2001-December 2002; Executive Vice President and Chief Financial Officer of United Airlines, July 1999-September 2001 | 66 | Director, Spartan Nash Company (food distributor); Director, Aircastle Limited (aircraft leasing); former Director, Nash Finch Company (food distributor), 2005-2013; former Director, SeaCube Container Leasing Ltd. (container leasing), 2010-2013; and former Director, Travelport Worldwide Limited (travel information technology), 2014-2019 |
| 32 | Columbia Connecticut 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 the past five years and other relevant professional experience | Number of Funds in the Columbia Fund Complex overseen | Other directorships held by Trustee during the past five years |
|
Nancy T. Lukitsh
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1956 |
Trustee
2011 |
Senior Vice President, Partner and Director of Marketing, Wellington Management Company, LLP (investment adviser), 1997-2010; Chair, Wellington Management Portfolios (commingled non-U.S. investment pools), 2007-2010; Director, Wellington Trust Company, NA and other Wellington affiliates, 1997-2010 | 66 | None |
|
David M. Moffett
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1952 |
Trustee
2011 |
Retired. Consultant to Bridgewater and Associates | 66 | Director, CSX Corporation (transportation suppliers); Director, Genworth Financial, Inc. (financial and insurance products and services); Director, PayPal Holdings Inc. (payment and data processing services); Trustee, University of Oklahoma Foundation; former Director, eBay Inc. (online trading community), 2007-2015; and former Director, CIT Bank, CIT Group Inc. (commercial and consumer finance), 2010-2016 |
|
John J. Neuhauser
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1943 |
Trustee
1984 |
President, Saint Michael’s College, August 2007-June 2018; Director or Trustee of several non-profit organizations, including University of Vermont Medical Center; Academic Vice President and Dean of Faculties, Boston College, August 1999-October 2005; University Professor, Boston College, November 2005-August 2007 | 66 | Director, Liberty All-Star Equity Fund and Liberty All-Star Growth Fund (closed-end funds) |
|
Patrick J. Simpson
c/o Columbia Management Investment Advisers, LLC 225 Franklin Street Mail Drop BX32 05228 Boston, MA 02110 1944 |
Trustee
2000 |
Of Counsel, Perkins Coie LLP (law firm) since 2015; Partner, Perkins Coie LLP, 1988-2014 | 66 | Former Director, M Fund, Inc. (M Funds mutual fund family), July 2018-July 2019 |
|
Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020
|
33 |
TRUSTEES AND OFFICERS (continued)
Consultants to the Independent Trustees*
Consultants to the Independent Trustees*
| * | J. Kevin Connaughton was appointed consultant to the Independent Trustees effective March 1, 2016. Natalie A. Trunow was appointed consultant to the Independent Trustees effective September 1, 2016. Olive Darragh was appointed consultant to the Independent Trustees effective June 10, 2019. |
| 34 | Columbia Connecticut 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 | 162 | 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 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 — Accounting and Tax, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002 (previously, Treasurer and Chief Accounting Officer, January 2009-December 2018 and December 2015-December 2018, 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 May 2010. |
|
Columbia Connecticut 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); Chief Legal Officer, Columbia Acorn/Wanger Funds, since September 2020; 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. |
Board Consideration
and Approval of Management
Agreement
On June 17, 2020, the Board of
Trustees (the Board) and the Trustees who are not interested persons (as defined in the Investment Company Act of 1940) (the Independent Trustees) of Columbia Funds Series Trust I (the Trust) unanimously approved the
continuation of the Management Agreement (the Management Agreement) with Columbia Management Investment Advisers, LLC (the Investment Manager) with respect to Columbia Connecticut Intermediate Municipal Bond Fund (the
Fund), a series of the Trust. As detailed below, the Board’s Advisory Fees and Expenses Committee (the Committee) and the Board met on multiple occasions to review and discuss, among themselves, with the
management team of the Investment Manager and with an independent fee consultant, materials provided by the Investment Manager, the independent fee consultant and others before determining to approve the continuation
of the Management Agreement.
In connection with their
deliberations regarding the continuation of the Management Agreement, the Committee and the Board evaluated materials requested from the Investment Manager regarding the Fund and the Management Agreement, and
discussed these materials with representatives of the Investment Manager at Committee meetings held on March 10, 2020, April 30, 2020 and June 17, 2020 and at Board meetings held on March 11, 2020 and June 17, 2020.
In addition, the Board and its various committees consider matters bearing on the Management Agreement at other meetings throughout the year and in prior years and meet regularly with senior management of the Trust
and the Investment Manager. Through the Board’s Investment Oversight Committees, Trustees also meet with selected portfolio managers of the funds the Trustees oversee and with other investment personnel at
various times throughout the year. The Committee and the Board also consulted with
| 36 | Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020 |
Board Consideration and Approval of
Management
Agreement (continued)
the independent fee consultant, Fund counsel and
the Independent Trustees’ independent legal counsel, who advised on various matters with respect to the Committee’s and the Board’s considerations and otherwise assisted the Committee and the Board
in their deliberations. On June 17, 2020, the Committee recommended that the Board approve the continuation of the Management Agreement. On June 17, 2020, the Board, including the Independent Trustees, voting
separately, unanimously approved the continuation of the Management Agreement for the Fund.
The Committee and the Board
considered all information that they, their legal counsel or the Investment Manager believed reasonably necessary to evaluate and to determine whether to recommend for approval or approve the continuation of the
Management Agreement. The information and factors considered by the Committee and the Board in recommending for approval or approving the continuation of the Management Agreement for the Fund included the
following:
| • | Information on the investment performance of the Fund relative to the performance of a group of mutual funds determined to be comparable to the Fund by an independent third-party data provider, as well as performance relative to benchmarks; |
| • | Information on the Fund’s management fees and total expenses, including information comparing the Fund’s expenses to those of a group of comparable mutual funds, as determined by the independent third-party data provider; |
| • | The Investment Manager’s agreement to contractually limit or cap total operating expenses for the Fund through February 28, 2021 so that total operating expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and infrequent and/or unusual expenses) would not exceed a specified annual rate, as a percentage of the Fund’s net assets; |
| • | The terms and conditions of the Management Agreement; |
| • | The current and proposed terms and conditions of other agreements and arrangements with affiliates of the Investment Manager relating to the operations of the Fund, including agreements with respect to the provision of distribution, transfer agency and shareholder services to the Fund; |
| • | Descriptions of various functions performed by the Investment Manager under the Management Agreement, including portfolio management and portfolio trading practices; |
| • | Information regarding any recently negotiated management fees of similarly-managed portfolios of other institutional clients of the Investment Manager; |
| • | Information regarding the reputation, regulatory history and resources of the Investment Manager, including information regarding senior management, portfolio managers and other personnel; |
| • | Information regarding the capabilities of the Investment Manager with respect to compliance monitoring services, including an assessment of the Investment Manager’s compliance system by the Fund’s Chief Compliance Officer; and |
| • | The profitability to the Investment Manager and its affiliates from their relationships with the Fund. |
Nature, extent and quality of
services provided under the Management Agreement
The Committee and the Board
considered the nature, extent and quality of services provided to the Fund by the Investment Manager and its affiliates under the Management Agreement and under separate agreements for the provision of transfer agency
and shareholder services, and the resources dedicated to the Fund and the other Columbia Funds by the Investment Manager and its affiliates. The Committee and the Board considered, among other things, the Investment
Manager’s ability to attract, motivate and retain highly qualified research, advisory and supervisory investment professionals (including compensation programs for personnel involved in fund management,
reputation and other attributes), the portfolio management services provided by those investment professionals, and the quality of the Investment Manager’s investment research capabilities and trade execution
services. The Committee and the Board also considered the potential benefits to shareholders of investing in a mutual fund that is part of a fund complex offering exposure to a variety of asset classes and investment
disciplines and providing a variety of fund and shareholder services.
|
Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020
|
37 |
Board Consideration and Approval of
Management
Agreement (continued)
The Committee and the Board also considered the
professional experience and qualifications of the senior personnel of the Investment Manager, which included consideration of the Investment Manager’s experience with funds using an investment strategy similar
to that used by the Investment Manager for the Fund. The Committee and the Board noted the compliance programs of and the compliance-related resources provided to the Fund by the Investment Manager and its affiliates
and the resources dedicated by the Investment Manager and its affiliates to risk management, and considered the Investment Manager’s ability to provide administrative services to the Fund and coordinate the
activities of the Fund’s other service providers. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the nature, extent and
quality of the services provided to the Fund under the Management Agreement supported the continuation of the Management Agreement.
Investment performance
The Committee and the Board
reviewed information about the performance of the Fund over various time periods, including performance information relative to benchmarks, information that compared the performance of the Fund to the performance of a
group of comparable mutual funds as determined by the independent third-party data provider, and information and analysis provided by the independent fee consultant. The Committee and the Board also reviewed a
description of the third party’s methodology for identifying the Fund’s peer groups for purposes of performance and expense comparisons. Although the Fund’s performance lagged that of a relevant peer
group for certain (although not necessarily all) periods, the Committee and the Board concluded that other factors relevant to performance were sufficient, in light of other considerations, to support continuation of
the Management Agreement. Those factors included one or more of the following: (i) that the Fund’s performance, although lagging in certain recent periods, was stronger over the longer term; (ii) that the
underperformance was attributable, to a significant extent, to investment decisions that were reasonable and consistent with the Fund’s investment strategy and policies and that the Fund was performing within a
reasonable range of expectations, given those investment decisions, market conditions and the Fund’s investment strategy; (iii) that the Fund’s performance was competitive when compared to other relevant
performance benchmarks or peer groups; and (iv) that the Investment Manager had taken or was taking steps designed to help improve the Fund’s investment performance, including, but not limited to, replacing
portfolio managers, enhancing the resources supporting the portfolio managers, or modifying investment strategies.
The Committee and the Board noted
that, through December 31, 2019, the Fund’s performance was in the fourteenth, forty-eighth and fifty-third percentile (where the best performance would be in the first percentile) of its category selected by
the independent third-party data provider for the purposes of performance comparisons for the one-, three- and five-year periods, respectively.
The Committee and the Board also
considered the Investment Manager’s performance and reputation generally, the Investment Manager’s historical responsiveness to Board concerns about performance, and the Investment Manager’s
willingness to take steps intended to improve performance. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the performance of the
Fund and the Investment Manager was sufficient, in light of other considerations, to support the continuation of the Management Agreement.
Investment management fee rates
and other expenses
The Committee and the Board
considered the management fees charged to the Fund under the Management Agreement as well as the total expenses incurred by the Fund. In assessing the reasonableness of the fees under the Management Agreement, the
Committee and the Board considered, among other information, the Fund’s total expense ratio as a percentage of average daily net assets. The Committee and the Board considered data provided by the independent
third-party data provider and the independent fee consultant. The Committee and the Board noted that, as of December 31, 2019, the Fund’s actual management fee and net total expense ratio were ranked in the
second and third quintiles, respectively, (where the lowest fees and expenses would be in the first quintile) against the Fund’s expense universe as determined by the independent third-party data provider for
purposes of expense comparison. The Committee and the Board also took into account the fee waiver and expense limitation arrangements agreed to by the Investment Manager, as noted above.
The Committee and the Board also
received and considered information about the management fees charged by the Investment Manager to institutional accounts. In considering the fees charged to those accounts, the Committee and the Board took into
account, among other things, the Investment Manager’s representations about the differences between
| 38 | Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020 |
Board Consideration and Approval of
Management
Agreement (continued)
managing mutual funds as compared to other types
of accounts, including differences in the services provided, differences in the risk profile of such business for the Investment Manager and the additional resources required to manage mutual funds effectively. The
Committee and the Board also received and considered information about the fees charged by the Investment Manager for sub-advisory services it provides to comparable unaffiliated funds. In evaluating the Fund’s
management fees, the Committee and the Board also took into account the demands, complexity and quality of the investment management of the Fund.
After reviewing these and related
factors, the Committee and the Board concluded, within the context of their overall conclusions, that the management fee rates and expenses of the Fund, in light of other considerations, supported the continuation of
the Management Agreement.
Costs of services provided and
profitability
The Committee and the Board also
took note of the costs the Investment Manager and its affiliates incur in connection with the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the
Fund, and the efforts undertaken by the Investment Manager and its affiliates to manage efficiently their costs to provide such services.
The Committee and the Board also
considered the compensation directly or indirectly received by the Investment Manager’s affiliates in connection with their relationships with the Fund. The Committee and the Board reviewed information provided
by management as to the profitability to the Investment Manager and its affiliates of their relationships with the Fund, information about the allocation of expenses used to calculate profitability, and comparisons of
profitability levels realized in 2019 to profitability levels realized in 2018. When reviewing profitability, the Committee and the Board also considered court cases in which adviser profitability was an issue in
whole or in part, the performance of similarly managed funds, the performance of the Fund, and the expense ratio of the Fund. In addition, the Committee and the Board considered information provided by the Investment
Manager regarding the Investment Manager’s financial condition and comparing its profitability to that of other asset management firms that are, or are subsidiaries of, publicly traded companies. In this regard,
the Committee and the Board also considered data provided by the independent fee consultant.
After reviewing these and related
factors, the Committee and the Board concluded, within the context of their overall conclusions, that the costs of services provided and the profitability to the Investment Manager and its affiliates from their
relationships with the Fund supported the continuation of the Management Agreement.
Economies of scale
The Committee and the Board
considered the potential existence of economies of scale in the provision by the Investment Manager of services to the Fund, to groups of related funds, and to the Investment Manager’s investment advisory
clients as a whole, and whether those economies of scale were shared with the Fund through breakpoints in investment management fees or other means, such as expense limitation arrangements and additional investments
by the Investment Manager in investment, trading, compliance and other resources. The Committee and the Board noted that the management fee schedules for the Fund contained breakpoints that would reduce the fee rate
on assets above specified threshold levels.
In considering these matters, the
Committee and the Board also considered the costs of the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund, as noted above. After reviewing
these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the extent to which any economies of scale were expected to be shared with the Fund supported the
continuation of the Management Agreement.
Other benefits to the Investment
Manager
The Committee and the Board
received and considered information regarding “fall-out” or ancillary benefits received by the Investment Manager and its affiliates as a result of their relationships with the Fund, such as the engagement
of the Investment Manager’s affiliates to provide distribution, transfer agency and shareholder services to the Fund. In this regard, among other matters, the Committee and the Board considered that the
Fund’s distributor retains a portion of the distribution fees from the Fund and receives a portion of the sales charges on sales or redemptions of certain classes of shares of the
|
Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020
|
39 |
Board Consideration and Approval of
Management
Agreement (continued)
Fund. The Committee and the Board also considered
the benefits of research made available to the Investment Manager by reason of brokerage commissions generated by the Fund’s securities transactions, and reviewed information about the Investment Manager’s
practices with respect to considering brokerage and research services when allocating portfolio transactions. In this connection, the Board also noted that the amount of research made available to the Investment
Manager by reason of brokerage commissions had been declining over time, and may decline further. The Committee and the Board recognized that the Investment Manager’s profitability would be somewhat lower
without these benefits.
Conclusion
The Committee and the Board
reviewed all of the above considerations in reaching their decisions to recommend or approve the continuation of the Management Agreement. In their deliberations, the Trustees did not identify any particular
information that was all-important or controlling, and individual Trustees may have attributed different weights to the various factors. Based on their evaluation of all factors that they deemed to be material,
including those factors described above, and assisted by the advice of independent legal counsel, the Board, including the Independent Trustees, voting separately, unanimously approved the continuation of the
Management Agreement.
| 40 | Columbia Connecticut Intermediate Municipal Bond Fund | Annual Report 2020 |
Columbia Connecticut 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/
ANN131_10_K01_(12/20)
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 David M. Moffett, Brian J. Gallagher, J. Kevin Connaughton, 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. Moffett, Mr. Gallagher, Mr. Connaughton, 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 six 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 October 31, 2020 and October 31, 2019 are approximately as follows:
20202019
$177,000 $174,000
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 October 31, 2020 and October 31, 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 October 31, 2020 and October 31, 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 October 31, 2020 and October 31, 2019 are approximately as follows:
|
2020 |
2019 |
|
$0 |
$17,400 |
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 October 31, 2020 and October 31, 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 October 31,
2020 and October 31, 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 October 31, 2020 and October 31, 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 October 31, 2020 and October 31, 2019 are approximately as follows:
20202019
$225,000 $242,400
(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 I |
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By (Signature and Title) |
/s/ Christopher O. Petersen |
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Christopher O. Petersen, President and Principal Executive Officer |
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Date |
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December 21, 2020 |
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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By (Signature and Title) |
/s/ Christopher O. Petersen |
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Christopher O. Petersen, President and Principal Executive Officer |
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Date |
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December 21, 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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December 21, 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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December 21, 2020 |
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