UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21852
Columbia Funds Series Trust II
(Exact name of registrant as specified in charter)
290 Congress Street
Boston, MA 02210
(Address of principal executive offices) (Zip code)
Daniel J. Beckman
c/o Columbia Management Investment Advisers, LLC
290 Congress Street
Boston, MA 02210
Ryan C. Larrenaga, Esq.
c/o Columbia Management Investment Advisers, LLC
290 Congress Street
Boston, MA 02210
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 345-6611
Date of fiscal year end: February 28
Date of reporting period: February 28, 2023
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.
Columbia Global
Value Fund
Not FDIC or NCUA Insured •
No Financial Institution Guarantee • May Lose Value
Table of Contents
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If you elect to receive the
shareholder report for Columbia Global Value Fund (the Fund) in paper, mailed to you, the Fund mails one shareholder report to each shareholder address, unless such shareholder elects to receive shareholder reports
from the Fund electronically via e-mail or by having a paper notice mailed to you (Postcard Notice) that your Fund’s shareholder report is available at the Columbia funds’ website
(columbiathreadneedleus.com/investor/). If you would like more than one report in paper to be mailed to you, or would like to elect to receive reports via e-mail or access them through Postcard Notice, 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, is available on columbiathreadneedleus.com/investor/ or 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)
290 Congress Street
Boston, MA 02210
Fund distributor
Columbia Management Investment Distributors,
Inc.
290 Congress Street
Boston, MA 02210
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 219104
Kansas City, MO 64121-9104
Columbia Global Value Fund | Annual
Report 2023
Fund at a Glance
(Unaudited)
(Unaudited)
Investment objective
The Fund
seeks to provide shareholders with growth of capital and income.
Portfolio management
Fred Copper, CFA
Co-Portfolio Manager
Managed Fund since 2016
Melda Mergen, CFA, CAIA
Co-Portfolio Manager
Managed Fund since 2016
Peter Schroeder, CFA
Co-Portfolio Manager
Managed Fund since 2016
Morningstar style boxTM
The Morningstar Style Box is based on a fund’s portfolio holdings. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows
investment style (value, blend, or growth). Information shown is based on the most recent data provided by Morningstar.
© 2023 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or
distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
| Columbia Global Value Fund | Annual Report 2023 | 3 |
Fund at a Glance (continued)
(Unaudited)
(Unaudited)
Performance of a hypothetical $10,000 investment (February 28, 2013 — February 28, 2023)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Global Value Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or
on the redemption of Fund shares.
| 4 | Columbia Global Value Fund | Annual Report 2023 |
Manager Discussion of Fund Performance
(Unaudited)
(Unaudited)
For the 12-month period that ended
February 28, 2023, Class A shares of Columbia Global Value Fund returned -1.40% excluding sales charges. The Fund outperformed its primary benchmark, the MSCI World Value Index (Net), which returned -2.21%, as well as
the MSCI World Index (Net), which returned -7.33% for the same time period.
Market overview
International equity markets
delivered mixed results during the 12-month period, with most major benchmarks posting negative returns despite strong results in certain industry groups. For example, the broad developed-market MSCI EAFE Index
(Net) finished down more than 3% in U.S. dollar terms. In contrast, the energy sector within the index was up more than 30%.
Numerous concerns weighed on
sentiment throughout the first half of the period, particularly a toxic combination of geopolitical and financial market events that punished most asset returns except for “hard” assets such as oil, gold
and other commodities. As a result of the Russian invasion of Ukraine, which some had considered a low-probability event early in the period, many western nations imposed punitive sanctions on Russia that limited its
ability to transact in global markets and access assets held outside its borders. Combined, Russia and Ukraine provide a significant portion of many raw materials to the global economy, focused most prominently
in Europe and the Middle East. Loss of these supplies disrupted access to basic necessities for many countries and raised the cost of such goods precipitously in some cases.
As the war in Ukraine continued to
grind on, pressure on commodity markets around the world were made even worse by lockdowns in China stemming from a zero-Covid policy. Mounting inflationary pressures forced central banks globally into the unfortunate
position of needing to tighten monetary policy despite deteriorating economic conditions. These “stagflationary” conditions proved to be a major driver of poor returns across both stocks and bonds.
Despite occasional bursts of
optimism that drove brief attempts at equity rallies, market momentum remained volatile and continued downward. Poor fixed-income returns – which typically have served as a safe-haven offset to declining equity
markets – compounded the steep drawdowns in stocks. A steadily strengthening U.S. dollar over the first seven months of the reporting period – from the end of February 2022 through the end of September
2022 – was an additional headwind for U.S. investors and eroded returns significantly. For example, over that stretch the MSCI EAFE Index lost about 11% when measured in local currencies but lost more
than 22% in U.S. dollar terms.
Sentiment reversed abruptly though,
apparently fueled by hints that the global slowdown was beginning to moderate. For example, an early catalyst was Australia hiking rates by just 25 basis points versus expectations of 50 basis points, leading to
speculation that other central banks would need to pivot in response to increasing stress from the global tightening cycle. Investors also were pleased that China scrapped its zero-Covid lockdowns, even though that
welcome news was followed by worries that a resulting surge in infections would weigh on growth and make for a challenging reopening of the country’s economy.
Those expectations helped weaken
the U.S. dollar and buoy international equity returns for U.S. investors – but only until the final month of the period. At that point, stronger-than-expected U.S. economic data revived worries over the
so-called “higher-for-longer” U.S. rate regime and overwhelmed any expectations of a slowdown in U.S. Federal Reserve rate hikes, pushing the dollar back on a strengthening trend that again fanned a
headwind for U.S. investors.
The Fund’s notable
contributors during the period
| • | The Fund’s outperformance of its primary benchmark during the period was largely a result of strong stock selection within the financials and energy sectors as well as within Canada and France. |
| • | From an allocation perspective, an overweight to energy and an underweight to real estate helped relative results, as did overweights to the United Kingdom, France and Singapore. |
| • | The Fund’s holdings in BP PLC (United Kingdom), Alimentation Couche-Tard, Inc. (Canada), AXA SA (France), TP Icap Group PLC (United Kingdom) and Johnson & Johnson (United States) were top contributors to performance versus the primary benchmark during the period. |
| Columbia Global Value Fund | Annual Report 2023 | 5 |
Manager Discussion of Fund Performance (continued)
(Unaudited)
(Unaudited)
The Fund’s notable
detractors during the period
| • | Security selection within the consumer discretionary and communication services sectors detracted from relative results, as did selection within the U.S. |
| • | The Fund’s holdings in Vodafone Group PLC (United Kingdom), Target Corp. (United States), Merck & Co., Inc. (United States), Charles Schwab Corp. (United States) and AT& T, Inc. (United States) detracted from relative results versus the primary benchmark during the period. The Fund sold its position in Charles Schwab early in the period. |
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Value securities may be unprofitable if the market fails to recognize their intrinsic worth or the portfolio manager misgauged that worth. Foreign investments subject the Fund to risks, including political, economic, market, social and others within a particular country, as well as to currency instabilities and less
stringent financial and accounting standards generally applicable to U.S. issuers. Investing in derivatives is a specialized activity that involves special risks, which may result in significant losses. The Fund may invest significantly in issuers within a particular
sector, which may be negatively affected by market, economic or other conditions, making the Fund more vulnerable to unfavorable developments in the sector. See the Fund’s
prospectus for more information on these and other risks.
The views expressed in this report
reflect the current views of the respective parties who have contributed to this 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 Global Value Fund | Annual Report 2023 |
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 365.
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.
| Columbia Global Value Fund | Annual Report 2023 | 7 |
Portfolio of Investments
February 28, 2023
February 28, 2023
(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 Global Value Fund | Annual Report 2023 |
Investments in
derivatives
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Global Value Fund | Annual Report 2023 | 9 |
Portfolio of Investments (continued)
February 28, 2023
February 28, 2023
Notes to Portfolio of
Investments
| (a) | Represents fair value as determined in good faith under procedures approved by the Board of Trustees. At February 28, 2023, the total value of these securities amounted to $0, which represents less than 0.01% of total net assets. |
| (b) | Denotes a restricted security, which is subject to legal or contractual restrictions on resale under federal securities laws. Disposal of a restricted investment may involve time-consuming negotiations and expenses, and prompt sale at an acceptable price may be difficult to achieve. Private placement securities are generally considered to be restricted, although certain of those securities may be traded between qualified institutional investors under the provisions of Section 4(a)(2) and Rule 144A. The Fund will not incur any registration costs upon such a trade. These securities are valued at fair value determined in good faith under consistently applied procedures approved by the Fund’s Board of Trustees. At February 28, 2023, the total market value of these securities amounted to $0, which represents less than 0.01% of total net assets. Additional information on these securities is as follows: |
| Security | Acquisition Dates | Shares | Cost ($) | Value ($) |
| Lukoil PJSC | 01/27/2022 | 48,225 | 4,239,605 | — |
| (c) | Valuation based on significant unobservable inputs. |
| (d) | Non-income producing investment. |
| (e) | The rate shown is the seven-day current annualized yield at February 28, 2023. |
| (f) | As defined in the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. The value of the holdings and transactions in these affiliated companies during the year ended February 28, 2023 are as follows: |
| Affiliated issuers | Beginning of period($) | Purchases($) | Sales($) | Net change in unrealized appreciation (depreciation)($) | End of period($) | Realized gain (loss)($) | Dividends($) | End of period shares |
| Columbia Short-Term Cash Fund, 4.748% | ||||||||
| 11,225,219 | 97,195,597 | (103,530,501) | 547 | 4,890,862 | (1,595) | 165,089 | 4,892,819 | |
Abbreviation Legend
| ADR | American Depositary Receipt |
Currency Legend
| AUD | Australian Dollar |
| CAD | Canada Dollar |
| CHF | Swiss Franc |
| EUR | Euro |
| GBP | British Pound |
| JPY | Japanese Yen |
| KRW | South Korean Won |
| NOK | Norwegian Krone |
| NZD | New Zealand Dollar |
| SEK | Swedish Krona |
| SGD | Singapore Dollar |
| USD | US Dollar |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
| ■ | 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. |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 10 | Columbia Global Value Fund | Annual Report 2023 |
Portfolio of Investments (continued)
February 28, 2023
February 28, 2023
Fair value measurements (continued)
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
Foreign equity securities actively
traded in markets where there is a significant delay in the local close relative to the New York Stock Exchange are classified as Level 2. The values of these securities may include an adjustment to reflect the impact
of market movements following the close of local trading, as described in Note 2 to the financial statements – Security valuation.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
The Fund’s Board of Trustees
(the Board) has designated the Investment Manager, through its Valuation Committee (the Committee), as valuation designee, responsible for determining the fair value of the assets of the Fund for which market
quotations are not readily available using 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 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. Representatives of Columbia Management Investment
Advisers, LLC report to the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of
the inputs used to value the Fund’s investments at February 28, 2023:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Common Stocks | ||||
| Australia | — | 11,955,582 | — | 11,955,582 |
| Canada | 24,727,787 | — | — | 24,727,787 |
| Finland | — | 7,955,134 | — | 7,955,134 |
| France | — | 35,916,482 | — | 35,916,482 |
| Hong Kong | — | 7,432,160 | — | 7,432,160 |
| Japan | — | 56,761,985 | — | 56,761,985 |
| Netherlands | — | 31,953,159 | — | 31,953,159 |
| Puerto Rico | 5,830,310 | — | — | 5,830,310 |
| Russian Federation | — | — | 0* | 0* |
| Singapore | — | 16,001,084 | — | 16,001,084 |
| South Korea | — | 12,667,869 | — | 12,667,869 |
| Spain | — | 4,473,028 | — | 4,473,028 |
| United Kingdom | 14,329,854 | 40,795,635 | — | 55,125,489 |
| United States | 517,593,214 | 581 | — | 517,593,795 |
| Total Common Stocks | 562,481,165 | 225,912,699 | 0* | 788,393,864 |
| Exchange-Traded Equity Funds | 16,139,844 | — | — | 16,139,844 |
| Money Market Funds | 4,890,862 | — | — | 4,890,862 |
| Total Investments in Securities | 583,511,871 | 225,912,699 | 0* | 809,424,570 |
| Investments in Derivatives | ||||
| Asset | ||||
| Forward Foreign Currency Exchange Contracts | — | 2,233,839 | — | 2,233,839 |
| Liability | ||||
| Forward Foreign Currency Exchange Contracts | — | (1,158,617) | — | (1,158,617) |
| Total | 583,511,871 | 226,987,921 | 0* | 810,499,792 |
| * | Rounds to zero. |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Global Value Fund | Annual Report 2023 | 11 |
Portfolio of Investments (continued)
February 28, 2023
February 28, 2023
Fair value measurements (continued)
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets. These assets include certain foreign securities for which a third party statistical pricing service may be employed for purposes of fair market valuation. The model utilized by such third party statistical pricing service takes into account a security’s correlation to available market data including, but not limited to, intraday index, ADR, and exchange-traded fund movements.
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets. These assets include certain foreign securities for which a third party statistical pricing service may be employed for purposes of fair market valuation. The model utilized by such third party statistical pricing service takes into account a security’s correlation to available market data including, but not limited to, intraday index, ADR, and exchange-traded fund movements.
Derivative instruments are valued at
unrealized appreciation (depreciation).
The Fund does not hold any significant
investments (greater than one percent of net assets) categorized as Level 3.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 12 | Columbia Global Value Fund | Annual Report 2023 |
Statement of Assets and Liabilities
February 28, 2023
February 28, 2023
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $728,651,047) | $804,533,708 |
| Affiliated issuers (cost $4,890,511) | 4,890,862 |
| Cash | 20,574 |
| Unrealized appreciation on forward foreign currency exchange contracts | 2,233,839 |
| Receivable for: | |
| Investments sold | 1,639,962 |
| Capital shares sold | 306,939 |
| Dividends | 1,642,555 |
| Foreign tax reclaims | 569,401 |
| Prepaid expenses | 9,812 |
| Trustees’ deferred compensation plan | 87,151 |
| Total assets | 815,934,803 |
| Liabilities | |
| Foreign currency (cost $20,574) | 20,385 |
| Unrealized depreciation on forward foreign currency exchange contracts | 1,158,617 |
| Payable for: | |
| Capital shares purchased | 613,467 |
| Management services fees | 15,685 |
| Distribution and/or service fees | 4,683 |
| Transfer agent fees | 68,625 |
| Compensation of board members | 268,237 |
| Compensation of chief compliance officer | 157 |
| Other expenses | 65,551 |
| Trustees’ deferred compensation plan | 87,151 |
| Total liabilities | 2,302,558 |
| Net assets applicable to outstanding capital stock | $813,632,245 |
| Represented by | |
| Paid in capital | 775,891,615 |
| Total distributable earnings (loss) | 37,740,630 |
| Total - representing net assets applicable to outstanding capital stock | $813,632,245 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Global Value Fund | Annual Report 2023 | 13 |
Statement of Assets and Liabilities (continued)
February 28, 2023
February 28, 2023
| Class A | |
| Net assets | $633,846,934 |
| Shares outstanding | 53,859,972 |
| Net asset value per share | $11.77 |
| Maximum sales charge | 5.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $12.49 |
| Advisor Class | |
| Net assets | $5,904,287 |
| Shares outstanding | 498,074 |
| Net asset value per share | $11.85 |
| Class C | |
| Net assets | $8,526,862 |
| Shares outstanding | 739,109 |
| Net asset value per share | $11.54 |
| Institutional Class | |
| Net assets | $136,608,205 |
| Shares outstanding | 11,575,290 |
| Net asset value per share | $11.80 |
| Institutional 2 Class | |
| Net assets | $8,989,941 |
| Shares outstanding | 764,085 |
| Net asset value per share | $11.77 |
| Institutional 3 Class | |
| Net assets | $13,348,948 |
| Shares outstanding | 1,180,462 |
| Net asset value per share | $11.31 |
| Class R | |
| Net assets | $6,407,068 |
| Shares outstanding | 546,509 |
| Net asset value per share | $11.72 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 14 | Columbia Global Value Fund | Annual Report 2023 |
Statement of Operations
Year Ended February 28, 2023
Year Ended February 28, 2023
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $25,094,584 |
| Dividends — affiliated issuers | 165,089 |
| European Union tax reclaim | 294,507 |
| Foreign taxes withheld | (1,808,429) |
| Total income | 23,745,751 |
| Expenses: | |
| Management services fees | 5,954,368 |
| Distribution and/or service fees | |
| Class A | 1,610,179 |
| Class C | 95,142 |
| Class R | 31,334 |
| Transfer agent fees | |
| Class A | 818,461 |
| Advisor Class | 8,347 |
| Class C | 12,083 |
| Institutional Class | 178,635 |
| Institutional 2 Class | 19,321 |
| Institutional 3 Class | 1,078 |
| Class R | 7,961 |
| Compensation of board members | 12,834 |
| Custodian fees | 60,670 |
| Printing and postage fees | 94,206 |
| Registration fees | 118,209 |
| Audit fees | 75,706 |
| Legal fees | 24,655 |
| Interest on collateral | 2,684 |
| Compensation of chief compliance officer | 153 |
| Other | 32,541 |
| Total expenses | 9,158,567 |
| Expense reduction | (6,786) |
| Total net expenses | 9,151,781 |
| Net investment income | 14,593,970 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 24,443,950 |
| Investments — affiliated issuers | (1,595) |
| Foreign currency translations | (257,579) |
| Forward foreign currency exchange contracts | 1,987,358 |
| Options purchased | (255,587) |
| Options contracts written | 425,167 |
| Net realized gain | 26,341,714 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (61,831,224) |
| Investments — affiliated issuers | 547 |
| Foreign currency translations | (8,146) |
| Forward foreign currency exchange contracts | 790,093 |
| Options contracts written | 43,054 |
| Net change in unrealized appreciation (depreciation) | (61,005,676) |
| Net realized and unrealized loss | (34,663,962) |
| Net decrease in net assets resulting from operations | $(20,069,992) |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Global Value Fund | Annual Report 2023 | 15 |
Statement of Changes in Net Assets
| Year Ended February 28, 2023 | Year Ended February 28, 2022 | |
| Operations | ||
| Net investment income | $14,593,970 | $16,045,728 |
| Net realized gain | 26,341,714 | 84,746,566 |
| Net change in unrealized appreciation (depreciation) | (61,005,676) | 14,119,018 |
| Net increase (decrease) in net assets resulting from operations | (20,069,992) | 114,911,312 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (47,053,581) | (81,232,263) |
| Advisor Class | (508,198) | (633,869) |
| Class C | (656,180) | (1,386,628) |
| Institutional Class | (10,693,987) | (17,775,009) |
| Institutional 2 Class | (4,318,013) | (8,001,138) |
| Institutional 3 Class | (712,368) | (1,020,438) |
| Class R | (437,067) | (894,905) |
| Total distributions to shareholders | (64,379,394) | (110,944,250) |
| Increase (decrease) in net assets from capital stock activity | (76,626,875) | 26,543,451 |
| Total increase (decrease) in net assets | (161,076,261) | 30,510,513 |
| Net assets at beginning of year | 974,708,506 | 944,197,993 |
| Net assets at end of year | $813,632,245 | $974,708,506 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 16 | Columbia Global Value Fund | Annual Report 2023 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| February 28, 2023 | February 28, 2022 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 1,057,347 | 12,178,834 | 1,347,530 | 18,331,729 |
| Distributions reinvested | 4,045,837 | 43,975,633 | 5,685,027 | 75,872,270 |
| Redemptions | (6,294,521) | (73,402,862) | (6,099,044) | (83,270,532) |
| Net increase (decrease) | (1,191,337) | (17,248,395) | 933,513 | 10,933,467 |
| Advisor Class | ||||
| Subscriptions | 132,358 | 1,571,155 | 236,921 | 3,233,007 |
| Distributions reinvested | 38,995 | 427,022 | 38,492 | 516,791 |
| Redemptions | (248,167) | (2,879,175) | (81,795) | (1,113,927) |
| Net increase (decrease) | (76,814) | (880,998) | 193,618 | 2,635,871 |
| Class C | ||||
| Subscriptions | 45,688 | 516,066 | 56,966 | 762,318 |
| Distributions reinvested | 61,736 | 654,781 | 105,312 | 1,383,420 |
| Redemptions | (280,309) | (3,185,575) | (394,505) | (5,323,836) |
| Net decrease | (172,885) | (2,014,728) | (232,227) | (3,178,098) |
| Institutional Class | ||||
| Subscriptions | 1,003,017 | 11,724,293 | 1,271,495 | 17,347,950 |
| Distributions reinvested | 889,213 | 9,706,409 | 1,203,185 | 16,093,539 |
| Redemptions | (2,362,528) | (27,347,764) | (1,972,965) | (26,981,639) |
| Net increase (decrease) | (470,298) | (5,917,062) | 501,715 | 6,459,850 |
| Institutional 2 Class | ||||
| Subscriptions | 415,453 | 5,015,187 | 849,645 | 11,595,971 |
| Distributions reinvested | 396,061 | 4,282,197 | 595,599 | 7,939,385 |
| Redemptions | (5,646,478) | (64,232,463) | (768,848) | (10,516,857) |
| Net increase (decrease) | (4,834,964) | (54,935,079) | 676,396 | 9,018,499 |
| Institutional 3 Class | ||||
| Subscriptions | 681,678 | 7,597,930 | 313,137 | 4,125,712 |
| Distributions reinvested | 67,545 | 708,542 | 79,198 | 1,019,983 |
| Redemptions | (328,683) | (3,766,597) | (280,170) | (3,706,710) |
| Net increase | 420,540 | 4,539,875 | 112,165 | 1,438,985 |
| Class R | ||||
| Subscriptions | 167,223 | 1,940,562 | 196,910 | 2,689,995 |
| Distributions reinvested | 40,371 | 437,064 | 66,898 | 891,234 |
| Redemptions | (215,393) | (2,548,114) | (319,417) | (4,346,352) |
| Net decrease | (7,799) | (170,488) | (55,609) | (765,123) |
| Total net increase (decrease) | (6,333,557) | (76,626,875) | 2,129,571 | 26,543,451 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Global Value Fund | Annual Report 2023 | 17 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total
return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain
derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
| Net asset value, beginning of period | Net investment income | Net realized and unrealized gain (loss) | Total from investment operations | Distributions from net investment income | Distributions from net realized gains | Total distributions to shareholders | |
| Class A | |||||||
| Year Ended 2/28/2023 | $12.91 | 0.19 | (0.46) | (0.27) | (0.18) | (0.69) | (0.87) |
| Year Ended 2/28/2022 | $12.87 | 0.21 | 1.35 | 1.56 | (0.33) | (1.19) | (1.52) |
| Year Ended 2/28/2021 | $11.89 | 0.19 | 1.89 | 2.08 | (0.20) | (0.90) | (1.10) |
| Year Ended 2/29/2020 | $13.00 | 0.29 | (0.18) | 0.11 | (0.27) | (0.95) | (1.22) |
| Year Ended 2/28/2019 | $14.20 | 0.22 | (0.22) | 0.00(e) | (0.17) | (1.03) | (1.20) |
| Advisor Class | |||||||
| Year Ended 2/28/2023 | $13.00 | 0.23 | (0.48) | (0.25) | (0.21) | (0.69) | (0.90) |
| Year Ended 2/28/2022 | $12.95 | 0.24 | 1.37 | 1.61 | (0.37) | (1.19) | (1.56) |
| Year Ended 2/28/2021 | $11.96 | 0.20 | 1.92 | 2.12 | (0.23) | (0.90) | (1.13) |
| Year Ended 2/29/2020 | $13.07 | 0.32 | (0.18) | 0.14 | (0.30) | (0.95) | (1.25) |
| Year Ended 2/28/2019 | $14.26 | 0.24 | (0.20) | 0.04 | (0.20) | (1.03) | (1.23) |
| Class C | |||||||
| Year Ended 2/28/2023 | $12.67 | 0.11 | (0.46) | (0.35) | (0.09) | (0.69) | (0.78) |
| Year Ended 2/28/2022 | $12.66 | 0.11 | 1.32 | 1.43 | (0.23) | (1.19) | (1.42) |
| Year Ended 2/28/2021 | $11.70 | 0.06 | 1.91 | 1.97 | (0.11) | (0.90) | (1.01) |
| Year Ended 2/29/2020 | $12.81 | 0.19 | (0.18) | 0.01 | (0.17) | (0.95) | (1.12) |
| Year Ended 2/28/2019 | $14.04 | 0.16 | (0.27) | (0.11) | (0.09) | (1.03) | (1.12) |
| Institutional Class | |||||||
| Year Ended 2/28/2023 | $12.95 | 0.22 | (0.47) | (0.25) | (0.21) | (0.69) | (0.90) |
| Year Ended 2/28/2022 | $12.90 | 0.24 | 1.37 | 1.61 | (0.37) | (1.19) | (1.56) |
| Year Ended 2/28/2021 | $11.92 | 0.21 | 1.90 | 2.11 | (0.23) | (0.90) | (1.13) |
| Year Ended 2/29/2020 | $13.03 | 0.32 | (0.18) | 0.14 | (0.30) | (0.95) | (1.25) |
| Year Ended 2/28/2019 | $14.22 | 0.25 | (0.21) | 0.04 | (0.20) | (1.03) | (1.23) |
| Institutional 2 Class | |||||||
| Year Ended 2/28/2023 | $12.91 | 0.27 | (0.50) | (0.23) | (0.22) | (0.69) | (0.91) |
| Year Ended 2/28/2022 | $12.87 | 0.25 | 1.36 | 1.61 | (0.38) | (1.19) | (1.57) |
| Year Ended 2/28/2021 | $11.89 | 0.19 | 1.93 | 2.12 | (0.24) | (0.90) | (1.14) |
| Year Ended 2/29/2020 | $13.00 | 0.32 | (0.17) | 0.15 | (0.31) | (0.95) | (1.26) |
| Year Ended 2/28/2019 | $14.19 | 0.25 | (0.21) | 0.04 | (0.20) | (1.03) | (1.23) |
| Institutional 3 Class | |||||||
| Year Ended 2/28/2023 | $12.45 | 0.22 | (0.44) | (0.22) | (0.23) | (0.69) | (0.92) |
| Year Ended 2/28/2022 | $12.46 | 0.25 | 1.32 | 1.57 | (0.39) | (1.19) | (1.58) |
| Year Ended 2/28/2021 | $11.55 | 0.19 | 1.87 | 2.06 | (0.25) | (0.90) | (1.15) |
| Year Ended 2/29/2020 | $12.66 | 0.32 | (0.16) | 0.16 | (0.32) | (0.95) | (1.27) |
| Year Ended 2/28/2019 | $13.85 | 0.25 | (0.20) | 0.05 | (0.21) | (1.03) | (1.24) |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 18 | Columbia Global Value Fund | Annual Report 2023 |
Financial Highlights (continued)
| Net asset value, end of period | Total return | Total gross expense ratio to average net assets(a) | Total net expense ratio to average net assets(a),(b) | Net investment income ratio to average net assets | Portfolio turnover | Net assets, end of period (000’s) | |
| Class A | |||||||
| Year Ended 2/28/2023 | $11.77 | (1.40%) | 1.13%(c) | 1.13%(c),(d) | 1.65% | 52% | $633,847 |
| Year Ended 2/28/2022 | $12.91 | 12.13% | 1.11%(c) | 1.11%(c),(d) | 1.52% | 48% | $710,822 |
| Year Ended 2/28/2021 | $12.87 | 18.84% | 1.15%(c) | 1.15%(c),(d) | 1.61% | 70% | $696,568 |
| Year Ended 2/29/2020 | $11.89 | 0.36% | 1.13%(c) | 1.13%(c),(d) | 2.20% | 37% | $570,739 |
| Year Ended 2/28/2019 | $13.00 | 0.40% | 1.15%(c) | 1.15%(c),(d) | 1.62% | 33% | $645,363 |
| Advisor Class | |||||||
| Year Ended 2/28/2023 | $11.85 | (1.21%) | 0.88%(c) | 0.87%(c),(d) | 1.93% | 52% | $5,904 |
| Year Ended 2/28/2022 | $13.00 | 12.44% | 0.83%(c) | 0.83%(c),(d) | 1.77% | 48% | $7,474 |
| Year Ended 2/28/2021 | $12.95 | 19.14% | 0.90%(c) | 0.90%(c),(d) | 1.72% | 70% | $4,937 |
| Year Ended 2/29/2020 | $11.96 | 0.61% | 0.88%(c) | 0.88%(c),(d) | 2.44% | 37% | $2,349 |
| Year Ended 2/28/2019 | $13.07 | 0.66% | 0.90%(c) | 0.90%(c),(d) | 1.77% | 33% | $1,856 |
| Class C | |||||||
| Year Ended 2/28/2023 | $11.54 | (2.13%) | 1.88%(c) | 1.87%(c),(d) | 0.92% | 52% | $8,527 |
| Year Ended 2/28/2022 | $12.67 | 11.24% | 1.85%(c) | 1.85%(c),(d) | 0.82% | 48% | $11,556 |
| Year Ended 2/28/2021 | $12.66 | 18.01% | 1.90%(c) | 1.90%(c),(d) | 0.54% | 70% | $14,480 |
| Year Ended 2/29/2020 | $11.70 | (0.39%) | 1.89%(c) | 1.89%(c),(d) | 1.46% | 37% | $3,696 |
| Year Ended 2/28/2019 | $12.81 | (0.39%) | 1.89%(c) | 1.89%(c),(d) | 1.17% | 33% | $5,573 |
| Institutional Class | |||||||
| Year Ended 2/28/2023 | $11.80 | (1.22%) | 0.88%(c) | 0.88%(c),(d) | 1.91% | 52% | $136,608 |
| Year Ended 2/28/2022 | $12.95 | 12.47% | 0.85%(c) | 0.85%(c),(d) | 1.77% | 48% | $155,962 |
| Year Ended 2/28/2021 | $12.90 | 19.11% | 0.90%(c) | 0.90%(c),(d) | 1.78% | 70% | $148,950 |
| Year Ended 2/29/2020 | $11.92 | 0.61% | 0.88%(c) | 0.88%(c),(d) | 2.45% | 37% | $88,301 |
| Year Ended 2/28/2019 | $13.03 | 0.66% | 0.90%(c) | 0.90%(c),(d) | 1.87% | 33% | $99,972 |
| Institutional 2 Class | |||||||
| Year Ended 2/28/2023 | $11.77 | (1.06%) | 0.78%(c) | 0.78%(c) | 2.26% | 52% | $8,990 |
| Year Ended 2/28/2022 | $12.91 | 12.48% | 0.79%(c) | 0.79%(c) | 1.81% | 48% | $72,299 |
| Year Ended 2/28/2021 | $12.87 | 19.26% | 0.84%(c) | 0.84%(c) | 1.55% | 70% | $63,366 |
| Year Ended 2/29/2020 | $11.89 | 0.68% | 0.81%(c) | 0.81%(c) | 2.48% | 37% | $1,008 |
| Year Ended 2/28/2019 | $13.00 | 0.72% | 0.83%(c) | 0.83%(c) | 1.86% | 33% | $626 |
| Institutional 3 Class | |||||||
| Year Ended 2/28/2023 | $11.31 | (1.05%) | 0.76%(c) | 0.76%(c) | 1.94% | 52% | $13,349 |
| Year Ended 2/28/2022 | $12.45 | 12.59% | 0.70%(c) | 0.70%(c) | 1.90% | 48% | $9,462 |
| Year Ended 2/28/2021 | $12.46 | 19.29% | 0.78%(c) | 0.78%(c) | 1.65% | 70% | $8,071 |
| Year Ended 2/29/2020 | $11.55 | 0.75% | 0.77%(c) | 0.77%(c) | 2.56% | 37% | $809 |
| Year Ended 2/28/2019 | $12.66 | 0.78% | 0.78%(c) | 0.78%(c) | 1.96% | 33% | $578 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Global Value Fund | Annual Report 2023 | 19 |
Financial Highlights (continued)
| Net asset value, beginning of period | Net investment income | Net realized and unrealized gain (loss) | Total from investment operations | Distributions from net investment income | Distributions from net realized gains | Total distributions to shareholders | |
| Class R | |||||||
| Year Ended 2/28/2023 | $12.87 | 0.16 | (0.47) | (0.31) | (0.15) | (0.69) | (0.84) |
| Year Ended 2/28/2022 | $12.83 | 0.18 | 1.35 | 1.53 | (0.30) | (1.19) | (1.49) |
| Year Ended 2/28/2021 | $11.85 | 0.13 | 1.92 | 2.05 | (0.17) | (0.90) | (1.07) |
| Year Ended 2/29/2020 | $12.96 | 0.26 | (0.18) | 0.08 | (0.24) | (0.95) | (1.19) |
| Year Ended 2/28/2019 | $14.17 | 0.18 | (0.22) | (0.04) | (0.14) | (1.03) | (1.17) |
| Notes to Financial Highlights | |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | Ratios include interest on collateral expense which is less than 0.01%. |
| (d) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (e) | Rounds to zero. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 20 | Columbia Global Value Fund | Annual Report 2023 |
Financial Highlights (continued)
| Net asset value, end of period | Total return | Total gross expense ratio to average net assets(a) | Total net expense ratio to average net assets(a),(b) | Net investment income ratio to average net assets | Portfolio turnover | Net assets, end of period (000’s) | |
| Class R | |||||||
| Year Ended 2/28/2023 | $11.72 | (1.74%) | 1.38%(c) | 1.38%(c),(d) | 1.39% | 52% | $6,407 |
| Year Ended 2/28/2022 | $12.87 | 11.92% | 1.32%(c) | 1.32%(c),(d) | 1.34% | 48% | $7,132 |
| Year Ended 2/28/2021 | $12.83 | 18.59% | 1.40%(c) | 1.40%(c),(d) | 1.08% | 70% | $7,825 |
| Year Ended 2/29/2020 | $11.85 | 0.11% | 1.38%(c) | 1.38%(c),(d) | 1.96% | 37% | $784 |
| Year Ended 2/28/2019 | $12.96 | 0.14% | 1.40%(c) | 1.40%(c),(d) | 1.37% | 33% | $1,187 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Global Value Fund | Annual Report 2023 | 21 |
Notes to Financial Statements
February 28, 2023
February 28, 2023
Note 1. Organization
Columbia Global Value Fund (the
Fund), a series of Columbia Funds Series Trust II (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 8 years. Advisor Class, Institutional Class, Institutional 2 Class,
Institutional 3 Class and Class R shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional investors and to certain other investors as also
described in the Fund’s prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
Equity securities listed on an
exchange are valued at the closing price or last trade price on their primary exchange at the close of business of the New York Stock Exchange. Securities with a closing price not readily available or not listed on
any exchange are valued at the mean between the closing bid and ask prices. Listed preferred stocks convertible into common stocks are valued using an evaluated price from a pricing service.
Foreign equity securities are
valued based on the closing price or last trade price on their primary exchange at the close of business of the New York Stock Exchange. If any foreign equity security closing prices are not readily available,
the securities are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are determined at the scheduled closing time of the New York Stock Exchange.
Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect
events that occur after such close but before the close of the New York Stock Exchange. In those situations, foreign securities will be fair valued pursuant to a policy approved by the Board of Trustees. Under the
policy, the Fund may utilize a third-party pricing service to determine these fair values. The third-party pricing service takes into account multiple factors, including, but not limited to, movements in the U.S.
securities markets, certain depositary receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that
reasonably reflects the current market conditions as of the close of the New York Stock Exchange. The fair value of a security is likely to be different from the quoted or published price, if available.
Investments in open-end investment
companies (other than exchange-traded funds (ETFs)), are valued at the latest net asset value reported by those companies as of the valuation time.
| 22 | Columbia Global Value Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
Forward foreign currency exchange
contracts are marked-to-market based upon foreign currency exchange rates provided by a pricing service.
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security, if
available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Foreign currency transactions and
translations
The values of all assets and
liabilities denominated in foreign currencies are generally translated into U.S. dollars at exchange rates determined at the close of regular trading on the New York Stock Exchange. Net realized and unrealized gains
(losses) on foreign currency transactions and translations include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising
from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes,
the Fund does not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations
are included with the net realized and unrealized gains (losses) on investments in the Statement of Operations.
Derivative instruments
The Fund invests in certain
derivative instruments, as detailed below, 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, failure of the clearinghouse or CCP may pose additional counterparty credit risk. 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
| Columbia Global Value Fund | Annual Report 2023 | 23 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
the aggregate amount of margin held by the
clearing broker for all its clients and such shortfall is remedied by the CCP or otherwise, 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 instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically
permit a single net payment in the event of default (close-out netting), including the bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may
impose restrictions on or prohibitions against the right of offset or netting in bankruptcy, insolvency or other events.
Collateral (margin) requirements
differ by type of derivative. Margin requirements are established by the clearinghouse or CCP for exchange-traded and centrally cleared derivatives. Brokers can ask for margin in excess of the minimum in certain
circumstances. Collateral terms 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 or receive interest income on cash collateral pledged to the broker. The Fund attempts to mitigate
counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.
Certain ISDA Master Agreements
allow counterparties of over-the-counter derivatives transactions to terminate derivatives contracts prior to maturity in the event the Fund’s net asset value declines by a stated percentage over a specified
time period or if the Fund fails to meet certain terms of the ISDA Master Agreement, which would cause the Fund to accelerate payment of any net liability owed to the counterparty. The Fund also has termination
rights if the counterparty fails to meet certain terms of the ISDA Master Agreement. In determining whether to exercise such termination rights, the Fund would consider, in addition to counterparty credit risk,
whether termination would result in a net liability owed from the counterparty.
For financial reporting purposes,
the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.
Forward foreign currency exchange
contracts
Forward foreign currency exchange
contracts are over-the-counter agreements between two parties to buy and sell a currency at a set price on a future date. The Fund utilized forward foreign currency exchange contracts to hedge the currency exposure
associated with some or all of the Fund’s securities, to shift investment exposure from one currency to another and to shift U.S. dollar exposure to achieve a representative weighted mix of major currencies in
its benchmark. These instruments may be used for other purposes in future periods.
The values of forward foreign
currency exchange contracts fluctuate daily with changes in foreign currency exchange rates. Changes in the value of these contracts are recorded as unrealized appreciation or depreciation until the contract is
exercised or has expired. The Fund will realize a gain or loss when the forward foreign currency exchange contract is closed or expires. Non-deliverable forward foreign currency exchange contracts are settled with the
counterparty in U.S. dollars without delivery of foreign currency.
| 24 | Columbia Global Value Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
The use of forward foreign currency
exchange contracts does not eliminate fluctuations in the prices of the Fund’s portfolio securities. The risks of forward foreign currency exchange contracts include movement in the values of the foreign
currencies relative to the U.S. dollar (or other foreign currencies) and the possibility that counterparties will not complete their contractual obligations, which may be in excess of the amount reflected, if any, in
the Statement of Assets and Liabilities.
Options contracts
Options are contracts which entitle
the holder to purchase or sell securities or other identified assets at a specified price, or in the case of index option contracts, to receive or pay the difference between the index value and the strike price of the
index option contract. Option contracts can be either exchange-traded or over-the-counter. The Fund purchased and has written option contracts to decrease the Fund’s exposure to equity risk and to facilitate
buying and selling of securities for investments. These instruments may be used for other purposes in future periods. Completion of transactions for option contracts traded in the over-the-counter market depends upon
the performance of the other party. Collateral may be collected or posted by the Fund to secure over-the-counter option contract trades. Collateral held or posted by the Fund for such option contract trades must be
returned to the broker or the Fund upon closure, exercise or expiration of the contract.
Options contracts purchased are
recorded as investments. When the Fund writes an options contract, the premium received is recorded as an asset and an amount equivalent to the premium is recorded as a liability in the Statement of Assets and
Liabilities and is subsequently adjusted to reflect the current fair value of the option written. Changes in the fair value of the written option are recorded as unrealized appreciation or depreciation until the
contract is exercised or has expired. The Fund realizes a gain or loss when the option contract is closed or expires. When option contracts are exercised, the proceeds on sales for a written call or purchased put
option contract, or the purchase cost for a written put or purchased call option contract, is adjusted by the amount of premium received or paid.
For over-the-counter options
purchased, the Fund bears the risk of loss of the amount of the premiums paid plus the positive change in market values net of any collateral held by the Fund should the counterparty fail to perform under the
contracts. Option contracts written by the Fund do not typically give rise to significant counterparty credit risk, as options written generally obligate the Fund and not the counterparty to perform. The risk in
writing a call option contract is that the Fund gives up the opportunity for profit if the market price of the security increases above the strike price and the option contract is exercised. The risk in writing a put
option contract is that the Fund may incur a loss if the market price of the security decreases below the strike price and the option contract is exercised. Exercise of a written option could result in the Fund
purchasing or selling a security or foreign currency when it otherwise would not, or at a price different from the current market value. In purchasing and writing options, the Fund bears the risk of an unfavorable
change in the value of the underlying instrument or the risk that the Fund may not be able to enter into a closing transaction due to an illiquid market.
Effects of derivative transactions in
the financial statements
The following tables are intended
to provide additional information about the effect of derivatives on the financial statements of the Fund, including: the fair value of derivatives by risk category and the location of those fair values in the
Statement of Assets and Liabilities; and the impact of derivative transactions over the period in the Statement of Operations, including realized and unrealized gains (losses). The derivative instrument schedules
following the Portfolio of Investments present additional information regarding derivative instruments outstanding at the end of the period, if any.
The following table is a summary of
the fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) at February 28, 2023:
| Columbia Global Value Fund | Annual Report 2023 | 25 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
| Liability derivatives | ||
| Risk exposure category | Statement of assets and liabilities location | Fair value ($) |
| Foreign exchange risk | Unrealized depreciation on forward foreign currency exchange contracts | 1,158,617 |
The following table indicates the
effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended February 28, 2023:
The following table is a summary
of the average outstanding volume by derivative instrument for the year ended February 28, 2023:
| Derivative instrument | Average value ($) |
| Options contracts — purchased | 9,564* |
| Options contracts — written | (13,421)** |
| Derivative instrument | Average unrealized appreciation ($)** | Average unrealized depreciation ($)** |
| Forward foreign currency exchange contracts | 1,956,961 | (1,578,760) |
| * | Based on the ending daily outstanding amounts for the year ended February 28, 2023. |
| ** | Based on the ending quarterly outstanding amounts for the year ended February 28, 2023. |
| 26 | Columbia Global Value Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
Offsetting of assets and
liabilities
The following table presents the
Fund’s gross and net amount of assets and liabilities available for offset under netting arrangements as well as any related collateral received or pledged by the Fund as of February 28, 2023:
| Morgan Stanley ($) | |
| Assets | |
| Forward foreign currency exchange contracts | 2,233,839 |
| Liabilities | |
| Forward foreign currency exchange contracts | 1,158,617 |
| Total financial and derivative net assets | 1,075,222 |
| Total collateral received (pledged) (a) | 763,000 |
| Net amount (b) | 312,222 |
| (a) | In some instances, the actual collateral received and/or pledged may be more than the amount shown due to overcollateralization. |
| (b) | Represents the net amount due from/(to) counterparties in the event of default. |
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Corporate actions and dividend
income are generally recorded net of any non-reclaimable tax withholdings, on the ex-dividend date or upon receipt of an ex-dividend notification in the case of certain foreign securities.
The Fund may receive distributions
from holdings in equity securities, business development companies (BDCs), exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment companies (RICs), and real estate investment trusts
(REITs), which report information as to the tax character of their distributions annually. These distributions are allocated to dividend income, capital gain and return of capital based on actual information reported.
Return of capital is recorded as a reduction of the cost basis of securities held. If the Fund no longer owns the applicable securities, return of capital is recorded as a realized gain. With respect to REITs, to the
extent actual information has not yet been reported, estimates for return of capital are made by Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise
Financial, Inc. (Ameriprise Financial). The Investment Manager’s estimates are subsequently adjusted when the actual character of the distributions is disclosed by the REITs, which could result in a
proportionate change in return of capital to shareholders.
Awards from class action litigation
are recorded as a reduction of cost basis if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities on the payment date, the proceeds are recorded as
realized gains.
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
| Columbia Global Value Fund | Annual Report 2023 | 27 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable income and net capital gain, if any, for its
tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net income and certain other
amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Foreign taxes
The Fund may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules
and regulations that exist in the markets in which it invests.
Realized gains in certain countries
may be subject to foreign taxes at the Fund level, based on statutory rates. The Fund accrues for such foreign taxes on realized and unrealized gains at the appropriate rate for each jurisdiction, as applicable. The
amount, if any, is disclosed as a liability in the Statement of Assets and Liabilities.
The Fund may file withholding tax
reclaims in certain European Union countries to recover a portion of foreign taxes previously withheld on dividends earned, which may be reclaimable based upon certain provisions in the Treaty on the Functioning of
the European Union (EU) and subsequent rulings by the European Court of Justice. The Fund may record a reclaim receivable when the amount is known, the Fund has received notice of a pending refund, and there are no
significant uncertainties on collectability. Income received from EU reclaims is included in the Statement of Operations.
Distributions to shareholders
Distributions from net investment
income, if any, are declared and paid each calendar quarter. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with
federal income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Recent accounting pronouncement
Tailored Shareholder Reports
In October 2022, the Securities and
Exchange Commission (SEC) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds and Exchange-Traded Funds; Fee Information in Investment Company Advertisements. The rule and form amendments
will, among other things, require the Fund to transmit concise and visually engaging shareholder reports that highlight key information. The amendments will require that funds tag information in a structured data
format and that certain more in-depth information be made available online and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month
transition period after the effective date of the amendment.
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
| 28 | Columbia Global Value Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
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 0.72% to 0.52% as the Fund’s net assets increase. The effective management services fee rate for the year ended February
28, 2023 was 0.70% of the Fund’s average daily net assets.
Compensation of board members
Members of the Board of Trustees
who are not officers or employees of the Investment Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the
Deferred Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of
certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All
amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund. The expense for the Deferred Plan, which includes Trustees’ fees deferred during the current period as well as any
gains or losses on the Trustees’ deferred compensation balances as a result of market fluctuations, is included in "Compensation of board members" in the Statement of Operations.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with SS&C GIDS, Inc. (SS&C GIDS) to serve as sub-transfer agent. Prior to January 1, 2023, SS&C GIDS was known as DST Asset
Manager Solutions, Inc. The Transfer Agent pays the fees of SS&C GIDS for services as sub-transfer agent and SS&C GIDS is not entitled to reimbursement for such fees from the Fund (with the exception of
out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class.
For the year ended February 28,
2023, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| Columbia Global Value Fund | Annual Report 2023 | 29 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended February 28, 2023, these minimum account balance fees reduced total expenses
of the Fund by $6,786.
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. Under a Plan and Agreement of Distribution, the Fund pays a fee at the maximum annual rates of up to 0.25%, 1.00% and 0.50% of the Fund’s average daily net assets attributable to Class A, Class C and
Class R shares, respectively. For Class C shares, of the 1.00% fee, up to 0.75% can be reimbursed for distribution expenses and up to an additional 0.25% can be reimbursed for shareholder servicing expenses. For Class
R shares, of the 0.50% fee, up to 0.25% can be reimbursed for shareholder servicing expenses.
The amount of distribution and
shareholder services expenses incurred by the Distributor and not yet reimbursed (unreimbursed expense) was approximately $811,000 for Class C shares. This amount is based on the most recent information available as
of December 31, 2022, and may be recovered from future payments under the distribution plan or contingent deferred sales charges (CDSCs). To the extent the unreimbursed expense has been fully recovered, the
distribution and/or shareholder services fee is reduced.
Sales charges (unaudited)
Sales charges, including front-end
charges and CDSCs, received by the Distributor for distributing Fund shares for the year ended February 28, 2023, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 5.75 | 0.50 - 1.00(a) | 70,183 |
| Class C | — | 1.00(b) | 1,066 |
| (a) | This charge is imposed on certain investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with certain limited exceptions. |
| (b) | This charge applies to redemptions within 12 months after purchase, with certain limited exceptions. |
The Fund’s other share
classes are not subject to sales charges.
Expenses waived/reimbursed by the
Investment Manager and its affiliates
The Investment Manager and certain
of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s
custodian, do not exceed the following annual rate(s) as a percentage of the classes’ average daily net assets:
| 30 | Columbia Global Value Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
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, costs associated with shareholder meetings, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be
modified or amended only with approval from the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are
not recoverable by the Investment Manager or its affiliates in future periods.
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At February 28, 2023, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, foreign currency transactions, passive foreign investment company (pfic) holdings, capital loss carryforwards,
trustees’ deferred compensation and distribution reclassifications. To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary
differences do not require reclassifications.
The following reclassifications
were made:
| Excess of distributions over net investment income ($) | Accumulated net realized (loss) ($) | Paid in capital ($) |
| 2,155,370 | (2,155,370) | — |
Net investment income (loss) and
net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended February 28, 2023 | Year Ended February 28, 2022 | ||||
| Ordinary income ($) | Long-term capital gains ($) | Total ($) | Ordinary income ($) | Long-term capital gains ($) | Total ($) |
| 29,509,096 | 34,870,298 | 64,379,394 | 29,704,924 | 81,239,326 | 110,944,250 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At February 28, 2023, the
components of distributable earnings on a tax basis were as follows:
| Undistributed ordinary income ($) | Undistributed long-term capital gains ($) | Capital loss carryforwards ($) | Net unrealized appreciation ($) |
| 2,319,583 | 17,360,286 | (51,887,781) | 70,342,130 |
At February 28, 2023, 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) ($) | Net unrealized appreciation ($) |
| 740,157,662 | 116,582,278 | (46,240,148) | 70,342,130 |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
| Columbia Global Value Fund | Annual Report 2023 | 31 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
The following capital loss
carryforwards, determined at February 28, 2023, 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
February 28, 2023, capital loss carryforwards utilized, if any, were as follows:
| No expiration short-term ($) | No expiration long-term ($) | Total ($) | Utilized ($) |
| (6,433,790) | (45,453,991) | (51,887,781) | 873,936 |
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 $436,633,211 and $556,853,809, respectively, for the year ended February 28, 2023. The amount of purchase and
sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes
referred to as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
Note 7. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund did not borrow or lend
money under the Interfund Program during the year ended February 28, 2023.
Note 8. Line of credit
The Fund has access to a
revolving credit facility with a syndicate of banks led by JPMorgan Chase Bank, N.A., Citibank, N.A. and Wells Fargo Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. Pursuant to an October 27, 2022 amendment and restatement, the credit facility, which is an agreement between the Fund and certain other funds managed by the Investment Manager
or an affiliated investment manager, severally and not jointly, permits aggregate borrowings up to $950 million. Interest is currently 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 secured overnight financing rate plus 0.10% and (iii) the overnight bank funding rate, plus in each case, 1.00%. Each borrowing under the credit facility
matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the unused amount of the credit facility at a rate of 0.15% per annum. The commitment fee
is included in other expenses in the Statement of Operations. This agreement expires annually in October unless extended or renewed.
| 32 | Columbia Global Value Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
Prior to the October 27, 2022 amendment and
restatement, the Fund had access to a revolving credit facility with a syndicate of banks led by JPMorgan Chase Bank, N.A., Citibank, N.A. and Wells Fargo Bank, N.A. which permitted collective borrowings up to $950
million. 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 secured overnight financing rate plus 0.11448% and (iii)
the overnight bank funding rate, plus in each case, 1.00%.
The Fund had no borrowings during
the year ended February 28, 2023.
Note 9. Significant
risks
Derivatives risk
Losses involving derivative
instruments may be substantial, because a relatively small movement in the underlying reference (which is generally the price, rate or other economic indicator associated with a security(ies), commodity, currency,
index or other instrument or asset) may result in a substantial loss for the Fund. In addition to the potential for increased losses, the use of derivative instruments may lead to increased volatility within the Fund.
Derivatives will typically increase the Fund’s exposure to principal risks to which it is otherwise exposed, and may expose the Fund to additional risks, including correlation risk, counterparty risk, hedging
risk, leverage risk, liquidity risk and pricing risk.
Financial sector risk
The Fund is more susceptible to the
particular risks that may affect companies in the financial services sector than if it were invested in a wider variety of companies in unrelated sectors. Companies in the financial services sector are subject to
certain risks, including the risk of regulatory change, decreased liquidity in credit markets and unstable interest rates. Such companies may have concentrated portfolios, such as a high level of loans to one or more
industries or sectors, which makes them vulnerable to economic conditions that affect such industries or sectors. Performance of such companies may be affected by competitive pressures and exposure to investments,
agreements and counterparties, including credit products that, under certain circumstances, may lead to losses (e.g., subprime loans). Companies in the financial services sector are subject to extensive governmental
regulation that may limit the amount and types of loans and other financial commitments they can make, and interest rates and fees that they may charge. In addition, profitability of such companies is largely
dependent upon the availability and the cost of capital.
Foreign securities and emerging
market countries risk
Investing in foreign securities may
involve heightened risks relative to investments in U.S. securities. Investing in foreign securities subjects the Fund to the risks associated with the issuer’s country of organization and places of business
operations, including risks associated with political, regulatory, economic, social, diplomatic and other conditions or events occurring in the country or region, which may result in significant market volatility. In
addition, certain foreign securities may be more volatile and less liquid than U.S. securities. Investing in emerging markets may increase these risks and expose the Fund to elevated risks associated with increased
inflation, deflation or currency devaluation. To the extent that the Fund concentrates its investment exposure to any one or a few specific countries, the Fund will be particularly susceptible to the risks associated
with the conditions, events or other factors impacting those countries or regions and may, therefore, have a greater risk than that of a fund that is more geographically diversified. The financial information and
disclosure made available by issuers of emerging market securities may be considerably less reliable than publicly available information about other foreign securities. The Public Company Accounting Oversight Board,
which regulates auditors of U.S. public companies, is unable to inspect audit work papers in certain foreign countries. Investors in foreign countries often have limited rights and few practical remedies to pursue
shareholder claims, including class actions or fraud claims, and the ability of the U.S. Securities and Exchange Commission, the U.S. Department of Justice and other authorities to bring and enforce actions against
foreign issuers or foreign persons is limited.
Market 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
| Columbia Global Value Fund | Annual Report 2023 | 33 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
Fund’s ability to price or value
hard-to-value assets in thinly traded and closed markets and could cause 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 large-scale invasion of Ukraine
by Russia in February 2022 has resulted in sanctions and market disruptions, including declines in regional and global stock markets, unusual volatility in global commodity markets and significant devaluations of
Russian currency. The extent and duration of the military action are impossible to predict but could be significant. Market disruption caused by the Russian military action, and any counter-measures or responses
thereto (including international sanctions, a downgrade in the country’s credit rating, purchasing and financing restrictions, boycotts, tariffs, changes in consumer or purchaser preferences, cyberattacks and
espionage) could have severe adverse impacts on regional and/or global securities and commodities markets, including markets for oil and natural gas. These impacts may include reduced market liquidity, distress in
credit markets, further disruption of global supply chains, increased risk of inflation, and limited access to investments in certain international markets and/or issuers. These developments and other related events
could negatively impact Fund performance.
Shareholder concentration risk
At February 28, 2023, affiliated
shareholders of record owned 41.1% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the
Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of
less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 10. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 11. Information
regarding pending and settled legal proceedings
Ameriprise Financial and certain
of its affiliates are involved in the normal course of business in legal proceedings which include regulatory inquiries, arbitration and litigation, including class actions concerning matters arising in connection
with the conduct of their activities as part of a diversified financial services firm. 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 Fund.
| 34 | Columbia Global Value Fund | Annual Report 2023 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust II and Shareholders of Columbia Global Value Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Global Value Fund (one of the funds constituting Columbia Funds Series Trust II, referred to hereafter as the "Fund") as of
February 28, 2023, the related statement of operations for the year ended February 28, 2023, the statement of changes in net assets for each of the two years in the period ended February 28, 2023, including the
related notes, and the financial highlights for each of the five years in the period ended February 28, 2023 (collectively referred to as the "financial statements"). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the Fund as of February 28, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the
period ended February 28, 2023 and the financial highlights for each of the five years in the period ended February 28, 2023 in conformity with accounting principles generally accepted in the United States of
America.
Basis for Opinion
These financial statements are the
responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these
financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of February 28, 2023 by correspondence with the custodian, transfer agent and broker. We believe that
our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
April 21, 2023
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
| Columbia Global Value Fund | Annual Report 2023 | 35 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended February 28, 2023. Shareholders will be notified in early 2024 of the amounts for use in preparing 2023 income tax returns.
| Qualified dividend income | Dividends received deduction | Section 199A dividends | Capital gain dividend |
| 78.24% | 49.60% | 0.85% | $24,097,854 |
Qualified dividend income. For
taxable, non-corporate shareholders, the percentage of ordinary income distributed during the fiscal year that represents qualified dividend income subject to reduced tax rates.
Dividends received deduction. The
percentage of ordinary income distributed during the fiscal year that qualifies for the corporate dividends received deduction.
Section 199A dividends. For
taxable, non-corporate shareholders, the percentage of ordinary income distributed during the fiscal year that represents Section 199A dividends potentially eligible for a 20% deduction.
Capital gain dividend. The Fund
designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
TRUSTEES AND
OFFICERS
(Unaudited)
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, each Trustee generally serves until December 31 of the year such Trustee turns seventy-five (75).
| 36 | Columbia Global Value Fund | Annual Report 2023 |
TRUSTEES AND OFFICERS (continued)
(Unaudited)
Independent trustees
(Unaudited)
Independent trustees
| Name, address, year of birth | Position held with the Columbia Funds and length of service | Principal occupation(s) during past five years and other relevant professional experience | Number of Funds in the Columbia Funds Complex* overseen | Other directorships held by Trustee during the past five years |
| George S. Batejan c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1954 | Trustee since 2017 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 176 | Former Chairman of the Board, NICSA (National Investment Company Services Association) (Executive Committee, Nominating Committee and Governance Committee), 2014-2016; former Director, Intech Investment Management, 2011-2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016; former Advisory Board Member, University of Colorado Business School, 2015-2018; former Board Member, Chase Bank International, 1993-1994 |
| Kathleen Blatz c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1954 | Trustee since 2006 | Attorney, specializing in arbitration and mediation; Chief Justice, Minnesota Supreme Court, 1998-2006; Associate Justice, Minnesota Supreme Court, 1996-1998; Fourth Judicial District Court Judge, Hennepin County, 1994-1996; Attorney in private practice and public service, 1984-1993; State Representative, Minnesota House of Representatives, 1979-1993, which included service on the Tax and Financial Institutions and Insurance Committees; Member and Interim Chair, Minnesota Sports Facilities Authority, January-July 2017; Interim President and Chief Executive Officer, Blue Cross and Blue Shield of Minnesota (health care insurance), February-July 2018, April-October 2021 | 176 | Former Trustee, Blue Cross and Blue Shield of Minnesota, 2009-2021 (Chair of the Business Development Committee, 2014-2017; Chair of the Governance Committee, 2017-2019); former Member and Chair of the Board, Minnesota Sports Facilities Authority, January 2017-July 2017; former Director, Robina Foundation, 2009-2020 (Chair, 2014-2020); Director, Richard M. Schulze Family Foundation, since 2021 |
| Pamela G. Carlton c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1954 | Chair since 2023; Trustee since 2007 | President, Springboard — Partners in Cross Cultural Leadership (consulting company), since 2003; Managing Director of US Equity Research, JP Morgan Chase, 1999-2003; Director of US Equity Research, Chase Asset Management, 1996-1999; Co-Director Latin America Research, 1993-1996, COO Global Research, 1992-1996, Co-Director of US Research, 1991-1992, Investment Banker, 1982-1991, Morgan Stanley; Attorney, Cleary Gottlieb Steen & Hamilton LLP, 1980-1982 | 176 | Trustee, New York Presbyterian Hospital Board, since 1996; Director, DR Bank (Audit Committee) since 2017; Director, Evercore Inc. (Audit Committee, Nominating and Governance Committee), since 2019; Director, Apollo Commercial Real Estate Finance, Inc. (Chair, Nominating and Governance Committee), since 2021; the Governing Council of the Independent Directors Council (IDC), since 2021 |
| Columbia Global Value Fund | Annual Report 2023 | 37 |
TRUSTEES AND OFFICERS (continued)
(Unaudited)
Independent trustees (continued)
(Unaudited)
Independent trustees (continued)
| Name, address, year of birth | Position held with the Columbia Funds and length of service | Principal occupation(s) during past five years and other relevant professional experience | Number of Funds in the Columbia Funds Complex* overseen | Other directorships held by Trustee during the past five years |
| Janet Langford Carrig c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1957 | Trustee since 1996 | Senior Vice President, General Counsel and Corporate Secretary, ConocoPhillips (independent energy company), September 2007-October 2018 | 174 | Director, EQT Corporation (natural gas producer), since 2019; former Director, Whiting Petroleum Corporation (independent oil and gas company), 2020-2022 |
| J. Kevin Connaughton c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1964 | Trustee since 2020 | CEO and President, RhodeWay Financial (non-profit financial planning firm), since December 2022; Member, FINRA National Adjudicatory Council, since January 2020; Adjunct Professor of Finance, Bentley University since January 2018; Consultant to Independent Trustees of CFVIT and CFST I from March 2016 to June 2020 with respect to CFVIT and to December 2020 with respect to CFST I; 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 | 174 | Former Director, The Autism Project, March 2015-December 2021; 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 M. Darragh c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1962 | Trustee since 2020 | Managing Director of Darragh Inc. (strategy and talent management consulting firm), since 2010; Founder and CEO, Zolio, Inc. (investment management talent identification platform), since 2004; Consultant to Independent Trustees of CFVIT and CFST I from June 2019 to June 2020 with respect to CFVIT and to December 2020 with respect to CFST I; Partner, Tudor Investments, 2004-2010; Senior Partner, McKinsey & Company (consulting), 1990-2004; Touche Ross CPA, 1985-1988 | 174 | Treasurer, Edinburgh University US Trust Board; Member, HBS Community Action Partners Board; Former Director, University of Edinburgh Business School (Member of US Board); former Director, Boston Public Library Foundation |
| Patricia M. Flynn c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1950 | Trustee since 2004 | Professor of Economics and Management, Bentley University, since 2002; Dean, McCallum Graduate School of Business, Bentley University, 1992-2002 | 176 | Former Trustee, MA Taxpayers Foundation,1997-2022; former Governing Board Member (Chairperson of Innovation Index Advisory Committee), MA Technology Collaborative, 1997-2020; former Director, The MA Business Roundtable, 2003-2019 |
| Brian J. Gallagher c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1954 | Trustee since 2017 | Retired; Partner with Deloitte & Touche LLP and its predecessors, 1977-2016 | 176 | Trustee, Catholic Schools Foundation, since 2004 |
| 38 | Columbia Global Value Fund | Annual Report 2023 |
TRUSTEES AND OFFICERS (continued)
(Unaudited)
Independent trustees (continued)
(Unaudited)
Independent trustees (continued)
| Name, address, year of birth | Position held with the Columbia Funds and length of service | Principal occupation(s) during past five years and other relevant professional experience | Number of Funds in the Columbia Funds Complex* overseen | Other directorships held by Trustee during the past five years |
| Douglas A. Hacker c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1955 | Trustee since 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 | 176 | Director, Spartan Nash Company (Chair of the Board) (food distributor); Director, Aircastle Limited (Chair of Audit Committee) (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 |
| Nancy T. Lukitsh c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1956 | Trustee since 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 | 174 | None |
| David M. Moffett c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1952 | Trustee since 2011 | Retired; former Chief Executive Officer of Freddie Mac and Chief Financial Officer of U.S. Bank | 174 | Director, CSX Corporation (transportation suppliers); 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; former Advisor to Bridgewater Associates and The Carlyle Group |
| Catherine James Paglia c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1952 | Trustee since 2004 | Director, Enterprise Asset Management, Inc. (private real estate and asset management company), since September 1998; Managing Director and Partner, Interlaken Capital, Inc., 1989-1997; Vice President, 1982-1985, Principal, 1985-1987, Managing Director, 1987-1989, Morgan Stanley; Vice President, Investment Banking, 1980-1982, Associate, Investment Banking, 1976-1980, Dean Witter Reynolds, Inc. | 176 | Director, Valmont Industries, Inc. (irrigation systems manufacturer), since 2012; Trustee, Carleton College (on the Investment Committee); Trustee, Carnegie Endowment for International Peace (on the Investment Committee) |
| Columbia Global Value Fund | Annual Report 2023 | 39 |
TRUSTEES AND OFFICERS (continued)
(Unaudited)
Independent trustees (continued)
(Unaudited)
Independent trustees (continued)
| Name, address, year of birth | Position held with the Columbia Funds and length of service | Principal occupation(s) during past five years and other relevant professional experience | Number of Funds in the Columbia Funds Complex* overseen | Other directorships held by Trustee during the past five years |
| Natalie A. Trunow c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1967 | Trustee since 2020 | Chief Executive Officer, Millennial Portfolio Solutions LLC (asset management and consulting services), January 2016-January 2021; Non-executive Member of the Investment Committee and Valuation Committee, Sarona Asset Management Inc. (private equity firm) since September 2019; Advisor, Horizon Investments (asset management and consulting services), August 2018-January 2022; Advisor, Paradigm Asset Management, November 2016-January 2022; Consultant to Independent Trustees of CFVIT and CFST I from September 2016 to June 2020 with respect to CFVIT and to December 2020 with respect to CFST I; Director of Investments/Consultant, Casey Family Programs, April 2016-November 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 | 174 | Independent Director, Investment Committee, Health Services for Children with Special Needs, Inc., 2010-2021; Independent Director, (Executive Committee and Chair, Audit Committee), Consumer Credit Counseling Services (formerly Guidewell Financial Solutions), since 2016; Independent Director, (Investment Committee), Sarona Asset Management, since 2019 |
| Sandra L. Yeager c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1964 | Trustee since 2017 | Retired; President and founder, Hanoverian Capital, LLC (SEC registered investment advisor firm), 2008-2016; Managing Director, DuPont Capital, 2006-2008; Managing Director, Morgan Stanley Investment Management, 2004-2006; Senior Vice President, Alliance Bernstein, 1990-2004 | 176 | Former Director, NAPE Education Foundation, October 2016-October 2020; Advisory Board, Jennersville YMCA, since 2022 |
| * | The term “Columbia Funds Complex” as used herein includes Columbia Seligman Premium Technology Growth Fund, Tri-Continental Corporation and each series of Columbia Funds Series Trust (CFST), Columbia Funds Series Trust I (CFST I), Columbia Funds Series Trust II (CFST II), Columbia ETF Trust I (CET I), Columbia ETF Trust II (CET II), Columbia Funds Variable Insurance Trust (CFVIT) and Columbia Funds Variable Series Trust II (CFVST II). Messrs. Batejan, Beckman, Gallagher and Hacker and Mses. Blatz, Carlton, Carrig, Flynn, Paglia and Yeager serve as Directors of Columbia Seligman Premium Technology Growth Fund and Tri-Continental Corporation. |
Interested trustee affiliated with
Investment Manager*
| Name, address, year of birth | Position held with the Columbia Funds 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 |
| Daniel J. Beckman c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1962 | Trustee since November 2021 and President since June 2021 | Vice President – Head of North America Product, Columbia Management Investment Advisers, LLC, since April 2015; President and Principal Executive Officer of the Columbia Funds, since June 2021; officer of Columbia Funds and affiliated funds, 2020-2021 | 176 | Director, Ameriprise Trust Company, since October 2016; Director, Columbia Management Investment Distributors, Inc. since November 2018; Board of Governors, Columbia Wanger Asset Management, LLC since, January 2022; Director, Columbia Threadneedle Canada, Inc., since December 2022 |
| * | 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. |
| 40 | Columbia Global Value Fund | Annual Report 2023 |
TRUSTEES AND OFFICERS (continued)
(Unaudited)
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.
(Unaudited)
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. Beckman, who is President and
Principal Executive Officer, the Fund’s other officers are:
Fund officers
| Columbia Global Value Fund | Annual Report 2023 | 41 |
TRUSTEES AND OFFICERS (continued)
(Unaudited)
Fund officers (continued)
(Unaudited)
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 |
| Ryan C. Larrenaga 290 Congress Street Boston, MA 02210 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. |
| Michael E. DeFao 290 Congress Street Boston, MA 02210 1968 | Vice President (2011) and Assistant Secretary (2010) | Vice President and Chief Counsel, Ameriprise Financial, Inc., since May 2010; Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC, since October 2021 (previously Vice President and Assistant Secretary, May 2010 – September 2021). |
| Lyn Kephart-Strong 5228 Ameriprise Financial Center Minneapolis, MN 55474 1960 | Vice President (2015) | Vice President, Global Investment Operations Services, Columbia Management Investment Advisers, LLC, since 2010; President, Columbia Management Investment Services Corp., since October 2014; President, Ameriprise Trust Company, since January 2017. |
| 42 | Columbia Global Value Fund | Annual Report 2023 |
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.
© 2023 Columbia Management Investment
Advisers, LLC.
columbiathreadneedleus.com/investor/
ANN145_02_N01_(04/23)
Columbia Overseas
Core Fund
Not FDIC or NCUA Insured •
No Financial Institution Guarantee • May Lose Value
Table of Contents
| 3 | |
| 5 | |
| 7 | |
| 8 | |
| 14 | |
| 16 | |
| 17 | |
| 20 | |
| 24 | |
| 38 | |
| 39 | |
| 39 |
If you elect to receive the
shareholder report for Columbia Overseas Core Fund (the Fund) in paper, mailed to you, the Fund mails one shareholder report to each shareholder address, unless such shareholder elects to receive shareholder reports
from the Fund electronically via e-mail or by having a paper notice mailed to you (Postcard Notice) that your Fund’s shareholder report is available at the Columbia funds’ website
(columbiathreadneedleus.com/investor/). If you would like more than one report in paper to be mailed to you, or would like to elect to receive reports via e-mail or access them through Postcard Notice, 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, is available on columbiathreadneedleus.com/investor/ or 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)
290 Congress Street
Boston, MA 02210
Fund distributor
Columbia Management Investment Distributors,
Inc.
290 Congress Street
Boston, MA 02210
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 219104
Kansas City, MO 64121-9104
Columbia Overseas Core Fund | Annual
Report 2023
Fund at a Glance
(Unaudited)
(Unaudited)
Investment objective
The Fund
seeks to provide shareholders with long-term capital appreciation.
Portfolio management
Fred Copper, CFA
Co-Portfolio Manager
Managed Fund since 2018
Daisuke Nomoto, CMA (SAAJ)
Co-Portfolio Manager
Managed Fund since 2018
Morningstar style boxTM
The Morningstar Style Box is based on a fund’s portfolio holdings. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows
investment style (value, blend, or growth). Information shown is based on the most recent data provided by Morningstar.
© 2023 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or
distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
| Columbia Overseas Core Fund | Annual Report 2023 | 3 |
Fund at a Glance (continued)
(Unaudited)
(Unaudited)
Performance of a hypothetical $10,000 investment (March 5, 2018 — February 28, 2023)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Overseas Core Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions
or on the redemption of Fund shares.
| 4 | Columbia Overseas Core Fund | Annual Report 2023 |
Manager Discussion of Fund Performance
(Unaudited)
(Unaudited)
At February 28, 2023, approximately
77.56% of the Fund’s shares were owned in the aggregate by affiliated funds-of-funds managed by Columbia Management Investment Advisers, LLC (the Investment Manager). As a result of asset allocation decisions by
the Investment Manager, it is possible that the Fund may experience relatively large purchases or redemptions from affiliated funds-of-funds. The Investment Manager seeks to minimize the impact of these transactions
by structuring them over a reasonable period of time. The Fund may experience increased expenses as it buys and sells securities as a result of purchases or redemptions by affiliated funds-of-funds.
For the 12-month period that ended
February 28, 2023, Class A shares of Columbia Overseas Core Fund returned -6.89% excluding sales charges. The Fund underperformed its benchmark, the MSCI EAFE Index (Net), which returned -3.14% for the same time
period.
Market overview
International equity markets
delivered mixed results during the 12-month period, with most major benchmarks posting negative returns despite strong results in certain industry groups. For example, the broad developed-market MSCI EAFE Index
(Net) finished down more than 3% in U.S. dollar terms. In contrast, the energy sector within the same index was up more than 30%.
Numerous concerns weighed on
sentiment throughout the first half of the period, particularly a toxic combination of geopolitical and financial market events that punished most asset returns except for “hard” assets such as oil, gold
and other commodities. As a result of the Russian invasion of Ukraine, many western nations imposed punitive sanctions on Russia that limited its ability to transact in global markets and access assets held outside
its borders. Combined, Russia and Ukraine provide a significant portion of many raw materials to the global economy, focused most prominently in Europe and the Middle East. Loss of these supplies disrupted
access to basic necessities for many countries and raised the cost of such goods precipitously in some cases.
As the war in Ukraine continued to
grind on, pressure on commodity markets around the world were made even worse by lockdowns in China stemming from its zero-COVID policy. Mounting inflationary pressures forced central banks globally into the
unfortunate position of needing to tighten monetary policy despite deteriorating economic conditions. These “stagflationary” conditions proved to be a major driver of poor returns across both stocks and
bonds.
Despite occasional bursts of
optimism that drove brief attempts at equity rallies, market momentum remained volatile and continued downward. Poor fixed-income returns, which typically have served as a safe-haven offset to declining equity
markets, compounded the steep drawdowns in stocks. A steadily strengthening U.S. dollar over the first seven months of the reporting period (from the end of February 2022 through the end of September 2022) was an
additional headwind for U.S. investors and eroded returns significantly. During that seven-month period, the MSCI EAFE Index (Net) lost about 11% when measured in local currencies but lost more than 22% in U.S.
dollar terms.
Sentiment reversed abruptly though,
apparently fueled by hints that the global slowdown was beginning to moderate. An early catalyst was Australia hiking interest rates by just 25 basis points versus expectations of 50 basis points, leading to
speculation that other central banks would need to pivot in response to increasing stress from the global tightening cycle. (A basis point is 1/100 of a percent.) Investors also were pleased that China scrapped its
zero-COVID lockdown policy, even though that welcome news was followed by worries that a resulting surge in infections would weigh on growth and make for a challenging reopening of the country’s economy.
Those expectations helped weaken
the U.S. dollar and buoy international equity returns for U.S. investors – but only until the final month of the period. At that point, stronger-than-expected U.S. economic data revived worries over the
so-called “higher-for-longer” U.S. interest rate regime and overwhelmed any expectations of a slowdown in U.S. Federal Reserve interest rate hikes, pushing the U.S. dollar back on a strengthening trend
that again fanned a headwind for U.S. investors.
The Fund’s notable
detractors during the period
| • | The Fund’s underperformance of its benchmark during the period was caused primarily by adverse stock selection, particularly within Sweden, Germany and the United Kingdom, as well as within the communication services, industrials and real estate sectors. |
| Columbia Overseas Core Fund | Annual Report 2023 | 5 |
Manager Discussion of Fund Performance (continued)
(Unaudited)
(Unaudited)
| • | Individual holdings that lagged in absolute and relative terms included Samhallsbyggnadsbolaget I Norden AB (Sweden), Parade Technologies Ltd. (Taiwan), KION Group AG (Germany), Vodafone Group PLC (United Kingdom) and Aroundtown SA (Germany). The Fund sold its position in Aroundtown. |
| • | From a geographical perspective, the Fund’s overweight position in Taiwan hurt relative performance. |
The Fund’s notable
contributors during the period
| • | Relative to its benchmark, the Fund’s overweight positions in Canada and the energy sector helped relative results. |
| • | Individual top performers included Alimentation Couche-Tard, Inc. (Canada), MatsukiyoCocokara & Co. (Japan), AstraZeneca PLC (United Kingdom), TP Icap Group PLC (United Kingdom) and ABN AMRO Bank NV (Netherlands). |
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. International investing involves certain risks and volatility due to potential political, economic or currency instabilities and different financial and accounting standards. Risks are
enhanced for emerging market issuers. Growth securities, at times, may not perform as well as value securities or the stock market in general and may be out of favor with investors. Value securities may be unprofitable if the market fails to recognize their intrinsic worth or the portfolio manager misgauged that worth. Investing in derivatives is a specialized activity that involves special risks that subject the Fund to significant loss potential, including when used as leverage, and may result in greater
fluctuation in Fund value. The value of the Fund’s portfolio may be more volatile than a more geographically diversified fund. 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 this 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 Overseas Core Fund | Annual Report 2023 |
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 365.
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 Overseas Core Fund | Annual Report 2023 | 7 |
Portfolio of Investments
February 28, 2023
February 28, 2023
(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 Overseas Core Fund | Annual Report 2023 |
Portfolio of Investments (continued)
February 28, 2023
February 28, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Overseas Core Fund | Annual Report 2023 | 9 |
Investments in
derivatives
Notes to Portfolio of
Investments
| (a) | Non-income producing investment. |
| (b) | Represents fair value as determined in good faith under procedures approved by the Board of Trustees. At February 28, 2023, the total value of these securities amounted to $0, which represents less than 0.01% of total net assets. |
| (c) | Denotes a restricted security, which is subject to legal or contractual restrictions on resale under federal securities laws. Disposal of a restricted investment may involve time-consuming negotiations and expenses, and prompt sale at an acceptable price may be difficult to achieve. Private placement securities are generally considered to be restricted, although certain of those securities may be traded between qualified institutional investors under the provisions of Section 4(a)(2) and Rule 144A. The Fund will not incur any registration costs upon such a trade. These securities are valued at fair value determined in good faith under consistently applied procedures approved by the Fund’s Board of Trustees. At February 28, 2023, the total market value of these securities amounted to $0, which represents less than 0.01% of total net assets. Additional information on these securities is as follows: |
| Security | Acquisition Dates | Shares | Cost ($) | Value ($) |
| Lukoil PJSC | 01/25/2022-02/02/2022 | 33,398 | 2,752,771 | — |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Overseas Core Fund | Annual Report 2023 |
Portfolio of Investments (continued)
February 28, 2023
February 28, 2023
Notes to Portfolio of Investments (continued)
| (d) | Valuation based on significant unobservable inputs. |
| (e) | The rate shown is the seven-day current annualized yield at February 28, 2023. |
| (f) | As defined in the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. The value of the holdings and transactions in these affiliated companies during the year ended February 28, 2023 are as follows: |
| Affiliated issuers | Beginning of period($) | Purchases($) | Sales($) | Net change in unrealized appreciation (depreciation)($) | End of period($) | Realized gain (loss)($) | Dividends($) | End of period shares |
| Columbia Short-Term Cash Fund, 4.748% | ||||||||
| 3,955,509 | 328,183,777 | (329,499,109) | 4 | 2,640,181 | (1,273) | 142,233 | 2,641,237 | |
Abbreviation Legend
| ADR | American Depositary Receipt |
Currency Legend
| AUD | Australian Dollar |
| CAD | Canada Dollar |
| CHF | Swiss Franc |
| DKK | Danish Krone |
| EUR | Euro |
| GBP | British Pound |
| JPY | Japanese Yen |
| KRW | South Korean Won |
| NOK | Norwegian Krone |
| NZD | New Zealand Dollar |
| SEK | Swedish Krona |
| SGD | Singapore Dollar |
| TWD | New Taiwan Dollar |
| USD | US Dollar |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
Foreign equity securities actively
traded in markets where there is a significant delay in the local close relative to the New York Stock Exchange are classified as Level 2. The values of these securities may include an adjustment to reflect the impact
of market movements following the close of local trading, as described in Note 2 to the financial statements – Security valuation.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Overseas Core Fund | Annual Report 2023 | 11 |
Portfolio of Investments (continued)
February 28, 2023
February 28, 2023
Fair value measurements (continued)
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.
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.
The Fund’s Board of Trustees
(the Board) has designated the Investment Manager, through its Valuation Committee (the Committee), as valuation designee, responsible for determining the fair value of the assets of the Fund for which market
quotations are not readily available using 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 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. Representatives of Columbia Management Investment
Advisers, LLC report to the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of
the inputs used to value the Fund’s investments at February 28, 2023:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Common Stocks | ||||
| Australia | — | 37,265,621 | — | 37,265,621 |
| Austria | — | 4,861,727 | — | 4,861,727 |
| Brazil | 3,337,900 | — | — | 3,337,900 |
| Canada | 49,351,869 | — | — | 49,351,869 |
| China | — | 11,977,225 | — | 11,977,225 |
| Denmark | — | 14,489,259 | — | 14,489,259 |
| Finland | — | 15,283,233 | — | 15,283,233 |
| France | 235,718 | 44,572,014 | — | 44,807,732 |
| Germany | — | 22,912,995 | — | 22,912,995 |
| Hong Kong | — | 3,868,316 | — | 3,868,316 |
| Ireland | 223,223 | 17,454,950 | — | 17,678,173 |
| Israel | 16,788,557 | 9,655,520 | — | 26,444,077 |
| Japan | — | 161,363,762 | — | 161,363,762 |
| Netherlands | — | 89,607,881 | — | 89,607,881 |
| Norway | — | 13,660,348 | — | 13,660,348 |
| Russian Federation | — | — | 0* | 0* |
| Singapore | — | 21,897,118 | — | 21,897,118 |
| South Africa | — | 3,319,842 | — | 3,319,842 |
| South Korea | — | 18,685,205 | — | 18,685,205 |
| Sweden | — | 8,330,396 | — | 8,330,396 |
| Switzerland | — | 53,643,053 | — | 53,643,053 |
| Taiwan | 3,393,379 | 30,972,336 | — | 34,365,715 |
| United Kingdom | 42,809,390 | 84,730,425 | — | 127,539,815 |
| United States | 49,812,205 | 417 | — | 49,812,622 |
| Total Common Stocks | 165,952,241 | 668,551,643 | 0* | 834,503,884 |
| Exchange-Traded Equity Funds | 19,656,495 | — | — | 19,656,495 |
| Money Market Funds | 2,640,181 | — | — | 2,640,181 |
| Total Investments in Securities | 188,248,917 | 668,551,643 | 0* | 856,800,560 |
| Investments in Derivatives | ||||
| Asset | ||||
| Forward Foreign Currency Exchange Contracts | — | 3,368,068 | — | 3,368,068 |
| Liability | ||||
| Forward Foreign Currency Exchange Contracts | — | (3,093,117) | — | (3,093,117) |
| Total | 188,248,917 | 668,826,594 | 0* | 857,075,511 |
| * | Rounds to zero. |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 12 | Columbia Overseas Core Fund | Annual Report 2023 |
Portfolio of Investments (continued)
February 28, 2023
February 28, 2023
Fair value measurements (continued)
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets. These assets include certain foreign securities for which a third party statistical pricing service may be employed for purposes of fair market valuation. The model utilized by such third party statistical pricing service takes into account a security’s correlation to available market data including, but not limited to, intraday index, ADR, and exchange-traded fund movements.
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets. These assets include certain foreign securities for which a third party statistical pricing service may be employed for purposes of fair market valuation. The model utilized by such third party statistical pricing service takes into account a security’s correlation to available market data including, but not limited to, intraday index, ADR, and exchange-traded fund movements.
Derivative instruments are valued at
unrealized appreciation (depreciation).
The Fund does not hold any significant
investments (greater than one percent of net assets) categorized as Level 3.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Overseas Core Fund | Annual Report 2023 | 13 |
Statement of Assets and Liabilities
February 28, 2023
February 28, 2023
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $825,623,683) | $854,160,379 |
| Affiliated issuers (cost $2,640,172) | 2,640,181 |
| Unrealized appreciation on forward foreign currency exchange contracts | 3,368,068 |
| Receivable for: | |
| Investments sold | 1,898,378 |
| Capital shares sold | 104,290 |
| Dividends | 1,637,267 |
| Foreign tax reclaims | 1,638,904 |
| Expense reimbursement due from Investment Manager | 1,930 |
| Prepaid expenses | 9,494 |
| Total assets | 865,458,891 |
| Liabilities | |
| Due to custodian | 13,409 |
| Foreign currency (cost $178,770) | 178,770 |
| Unrealized depreciation on forward foreign currency exchange contracts | 3,093,117 |
| Payable for: | |
| Investments purchased | 3,366,455 |
| Capital shares purchased | 271,024 |
| Foreign capital gains taxes deferred | 881 |
| Management services fees | 19,921 |
| Distribution and/or service fees | 367 |
| Transfer agent fees | 45,999 |
| Compensation of board members | 83,489 |
| Compensation of chief compliance officer | 170 |
| Other expenses | 74,969 |
| Total liabilities | 7,148,571 |
| Net assets applicable to outstanding capital stock | $858,310,320 |
| Represented by | |
| Paid in capital | 897,405,405 |
| Total distributable earnings (loss) | (39,095,085) |
| Total - representing net assets applicable to outstanding capital stock | $858,310,320 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 14 | Columbia Overseas Core Fund | Annual Report 2023 |
Statement of Assets and Liabilities (continued)
February 28, 2023
February 28, 2023
| Class A | |
| Net assets | $47,249,723 |
| Shares outstanding | 5,037,646 |
| Net asset value per share | $9.38 |
| Maximum sales charge | 5.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $9.95 |
| Advisor Class | |
| Net assets | $189,019 |
| Shares outstanding | 20,101 |
| Net asset value per share | $9.40 |
| Class C | |
| Net assets | $1,493,941 |
| Shares outstanding | 160,928 |
| Net asset value per share | $9.28 |
| Institutional Class | |
| Net assets | $286,668,606 |
| Shares outstanding | 30,460,516 |
| Net asset value per share | $9.41 |
| Institutional 2 Class | |
| Net assets | $849,977 |
| Shares outstanding | 90,160 |
| Net asset value per share | $9.43 |
| Institutional 3 Class | |
| Net assets | $521,856,107 |
| Shares outstanding | 55,327,883 |
| Net asset value per share | $9.43 |
| Class R | |
| Net assets | $2,947 |
| Shares outstanding | 315 |
| Net asset value per share | $9.36 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Overseas Core Fund | Annual Report 2023 | 15 |
Statement of Operations
Year Ended February 28, 2023
Year Ended February 28, 2023
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $31,490,535 |
| Dividends — affiliated issuers | 142,233 |
| European Union tax reclaim | 192,773 |
| Foreign taxes withheld | (3,812,278) |
| Total income | 28,013,263 |
| Expenses: | |
| Management services fees | 7,850,696 |
| Distribution and/or service fees | |
| Class A | 119,735 |
| Class C | 19,244 |
| Class R | 15 |
| Transfer agent fees | |
| Class A | 67,772 |
| Advisor Class | 295 |
| Class C | 2,696 |
| Institutional Class | 441,222 |
| Institutional 2 Class | 422 |
| Institutional 3 Class | 34,926 |
| Class R | 4 |
| Compensation of board members | 24,750 |
| Custodian fees | 161,785 |
| Printing and postage fees | 47,394 |
| Registration fees | 135,894 |
| Audit fees | 46,652 |
| Legal fees | 25,926 |
| Interest on collateral | 13,057 |
| Interest on interfund lending | 2,799 |
| Compensation of chief compliance officer | 168 |
| Other | 46,595 |
| Total expenses | 9,042,047 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (520,108) |
| Fees waived by transfer agent | |
| Institutional 2 Class | (14) |
| Expense reduction | (20) |
| Total net expenses | 8,521,905 |
| Net investment income | 19,491,358 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (72,233,464) |
| Investments — affiliated issuers | (1,273) |
| Foreign currency translations | (193,351) |
| Forward foreign currency exchange contracts | 1,518,808 |
| Futures contracts | (477,883) |
| Options purchased | (384,355) |
| Options contracts written | 1,095,270 |
| Net realized loss | (70,676,248) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (30,906,757) |
| Investments — affiliated issuers | 4 |
| Foreign currency translations | (94,129) |
| Forward foreign currency exchange contracts | 766,905 |
| Options contracts written | 63,404 |
| Foreign capital gains tax | (881) |
| Net change in unrealized appreciation (depreciation) | (30,171,454) |
| Net realized and unrealized loss | (100,847,702) |
| Net decrease in net assets resulting from operations | $(81,356,344) |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 16 | Columbia Overseas Core Fund | Annual Report 2023 |
Statement of Changes in Net Assets
| Year Ended February 28, 2023 | Year Ended February 28, 2022 | |
| Operations | ||
| Net investment income | $19,491,358 | $17,675,646 |
| Net realized gain (loss) | (70,676,248) | 41,781,419 |
| Net change in unrealized appreciation (depreciation) | (30,171,454) | (49,402,278) |
| Net increase (decrease) in net assets resulting from operations | (81,356,344) | 10,054,787 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (711,103) | (4,475,901) |
| Advisor Class | (3,199) | (24,634) |
| Class C | (30,685) | (210,035) |
| Institutional Class | (4,867,701) | (18,273,977) |
| Institutional 2 Class | (6,050) | (36,785) |
| Institutional 3 Class | (8,588,232) | (52,919,165) |
| Class R | (42) | (258) |
| Total distributions to shareholders | (14,207,012) | (75,940,755) |
| Increase (decrease) in net assets from capital stock activity | (46,696,535) | 233,287,464 |
| Total increase (decrease) in net assets | (142,259,891) | 167,401,496 |
| Net assets at beginning of year | 1,000,570,211 | 833,168,715 |
| Net assets at end of year | $858,310,320 | $1,000,570,211 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| Columbia Overseas Core Fund | Annual Report 2023 | 17 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| February 28, 2023 | February 28, 2022 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 417,180 | 3,782,989 | 440,480 | 5,026,131 |
| Distributions reinvested | 81,687 | 697,607 | 401,739 | 4,394,805 |
| Redemptions | (908,262) | (8,071,441) | (653,764) | (7,367,436) |
| Net increase (decrease) | (409,395) | (3,590,845) | 188,455 | 2,053,500 |
| Advisor Class | ||||
| Subscriptions | 286 | 2,538 | 3,182 | 37,260 |
| Distributions reinvested | 341 | 2,921 | 2,074 | 22,784 |
| Redemptions | (6,164) | (52,080) | (13,390) | (155,182) |
| Net decrease | (5,537) | (46,621) | (8,134) | (95,138) |
| Class C | ||||
| Subscriptions | 14,576 | 132,658 | 29,678 | 329,924 |
| Distributions reinvested | 3,401 | 28,907 | 17,841 | 196,304 |
| Redemptions | (118,762) | (1,041,494) | (141,615) | (1,615,193) |
| Net decrease | (100,785) | (879,929) | (94,096) | (1,088,965) |
| Institutional Class | ||||
| Subscriptions | 15,681,407 | 153,782,615 | 7,846,015 | 85,315,544 |
| Distributions reinvested | 568,340 | 4,864,990 | 1,671,172 | 18,258,565 |
| Redemptions | (12,654,681) | (112,948,653) | (2,459,012) | (28,436,361) |
| Net increase | 3,595,066 | 45,698,952 | 7,058,175 | 75,137,748 |
| Institutional 2 Class | ||||
| Subscriptions | 70,546 | 639,595 | 3,636 | 41,864 |
| Distributions reinvested | 701 | 6,009 | 3,340 | 36,506 |
| Redemptions | (25,357) | (225,576) | (2,997) | (34,437) |
| Net increase | 45,890 | 420,028 | 3,979 | 43,933 |
| Institutional 3 Class | ||||
| Subscriptions | 892,497 | 8,278,860 | 14,220,931 | 160,654,936 |
| Distributions reinvested | 1,002,123 | 8,588,191 | 4,836,826 | 52,918,883 |
| Redemptions | (11,594,370) | (105,165,171) | (4,967,797) | (56,337,433) |
| Net increase (decrease) | (9,699,750) | (88,298,120) | 14,089,960 | 157,236,386 |
| Total net increase (decrease) | (6,574,511) | (46,696,535) | 21,238,339 | 233,287,464 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 18 | Columbia Overseas Core Fund | Annual Report 2023 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total
return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain
derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
| Net asset value, beginning of period | Net investment income (loss) | Net realized and unrealized gain (loss) | Total from investment operations | Distributions from net investment income | Distributions from net realized gains | Total distributions to shareholders | |
| Class A | |||||||
| Year Ended 2/28/2023 | $10.23 | 0.16 | (0.88) | (0.72) | — | (0.13) | (0.13) |
| Year Ended 2/28/2022 | $10.89 | 0.17 | 0.02(f) | 0.19 | (0.27) | (0.58) | (0.85) |
| Year Ended 2/28/2021 | $8.99 | 0.06 | 2.06 | 2.12 | (0.05) | (0.17) | (0.22) |
| Year Ended 2/29/2020 | $9.36 | 0.09 | (0.11) | (0.02) | (0.31) | (0.04) | (0.35) |
| Year Ended 2/28/2019(g) | $10.00 | 0.25 | (0.81) | (0.56) | (0.08) | — | (0.08) |
| Advisor Class | |||||||
| Year Ended 2/28/2023 | $10.23 | 0.19 | (0.89) | (0.70) | — | (0.13) | (0.13) |
| Year Ended 2/28/2022 | $10.89 | 0.21 | 0.01(f) | 0.22 | (0.30) | (0.58) | (0.88) |
| Year Ended 2/28/2021 | $8.99 | 0.09 | 2.05 | 2.14 | (0.07) | (0.17) | (0.24) |
| Year Ended 2/29/2020 | $9.37 | 0.19 | (0.19) | 0.00 | (0.34) | (0.04) | (0.38) |
| Year Ended 2/28/2019(g) | $10.00 | 0.28 | (0.81) | (0.53) | (0.10) | — | (0.10) |
| Class C | |||||||
| Year Ended 2/28/2023 | $10.20 | 0.10 | (0.89) | (0.79) | — | (0.13) | (0.13) |
| Year Ended 2/28/2022 | $10.86 | 0.09 | 0.02(f) | 0.11 | (0.19) | (0.58) | (0.77) |
| Year Ended 2/28/2021 | $9.00 | (0.01) | 2.04 | 2.03 | — | (0.17) | (0.17) |
| Year Ended 2/29/2020 | $9.36 | 0.06 | (0.15) | (0.09) | (0.23) | (0.04) | (0.27) |
| Year Ended 2/28/2019(g) | $10.00 | 0.18 | (0.80) | (0.62) | (0.02) | — | (0.02) |
| Institutional Class | |||||||
| Year Ended 2/28/2023 | $10.24 | 0.19 | (0.89) | (0.70) | — | (0.13) | (0.13) |
| Year Ended 2/28/2022 | $10.89 | 0.19 | 0.04(f) | 0.23 | (0.30) | (0.58) | (0.88) |
| Year Ended 2/28/2021 | $9.00 | 0.13 | 2.00 | 2.13 | (0.07) | (0.17) | (0.24) |
| Year Ended 2/29/2020 | $9.37 | 0.19 | (0.18) | 0.01 | (0.34) | (0.04) | (0.38) |
| Year Ended 2/28/2019(g) | $10.00 | 0.38 | (0.91) | (0.53) | (0.10) | — | (0.10) |
| Institutional 2 Class | |||||||
| Year Ended 2/28/2023 | $10.25 | 0.16 | (0.85) | (0.69) | — | (0.13) | (0.13) |
| Year Ended 2/28/2022 | $10.90 | 0.20 | 0.04(f) | 0.24 | (0.31) | (0.58) | (0.89) |
| Year Ended 2/28/2021 | $9.00 | 0.10 | 2.05 | 2.15 | (0.08) | (0.17) | (0.25) |
| Year Ended 2/29/2020 | $9.38 | 0.19 | (0.18) | 0.01 | (0.35) | (0.04) | (0.39) |
| Year Ended 2/28/2019(g) | $10.00 | 0.28 | (0.81) | (0.53) | (0.09) | — | (0.09) |
| Institutional 3 Class | |||||||
| Year Ended 2/28/2023 | $10.25 | 0.19 | (0.88) | (0.69) | — | (0.13) | (0.13) |
| Year Ended 2/28/2022 | $10.91 | 0.21 | 0.03(f) | 0.24 | (0.32) | (0.58) | (0.90) |
| Year Ended 2/28/2021 | $9.00 | 0.12 | 2.05 | 2.17 | (0.09) | (0.17) | (0.26) |
| Year Ended 2/29/2020 | $9.38 | 0.21 | (0.19) | 0.02 | (0.36) | (0.04) | (0.40) |
| Year Ended 2/28/2019(g) | $10.00 | 0.29 | (0.81) | (0.52) | (0.10) | — | (0.10) |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 20 | Columbia Overseas Core Fund | Annual Report 2023 |
Financial Highlights (continued)
| Net asset value, end of period | Total return | Total gross expense ratio to average net assets(a) | Total net expense ratio to average net assets(a),(b) | Net investment income (loss) ratio to average net assets | Portfolio turnover | Net assets, end of period (000’s) | |
| Class A | |||||||
| Year Ended 2/28/2023 | $9.38 | (6.89%) | 1.28%(c),(d) | 1.22%(c),(d),(e) | 1.74% | 60% | $47,250 |
| Year Ended 2/28/2022 | $10.23 | 1.38% | 1.27%(c),(d) | 1.22%(c),(d),(e) | 1.47% | 43% | $55,723 |
| Year Ended 2/28/2021 | $10.89 | 23.80% | 1.33%(c),(d) | 1.24%(c),(d),(e) | 0.59% | 39% | $57,243 |
| Year Ended 2/29/2020 | $8.99 | (0.46%) | 1.40% | 1.26% | 0.94% | 48% | $431 |
| Year Ended 2/28/2019(g) | $9.36 | (5.55%) | 1.65%(d),(h) | 1.28%(d),(h) | 2.64%(h) | 71% | $30 |
| Advisor Class | |||||||
| Year Ended 2/28/2023 | $9.40 | (6.69%) | 1.03%(c),(d) | 0.97%(c),(d),(e) | 2.05% | 60% | $189 |
| Year Ended 2/28/2022 | $10.23 | 1.64% | 1.02%(c),(d) | 0.97%(c),(d),(e) | 1.83% | 43% | $262 |
| Year Ended 2/28/2021 | $10.89 | 24.07% | 1.08%(c),(d) | 0.99%(c),(d),(e) | 0.91% | 39% | $368 |
| Year Ended 2/29/2020 | $8.99 | (0.30%) | 1.15% | 1.01% | 1.98% | 48% | $19 |
| Year Ended 2/28/2019(g) | $9.37 | (5.22%) | 1.40%(d),(h) | 1.03%(d),(h) | 2.95%(h) | 71% | $20 |
| Class C | |||||||
| Year Ended 2/28/2023 | $9.28 | (7.60%) | 2.03%(c),(d) | 1.97%(c),(d),(e) | 1.13% | 60% | $1,494 |
| Year Ended 2/28/2022 | $10.20 | 0.60% | 2.02%(c),(d) | 1.97%(c),(d),(e) | 0.82% | 43% | $2,670 |
| Year Ended 2/28/2021 | $10.86 | 22.80% | 2.07%(c),(d) | 1.99%(c),(d),(e) | (0.14%) | 39% | $3,863 |
| Year Ended 2/29/2020 | $9.00 | (1.17%) | 2.15% | 2.01% | 0.63% | 48% | $49 |
| Year Ended 2/28/2019(g) | $9.36 | (6.22%) | 2.40%(d),(h) | 2.03%(d),(h) | 1.89%(h) | 71% | $25 |
| Institutional Class | |||||||
| Year Ended 2/28/2023 | $9.41 | (6.68%) | 1.03%(c),(d) | 0.97%(c),(d),(e) | 2.05% | 60% | $286,669 |
| Year Ended 2/28/2022 | $10.24 | 1.73% | 1.02%(c),(d) | 0.97%(c),(d),(e) | 1.68% | 43% | $275,013 |
| Year Ended 2/28/2021 | $10.89 | 23.93% | 1.10%(c),(d) | 1.00%(c),(d),(e) | 1.40% | 39% | $215,765 |
| Year Ended 2/29/2020 | $9.00 | (0.19%) | 1.15% | 1.02% | 1.98% | 48% | $131,881 |
| Year Ended 2/28/2019(g) | $9.37 | (5.22%) | 1.37%(d),(h) | 1.03%(d),(h) | 4.47%(h) | 71% | $120,114 |
| Institutional 2 Class | |||||||
| Year Ended 2/28/2023 | $9.43 | (6.58%) | 0.97%(c),(d) | 0.90%(c),(d) | 1.78% | 60% | $850 |
| Year Ended 2/28/2022 | $10.25 | 1.81% | 0.95%(c),(d) | 0.90%(c),(d) | 1.77% | 43% | $454 |
| Year Ended 2/28/2021 | $10.90 | 24.16% | 0.99%(c),(d) | 0.90%(c),(d) | 1.02% | 39% | $439 |
| Year Ended 2/29/2020 | $9.00 | (0.18%) | 1.04% | 0.91% | 1.99% | 48% | $47 |
| Year Ended 2/28/2019(g) | $9.38 | (5.17%) | 1.25%(d),(h) | 0.93%(d),(h) | 3.02%(h) | 71% | $29 |
| Institutional 3 Class | |||||||
| Year Ended 2/28/2023 | $9.43 | (6.58%) | 0.90%(c),(d) | 0.85%(c),(d) | 2.13% | 60% | $521,856 |
| Year Ended 2/28/2022 | $10.25 | 1.78% | 0.89%(c),(d) | 0.84%(c),(d) | 1.85% | 43% | $666,445 |
| Year Ended 2/28/2021 | $10.91 | 24.34% | 0.94%(c),(d) | 0.84%(c),(d) | 1.21% | 39% | $555,487 |
| Year Ended 2/29/2020 | $9.00 | (0.11%) | 0.97% | 0.85% | 2.18% | 48% | $119,513 |
| Year Ended 2/28/2019(g) | $9.38 | (5.11%) | 1.19%(d),(h) | 0.87%(d),(h) | 3.14%(h) | 71% | $132,187 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Overseas Core Fund | Annual Report 2023 | 21 |
Financial Highlights (continued)
| Net asset value, beginning of period | Net investment income (loss) | Net realized and unrealized gain (loss) | Total from investment operations | Distributions from net investment income | Distributions from net realized gains | Total distributions to shareholders | |
| Class R | |||||||
| Year Ended 2/28/2023 | $10.23 | 0.13 | (0.87) | (0.74) | — | (0.13) | (0.13) |
| Year Ended 2/28/2022 | $10.88 | 0.15 | 0.02(f) | 0.17 | (0.24) | (0.58) | (0.82) |
| Year Ended 2/28/2021 | $8.99 | 0.20 | 1.88 | 2.08 | (0.02) | (0.17) | (0.19) |
| Year Ended 2/29/2020 | $9.36 | 0.18 | (0.22) | (0.04) | (0.29) | (0.04) | (0.33) |
| Year Ended 2/28/2019(g) | $10.00 | 0.26 | (0.84) | (0.58) | (0.06) | — | (0.06) |
| Notes to Financial Highlights | |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | Ratios include interest on collateral expense which is less than 0.01%. |
| (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) | 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) | The Fund commenced operations on March 5, 2018. Per share data and total return reflect activity from that date. |
| (h) | Annualized. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 22 | Columbia Overseas Core Fund | Annual Report 2023 |
Financial Highlights (continued)
| Net asset value, end of period | Total return | Total gross expense ratio to average net assets(a) | Total net expense ratio to average net assets(a),(b) | Net investment income (loss) ratio to average net assets | Portfolio turnover | Net assets, end of period (000’s) | |
| Class R | |||||||
| Year Ended 2/28/2023 | $9.36 | (7.09%) | 1.50%(c),(d) | 1.47%(c),(d),(e) | 1.46% | 60% | $3 |
| Year Ended 2/28/2022 | $10.23 | 1.18% | 1.51%(c),(d) | 1.47%(c),(d),(e) | 1.24% | 43% | $3 |
| Year Ended 2/28/2021 | $10.88 | 23.43% | 1.59%(c),(d) | 1.48%(c),(d),(e) | 2.33% | 39% | $3 |
| Year Ended 2/29/2020 | $8.99 | (0.73%) | 1.65% | 1.52% | 1.88% | 48% | $19 |
| Year Ended 2/28/2019(g) | $9.36 | (5.77%) | 1.90%(d),(h) | 1.53%(d),(h) | 2.91%(h) | 71% | $64 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Overseas Core Fund | Annual Report 2023 | 23 |
Notes to Financial Statements
February 28, 2023
February 28, 2023
Note 1. Organization
Columbia Overseas Core Fund (the
Fund), a series of Columbia Funds Series Trust II (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 8 years. Advisor Class, Institutional Class, Institutional 2 Class,
Institutional 3 Class and Class R shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional investors and to certain other investors as also
described in the Fund’s prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
Equity securities listed on an
exchange are valued at the closing price or last trade price on their primary exchange at the close of business of the New York Stock Exchange. Securities with a closing price not readily available or not listed on
any exchange are valued at the mean between the closing bid and ask prices. Listed preferred stocks convertible into common stocks are valued using an evaluated price from a pricing service.
Foreign equity securities are
valued based on the closing price or last trade price on their primary exchange at the close of business of the New York Stock Exchange. If any foreign equity security closing prices are not readily available,
the securities are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are determined at the scheduled closing time of the New York Stock Exchange.
Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect
events that occur after such close but before the close of the New York Stock Exchange. In those situations, foreign securities will be fair valued pursuant to a policy approved by the Board of Trustees. Under the
policy, the Fund may utilize a third-party pricing service to determine these fair values. The third-party pricing service takes into account multiple factors, including, but not limited to, movements in the U.S.
securities markets, certain depositary receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that
reasonably reflects the current market conditions as of the close of the New York Stock Exchange. The fair value of a security is likely to be different from the quoted or published price, if available.
Investments in open-end investment
companies (other than exchange-traded funds (ETFs)), are valued at the latest net asset value reported by those companies as of the valuation time.
| 24 | Columbia Overseas Core Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
Forward foreign currency exchange
contracts are marked-to-market based upon foreign currency exchange rates provided by a pricing service.
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security, if
available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Foreign currency transactions and
translations
The values of all assets and
liabilities denominated in foreign currencies are generally translated into U.S. dollars at exchange rates determined at the close of regular trading on the New York Stock Exchange. Net realized and unrealized gains
(losses) on foreign currency transactions and translations include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising
from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes,
the Fund does not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations
are included with the net realized and unrealized gains (losses) on investments in the Statement of Operations.
Derivative instruments
The Fund invests in certain
derivative instruments, as detailed below, 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, failure of the clearinghouse or CCP may pose additional counterparty credit risk. 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
| Columbia Overseas Core Fund | Annual Report 2023 | 25 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
the aggregate amount of margin held by the
clearing broker for all its clients and such shortfall is remedied by the CCP or otherwise, 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 instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically
permit a single net payment in the event of default (close-out netting), including the bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may
impose restrictions on or prohibitions against the right of offset or netting in bankruptcy, insolvency or other events.
Collateral (margin) requirements
differ by type of derivative. Margin requirements are established by the clearinghouse or CCP for exchange-traded and centrally cleared derivatives. Brokers can ask for margin in excess of the minimum in certain
circumstances. Collateral terms 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 or receive interest income on cash collateral pledged to the broker. The Fund attempts to mitigate
counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.
Certain ISDA Master Agreements
allow counterparties of over-the-counter derivatives transactions to terminate derivatives contracts prior to maturity in the event the Fund’s net asset value declines by a stated percentage over a specified
time period or if the Fund fails to meet certain terms of the ISDA Master Agreement, which would cause the Fund to accelerate payment of any net liability owed to the counterparty. The Fund also has termination
rights if the counterparty fails to meet certain terms of the ISDA Master Agreement. In determining whether to exercise such termination rights, the Fund would consider, in addition to counterparty credit risk,
whether termination would result in a net liability owed from the counterparty.
For financial reporting purposes,
the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.
Forward foreign currency exchange
contracts
Forward foreign currency exchange
contracts are over-the-counter agreements between two parties to buy and sell a currency at a set price on a future date. The Fund utilized forward foreign currency exchange contracts to hedge the currency exposure
associated with some or all of the Fund’s securities, to shift investment exposure from one currency to another and to shift U.S. dollar exposure to achieve a representative weighted mix of major currencies in
its benchmark. These instruments may be used for other purposes in future periods.
The values of forward foreign
currency exchange contracts fluctuate daily with changes in foreign currency exchange rates. Changes in the value of these contracts are recorded as unrealized appreciation or depreciation until the contract is
exercised or has expired. The Fund will realize a gain or loss when the forward foreign currency exchange contract is closed or expires. Non-deliverable forward foreign currency exchange contracts are settled with the
counterparty in U.S. dollars without delivery of foreign currency.
| 26 | Columbia Overseas Core Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
The use of forward foreign currency
exchange contracts does not eliminate fluctuations in the prices of the Fund’s portfolio securities. The risks of forward foreign currency exchange contracts include movement in the values of the foreign
currencies relative to the U.S. dollar (or other foreign currencies) and the possibility that counterparties will not complete their contractual obligations, which may be in excess of the amount reflected, if any, in
the Statement of Assets and Liabilities.
Futures contracts
Futures contracts are
exchange-traded and represent commitments for the future purchase or sale of an asset at a specified price on a specified date. The Fund bought and sold futures contracts to maintain appropriate equity market exposure
while keeping sufficient cash to accommodate daily redemptions. These instruments may be used for other purposes in future periods. Upon entering into futures contracts, the Fund bears risks that it may not achieve
the anticipated benefits of the futures contracts and may realize a loss. Additional risks include counterparty credit risk, the possibility of an illiquid market, and that a change in the value of the contract or
option may not correlate with changes in the value of the underlying asset.
Upon entering into a futures
contract, the Fund deposits cash or securities with the broker, known as a futures commission merchant (FCM), in an amount sufficient to meet the initial margin requirement. The initial margin deposit must be
maintained at an established level over the life of the contract. Cash deposited as initial margin is recorded in the Statement of Assets and Liabilities as margin deposits. Securities deposited as initial margin are
designated in the Portfolio of Investments. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily change in the contract value and are
recorded as variation margin receivable or payable and are offset in unrealized gains or losses. The Fund generally expects to earn interest income on its margin deposits. 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.
Options contracts
Options are contracts which entitle
the holder to purchase or sell securities or other identified assets at a specified price, or in the case of index option contracts, to receive or pay the difference between the index value and the strike price of the
index option contract. Option contracts can be either exchange-traded or over-the-counter. The Fund purchased and has written option contracts to decrease the Fund’s exposure to equity market risk and to
facilitate buying and selling of securities for investments. These instruments may be used for other purposes in future periods. Completion of transactions for option contracts traded in the over-the-counter market
depends upon the performance of the other party. Collateral may be collected or posted by the Fund to secure over-the-counter option contract trades. Collateral held or posted by the Fund for such option contract
trades must be returned to the broker or the Fund upon closure, exercise or expiration of the contract.
Options contracts purchased are
recorded as investments. When the Fund writes an options contract, the premium received is recorded as an asset and an amount equivalent to the premium is recorded as a liability in the Statement of Assets and
Liabilities and is subsequently adjusted to reflect the current fair value of the option written. Changes in the fair value of the written option are recorded as unrealized appreciation or depreciation until the
contract is exercised or has expired. The Fund realizes a gain or loss when the option contract is closed or expires. When option contracts are exercised, the proceeds on sales for a written call or purchased put
option contract, or the purchase cost for a written put or purchased call option contract, is adjusted by the amount of premium received or paid.
For over-the-counter options
purchased, the Fund bears the risk of loss of the amount of the premiums paid plus the positive change in market values net of any collateral held by the Fund should the counterparty fail to perform under the
contracts. Option contracts written by the Fund do not typically give rise to significant counterparty credit risk, as options written generally obligate the Fund and not the counterparty to perform. The risk in
writing a call option contract is that the Fund gives up the opportunity for profit if the market price of the security increases above the strike price and the option contract is exercised. The risk in writing a put
option contract is that the Fund may incur a loss if the market price of the security decreases below the strike price and the option contract is exercised. Exercise of a written option could result in the Fund
purchasing or selling a security or foreign currency when it otherwise would not, or at a price different from the current market value. In purchasing and writing options, the Fund bears the risk of an unfavorable
change in the value of the underlying instrument or the risk that the Fund may not be able to enter into a closing transaction due to an illiquid market.
| Columbia Overseas Core Fund | Annual Report 2023 | 27 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
Effects of derivative transactions in
the financial statements
The following tables are intended
to provide additional information about the effect of derivatives on the financial statements of the Fund, including: the fair value of derivatives by risk category and the location of those fair values in the
Statement of Assets and Liabilities; and the impact of derivative transactions over the period in the Statement of Operations, including realized and unrealized gains (losses). The derivative instrument schedules
following the Portfolio of Investments present additional information regarding derivative instruments outstanding at the end of the period, if any.
The following table is a summary of
the fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) at February 28, 2023:
The following table indicates the
effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended February 28, 2023:
The following table is a summary
of the average outstanding volume by derivative instrument for the year ended February 28, 2023:
| Derivative instrument | Average notional amounts ($)* |
| Futures contracts — long | 109,507 |
| 28 | Columbia Overseas Core Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
| Derivative instrument | Average value ($) |
| Options contracts — purchased | 118,981** |
| Options contracts — written | (156,086)** |
| Derivative instrument | Average unrealized appreciation ($) | Average unrealized depreciation ($) |
| Forward foreign currency exchange contracts | 4,961,766** | (3,820,317)** |
| * | Based on the ending daily outstanding amounts for the year ended February 28, 2023. |
| ** | Based on the ending quarterly outstanding amounts for the year ended February 28, 2023. |
Offsetting of assets and
liabilities
The following table presents the
Fund’s gross and net amount of assets and liabilities available for offset under netting arrangements as well as any related collateral received or pledged by the Fund as of February 28, 2023:
| Morgan Stanley ($) | |
| Assets | |
| Forward foreign currency exchange contracts | 3,368,068 |
| Liabilities | |
| Forward foreign currency exchange contracts | 3,093,117 |
| Total financial and derivative net assets | 274,951 |
| Total collateral received (pledged) (a) | 274,951 |
| Net amount (b) | - |
| (a) | In some instances, the actual collateral received and/or pledged may be more than the amount shown due to overcollateralization. |
| (b) | Represents the net amount due from/(to) counterparties in the event of default. |
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Corporate actions and dividend
income are generally recorded net of any non-reclaimable tax withholdings, on the ex-dividend date or upon receipt of an ex-dividend notification in the case of certain foreign securities.
The Fund may receive distributions
from holdings in equity securities, business development companies (BDCs), exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment companies (RICs), and real estate investment trusts
(REITs), which report information as to the tax character of their distributions annually. These distributions are allocated to dividend income, capital gain and return of capital based on actual information reported.
Return of capital is recorded as a reduction of the cost basis of securities held. If the Fund no longer owns the applicable securities, return of capital is recorded as a realized gain. With respect to REITs, to the
extent actual information has not yet been reported, estimates for return of capital are made by Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise
Financial, Inc. (Ameriprise Financial). The Investment Manager’s estimates are subsequently adjusted when the actual character of the distributions is disclosed by the REITs, which could result in a
proportionate change in return of capital to shareholders.
Awards from class action litigation
are recorded as a reduction of cost basis if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities on the payment date, the proceeds are recorded as
realized gains.
| Columbia Overseas Core Fund | Annual Report 2023 | 29 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable income and net capital gain, if any, for its
tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net income and certain other
amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Foreign taxes
The Fund may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules
and regulations that exist in the markets in which it invests.
Realized gains in certain countries
may be subject to foreign taxes at the Fund level, based on statutory rates. The Fund accrues for such foreign taxes on realized and unrealized gains at the appropriate rate for each jurisdiction, as applicable. The
amount, if any, is disclosed as a liability in the Statement of Assets and Liabilities.
The Fund may file withholding tax
reclaims in certain European Union countries to recover a portion of foreign taxes previously withheld on dividends earned, which may be reclaimable based upon certain provisions in the Treaty on the Functioning of
the European Union (EU) and subsequent rulings by the European Court of Justice. The Fund may record a reclaim receivable when the amount is known, the Fund has received notice of a pending refund, and there are no
significant uncertainties on collectability. Income received from EU reclaims is included in the Statement of Operations.
Distributions to shareholders
Distributions from net investment
income, if any, are declared and paid semi-annually. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Recent accounting pronouncement
Tailored Shareholder Reports
In October 2022, the Securities and
Exchange Commission (SEC) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds and Exchange-Traded Funds; Fee Information in Investment Company Advertisements. The rule and form amendments
will, among other things, require the Fund to transmit concise and visually engaging shareholder reports that highlight key information. The amendments will require that funds tag information in a structured data
format and that
| 30 | Columbia Overseas Core Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
certain more in-depth information be made
available online and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the
amendment.
Note 3. Fees and other
transactions with affiliates
Management services fees
The Fund has entered into a
Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the
Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the
Fund’s daily net assets that declines from 0.87% to 0.62% as the Fund’s net assets increase. The effective management services fee rate for the year ended February 28, 2023 was 0.84% of the Fund’s
average daily net assets.
Compensation of board members
Members of the Board of Trustees
who are not officers or employees of the Investment Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the
Deferred Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of
certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All
amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund. The expense for the Deferred Plan, which includes Trustees’ fees deferred during the current period as well as any
gains or losses on the Trustees’ deferred compensation balances as a result of market fluctuations, is included in "Compensation of board members" in the Statement of Operations.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with SS&C GIDS, Inc. (SS&C GIDS) to serve as sub-transfer agent. Prior to January 1, 2023, SS&C GIDS was known as DST Asset
Manager Solutions, Inc. The Transfer Agent pays the fees of SS&C GIDS for services as sub-transfer agent and SS&C GIDS is not entitled to reimbursement for such fees from the Fund (with the exception of
out-of-pocket fees).
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class. In addition, prior to July 1, 2022, Institutional 2 Class shares were subject to a
contractual transfer agency fee annual limitation of not more than 0.06% of the average daily net assets attributable to that share class.
| Columbia Overseas Core Fund | Annual Report 2023 | 31 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
For the year ended February
28, 2023, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| Effective rate (%) | |
| Class A | 0.14 |
| Advisor Class | 0.14 |
| Class C | 0.14 |
| Institutional Class | 0.14 |
| Institutional 2 Class | 0.07 |
| Institutional 3 Class | 0.01 |
| Class R | 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 February 28, 2023, these minimum account balance fees reduced total expenses
of the Fund by $20.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. Under a Plan and Agreement of Distribution, the Fund pays a fee at the maximum annual rates of up to 0.25%, 1.00% and 0.50% of the Fund’s average daily net assets attributable to Class A, Class C and
Class R shares, respectively. For Class C shares, of the 1.00% fee, up to 0.75% can be reimbursed for distribution expenses and up to an additional 0.25% can be reimbursed for shareholder servicing expenses. For Class
R shares, of the 0.50% fee, up to 0.25% can be reimbursed for shareholder servicing expenses.
The amount of distribution and
shareholder services expenses incurred by the Distributor and not yet reimbursed (unreimbursed expense) was approximately $195,000 for Class C shares. This amount is based on the most recent information available as
of December 31, 2022, and may be recovered from future payments under the distribution plan or contingent deferred sales charges (CDSCs). To the extent the unreimbursed expense has been fully recovered, the
distribution and/or shareholder services fee is reduced.
Sales charges (unaudited)
Sales charges, including front-end
charges and CDSCs, received by the Distributor for distributing Fund shares for the year ended February 28, 2023, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 5.75 | 0.50 - 1.00(a) | 11,795 |
| Class C | — | 1.00(b) | 19 |
| (a) | This charge is imposed on certain investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with certain limited exceptions. |
| (b) | This charge applies to redemptions within 12 months after purchase, with certain limited exceptions. |
The Fund’s other share
classes are not subject to sales charges.
| 32 | Columbia Overseas Core Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
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 classes’ average daily net assets:
Under the agreement governing
these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes
(including foreign transaction taxes), expenses associated with investments in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and
brokerage commissions, costs related to any securities lending program, dividend expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed
money, interest, costs associated with shareholder meetings, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may
be modified or amended only with approval from the Investment Manager, certain of its affiliates and the Fund. Reflected in the contractual cap commitment, prior to July 1, 2022, is the Transfer Agent’s
contractual agreement to limit total transfer agency fees to an annual rate of not more than 0.06% for Institutional 2 Class of the average daily net assets attributable to that share class. Any fees waived and/or
expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its affiliates in future periods.
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At February 28, 2023, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, foreign currency transactions, passive foreign investment company (pfic) holdings, tax straddles, capital loss
carryforwards, trustees’ deferred compensation, non-deductible expenses, distribution reclassifications and foreign capital gains tax. To the extent these differences were permanent, reclassifications were made
among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
The following reclassifications
were made:
| Undistributed net investment income ($) | Accumulated net realized (loss) ($) | Paid in capital ($) |
| 884,668 | (884,667) | (1) |
Net investment income (loss) and
net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
| Columbia Overseas Core Fund | Annual Report 2023 | 33 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended February 28, 2023 | Year Ended February 28, 2022 | ||||
| Ordinary income ($) | Long-term capital gains ($) | Total ($) | Ordinary income ($) | Long-term capital gains ($) | Total ($) |
| 249,728 | 13,957,284 | 14,207,012 | 26,538,226 | 49,402,529 | 75,940,755 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At February 28, 2023, the
components of distributable earnings on a tax basis were as follows:
| Undistributed ordinary income ($) | Undistributed long-term capital gains ($) | Capital loss carryforwards ($) | Net unrealized appreciation ($) |
| 16,347,578 | — | (65,247,319) | 10,045,875 |
At February 28, 2023, 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) ($) | Net unrealized appreciation ($) |
| 847,029,636 | 92,727,967 | (82,682,092) | 10,045,875 |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
The following capital loss
carryforwards, determined at February 28, 2023, 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
February 28, 2023, capital loss carryforwards utilized, if any, were as follows:
| No expiration short-term ($) | No expiration long-term ($) | Total ($) | Utilized ($) |
| (31,432,423) | (33,814,896) | (65,247,319) | — |
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 $561,426,446 and $598,782,377, respectively, for the year ended February 28, 2023. The amount of purchase and
sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes
referred to as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
| 34 | Columbia Overseas Core Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
Note 7. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the
Interfund Program during the year ended February 28, 2023 was as follows:
| Borrower or lender | Average loan balance ($) | Weighted average interest rate (%) | Number of days with outstanding loans |
| Borrower | 2,381,818 | 4.05 | 11 |
Interest expense incurred by the
Fund is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at February 28, 2023.
Note 8. Line of credit
The Fund has access to a
revolving credit facility with a syndicate of banks led by JPMorgan Chase Bank, N.A., Citibank, N.A. and Wells Fargo Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. Pursuant to an October 27, 2022 amendment and restatement, the credit facility, which is an agreement between the Fund and certain other funds managed by the Investment Manager
or an affiliated investment manager, severally and not jointly, permits aggregate borrowings up to $950 million. Interest is currently 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 secured overnight financing rate plus 0.10% and (iii) the overnight bank funding rate, plus in each case, 1.00%. Each borrowing under the credit facility
matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the unused amount of the credit facility at a rate of 0.15% per annum. The commitment fee
is included in other expenses in the Statement of Operations. This agreement expires annually in October unless extended or renewed. Prior to the October 27, 2022 amendment and restatement, the Fund had access to a
revolving credit facility with a syndicate of banks led by JPMorgan Chase Bank, N.A., Citibank, N.A. and Wells Fargo Bank, N.A. which permitted collective borrowings up to $950 million. 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 secured overnight financing rate plus 0.11448% and (iii) the overnight bank funding rate, plus
in each case, 1.00%.
The Fund had no borrowings during
the year ended February 28, 2023.
Note 9. Significant
risks
Foreign securities and emerging
market countries risk
Investing in foreign securities may
involve heightened risks relative to investments in U.S. securities. Investing in foreign securities subjects the Fund to the risks associated with the issuer’s country of organization and places of business
operations, including risks associated with political, regulatory, economic, social, diplomatic and other conditions or events occurring in the country or region, which may result in significant market volatility. In
addition, certain foreign securities may be more volatile and less liquid than U.S. securities. Investing in emerging markets may increase these risks and expose the Fund to elevated risks associated with increased
inflation, deflation or currency devaluation. To the extent that the Fund concentrates its investment exposure to any one or a few specific countries, the Fund will be particularly susceptible to the risks associated
with the conditions, events or other factors impacting those countries or regions and may, therefore, have a greater risk than that of a fund that is more geographically diversified. The financial information and
disclosure made available by issuers of emerging market securities may be considerably less reliable than publicly available information about other foreign securities. The Public Company Accounting Oversight Board,
which regulates auditors of U.S. public companies, is
| Columbia Overseas Core Fund | Annual Report 2023 | 35 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
unable to inspect audit work papers in certain
foreign countries. Investors in foreign countries often have limited rights and few practical remedies to pursue shareholder claims, including class actions or fraud claims, and the ability of the U.S. Securities and
Exchange Commission, the U.S. Department of Justice and other authorities to bring and enforce actions against foreign issuers or foreign persons is limited.
Geographic focus risk
The Fund may be particularly
susceptible to risks related to economic, political, regulatory or other events or conditions affecting issuers and countries within the specific geographic regions in which the Fund invests. The Fund’s net
asset value may be more volatile than the net asset value of a more geographically diversified fund.
Asia Pacific Region. The Fund is particularly susceptible to economic, political, regulatory or other events or conditions affecting issuers and countries in the Asia Pacific region. Many of the countries in
the region are considered underdeveloped or developing, including from a political, economic and/or social perspective, and may have relatively unstable governments and economies based on limited business, industries
and/or natural resources or commodities. Events in any one country within the region may impact other countries in the region or the region as a whole. As a result, events in the region will generally have a greater
effect on the Fund than if the Fund were more geographically diversified. This could result in increased volatility in the value of the Fund’s investments and losses for the Fund. Also, securities of some
companies in the region can be less liquid than U.S. or other foreign securities, potentially making it difficult for the Fund to sell such securities at a desirable time and price.
Europe. The Fund is particularly susceptible to risks related to economic, political, regulatory or other events or conditions, including acts of war or other conflicts in the region, affecting
issuers and countries in Europe. Countries in Europe are often closely connected and interdependent, and events in one European country can have an adverse impact on, and potentially spread to, other European
countries. In addition, significant private or public debt problems in a single European Union (EU) country can pose economic risks to the EU as a whole. As a result, the Fund’s net asset value may be more
volatile than the net asset value of a more geographically diversified fund. If securities of issuers in Europe fall out of favor, it may cause the Fund to underperform other funds that do not focus their investments
in this region of the world. The departure of the United Kingdom (UK) from the EU single market became effective January 1, 2021 with the end of the Brexit transition period and the post-Brexit trade deal between the
UK and EU taking effect on December 31, 2020. The impact of Brexit on the UK and European economies and the broader global economy could be significant, resulting in negative impacts on currency and financial markets
generally, such as increased volatility and illiquidity, and potentially lower economic growth in markets in Europe, which may adversely affect the value of your investment in the Fund.
Market 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’s ability to price or value hard-to-value assets in thinly traded and closed markets and could cause 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 large-scale invasion of Ukraine
by Russia in February 2022 has resulted in sanctions and market disruptions, including declines in regional and global stock markets, unusual volatility in global commodity markets and significant devaluations of
Russian currency. The extent and duration of the military action are impossible to predict but could be significant. Market disruption caused by the Russian military action, and any counter-measures or responses
thereto (including international sanctions, a downgrade in the country’s credit rating, purchasing and financing restrictions, boycotts, tariffs, changes in consumer or purchaser preferences, cyberattacks and
espionage) could have severe adverse impacts on regional and/or
| 36 | Columbia Overseas Core Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
February 28, 2023
February 28, 2023
global securities and commodities markets,
including markets for oil and natural gas. These impacts may include reduced market liquidity, distress in credit markets, further disruption of global supply chains, increased risk of inflation, and limited access to
investments in certain international markets and/or issuers. These developments and other related events could negatively impact Fund performance.
Shareholder concentration risk
At February 28, 2023, one
unaffiliated shareholder of record owned 11.8% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Affiliated
shareholders of record owned 86.1% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the
Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of
less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 10. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 11. Information
regarding pending and settled legal proceedings
Ameriprise Financial and certain
of its affiliates are involved in the normal course of business in legal proceedings which include regulatory inquiries, arbitration and litigation, including class actions concerning matters arising in connection
with the conduct of their activities as part of a diversified financial services firm. 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 Fund.
| Columbia Overseas Core Fund | Annual Report 2023 | 37 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust II and Shareholders of Columbia Overseas Core Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Overseas Core Fund (one of the funds constituting Columbia Funds Series Trust II, referred to hereafter as the "Fund") as of
February 28, 2023, the related statement of operations for the year ended February 28, 2023, the statement of changes in net assets for each of the two years in the period ended February 28, 2023, including the
related notes, and the financial highlights for each of the four years in the period ended February 28, 2023 and for the period March 5, 2018 (commencement of operations) through February 28, 2019 (collectively
referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of February 28, 2023, the results of its
operations for the year then ended, the changes in its net assets for each of the two years in the period ended February 28, 2023 and the financial highlights for each of the four years in the period ended February
28, 2023 and for the period March 5, 2018 (commencement of operations) through February 28, 2019 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the
responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these
financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of February 28, 2023 by correspondence with the custodian, transfer agent and brokers; when replies
were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
April 21, 2023
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
| 38 | Columbia Overseas Core Fund | Annual Report 2023 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended February 28, 2023. Shareholders will be notified in early 2024 of the amounts for use in preparing 2023 income tax returns.
| Qualified dividend income | Dividends received deduction | Foreign taxes paid to foreign countries | Foreign taxes paid per share to foreign countries | Foreign source income | Foreign source income per share |
| 100.00% | 1.26% | $3,811,152 | $0.04 | $30,599,580 | $0.34 |
Qualified dividend income. For
taxable, non-corporate shareholders, the percentage of ordinary income distributed during the fiscal year that represents qualified dividend income subject to reduced tax rates.
Dividends received deduction. The
percentage of ordinary income distributed during the fiscal year that qualifies for the corporate dividends received deduction.
Foreign taxes. The Fund makes the
election to pass through to shareholders the foreign taxes paid. Eligible shareholders may claim a foreign tax credit. These taxes, and the corresponding foreign source income, are provided in the table above.
TRUSTEES AND
OFFICERS
(Unaudited)
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, each Trustee generally serves until December 31 of the year such Trustee turns seventy-five (75).
Independent trustees
| Name, address, year of birth | Position held with the Columbia Funds and length of service | Principal occupation(s) during past five years and other relevant professional experience | Number of Funds in the Columbia Funds Complex* overseen | Other directorships held by Trustee during the past five years |
| George S. Batejan c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1954 | Trustee since 2017 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 176 | Former Chairman of the Board, NICSA (National Investment Company Services Association) (Executive Committee, Nominating Committee and Governance Committee), 2014-2016; former Director, Intech Investment Management, 2011-2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016; former Advisory Board Member, University of Colorado Business School, 2015-2018; former Board Member, Chase Bank International, 1993-1994 |
| Columbia Overseas Core Fund | Annual Report 2023 | 39 |
TRUSTEES AND OFFICERS (continued)
(Unaudited)
Independent trustees (continued)
(Unaudited)
Independent trustees (continued)
| Name, address, year of birth | Position held with the Columbia Funds and length of service | Principal occupation(s) during past five years and other relevant professional experience | Number of Funds in the Columbia Funds Complex* overseen | Other directorships held by Trustee during the past five years |
| Kathleen Blatz c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1954 | Trustee since 2006 | Attorney, specializing in arbitration and mediation; Chief Justice, Minnesota Supreme Court, 1998-2006; Associate Justice, Minnesota Supreme Court, 1996-1998; Fourth Judicial District Court Judge, Hennepin County, 1994-1996; Attorney in private practice and public service, 1984-1993; State Representative, Minnesota House of Representatives, 1979-1993, which included service on the Tax and Financial Institutions and Insurance Committees; Member and Interim Chair, Minnesota Sports Facilities Authority, January-July 2017; Interim President and Chief Executive Officer, Blue Cross and Blue Shield of Minnesota (health care insurance), February-July 2018, April-October 2021 | 176 | Former Trustee, Blue Cross and Blue Shield of Minnesota, 2009-2021 (Chair of the Business Development Committee, 2014-2017; Chair of the Governance Committee, 2017-2019); former Member and Chair of the Board, Minnesota Sports Facilities Authority, January 2017-July 2017; former Director, Robina Foundation, 2009-2020 (Chair, 2014-2020); Director, Richard M. Schulze Family Foundation, since 2021 |
| Pamela G. Carlton c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1954 | Chair since 2023; Trustee since 2007 | President, Springboard — Partners in Cross Cultural Leadership (consulting company), since 2003; Managing Director of US Equity Research, JP Morgan Chase, 1999-2003; Director of US Equity Research, Chase Asset Management, 1996-1999; Co-Director Latin America Research, 1993-1996, COO Global Research, 1992-1996, Co-Director of US Research, 1991-1992, Investment Banker, 1982-1991, Morgan Stanley; Attorney, Cleary Gottlieb Steen & Hamilton LLP, 1980-1982 | 176 | Trustee, New York Presbyterian Hospital Board, since 1996; Director, DR Bank (Audit Committee) since 2017; Director, Evercore Inc. (Audit Committee, Nominating and Governance Committee), since 2019; Director, Apollo Commercial Real Estate Finance, Inc. (Chair, Nominating and Governance Committee), since 2021; the Governing Council of the Independent Directors Council (IDC), since 2021 |
| Janet Langford Carrig c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1957 | Trustee since 1996 | Senior Vice President, General Counsel and Corporate Secretary, ConocoPhillips (independent energy company), September 2007-October 2018 | 174 | Director, EQT Corporation (natural gas producer), since 2019; former Director, Whiting Petroleum Corporation (independent oil and gas company), 2020-2022 |
| J. Kevin Connaughton c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1964 | Trustee since 2020 | CEO and President, RhodeWay Financial (non-profit financial planning firm), since December 2022; Member, FINRA National Adjudicatory Council, since January 2020; Adjunct Professor of Finance, Bentley University since January 2018; Consultant to Independent Trustees of CFVIT and CFST I from March 2016 to June 2020 with respect to CFVIT and to December 2020 with respect to CFST I; 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 | 174 | Former Director, The Autism Project, March 2015-December 2021; 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 |
| 40 | Columbia Overseas Core Fund | Annual Report 2023 |
TRUSTEES AND OFFICERS (continued)
(Unaudited)
Independent trustees (continued)
(Unaudited)
Independent trustees (continued)
| Name, address, year of birth | Position held with the Columbia Funds and length of service | Principal occupation(s) during past five years and other relevant professional experience | Number of Funds in the Columbia Funds Complex* overseen | Other directorships held by Trustee during the past five years |
| Olive M. Darragh c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1962 | Trustee since 2020 | Managing Director of Darragh Inc. (strategy and talent management consulting firm), since 2010; Founder and CEO, Zolio, Inc. (investment management talent identification platform), since 2004; Consultant to Independent Trustees of CFVIT and CFST I from June 2019 to June 2020 with respect to CFVIT and to December 2020 with respect to CFST I; Partner, Tudor Investments, 2004-2010; Senior Partner, McKinsey & Company (consulting), 1990-2004; Touche Ross CPA, 1985-1988 | 174 | Treasurer, Edinburgh University US Trust Board; Member, HBS Community Action Partners Board; Former Director, University of Edinburgh Business School (Member of US Board); former Director, Boston Public Library Foundation |
| Patricia M. Flynn c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1950 | Trustee since 2004 | Professor of Economics and Management, Bentley University, since 2002; Dean, McCallum Graduate School of Business, Bentley University, 1992-2002 | 176 | Former Trustee, MA Taxpayers Foundation,1997-2022; former Governing Board Member (Chairperson of Innovation Index Advisory Committee), MA Technology Collaborative, 1997-2020; former Director, The MA Business Roundtable, 2003-2019 |
| Brian J. Gallagher c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1954 | Trustee since 2017 | Retired; Partner with Deloitte & Touche LLP and its predecessors, 1977-2016 | 176 | Trustee, Catholic Schools Foundation, since 2004 |
| Douglas A. Hacker c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1955 | Trustee since 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 | 176 | Director, Spartan Nash Company (Chair of the Board) (food distributor); Director, Aircastle Limited (Chair of Audit Committee) (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 |
| Nancy T. Lukitsh c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1956 | Trustee since 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 | 174 | None |
| Columbia Overseas Core Fund | Annual Report 2023 | 41 |
TRUSTEES AND OFFICERS (continued)
(Unaudited)
Independent trustees (continued)
(Unaudited)
Independent trustees (continued)
| Name, address, year of birth | Position held with the Columbia Funds and length of service | Principal occupation(s) during past five years and other relevant professional experience | Number of Funds in the Columbia Funds Complex* overseen | Other directorships held by Trustee during the past five years |
| David M. Moffett c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1952 | Trustee since 2011 | Retired; former Chief Executive Officer of Freddie Mac and Chief Financial Officer of U.S. Bank | 174 | Director, CSX Corporation (transportation suppliers); 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; former Advisor to Bridgewater Associates and The Carlyle Group |
| Catherine James Paglia c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1952 | Trustee since 2004 | Director, Enterprise Asset Management, Inc. (private real estate and asset management company), since September 1998; Managing Director and Partner, Interlaken Capital, Inc., 1989-1997; Vice President, 1982-1985, Principal, 1985-1987, Managing Director, 1987-1989, Morgan Stanley; Vice President, Investment Banking, 1980-1982, Associate, Investment Banking, 1976-1980, Dean Witter Reynolds, Inc. | 176 | Director, Valmont Industries, Inc. (irrigation systems manufacturer), since 2012; Trustee, Carleton College (on the Investment Committee); Trustee, Carnegie Endowment for International Peace (on the Investment Committee) |
| Natalie A. Trunow c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1967 | Trustee since 2020 | Chief Executive Officer, Millennial Portfolio Solutions LLC (asset management and consulting services), January 2016-January 2021; Non-executive Member of the Investment Committee and Valuation Committee, Sarona Asset Management Inc. (private equity firm) since September 2019; Advisor, Horizon Investments (asset management and consulting services), August 2018-January 2022; Advisor, Paradigm Asset Management, November 2016-January 2022; Consultant to Independent Trustees of CFVIT and CFST I from September 2016 to June 2020 with respect to CFVIT and to December 2020 with respect to CFST I; Director of Investments/Consultant, Casey Family Programs, April 2016-November 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 | 174 | Independent Director, Investment Committee, Health Services for Children with Special Needs, Inc., 2010-2021; Independent Director, (Executive Committee and Chair, Audit Committee), Consumer Credit Counseling Services (formerly Guidewell Financial Solutions), since 2016; Independent Director, (Investment Committee), Sarona Asset Management, since 2019 |
| Sandra L. Yeager c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1964 | Trustee since 2017 | Retired; President and founder, Hanoverian Capital, LLC (SEC registered investment advisor firm), 2008-2016; Managing Director, DuPont Capital, 2006-2008; Managing Director, Morgan Stanley Investment Management, 2004-2006; Senior Vice President, Alliance Bernstein, 1990-2004 | 176 | Former Director, NAPE Education Foundation, October 2016-October 2020; Advisory Board, Jennersville YMCA, since 2022 |
| 42 | Columbia Overseas Core Fund | Annual Report 2023 |
TRUSTEES AND OFFICERS (continued)
(Unaudited)
(Unaudited)
| * | The term “Columbia Funds Complex” as used herein includes Columbia Seligman Premium Technology Growth Fund, Tri-Continental Corporation and each series of Columbia Funds Series Trust (CFST), Columbia Funds Series Trust I (CFST I), Columbia Funds Series Trust II (CFST II), Columbia ETF Trust I (CET I), Columbia ETF Trust II (CET II), Columbia Funds Variable Insurance Trust (CFVIT) and Columbia Funds Variable Series Trust II (CFVST II). Messrs. Batejan, Beckman, Gallagher and Hacker and Mses. Blatz, Carlton, Carrig, Flynn, Paglia and Yeager serve as Directors of Columbia Seligman Premium Technology Growth Fund and Tri-Continental Corporation. |
Interested trustee affiliated with
Investment Manager*
| Name, address, year of birth | Position held with the Columbia Funds 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 |
| Daniel J. Beckman c/o Columbia Management Investment Advisers, LLC 290 Congress Street Boston, MA 02210 1962 | Trustee since November 2021 and President since June 2021 | Vice President – Head of North America Product, Columbia Management Investment Advisers, LLC, since April 2015; President and Principal Executive Officer of the Columbia Funds, since June 2021; officer of Columbia Funds and affiliated funds, 2020-2021 | 176 | Director, Ameriprise Trust Company, since October 2016; Director, Columbia Management Investment Distributors, Inc. since November 2018; Board of Governors, Columbia Wanger Asset Management, LLC since, January 2022; Director, Columbia Threadneedle Canada, Inc., since December 2022 |
| * | 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. Beckman, who is President and
Principal Executive Officer, the Fund’s other officers are:
Fund officers
| Columbia Overseas Core Fund | Annual Report 2023 | 43 |
TRUSTEES AND OFFICERS (continued)
(Unaudited)
Fund officers (continued)
(Unaudited)
Fund officers (continued)
| 44 | Columbia Overseas Core Fund | Annual Report 2023 |
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.
© 2023 Columbia Management Investment
Advisers, LLC.
columbiathreadneedleus.com/investor/
ANN297_02_N01_(04/23)
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, Sandra L. Yeager, and Douglas A. Hacker, 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, Ms. Yeager, and Mr. Hacker 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 two series of the registrant whose reports to stockholders are included in this annual filing.
(a) Audit Fees. Aggregate Audit Fees billed by the principal accountant for professional services rendered during the fiscal years ended February 28, 2023 and February 28, 2022 are approximately as follows:
|
2023 |
2022 |
|
$60,200 |
$59,000 |
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 February 28, 2023 and February 28, 2022 are approximately as follows:
|
2023 |
2022 |
|
$0 |
$29,600 |
Audit-Related Fees include amounts for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported in Audit Fees above.
During the fiscal years ended February 28, 2023 and February 28, 2022, there were no Audit-Related Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant.
(c) Tax Fees. Aggregate Tax Fees billed by the principal accountant to the registrant for professional services rendered during the fiscal years ended February 28, 2023 and February 28, 2022 are approximately as follows:
|
2023 |
2022 |
|
$25,000 |
$14,100 |
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 February 28, 2023 and February 28, 2022, there were no Tax Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant.
(d) All Other Fees. Aggregate All Other Fees billed by the principal accountant to the registrant for professional services rendered during the fiscal years ended February 28, 2023 and February 28, 2022 are approximately as follows:
|
2023 |
2022 |
|
$0 |
$0 |
All Other Fees, if any, include amounts for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) above.
Aggregate All Other Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant during the fiscal years ended February 28, 2023 and February 28, 2022 are approximately as follows:
|
2023 |
2022 |
|
$541,000 |
$535,000 |
In fiscal years 2023 and 2022, All Other Fees primarily consists of fees billed for internal control examinations of the registrant’s transfer agent and investment adviser.
(e)(1) Audit Committee Pre-Approval Policies and Procedures
The registrant’s Audit Committee is required to pre-approve the engagement of the registrant’s independent auditors to provide audit and non-audit services to the registrant and non-audit services to its investment adviser (excluding any sub-adviser whose role is primarily portfolio management and is sub-contracted or overseen by another investment adviser (the “Adviser”) or any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Fund (a “Control Affiliate”) if the engagement relates directly to the operations and financial reporting of the registrant.
The Audit Committee has adopted a Policy for Engagement of Independent Auditors for Audit and Non-Audit Services (the “Policy”). The Policy sets forth the understanding of the Audit Committee regarding the engagement of the registrant’s independent accountants to provide (i) audit and permissible audit-related, tax and other services to the registrant (“Fund Services”); (ii) non-audit services to the registrant’s Adviser and any Control Affiliates, that relates directly to the operations and financial reporting of a Fund (“Fund-related Adviser Services”); and (iii) certain other audit and non-audit services to the registrant’s Adviser and its Control Affiliates. A service will require specific pre-approval by the Audit Committee if it is to be provided by the Fund’s independent auditor; provided, however, that pre-approval of non-audit services to the Fund, the Adviser or Control Affiliates may be waived if certain de minimis requirements set forth in the SEC’s rules are met.
Under the Policy, the Audit Committee may delegate pre-approval authority to any pre-designated member or members who are independent board members. The member(s) to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next regular meeting. The Audit Committee's responsibilities with respect to the pre-approval of services performed by the independent auditor may not be delegated to management.
On an annual basis, at a regularly scheduled Audit Committee meeting, the Fund’s Treasurer or other Fund officer shall submit to the Audit Committee a schedule of the types of Fund Services and Fund-related Adviser Services that are subject to specific pre-approval. This schedule will provide a description of each type of service that is subject to specific pre-approval, along with total projected fees for each service. The pre-approval will generally cover a one-year period. The Audit Committee will review and approve the types of services and the projected fees for the next one-year period and may add to, or subtract from, the list of pre-approved services from time to time, based on subsequent determinations. This specific approval acknowledges that the Audit Committee is in agreement with the specific types of services that the independent auditor will be permitted to perform and the projected fees for each service.
The Fund’s Treasurer or other Fund officer shall report to the Audit Committee at each of its regular meetings regarding all Fund Services or Fund-related Adviser Services provided since the last such report was rendered, including a description of the services, by category, with forecasted fees for the annual reporting period, proposed changes requiring specific pre-approval and a description of services provided by the independent auditor, by category, with actual fees during the current reporting period.
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(e)(2) 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 February 28, 2023 and February 28, 2022 are approximately as follows:
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2023 |
2022 |
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$566,000 |
$579,000 |
(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
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(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. |
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(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.
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(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. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable.
Item 13. Exhibits.
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 authorized.
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(registrant) |
Columbia Funds Series Trust II |
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By (Signature and Title) |
/s/ Daniel J. Beckman |
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Daniel J. Beckman, President and Principal Executive Officer |
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Date |
April 21, 2023 |
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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/ Daniel J. Beckman |
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Daniel J. Beckman, President and Principal Executive Officer |
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Date |
April 21, 2023 |
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By (Signature and Title) |
/s/ Michael G. Clarke |
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Michael G. Clarke, Chief Financial Officer, |
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Principal Financial Officer and Senior Vice President |
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Date |
April 21, 2023 |
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By (Signature and Title) |
/s/ Joseph Beranek |
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Joseph Beranek, Treasurer, Chief Accounting |
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Officer and Principal Financial Officer |
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Date |
April 21, 2023 |
