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 811-04367
Columbia Funds Series Trust I
(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: April 30
Date of reporting period: April 30, 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.
Multi-Manager
Directional Alternative Strategies 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 Multi-Manager Directional Alternative Strategies 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.
You may obtain the current net
asset value (NAV) of Fund shares at no cost by calling 800.345.6611 or by sending an e-mail to serviceinquiries@columbiathreadneedle.com.
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
Multi-Manager Directional Alternative Strategies
Fund | Annual Report 2023
Fund at a Glance
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Investment objective
The Fund
seeks capital appreciation.
Portfolio management
Allspring Global Investments, LLC
Harindra de Silva, CFA
David Krider, CFA
Boston Partners Global Investors, Inc.
Joseph Feeney, Jr., CFA
Scott Burgess, CFA
J.P. Morgan Investment Management Inc.
Rick Singh
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 3 |
Fund at a Glance (continued)
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Performance of a hypothetical $10,000 investment (October 17, 2016 — April 30, 2023)
The chart above shows the change in
value of a hypothetical $10,000 investment in Institutional Class shares of Multi-Manager Directional Alternative Strategies 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 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
Fund at a Glance (continued)
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| Equity sector breakdown — short positions (%) (at April 30, 2023) | |
| Communication Services | (3.8) |
| Consumer Discretionary | (17.7) |
| Consumer Staples | (5.3) |
| Energy | (6.8) |
| Financials | (14.2) |
| Health Care | (8.5) |
| Industrials | (21.6) |
| Information Technology | (10.7) |
| Materials | (6.3) |
| Real Estate | (4.7) |
| Utilities | (0.4) |
| Total | (100.0) |
Percentages indicated are based
upon total short equity investments. The Fund’s portfolio composition is subject to change.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 5 |
Manager Discussion of Fund Performance
(Unaudited)
(Unaudited)
During the 12-month period ended
April 30, 2023, the Fund was managed by three independent money management firms and each invested a portion of the portfolio’s assets. As of April 30, 2023, Allspring Global Investments, LLC (Allspring), Boston
Partners Global Investors, Inc. doing business as Boston Partners (Boston Partners) and J.P. Morgan Investment Management Inc. (JPMorgan) managed approximately 30.06%, 39.74% and 30.20% of the Fund’s assets,
respectively.
For the 12-month period that ended
April 30, 2023, Institutional Class shares of Multi-Manager Directional Alternative Strategies Fund returned -3.44%. During the same time period, the Fund underperformed the HFRX Equity Hedge Index, which returned
0.22%, and the Wilshire Liquid Alternative Equity Hedge Index, which returned 0.83%. The Fund also underperformed the MSCI World Index (Net), which returned 3.18% during the 12-month period.
The Fund’s subadvisers employ
a variety of alternative investment strategies, involving strategies, techniques and practices designed to seek capital appreciation through participation in the broad equity and other markets while hedging overall
market exposure relative to traditional long-only equity strategies. Generally, the Fund seeks to provide higher risk-adjusted returns with lower volatility compared to equity markets
Market overview
U.S. equities performed unevenly
over the 12-months ending April 30, 2023, ending with a wide range of mixed results. Sentiment was driven largely by expectations around the course of inflation and corresponding action by the U.S. Federal Reserve
(Fed), which hiked rates eight times by a combined 450 percentage points over the course of the period. Some upside early in the period was sparked by investors’ interpretation of Fed Chair Powell’s
remarks after the Federal Open Market Committee (FOMC) announced an anticipated 75-basis point rate hike at the end of July, which followed a 75-basis point hike in June. (A basis point is 1/100 of a percent.) What
many seemingly heard were hints that rate hikes would slow in concert with softening economic growth. That takeaway evaporated a month later when Fed chair Jerome Powell spoke at a symposium in Jackson Hole, Wyoming
and prioritized fighting inflation no matter how much pain the economy might suffer. His inflation-fighting resolve was confirmed by additional 75-basis point hikes in September and November and a 50-basis point hike
in December, along with a forecast showing no expectations for rate cuts until 2024.
Despite the rate-hike headwinds in
late 2022, equities attempted to rally moving into the final four months of the period. Growth stocks led the way, in stark contrast to their performance relative to value in 2022, as market participants seemed to be
warming up yet again to the notion of a softer landing, based on better-than-expected earnings, as well as constructive inflation and economic data. Markets reversed course during February 2023, as a blowout January
employment report and continued higher-for-longer messaging from the Fed dampened sentiment, along with mixed earnings reports and geopolitical uncertainties. In March, banking sector turmoil dominated headlines as
two banks failed quickly. While intervention to guarantee uninsured deposits and to provide emergency liquidity helped to limit any broader banking contagion, regional bank stocks still suffered. However, this bank
crisis brought with it a rate reprieve and heightened expectations for a Fed pivot, providing a tailwind for technology and other growth-oriented stocks. In addition, strong earnings reports from large technology
companies, such as Meta Platforms and Microsoft, were especially supportive, as were healthy consumer trends and guidance suggesting a possible soft-landing for the economy. Bullish investors also focused on potential
for the Fed to signal a pause following another 25-basis point hike at its May 2023 meeting. Less constructive was the first read of first-quarter GDP, which showed a larger-than-expected deceleration to a 1.1%
seasonally adjusted annual rate. Additional sources of concern included narrowing equity market leadership, the political stalemate on the debt ceiling and spending cuts and the UK’s decision to block
Microsoft’s acquisition of Activision. Also, although some bank earnings reports were better than feared, news that First Republic Bank would be put into receivership at the end of the period heightened concerns
that turmoil may continue in the banking sector.
Global equities, as measured by the
MSCI World Index (Net), posted positive returns for the period, moving higher early in the period but moving significantly higher in later 2022 and early 2023 as concerns over the Russia/Ukraine conflict, general
uncertainty surrounding inflation and rising interest rates seemed to abate. Early in the period, global markets continued to display volatility as investors responded to global political tensions, and a hawkish Fed.
U.S equities underperformed global stocks during the last quarter of 2022, but the big news was that the U.S. dollar weakened notably against other developed market currencies for the first time in a long time.
| 6 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
Manager Discussion of Fund Performance (continued)
(Unaudited)
(Unaudited)
Allspring
Our portion of the Fund
underperformed its custom benchmark, composed of 50% MSCI World Index (Net)/50% FTSE Three-Month U.S. Treasury Bill Index, due primarily to sector exposures in our portion of the Fund.
Our portion of the Fund utilizes
short positions to pursue downside protection, risk hedging, and also to enhance stock selection. Our Global Long/Short strategy attempts to achieve a consistent 100% Long/30% Short structure at all times.
Notable detractors in our portion
of the Fund during the period
| • | Our portion of the Fund maintained an overweight position to lower beta sectors and an underweight position to high beta sectors. During this period, low beta sectors substantially underperformed the market and high beta sectors substantially outperformed the market. |
| • | Short positions in aerospace and defense company Rolls-Royce Holdings PLC and long positions in real estate investment trust Medical Properties Trust, Inc. and energy producer Uniper SE were the largest negative contributors to performance. These holdings exhibited factor exposures which were not rewarded by the market environment. |
| • | In addition, underweight exposures to the information technology and health care sectors were the greatest negative contributors from a sector weighting perspective. |
| • | Country allocations that had negative contributions were the United Kingdom and Italy. |
| • | Stock selection within Germany also detracted. |
Notable contributors in our
portion of the Fund during the period
| • | Our stock selection model performed reasonably well during most of the period, as stocks we forecasted to do well outperformed stocks we thought would do poorly. This was primarily the result of favoring certain valuation characteristics which outperformed during the trailing 12-month period. Specifically, an emphasis to companies with strong book value and earnings relative to their price positively impacted results as these characteristics were rewarded by investors. |
| • | Short positions within our portion of the Fund in food retailer Ocado Group PLC, electric vehicle manufacturer Rivian Automotive, Inc. and online payments platform Affirm Holdings, Inc. were the largest positive contributors to performance. These holdings exhibited factor exposures which were rewarded by the market environment. |
| • | In addition, an underweight exposure to the communication services sector was the greatest positive contributor from a sector weighting perspective. |
| • | Countries allocations that made positive contributions within our portion of the Fund were underweight positions to the Netherlands, Germany and Japan. |
| • | In addition, while an underweight position in the United States detracted slightly from performance, stock selection was particularly strong within the United States and added significant value overall. |
| • | Overweight positions to Denmark and strong stock selection in Japan also contributed during the period. |
Boston Partners
Our portion of the Fund
outperformed its benchmark, the S&P 500 Index, for the 12 months that ended April 30, 2023, primarily a result of positive security selection and sector allocation. Our portion of the Fund is populated with long
positions in statistically inexpensive companies, and short positions in expensive companies, which overall was a slight headwind to performance. Value stocks, as measured by the Russell 3000 Value Index, rose 0.67%
for the one-year period ending April 30, 2023, while growth stocks, as measured by the Russell 3000 Growth Index gained 2.25%. Despite the value headwind, the long portfolio performed in line with the S&P 500
Index while the short portfolio fell in price and contributed positively to returns.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 7 |
Manager Discussion of Fund Performance (continued)
(Unaudited)
(Unaudited)
Notable contributors in our
portion of the Fund during the period
| • | The Fund’s outperformance relative to its benchmark was a result of positive security selection and sector allocation. |
| • | Long positions in the industrials, energy and consumer discretionary stocks were the top contributors to performance during the reporting period. |
| ○ | Within the industrials sector, positions in defense-related companies including Howmet Aerospace, Inc., BWX Technologies, Inc. and Curtiss-Wright Corp. outperformed as the Ukrainian conflict resulted in increased defense spending in the United States and Europe. |
| ○ | In the energy sector, positions in refiner Marathon Petroleum Corp. and oil services company Schlumberger NV outperformed during the 12-month period as they reported strong earnings and have been returning cash to shareholders. |
| ○ | Within the consumer discretionary sector, a position in AutoZone, Inc. contributed as the company continued to gain share with commercial customers resulting in better-than expected sales and earnings. |
| • | Short positions in the financials, real estate and information technology sectors were significant positive contributors. |
| ○ | In the financials sector, capital markets shorts were down sharply, led by investment banking company Credit Suisse Group AG. |
| ○ | In the real estate sector, a short position in WeWork, Inc., a company which provides coworking office space, was down significantly as free cash flow losses accelerated and cash on their balance sheet dwindled. |
| ○ | In the information technology sector, high P/E software shorts continued to see multiple compression as long-term interest rates moved higher. |
Notable detractors in our portion
of the Fund during the period
| • | Long positions in the information technology, real estate and financials sectors detracted from performance during the reporting period. |
| ○ | Within the information technology sector, IT services company Cognizant Technology Solutions Corp. underperformed due to declining sales. |
| ○ | In real estate, apartment real estate investment trust (REIT) operator Essex Property Trust, Inc. experienced softening in lease rates on the West Coast. |
| ○ | In the financial sector, regional banks Fifth Third Bancorp and KeyCorp detracted as future net interest margins were in doubt as funding costs rose. |
| • | Short positions in the consumer discretionary and industrials sectors were the top detractors to performance in our portion of the Fund during the period. |
| ○ | Within the consumer discretionary sector, shorts in fast-casual restaurants Wingstop, Inc. and Chipotle Mexican Grill, Inc. and household durable firm La-Z-Boy, Inc. detracted. |
| ○ | Within industrials, a short position in General Electric Co. rose on aerospace segment strength, but free cash flow at the company remained elusive. |
JPMorgan
Our portion of the Fund
underperformed its custom benchmark, composed of 50% S&P 500 Index/50% FTSE Three-Month U.S. Treasury Bill Index. The rally in higher stocks during the period hindered performance in the short portfolio. The long
portfolio remained conservatively postured with notable positions in macro-agnostic companies such as managed care, utilities and payment processors. These businesses, which tend to have defensive profiles, lagged as
the market moved higher to start 2023.
| 8 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
Manager Discussion of Fund Performance (continued)
(Unaudited)
(Unaudited)
Notable detractors in our portion
of the Fund during the period
| • | The short portfolio was the largest detractor during the period. |
| • | Short positions within the industrials and consumer discretionary sectors detracted. |
| • | Within the long portfolio, positions in the consumer discretionary sector were the most notable detractors during the period. |
| • | Top individual detractors included a modest long position in Amazon.com, Inc., a long position in NIO, Inc., as well as a short position in Old Dominion Freight Line, Inc. |
Notable contributors in our
portion of the Fund during the period
| • | Long positions within utilities contributed. |
| • | Short positions in the real estate sector contributed. |
| • | Top individual contributors include long positions in Fiserv, Inc., Ferrari NV and Constellation Energy Corp. The position in Constellation Energy was closed during the period. |
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. The Fund is managed by multiple advisers independently of one another, which may result in contradicting trades (i.e., with no net benefit to the Fund), while increasing transaction costs. As a non-diversified fund, fewer investments could have a greater effect on performance. Alternative investments cover a broad range of strategies and structures designed to be low or non-correlated to
traditional equity and fixed-income markets with along-term expectation of illiquidity. Alternative investments involve substantial risks and are more volatile than traditional investments, making them more suitable for investors with an above-average tolerance for risk. 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. Short positions (where the underlying asset is not owned) can create unlimited risk. The Fund’s use of leverage allows for investment exposure in excess of net assets, thereby magnifying volatility of returns and risk of loss. 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. Risks are enhanced for emerging market issuers. A rise in interest rates may result in a price decline of fixed-income instruments held by the Fund, negatively impacting its performance and NAV. Falling rates may result in the Fund investing in lower yielding
debt instruments, lowering the Fund’s income and yield. These risks may be heightened for longer maturity and duration securities. Fixed-income securities present issuer default risk. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. See the Fund’s prospectus for more information on these and other risks.
The views expressed in this report
reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and
results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update
such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf
of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 9 |
Understanding Your Fund’s
Expenses
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(Unaudited)
As an investor, you incur two types
of costs. There are shareholder transaction costs, which may include redemption fees. There are also ongoing fund costs, which generally include management fees, distribution and/or service fees, and other fund
expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual
funds.
Analyzing your Fund’s
expenses
To illustrate these ongoing
costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment
of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the
“Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the
expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under
the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the
Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or
the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are
required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the
hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are
meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
Expenses paid during the period
are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal
half year and divided by 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.
The Fund is offered only through
certain wrap fee programs sponsored and/or managed by Ameriprise Financial, Inc. or its affiliates. Participants in wrap fee programs pay other fees that are not included in the above table. Please refer to the wrap
program documents for information about the fees charged.
| 10 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
Portfolio of Investments
April 30, 2023
April 30, 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.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 11 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 12 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 13 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 14 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 15 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 16 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 17 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 18 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 19 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 20 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 21 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
At April 30, 2023,
securities and/or cash totaling $155,221,964 were pledged as collateral.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 22 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
Investments in derivatives
| Put option contracts purchased | ||||||||
| Description | Counterparty | Trading currency | Notional amount | Number of contracts | Exercise price/Rate | Expiration date | Cost ($) | Value ($) |
| NASDAQ 100 Index | Citi | USD | 13,245,990 | 10 | 11,800.00 | 06/16/2023 | 154,419 | 65,450 |
| S&P 500 Index | Citi | USD | 3,752,532 | 9 | 4,000.00 | 06/16/2023 | 82,087 | 35,370 |
| Total | 236,506 | 100,820 | ||||||
| Reference index and values for swap contracts as of period end | ||
| Reference index | Reference rate | |
| 1-Day Overnight Fed Funds Effective Rate | Overnight Federal Funds Effective Rate | 4.830% |
Notes to Portfolio of
Investments
| (a) | Non-income producing investment. |
| (b) | This security or a portion of this security has been pledged as collateral in connection with investments sold short and/or derivative contracts. |
| (c) | The rate shown is the seven-day current annualized yield at April 30, 2023. |
| (d) | As defined in the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. The value of the holdings and transactions in these affiliated companies during the year ended April 30, 2023 are as follows: |
| Affiliated issuers | Beginning of period($) | Purchases($) | Sales($) | Net change in unrealized appreciation (depreciation)($) | End of period($) | Realized gain (loss)($) | Dividends($) | End of period shares |
| Columbia Short-Term Cash Fund, 5.046% | ||||||||
| 42,562,256 | 358,579,883 | (367,895,143) | 329 | 33,247,325 | (5,074) | 1,062,787 | 33,260,630 | |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 23 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
Abbreviation Legend
| ADR | American Depositary Receipt |
| NVDR | Non-Voting Depositary Receipt |
Currency Legend
| USD | US Dollar |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
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 April 30, 2023:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Common Stocks | ||||
| Communication Services | 7,517,660 | 1,600,145 | — | 9,117,805 |
| Consumer Discretionary | 19,944,142 | 4,095,486 | — | 24,039,628 |
| Consumer Staples | 17,971,126 | 2,299,040 | — | 20,270,166 |
| Energy | 14,071,188 | 778,186 | — | 14,849,374 |
| Financials | 26,749,590 | 5,006,212 | — | 31,755,802 |
| Health Care | 29,277,443 | 5,683,983 | — | 34,961,426 |
| Industrials | 22,681,899 | 6,488,015 | — | 29,169,914 |
| Information Technology | 33,277,373 | 886,006 | — | 34,163,379 |
| Materials | 3,947,053 | 3,852,108 | — | 7,799,161 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 24 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
Fair value measurements (continued)
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Real Estate | 3,556,083 | 1,916,609 | — | 5,472,692 |
| Utilities | 8,375,043 | 5,066,020 | — | 13,441,063 |
| Total Common Stocks | 187,368,600 | 37,671,810 | — | 225,040,410 |
| Exchange-Traded Equity Funds | 3,195,590 | — | — | 3,195,590 |
| Preferred Stocks | ||||
| Consumer Discretionary | — | 182,508 | — | 182,508 |
| Total Preferred Stocks | — | 182,508 | — | 182,508 |
| Put Option Contracts Purchased | 100,820 | — | — | 100,820 |
| Money Market Funds | 33,247,325 | — | — | 33,247,325 |
| Total Investments in Securities | 223,912,335 | 37,854,318 | — | 261,766,653 |
| Investments in Securities Sold Short | ||||
| Common Stocks | ||||
| Communication Services | (2,567,105) | (427,301) | — | (2,994,406) |
| Consumer Discretionary | (10,545,561) | (3,311,794) | — | (13,857,355) |
| Consumer Staples | (3,750,220) | (436,784) | — | (4,187,004) |
| Energy | (5,110,124) | (227,842) | — | (5,337,966) |
| Financials | (7,637,116) | (3,467,777) | — | (11,104,893) |
| Health Care | (4,802,133) | (1,870,074) | — | (6,672,207) |
| Industrials | (13,376,369) | (3,556,378) | — | (16,932,747) |
| Information Technology | (7,362,919) | (1,051,285) | — | (8,414,204) |
| Materials | (3,532,757) | (1,407,424) | — | (4,940,181) |
| Real Estate | (3,066,397) | (594,712) | — | (3,661,109) |
| Utilities | (350,463) | — | — | (350,463) |
| Total Common Stocks | (62,101,164) | (16,351,371) | — | (78,452,535) |
| Total Investments in Securities Sold Short | (62,101,164) | (16,351,371) | — | (78,452,535) |
| Total Investments in Securities, Net of Securities Sold Short | 161,811,171 | 21,502,947 | — | 183,314,118 |
| Investments in Derivatives | ||||
| Liability | ||||
| Call Option Contracts Written | (74,290) | — | — | (74,290) |
| Put Option Contracts Written | (3,140) | — | — | (3,140) |
| Swap Contracts | — | (1,530) | — | (1,530) |
| Total | 161,733,741 | 21,501,417 | — | 183,235,158 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The Fund’s assets assigned to
the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical
assets. These assets include certain foreign securities for which a third party statistical pricing service may be employed for purposes of fair market valuation. The model utilized by such third party statistical
pricing service takes into account a security’s correlation to available market data including, but not limited to, intraday index, ADR, and exchange-traded fund movements.
Swap contracts are valued at
unrealized appreciation (depreciation).
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 25 |
Statement of Assets and Liabilities
April 30, 2023
April 30, 2023
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $206,884,378) | $228,418,508 |
| Affiliated issuers (cost $33,243,643) | 33,247,325 |
| Option contracts purchased (cost $236,506) | 100,820 |
| Cash collateral held at broker for: | |
| Swap contracts | 60,000 |
| Securities sold short | 82,688,690 |
| Receivable for: | |
| Investments sold | 1,106,896 |
| Capital shares sold | 295,353 |
| Dividends | 374,592 |
| Interest | 173,401 |
| Foreign tax reclaims | 301,445 |
| Expense reimbursement due from Investment Manager | 2,341 |
| Prepaid expenses | 2,260 |
| Trustees’ deferred compensation plan | 36,456 |
| Total assets | 346,808,087 |
| Liabilities | |
| Securities sold short, at value (proceeds $84,817,354) | 78,452,535 |
| Option contracts written, at value (premiums received $78,682) | 77,430 |
| Due to custodian | 1,976 |
| Foreign currency (cost $6,999) | 7,063 |
| Unrealized depreciation on swap contracts | 1,530 |
| Payable for: | |
| Investments purchased | 7,726,352 |
| Capital shares purchased | 359,129 |
| Dividends and interest on securities sold short | 79,922 |
| Management services fees | 11,356 |
| Transfer agent fees | 44,355 |
| Compensation of board members | 14,999 |
| Other expenses | 231,985 |
| Trustees’ deferred compensation plan | 36,456 |
| Total liabilities | 87,045,088 |
| Net assets applicable to outstanding capital stock | $259,762,999 |
| Represented by | |
| Paid in capital | 249,228,323 |
| Total distributable earnings (loss) | 10,534,676 |
| Total - representing net assets applicable to outstanding capital stock | $259,762,999 |
| Institutional Class | |
| Net assets | $259,762,999 |
| Shares outstanding | 40,492,136 |
| Net asset value per share | $6.42 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 26 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
Statement of Operations
Year Ended April 30, 2023
Year Ended April 30, 2023
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $5,393,849 |
| Dividends — affiliated issuers | 1,062,787 |
| Interest | 1,545,065 |
| Interfund lending | 1,945 |
| Foreign taxes withheld | (242,011) |
| Total income | 7,761,635 |
| Expenses: | |
| Management services fees | 4,179,165 |
| Transfer agent fees | |
| Institutional Class | 584,508 |
| Compensation of board members | 18,409 |
| Custodian fees | 387,250 |
| Printing and postage fees | 73,293 |
| Registration fees | 43,530 |
| Accounting services fees | 83,996 |
| Legal fees | 16,077 |
| Dividends and interest on securities sold short | 1,338,908 |
| Interest on interfund lending | 27 |
| Compensation of chief compliance officer | 51 |
| Other | 108,643 |
| Total expenses | 6,833,857 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (688,882) |
| Total net expenses | 6,144,975 |
| Net investment income | 1,616,660 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (11,649,837) |
| Investments — affiliated issuers | (5,074) |
| Foreign currency translations | (1,007,325) |
| Option contracts purchased | (59,877) |
| Option contracts written | 154,222 |
| Securities sold short | 6,562,210 |
| Swap contracts | 142 |
| Net realized loss | (6,005,539) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | 4,030,972 |
| Investments — affiliated issuers | 329 |
| Foreign currency translations | 760,790 |
| Option contracts purchased | (135,686) |
| Option contracts written | 1,252 |
| Securities sold short | (9,288,658) |
| Swap contracts | (26,652) |
| Net change in unrealized appreciation (depreciation) | (4,657,653) |
| Net realized and unrealized loss | (10,663,192) |
| Net decrease in net assets resulting from operations | $(9,046,532) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 27 |
Statement of Changes in Net Assets
| Year Ended April 30, 2023 | Year Ended April 30, 2022 | |
| Operations | ||
| Net investment income (loss) | $1,616,660 | $(2,699,534) |
| Net realized gain (loss) | (6,005,539) | 43,103,719 |
| Net change in unrealized appreciation (depreciation) | (4,657,653) | (11,258,958) |
| Net increase (decrease) in net assets resulting from operations | (9,046,532) | 29,145,227 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Institutional Class | (27,498,020) | (19,622,766) |
| Total distributions to shareholders | (27,498,020) | (19,622,766) |
| Increase (decrease) in net assets from capital stock activity | 29,607,127 | (21,172,260) |
| Total decrease in net assets | (6,937,425) | (11,649,799) |
| Net assets at beginning of year | 266,700,424 | 278,350,223 |
| Net assets at end of year | $259,762,999 | $266,700,424 |
| Year Ended | Year Ended | |||
| April 30, 2023 | April 30, 2022 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Institutional Class | ||||
| Subscriptions | 10,452,906 | 73,487,604 | 7,824,223 | 58,217,586 |
| Distributions reinvested | 4,198,171 | 27,498,020 | 2,767,668 | 19,622,766 |
| Redemptions | (10,094,867) | (71,378,497) | (13,156,101) | (99,012,612) |
| Net increase (decrease) | 4,556,210 | 29,607,127 | (2,564,210) | (21,172,260) |
| Total net increase (decrease) | 4,556,210 | 29,607,127 | (2,564,210) | (21,172,260) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 28 | Multi-Manager Directional Alternative Strategies 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 ratios of expenses and net investment income are 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.
| Institutional Class | Year Ended April 30, | ||||
| 2023 | 2022 | 2021 | 2020 | 2019 | |
| Per share data | |||||
| Net asset value, beginning of period | $7.42 | $7.23 | $6.00 | $6.78 | $10.82 |
| Income (loss) from investment operations: | |||||
| Net investment income (loss) | 0.04 | (0.07) | (0.08) | (0.01) | (0.01) |
| Net realized and unrealized gain (loss) | (0.28) | 0.80 | 1.31 | (0.72) | (0.80) |
| Total from investment operations | (0.24) | 0.73 | 1.23 | (0.73) | (0.81) |
| Distributions to shareholders | |||||
| Distributions from net investment income | (0.15) | (0.08) | — | — | (0.06) |
| Distributions from net realized gains | (0.61) | (0.46) | — | (0.05) | (3.17) |
| Total distributions to shareholders | (0.76) | (0.54) | — | (0.05) | (3.23) |
| Net asset value, end of period | $6.42 | $7.42 | $7.23 | $6.00 | $6.78 |
| Total return | (3.44%) | 10.42% | 20.50% | (10.81%) | (5.65%) |
| Ratios to average net assets | |||||
| Total gross expenses(a) | 2.62%(b),(c) | 2.61%(b),(c),(d) | 2.90%(b),(c),(d) | 2.31%(b),(d) | 2.16%(b),(c),(d) |
| Total net expenses(a),(e) | 2.35%(b),(c) | 2.43%(b),(c),(d) | 2.71%(b),(c),(d) | 2.19%(b),(d) | 2.12%(b),(c),(d) |
| Net investment income (loss) | 0.62% | (1.00%) | (1.31%) | (0.14%) | (0.11%) |
| Supplemental data | |||||
| Net assets, end of period (in thousands) | $259,763 | $266,700 | $278,350 | $221,159 | $251,976 |
| Portfolio turnover | 399% | 323% | 254% | 197% | 146%(f) |
| 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) | Ratios include dividends and interest on securities sold short. If dividends and interest on securities sold short had been excluded, expenses would have been lower by: |
| Class | 4/30/2023 | 4/30/2022 | 4/30/2021 | 4/30/2020 | 4/30/2019 |
| Institutional Class | 0.51% | 0.59% | 0.87% | 0.32% | 0.19% |
| (c) | Ratios include interfund lending expense which is less than 0.01%. |
| (d) | Ratios include interest on collateral expense which is less than 0.01%. |
| (e) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (f) | The rate for the year ended April 30, 2019, as disclosed in the April 30, 2020 and 2019 financial statements was calculated and presented incorrectly and has been corrected. |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 29 |
Notes to Financial Statements
April 30, 2023
April 30, 2023
Note 1. Organization
Multi-Manager Directional
Alternative Strategies Fund (the Fund), a series of Columbia Funds Series Trust I (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Massachusetts business trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund is offered only through certain wrap fee programs sponsored and/or managed by Ameriprise Financial, Inc. (Ameriprise Financial) or its affiliates. The Fund offers the
share class listed in the Statement of Assets and Liabilities which is not subject to any front-end sales charge or contingent deferred sales charge.
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.
Option contracts are valued at the
mean of the latest quoted bid and ask prices on their primary exchanges. Option contracts, including over-the-counter option contracts, with no readily available market quotations are valued using mid-market
evaluations from independent third-party vendors.
Swap transactions are valued
through an independent pricing service or broker, or if neither is available, through an internal model based upon observable inputs.
| 30 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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 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.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 31 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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.
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, to increase return
on investments and to protect gains. 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.
| 32 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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.
Swap contracts
Swap contracts are negotiated in
the over-the-counter market and are entered into bilaterally or centrally cleared (centrally cleared swap contract). In a centrally cleared swap contract, immediately following execution of the swap contract with a
broker, the swap contract is novated to a central counterparty (the CCP) and the CCP becomes the Fund’s counterparty to the centrally cleared swap contract. The Fund is required to deposit initial margin with
the futures commission merchant (FCM), which pledges it through to the CCP in the form of cash or securities in an amount that varies depending on the size and risk profile of the particular swap contract. Securities
deposited as initial margin are designated in the Portfolio of Investments and cash deposited is recorded in the Statement of Assets and Liabilities as margin deposits. For a bilateral swap contract, the Fund has
credit exposure to the broker, but exchanges daily variation margin with the broker based on the mark-to-market value of the swap contract to minimize that exposure. For centrally cleared swap contracts, the Fund has
minimal credit exposure to the FCM because the CCP stands between the Fund and the relevant buyer/seller on the other side of the contract. Swap contracts are marked-to-market daily and changes in value are recorded
as unrealized appreciation (depreciation). The daily change in valuation of centrally cleared swap contracts, if any, is recorded as a receivable or payable for variation margin in the Statement of Assets and
Liabilities.
Entering into these contracts
involves, to varying degrees, elements of interest, liquidity and counterparty credit risk in excess of the amounts recognized in the Statement of Assets and Liabilities. Such risks involve the possibility that there
may be unfavorable changes in interest rates, market conditions or other conditions, that it may be difficult to initiate a swap transaction or liquidate a position at an advantageous time or price which may result in
significant losses, and that the bilateral counterparty, FCM or CCP, as applicable, may not fulfill its obligation under the contract.
Total return swap contracts
The Fund entered into total return
swap contracts to manage long or short exposure to the total return on a specified reference security in return for periodic payments based on a fixed or variable interest rate. These instruments may be used for other
purposes in future periods. Total return swap contracts may be used to obtain exposure to an underlying reference security, instrument, or other asset or index or market without owning, taking physical custody of, or
short selling any such security, instrument or asset in a market.
Total return swap contracts are
valued daily, and the change in value is recorded as unrealized appreciation (depreciation) until the termination of the swap, at which time the Fund will realize a gain (loss). Periodic payments received (or made) by
the Fund over the term of the contract are recorded as realized gains (losses). Total return swap contracts are subject to the risk associated with the investment in the underlying reference security, instrument or
asset. This risk may be offset if the Fund holds any of the underlying reference security, instrument or asset. Total return swap contracts are subject to the risk that the counterparty may not fulfill its obligations
under the contract. This risk is offset by the daily exchange of variation margin with the swap counterparty.
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.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 33 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
The following table is a summary of
the fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) at April 30, 2023:
| Asset derivatives | ||
| Risk exposure category | Statement of assets and liabilities location | Fair value ($) |
| Equity risk | Investments, at value — Option contracts purchased | 100,820 |
| Liability derivatives | ||
| Risk exposure category | Statement of assets and liabilities location | Fair value ($) |
| Equity risk | Option contracts written, at value | 77,430 |
| Equity risk | Component of total distributable earnings (loss) — unrealized depreciation on swap contracts | 1,530* |
| Total | 78,960 |
| * | Includes cumulative appreciation (depreciation) as reported in the tables following the Portfolio of Investments. Only the current day’s variation margin is reported in receivables or payables in the Statement of Assets and Liabilities. |
The following table indicates the
effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended April 30, 2023:
The following table is a summary
of the average outstanding volume by derivative instrument for the year ended April 30, 2023:
| Derivative instrument | Average value ($) |
| Option contracts purchased | 19,182* |
| Option contracts written | (50,205)** |
| Derivative instrument | Average unrealized appreciation ($)** | Average unrealized depreciation ($)** |
| Total return swap contracts | 9,591 | (383) |
| * | Based on the ending daily outstanding amounts for the year ended April 30, 2023. |
| ** | Based on the ending quarterly outstanding amounts for the year ended April 30, 2023. |
Short sales
The Fund may sell a security it
does not own in anticipation of a decline in the fair value of the security. When the Fund sells a security short, it must borrow the security sold short and deliver it to the broker-dealer through which it made the
short sale. The Fund is required to maintain a margin account with the broker and to pledge assets to the broker as collateral for the borrowed security. Securities pledged as collateral are designated in the
Portfolio of Investments. In addition, the collateral is recorded as cash collateral held at broker in the Statement of Assets and Liabilities. The Fund can purchase the
| 34 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
same security at the current market price and
deliver it to the broker to close out the short sale. The Fund is obligated to pay the broker a fee for borrowing the security and may receive rebate income from the investment of collateral. The net amount of income
or fees is included in "Interest income" (for net income received) or “Dividends and interest on securities sold short” (for net expense) in the Statement of Operations. A short position is reported as a
liability at fair value in the Statement of Assets and Liabilities. The Fund must also pay the broker for any dividends accrued (recognized on ex-date) on the borrowed security. This amount is recorded as an expense
in the Statement of Operations. The Fund will record a gain if the security declines in value, and will realize a loss if the security appreciates. Such gain, limited to the price at which the Fund sold the security
short, or such loss, potentially unlimited in size because the short position loses value as the market price of the security sold short increases, will be recognized upon the termination of a short sale.
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 April 30, 2023:
| Citi ($) | JPMorgan ($) | Macquarie ($) | Morgan Stanley ($) | Total ($) | |
| Assets | |||||
| Put option contracts purchased | 100,820 | - | - | - | 100,820 |
| Total assets | 100,820 | - | - | - | 100,820 |
| Liabilities | |||||
| Call option contracts written | - | - | - | 74,290 | 74,290 |
| Put option contracts written | - | - | - | 3,140 | 3,140 |
| OTC total return swap contracts (a) | - | - | 1,530 | - | 1,530 |
| Securities borrowed | 13,395,670 | 4,223,012 | - | 60,833,853 | 78,452,535 |
| Total liabilities | 13,395,670 | 4,223,012 | 1,530 | 60,911,283 | 78,531,495 |
| Total financial and derivative net assets | (13,294,850) | (4,223,012) | (1,530) | (60,911,283) | (78,430,675) |
| Total collateral received (pledged) (b) | (13,294,850) | (4,223,012) | (1,530) | (60,911,283) | (78,430,675) |
| Net amount (c) | - | - | - | - | - |
| (a) | Over-the-Counter (OTC) swap contracts are presented at market value plus periodic payments receivable (payable), which is comprised of unrealized appreciation, unrealized depreciation, upfront payments and upfront receipts. |
| (b) | In some instances, the actual collateral received and/or pledged may be more than the amount shown due to overcollateralization. |
| (c) | 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
Interest income is recorded on an
accrual basis.
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.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 35 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Awards from class action litigation
are recorded as a reduction of cost basis if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities on the payment date, the proceeds are recorded as
realized gains.
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable income and net capital gain, if any, for its
tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net income and certain other
amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Foreign taxes
The Fund may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules
and regulations that exist in the markets in which it invests.
Realized gains in certain countries
may be subject to foreign taxes at the Fund level, based on statutory rates. The Fund accrues for such foreign taxes on realized and unrealized gains at the appropriate rate for each jurisdiction, as applicable. The
amount, if any, is disclosed as a liability in the Statement of Assets and Liabilities.
Distributions to shareholders
Distributions from net investment
income, if any, are declared and paid 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 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.
| 36 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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 Investment Manager is responsible for the ultimate oversight of investments made by the
Fund. The Fund’s subadvisers (see Subadvisory agreements below) have the primary responsibility for the day-to-day portfolio management of the Fund. The management services fee is equal to 1.60% of the
Fund’s daily net assets.
Subadvisory agreements
The Investment Manager has entered
into Subadvisory Agreements with Allspring Global Investments, LLC, Boston Partners Global Investors, Inc. and J.P. Morgan Investment Management Inc., each of which subadvises a portion of the assets of the Fund.
New investments in the Fund, net of any redemptions, are allocated in accordance with the Investment Manager’s determination. Each subadviser’s proportionate share of investments in the Fund will
vary due to market fluctuations. The Investment Manager compensates each subadviser to manage the investment of the Fund’s 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.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 37 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
For the year ended April 30, 2023,
the Fund’s effective transfer agency fee rate as a percentage of average daily net assets was as follows:
| Effective rate (%) | |
| Institutional Class | 0.22 |
Distribution and service fees
The Fund has an agreement with
Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder services. The Fund
does not pay the Distributor a fee for the distribution services it provides to the Fund.
Expenses waived/reimbursed by the
Investment Manager and its affiliates
The Investment Manager and certain
of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s
custodian, do not exceed the following annual rate(s) as a percentage of the classes’ average daily net assets:
| Fee rate(s) contractual through August 31, 2023 | |
| Institutional Class | 1.84% |
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 April 30, 2023, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, foreign currency transactions, derivative investments, swap investments, passive foreign investment company (pfic)
holdings, tax straddles, constructive sales of appreciated financial positions, capital loss carryforwards, trustees’ deferred compensation, non-deductible expenses, distribution reclassifications and
miscellaneous adjustments. 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) ($) | Paid in capital ($) |
| (613,694) | 613,693 | 1 |
| 38 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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 April 30, 2023 | Year Ended April 30, 2022 | ||||
| Ordinary income ($) | Long-term capital gains ($) | Total ($) | Ordinary income ($) | Long-term capital gains ($) | Total ($) |
| 15,634,193 | 11,863,827 | 27,498,020 | 2,950,230 | 16,672,536 | 19,622,766 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At April 30, 2023, the components
of distributable earnings on a tax basis were as follows:
| Undistributed ordinary income ($) | Undistributed long-term capital gains ($) | Capital loss carryforwards ($) | Net unrealized appreciation ($) |
| 938,228 | — | (7,018,378) | 16,746,141 |
At April 30, 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) ($) | Net unrealized appreciation ($) |
| 166,489,017 | 25,676,220 | (8,930,079) | 16,746,141 |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
The following capital loss
carryforwards, determined at April 30, 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 April 30,
2023, capital loss carryforwards utilized, if any, were as follows:
| No expiration short-term ($) | No expiration long-term ($) | Total ($) | Utilized ($) |
| (7,018,378) | — | (7,018,378) | — |
Management of the Fund has
concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at
a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the
prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio
information
The cost of purchases and
proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $1,264,393,277 and $1,247,569,939, respectively, for the year ended April 30, 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,
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 39 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
the Board of Trustees of the Affiliated
MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes referred to as imposing a redemption gate) in the event its liquidity falls below regulatory
limits.
Note 7. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the
Interfund Program during the year ended April 30, 2023 was as follows:
| Borrower or lender | Average loan balance ($) | Weighted average interest rate (%) | Number of days with outstanding loans |
| Borrower | 200,000 | 4.85 | 1 |
| Lender | 2,375,000 | 4.32 | 8 |
Interest income earned and
interest expense incurred by the Fund is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at April 30, 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 April 30, 2023.
Note 9. Significant
risks
Alternative strategies investment
risk
An investment in alternative
investment strategies (Alternative Strategies) involves risks, which may be significant. Alternative Strategies may include strategies, instruments or other assets, such as derivatives, that seek investment returns
uncorrelated with the broad equity and fixed income/debt markets, as well as those providing exposure to other markets (such as commodity markets), including but not limited to absolute (positive) return strategies.
Alternative Strategies may fail to achieve their desired performance, market or other exposure, or their returns (or lack thereof) may be more correlated with the broad equity and/or fixed income/debt markets than was
anticipated, and the Fund may lose money.
| 40 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Foreign currency risk
The performance of the Fund may be
materially affected positively or negatively by foreign currency strength or weakness relative to the U.S. dollar, particularly if the Fund invests a significant percentage of its assets in foreign securities or other
assets denominated in currencies other than the U.S. dollar. Currency rates in foreign countries may fluctuate significantly over short or long periods of time for a number of reasons, including changes in interest
rates, imposition of currency controls and economic or political developments in the U.S. or abroad. The Fund may also incur currency conversion costs when converting foreign currencies into U.S. dollars and vice
versa.
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 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, restricted cross-border payments and limited access to investments and/or assets in certain international markets and/or
issuers. These developments and other related events could negatively impact Fund performance.
Shareholder concentration risk
At April 30, 2023, affiliated
shareholders of record owned 100.0% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the
Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of
less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Short selling risk
Leverage occurs when the Fund
increases its assets available for investment using borrowings, short sales, derivatives, or similar instruments or techniques. Because short sales involve borrowing securities and then selling them, the Fund’s
short sales effectively leverage the Fund’s assets. The Fund’s assets that are used as collateral to secure the Fund’s obligations to return the securities sold short may decrease in value while the
short positions are outstanding, which may force the Fund to use its other assets to increase the collateral. Leverage can create an interest expense that may lower the Fund’s overall returns. Leverage presents
the opportunity for increased net income and capital gains, but may also exaggerate the Fund’s volatility and risk of loss. There can be no guarantee that a leveraging strategy will be successful.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 41 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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.
| 42 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust I and Shareholders of Multi-Manager Directional Alternative Strategies Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Multi-Manager Directional Alternative Strategies Fund (one of the funds constituting Columbia Funds Series Trust I, referred to hereafter
as the "Fund") as of April 30, 2023, the related statement of operations for the year ended April 30, 2023, the statement of changes in net assets for each of the two years in the period ended April 30, 2023,
including the related notes, and the financial highlights for each of the five years in the period ended April 30, 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 April 30, 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 April 30, 2023 and the financial highlights for each of the five years in the period ended April 30, 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 April 30, 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
June 22, 2023
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 43 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended April 30, 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 |
| 4.45% | 2.85% | 0.08% |
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.
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 and other relevant Board experience |
| 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 | 174 | 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 |
| 44 | Multi-Manager Directional Alternative Strategies 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 and other relevant Board experience |
| 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 | 174 | 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 | 174 | 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) (financial services), 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 | 172 | 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 (former mutual fund complex), January 2015-December 2017 |
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 45 |
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 and other relevant Board experience |
| 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 | 172 | Treasurer, Edinburgh University US Trust Board, since January 2023; Member, HBS Community Action Partners Board, since September 2022; former Director, University of Edinburgh Business School (Member of US Board), 2004-2019; former Director, Boston Public Library Foundation, 2008-2017 |
| 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 | 174 | Former Trustee, MA Taxpayers Foundation, 1997-2022; former Director, The MA Business Roundtable, 2003-2019; former Chairperson, Innovation Index Advisory Committee, MA Technology Collaborative, 1997-2020 |
| 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 | 174 | 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 | 174 | Director, SpartanNash Company since November 2013 (Chair of the Board, since May 2021) (food distributor); Director, Aircastle Limited (Chair of Audit Committee) (aircraft leasing), since August 2006; 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 | 172 | None |
| 46 | Multi-Manager Directional Alternative Strategies 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 and other relevant Board experience |
| 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 | 172 | 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 Senior Adviser to The Carlyle Group (financial services), March 2008-September 2008; former Governance Consultant to Bridgewater Associates, January 2013-December 2015 |
| 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. | 174 | Director, Valmont Industries, Inc. (irrigation systems manufacturer), since 2012; Trustee, Carleton College (on the Investment Committee), since 1987; Trustee, Carnegie Endowment for International Peace (on the Investment Committee), since 2009 |
| 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 | 172 | 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 |
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 47 |
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 and other relevant Board experience |
| 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 | 174 | Former Director, NAPE (National Alliance for Partnerships in Equity) Education Foundation, October 2016-October 2020; Advisory Board, Jennersville YMCA, since 2022 |
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 and other relevant Board experience |
| 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 | 174 | 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 |
| * | 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 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.
| 48 | Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 |
TRUSTEES AND OFFICERS (continued)
(Unaudited)
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:
(Unaudited)
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
| Multi-Manager Directional Alternative Strategies Fund | Annual Report 2023 | 49 |
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 |
| 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. |
Liquidity Risk
Management Program
(Unaudited)
Pursuant to Rule 22e-4 under the
1940 Act, the Fund has adopted a liquidity risk management program (Program). The Program’s principal objectives include assessing, managing and periodically reviewing the Fund’s liquidity risk. Liquidity
risk is defined as the risk that the Fund could not meet redemption requests without significant dilution of remaining investors’ interests in the Fund.
The Board has appointed the
Investment Manager as the program administrator for the Fund’s Program. The Investment Manager has delegated oversight of the Program to its Liquidity Risk Management Committee (the Committee). At a board
meeting during the fiscal period, the Committee provided the Board with a report addressing the operations of the program and assessing its adequacy and effectiveness of implementation for the period January 1, 2022,
through December 31, 2022, including:
| • | the Fund had sufficient liquidity to both meet redemptions and operate effectively on behalf of shareholders; |
| • | there were no material changes to the Program during the period; |
| • | the implementation of the Program was effective to manage the Fund’s liquidity risk; and |
| • | the Program operated adequately during the period. |
There can be no assurance that the
Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an
investment in the Fund may be subject.
| 50 | Multi-Manager Directional Alternative Strategies 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/
ANN284_04_N01_(06/23)
Columbia Total
Return Bond Fund
Not FDIC or NCUA Insured •
No Financial Institution Guarantee • May Lose Value
Table of Contents
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| 67 | |
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| 74 |
If you elect to receive the
shareholder report for Columbia Total Return Bond 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 Total Return Bond
Fund | Annual Report 2023
Fund at a Glance
(Unaudited)
(Unaudited)
Investment objective
The Fund
seeks total return, consisting of current income and capital appreciation.
Portfolio management
Jason Callan
Lead Portfolio Manager
Managed Fund since 2016
Gene Tannuzzo, CFA
Portfolio Manager
Managed Fund since 2017
Alex Christensen, CFA
Portfolio Manager
Managed Fund since 2021
| Columbia Total Return Bond Fund | Annual Report 2023 | 3 |
Fund at a Glance (continued)
(Unaudited)
(Unaudited)
Performance of a hypothetical $10,000 investment (April 30, 2013 — April 30, 2023)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Total Return Bond Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund
distributions or on the redemption of Fund shares.
| 4 | Columbia Total Return Bond Fund | Annual Report 2023 |
Fund at a Glance (continued)
(Unaudited)
(Unaudited)
| Market exposure through derivatives investments (% of notional exposure) (at April 30, 2023)(a) | |||
| Long | Short | Net | |
| Fixed Income Derivative Contracts | 144.2 | (43.9) | 100.3 |
| Foreign Currency Derivative Contracts | — | (0.3) | (0.3) |
| Total Notional Market Value of Derivative Contracts | 144.2 | (44.2) | 100.0 |
(a) The Fund has market exposure
(long and/or short) to fixed income and foreign currency through its investments in derivatives. The notional exposure of a financial instrument is the nominal or face amount that is used to calculate payments made on
that instrument and/or changes in value for the instrument. The notional exposure is a hypothetical underlying quantity upon which payment obligations are computed. Notional exposures provide a gauge for how the Fund
may behave given changes in individual markets. For a description of the Fund’s investments in derivatives, see Investments in derivatives following the Portfolio of Investments, and Note 2 of the Notes to
Financial Statements.
| Columbia Total Return Bond Fund | Annual Report 2023 | 5 |
Manager Discussion of Fund Performance
(Unaudited)
(Unaudited)
For the 12-month period that
ended April 30, 2023, Class A shares of Columbia Total Return Bond Fund returned -3.27% excluding sales charges. The Fund underperformed its benchmark, the Bloomberg U.S. Aggregate Bond Index, which returned -0.43%
for the same period.
Market overview
Fixed-income returns were muted
for the 12-month period that ended April 30, 2023, as U.S. Treasury yields finished the period higher and credit spreads ended the period wider. Entering the period, geopolitical developments weighed heavily on risk
sentiment, including Russia’s ongoing war against Ukraine and the shuttering of China’s economy in conjunction with the government’s zero-COVID-19 policy. At the same time, policymakers were
confronted with historically high inflation with U.S. consumer price inflation peaking at over 9% in June 2022. With the market concerned over whether the U.S. Federal Reserve’s (Fed) response to inflation would
plunge the economy into recession, returns for credit sensitive assets turned deeply negative.
The Fed aggressively hiked its
benchmark overnight lending rate between May and December 2022, bringing the federal funds target rate to a range of 4.25% to 4.50% at the end of 2022, versus 0% to 0.25% at the beginning of 2022. U.S. Treasury yields
moved sharply higher in response, and the yield curve became inverted as the market anticipated recession.
Entering 2023, risk assets rallied
amid growing optimism that the Fed was coming to the end of its rate hiking cycle. On February 1, the Fed implemented a modest 25 basis point rate increase, bringing the federal funds target rate to a range of 4.50%
to 4.75%. (A basis point is 1/100 of a percent.) In March, the failure of two U.S. banks and the collapse of European giant Credit Suisse raised fears of a financial crisis, leading the market to anticipate Fed rate
cuts over the second half of 2023. The prospect of easier monetary policy and a flight to safety spurred by banking concerns led U.S. Treasury yields lower, enabling bonds to recover some of their earlier losses.
At its March 2023 meeting, the Fed
went forward with another incremental quarter-point increase, leaving the federal funds target rate at 4.75% to 5.0%. The increase was largely received by financial markets as an indication that the central bank
believed the financial system remained sound overall. The yield on the 10-year Treasury note ended April at 3.44% versus 2.89% 12 months earlier.
The Fund’s notable
detractors during the period
| • | The Fund’s underperformance relative to the benchmark was largely the result of its positioning with respect to interest rates. Specifically, the Fund had an above-benchmark stance with respect to duration and corresponding interest rate sensitivity as U.S. Treasury yields moved higher for much of the period. |
| • | The Fund’s positioning along the yield curve also detracted. |
| • | Moreover, as rates moved higher, performance for the Fund’s mortgage-backed security holdings suffered as prepayments ground to a halt and durations extended for these issues at a time when investors were seeking to reduce interest rate risk. |
| • | Sector allocation also detracted from relative performance, most notably out-of-benchmark exposure to below-investment-grade, high-yield corporate bonds. |
| • | In terms of selection, a tilt toward single-asset, single-borrower issues within commercial mortgage-backed securities detracted, along with holdings within government-related issues. |
The Fund’s notable
contributors during the period
| • | Security selection led positive contributions to the Fund’s performance relative to the benchmark. |
| • | Most notably, within financials, the Fund favored the large, global systemically important banks subject to the most rigorous capital requirements while avoiding the regional and second-tier banks that were most negatively impacted by fears of a banking crisis. |
| • | Selection within agency and non-agency mortgage-backed securities also proved additive. |
| 6 | Columbia Total Return Bond Fund | Annual Report 2023 |
Manager Discussion of Fund Performance (continued)
(Unaudited)
(Unaudited)
Derivative usage
We invested in highly-liquid,
widely traded U.S. Treasury futures and interest rate swap contracts to help manage portfolio duration. These enable us to efficiently implement our yield curve opinions and offset unintended yield curve impacts from
other investments in the portfolio. We also used indexed exposure to credit default swaps to manage the Fund’s overall level of credit risk. On a standalone basis, the Fund’s use of derivatives had a
negative impact on Fund performance.
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Fixed-income securities present issuer default risk. A rise in interest rates may result in a price decline of fixed-income instruments held by the Fund, negatively impacting its performance and NAV. Falling rates may result in the Fund investing in lower yielding
debt instruments, lowering the Fund’s income and yield. These risks may be heightened for longer maturity and duration securities. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise which may reduce investment opportunities and potential returns. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. 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. Market or other (e.g., interest rate) environments may adversely affect the liquidity of fund investments, negatively impacting their price. Generally, the less liquid the market at the time the Fund sells a holding, the greater the risk of loss or decline of value to the
Fund. 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.
| Columbia Total Return Bond Fund | Annual Report 2023 | 7 |
Understanding Your Fund’s
Expenses
(Unaudited)
(Unaudited)
As an investor, you incur two types
of costs. There are shareholder transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing fund costs, which generally include management fees,
distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with
the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s
expenses
To illustrate these ongoing
costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment
of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the
“Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the
expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under
the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the
Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or
the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are
required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the
hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are
meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in
comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
Expenses paid during the period
are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal
half year and divided by 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.
| 8 | Columbia Total Return Bond Fund | Annual Report 2023 |
Portfolio of Investments
April 30, 2023
April 30, 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.
| Columbia Total Return Bond Fund | Annual Report 2023 | 9 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Total Return Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 11 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 12 | Columbia Total Return Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 13 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 14 | Columbia Total Return Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 15 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 16 | Columbia Total Return Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 17 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 18 | Columbia Total Return Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 19 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 20 | Columbia Total Return Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 21 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 22 | Columbia Total Return Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 23 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 24 | Columbia Total Return Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 25 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 26 | Columbia Total Return Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 27 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 28 | Columbia Total Return Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 29 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 30 | Columbia Total Return Bond Fund | Annual Report 2023 |
At April 30, 2023,
securities and/or cash totaling $48,420,197 were pledged as collateral.
Investments in
derivatives
| Forward foreign currency exchange contracts | |||||
| Currency to be sold | Currency to be purchased | Counterparty | Settlement date | Unrealized appreciation ($) | Unrealized depreciation ($) |
| 3,494,900 EUR | 3,849,597 USD | Citi | 06/09/2023 | — | (10,359) |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 31 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
| Long futures contracts | ||||||
| Description | Number of contracts | Expiration date | Trading currency | Notional amount | Value/Unrealized appreciation ($) | Value/Unrealized depreciation ($) |
| U.S. Treasury 10-Year Note | 3,902 | 06/2023 | USD | 449,522,594 | 11,078,082 | — |
| U.S. Treasury 5-Year Note | 1,799 | 06/2023 | USD | 197,426,196 | 1,306,773 | — |
| U.S. Treasury Ultra Bond | 847 | 06/2023 | USD | 119,771,094 | 4,807,655 | — |
| Total | 17,192,510 | — | ||||
| Short futures contracts | ||||||
| Description | Number of contracts | Expiration date | Trading currency | Notional amount | Value/Unrealized appreciation ($) | Value/Unrealized depreciation ($) |
| Euro-Bobl | (307) | 06/2023 | EUR | (36,216,790) | — | (865,126) |
| Euro-Bund | (271) | 06/2023 | EUR | (36,736,760) | — | (1,295,393) |
| Japanese 10-Year Government Bond | (41) | 06/2023 | JPY | (6,092,600,000) | — | (955,105) |
| U.S. Treasury 2-Year Note | (325) | 06/2023 | USD | (67,003,320) | 372,690 | — |
| Total | 372,690 | (3,115,624) | ||||
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 32 | Columbia Total Return Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
| Credit default swap contracts - buy protection | ||||||||||||
| Reference entity | Counterparty | Maturity date | Pay fixed rate (%) | Payment frequency | Notional currency | Notional amount | Value ($) | Periodic payments receivable (payable) ($) | Upfront payments ($) | Upfront receipts ($) | Unrealized appreciation ($) | Unrealized depreciation ($) |
| Markit CMBX North America Index, Series 11 BBB- | Citi | 11/18/2054 | 3.000 | Monthly | USD | 7,000,000 | 1,798,125 | (2,333) | 1,758,140 | — | 37,652 | — |
| Markit CMBX North America Index, Series 12 BBB- | Citi | 08/17/2061 | 3.000 | Monthly | USD | 5,800,000 | 1,725,500 | (1,933) | 1,589,132 | — | 134,435 | — |
| Markit CMBX North America Index, Series 11 BBB- | Goldman Sachs International | 11/18/2054 | 3.000 | Monthly | USD | 1,700,000 | 436,687 | (566) | 258,625 | — | 177,496 | — |
| Markit CMBX North America Index, Series 10 BBB- | JPMorgan | 11/17/2059 | 3.000 | Monthly | USD | 8,000,000 | 2,360,000 | (2,667) | 322,825 | — | 2,034,508 | — |
| Markit CMBX North America Index, Series 11 BBB- | JPMorgan | 11/18/2054 | 3.000 | Monthly | USD | 1,700,000 | 436,688 | (567) | 57,179 | — | 378,942 | — |
| Markit CMBX North America Index, Series 11 BBB- | Morgan Stanley | 11/17/2059 | 3.000 | Monthly | USD | 1,000,000 | 295,000 | (333) | 57,725 | — | 236,942 | — |
| Markit CMBX North America Index, Series 16 BBB- | Morgan Stanley | 04/17/2065 | 3.000 | Monthly | USD | 5,780,000 | 1,560,600 | (1,927) | 1,353,007 | — | 205,666 | — |
| Total | 8,612,600 | (10,326) | 5,396,633 | — | 3,205,641 | — | ||||||
| Cleared credit default swap contracts - buy protection | |||||||||||
| Reference entity | Counterparty | Maturity date | Pay fixed rate (%) | Payment frequency | Notional currency | Notional amount | Value ($) | Upfront payments ($) | Upfront receipts ($) | Unrealized appreciation ($) | Unrealized depreciation ($) |
| Markit CDX North America High Yield Index, Series 39 | Morgan Stanley | 12/20/2027 | 5.000 | Quarterly | USD | 230,670,000 | (67,587) | — | — | — | (67,587) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 33 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
* Implied credit spreads,
represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate or sovereign issues as of period end serve as an indicator of the current status of the
payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may
include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or
other credit event occurring as defined under the terms of the agreement.
Notes to Portfolio of
Investments
| (a) | Represents privately placed and other securities and instruments exempt from Securities and Exchange Commission registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. At April 30, 2023, the total value of these securities amounted to $1,566,450,512, which represents 55.89% of total net assets. |
| (b) | Valuation based on significant unobservable inputs. |
| (c) | Variable rate security. The interest rate shown was the current rate as of April 30, 2023. |
| (d) | Represents a security purchased on a when-issued basis. |
| (e) | Variable or floating rate security, the interest rate of which adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. The interest rate shown was the current rate as of April 30, 2023. |
| (f) | Represents interest only securities which have the right to receive the monthly interest payments on an underlying pool of mortgage loans. |
| (g) | Non-income producing investment. |
| (h) | Principal amounts are denominated in United States Dollars unless otherwise noted. |
| (i) | Represents a variable rate security with a step coupon where the rate adjusts according to a schedule for a series of periods, typically lower for an initial period and then increasing to a higher coupon rate thereafter. The interest rate shown was the current rate as of April 30, 2023. |
| (j) | Represents fair value as determined in good faith under procedures approved by the Board of Trustees. At April 30, 2023, the total value of these securities amounted to $1,263,516, which represents 0.05% of total net assets. |
| (k) | Represents a security in default. |
| (l) | Payment-in-kind security. Interest can be paid by issuing additional par of the security or in cash. |
| (m) | As a result of sanctions and restricted cross-border payments, certain income and/or principal has not been recognized by the Fund. The Fund will continue to monitor the net realizable value and record the income when it is considered collectible. |
| (n) | Principal and interest may not be guaranteed by a governmental entity. |
| (o) | This security or a portion of this security has been pledged as collateral in connection with derivative contracts. |
| (p) | The stated interest rate represents the weighted average interest rate at April 30, 2023 of contracts within the senior loan facility. Interest rates on contracts are primarily determined either weekly, monthly or quarterly by reference to the indicated base lending rate and spread and the reset period. These base lending rates are primarily the LIBOR and other short-term rates. Base lending rates may be subject to a floor or minimum rate. The interest rate for senior loans purchased on a when-issued or delayed delivery basis will be determined upon settlement, therefore no interest rate is disclosed. Senior loans often require prepayments from excess cash flows or permit the borrowers to repay at their election. The degree to which borrowers repay cannot be predicted with accuracy. As a result, remaining maturities of senior loans may be less than the stated maturities. Generally, the Fund is contractually obligated to receive approval from the agent bank and/or borrower prior to the disposition of a senior loan. |
| (q) | The rate shown is the seven-day current annualized yield at April 30, 2023. |
| (r) | 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 April 30, 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, 5.046% | ||||||||
| 121,311,912 | 1,429,067,468 | (1,336,007,702) | 4,636 | 214,376,314 | (54,150) | 4,496,185 | 214,462,099 | |
Abbreviation Legend
| CMO | Collateralized Mortgage Obligation |
| CMT | Constant Maturity Treasury |
| FHLMC | Federal Home Loan Mortgage Corporation |
| LIBOR | London Interbank Offered Rate |
| SOFR | Secured Overnight Financing Rate |
| STRIPS | Separate Trading of Registered Interest and Principal Securities |
| TBA | To Be Announced |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 34 | Columbia Total Return Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
Currency Legend
| EUR | Euro |
| JPY | Japanese Yen |
| USD | US Dollar |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
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 April 30, 2023:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Asset-Backed Securities — Non-Agency | — | 331,413,822 | 16,858,904 | 348,272,726 |
| Commercial Mortgage-Backed Securities - Agency | — | 5,362,255 | — | 5,362,255 |
| Commercial Mortgage-Backed Securities - Non-Agency | — | 114,233,958 | — | 114,233,958 |
| Common Stocks | ||||
| Financials | 209,184 | — | — | 209,184 |
| Industrials | 65,393 | — | — | 65,393 |
| Total Common Stocks | 274,577 | — | — | 274,577 |
| Convertible Bonds | — | 269,412 | — | 269,412 |
| Corporate Bonds & Notes | — | 766,747,779 | 41,069 | 766,788,848 |
| Foreign Government Obligations | — | 72,882,211 | — | 72,882,211 |
| Residential Mortgage-Backed Securities - Agency | — | 1,027,396,192 | — | 1,027,396,192 |
| Residential Mortgage-Backed Securities - Non-Agency | — | 732,894,347 | 51,697,995 | 784,592,342 |
| Senior Loans | — | 3,697,686 | — | 3,697,686 |
| U.S. Treasury Obligations | — | 52,987,266 | — | 52,987,266 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 35 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
Fair value measurements (continued)
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Call Option Contracts Purchased | — | 7,579,167 | — | 7,579,167 |
| Money Market Funds | 214,376,314 | — | — | 214,376,314 |
| Total Investments in Securities | 214,650,891 | 3,115,464,095 | 68,597,968 | 3,398,712,954 |
| Investments in Derivatives | ||||
| Asset | ||||
| Futures Contracts | 17,565,200 | — | — | 17,565,200 |
| Swap Contracts | — | 3,205,641 | — | 3,205,641 |
| Liability | ||||
| Forward Foreign Currency Exchange Contracts | — | (10,359) | — | (10,359) |
| Futures Contracts | (3,115,624) | — | — | (3,115,624) |
| Call Option Contracts Written | — | (36,360) | — | (36,360) |
| Put Option Contracts Written | — | (219,176) | — | (219,176) |
| Swap Contracts | — | (3,668,912) | — | (3,668,912) |
| Total | 229,100,467 | 3,114,734,929 | 68,597,968 | 3,412,433,364 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The Fund’s assets assigned to
the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical
assets.
Forward foreign currency exchange
contracts, futures contracts and swap contracts are valued at unrealized appreciation (depreciation).
The following table is a
reconciliation of Level 3 assets for which significant observable and unobservable inputs were used to determine fair value:
| Balance as of 04/30/2022 ($) | Increase (decrease) in accrued discounts/ premiums ($) | Realized gain (loss) ($) | Change in unrealized appreciation (depreciation)(a) ($) | Purchases ($) | Sales ($) | Transfers into Level 3 ($) | Transfers out of Level 3 ($) | Balance as of 04/30/2023 ($) | |
| Asset-Backed Securities — Non-Agency | 15,192,448 | (356,554) | 856,382 | (741,423) | 17,630,343 | (7,968,186) | — | (7,754,106) | 16,858,904 |
| Corporate Bonds & Notes | 41,069 | — | — | — | — | — | — | — | 41,069 |
| Residential Mortgage-Backed Securities — Non-Agency | 114,128,474 | (16,380) | 99,686 | (1,078,531) | — | (61,435,254) | — | — | 51,697,995 |
| Total | 129,361,991 | (372,934) | 956,068 | (1,819,954) | 17,630,343 | (69,403,440) | — | (7,754,106) | 68,597,968 |
(a) Change in unrealized
appreciation (depreciation) relating to securities held at April 30, 2023 was $(1,076,774), which is comprised of Asset-Backed Securities — Non-Agency of $29,437 and Residential Mortgage-Backed Securities
— Non-Agency of $(1,106,211).
The Fund’s assets assigned to
the Level 3 category are valued utilizing the valuation technique deemed the most appropriate in the circumstances.
Certain corporate bonds classified
as Level 3 are valued using a market approach. To determine fair value for these securities, management considered various factors which may have included, but were not limited to, trades of similar securities,
estimated earnings of the respective company, market multiples derived from a set of comparable companies, and the position of the security within the respective company’s capital structure. Significant
increases (decreases) to any of these inputs would have resulted in a significantly higher (lower) fair value measurement. Generally, a change in estimated earnings of the respective company might result in change to
the comparable companies and market multiples.
Certain residential mortgage backed
securities and asset backed securities classified as Level 3 securities are valued using the market approach and utilize single market quotations from broker dealers which may have included, but were not limited to,
observable transactions for identical or similar assets in the market and the distressed nature of the security. The appropriateness of fair values for these securities is monitored on an ongoing basis which may
include results of back testing, manual price reviews and other control procedures. Significant increases (decreases) to any of these inputs would have resulted in a significantly higher (lower) fair value
measurement.
Financial assets were transferred
from Level 3 to Level 2 as observable market inputs were utilized and management determined that there was sufficient, reliable and observable market data to value these assets as of period end.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 36 | Columbia Total Return Bond Fund | Annual Report 2023 |
Statement of Assets and Liabilities
April 30, 2023
April 30, 2023
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $3,408,302,840) | $3,176,757,473 |
| Affiliated issuers (cost $214,358,462) | 214,376,314 |
| Option contracts purchased (cost $25,587,562) | 7,579,167 |
| Cash collateral held at broker for: | |
| Swap contracts | 3,220,000 |
| TBA | 6,688,023 |
| Margin deposits on: | |
| Swap contracts | 13,875,278 |
| Unrealized appreciation on swap contracts | 3,205,641 |
| Upfront payments on swap contracts | 5,396,633 |
| Receivable for: | |
| Investments sold | 6,174,932 |
| Investments sold on a delayed delivery basis | 102,333,316 |
| Capital shares sold | 14,370,605 |
| Dividends | 869,617 |
| Interest | 16,329,045 |
| Foreign tax reclaims | 7,731 |
| Variation margin for futures contracts | 3,787,375 |
| Expense reimbursement due from Investment Manager | 11,715 |
| Prepaid expenses | 15,664 |
| Trustees’ deferred compensation plan | 332,517 |
| Total assets | 3,575,331,046 |
| Liabilities | |
| Option contracts written, at value (premiums received $4,632,043) | 255,536 |
| Due to custodian | 316,735 |
| Unrealized depreciation on forward foreign currency exchange contracts | 10,359 |
| Unrealized depreciation on swap contracts | 3,601,325 |
| Upfront receipts on swap contracts | 6,385,425 |
| Payable for: | |
| Investments purchased | 50,460,660 |
| Investments purchased on a delayed delivery basis | 697,319,744 |
| Capital shares purchased | 2,720,181 |
| Distributions to shareholders | 4,878,576 |
| Variation margin for futures contracts | 911,698 |
| Variation margin for swap contracts | 4,838,308 |
| Management services fees | 36,496 |
| Distribution and/or service fees | 4,743 |
| Transfer agent fees | 306,859 |
| Compensation of board members | 42,729 |
| Other expenses | 111,961 |
| Trustees’ deferred compensation plan | 332,517 |
| Total liabilities | 772,533,852 |
| Net assets applicable to outstanding capital stock | $2,802,797,194 |
| Represented by | |
| Paid in capital | 3,445,659,989 |
| Total distributable earnings (loss) | (642,862,795) |
| Total - representing net assets applicable to outstanding capital stock | $2,802,797,194 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 37 |
Statement of Assets and Liabilities (continued)
April 30, 2023
April 30, 2023
| Class A | |
| Net assets | $621,570,249 |
| Shares outstanding | 20,247,039 |
| Net asset value per share | $30.70 |
| Maximum sales charge | 3.00% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $31.65 |
| Advisor Class | |
| Net assets | $264,456,462 |
| Shares outstanding | 8,625,140 |
| Net asset value per share | $30.66 |
| Class C | |
| Net assets | $16,427,751 |
| Shares outstanding | 535,057 |
| Net asset value per share | $30.70 |
| Institutional Class | |
| Net assets | $1,307,981,373 |
| Shares outstanding | 42,581,958 |
| Net asset value per share | $30.72 |
| Institutional 2 Class | |
| Net assets | $274,094,064 |
| Shares outstanding | 8,940,752 |
| Net asset value per share | $30.66 |
| Institutional 3 Class | |
| Net assets | $313,214,887 |
| Shares outstanding | 10,195,792 |
| Net asset value per share | $30.72 |
| Class R | |
| Net assets | $5,052,408 |
| Shares outstanding | 164,505 |
| Net asset value per share | $30.71 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 38 | Columbia Total Return Bond Fund | Annual Report 2023 |
Statement of Operations
Year Ended April 30, 2023
Year Ended April 30, 2023
| Net investment income | |
| Income: | |
| Dividends — affiliated issuers | $4,496,185 |
| Interest | 123,266,153 |
| Interfund lending | 2,074 |
| Total income | 127,764,412 |
| Expenses: | |
| Management services fees | 12,914,722 |
| Distribution and/or service fees | |
| Class A | 1,531,221 |
| Class C | 147,231 |
| Class R | 28,256 |
| Transfer agent fees | |
| Class A | 787,294 |
| Advisor Class | 373,466 |
| Class C | 18,928 |
| Institutional Class | 1,645,478 |
| Institutional 2 Class | 84,868 |
| Institutional 3 Class | 23,136 |
| Class R | 7,261 |
| Compensation of board members | 56,686 |
| Custodian fees | 57,529 |
| Printing and postage fees | 155,556 |
| Registration fees | 224,434 |
| Accounting services fees | 56,990 |
| Legal fees | 48,620 |
| Interest on collateral | 295,195 |
| Compensation of chief compliance officer | 481 |
| Other | 54,547 |
| Total expenses | 18,511,899 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (3,917,486) |
| Fees waived by transfer agent | |
| Institutional 2 Class | (9,820) |
| Institutional 3 Class | (23,136) |
| Expense reduction | (1,683) |
| Total net expenses | 14,559,774 |
| Net investment income | 113,204,638 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 39 |
Statement of Operations (continued)
Year Ended April 30, 2023
Year Ended April 30, 2023
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | $(146,739,861) |
| Investments — affiliated issuers | (54,150) |
| Foreign currency translations | 209,005 |
| Forward foreign currency exchange contracts | (880,715) |
| Futures contracts | (94,539,300) |
| Option contracts purchased | 7,870,794 |
| Option contracts written | (31,711,183) |
| Swap contracts | (20,751,286) |
| Net realized loss | (286,596,696) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | 30,445,984 |
| Investments — affiliated issuers | 4,636 |
| Foreign currency translations | 1,713 |
| Forward foreign currency exchange contracts | (122,479) |
| Futures contracts | 33,539,722 |
| Option contracts purchased | (35,179,390) |
| Option contracts written | 39,770,517 |
| Swap contracts | (5,965,107) |
| Net change in unrealized appreciation (depreciation) | 62,495,596 |
| Net realized and unrealized loss | (224,101,100) |
| Net decrease in net assets resulting from operations | $(110,896,462) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 40 | Columbia Total Return Bond Fund | Annual Report 2023 |
Statement of Changes in Net Assets
| Year Ended April 30, 2023 | Year Ended April 30, 2022 | |
| Operations | ||
| Net investment income | $113,204,638 | $88,163,629 |
| Net realized loss | (286,596,696) | (145,343,382) |
| Net change in unrealized appreciation (depreciation) | 62,495,596 | (350,962,116) |
| Net decrease in net assets resulting from operations | (110,896,462) | (408,141,869) |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (20,978,581) | (20,545,842) |
| Advisor Class | (10,698,456) | (10,992,351) |
| Class C | (389,030) | (365,555) |
| Institutional Class | (47,006,366) | (39,125,903) |
| Institutional 2 Class | (5,384,392) | (6,621,970) |
| Institutional 3 Class | (12,457,516) | (13,245,990) |
| Class R | (181,261) | (147,159) |
| Total distributions to shareholders | (97,095,602) | (91,044,770) |
| Increase (decrease) in net assets from capital stock activity | (182,861,501) | 1,148,230,395 |
| Total increase (decrease) in net assets | (390,853,565) | 649,043,756 |
| Net assets at beginning of year | 3,193,650,759 | 2,544,607,003 |
| Net assets at end of year | $2,802,797,194 | $3,193,650,759 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 41 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| April 30, 2023 | April 30, 2022 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 2,905,622 | 89,205,065 | 3,044,452 | 113,585,218 |
| Fund reorganization | — | — | 1,160,251 | 43,249,882 |
| Distributions reinvested | 658,285 | 20,098,093 | 539,052 | 19,810,483 |
| Redemptions | (4,609,085) | (142,309,477) | (4,293,120) | (156,197,661) |
| Net increase (decrease) | (1,045,178) | (33,006,319) | 450,635 | 20,447,922 |
| Advisor Class | ||||
| Subscriptions | 2,384,891 | 73,731,809 | 4,447,352 | 164,193,332 |
| Fund reorganization | — | — | 22,289,843 | 829,852,611 |
| Distributions reinvested | 340,701 | 10,402,385 | 294,563 | 10,666,605 |
| Redemptions | (5,034,516) | (154,910,307) | (20,328,558) | (718,469,434) |
| Net increase (decrease) | (2,308,924) | (70,776,113) | 6,703,200 | 286,243,114 |
| Class C | ||||
| Subscriptions | 211,304 | 6,480,416 | 191,880 | 7,174,826 |
| Distributions reinvested | 12,072 | 368,005 | 9,468 | 348,440 |
| Redemptions | (186,563) | (5,739,939) | (245,685) | (9,028,183) |
| Net increase (decrease) | 36,813 | 1,108,482 | (44,337) | (1,504,917) |
| Institutional Class | ||||
| Subscriptions | 18,265,651 | 562,848,690 | 33,295,466 | 1,210,427,840 |
| Distributions reinvested | 1,436,661 | 43,885,983 | 915,801 | 33,518,142 |
| Redemptions | (22,689,272) | (693,946,716) | (16,764,044) | (602,857,360) |
| Net increase (decrease) | (2,986,960) | (87,212,043) | 17,447,223 | 641,088,622 |
| Institutional 2 Class | ||||
| Subscriptions | 7,214,082 | 220,022,628 | 6,069,976 | 224,354,721 |
| Distributions reinvested | 175,765 | 5,378,164 | 180,719 | 6,615,919 |
| Redemptions | (4,822,569) | (151,546,763) | (4,012,675) | (143,682,213) |
| Net increase | 2,567,278 | 73,854,029 | 2,238,020 | 87,288,427 |
| Institutional 3 Class | ||||
| Subscriptions | 5,350,071 | 164,475,815 | 5,326,489 | 198,016,596 |
| Distributions reinvested | 222,256 | 6,795,490 | 187,435 | 6,885,479 |
| Redemptions | (7,719,233) | (237,241,565) | (2,548,127) | (92,789,213) |
| Net increase (decrease) | (2,146,906) | (65,970,260) | 2,965,797 | 112,112,862 |
| Class R | ||||
| Subscriptions | 28,342 | 869,254 | 109,119 | 4,081,279 |
| Distributions reinvested | 5,849 | 178,470 | 3,963 | 145,150 |
| Redemptions | (62,951) | (1,907,001) | (45,604) | (1,672,064) |
| Net increase (decrease) | (28,760) | (859,277) | 67,478 | 2,554,365 |
| Total net increase (decrease) | (5,912,637) | (182,861,501) | 29,828,016 | 1,148,230,395 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 42 | Columbia Total Return Bond 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 ratios of expenses and net investment income are annualized for periods of less than one year. The portfolio turnover rate is
calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be
higher.
| Net asset value, beginning of period | Net investment income | Net realized and unrealized gain (loss) | Total from investment operations | Distributions from net investment income | Distributions from net realized gains | Total distributions to shareholders | |
| Class A | |||||||
| Year Ended 4/30/2023 | $32.85 | 1.24 | (2.34) | (1.10) | (1.05) | — | (1.05) |
| Year Ended 4/30/2022 | $37.76 | 0.91 | (4.87) | (3.96) | (0.87) | (0.08) | (0.95) |
| Year Ended 4/30/2021(e) | $36.96 | 1.16 | 2.64 | 3.80 | (1.13) | (1.87) | (3.00) |
| Year Ended 4/30/2020(e) | $36.19 | 1.12 | 1.17 | 2.29 | (1.04) | (0.48) | (1.52) |
| Year Ended 4/30/2019(e) | $35.33 | 1.12 | 0.74 | 1.86 | (1.00) | — | (1.00) |
| Advisor Class | |||||||
| Year Ended 4/30/2023 | $32.81 | 1.30 | (2.32) | (1.02) | (1.13) | — | (1.13) |
| Year Ended 4/30/2022 | $37.71 | 0.98 | (4.84) | (3.86) | (0.96) | (0.08) | (1.04) |
| Year Ended 4/30/2021(e) | $36.91 | 1.26 | 2.64 | 3.90 | (1.23) | (1.87) | (3.10) |
| Year Ended 4/30/2020(e) | $36.16 | 1.20 | 1.15 | 2.35 | (1.12) | (0.48) | (1.60) |
| Year Ended 4/30/2019(e) | $35.29 | 1.24 | 0.75 | 1.99 | (1.12) | — | (1.12) |
| Class C | |||||||
| Year Ended 4/30/2023 | $32.85 | 1.01 | (2.34) | (1.33) | (0.82) | — | (0.82) |
| Year Ended 4/30/2022 | $37.77 | 0.64 | (4.89) | (4.25) | (0.59) | (0.08) | (0.67) |
| Year Ended 4/30/2021(e) | $36.96 | 0.87 | 2.65 | 3.52 | (0.84) | (1.87) | (2.71) |
| Year Ended 4/30/2020(e) | $36.19 | 0.84 | 1.17 | 2.01 | (0.76) | (0.48) | (1.24) |
| Year Ended 4/30/2019(e) | $35.33 | 0.84 | 0.78 | 1.62 | (0.76) | — | (0.76) |
| Institutional Class | |||||||
| Year Ended 4/30/2023 | $32.87 | 1.31 | (2.33) | (1.02) | (1.13) | — | (1.13) |
| Year Ended 4/30/2022 | $37.78 | 1.01 | (4.87) | (3.86) | (0.97) | (0.08) | (1.05) |
| Year Ended 4/30/2021(e) | $36.98 | 1.26 | 2.64 | 3.90 | (1.23) | (1.87) | (3.10) |
| Year Ended 4/30/2020(e) | $36.21 | 1.24 | 1.13 | 2.37 | (1.12) | (0.48) | (1.60) |
| Year Ended 4/30/2019(e) | $35.34 | 1.20 | 0.79 | 1.99 | (1.12) | — | (1.12) |
| Institutional 2 Class | |||||||
| Year Ended 4/30/2023 | $32.81 | 1.35 | (2.35) | (1.00) | (1.15) | — | (1.15) |
| Year Ended 4/30/2022 | $37.71 | 1.03 | (4.86) | (3.83) | (0.99) | (0.08) | (1.07) |
| Year Ended 4/30/2021(e) | $36.91 | 1.28 | 2.64 | 3.92 | (1.25) | (1.87) | (3.12) |
| Year Ended 4/30/2020(e) | $36.15 | 1.24 | 1.16 | 2.40 | (1.16) | (0.48) | (1.64) |
| Year Ended 4/30/2019(e) | $35.29 | 1.28 | 0.70 | 1.98 | (1.12) | — | (1.12) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 44 | Columbia Total Return Bond 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 4/30/2023 | $30.70 | (3.27%) | 0.90%(c) | 0.75%(c),(d) | 4.02% | 247% | $621,570 |
| Year Ended 4/30/2022 | $32.85 | (10.72%) | 0.87%(c) | 0.74%(c),(d) | 2.48% | 173% | $699,471 |
| Year Ended 4/30/2021(e) | $37.76 | 10.36% | 0.88%(c) | 0.74%(c),(d) | 3.00% | 295% | $786,976 |
| Year Ended 4/30/2020(e) | $36.96 | 6.34% | 0.90%(c) | 0.74%(c),(d) | 3.05% | 272% | $694,852 |
| Year Ended 4/30/2019(e) | $36.19 | 5.45% | 0.91%(c) | 0.86%(c),(d) | 3.19% | 262% | $681,416 |
| Advisor Class | |||||||
| Year Ended 4/30/2023 | $30.66 | (3.04%) | 0.64%(c) | 0.50%(c),(d) | 4.24% | 247% | $264,456 |
| Year Ended 4/30/2022 | $32.81 | (10.49%) | 0.62%(c) | 0.49%(c),(d) | 2.69% | 173% | $358,749 |
| Year Ended 4/30/2021(e) | $37.71 | 10.62% | 0.63%(c) | 0.49%(c),(d) | 3.27% | 295% | $159,565 |
| Year Ended 4/30/2020(e) | $36.91 | 6.61% | 0.65%(c) | 0.49%(c),(d) | 3.32% | 272% | $93,369 |
| Year Ended 4/30/2019(e) | $36.16 | 5.72% | 0.66%(c) | 0.61%(c),(d) | 3.53% | 262% | $15,272 |
| Class C | |||||||
| Year Ended 4/30/2023 | $30.70 | (3.99%) | 1.65%(c) | 1.50%(c),(d) | 3.28% | 247% | $16,428 |
| Year Ended 4/30/2022 | $32.85 | (11.42%) | 1.62%(c) | 1.49%(c),(d) | 1.73% | 173% | $16,370 |
| Year Ended 4/30/2021(e) | $37.77 | 9.57% | 1.63%(c) | 1.49%(c),(d) | 2.25% | 295% | $20,492 |
| Year Ended 4/30/2020(e) | $36.96 | 5.55% | 1.65%(c) | 1.50%(c),(d) | 2.30% | 272% | $20,696 |
| Year Ended 4/30/2019(e) | $36.19 | 4.66% | 1.66%(c) | 1.61%(c),(d) | 2.37% | 262% | $18,905 |
| Institutional Class | |||||||
| Year Ended 4/30/2023 | $30.72 | (3.02%) | 0.65%(c) | 0.50%(c),(d) | 4.26% | 247% | $1,307,981 |
| Year Ended 4/30/2022 | $32.87 | (10.49%) | 0.62%(c) | 0.49%(c),(d) | 2.75% | 173% | $1,497,858 |
| Year Ended 4/30/2021(e) | $37.78 | 10.70% | 0.63%(c) | 0.49%(c),(d) | 3.26% | 295% | $1,062,540 |
| Year Ended 4/30/2020(e) | $36.98 | 6.61% | 0.65%(c) | 0.49%(c),(d) | 3.30% | 272% | $710,558 |
| Year Ended 4/30/2019(e) | $36.21 | 5.60% | 0.66%(c) | 0.61%(c),(d) | 3.42% | 262% | $949,377 |
| Institutional 2 Class | |||||||
| Year Ended 4/30/2023 | $30.66 | (2.96%) | 0.57%(c) | 0.42%(c) | 4.40% | 247% | $274,094 |
| Year Ended 4/30/2022 | $32.81 | (10.43%) | 0.55%(c) | 0.42%(c) | 2.80% | 173% | $209,091 |
| Year Ended 4/30/2021(e) | $37.71 | 10.69% | 0.57%(c) | 0.43%(c) | 3.33% | 295% | $155,945 |
| Year Ended 4/30/2020(e) | $36.91 | 6.69% | 0.57%(c) | 0.42%(c) | 3.38% | 272% | $84,295 |
| Year Ended 4/30/2019(e) | $36.15 | 5.81% | 0.58%(c) | 0.53%(c) | 3.64% | 262% | $80,083 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 45 |
Financial Highlights (continued)
| Net asset value, beginning of period | Net investment income | Net realized and unrealized gain (loss) | Total from investment operations | Distributions from net investment income | Distributions from net realized gains | Total distributions to shareholders | |
| Institutional 3 Class | |||||||
| Year Ended 4/30/2023 | $32.87 | 1.35 | (2.33) | (0.98) | (1.17) | — | (1.17) |
| Year Ended 4/30/2022 | $37.79 | 1.05 | (4.88) | (3.83) | (1.01) | (0.08) | (1.09) |
| Year Ended 4/30/2021(e) | $36.98 | 1.29 | 2.66 | 3.95 | (1.27) | (1.87) | (3.14) |
| Year Ended 4/30/2020(e) | $36.21 | 1.24 | 1.17 | 2.41 | (1.16) | (0.48) | (1.64) |
| Year Ended 4/30/2019(e) | $35.35 | 1.28 | 0.74 | 2.02 | (1.16) | — | (1.16) |
| Class R | |||||||
| Year Ended 4/30/2023 | $32.87 | 1.15 | (2.33) | (1.18) | (0.98) | — | (0.98) |
| Year Ended 4/30/2022 | $37.78 | 0.82 | (4.87) | (4.05) | (0.78) | (0.08) | (0.86) |
| Year Ended 4/30/2021(e) | $36.97 | 1.06 | 2.66 | 3.72 | (1.04) | (1.87) | (2.91) |
| Year Ended 4/30/2020(e) | $36.20 | 1.04 | 1.17 | 2.21 | (0.96) | (0.48) | (1.44) |
| Year Ended 4/30/2019(e) | $35.33 | 1.04 | 0.75 | 1.79 | (0.92) | — | (0.92) |
| 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. For the periods indicated below, if interest on collateral expense had been excluded, expenses would have been lower by: |
| Class | 4/30/2023 | 4/30/2022 | 4/30/2021 | 4/30/2020 | 4/30/2019 |
| Class A | 0.01% | less than 0.01% | less than 0.01% | less than 0.01% | less than 0.01% |
| Advisor Class | 0.01% | less than 0.01% | less than 0.01% | less than 0.01% | less than 0.01% |
| Class C | 0.01% | less than 0.01% | less than 0.01% | less than 0.01% | less than 0.01% |
| Institutional Class | 0.01% | less than 0.01% | less than 0.01% | less than 0.01% | less than 0.01% |
| Institutional 2 Class | 0.01% | less than 0.01% | less than 0.01% | less than 0.01% | less than 0.01% |
| Institutional 3 Class | 0.01% | less than 0.01% | less than 0.01% | less than 0.01% | less than 0.01% |
| Class R | 0.01% | less than 0.01% | less than 0.01% | less than 0.01% | less than 0.01% |
| (d) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (e) | Per share amounts have been adjusted on a retroactive basis to reflect a 4 to 1 reverse stock split completed after the close of business on September 11, 2020. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 46 | Columbia Total Return Bond 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) | |
| Institutional 3 Class | |||||||
| Year Ended 4/30/2023 | $30.72 | (2.90%) | 0.52%(c) | 0.37%(c) | 4.38% | 247% | $313,215 |
| Year Ended 4/30/2022 | $32.87 | (10.41%) | 0.50%(c) | 0.37%(c) | 2.85% | 173% | $405,759 |
| Year Ended 4/30/2021(e) | $37.79 | 10.73% | 0.52%(c) | 0.38%(c) | 3.32% | 295% | $354,336 |
| Year Ended 4/30/2020(e) | $36.98 | 6.86% | 0.53%(c) | 0.37%(c) | 3.42% | 272% | $525,287 |
| Year Ended 4/30/2019(e) | $36.21 | 5.73% | 0.53%(c) | 0.49%(c) | 3.56% | 262% | $258,172 |
| Class R | |||||||
| Year Ended 4/30/2023 | $30.71 | (3.54%) | 1.15%(c) | 1.00%(c),(d) | 3.75% | 247% | $5,052 |
| Year Ended 4/30/2022 | $32.87 | (10.94%) | 1.12%(c) | 0.99%(c),(d) | 2.24% | 173% | $6,352 |
| Year Ended 4/30/2021(e) | $37.78 | 10.15% | 1.13%(c) | 0.99%(c),(d) | 2.76% | 295% | $4,752 |
| Year Ended 4/30/2020(e) | $36.97 | 6.08% | 1.15%(c) | 1.00%(c),(d) | 2.79% | 272% | $2,501 |
| Year Ended 4/30/2019(e) | $36.20 | 5.19% | 1.16%(c) | 1.11%(c),(d) | 2.97% | 262% | $2,380 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Total Return Bond Fund | Annual Report 2023 | 47 |
Notes to Financial Statements
April 30, 2023
April 30, 2023
Note 1. Organization
Columbia Total Return Bond Fund
(the Fund), a series of Columbia Funds Series Trust I (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different net investment income distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a
liquidation will be proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A and Class C shares are offered to the general public for investment. Class C shares automatically convert to Class A shares after 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.
Debt securities generally are
valued based on prices obtained from pricing services, which are intended to reflect market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing
techniques that take into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes.
Debt securities for which quotations are not readily available or not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities
maturing in 60 days or less are valued primarily at amortized market value, unless this method results in a valuation that management believes does not approximate fair value.
Asset- and mortgage-backed
securities are generally valued by pricing services, which utilize pricing models that incorporate the securities’ cash flow and loan performance data. These models also take into account available market data,
including trades, market quotations, and benchmark yield curves for identical or similar securities. Factors used to identify similar securities may include, but are not limited to, issuer, collateral type, vintage,
prepayment speeds, collateral performance, credit ratings, credit enhancement and expected life. Asset-backed securities for which quotations are readily available may also be valued based upon an over-the-counter or
exchange bid quote from an approved independent broker-dealer. Debt securities maturing in 60 days or less are valued primarily at amortized market value, unless this method results in a valuation that management
believes does not approximate fair value.
| 48 | Columbia Total Return Bond Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Senior loan securities for which
reliable market quotations are readily available are generally valued by pricing services at the average of the bids received.
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.
Forward foreign currency exchange
contracts are marked-to-market based upon foreign currency exchange rates provided by a pricing service.
Futures and options on futures
contracts are valued based upon the settlement price at the close of regular trading on their principal exchanges or, in the absence of a settlement price, at the mean of the latest quoted bid and ask prices.
Option contracts are valued at the
mean of the latest quoted bid and ask prices on their primary exchanges. Option contracts, including over-the-counter option contracts, with no readily available market quotations are valued using mid-market
evaluations from independent third-party vendors.
Swap transactions are valued
through an independent pricing service or broker, or if neither is available, through an internal model based upon observable inputs.
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
| Columbia Total Return Bond Fund | Annual Report 2023 | 49 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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 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.
| 50 | Columbia Total Return Bond Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Forward foreign currency exchange
contracts
Forward foreign currency exchange
contracts are over-the-counter agreements between two parties to buy and sell a currency at a set price on a future date. The Fund utilized forward foreign currency exchange contracts to hedge the currency exposure
associated with some or all of the Fund’s securities. These instruments may be used for other purposes in future periods.
The values of forward foreign
currency exchange contracts fluctuate daily with changes in foreign currency exchange rates. Changes in the value of these contracts are recorded as unrealized appreciation or depreciation until the contract is
exercised or has expired. The Fund will realize a gain or loss when the forward foreign currency exchange contract is closed or expires. Non-deliverable forward foreign currency exchange contracts are settled with the
counterparty in U.S. dollars without delivery of foreign currency.
The use of forward foreign currency
exchange contracts does not eliminate fluctuations in the prices of the Fund’s portfolio securities. The risks of forward foreign currency exchange contracts include movement in the values of the foreign
currencies relative to the U.S. dollar (or other foreign currencies) and the possibility that counterparties will not complete their contractual obligations, which may be in excess of the amount reflected, if any, in
the Statement of Assets and Liabilities.
Futures contracts
Futures contracts are
exchange-traded and represent commitments for the future purchase or sale of an asset at a specified price on a specified date. The Fund bought and sold futures contracts to manage the duration and yield curve
exposure of the Fund versus the benchmark and to manage exposure to movements in interest rates. These instruments may be used for other purposes in future periods. Upon entering into futures contracts, the Fund bears
risks that it may not achieve the anticipated benefits of the futures contracts and may realize a loss. Additional risks include counterparty credit risk, the possibility of an illiquid market, and that a change in
the value of the contract or option may not correlate with changes in the value of the underlying asset.
Upon entering into a futures
contract, the Fund deposits cash or securities with the broker, known as a futures commission merchant (FCM), in an amount sufficient to meet the initial margin requirement. The initial margin deposit must be
maintained at an established level over the life of the contract. Cash deposited as initial margin is recorded in the Statement of Assets and Liabilities as margin deposits. Securities deposited as initial margin are
designated in the Portfolio of Investments. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily change in the contract value and are
recorded as variation margin receivable or payable and are offset in unrealized gains or losses. The Fund 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 manage exposure to fluctuations in interest rates and to manage
convexity risk. 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.
| Columbia Total Return Bond Fund | Annual Report 2023 | 51 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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.
Interest rate swaption contracts
Interest rate swaption contracts
entered into by the Fund typically represent an option that gives the purchaser the right, but not the obligation, to enter into an interest rate swap contract on a future date. Each interest rate swaption contract
will specify if the buyer is entitled to receive the fixed or floating rate if the interest rate is exercised. Changes in the value of a purchased interest rate swaption contracts are reported as unrealized
appreciation or depreciation on options in the Statement of Assets and Liabilities. Gain or loss is recognized in the Statement of Operations when the interest rate swaption contract is closed or expires.
When the Fund writes an interest
rate swaption 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 interest rate swaption contract written. Premiums received from writing interest rate swaption contracts that expire unexercised are recorded by the Fund on the expiration date as
realized gains from options written in the Statement of Operations. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also recorded
as realized gain, or if the premium is less than the amount paid for the closing purchase, as realized loss. These amounts are reflected as net realized gain (loss) on options written in the Statement of
Operations.
Swap contracts
Swap contracts are negotiated in
the over-the-counter market and are entered into bilaterally or centrally cleared (centrally cleared swap contract). In a centrally cleared swap contract, immediately following execution of the swap contract with a
broker, the swap contract is novated to a central counterparty (the CCP) and the CCP becomes the Fund’s counterparty to the centrally cleared swap contract. The Fund is required to deposit initial margin with
the futures commission merchant (FCM), which pledges it through to the CCP in the form of cash or securities in an amount that varies depending on the size and risk profile of the particular swap contract. Securities
deposited as initial margin are designated in the Portfolio of Investments and cash deposited is recorded in the Statement of Assets and Liabilities as margin deposits. For a bilateral swap contract, the Fund has
credit exposure to the broker, but exchanges daily variation margin with the broker based on the mark-to-market value of the swap contract to minimize that exposure. For centrally cleared swap contracts, the Fund has
minimal credit exposure to the FCM because the CCP stands between the Fund and the relevant buyer/seller on the other side of the contract. Swap contracts are marked-to-market daily and changes in value are recorded
as unrealized appreciation (depreciation). The daily change in valuation of centrally cleared swap contracts, if any, is recorded as a receivable or payable for variation margin in the Statement of Assets and
Liabilities.
Entering into these contracts
involves, to varying degrees, elements of interest, liquidity and counterparty credit risk in excess of the amounts recognized in the Statement of Assets and Liabilities. Such risks involve the possibility that there
may be unfavorable changes in interest rates, market conditions or other conditions, that it may be difficult to initiate a swap transaction or liquidate a position at an advantageous time or price which may result in
significant losses, and that the bilateral counterparty, FCM or CCP, as applicable, may not fulfill its obligation under the contract.
| 52 | Columbia Total Return Bond Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Credit default swap contracts
The Fund entered into credit
default swap contracts to increase or decrease its credit exposure to an index. These instruments may be used for other purposes in future periods. Credit default swap contracts are transactions in which one party
pays fixed periodic payments to a counterparty in consideration for an agreement from the counterparty to make a specific payment should a specified credit event(s) take place. Although specified credit events are
contract specific, credit events are typically bankruptcy, failure to pay, restructuring, obligation acceleration, obligation default, or repudiation/moratorium.
As the purchaser of a credit
default swap contract, the Fund purchases protection by paying a periodic interest rate on the notional amount to the counterparty. The interest amount is accrued daily as a component of unrealized appreciation
(depreciation) and is recorded as a realized loss upon payment. If a credit event as specified in the contract occurs, the Fund may have the option either to deliver the reference obligation to the seller in exchange
for a cash payment of its par amount, or to receive a net cash settlement equal to the par amount less an agreed-upon value of the reference obligation as of the date of the credit event. The difference between the
value of the obligation or cash delivered and the notional amount received will be recorded as a realized gain (loss).
As the seller of a credit default
swap contract, the Fund sells protection to a buyer and will generally receive a periodic interest rate on a notional amount. The interest amount is accrued daily as a component of unrealized appreciation
(depreciation) and is recorded as a realized gain upon receipt of the payment. If a credit event as specified in the contract with the counterparty occurs, the Fund may either be required to accept the reference
obligation from the buyer in exchange for a cash payment of its notional amount, or to pay the buyer a net cash settlement equal to the notional amount less an agreed-upon value of the reference obligation (recovery
value) as of the date of the credit event. The difference between the value of the obligation or cash received and the notional amount paid will be recorded as a realized gain (loss). The maximum potential amount of
undiscounted future payments the Fund could be required to make as the seller of protection under a credit default swap contract is equal to the notional amount of the reference obligation. These potential amounts may
be partially offset by any recovery values of the respective reference obligations or upfront receipts upon entering into the agreement. The notional amounts and market values of all credit default swap contracts in
which the Fund is the seller of protection, if any, are disclosed in the Credit Default Swap Contracts Outstanding schedule following the Portfolio of Investments.
As a protection seller, the Fund
bears the risk of loss from the credit events specified in the contract with the counterparty. For credit default swap contracts on credit indices, quoted market prices and resulting market values serve as an
indicator of the current status of the payment/performance risk. Increasing market values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the reference entity’s
credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the contract.
Any upfront payment or receipt by
the Fund upon entering into a credit default swap contract is recorded as an asset or liability, respectively, and amortized daily as a component of realized gain (loss) in the Statement of Operations. Credit default
swap contracts are valued daily, and the change in value is recorded as unrealized appreciation (depreciation) until the termination of the swap, at which time a realized gain (loss) is recorded.
Credit default swap contracts can
involve greater risks than if a fund had invested in the reference obligation directly since, in addition to general market risks, credit default swaps are subject to counterparty credit risk, leverage risk, hedging
risk, correlation risk and liquidity risk.
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.
| Columbia Total Return Bond Fund | Annual Report 2023 | 53 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
The following table is a summary of
the fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) at April 30, 2023:
| Asset derivatives | ||
| Risk exposure category | Statement of assets and liabilities location | Fair value ($) |
| Credit risk | Component of total distributable earnings (loss) — unrealized appreciation on swap contracts | 3,205,641* |
| Credit risk | Upfront payments on swap contracts | 5,396,633 |
| Interest rate risk | Component of total distributable earnings (loss) — unrealized appreciation on futures contracts | 17,565,200* |
| Interest rate risk | Investments, at value — Option contracts purchased | 7,579,167 |
| Total | 33,746,641 |
| Liability derivatives | ||
| Risk exposure category | Statement of assets and liabilities location | Fair value ($) |
| Credit risk | Component of total distributable earnings (loss) — unrealized depreciation on swap contracts | 3,668,912* |
| Credit risk | Upfront receipts on swap contracts | 6,385,425 |
| Foreign exchange risk | Unrealized depreciation on forward foreign currency exchange contracts | 10,359 |
| Interest rate risk | Component of total distributable earnings (loss) — unrealized depreciation on futures contracts | 3,115,624* |
| Interest rate risk | Option contracts written, at value | 255,536 |
| Total | 13,435,856 |
| * | Includes cumulative appreciation (depreciation) as reported in the tables following the Portfolio of Investments. Only the current day’s variation margin is reported in receivables or payables in the Statement of Assets and Liabilities. |
The following table indicates the
effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended April 30, 2023:
| 54 | Columbia Total Return Bond Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
The following table is a summary
of the average outstanding volume by derivative instrument for the year ended April 30, 2023:
| Derivative instrument | Average notional amounts ($)* |
| Futures contracts — long | 772,301,683 |
| Futures contracts — short | 627,585,785 |
| Credit default swap contracts — buy protection | 313,989,095 |
| Credit default swap contracts — sell protection | 55,762,500 |
| Derivative instrument | Average value ($)* |
| Option contracts purchased | 15,496,936 |
| Option contracts written | (2,360,301) |
| Derivative instrument | Average unrealized appreciation ($)* | Average unrealized depreciation ($)* |
| Forward foreign currency exchange contracts | 67,523 | (36,016) |
| * | Based on the ending quarterly outstanding amounts for the year ended April 30, 2023. |
Investments in senior loans
The Fund may invest in senior loan
assignments. When the Fund purchases an assignment of a senior loan, the Fund typically has direct rights against the borrower; provided, however, that the Fund’s rights may be more limited than the lender from
which it acquired the assignment and the Fund may be able to enforce its rights only through an administrative agent. Although certain senior loan assignments are secured by collateral, the Fund could experience
delays or limitations in realizing such collateral or have its interest subordinated to other indebtedness of the obligor. In the event that the administrator or collateral agent of a loan becomes insolvent or enters
into receivership or bankruptcy, the Fund may incur costs and delays in realizing payment or may suffer a loss of principal and/or interest. The risk of loss is greater for unsecured or subordinated loans. In
addition, senior loan assignments are vulnerable to market, economic or other conditions or events that may reduce the demand for senior loan assignments and certain senior loan assignments which were liquid when
purchased, may become illiquid.
The Fund may enter into senior loan
assignments where all or a portion of the loan may be unfunded. The Fund is obligated to fund these commitments at the borrower’s discretion. These commitments, if any, are generally traded and priced in the
same manner as other senior loan securities and are disclosed as unfunded senior loan commitments in the Fund’s Portfolio of Investments with a corresponding payable for investments purchased. The Fund
designates cash or liquid securities to cover these commitments.
Asset- and mortgage-backed
securities
The Fund may invest in asset-backed
and mortgage-backed securities. The maturity dates shown represent the original maturity of the underlying obligation. Actual maturity may vary based upon prepayment activity on these obligations. All, or a portion,
of the obligation may be prepaid at any time because the underlying asset may be prepaid. As a result, decreasing market interest rates could result in an increased level of prepayment. An increased prepayment rate
will have the effect of shortening the maturity of the security. Unless otherwise noted, the coupon rates presented are fixed rates.
Delayed delivery securities
The Fund may trade securities on
other than normal settlement terms, including securities purchased or sold on a “when-issued” or "forward commitment" basis. This may increase risk to the Fund since the other party to the transaction may
fail to deliver, which could cause the Fund to subsequently invest at less advantageous prices. The Fund designates cash or liquid securities in an amount equal to the delayed delivery commitment.
| Columbia Total Return Bond Fund | Annual Report 2023 | 55 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
To be announced securities
The Fund may trade securities on a
To Be Announced (TBA) basis. As with other delayed-delivery transactions, a seller agrees to issue a TBA security at a future date. However, the seller does not specify the particular securities to be delivered.
Instead, the Fund agrees to accept any security that meets specified terms.
In some cases, Master Securities
Forward Transaction Agreements (MSFTAs) may be used to govern transactions of certain forward-settling agency mortgage-backed securities, such as delayed-delivery and TBAs, between the Fund and counterparty. The MSFTA
maintains provisions for, among other things, initiation and confirmation, payment and transfer, events of default, termination, and maintenance of collateral relating to such transactions.
Mortgage dollar roll transactions
The Fund may enter into mortgage
“dollar rolls” in which the Fund sells securities for delivery in the current month and simultaneously contracts with the same counterparty to repurchase similar but not identical securities (same type,
coupon and maturity) on a specified future date. These transactions may increase the Fund’s portfolio turnover rate. During the roll period, the Fund loses the right to receive principal and interest paid on the
securities sold. However, the Fund may benefit because it receives negotiated amounts in the form of reductions of the purchase price for the future purchase plus the interest earned on the cash proceeds of the
securities sold until the settlement date of the forward purchase. The Fund records the incremental difference between the forward purchase and sale of each forward roll as a realized gain or loss. Unless any realized
gains exceed the income, capital appreciation, and gain or loss due to mortgage prepayments that would have been realized on the securities sold as part of the mortgage dollar roll, the use of this technique may
diminish the investment performance of the Fund compared to what the performance would have been without the use of mortgage dollar rolls. Mortgage dollar rolls involve the risk that the market value of the securities
the Fund is obligated to repurchase may decline below the repurchase price, or that the counterparty may default on its obligations. All cash proceeds will be invested in instruments that are permissible investments
for the Fund. The Fund identifies cash or liquid securities in an amount equal to the forward purchase price. The Fund does not currently enter into mortgage dollar rolls that are accounted for as financing
transactions.
Interest only and principal only
securities
The Fund may invest in Interest
Only (IO) or Principal Only (PO) securities. IOs are stripped securities entitled to receive all of the security’s interest, but none of its principal. IOs are particularly sensitive to changes in interest rates
and therefore subject to greater fluctuations in price than typical interest bearing debt securities. IOs are also subject to credit risk because the Fund may not receive all or part of the interest payments if the
issuer, obligor, guarantor or counterparty defaults on its obligation. Payments received for IOs are included in interest income in the Statement of Operations. Because no principal will be received at the maturity of
an IO, adjustments are made to the cost of the security on a monthly basis until maturity. These adjustments are included in interest income in the Statement of Operations. POs are stripped securities entitled to
receive the principal from the underlying obligation, but not the interest. POs are particularly sensitive to changes in interest rates and therefore are subject to fluctuations in price. POs are also subject to
credit risk because the Fund may not receive all or part of its principal if the issuer, obligor, guarantor or counterparty defaults on its obligation. The Fund may also invest in IO or PO stripped mortgage-backed
securities. Payments received for POs are treated as reductions to the cost and par value of the securities.
| 56 | Columbia Total Return Bond Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 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 April 30, 2023:
| Citi ($)(a) | Citi ($)(a) | Goldman Sachs International ($) | JPMorgan ($) | Morgan Stanley ($)(a) | Morgan Stanley ($)(a) | Total ($) | ||
| Assets | ||||||||
| Call option contracts purchased | 6,010,640 | - | - | - | 1,568,527 | - | 7,579,167 | |
| OTC credit default swap contracts (b) | - | 3,519,359 | 436,121 | 2,793,454 | 1,853,340 | - | 8,602,274 | |
| Total assets | 6,010,640 | 3,519,359 | 436,121 | 2,793,454 | 3,421,867 | - | 16,181,441 | |
| Liabilities | ||||||||
| Centrally cleared credit default swap contracts (c) | - | - | - | - | - | 4,838,308 | 4,838,308 | |
| Forward foreign currency exchange contracts | 10,359 | - | - | - | - | - | 10,359 | |
| Call option contracts written | 36,360 | - | - | - | - | - | 36,360 | |
| Put option contracts written | 152,729 | - | - | - | 66,447 | - | 219,176 | |
| OTC credit default swap contracts (b) | - | 3,241,333 | - | 4,420,000 | 2,325,417 | - | 9,986,750 | |
| Total liabilities | 199,448 | 3,241,333 | - | 4,420,000 | 2,391,864 | 4,838,308 | 15,090,953 | |
| Total financial and derivative net assets | 5,811,192 | 278,026 | 436,121 | (1,626,546) | 1,030,003 | (4,838,308) | 1,090,488 | |
| Total collateral received (pledged) (d) | 5,391,000 | - | 420,000 | (1,626,546) | 889,000 | (4,838,308) | 235,146 | |
| Net amount (e) | 420,192 | 278,026 | 16,121 | - | 141,003 | - | 855,342 |
| (a) | Exposure can only be netted across transactions governed under the same master agreement with the same legal entity. |
| (b) | Over-the-Counter (OTC) Swap Contracts are presented at market value plus periodic payments receivable (payable), which is comprised of unrealized appreciation, unrealized depreciation, upfront payments and upfront receipts. |
| (c) | Centrally cleared swaps are included within payable/receivable for variation margin on the Statement of Assets and Liabilities. |
| (d) | In some instances, the actual collateral received and/or pledged may be more than the amount shown due to overcollateralization. |
| (e) | 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.
The trade date for senior loans
purchased in the primary market is the date on which the loan is allocated. The trade date for senior loans purchased in the secondary market is the date on which the transaction is entered into.
Income recognition
Interest income is recorded on an
accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted. The
Fund classifies gains and losses realized on prepayments received on mortgage-backed securities as adjustments to interest income. For convertible securities, premiums attributable to the conversion feature are
not amortized.
The Fund may place a debt security
on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. The Fund may also adjust
accrual rates when it becomes probable the full interest will not be collected and a partial payment will be received. A defaulted debt security is removed from non-accrual status when the issuer resumes interest
payments or when collectability of interest is reasonably assured.
Corporate actions and dividend
income are recorded on the ex-dividend date.
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
| Columbia Total Return Bond Fund | Annual Report 2023 | 57 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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.
The value of additional securities
received as an income payment through a payment in kind, if any, is recorded as interest income and increases the cost basis of such securities.
The Fund may receive other income
from senior loans, including amendment fees, consent fees and commitment fees. These fees are recorded as income when received by the Fund. These amounts are included in Interest Income in the Statement of
Operations.
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.
Distributions to shareholders
Distributions from net investment
income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
| 58 | Columbia Total Return Bond Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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 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 0.50% to 0.34% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30, 2023 was 0.48% 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
| Columbia Total Return Bond Fund | Annual Report 2023 | 59 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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, effective through August 31, 2023, Institutional 2 Class shares are
subject to a contractual transfer agency fee annual limitation of not more than 0.05% and Institutional 3 Class shares are subject to a contractual transfer agency fee annual limitation of not more than 0.00% of the
average daily net assets attributable to each share class.
For the year ended April
30, 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 | 0.13 |
| Advisor Class | 0.13 |
| Class C | 0.13 |
| Institutional Class | 0.13 |
| Institutional 2 Class | 0.05 |
| Institutional 3 Class | 0.00 |
| 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 April 30, 2023, these minimum account balance fees reduced total expenses of
the Fund by $1,683.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A and Class C shares of the Fund. Also under the Plans, the Fund pays a
monthly distribution fee to the Distributor at the maximum annual rates of 0.10%, 0.75% and 0.50% of the average daily net assets attributable to Class A, Class C and Class R shares of the Fund,
respectively.
Although the Fund may pay
distribution and service fees up to a maximum annual rate of 0.35% of the Fund’s average daily net assets attributable to Class A shares (comprised of up to 0.10% for distribution services and up to 0.25% for
shareholder services), the Fund currently limits such fees to an aggregate fee of not more than 0.25% of the Fund’s average daily net assets attributable to Class A shares.
| 60 | Columbia Total Return Bond Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended April 30, 2023, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 3.00 | 0.50 - 1.00(a) | 229,402 |
| Class C | — | 1.00(b) | 4,591 |
| (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:
| Fee rate(s) contractual August 31, 2024 | |
| Class A | 0.74% |
| Advisor Class | 0.49 |
| Class C | 1.49 |
| Institutional Class | 0.49 |
| Institutional 2 Class | 0.42 |
| Institutional 3 Class | 0.37 |
| Class R | 0.99 |
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. In addition to the contractual agreement, the Investment Manager and certain of its affiliates have
voluntarily agreed to waive fees and/or reimburse Fund expenses (excluding certain fees and expenses described above) so that Fund level expenses (expenses directly attributable to the Fund and not to a specific share
class) are waived proportionately across all share classes. This arrangement may be revised or discontinued at any time. Reflected in the contractual cap commitment, effective through August 31, 2023, is the Transfer
Agent’s contractual agreement to limit total transfer agency fees to an annual rate of not more than 0.05% for Institutional 2 Class and 0.00% for Institutional 3 Class of the average daily net assets
attributable to each share class, unless sooner terminated at the sole discretion of the Board of Trustees. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are
not recoverable by the Investment Manager or its affiliates in future periods.
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
| Columbia Total Return Bond Fund | Annual Report 2023 | 61 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
At April 30, 2023, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, foreign currency transactions, derivative investments, swap investments, tax straddles, principal and/or interest from
fixed income securities, defaulted securities/troubled debt, capital loss carryforwards, trustees’ deferred compensation and distributions. To the extent these differences were permanent, reclassifications
were made among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
The following reclassifications
were made:
| Undistributed net investment income ($) | Accumulated net realized (loss) ($) | Paid in capital ($) |
| (12,452,411) | 12,452,411 | — |
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 April 30, 2023 | Year Ended April 30, 2022 | ||||
| Ordinary income ($) | Long-term capital gains ($) | Total ($) | Ordinary income ($) | Long-term capital gains ($) | Total ($) |
| 97,095,602 | — | 97,095,602 | 84,107,203 | 6,937,567 | 91,044,770 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At April 30, 2023, the components
of distributable earnings on a tax basis were as follows:
| Undistributed ordinary income ($) | Undistributed long-term capital gains ($) | Capital loss carryforwards ($) | Net unrealized (depreciation) ($) |
| 8,747,607 | — | (388,222,421) | (258,136,611) |
At April 30, 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) ($) | Net unrealized (depreciation) ($) |
| 3,669,581,183 | 10,975,561 | (269,112,172) | (258,136,611) |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
The following capital loss
carryforwards, determined at April 30, 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 April 30,
2023, capital loss carryforwards utilized, if any, were as follows:
| No expiration short-term ($) | No expiration long-term ($) | Total ($) | Utilized ($) |
| (188,894,279) | (199,328,142) | (388,222,421) | — |
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.
| 62 | Columbia Total Return Bond Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Note 5. Portfolio
information
The cost of purchases and
proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $7,449,468,494 and $7,592,219,141, respectively, for the year ended April 30, 2023, of which $6,704,571,029
and $6,312,035,479, respectively, were U.S. government securities. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes
referred to as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
Note 7. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the
Interfund Program during the year ended April 30, 2023 was as follows:
| Borrower or lender | Average loan balance ($) | Weighted average interest rate (%) | Number of days with outstanding loans |
| Lender | 2,285,714 | 4.35 | 7 |
Interest income earned by the Fund
is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at April 30, 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%.
| Columbia Total Return Bond Fund | Annual Report 2023 | 63 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
The Fund had no borrowings during
the year ended April 30, 2023.
Note 9. Fund
reorganization
At the close of business on
December 10, 2021, the Fund acquired the assets and assumed the identified liabilities of BMO Core Plus Bond Fund (the Acquired Fund), a series of BMO Funds Inc. The reorganization was completed after
shareholders of the Acquired Fund approved a plan of reorganization at a shareholder meeting held on November 23, 2021. The purpose of the reorganization was to combine two funds with comparable investment objectives
and strategies.
The aggregate net assets of the
Fund immediately before the reorganization were $3,221,966,676 and the combined net assets immediately after the reorganization were $4,095,069,169.
The reorganization was accomplished
by a tax-free exchange of 75,114,557 shares of the Acquired Fund valued at $873,102,493 (including $6,019,203 of unrealized appreciation/(depreciation)).
In exchange for the Acquired
Fund’s shares, the Fund issued the following number of shares:
| Shares | |
| Class A | 1,160,251 |
| Advisor Class | 22,289,843 |
For financial reporting purposes,
net assets received and shares issued by the Fund were recorded at fair value; however, the Acquired Fund’s cost of investments was carried forward.
The Fund’s financial
statements reflect both the operations of the Fund for the period prior to the reorganization and the combined Fund for the period subsequent to the reorganization. Because the combined investment portfolios have been
managed as a single integrated portfolio since the reorganization was completed, it is not practicable to separate the amounts of revenue and earnings of the Acquired Fund that have been included in the combined
Fund’s Statement of Operations since the reorganization was completed.
Assuming the reorganization had
been completed on May 1, 2021, the Fund’s pro-forma results of operations for the year ended April 30, 2022 would have been approximately:
| ($) | |
| Net investment income | 104,475,000 |
| Net realized loss | (114,922,000) |
| Net change in unrealized appreciation/(depreciation) | (384,820,000) |
| Net decrease in net assets from operations | (395,267,000) |
Note 10. Significant
risks
Credit risk
Credit risk is the risk that the
value of debt instruments in the Fund’s portfolio may decline because the issuer defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial obligations,
such as making payments to the Fund when due. Credit rating agencies assign credit ratings to certain debt instruments to indicate their credit risk. Lower-rated or unrated debt instruments held by the Fund may
present increased credit risk as compared to higher-rated debt instruments.
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.
| 64 | Columbia Total Return Bond Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
High-yield investments risk
Securities and other debt
instruments held by the Fund that are rated below investment grade (commonly called "high-yield" or "junk" bonds) and unrated debt instruments of comparable quality expose the Fund to a greater risk of loss of
principal and income than a fund that invests solely or primarily in investment grade debt instruments. In addition, these investments have greater price fluctuations, are less liquid and are more likely to experience
a default than higher-rated debt instruments. High-yield debt instruments are considered to be predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Interest rate risk
Interest rate risk is the risk of
losses attributable to changes in interest rates. In general, if interest rates rise, the values of debt instruments tend to fall, and if interest rates fall, the values of debt instruments tend to rise. Actions by
governments and central banking authorities can result in increases or decreases in interest rates. Higher periods of inflation could lead such authorities to raise interest rates. Increasing interest rates may
negatively affect the value of debt securities held by the Fund, resulting in a negative impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt
security, the greater its sensitivity to changes in interest rates. The Fund is subject to the risk that the income generated by its investments may not keep pace with inflation.
Liquidity risk
Liquidity risk is the risk
associated with a lack of marketability of investments which may make it difficult to sell the investment at a desirable time or price. Changing regulatory, market or other conditions or environments (for example, the
interest rate or credit environments) may adversely affect the liquidity of the Fund’s investments. The Fund may have to accept a lower selling price for the holding, sell other investments, or forego another,
more appealing investment opportunity. Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. A less liquid market can
lead to an increase in Fund redemptions, which may negatively impact Fund performance and net asset value per share, including, for example, if the Fund is forced to sell securities in a down market.
Market 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 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, restricted cross-border payments and limited access to investments and/or assets in certain international markets and/or
issuers. These developments and other related events could negatively impact Fund performance.
| Columbia Total Return Bond Fund | Annual Report 2023 | 65 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Mortgage- and other asset-backed
securities risk
The value of any mortgage-backed
and other asset-backed securities including collateralized debt obligations, if any, held by the Fund may be affected by, among other things, changes or perceived changes in: interest rates; factors concerning the
interests in and structure of the issuer or the originator of the mortgages or other assets; the creditworthiness of the entities that provide any supporting letters of credit, surety bonds or other credit enhancements;
or the market’s assessment of the quality of underlying assets. Payment of principal and interest on some mortgage-backed securities (but not the market value of the securities themselves) may be guaranteed by
the full faith and credit of a particular U.S. Government agency, authority, enterprise or instrumentality, and some, but not all, are also insured or guaranteed by the U.S. Government. Mortgage-backed securities
issued by non-governmental issuers (such as commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers) may entail greater risk than
obligations guaranteed by the U.S. Government. Mortgage- and other asset-backed securities are subject to liquidity risk and prepayment risk. A decline or flattening of housing values may cause delinquencies in
mortgages (especially sub-prime or non-prime mortgages) underlying mortgage-backed securities and thereby adversely affect the ability of the mortgage-backed securities issuer to make principal and/or interest
payments to mortgage-backed securities holders, including the Fund. Rising or high interest rates tend to extend the duration of mortgage- and other asset-backed securities, making their prices more volatile and more
sensitive to changes in interest rates.
Shareholder concentration risk
At April 30, 2023, two unaffiliated
shareholders of record owned 23.1% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Affiliated shareholders of
record owned 41.9% 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 11. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 12. Information
regarding pending and settled legal proceedings
Ameriprise Financial and certain
of its affiliates 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.
| 66 | Columbia Total Return Bond Fund | Annual Report 2023 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust I and Shareholders of Columbia Total Return Bond Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Total Return Bond Fund (one of the funds constituting Columbia Funds Series Trust I, referred to hereafter as the "Fund") as of
April 30, 2023, the related statement of operations for the year ended April 30, 2023, the statement of changes in net assets for each of the two years in the period ended April 30, 2023, including the related notes,
and the financial highlights for each of the five years in the period ended April 30, 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 April 30, 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 April 30,
2023 and the financial highlights for each of the five years in the period ended April 30, 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 April 30, 2023 by correspondence with the custodian, transfer agent, brokers and agent banks; when
replies were not received from brokers and agent banks, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
June 22, 2023
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
| Columbia Total Return Bond Fund | Annual Report 2023 | 67 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended April 30, 2023. Shareholders will be notified in early 2024 of the amounts for use in preparing 2023 income tax returns.
| Section 163(j) Interest Dividends | |
| 100.00% |
Section 163(j) Interest Dividends.
The percentage of ordinary income distributed during the fiscal year that shareholders may treat as interest income for purposes of IRC Section 163(j), subject to holding period requirements and other limitations.
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 and other relevant Board experience |
| 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 | 174 | 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 |
| 68 | Columbia Total Return Bond 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 and other relevant Board experience |
| 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 | 174 | 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 | 174 | 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) (financial services), 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 | 172 | 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 (former mutual fund complex), January 2015-December 2017 |
| Columbia Total Return Bond Fund | Annual Report 2023 | 69 |
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 and other relevant Board experience |
| 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 | 172 | Treasurer, Edinburgh University US Trust Board, since January 2023; Member, HBS Community Action Partners Board, since September 2022; former Director, University of Edinburgh Business School (Member of US Board), 2004-2019; former Director, Boston Public Library Foundation, 2008-2017 |
| 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 | 174 | Former Trustee, MA Taxpayers Foundation, 1997-2022; former Director, The MA Business Roundtable, 2003-2019; former Chairperson, Innovation Index Advisory Committee, MA Technology Collaborative, 1997-2020 |
| 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 | 174 | 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 | 174 | Director, SpartanNash Company since November 2013 (Chair of the Board, since May 2021) (food distributor); Director, Aircastle Limited (Chair of Audit Committee) (aircraft leasing), since August 2006; 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 | 172 | None |
| 70 | Columbia Total Return Bond 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 and other relevant Board experience |
| 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 | 172 | 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 Senior Adviser to The Carlyle Group (financial services), March 2008-September 2008; former Governance Consultant to Bridgewater Associates, January 2013-December 2015 |
| 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. | 174 | Director, Valmont Industries, Inc. (irrigation systems manufacturer), since 2012; Trustee, Carleton College (on the Investment Committee), since 1987; Trustee, Carnegie Endowment for International Peace (on the Investment Committee), since 2009 |
| 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 | 172 | 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 |
| Columbia Total Return Bond Fund | Annual Report 2023 | 71 |
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 and other relevant Board experience |
| 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 | 174 | Former Director, NAPE (National Alliance for Partnerships in Equity) Education Foundation, October 2016-October 2020; Advisory Board, Jennersville YMCA, since 2022 |
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 and other relevant Board experience |
| 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 | 174 | 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 |
| * | 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 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.
| 72 | Columbia Total Return Bond Fund | Annual Report 2023 |
TRUSTEES AND OFFICERS (continued)
(Unaudited)
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:
(Unaudited)
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 Total Return Bond Fund | Annual Report 2023 | 73 |
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 |
| 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. |
Liquidity Risk
Management Program
(Unaudited)
Pursuant to Rule 22e-4 under the
1940 Act, the Fund has adopted a liquidity risk management program (Program). The Program’s principal objectives include assessing, managing and periodically reviewing the Fund’s liquidity risk. Liquidity
risk is defined as the risk that the Fund could not meet redemption requests without significant dilution of remaining investors’ interests in the Fund.
The Board has appointed the
Investment Manager as the program administrator for the Fund’s Program. The Investment Manager has delegated oversight of the Program to its Liquidity Risk Management Committee (the Committee). At a board
meeting during the fiscal period, the Committee provided the Board with a report addressing the operations of the program and assessing its adequacy and effectiveness of implementation for the period January 1, 2022,
through December 31, 2022, including:
| • | the Fund had sufficient liquidity to both meet redemptions and operate effectively on behalf of shareholders; |
| • | there were no material changes to the Program during the period; |
| • | the implementation of the Program was effective to manage the Fund’s liquidity risk; and |
| • | the Program operated adequately during the period. |
There can be no assurance that the
Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an
investment in the Fund may be subject.
| 74 | Columbia Total Return Bond 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/
ANN166_04_N01_(06/23)
Columbia Corporate
Income Fund
Not FDIC or NCUA Insured •
No Financial Institution Guarantee • May Lose Value
Table of Contents
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| 8 | |
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| 25 | |
| 26 | |
| 28 | |
| 32 | |
| 46 | |
| 47 | |
| 47 | |
| 53 |
If you elect to receive the
shareholder report for Columbia Corporate Income 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 Corporate Income Fund | Annual
Report 2023
Fund at a Glance
(Unaudited)
(Unaudited)
Investment objective
The Fund
seeks total return, consisting primarily of current income and secondarily of capital appreciation.
Portfolio management
Tom Murphy, CFA
Lead Portfolio Manager
Managed Fund since 2011
Royce Wilson, CFA
Portfolio Manager
Managed Fund since 2020
John Dawson, CFA
Portfolio Manager
Managed Fund since 2020
Shannon Rinehart, CFA
Portfolio Manager
Managed Fund since February 2022
| Columbia Corporate Income Fund | Annual Report 2023 | 3 |
Fund at a Glance (continued)
(Unaudited)
(Unaudited)
Performance of a hypothetical $10,000 investment (April 30, 2013 — April 30, 2023)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Corporate Income Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund
distributions or on the redemption of Fund shares.
| 4 | Columbia Corporate Income Fund | Annual Report 2023 |
Manager Discussion of Fund Performance
(Unaudited)
(Unaudited)
At April 30, 2023, approximately
53.63% 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
April 30, 2023, the Class A shares of Columbia Corporate Income Fund returned 1.51% excluding sales charges. The Fund’s Blended Benchmark returned 0.78% for the same time period.
Market overview
For much of the reporting period,
geopolitical developments including Russia’s ongoing war against Ukraine and the shuttering of China’s economy in response to COVID-19 weighed heavily on risk sentiment. At the same time, central bankers
were struggling to rein in historically high inflation. The U.S. Federal Reserve (Fed) initiated a series of sharp interest rate hikes, ultimately bringing the federal funds target to a range of 4.50% to 4.75%, versus
0% to 0.25% at the beginning of 2022. U.S. Treasury yields moved higher in response with the 10-year Treasury yield peaking at 4.24% in late October 2022, and the Treasury yield curve became inverted as the market
anticipated recession.
Entering 2023, risk assets
including corporate bonds rallied amid growing optimism that the Fed and other leading central banks were poised to stop raising interest rates. In March, the failure of three U.S. banks and collapse of European giant
Credit Suisse raised fears of a financial crisis. The Fed implemented a new lending program to backstop bank liquidity in response, while the market began to anticipate Fed rate cuts over the second half of the year.
The outlook for easier monetary policy and a flight to safety in the wake of banking concerns led Treasury yields to move sharply lower, supporting bond market returns. As of April 30, 2023, the yield on the 10-year
Treasury note closed at 3.44% versus 2.89% 12 months earlier.
The Fund’s notable
contributors during the period
| • | Positive contributions to the Fund’s performance relative to the benchmark over the 12-month period were highlighted by individual bond selection within the industrials and utilities sectors. |
| • | In terms of individual names, an overweight to Netflix Inc. was the top contributor to performance over the period. |
| • | The Fund’s credit risk profile within both investment-grade and high-yield corporate bonds was higher than that of the benchmark, which contributed to performance as credit spreads narrowed over the latter part of the period. |
| • | The Fund’s allocation across industries contributed to relative performance as well. In particular, overweight exposure to the aerospace & defense and food & beverage segments was additive, along with underweights in both office and retail real estate investment trusts (REITs). |
| • | The Fund’s stance with respect to duration (and corresponding interest rate sensitivity) and positioning along the yield curve also proved beneficial. Duration and yield curve positioning are generally not a meaningful source of relative performance for the Fund as the management team seeks to maintain portfolio duration within a fairly narrow band around that of the benchmark. |
The Fund’s notable
detractors during the period
| • | While detractors from the Fund’s performance were limited, an overweight allocation to the life insurance industry weighed on return relative to the benchmark. |
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Fixed-income securities present issuer default risk. A rise in interest rates may result in a price decline of fixed-income instruments held by the Fund, negatively impacting its performance and NAV. Falling rates may result in the Fund investing in lower yielding
debt instruments, lowering the Fund’s income and yield. These risks may be heightened for longer maturity and duration securities. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise which may reduce investment opportunities and potential returns. Investing in derivatives is a specialized activity that
| Columbia Corporate Income Fund | Annual Report 2023 | 5 |
Manager Discussion of Fund Performance (continued)
(Unaudited)
(Unaudited)
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. Liquidity risk is associated with the difficulty of selling underlying investments at a desirable time or price. See the Fund’s prospectus for more information on these and other risks.
The views expressed in this report
reflect the current views of the respective parties who have contributed to 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 Corporate Income 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 Corporate Income Fund | Annual Report 2023 | 7 |
Portfolio of Investments
April 30, 2023
April 30, 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 Corporate Income Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Corporate Income Fund | Annual Report 2023 | 9 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Corporate Income Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Corporate Income Fund | Annual Report 2023 | 11 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 12 | Columbia Corporate Income Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Corporate Income Fund | Annual Report 2023 | 13 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 14 | Columbia Corporate Income Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Corporate Income Fund | Annual Report 2023 | 15 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 16 | Columbia Corporate Income Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Corporate Income Fund | Annual Report 2023 | 17 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 18 | Columbia Corporate Income Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Corporate Income Fund | Annual Report 2023 | 19 |
At April 30, 2023,
securities and/or cash totaling $4,571,912 were pledged as collateral.
Investments in
derivatives
| Long futures contracts | ||||||
| Description | Number of contracts | Expiration date | Trading currency | Notional amount | Value/Unrealized appreciation ($) | Value/Unrealized depreciation ($) |
| U.S. Long Bond | 789 | 06/2023 | USD | 103,876,781 | 4,072,089 | — |
| U.S. Treasury 2-Year Note | 491 | 06/2023 | USD | 101,226,554 | 994,731 | — |
| U.S. Treasury 5-Year Note | 1,933 | 06/2023 | USD | 212,131,649 | 3,777,955 | — |
| Total | 8,844,775 | — | ||||
| Short futures contracts | ||||||
| Description | Number of contracts | Expiration date | Trading currency | Notional amount | Value/Unrealized appreciation ($) | Value/Unrealized depreciation ($) |
| U.S. Treasury 10-Year Note | (2,068) | 06/2023 | USD | (238,240,063) | — | (6,563,797) |
| U.S. Treasury Ultra 10-Year Note | (904) | 06/2023 | USD | (109,793,625) | — | (1,646,002) |
| U.S. Treasury Ultra Bond | (181) | 06/2023 | USD | (25,594,531) | 87,043 | — |
| Total | 87,043 | (8,209,799) | ||||
Notes to Portfolio of
Investments
| (a) | Non-income producing investment. |
| (b) | Represents privately placed and other securities and instruments exempt from Securities and Exchange Commission registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. At April 30, 2023, the total value of these securities amounted to $492,637,816, which represents 30.27% of total net assets. |
| (c) | Represents a variable rate security with a step coupon where the rate adjusts according to a schedule for a series of periods, typically lower for an initial period and then increasing to a higher coupon rate thereafter. The interest rate shown was the current rate as of April 30, 2023. |
| (d) | Represents fair value as determined in good faith under procedures approved by the Board of Trustees. At April 30, 2023, the total value of these securities amounted to $9,525, which represents less than 0.01% of total net assets. |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 20 | Columbia Corporate Income Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
Notes to Portfolio of Investments (continued)
| (e) | Represents a security in default. |
| (f) | Valuation based on significant unobservable inputs. |
| (g) | Payment-in-kind security. Interest can be paid by issuing additional par of the security or in cash. |
| (h) | Represents a security purchased on a when-issued basis. |
| (i) | Principal and interest may not be guaranteed by a governmental entity. |
| (j) | The stated interest rate represents the weighted average interest rate at April 30, 2023 of contracts within the senior loan facility. Interest rates on contracts are primarily determined either weekly, monthly or quarterly by reference to the indicated base lending rate and spread and the reset period. These base lending rates are primarily the LIBOR and other short-term rates. Base lending rates may be subject to a floor or minimum rate. The interest rate for senior loans purchased on a when-issued or delayed delivery basis will be determined upon settlement, therefore no interest rate is disclosed. Senior loans often require prepayments from excess cash flows or permit the borrowers to repay at their election. The degree to which borrowers repay cannot be predicted with accuracy. As a result, remaining maturities of senior loans may be less than the stated maturities. Generally, the Fund is contractually obligated to receive approval from the agent bank and/or borrower prior to the disposition of a senior loan. |
| (k) | Variable rate security. The interest rate shown was the current rate as of April 30, 2023. |
| (l) | The rate shown is the seven-day current annualized yield at April 30, 2023. |
| (m) | 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 April 30, 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, 5.046% | ||||||||
| 108,888,867 | 833,779,883 | (849,048,460) | (13,789) | 93,606,501 | (35,232) | 2,310,524 | 93,643,958 | |
Abbreviation Legend
| LIBOR | London Interbank Offered Rate |
| SOFR | Secured Overnight Financing Rate |
Currency Legend
| USD | US Dollar |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Corporate Income Fund | Annual Report 2023 | 21 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
Fair value measurements (continued)
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 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 April 30, 2023:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Common Stocks | ||||
| Financials | 82,507 | — | — | 82,507 |
| Total Common Stocks | 82,507 | — | — | 82,507 |
| Convertible Bonds | — | 221,841 | — | 221,841 |
| Corporate Bonds & Notes | — | 1,495,563,096 | 9,525 | 1,495,572,621 |
| Foreign Government Obligations | — | 480,715 | — | 480,715 |
| Senior Loans | — | 2,781,439 | — | 2,781,439 |
| U.S. Treasury Obligations | — | 59,388,312 | — | 59,388,312 |
| Money Market Funds | 93,606,501 | — | — | 93,606,501 |
| Total Investments in Securities | 93,689,008 | 1,558,435,403 | 9,525 | 1,652,133,936 |
| Investments in Derivatives | ||||
| Asset | ||||
| Futures Contracts | 8,931,818 | — | — | 8,931,818 |
| Liability | ||||
| Futures Contracts | (8,209,799) | — | — | (8,209,799) |
| Total | 94,411,027 | 1,558,435,403 | 9,525 | 1,652,855,955 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The Fund’s assets assigned to
the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical
assets.
Derivative instruments are valued at
unrealized appreciation (depreciation).
The 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.
| 22 | Columbia Corporate Income Fund | Annual Report 2023 |
Statement of Assets and Liabilities
April 30, 2023
April 30, 2023
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $1,691,011,561) | $1,558,527,435 |
| Affiliated issuers (cost $93,613,920) | 93,606,501 |
| Cash | 4,706 |
| Margin deposits on: | |
| Futures contracts | 4,571,912 |
| Receivable for: | |
| Investments sold | 154,315 |
| Capital shares sold | 5,978,221 |
| Dividends | 292,321 |
| Interest | 15,709,098 |
| Foreign tax reclaims | 14,986 |
| Variation margin for futures contracts | 1,510,523 |
| Expense reimbursement due from Investment Manager | 3,709 |
| Prepaid expenses | 9,483 |
| Trustees’ deferred compensation plan | 174,121 |
| Total assets | 1,680,557,331 |
| Liabilities | |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 43,358,073 |
| Capital shares purchased | 1,924,272 |
| Distributions to shareholders | 5,343,451 |
| Variation margin for futures contracts | 2,013,306 |
| Management services fees | 21,719 |
| Distribution and/or service fees | 715 |
| Transfer agent fees | 163,301 |
| Compensation of board members | 28,226 |
| Other expenses | 40,165 |
| Trustees’ deferred compensation plan | 174,121 |
| Total liabilities | 53,067,349 |
| Net assets applicable to outstanding capital stock | $1,627,489,982 |
| Represented by | |
| Paid in capital | 1,876,509,870 |
| Total distributable earnings (loss) | (249,019,888) |
| Total - representing net assets applicable to outstanding capital stock | $1,627,489,982 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Corporate Income Fund | Annual Report 2023 | 23 |
Statement of Assets and Liabilities (continued)
April 30, 2023
April 30, 2023
| Class A | |
| Net assets | $93,140,748 |
| Shares outstanding | 10,294,170 |
| Net asset value per share | $9.05 |
| Maximum sales charge | 4.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $9.50 |
| Advisor Class | |
| Net assets | $115,910,851 |
| Shares outstanding | 12,830,365 |
| Net asset value per share | $9.03 |
| Class C | |
| Net assets | $3,785,293 |
| Shares outstanding | 418,494 |
| Net asset value per share | $9.05 |
| Institutional Class | |
| Net assets | $577,091,623 |
| Shares outstanding | 63,783,143 |
| Net asset value per share | $9.05 |
| Institutional 2 Class | |
| Net assets | $72,771,247 |
| Shares outstanding | 8,053,870 |
| Net asset value per share | $9.04 |
| Institutional 3 Class | |
| Net assets | $764,790,220 |
| Shares outstanding | 84,576,536 |
| Net asset value per share | $9.04 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 24 | Columbia Corporate Income Fund | Annual Report 2023 |
Statement of Operations
Year Ended April 30, 2023
Year Ended April 30, 2023
| Net investment income | |
| Income: | |
| Dividends — affiliated issuers | $2,310,524 |
| Interest | 60,316,211 |
| Interfund lending | 1,128 |
| Total income | 62,627,863 |
| Expenses: | |
| Management services fees | 7,340,794 |
| Distribution and/or service fees | |
| Class A | 240,948 |
| Class C | 22,437 |
| Transfer agent fees | |
| Class A | 170,499 |
| Advisor Class | 242,969 |
| Class C | 5,104 |
| Institutional Class | 779,091 |
| Institutional 2 Class | 33,430 |
| Institutional 3 Class | 48,790 |
| Compensation of board members | 37,208 |
| Custodian fees | 14,838 |
| Printing and postage fees | 45,643 |
| Registration fees | 151,640 |
| Accounting services fees | 34,090 |
| Legal fees | 32,432 |
| Compensation of chief compliance officer | 287 |
| Other | 28,984 |
| Total expenses | 9,229,184 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (874,999) |
| Fees waived by transfer agent | |
| Institutional 2 Class | (3,934) |
| Institutional 3 Class | (48,790) |
| Expense reduction | (1,001) |
| Total net expenses | 8,300,460 |
| Net investment income | 54,327,403 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (102,455,704) |
| Investments — affiliated issuers | (35,232) |
| Futures contracts | 6,980,079 |
| Net realized loss | (95,510,857) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | 68,657,700 |
| Investments — affiliated issuers | (13,789) |
| Futures contracts | (4,988,500) |
| Net change in unrealized appreciation (depreciation) | 63,655,411 |
| Net realized and unrealized loss | (31,855,446) |
| Net increase in net assets resulting from operations | $22,471,957 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| Columbia Corporate Income Fund | Annual Report 2023 | 25 |
Statement of Changes in Net Assets
| Year Ended April 30, 2023 | Year Ended April 30, 2022 | |
| Operations | ||
| Net investment income | $54,327,403 | $37,488,969 |
| Net realized loss | (95,510,857) | (2,173,302) |
| Net change in unrealized appreciation (depreciation) | 63,655,411 | (226,095,867) |
| Net increase (decrease) in net assets resulting from operations | 22,471,957 | (190,780,200) |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (3,226,634) | (3,854,952) |
| Advisor Class | (4,930,641) | (2,031,592) |
| Class C | (80,248) | (130,378) |
| Institutional Class | (15,586,268) | (18,611,079) |
| Institutional 2 Class | (2,232,056) | (2,203,410) |
| Institutional 3 Class | (28,891,488) | (43,577,361) |
| Total distributions to shareholders | (54,947,335) | (70,408,772) |
| Increase in net assets from capital stock activity | 61,746,003 | 399,692,269 |
| Total increase in net assets | 29,270,625 | 138,503,297 |
| Net assets at beginning of year | 1,598,219,357 | 1,459,716,060 |
| Net assets at end of year | $1,627,489,982 | $1,598,219,357 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 26 | Columbia Corporate Income Fund | Annual Report 2023 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| April 30, 2023 | April 30, 2022 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 1,145,923 | 10,257,140 | 638,607 | 6,769,881 |
| Fund reorganization | — | — | 5,714,967 | 59,304,731 |
| Distributions reinvested | 341,069 | 3,036,558 | 343,238 | 3,605,192 |
| Redemptions | (2,893,914) | (25,940,328) | (3,212,631) | (32,315,030) |
| Net increase (decrease) | (1,406,922) | (12,646,630) | 3,484,181 | 37,364,774 |
| Advisor Class | ||||
| Subscriptions | 2,491,183 | 22,372,358 | 877,829 | 8,954,563 |
| Fund reorganization | — | — | 24,537,894 | 254,220,549 |
| Distributions reinvested | 372,622 | 3,316,303 | 145,363 | 1,444,471 |
| Redemptions | (10,773,206) | (94,579,339) | (5,808,925) | (57,624,830) |
| Net increase (decrease) | (7,909,401) | (68,890,678) | 19,752,161 | 206,994,753 |
| Class C | ||||
| Subscriptions | 238,787 | 2,117,148 | 53,093 | 553,091 |
| Distributions reinvested | 8,647 | 76,996 | 11,849 | 125,621 |
| Redemptions | (111,909) | (994,134) | (195,053) | (2,044,510) |
| Net increase (decrease) | 135,525 | 1,200,010 | (130,111) | (1,365,798) |
| Institutional Class | ||||
| Subscriptions | 33,329,267 | 299,094,986 | 8,951,136 | 94,457,557 |
| Distributions reinvested | 1,502,621 | 13,398,413 | 1,360,579 | 14,368,616 |
| Redemptions | (12,341,543) | (110,298,480) | (9,054,166) | (95,583,271) |
| Net increase | 22,490,345 | 202,194,919 | 1,257,549 | 13,242,902 |
| Institutional 2 Class | ||||
| Subscriptions | 5,052,342 | 43,885,536 | 2,215,006 | 22,835,824 |
| Distributions reinvested | 251,152 | 2,230,890 | 208,806 | 2,202,458 |
| Redemptions | (2,801,937) | (25,252,147) | (1,448,999) | (15,704,938) |
| Net increase | 2,501,557 | 20,864,279 | 974,813 | 9,333,344 |
| Institutional 3 Class | ||||
| Subscriptions | 18,212,248 | 163,568,303 | 17,930,828 | 191,386,445 |
| Distributions reinvested | 2,969,420 | 26,431,298 | 3,706,220 | 39,133,542 |
| Redemptions | (30,449,107) | (270,975,498) | (9,092,452) | (96,397,693) |
| Net increase (decrease) | (9,267,439) | (80,975,897) | 12,544,596 | 134,122,294 |
| Total net increase | 6,543,665 | 61,746,003 | 37,883,189 | 399,692,269 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Corporate Income Fund | Annual Report 2023 | 27 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total
return and portfolio turnover are not annualized for periods of less than one year. The ratios of expenses and net investment income are annualized for periods of less than one year. The portfolio turnover rate is
calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be
higher.
| Net asset value, beginning of period | Net investment income | Net realized and unrealized gain (loss) | Total from investment operations | Distributions from net investment income | Distributions from net realized gains | Total distributions to shareholders | |
| Class A | |||||||
| Year Ended 4/30/2023 | $9.22 | 0.29 | (0.16) | 0.13 | (0.30) | — | (0.30) |
| Year Ended 4/30/2022 | $10.77 | 0.21 | (1.32) | (1.11) | (0.22) | (0.22) | (0.44) |
| Year Ended 4/30/2021 | $10.87 | 0.23 | 0.38 | 0.61 | (0.24) | (0.47) | (0.71) |
| Year Ended 4/30/2020 | $10.15 | 0.29 | 0.72 | 1.01 | (0.29) | — | (0.29) |
| Year Ended 4/30/2019 | $9.88 | 0.30 | 0.27 | 0.57 | (0.30) | — | (0.30) |
| Advisor Class | |||||||
| Year Ended 4/30/2023 | $9.21 | 0.31 | (0.17) | 0.14 | (0.32) | — | (0.32) |
| Year Ended 4/30/2022 | $10.76 | 0.25 | (1.34) | (1.09) | (0.24) | (0.22) | (0.46) |
| Year Ended 4/30/2021 | $10.85 | 0.27 | 0.37 | 0.64 | (0.26) | (0.47) | (0.73) |
| Year Ended 4/30/2020 | $10.14 | 0.32 | 0.71 | 1.03 | (0.32) | — | (0.32) |
| Year Ended 4/30/2019 | $9.87 | 0.33 | 0.27 | 0.60 | (0.33) | — | (0.33) |
| Class C | |||||||
| Year Ended 4/30/2023 | $9.22 | 0.25 | (0.17) | 0.08 | (0.25) | — | (0.25) |
| Year Ended 4/30/2022 | $10.77 | 0.15 | (1.32) | (1.17) | (0.16) | (0.22) | (0.38) |
| Year Ended 4/30/2021 | $10.86 | 0.17 | 0.38 | 0.55 | (0.17) | (0.47) | (0.64) |
| Year Ended 4/30/2020 | $10.15 | 0.23 | 0.71 | 0.94 | (0.23) | — | (0.23) |
| Year Ended 4/30/2019 | $9.88 | 0.24 | 0.27 | 0.51 | (0.24) | — | (0.24) |
| Institutional Class | |||||||
| Year Ended 4/30/2023 | $9.22 | 0.32 | (0.17) | 0.15 | (0.32) | — | (0.32) |
| Year Ended 4/30/2022 | $10.77 | 0.24 | (1.33) | (1.09) | (0.24) | (0.22) | (0.46) |
| Year Ended 4/30/2021 | $10.87 | 0.26 | 0.37 | 0.63 | (0.26) | (0.47) | (0.73) |
| Year Ended 4/30/2020 | $10.15 | 0.32 | 0.72 | 1.04 | (0.32) | — | (0.32) |
| Year Ended 4/30/2019 | $9.88 | 0.33 | 0.27 | 0.60 | (0.33) | — | (0.33) |
| Institutional 2 Class | |||||||
| Year Ended 4/30/2023 | $9.21 | 0.33 | (0.17) | 0.16 | (0.33) | — | (0.33) |
| Year Ended 4/30/2022 | $10.76 | 0.25 | (1.32) | (1.07) | (0.26) | (0.22) | (0.48) |
| Year Ended 4/30/2021 | $10.85 | 0.27 | 0.38 | 0.65 | (0.27) | (0.47) | (0.74) |
| Year Ended 4/30/2020 | $10.14 | 0.33 | 0.71 | 1.04 | (0.33) | — | (0.33) |
| Year Ended 4/30/2019 | $9.87 | 0.35 | 0.26 | 0.61 | (0.34) | — | (0.34) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 28 | Columbia Corporate Income 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 4/30/2023 | $9.05 | 1.51% | 0.94% | 0.87%(c) | 3.31% | 79% | $93,141 |
| Year Ended 4/30/2022 | $9.22 | (10.79%) | 0.92% | 0.87%(c) | 2.03% | 80% | $107,905 |
| Year Ended 4/30/2021 | $10.77 | 5.47% | 0.93% | 0.88%(c) | 2.10% | 74% | $88,537 |
| Year Ended 4/30/2020 | $10.87 | 10.10% | 0.95% | 0.91%(c) | 2.77% | 91% | $68,880 |
| Year Ended 4/30/2019 | $10.15 | 5.93% | 0.93% | 0.91%(c) | 3.07% | 65% | $60,085 |
| Advisor Class | |||||||
| Year Ended 4/30/2023 | $9.03 | 1.65% | 0.69% | 0.62%(c) | 3.51% | 79% | $115,911 |
| Year Ended 4/30/2022 | $9.21 | (10.58%) | 0.67% | 0.62%(c) | 2.54% | 80% | $190,943 |
| Year Ended 4/30/2021 | $10.76 | 5.83% | 0.68% | 0.63%(c) | 2.38% | 74% | $10,624 |
| Year Ended 4/30/2020 | $10.85 | 10.28% | 0.70% | 0.66%(c) | 3.02% | 91% | $18,086 |
| Year Ended 4/30/2019 | $10.14 | 6.20% | 0.68% | 0.66%(c) | 3.32% | 65% | $8,289 |
| Class C | |||||||
| Year Ended 4/30/2023 | $9.05 | 0.95% | 1.50% | 1.42%(c) | 2.82% | 79% | $3,785 |
| Year Ended 4/30/2022 | $9.22 | (11.28%) | 1.54% | 1.42%(c) | 1.41% | 80% | $2,609 |
| Year Ended 4/30/2021 | $10.77 | 4.96% | 1.68% | 1.45%(c) | 1.53% | 74% | $4,450 |
| Year Ended 4/30/2020 | $10.86 | 9.35% | 1.70% | 1.51%(c) | 2.17% | 91% | $5,646 |
| Year Ended 4/30/2019 | $10.15 | 5.29% | 1.68% | 1.51%(c) | 2.45% | 65% | $5,045 |
| Institutional Class | |||||||
| Year Ended 4/30/2023 | $9.05 | 1.76% | 0.70% | 0.62%(c) | 3.62% | 79% | $577,092 |
| Year Ended 4/30/2022 | $9.22 | (10.57%) | 0.67% | 0.62%(c) | 2.24% | 80% | $380,743 |
| Year Ended 4/30/2021 | $10.77 | 5.73% | 0.68% | 0.63%(c) | 2.36% | 74% | $431,331 |
| Year Ended 4/30/2020 | $10.87 | 10.37% | 0.70% | 0.66%(c) | 3.02% | 91% | $364,875 |
| Year Ended 4/30/2019 | $10.15 | 6.19% | 0.68% | 0.66%(c) | 3.31% | 65% | $579,312 |
| Institutional 2 Class | |||||||
| Year Ended 4/30/2023 | $9.04 | 1.86% | 0.57% | 0.52% | 3.74% | 79% | $72,771 |
| Year Ended 4/30/2022 | $9.21 | (10.49%) | 0.56% | 0.52% | 2.34% | 80% | $51,119 |
| Year Ended 4/30/2021 | $10.76 | 5.94% | 0.58% | 0.53% | 2.45% | 74% | $49,251 |
| Year Ended 4/30/2020 | $10.85 | 10.39% | 0.58% | 0.56% | 3.13% | 91% | $6,267 |
| Year Ended 4/30/2019 | $10.14 | 6.29% | 0.59% | 0.58% | 3.52% | 65% | $8,052 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| Columbia Corporate Income Fund | Annual Report 2023 | 29 |
Financial Highlights (continued)
| Net asset value, beginning of period | Net investment income | Net realized and unrealized gain (loss) | Total from investment operations | Distributions from net investment income | Distributions from net realized gains | Total distributions to shareholders | |
| Institutional 3 Class | |||||||
| Year Ended 4/30/2023 | $9.22 | 0.33 | (0.18) | 0.15 | (0.33) | — | (0.33) |
| Year Ended 4/30/2022 | $10.77 | 0.25 | (1.32) | (1.07) | (0.26) | (0.22) | (0.48) |
| Year Ended 4/30/2021 | $10.86 | 0.28 | 0.38 | 0.66 | (0.28) | (0.47) | (0.75) |
| Year Ended 4/30/2020 | $10.15 | 0.33 | 0.72 | 1.05 | (0.34) | — | (0.34) |
| Year Ended 4/30/2019 | $9.88 | 0.34 | 0.27 | 0.61 | (0.34) | — | (0.34) |
| Notes to Financial Highlights | |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | The benefits derived from expense reductions had an impact of less than 0.01%. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 30 | Columbia Corporate Income 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) | |
| Institutional 3 Class | |||||||
| Year Ended 4/30/2023 | $9.04 | 1.80% | 0.52% | 0.47% | 3.71% | 79% | $764,790 |
| Year Ended 4/30/2022 | $9.22 | (10.43%) | 0.51% | 0.47% | 2.39% | 80% | $864,900 |
| Year Ended 4/30/2021 | $10.77 | 5.99% | 0.52% | 0.47% | 2.49% | 74% | $875,524 |
| Year Ended 4/30/2020 | $10.86 | 10.44% | 0.53% | 0.50% | 3.17% | 91% | $556,117 |
| Year Ended 4/30/2019 | $10.15 | 6.34% | 0.53% | 0.52% | 3.44% | 65% | $442,521 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Corporate Income Fund | Annual Report 2023 | 31 |
Notes to Financial Statements
April 30, 2023
April 30, 2023
Note 1. Organization
Columbia Corporate Income Fund
(the Fund), a series of Columbia Funds Series Trust I (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different net investment income distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a
liquidation will be proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A and Class C shares are offered to the general public for investment. Class C shares automatically convert to Class A shares after 8 years. Advisor Class, Institutional Class, Institutional 2 Class
and Institutional 3 Class shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional investors and to certain other investors as also described in the
Fund’s prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The Fund received a reimbursement for expenses overbilled by a third party. Such reimbursement is
included as an offset to other expenses on the Statement of Operations. All fee waivers and expense reimbursements by Columbia Management Investment Advisers, LLC and its affiliates were applied before giving effect
to the third party reimbursement.
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.
Debt securities generally are
valued based on prices obtained from pricing services, which are intended to reflect market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing
techniques that take into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes.
Debt securities for which quotations are not readily available or not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities
maturing in 60 days or less are valued primarily at amortized market value, unless this method results in a valuation that management believes does not approximate fair value.
Senior loan securities for which
reliable market quotations are readily available are generally valued by pricing services at the average of the bids received.
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.
| 32 | Columbia Corporate Income Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Futures and options on futures
contracts are valued based upon the settlement price at the close of regular trading on their principal exchanges or, in the absence of a settlement price, at the mean of the latest quoted bid and ask prices.
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.
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 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.
| Columbia Corporate Income Fund | Annual Report 2023 | 33 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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.
Futures contracts
Futures contracts are
exchange-traded and represent commitments for the future purchase or sale of an asset at a specified price on a specified date. The Fund bought and sold futures contracts to manage the duration and yield curve
exposure of the Fund versus the benchmark and to manage exposure to movements in interest rates. These instruments may be used for other purposes in future periods. Upon entering into futures contracts, the Fund
bears risks that it may not achieve the anticipated benefits of the futures contracts and may realize a loss. Additional risks include counterparty credit risk, the possibility of an illiquid market, and that a change
in the value of the contract or option may not correlate with changes in the value of the underlying asset.
Upon entering into a futures
contract, the Fund deposits cash or securities with the broker, known as a futures commission merchant (FCM), in an amount sufficient to meet the initial margin requirement. The initial margin deposit must be
maintained at an established level over the life of the contract. Cash deposited as initial margin is recorded in the Statement of Assets and Liabilities as margin deposits. Securities deposited as initial margin are
designated in the Portfolio of Investments. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily change in the contract value and are
recorded as variation margin receivable or payable and are offset in unrealized gains or losses. The Fund 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.
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.
| 34 | Columbia Corporate Income Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
The following table is a summary of
the fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) at April 30, 2023:
| Asset derivatives | ||
| Risk exposure category | Statement of assets and liabilities location | Fair value ($) |
| Interest rate risk | Component of total distributable earnings (loss) — unrealized appreciation on futures contracts | 8,931,818* |
| * | Includes cumulative appreciation (depreciation) as reported in the tables following the Portfolio of Investments. Only the current day’s variation margin is reported in receivables or payables in the Statement of Assets and Liabilities. |
The following table indicates the
effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended April 30, 2023:
The following table is a summary
of the average outstanding volume by derivative instrument for the year ended April 30, 2023:
| Derivative instrument | Average notional amounts ($)* |
| Futures contracts — long | 388,268,122 |
| Futures contracts — short | 341,763,672 |
| * | Based on the ending quarterly outstanding amounts for the year ended April 30, 2023. |
Investments in senior loans
The Fund may invest in senior loan
assignments. When the Fund purchases an assignment of a senior loan, the Fund typically has direct rights against the borrower; provided, however, that the Fund’s rights may be more limited than the lender from
which it acquired the assignment and the Fund may be able to enforce its rights only through an administrative agent. Although certain senior loan assignments are secured by collateral, the Fund could experience
delays or limitations in realizing such collateral or have its interest subordinated to other indebtedness of the obligor. In the event that the administrator or collateral agent of a loan becomes insolvent or enters
into receivership or bankruptcy, the Fund may incur costs and delays in realizing payment or may suffer a loss of principal and/or interest. The risk of loss is greater for unsecured or subordinated loans. In
addition, senior loan assignments are vulnerable to market, economic or other conditions or events that may reduce the demand for senior loan assignments and certain senior loan assignments which were liquid when
purchased, may become illiquid.
| Columbia Corporate Income Fund | Annual Report 2023 | 35 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
The Fund may enter into senior loan
assignments where all or a portion of the loan may be unfunded. The Fund is obligated to fund these commitments at the borrower’s discretion. These commitments, if any, are generally traded and priced in the
same manner as other senior loan securities and are disclosed as unfunded senior loan commitments in the Fund’s Portfolio of Investments with a corresponding payable for investments purchased. The Fund
designates cash or liquid securities to cover these commitments.
Delayed delivery securities
The Fund may trade securities on
other than normal settlement terms, including securities purchased or sold on a “when-issued” or "forward commitment" basis. This may increase risk to the Fund since the other party to the transaction may
fail to deliver, which could cause the Fund to subsequently invest at less advantageous prices. The Fund designates cash or liquid securities in an amount equal to the delayed delivery commitment.
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
The trade date for senior loans
purchased in the primary market is the date on which the loan is allocated. The trade date for senior loans purchased in the secondary market is the date on which the transaction is entered into.
Income recognition
Interest income is recorded on an
accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted. For
convertible securities, premiums attributable to the conversion feature are not amortized.
The Fund may place a debt security
on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. The Fund may also adjust
accrual rates when it becomes probable the full interest will not be collected and a partial payment will be received. A defaulted debt security is removed from non-accrual status when the issuer resumes interest
payments or when collectability of interest is reasonably assured.
Corporate actions and dividend
income are recorded on the ex-dividend date.
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.
The value of additional securities
received as an income payment through a payment in kind, if any, is recorded as interest income and increases the cost basis of such securities.
The Fund may receive other income
from senior loans, including amendment fees, consent fees and commitment fees. These fees are recorded as income when received by the Fund. These amounts are included in Interest Income in the Statement of
Operations.
| 36 | Columbia Corporate Income Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 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.
Distributions to shareholders
Distributions from net investment
income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
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.
| Columbia Corporate Income Fund | Annual Report 2023 | 37 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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 0.50% to 0.34% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30, 2023 was 0.49% 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, effective through August 31, 2024, Institutional 2 Class shares are
subject to a contractual transfer agency fee annual limitation of not more than 0.05% and Institutional 3 Class shares are subject to a contractual transfer agency fee annual limitation of not more than 0.00% of the
average daily net assets attributable to each share class.
| 38 | Columbia Corporate Income Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
For the year ended April
30, 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 | 0.18 |
| Advisor Class | 0.17 |
| Class C | 0.18 |
| Institutional Class | 0.18 |
| Institutional 2 Class | 0.05 |
| Institutional 3 Class | 0.00 |
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended April 30, 2023, these minimum account balance fees reduced total expenses of
the Fund by $1,001.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A and Class C shares of the Fund. Also under the Plans, the Fund pays a monthly
distribution fee to the Distributor at the maximum annual rate of 0.55% of the average daily net assets attributable to Class C shares of the Fund.
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended April 30, 2023, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 4.75 | 0.50 - 1.00(a) | 36,893 |
| Class C | — | 1.00(b) | 316 |
| (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.
| Columbia Corporate Income Fund | Annual Report 2023 | 39 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 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:
| September 1, 2021 through August 31, 2024 | |||||
| Class A | 0.87% | ||||
| Advisor Class | 0.62 | ||||
| Class C | 1.42 | ||||
| Institutional Class | 0.62 | ||||
| Institutional 2 Class | 0.52 | ||||
| Institutional 3 Class | 0.47 |
Under the agreement governing
these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes
(including foreign transaction taxes), expenses associated with investments in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and
brokerage commissions, costs related to any securities lending program, dividend expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed
money, interest, 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, effective through August 31, 2024, is the Transfer Agent’s
contractual agreement to limit total transfer agency fees to an annual rate of not more than 0.05% for Institutional 2 Class and 0.00% for Institutional 3 Class of the average daily net assets attributable to each
share class, unless sooner terminated at the sole discretion of the Board of Trustees. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the
Investment Manager or its affiliates in future periods.
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At April 30, 2023, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, derivative investments, tax straddles, principal and/or interest from fixed income securities, defaulted
securities/troubled debt, capital loss carryforwards, trustees’ deferred compensation and distributions. To the extent these differences were permanent, reclassifications were made among the components of the
Fund’s net assets.Temporary differences do not require reclassifications.
The following reclassifications
were made:
| Excess of distributions over net investment income ($) | Accumulated net realized (loss) ($) | Paid in capital ($) |
| 403,125 | (403,124) | (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.
| 40 | Columbia Corporate Income Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended April 30, 2023 | Year Ended April 30, 2022 | ||||
| Ordinary income ($) | Long-term capital gains ($) | Total ($) | Ordinary income ($) | Long-term capital gains ($) | Total ($) |
| 54,947,335 | — | 54,947,335 | 47,640,113 | 22,768,659 | 70,408,772 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At April 30, 2023, the components
of distributable earnings on a tax basis were as follows:
| Undistributed ordinary income ($) | Undistributed long-term capital gains ($) | Capital loss carryforwards ($) | Net unrealized (depreciation) ($) |
| 5,187,007 | — | (107,765,180) | (140,896,845) |
At April 30, 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) ($) | Net unrealized (depreciation) ($) |
| 1,793,752,799 | 3,356,097 | (144,252,942) | (140,896,845) |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
The following capital loss
carryforwards, determined at April 30, 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 April 30,
2023, capital loss carryforwards utilized, if any, were as follows:
| No expiration short-term ($) | No expiration long-term ($) | Total ($) | Utilized ($) |
| (44,928,785) | (62,836,395) | (107,765,180) | — |
Management of the Fund has
concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at
a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the
prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio
information
The cost of purchases and
proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $1,243,351,571 and $1,127,487,231, respectively, for the year ended April 30, 2023, of which $174,819,732 and
$148,322,125, respectively, were U.S. government securities. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes
referred to as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
| Columbia Corporate Income Fund | Annual Report 2023 | 41 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 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 April 30, 2023 was as follows:
| Borrower or lender | Average loan balance ($) | Weighted average interest rate (%) | Number of days with outstanding loans |
| Lender | 850,000 | 4.75 | 10 |
Interest income earned by the Fund
is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at April 30, 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 April 30, 2023.
Note 9. Fund
reorganization
At the close of business on
January 21, 2022, the Fund acquired the assets and assumed the identified liabilities of BMO Corporate Income Fund (the Acquired Fund), a series of BMO Funds Inc. The reorganization was completed after
shareholders of the Acquired Fund approved a plan of reorganization at a shareholder meeting held on January 7, 2022. The purpose of the reorganization was to combine two funds with comparable investment objectives
and strategies.
The aggregate net assets of the
Fund immediately before the reorganization were $1,506,560,053 and the combined net assets immediately after the reorganization were $1,820,085,333.
The reorganization was accomplished
by a tax-free exchange of 23,832,742 shares of the Acquired Fund valued at $313,525,280 (including $6,649,604 of unrealized appreciation/(depreciation)).
In exchange for the Acquired
Fund’s shares, the Fund issued the following number of shares:
| 42 | Columbia Corporate Income Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
| Shares | |
| Class A | 5,714,967 |
| Advisor Class | 24,537,894 |
For financial reporting purposes,
net assets received and shares issued by the Fund were recorded at fair value; however, the Acquired Fund’s cost of investments was carried forward.
The Fund’s financial
statements reflect both the operations of the Fund for the period prior to the reorganization and the combined Fund for the period subsequent to the reorganization. Because the combined investment portfolios have been
managed as a single integrated portfolio since the reorganization was completed, it is not practicable to separate the amounts of revenue and earnings of the Acquired Fund that have been included in the combined
Fund’s Statement of Operations since the reorganization was completed.
Assuming the reorganization had
been completed on May 1, 2021, the Fund’s pro-forma results of operations for the year ended April 30, 2022 would have been approximately:
| ($) | |
| Net investment income | 45,018,000 |
| Net realized gain | 9,130,000 |
| Net change in unrealized appreciation/(depreciation) | (240,761,000) |
| Net decrease in net assets from operations | (186,613,000) |
Note 10. Significant
risks
Credit risk
Credit risk is the risk that the
value of debt instruments in the Fund’s portfolio may decline because the issuer defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial obligations,
such as making payments to the Fund when due. Credit rating agencies assign credit ratings to certain debt instruments to indicate their credit risk. Lower-rated or unrated debt instruments held by the Fund may
present increased credit risk as compared to higher-rated debt instruments.
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.
Interest rate risk
Interest rate risk is the risk of
losses attributable to changes in interest rates. In general, if interest rates rise, the values of debt instruments tend to fall, and if interest rates fall, the values of debt instruments tend to rise. Actions by
governments and central banking authorities can result in increases or decreases in interest rates. Higher periods of inflation could lead such authorities to raise interest rates. Increasing interest rates may
negatively affect the value of debt securities held by the Fund, resulting in a negative impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt
security, the greater its sensitivity to changes in interest rates. The Fund is subject to the risk that the income generated by its investments may not keep pace with inflation.
Liquidity risk
Liquidity risk is the risk
associated with a lack of marketability of investments which may make it difficult to sell the investment at a desirable time or price. Changing regulatory, market or other conditions or environments (for example, the
interest rate or credit environments) may adversely affect the liquidity of the Fund’s investments. The Fund may have to accept a lower selling price for the holding, sell other investments, or forego another,
more appealing investment opportunity.
| Columbia Corporate Income Fund | Annual Report 2023 | 43 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Generally, the less liquid the market at the time
the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. A less liquid market can lead to an increase in Fund redemptions, which may negatively impact Fund performance and
net asset value per share, including, for example, if the Fund is forced to sell securities in a down market.
Market 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 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, restricted cross-border payments and limited access to investments and/or assets in certain international markets and/or
issuers. These developments and other related events could negatively impact Fund performance.
Shareholder concentration risk
At April 30, 2023, affiliated
shareholders of record owned 70.6% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the
Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of
less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 11. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 12. Information
regarding pending and settled legal proceedings
Ameriprise Financial and certain
of its affiliates 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.
| 44 | Columbia Corporate Income Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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 Corporate Income Fund | Annual Report 2023 | 45 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust I and Shareholders of Columbia Corporate Income Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Corporate Income Fund (one of the funds constituting Columbia Funds Series Trust I, referred to hereafter as the "Fund") as of
April 30, 2023, the related statement of operations for the year ended April 30, 2023, the statement of changes in net assets for each of the two years in the period ended April 30, 2023, including the related notes,
and the financial highlights for each of the five years in the period ended April 30, 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 April 30, 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 April 30,
2023 and the financial highlights for each of the five years in the period ended April 30, 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 April 30, 2023 by correspondence with the custodian, transfer agent, brokers and agent banks; when
replies were not received from brokers and agent banks, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
June 22, 2023
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
| 46 | Columbia Corporate Income Fund | Annual Report 2023 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended April 30, 2023. Shareholders will be notified in early 2024 of the amounts for use in preparing 2023 income tax returns.
| Section 163(j) Interest Dividends | |
| 99.80% |
Section 163(j) Interest Dividends.
The percentage of ordinary income distributed during the fiscal year that shareholders may treat as interest income for purposes of IRC Section 163(j), subject to holding period requirements and other limitations.
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 and other relevant Board experience |
| 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 | 174 | 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 Corporate Income Fund | Annual Report 2023 | 47 |
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 and other relevant Board experience |
| 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 | 174 | 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 | 174 | 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) (financial services), 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 | 172 | 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 (former mutual fund complex), January 2015-December 2017 |
| 48 | Columbia Corporate Income 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 and other relevant Board experience |
| 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 | 172 | Treasurer, Edinburgh University US Trust Board, since January 2023; Member, HBS Community Action Partners Board, since September 2022; former Director, University of Edinburgh Business School (Member of US Board), 2004-2019; former Director, Boston Public Library Foundation, 2008-2017 |
| 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 | 174 | Former Trustee, MA Taxpayers Foundation, 1997-2022; former Director, The MA Business Roundtable, 2003-2019; former Chairperson, Innovation Index Advisory Committee, MA Technology Collaborative, 1997-2020 |
| 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 | 174 | 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 | 174 | Director, SpartanNash Company since November 2013 (Chair of the Board, since May 2021) (food distributor); Director, Aircastle Limited (Chair of Audit Committee) (aircraft leasing), since August 2006; 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 | 172 | None |
| Columbia Corporate Income Fund | Annual Report 2023 | 49 |
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 and other relevant Board experience |
| 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 | 172 | 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 Senior Adviser to The Carlyle Group (financial services), March 2008-September 2008; former Governance Consultant to Bridgewater Associates, January 2013-December 2015 |
| 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. | 174 | Director, Valmont Industries, Inc. (irrigation systems manufacturer), since 2012; Trustee, Carleton College (on the Investment Committee), since 1987; Trustee, Carnegie Endowment for International Peace (on the Investment Committee), since 2009 |
| 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 | 172 | 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 |
| 50 | Columbia Corporate Income 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 and other relevant Board experience |
| 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 | 174 | Former Director, NAPE (National Alliance for Partnerships in Equity) Education Foundation, October 2016-October 2020; Advisory Board, Jennersville YMCA, since 2022 |
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 and other relevant Board experience |
| 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 | 174 | 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 |
| * | 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 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.
| Columbia Corporate Income Fund | Annual Report 2023 | 51 |
TRUSTEES AND OFFICERS (continued)
(Unaudited)
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:
(Unaudited)
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
| 52 | Columbia Corporate Income Fund | Annual Report 2023 |
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 |
| 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. |
Liquidity Risk
Management Program
(Unaudited)
Pursuant to Rule 22e-4 under the
1940 Act, the Fund has adopted a liquidity risk management program (Program). The Program’s principal objectives include assessing, managing and periodically reviewing the Fund’s liquidity risk. Liquidity
risk is defined as the risk that the Fund could not meet redemption requests without significant dilution of remaining investors’ interests in the Fund.
The Board has appointed the
Investment Manager as the program administrator for the Fund’s Program. The Investment Manager has delegated oversight of the Program to its Liquidity Risk Management Committee (the Committee). At a board
meeting during the fiscal period, the Committee provided the Board with a report addressing the operations of the program and assessing its adequacy and effectiveness of implementation for the period January 1, 2022,
through December 31, 2022, including:
| • | the Fund had sufficient liquidity to both meet redemptions and operate effectively on behalf of shareholders; |
| • | there were no material changes to the Program during the period; |
| • | the implementation of the Program was effective to manage the Fund’s liquidity risk; and |
| • | the Program operated adequately during the period. |
There can be no assurance that the
Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an
investment in the Fund may be subject.
| Columbia Corporate Income Fund | Annual Report 2023 | 53 |
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/
ANN136_04_N01_(06/23)
Columbia U.S.
Treasury Index 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 U.S. Treasury Index 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 U.S. Treasury Index
Fund | Annual Report 2023
Fund at a Glance
(Unaudited)
(Unaudited)
Investment objective
The Fund
seeks total return that corresponds to the total return of the FTSE USBIG Treasury Index, before fees and expenses.
| Columbia U.S. Treasury Index Fund | Annual Report 2023 | 3 |
Fund at a Glance (continued)
(Unaudited)
(Unaudited)
Performance of a hypothetical $10,000 investment (April 30, 2013 — April 30, 2023)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia U.S. Treasury Index Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund
distributions or on the redemption of Fund shares.
| 4 | Columbia U.S. Treasury Index Fund | Annual Report 2023 |
Manager Discussion of Fund Performance
(Unaudited)
(Unaudited)
At April 30, 2023, approximately
81.63% 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
April 30, 2023, Class A shares of Columbia U.S. Treasury Index Fund returned -1.26%. The Fund’s benchmark, the FTSE USBIG Treasury Index, returned -1.04% for the same time period. Mutual funds, unlike unmanaged
indices, incur operating expenses.
Market overview
During the 12-month period ended
April 30, 2023, U.S. Federal Reserve (Fed) monetary policy was the dominant factor in the performance of the U.S. Treasury market. Initially, the Fed began adjusting the overnight federal funds target rate in 25 basis
point increments. (A basis point is 1/100 of a percent.) As inflation continued to accelerate during the period, and it was apparent that Fed policy was lagging, rate hikes increased to 50bps and then 75bps increments
through the end of 2022. Over the course of the 12-month period, the Fed moved the overnight rate 475bps higher, a historically unprecedented pace.
The overall U.S. Treasury market
reflected the Fed pace with yields increasing at an accelerating rate as the period progressed. U.S. Treasury yields moved higher in response with the 10-year Treasury yield peaking at 4.24% in late October 2022, and
the Treasury yield curve became inverted as the market anticipated recession. As inflation numbers began to moderate in the fourth quarter of 2022, yields adjusted and moved lower to end the year approximately
100-150bps higher.
Rates spiked higher in March 2023
but soon began to decline as the failure of three U.S. banks and collapse of European giant Credit Suisse raised fears of a financial crisis. The Fed implemented a new lending program to backstop bank liquidity in
response, while the market began to anticipate Fed rate cuts over the second half of the year. The outlook for easier monetary policy and a flight to safety in the wake of banking concerns led Treasury yields to move
sharply lower. As of April 30, 2023, the yield on the 10-year Treasury note closed at 3.44% versus 2.89% 12 months earlier.
The Fund’s notable
detractors during the period
| • | The Fund attempts to match the return of its benchmark, the unmanaged FTSE USBIG Treasury Index. |
| • | The negative return for the benchmark was driven by securities with longer than 10-year maturities with a total return of -7.33%. |
The Fund’s notable
contributors during the period
| • | The front end of the yield curve actually posted a positive return of 0.93% as the shorter duration (interest rate sensitivity) of these issues mitigated the negative price pressure and the benchmark was able to capture the higher yields as the market priced higher. |
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. The U.S. government may be unable or unwilling to honor its financial obligations. Securities issued or guaranteed by federal agencies and U.S. government-sponsored instrumentalities may or
may not be backed by the full faith and credit of the U.S. government. A rise in interest rates may result in a price decline of fixed-income instruments held by the Fund, negatively impacting its performance and NAV. Falling rates may result in the Fund investing
in lower yielding debt instruments, lowering the Fund’s income and yield. These risks may be heightened for longer maturity and duration securities. The Fund’s net value will generally decline when the
performance of its targeted index declines. See the Fund’s prospectus for more information on these and other risks.
The views expressed in this report
reflect the current views of the respective parties 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.
| Columbia U.S. Treasury Index Fund | Annual Report 2023 | 5 |
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.
| 6 | Columbia U.S. Treasury Index Fund | Annual Report 2023 |
Portfolio of Investments
April 30, 2023
April 30, 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.
| Columbia U.S. Treasury Index Fund | Annual Report 2023 | 7 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 8 | Columbia U.S. Treasury Index Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
Notes to Portfolio of
Investments
| (a) | The rate shown is the seven-day current annualized yield at April 30, 2023. |
| (b) | 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 April 30, 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, 5.046% | ||||||||
| 12,203,954 | 150,452,514 | (159,027,500) | (1,052) | 3,627,916 | (1,913) | 151,130 | 3,629,368 | |
Fair value
measurements
The Fund categorizes
its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that
reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input
that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For
example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active
market.
Fair value inputs are
summarized in the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia U.S. Treasury Index Fund | Annual Report 2023 | 9 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
Fair value measurements (continued)
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
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 April 30, 2023:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| U.S. Treasury Obligations | — | 1,182,081,225 | — | 1,182,081,225 |
| Money Market Funds | 3,627,916 | — | — | 3,627,916 |
| Total Investments in Securities | 3,627,916 | 1,182,081,225 | — | 1,185,709,141 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The Fund’s assets assigned to
the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical
assets.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 10 | Columbia U.S. Treasury Index Fund | Annual Report 2023 |
Statement of Assets and Liabilities
April 30, 2023
April 30, 2023
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $1,261,763,106) | $1,182,081,225 |
| Affiliated issuers (cost $3,627,699) | 3,627,916 |
| Receivable for: | |
| Investments sold | 12,852,447 |
| Capital shares sold | 2,477,825 |
| Dividends | 20,795 |
| Interest | 8,345,290 |
| Expense reimbursement due from Investment Manager | 7,525 |
| Trustees’ deferred compensation plan | 122,827 |
| Total assets | 1,209,535,850 |
| Liabilities | |
| Payable for: | |
| Investments purchased | 13,391,398 |
| Capital shares purchased | 513,216 |
| Distributions to shareholders | 2,349,510 |
| Management services fees | 12,983 |
| Distribution and/or service fees | 300 |
| Compensation of board members | 26,153 |
| Trustees’ deferred compensation plan | 122,827 |
| Total liabilities | 16,416,387 |
| Net assets applicable to outstanding capital stock | $1,193,119,463 |
| Represented by | |
| Paid in capital | 1,338,437,505 |
| Total distributable earnings (loss) | (145,318,042) |
| Total - representing net assets applicable to outstanding capital stock | $1,193,119,463 |
| Class A | |
| Net assets | $68,565,009 |
| Shares outstanding | 6,719,426 |
| Net asset value per share | $10.20 |
| Class C | |
| Net assets | $887,562 |
| Shares outstanding | 86,980 |
| Net asset value per share | $10.20 |
| Institutional Class | |
| Net assets | $498,883,646 |
| Shares outstanding | 48,872,551 |
| Net asset value per share | $10.21 |
| Institutional 2 Class | |
| Net assets | $28,313,548 |
| Shares outstanding | 2,779,907 |
| Net asset value per share | $10.19 |
| Institutional 3 Class | |
| Net assets | $596,469,698 |
| Shares outstanding | 58,105,895 |
| Net asset value per share | $10.27 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia U.S. Treasury Index Fund | Annual Report 2023 | 11 |
Statement of Operations
Year Ended April 30, 2023
Year Ended April 30, 2023
| Net investment income | |
| Income: | |
| Dividends — affiliated issuers | $151,130 |
| Interest | 24,172,082 |
| Interfund lending | 310 |
| Total income | 24,323,522 |
| Expenses: | |
| Management services fees | 4,563,742 |
| Distribution and/or service fees | |
| Class A | 90,559 |
| Class C | 13,108 |
| Compensation of board members | 32,047 |
| Total expenses | 4,699,456 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (2,656,199) |
| Expense reduction | (580) |
| Total net expenses | 2,042,677 |
| Net investment income | 22,280,845 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (60,256,874) |
| Investments — affiliated issuers | (1,913) |
| Net realized loss | (60,258,787) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | 23,293,532 |
| Investments — affiliated issuers | (1,052) |
| Net change in unrealized appreciation (depreciation) | 23,292,480 |
| Net realized and unrealized loss | (36,966,307) |
| Net decrease in net assets resulting from operations | $(14,685,462) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 12 | Columbia U.S. Treasury Index Fund | Annual Report 2023 |
Statement of Changes in Net Assets
| Year Ended April 30, 2023 | Year Ended April 30, 2022 | |
| Operations | ||
| Net investment income | $22,280,845 | $17,605,832 |
| Net realized loss | (60,258,787) | (970,887) |
| Net change in unrealized appreciation (depreciation) | 23,292,480 | (124,254,422) |
| Net decrease in net assets resulting from operations | (14,685,462) | (107,619,477) |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (1,129,848) | (508,052) |
| Class C | (17,057) | (25,091) |
| Institutional Class | (9,181,389) | (7,204,929) |
| Institutional 2 Class | (432,012) | (725,831) |
| Institutional 3 Class | (11,631,519) | (12,283,759) |
| Total distributions to shareholders | (22,391,825) | (20,747,662) |
| Increase (decrease) in net assets from capital stock activity | (62,638,706) | 182,947,241 |
| Total increase (decrease) in net assets | (99,715,993) | 54,580,102 |
| Net assets at beginning of year | 1,292,835,456 | 1,238,255,354 |
| Net assets at end of year | $1,193,119,463 | $1,292,835,456 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| Columbia U.S. Treasury Index Fund | Annual Report 2023 | 13 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| April 30, 2023 | April 30, 2022 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 4,981,834 | 51,719,018 | 823,155 | 9,394,626 |
| Distributions reinvested | 37,842 | 383,115 | 25,050 | 286,578 |
| Redemptions | (1,675,602) | (17,122,290) | (1,667,328) | (19,113,195) |
| Net increase (decrease) | 3,344,074 | 34,979,843 | (819,123) | (9,431,991) |
| Class C | ||||
| Subscriptions | 4,772 | 48,327 | 20,460 | 237,356 |
| Distributions reinvested | 1,682 | 17,057 | 2,179 | 25,022 |
| Redemptions | (160,991) | (1,623,685) | (360,822) | (4,116,126) |
| Net decrease | (154,537) | (1,558,301) | (338,183) | (3,853,748) |
| Institutional Class | ||||
| Subscriptions | 12,613,230 | 126,812,970 | 7,139,052 | 81,835,936 |
| Distributions reinvested | 880,119 | 8,914,230 | 611,158 | 6,987,861 |
| Redemptions | (6,904,405) | (70,132,989) | (12,069,469) | (137,444,941) |
| Net increase (decrease) | 6,588,944 | 65,594,211 | (4,319,259) | (48,621,144) |
| Institutional 2 Class | ||||
| Subscriptions | 1,917,292 | 19,249,047 | 1,498,220 | 17,118,267 |
| Distributions reinvested | 21,859 | 220,532 | 13,042 | 149,480 |
| Redemptions | (3,325,044) | (34,809,795) | (1,968,952) | (22,484,879) |
| Net decrease | (1,385,893) | (15,340,216) | (457,690) | (5,217,132) |
| Institutional 3 Class | ||||
| Subscriptions | 32,582,117 | 333,437,917 | 30,992,063 | 359,650,385 |
| Distributions reinvested | 1,137,179 | 11,596,979 | 1,066,894 | 12,261,812 |
| Redemptions | (48,027,100) | (491,349,139) | (10,775,546) | (121,840,941) |
| Net increase (decrease) | (14,307,804) | (146,314,243) | 21,283,411 | 250,071,256 |
| Total net increase (decrease) | (5,915,216) | (62,638,706) | 15,349,156 | 182,947,241 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 14 | Columbia U.S. Treasury Index 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 ratios of expenses and net investment income are annualized for periods of less than one year. The portfolio turnover rate is
calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be
higher.
| Net asset value, beginning of period | Net investment income | Net realized and unrealized gain (loss) | Total from investment operations | Distributions from net investment income | Distributions from net realized gains | Total distributions to shareholders | |
| Class A | |||||||
| Year Ended 4/30/2023 | $10.52 | 0.19 | (0.33) | (0.14) | (0.18) | — | (0.18) |
| Year Ended 4/30/2022 | $11.52 | 0.12 | (0.98) | (0.86) | (0.12) | (0.02) | (0.14) |
| Year Ended 4/30/2021 | $12.30 | 0.14 | (0.71) | (0.57) | (0.14) | (0.07) | (0.21) |
| Year Ended 4/30/2020 | $11.00 | 0.21 | 1.30 | 1.51 | (0.21) | — | (0.21) |
| Year Ended 4/30/2019 | $10.75 | 0.21 | 0.25 | 0.46 | (0.21) | — | (0.21) |
| Class C | |||||||
| Year Ended 4/30/2023 | $10.52 | 0.11 | (0.31) | (0.20) | (0.12) | — | (0.12) |
| Year Ended 4/30/2022 | $11.52 | 0.04 | (0.97) | (0.93) | (0.05) | (0.02) | (0.07) |
| Year Ended 4/30/2021 | $12.29 | 0.06 | (0.70) | (0.64) | (0.06) | (0.07) | (0.13) |
| Year Ended 4/30/2020 | $11.00 | 0.13 | 1.29 | 1.42 | (0.13) | — | (0.13) |
| Year Ended 4/30/2019 | $10.75 | 0.13 | 0.25 | 0.38 | (0.13) | — | (0.13) |
| Institutional Class | |||||||
| Year Ended 4/30/2023 | $10.52 | 0.20 | (0.31) | (0.11) | (0.20) | — | (0.20) |
| Year Ended 4/30/2022 | $11.53 | 0.14 | (0.99) | (0.85) | (0.14) | (0.02) | (0.16) |
| Year Ended 4/30/2021 | $12.30 | 0.16 | (0.70) | (0.54) | (0.16) | (0.07) | (0.23) |
| Year Ended 4/30/2020 | $11.01 | 0.23 | 1.29 | 1.52 | (0.23) | — | (0.23) |
| Year Ended 4/30/2019 | $10.75 | 0.22 | 0.27 | 0.49 | (0.23) | — | (0.23) |
| Institutional 2 Class | |||||||
| Year Ended 4/30/2023 | $10.50 | 0.20 | (0.31) | (0.11) | (0.20) | — | (0.20) |
| Year Ended 4/30/2022 | $11.50 | 0.13 | (0.97) | (0.84) | (0.14) | (0.02) | (0.16) |
| Year Ended 4/30/2021 | $12.27 | 0.16 | (0.70) | (0.54) | (0.16) | (0.07) | (0.23) |
| Year Ended 4/30/2020 | $10.98 | 0.23 | 1.29 | 1.52 | (0.23) | — | (0.23) |
| Year Ended 4/30/2019 | $10.73 | 0.23 | 0.25 | 0.48 | (0.23) | — | (0.23) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 16 | Columbia U.S. Treasury Index 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 4/30/2023 | $10.20 | (1.26%) | 0.56% | 0.32%(c) | 1.86% | 56% | $68,565 |
| Year Ended 4/30/2022 | $10.52 | (7.54%) | 0.59% | 0.32%(c) | 1.03% | 31% | $35,499 |
| Year Ended 4/30/2021 | $11.52 | (4.66%) | 0.65% | 0.32%(c),(d) | 1.20% | 40% | $48,338 |
| Year Ended 4/30/2020 | $12.30 | 13.88% | 0.65% | 0.33%(c),(d) | 1.83% | 54% | $51,890 |
| Year Ended 4/30/2019 | $11.00 | 4.32% | 0.65% | 0.35%(c),(d) | 1.93% | 50% | $35,707 |
| Class C | |||||||
| Year Ended 4/30/2023 | $10.20 | (1.90%) | 1.20% | 0.97%(c) | 1.04% | 56% | $888 |
| Year Ended 4/30/2022 | $10.52 | (8.14%) | 1.29% | 0.97%(c) | 0.37% | 31% | $2,540 |
| Year Ended 4/30/2021 | $11.52 | (5.22%) | 1.40% | 0.99%(c),(d) | 0.53% | 40% | $6,680 |
| Year Ended 4/30/2020 | $12.29 | 13.00% | 1.41% | 1.03%(c),(d) | 1.12% | 54% | $6,910 |
| Year Ended 4/30/2019 | $11.00 | 3.59% | 1.40% | 1.05%(c),(d) | 1.23% | 50% | $2,801 |
| Institutional Class | |||||||
| Year Ended 4/30/2023 | $10.21 | (1.02%) | 0.40% | 0.17%(c) | 1.98% | 56% | $498,884 |
| Year Ended 4/30/2022 | $10.52 | (7.48%) | 0.40% | 0.17%(c) | 1.18% | 31% | $444,883 |
| Year Ended 4/30/2021 | $11.53 | (4.44%) | 0.40% | 0.17%(c) | 1.35% | 40% | $537,273 |
| Year Ended 4/30/2020 | $12.30 | 13.95% | 0.40% | 0.18%(c) | 1.98% | 54% | $581,931 |
| Year Ended 4/30/2019 | $11.01 | 4.57% | 0.40% | 0.20%(c) | 2.08% | 50% | $323,226 |
| Institutional 2 Class | |||||||
| Year Ended 4/30/2023 | $10.19 | (1.02%) | 0.40% | 0.17% | 1.94% | 56% | $28,314 |
| Year Ended 4/30/2022 | $10.50 | (7.42%) | 0.40% | 0.17% | 1.18% | 31% | $43,738 |
| Year Ended 4/30/2021 | $11.50 | (4.45%) | 0.40% | 0.17% | 1.35% | 40% | $53,191 |
| Year Ended 4/30/2020 | $12.27 | 13.98% | 0.40% | 0.18% | 1.98% | 54% | $51,284 |
| Year Ended 4/30/2019 | $10.98 | 4.48% | 0.40% | 0.20% | 2.10% | 50% | $35,855 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| Columbia U.S. Treasury Index Fund | Annual Report 2023 | 17 |
Financial Highlights (continued)
| Net asset value, beginning of period | Net investment income | Net realized and unrealized gain (loss) | Total from investment operations | Distributions from net investment income | Distributions from net realized gains | Total distributions to shareholders | |
| Institutional 3 Class | |||||||
| Year Ended 4/30/2023 | $10.58 | 0.20 | (0.31) | (0.11) | (0.20) | — | (0.20) |
| Year Ended 4/30/2022 | $11.59 | 0.14 | (0.99) | (0.85) | (0.14) | (0.02) | (0.16) |
| Year Ended 4/30/2021 | $12.37 | 0.16 | (0.71) | (0.55) | (0.16) | (0.07) | (0.23) |
| Year Ended 4/30/2020 | $11.07 | 0.23 | 1.30 | 1.53 | (0.23) | — | (0.23) |
| Year Ended 4/30/2019 | $10.81 | 0.23 | 0.26 | 0.49 | (0.23) | — | (0.23) |
| Notes to Financial Highlights | |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (d) | Ratios include the impact of voluntary waivers paid by the Investment Manager. For the periods indicated below, if the Investment Manager had not paid these voluntary waivers, the Fund’s net expense ratio would increase by: |
| 4/30/2021 | 4/30/2020 | 4/30/2019 | |
| Class A | 0.03% | 0.10% | 0.10% |
| Class C | 0.05% | 0.15% | 0.15% |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 18 | Columbia U.S. Treasury Index 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) | |
| Institutional 3 Class | |||||||
| Year Ended 4/30/2023 | $10.27 | (1.00%) | 0.40% | 0.17% | 1.94% | 56% | $596,470 |
| Year Ended 4/30/2022 | $10.58 | (7.44%) | 0.40% | 0.17% | 1.19% | 31% | $766,175 |
| Year Ended 4/30/2021 | $11.59 | (4.49%) | 0.40% | 0.17% | 1.33% | 40% | $592,772 |
| Year Ended 4/30/2020 | $12.37 | 13.97% | 0.40% | 0.18% | 2.00% | 54% | $415,616 |
| Year Ended 4/30/2019 | $11.07 | 4.56% | 0.40% | 0.20% | 2.10% | 50% | $445,200 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia U.S. Treasury Index Fund | Annual Report 2023 | 19 |
Notes to Financial Statements
April 30, 2023
April 30, 2023
Note 1. Organization
Columbia U.S. Treasury Index Fund
(the Fund), a series of Columbia Funds Series Trust I (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different net investment income distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a
liquidation will be proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A and Class C shares are offered to the general public for investment. Class C shares automatically convert to Class A shares after 8 years. Institutional Class, Institutional 2 Class and
Institutional 3 Class shares are available through authorized investment professionals to omnibus retirement plans or to institutional investors and to certain other investors as also described in the Fund’s
prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
Debt securities generally are
valued based on prices obtained from pricing services, which are intended to reflect market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing
techniques that take into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes.
Debt securities for which quotations are not readily available or not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities
maturing in 60 days or less are valued primarily at amortized market value, unless this method results in a valuation that management believes does not approximate fair value.
Investments in open-end investment
companies (other than exchange-traded funds (ETFs)), are valued at the latest net asset value reported by those companies as of the valuation time.
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security, if
available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
| 20 | Columbia U.S. Treasury Index Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Interest income is recorded on an
accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted.
The Fund may place a debt security
on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. The Fund may also adjust
accrual rates when it becomes probable the full interest will not be collected and a partial payment will be received. A defaulted debt security is removed from non-accrual status when the issuer resumes interest
payments or when collectability of interest is reasonably assured.
Dividend income is recorded on the
ex-dividend date.
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable income and net capital gain, if any, for its
tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net income and certain other
amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to shareholders
Distributions from net investment
income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Recent accounting pronouncement
Tailored Shareholder Reports
| Columbia U.S. Treasury Index Fund | Annual Report 2023 | 21 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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 services. The management services fee is an annual fee that is equal to 0.40% of the Fund’s
daily net assets.
The Investment Manager, from the
management services fee it receives from the Fund, pays all operating expenses of the Fund, with the exception of brokerage fees and commissions, taxes, interest, fees and expenses of Board of Trustees who are not
officers, directors or employees of the Investment Manager or its affiliates, distribution and/or shareholder servicing and any extraordinary non-recurring expenses that may arise, including litigation fees.
Compensation of board members
Members of the Board of Trustees
who are not officers or employees of the Investment Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the
Deferred Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of
certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All
amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund. 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. A portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other allocations to
affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets. The expenses of the Chief Compliance Officer allocated to the Fund are payable by the
Investment Manager.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with 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 agency fees are
payable by the Investment Manager. 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. The Transfer
Agent also receives compensation from the Investment Manager for various shareholder services and reimbursements for certain out-of-pocket expenses.
| 22 | Columbia U.S. Treasury Index Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 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 April 30, 2023, these minimum account balance fees reduced total expenses of
the Fund by $580.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly service fee to the Distributor at the maximum annual rate of 0.15% of the average daily net assets attributable to Class A and Class C shares of the Fund. Also under the Plans, the Fund pays a monthly
distribution fee to the Distributor at the maximum annual rate of 0.65% of the average daily net assets attributable to Class C shares of the Fund.
Sales charges (unaudited)
For the year ended April 30, 2023,
there were no sales charges, including front-end charges and CDSCs, received by the Distributor for distributing Fund shares.
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:
| Fee rate(s) contractual August 31, 2023 | |
| Class A | 0.32% |
| Class C | 0.97 |
| Institutional Class | 0.17 |
| Institutional 2 Class | 0.17 |
| Institutional 3 Class | 0.17 |
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.
| Columbia U.S. Treasury Index Fund | Annual Report 2023 | 23 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At April 30, 2023, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, capital loss carryforwards, trustees’ deferred compensation and distributions. To the extent these
differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
The Fund did not have any permanent
differences; therefore, no reclassifications were made.
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended April 30, 2023 | Year Ended April 30, 2022 | ||||
| Ordinary income ($) | Long-term capital gains ($) | Total ($) | Ordinary income ($) | Long-term capital gains ($) | Total ($) |
| 22,391,825 | — | 22,391,825 | 17,854,919 | 2,892,743 | 20,747,662 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At April 30, 2023, the components
of distributable earnings on a tax basis were as follows:
| Undistributed ordinary income ($) | Undistributed long-term capital gains ($) | Capital loss carryforwards ($) | Net unrealized (depreciation) ($) |
| 1,972,315 | — | (60,390,821) | (84,402,056) |
At April 30, 2023, the cost of all
investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
| Federal tax cost ($) | Gross unrealized appreciation ($) | Gross unrealized (depreciation) ($) | Net unrealized (depreciation) ($) |
| 1,270,111,197 | 3,879,149 | (88,281,205) | (84,402,056) |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
The following capital loss
carryforwards, determined at April 30, 2023, may be available to reduce future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code. In addition, for the year ended April 30,
2023, capital loss carryforwards utilized, if any, were as follows:
| No expiration short-term ($) | No expiration long-term ($) | Total ($) | Utilized ($) |
| (7,906,155) | (52,484,666) | (60,390,821) | — |
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 $637,657,890 and $698,130,730, respectively, for the year ended April 30, 2023, of which $637,657,890 and
$698,130,730, respectively, were U.S. government securities. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
| 24 | Columbia U.S. Treasury Index Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes
referred to as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
Note 7. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the
Interfund Program during the year ended April 30, 2023 was as follows:
| Borrower or lender | Average loan balance ($) | Weighted average interest rate (%) | Number of days with outstanding loans |
| Lender | 3,100,000 | 3.60 | 1 |
Interest income earned by the Fund
is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at April 30, 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 April 30, 2023.
| Columbia U.S. Treasury Index Fund | Annual Report 2023 | 25 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Note 9. Significant
risks
Credit risk
Credit risk is the risk that the
value of debt instruments in the Fund’s portfolio may decline because the issuer defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial obligations,
such as making payments to the Fund when due. Credit rating agencies assign credit ratings to certain debt instruments to indicate their credit risk. Lower-rated or unrated debt instruments held by the Fund may
present increased credit risk as compared to higher-rated debt instruments.
Interest rate risk
Interest rate risk is the risk of
losses attributable to changes in interest rates. In general, if interest rates rise, the values of debt instruments tend to fall, and if interest rates fall, the values of debt instruments tend to rise. Actions by
governments and central banking authorities can result in increases or decreases in interest rates. Higher periods of inflation could lead such authorities to raise interest rates. Increasing interest rates may
negatively affect the value of debt securities held by the Fund, resulting in a negative impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt
security, the greater its sensitivity to changes in interest rates. The Fund is subject to the risk that the income generated by its investments may not keep pace with inflation.
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 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, restricted cross-border payments and limited access to investments and/or assets in certain international markets and/or
issuers. These developments and other related events could negatively impact Fund performance.
Passive investment risk
The Fund is not
“actively” managed and may be affected by a general decline in market segments related to its Index’s investment exposures. The Fund invests in securities or instruments included in, or believed by
the Investment Manager to be representative of the Index regardless of their investment merits. The Fund does not seek temporary defensive positions when markets decline or appear overvalued. The decision of whether
to remove a security from the tracking index is made by an independent index provider who is not affiliated with the Fund or the Investment Manager.
| 26 | Columbia U.S. Treasury Index Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Shareholder concentration risk
At April 30, 2023, affiliated
shareholders of record owned 83.9% 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 U.S. Treasury Index Fund | Annual Report 2023 | 27 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust I and Shareholders of Columbia U.S. Treasury Index Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia U.S. Treasury Index Fund (one of the funds constituting Columbia Funds Series Trust I, referred to hereafter as the "Fund") as
of April 30, 2023, the related statement of operations for the year ended April 30, 2023, the statement of changes in net assets for each of the two years in the period ended April 30, 2023, including the related
notes, and the financial highlights for each of the five years in the period ended April 30, 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 April 30, 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 April
30, 2023 and the financial highlights for each of the five years in the period ended April 30, 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 April 30, 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
June 22, 2023
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
| 28 | Columbia U.S. Treasury Index Fund | Annual Report 2023 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended April 30, 2023. Shareholders will be notified in early 2024 of the amounts for use in preparing 2023 income tax returns.
| Section 163(j) Interest Dividends | |
| 100.00% |
Section 163(j) Interest Dividends.
The percentage of ordinary income distributed during the fiscal year that shareholders may treat as interest income for purposes of IRC Section 163(j), subject to holding period requirements and other limitations.
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 and other relevant Board experience |
| 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 | 174 | 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 U.S. Treasury Index Fund | Annual Report 2023 | 29 |
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 and other relevant Board experience |
| 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 | 174 | 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 | 174 | 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) (financial services), 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 | 172 | 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 (former mutual fund complex), January 2015-December 2017 |
| 30 | Columbia U.S. Treasury Index 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 and other relevant Board experience |
| 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 | 172 | Treasurer, Edinburgh University US Trust Board, since January 2023; Member, HBS Community Action Partners Board, since September 2022; former Director, University of Edinburgh Business School (Member of US Board), 2004-2019; former Director, Boston Public Library Foundation, 2008-2017 |
| 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 | 174 | Former Trustee, MA Taxpayers Foundation, 1997-2022; former Director, The MA Business Roundtable, 2003-2019; former Chairperson, Innovation Index Advisory Committee, MA Technology Collaborative, 1997-2020 |
| 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 | 174 | 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 | 174 | Director, SpartanNash Company since November 2013 (Chair of the Board, since May 2021) (food distributor); Director, Aircastle Limited (Chair of Audit Committee) (aircraft leasing), since August 2006; 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 | 172 | None |
| Columbia U.S. Treasury Index Fund | Annual Report 2023 | 31 |
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 and other relevant Board experience |
| 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 | 172 | 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 Senior Adviser to The Carlyle Group (financial services), March 2008-September 2008; former Governance Consultant to Bridgewater Associates, January 2013-December 2015 |
| 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. | 174 | Director, Valmont Industries, Inc. (irrigation systems manufacturer), since 2012; Trustee, Carleton College (on the Investment Committee), since 1987; Trustee, Carnegie Endowment for International Peace (on the Investment Committee), since 2009 |
| 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 | 172 | 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 |
| 32 | Columbia U.S. Treasury Index 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 and other relevant Board experience |
| 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 | 174 | Former Director, NAPE (National Alliance for Partnerships in Equity) Education Foundation, October 2016-October 2020; Advisory Board, Jennersville YMCA, since 2022 |
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 and other relevant Board experience |
| 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 | 174 | 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 |
| * | 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 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.
| Columbia U.S. Treasury Index Fund | Annual Report 2023 | 33 |
TRUSTEES AND OFFICERS (continued)
(Unaudited)
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:
(Unaudited)
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
| 34 | Columbia U.S. Treasury Index Fund | Annual Report 2023 |
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 |
| 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. |
Liquidity Risk
Management Program
(Unaudited)
Pursuant to Rule 22e-4 under the
1940 Act, the Fund has adopted a liquidity risk management program (Program). The Program’s principal objectives include assessing, managing and periodically reviewing the Fund’s liquidity risk. Liquidity
risk is defined as the risk that the Fund could not meet redemption requests without significant dilution of remaining investors’ interests in the Fund.
The Board has appointed the
Investment Manager as the program administrator for the Fund’s Program. The Investment Manager has delegated oversight of the Program to its Liquidity Risk Management Committee (the Committee). At a board
meeting during the fiscal period, the Committee provided the Board with a report addressing the operations of the program and assessing its adequacy and effectiveness of implementation for the period January 1, 2022,
through December 31, 2022, including:
| • | the Fund had sufficient liquidity to both meet redemptions and operate effectively on behalf of shareholders; |
| • | there were no material changes to the Program during the period; |
| • | the implementation of the Program was effective to manage the Fund’s liquidity risk; and |
| • | the Program operated adequately during the period. |
There can be no assurance that the
Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an
investment in the Fund may be subject.
| Columbia U.S. Treasury Index Fund | Annual Report 2023 | 35 |
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/
ANN237_04_N01_(06/23)
Columbia Small Cap
Value Fund I
Not FDIC or NCUA Insured •
No Financial Institution Guarantee • May Lose Value
Table of Contents
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| 5 | |
| 7 | |
| 8 | |
| 15 | |
| 17 | |
| 18 | |
| 20 | |
| 24 | |
| 34 | |
| 35 | |
| 35 | |
| 41 |
If you elect to receive the
shareholder report for Columbia Small Cap Value Fund I (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 Small Cap Value Fund
I | Annual Report 2023
Fund at a Glance
(Unaudited)
(Unaudited)
Investment objective
The Fund
seeks long-term capital appreciation.
Portfolio management
Jeremy Javidi, CFA
Portfolio Manager
Managed Fund since 2005
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 Small Cap Value Fund I | Annual Report 2023 | 3 |
Fund at a Glance (continued)
(Unaudited)
(Unaudited)
Performance of a hypothetical $10,000 investment (April 30, 2013 — April 30, 2023)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Small Cap Value Fund I 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 Small Cap Value Fund I | Annual Report 2023 |
Manager Discussion of Fund Performance
(Unaudited)
(Unaudited)
For the 12-month period that ended
April 30, 2023, Class A shares of Columbia Small Cap Value Fund I returned -0.90% excluding sales charges. The Fund outperformed its benchmark, the Russell 2000 Value Index, which returned -7.99% for the same
period.
Market overview
U.S. equities performed unevenly
over the 12 months ending April 30, 2023, ending with mixed results. Sentiment was driven largely by expectations around the course of inflation and corresponding action by the U.S. Federal Reserve (Fed), which hiked
rates eight times by a combined 450 percentage points over the course of the period. Some upside early in the period was sparked by investors’ interpretation of Fed Chair Powell’s remarks after the Federal
Open Market Committee (FOMC) announced an anticipated 75-basis point rate hike at the end of July, which followed a 75-basis point hike in June. (A basis point is 1/100 of a percent.) What many seemingly heard
were hints that rate hikes will slow in concert with softening economic growth. That takeaway evaporated a month later when Fed chair Jerome Powell spoke at a symposium in Jackson Hole and prioritized fighting
inflation no matter how much pain the economy might suffer. His inflation-fighting resolve was confirmed by additional 75-basis point hikes in September and November and a 50-basis point hike in December, along with a
forecast showing no expectations for rate cuts until 2024.
Despite the rate-hike headwinds in
late 2022, equities attempted to rally moving into the final four months of the period. Growth stocks led the way, in stark contrast to their performance relative to value in 2022, as market participants seemed to be
warming up yet again to the notion of a softer landing, based on better-than-expected earnings, as well as constructive inflation and economic data. Markets reversed course during February 2023, as a blowout January
employment report and continued higher-for-longer messaging from the Fed dampened sentiment, along with mixed earnings reports and geopolitical uncertainties. In March, banking sector turmoil dominated headlines as
two banks failed quickly. While intervention to guarantee uninsured deposits and to provide emergency liquidity helped to limit any broader banking contagion, regional bank stocks still suffered. However, this bank
crisis brought with it a rate reprieve and heightened expectations for a Fed pivot, providing a tailwind for technology and other growth-oriented stocks. In addition, strong earnings reports from large technology
companies, such as Meta Platforms and Microsoft, were especially supportive, as were healthy consumer trends and guidance suggesting a possible soft-landing for the economy. Bullish investors also focused on the
potential for the Fed to signal a pause following another 25-basis point hike at its May 2023 meeting. Less constructive was the first read of first-quarter GDP, which showed a larger-than-expected deceleration to a
1.1% seasonally adjusted annual rate. Additional sources of concern included narrowing equity market leadership, the political stalemate on the debt ceiling and spending cuts and the UK’s decision to block
Microsoft’s acquisition of Activision. Also, although some bank earnings reports were better than feared, news that First Republic Bank would be put into receivership at the end of the period heightened concerns
that turmoil may continue in the banking sector.
Against this backdrop, the broad
U.S. equity market, as measured by the S&P 500 Index, had a return of 2.66% for the 12 months under review. Six of the 11 economic sectors within the S&P 500 Index delivered positive returns. Energy
stocks performed best, up more than 19% even though oil prices retreated steadily over the course of the period from levels near 20-year highs. Information technology, industrials, health care, consumer staples
and communication services rounded out the positive performers. Real estate stocks declined the most, followed by consumer discretionary, materials, financials and utilities. Growth stocks, as measured by the Russell
1000 Growth Index, modestly outperformed value, as represented by the Russell 1000 Value Index. Larger-cap stocks generally outperformed mid-caps and small-caps. The Russell 1000 Index returned 1.82%, while the
Russell 2000 returned -3.65% and the Russell Midcap Index returned -1.69%. Despite the continually shifting and mixed sentiment throughout the period, volatility was muted, with the price level of the VIX (CBOE
Market Volatility Index) dropping more than 50% to its lowest levels since mid-2021.
The Fund’s notable
contributors during the period
| • | The Fund’s outperformance of its benchmark was driven primarily by strong, broad-based stock selection, particularly within the industrials, financials, health care, materials and information technology sectors. |
| • | Sector allocation also helped relative results, particularly underweights to the poor-performing real estate, financials and communication services sectors. Overweights to information technology, industrials and materials also helped. |
| Columbia Small Cap Value Fund I | Annual Report 2023 | 5 |
Manager Discussion of Fund Performance (continued)
(Unaudited)
(Unaudited)
| • | Top individual contributors during the period included: |
| ○ | Shares of space technology provider Maxar Technologies, Inc. rose sharply on news that it was being acquired by a private equity firm. |
| ○ | Solar energy systems makers Array Technologies, Inc. and Shoals Technologies Group, Inc., both experienced a rise in share price on strong results and expectations for market growth. |
| ○ | Thermal management solutions provider Modine Manufacturing Co. pleased investors with strong results and guidance across all business lines. |
| ○ | Electronic equipment maker Bel Fuse, Inc. reported record results and expectations for continued strength in end markets. |
The Fund’s notable
detractors during the period
| • | Security selection within energy was a notable detractor to relative results, as was an underweight to utilities. |
| • | Notable individual detractors included: |
| ○ | Commercial real estate developer and operator Hudson Pacific Properties, Inc., whose share price fell on worries over its exposure to West Coast markets hampered by the bank crisis and tech slowdown. |
| ○ | California bank Silvergate Capital Corp., was hurt by concerns over its focus on crypto currencies. |
| ○ | North Carolina-based office REIT Highwoods Properties, Inc. saw its share price fall on a poor earnings growth outlook despite a quicker recovery for office rentals in Sunbelt markets. |
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Foreign investments subject the Fund to risks, including political, economic, market, social and others within a particular country, as well as to currency instabilities and less
stringent financial and accounting standards generally applicable to U.S. issuers. Investments in small-cap companies may be subject to greater volatility and price fluctuations because they may be thinly traded and less liquid. Value securities may be unprofitable if the
market fails to recognize their intrinsic worth or the portfolio manager misgauged that worth. The Fund may invest significantly in issuers within a particular sector, which may be negatively affected by market, economic or other conditions, making the Fund more vulnerable to unfavorable developments in the sector. See the Fund’s
prospectus for more information on these and other risks.
The views expressed in this report
reflect the current views of the respective parties 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 Small Cap Value Fund I | 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 Small Cap Value Fund I | Annual Report 2023 | 7 |
Portfolio of Investments
April 30, 2023
April 30, 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 Small Cap Value Fund I | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Small Cap Value Fund I | Annual Report 2023 | 9 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Small Cap Value Fund I | Annual Report 2023 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Small Cap Value Fund I | Annual Report 2023 | 11 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 12 | Columbia Small Cap Value Fund I | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
Notes to Portfolio of
Investments
| (a) | 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 April 30, 2023 are as follows: |
| ‡ | Issuer was not an affiliate at the beginning of period. |
| (b) | Non-income producing investment. |
| (c) | The rate shown is the seven-day current annualized yield at April 30, 2023. |
Abbreviation Legend
| ADR | American Depositary Receipt |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
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 accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Small Cap Value Fund I | Annual Report 2023 | 13 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
Fair value measurements (continued)
The following table is a summary of the inputs used to value the Fund’s investments at April 30, 2023:
The following table is a summary of the inputs used to value the Fund’s investments at April 30, 2023:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Common Stocks | ||||
| Communication Services | 22,208,218 | — | — | 22,208,218 |
| Consumer Discretionary | 150,056,667 | 1,570,499 | — | 151,627,166 |
| Consumer Staples | 32,795,718 | — | — | 32,795,718 |
| Energy | 72,997,612 | — | — | 72,997,612 |
| Financials | 279,397,446 | — | — | 279,397,446 |
| Health Care | 117,034,334 | — | — | 117,034,334 |
| Industrials | 230,880,264 | — | — | 230,880,264 |
| Information Technology | 131,344,609 | — | — | 131,344,609 |
| Materials | 102,481,986 | — | — | 102,481,986 |
| Real Estate | 73,480,481 | — | — | 73,480,481 |
| Utilities | 11,529,775 | — | — | 11,529,775 |
| Total Common Stocks | 1,224,207,110 | 1,570,499 | — | 1,225,777,609 |
| Money Market Funds | 4,421,052 | — | — | 4,421,052 |
| Total Investments in Securities | 1,228,628,162 | 1,570,499 | — | 1,230,198,661 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The Fund’s assets assigned to
the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical
assets. These assets include certain foreign securities for which a third party statistical pricing service may be employed for purposes of fair market valuation. The model utilized by such third party statistical
pricing service takes into account a security’s correlation to available market data including, but not limited to, intraday index, ADR, and exchange-traded fund movements.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 14 | Columbia Small Cap Value Fund I | Annual Report 2023 |
Statement of Assets and Liabilities
April 30, 2023
April 30, 2023
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $1,022,289,047) | $1,223,367,047 |
| Affiliated issuers (cost $8,981,235) | 6,831,614 |
| Receivable for: | |
| Investments sold | 8,359,399 |
| Capital shares sold | 1,336,575 |
| Dividends | 333,386 |
| Foreign tax reclaims | 3,740 |
| Prepaid expenses | 6,526 |
| Trustees’ deferred compensation plan | 338,725 |
| Total assets | 1,240,577,012 |
| Liabilities | |
| Payable for: | |
| Investments purchased | 4,335,143 |
| Capital shares purchased | 996,780 |
| Management services fees | 27,186 |
| Distribution and/or service fees | 1,785 |
| Transfer agent fees | 180,987 |
| Compensation of board members | 24,287 |
| Other expenses | 71,226 |
| Trustees’ deferred compensation plan | 338,725 |
| Total liabilities | 5,976,119 |
| Net assets applicable to outstanding capital stock | $1,234,600,893 |
| Represented by | |
| Paid in capital | 1,044,275,676 |
| Total distributable earnings (loss) | 190,325,217 |
| Total - representing net assets applicable to outstanding capital stock | $1,234,600,893 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Small Cap Value Fund I | Annual Report 2023 | 15 |
Statement of Assets and Liabilities (continued)
April 30, 2023
April 30, 2023
| Class A | |
| Net assets | $233,599,102 |
| Shares outstanding | 6,137,243 |
| Net asset value per share | $38.06 |
| 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) | $40.38 |
| Advisor Class | |
| Net assets | $65,397,628 |
| Shares outstanding | 1,430,209 |
| Net asset value per share | $45.73 |
| Class C | |
| Net assets | $6,017,903 |
| Shares outstanding | 286,899 |
| Net asset value per share | $20.98 |
| Institutional Class | |
| Net assets | $612,677,061 |
| Shares outstanding | 13,922,645 |
| Net asset value per share | $44.01 |
| Institutional 2 Class | |
| Net assets | $138,904,525 |
| Shares outstanding | 3,031,889 |
| Net asset value per share | $45.81 |
| Institutional 3 Class | |
| Net assets | $176,273,426 |
| Shares outstanding | 3,971,585 |
| Net asset value per share | $44.38 |
| Class R | |
| Net assets | $1,731,248 |
| Shares outstanding | 45,818 |
| Net asset value per share | $37.79 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 16 | Columbia Small Cap Value Fund I | Annual Report 2023 |
Statement of Operations
Year Ended April 30, 2023
Year Ended April 30, 2023
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $20,070,965 |
| Dividends — affiliated issuers | 222,249 |
| Foreign taxes withheld | (176,857) |
| Total income | 20,116,357 |
| Expenses: | |
| Management services fees | 10,199,208 |
| Distribution and/or service fees | |
| Class A | 604,962 |
| Class C | 64,836 |
| Class R | 9,621 |
| Transfer agent fees | |
| Class A | 355,242 |
| Advisor Class | 85,418 |
| Class C | 9,520 |
| Institutional Class | 979,254 |
| Institutional 2 Class | 63,758 |
| Institutional 3 Class | 12,611 |
| Class R | 2,824 |
| Compensation of board members | 33,585 |
| Custodian fees | 27,644 |
| Printing and postage fees | 140,543 |
| Registration fees | 152,963 |
| Accounting services fees | 32,840 |
| Legal fees | 29,971 |
| Interest on interfund lending | 1,246 |
| Compensation of chief compliance officer | 249 |
| Other | 39,755 |
| Total expenses | 12,846,050 |
| Expense reduction | (2,680) |
| Total net expenses | 12,843,370 |
| Net investment income | 7,272,987 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 12,285,072 |
| Investments — affiliated issuers | (629,176) |
| Foreign currency translations | (3,413) |
| Net realized gain | 11,652,483 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (16,329,481) |
| Investments — affiliated issuers | (2,149,624) |
| Foreign currency translations | (658) |
| Net change in unrealized appreciation (depreciation) | (18,479,763) |
| Net realized and unrealized loss | (6,827,280) |
| Net increase in net assets resulting from operations | $445,707 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| Columbia Small Cap Value Fund I | Annual Report 2023 | 17 |
Statement of Changes in Net Assets
| Year Ended April 30, 2023 | Year Ended April 30, 2022 | |
| Operations | ||
| Net investment income | $7,272,987 | $2,934,562 |
| Net realized gain | 11,652,483 | 140,463,201 |
| Net change in unrealized appreciation (depreciation) | (18,479,763) | (212,547,027) |
| Net increase (decrease) in net assets resulting from operations | 445,707 | (69,149,264) |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (13,945,771) | (34,661,347) |
| Advisor Class | (2,764,530) | (6,688,259) |
| Class C | (633,272) | (1,744,634) |
| Institutional Class | (28,176,888) | (51,903,589) |
| Institutional 2 Class | (5,246,792) | (12,568,941) |
| Institutional 3 Class | (8,710,054) | (20,943,537) |
| Class R | (113,858) | (329,937) |
| Total distributions to shareholders | (59,591,165) | (128,840,244) |
| Increase in net assets from capital stock activity | 147,585,905 | 257,119,317 |
| Total increase in net assets | 88,440,447 | 59,129,809 |
| Net assets at beginning of year | 1,146,160,446 | 1,087,030,637 |
| Net assets at end of year | $1,234,600,893 | $1,146,160,446 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 18 | Columbia Small Cap Value Fund I | Annual Report 2023 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| April 30, 2023 | April 30, 2022 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 583,191 | 22,595,872 | 628,215 | 29,444,739 |
| Distributions reinvested | 362,208 | 12,817,394 | 693,929 | 31,789,734 |
| Redemptions | (934,811) | (35,949,994) | (1,004,933) | (46,390,939) |
| Net increase (decrease) | 10,588 | (536,728) | 317,211 | 14,843,534 |
| Advisor Class | ||||
| Subscriptions | 674,898 | 32,214,091 | 1,155,300 | 63,891,992 |
| Distributions reinvested | 57,135 | 2,432,012 | 108,730 | 5,887,738 |
| Redemptions | (509,459) | (23,528,750) | (1,006,847) | (56,195,509) |
| Net increase | 222,574 | 11,117,353 | 257,183 | 13,584,221 |
| Class C | ||||
| Subscriptions | 67,987 | 1,473,734 | 90,981 | 2,646,075 |
| Distributions reinvested | 30,691 | 597,238 | 62,233 | 1,683,680 |
| Redemptions | (118,478) | (2,541,729) | (119,948) | (3,311,185) |
| Net increase (decrease) | (19,800) | (470,757) | 33,266 | 1,018,570 |
| Institutional Class | ||||
| Subscriptions | 8,205,125 | 353,422,764 | 5,939,467 | 306,524,158 |
| Distributions reinvested | 568,409 | 23,351,820 | 779,290 | 40,687,924 |
| Redemptions | (6,316,981) | (281,131,997) | (3,163,933) | (165,504,371) |
| Net increase | 2,456,553 | 95,642,587 | 3,554,824 | 181,707,711 |
| Institutional 2 Class | ||||
| Subscriptions | 1,267,764 | 58,607,741 | 645,557 | 35,674,714 |
| Distributions reinvested | 122,865 | 5,246,792 | 231,712 | 12,568,941 |
| Redemptions | (520,518) | (24,090,097) | (735,537) | (39,935,484) |
| Net increase | 870,111 | 39,764,436 | 141,732 | 8,308,171 |
| Institutional 3 Class | ||||
| Subscriptions | 863,431 | 39,079,011 | 1,330,426 | 70,352,538 |
| Distributions reinvested | 147,320 | 6,094,970 | 299,125 | 15,740,695 |
| Redemptions | (953,022) | (42,957,800) | (903,984) | (48,368,264) |
| Net increase | 57,729 | 2,216,181 | 725,567 | 37,724,969 |
| Class R | ||||
| Subscriptions | 4,862 | 184,687 | 18,879 | 895,719 |
| Distributions reinvested | 3,243 | 113,671 | 7,230 | 329,493 |
| Redemptions | (11,560) | (445,525) | (28,200) | (1,293,071) |
| Net decrease | (3,455) | (147,167) | (2,091) | (67,859) |
| Total net increase | 3,594,300 | 147,585,905 | 5,027,692 | 257,119,317 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Small Cap Value Fund I | Annual Report 2023 | 19 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total
return and portfolio turnover are not annualized for periods of less than one year. The ratios of expenses and net investment income are 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 4/30/2023 | $40.91 | 0.14 | (0.69) | (0.55) | (0.13) | (2.17) | (2.30) |
| Year Ended 4/30/2022 | $49.30 | 0.02 | (2.46) | (2.44) | (0.07) | (5.88) | (5.95) |
| Year Ended 4/30/2021 | $26.90 | 0.19 | 22.41 | 22.60 | (0.17) | (0.03) | (0.20) |
| Year Ended 4/30/2020 | $36.62 | 0.18 | (8.59) | (8.41) | (0.17) | (1.14) | (1.31) |
| Year Ended 4/30/2019 | $40.70 | 0.08 | (1.08) | (1.00) | (0.13) | (2.95) | (3.08) |
| Advisor Class | |||||||
| Year Ended 4/30/2023 | $48.60 | 0.28 | (0.78) | (0.50) | (0.20) | (2.17) | (2.37) |
| Year Ended 4/30/2022 | $57.47 | 0.15 | (2.94) | (2.79) | (0.20) | (5.88) | (6.08) |
| Year Ended 4/30/2021 | $31.32 | 0.37 | 26.06 | 26.43 | (0.25) | (0.03) | (0.28) |
| Year Ended 4/30/2020 | $42.37 | 0.30 | (9.98) | (9.68) | (0.23) | (1.14) | (1.37) |
| Year Ended 4/30/2019 | $46.56 | 0.21 | (1.25) | (1.04) | (0.20) | (2.95) | (3.15) |
| Class C | |||||||
| Year Ended 4/30/2023 | $23.70 | (0.08) | (0.47) | (0.55) | — | (2.17) | (2.17) |
| Year Ended 4/30/2022 | $31.15 | (0.20) | (1.37) | (1.57) | — | (5.88) | (5.88) |
| Year Ended 4/30/2021 | $17.06 | (0.04) | 14.16 | 14.12 | — | (0.03) | (0.03) |
| Year Ended 4/30/2020 | $23.72 | (0.04) | (5.48) | (5.52) | — | (1.14) | (1.14) |
| Year Ended 4/30/2019 | $27.55 | (0.16) | (0.72) | (0.88) | — | (2.95) | (2.95) |
| Institutional Class | |||||||
| Year Ended 4/30/2023 | $46.87 | 0.27 | (0.76) | (0.49) | (0.20) | (2.17) | (2.37) |
| Year Ended 4/30/2022 | $55.63 | 0.15 | (2.82) | (2.67) | (0.21) | (5.88) | (6.09) |
| Year Ended 4/30/2021 | $30.33 | 0.33 | 25.25 | 25.58 | (0.25) | (0.03) | (0.28) |
| Year Ended 4/30/2020 | $41.07 | 0.30 | (9.67) | (9.37) | (0.23) | (1.14) | (1.37) |
| Year Ended 4/30/2019 | $45.24 | 0.20 | (1.22) | (1.02) | (0.20) | (2.95) | (3.15) |
| Institutional 2 Class | |||||||
| Year Ended 4/30/2023 | $48.68 | 0.32 | (0.79) | (0.47) | (0.23) | (2.17) | (2.40) |
| Year Ended 4/30/2022 | $57.55 | 0.21 | (2.94) | (2.73) | (0.26) | (5.88) | (6.14) |
| Year Ended 4/30/2021 | $31.36 | 0.40 | 26.11 | 26.51 | (0.29) | (0.03) | (0.32) |
| Year Ended 4/30/2020 | $42.40 | 0.36 | (10.00) | (9.64) | (0.26) | (1.14) | (1.40) |
| Year Ended 4/30/2019 | $46.57 | 0.27 | (1.25) | (0.98) | (0.24) | (2.95) | (3.19) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 20 | Columbia Small Cap Value Fund I | 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 4/30/2023 | $38.06 | (0.90%) | 1.24%(c) | 1.24%(c),(d) | 0.36% | 72% | $233,599 |
| Year Ended 4/30/2022 | $40.91 | (5.94%) | 1.26%(c) | 1.26%(c),(d) | 0.04% | 58% | $250,665 |
| Year Ended 4/30/2021 | $49.30 | 84.29% | 1.33%(c) | 1.31%(c),(d) | 0.53% | 43% | $286,411 |
| Year Ended 4/30/2020 | $26.90 | (23.69%) | 1.37%(c),(e) | 1.32%(c),(d),(e) | 0.55% | 60% | $152,006 |
| Year Ended 4/30/2019 | $36.62 | (2.38%) | 1.36%(c),(e) | 1.32%(c),(d),(e) | 0.21% | 62% | $234,765 |
| Advisor Class | |||||||
| Year Ended 4/30/2023 | $45.73 | (0.64%) | 0.99%(c) | 0.99%(c),(d) | 0.61% | 72% | $65,398 |
| Year Ended 4/30/2022 | $48.60 | (5.71%) | 1.01%(c) | 1.01%(c),(d) | 0.28% | 58% | $58,696 |
| Year Ended 4/30/2021 | $57.47 | 84.74% | 1.08%(c) | 1.06%(c),(d) | 0.87% | 43% | $54,621 |
| Year Ended 4/30/2020 | $31.32 | (23.49%) | 1.12%(c),(e) | 1.07%(c),(d),(e) | 0.79% | 60% | $19,077 |
| Year Ended 4/30/2019 | $42.37 | (2.14%) | 1.12%(c),(e) | 1.07%(c),(d),(e) | 0.48% | 62% | $29,064 |
| Class C | |||||||
| Year Ended 4/30/2023 | $20.98 | (1.62%) | 1.99%(c) | 1.99%(c),(d) | (0.39%) | 72% | $6,018 |
| Year Ended 4/30/2022 | $23.70 | (6.66%) | 2.01%(c) | 2.01%(c),(d) | (0.71%) | 58% | $7,269 |
| Year Ended 4/30/2021 | $31.15 | 82.90% | 2.08%(c) | 2.05%(c),(d) | (0.19%) | 43% | $8,516 |
| Year Ended 4/30/2020 | $17.06 | (24.24%) | 2.12%(c),(e) | 2.07%(c),(d),(e) | (0.20%) | 60% | $3,178 |
| Year Ended 4/30/2019 | $23.72 | (3.15%) | 2.10%(c),(e) | 2.07%(c),(d),(e) | (0.59%) | 62% | $7,969 |
| Institutional Class | |||||||
| Year Ended 4/30/2023 | $44.01 | (0.64%) | 0.99%(c) | 0.99%(c),(d) | 0.60% | 72% | $612,677 |
| Year Ended 4/30/2022 | $46.87 | (5.70%) | 1.01%(c) | 1.01%(c),(d) | 0.30% | 58% | $537,447 |
| Year Ended 4/30/2021 | $55.63 | 84.72% | 1.07%(c) | 1.05%(c),(d) | 0.77% | 43% | $440,126 |
| Year Ended 4/30/2020 | $30.33 | (23.48%) | 1.12%(c),(e) | 1.07%(c),(d),(e) | 0.79% | 60% | $106,186 |
| Year Ended 4/30/2019 | $41.07 | (2.16%) | 1.11%(c),(e) | 1.07%(c),(d),(e) | 0.47% | 62% | $192,878 |
| Institutional 2 Class | |||||||
| Year Ended 4/30/2023 | $45.81 | (0.59%) | 0.90%(c) | 0.90%(c) | 0.68% | 72% | $138,905 |
| Year Ended 4/30/2022 | $48.68 | (5.60%) | 0.91%(c) | 0.91%(c) | 0.39% | 58% | $105,229 |
| Year Ended 4/30/2021 | $57.55 | 84.97% | 0.95%(c) | 0.93%(c) | 0.93% | 43% | $116,249 |
| Year Ended 4/30/2020 | $31.36 | (23.39%) | 0.98%(c),(e) | 0.94%(c),(e) | 0.96% | 60% | $52,825 |
| Year Ended 4/30/2019 | $42.40 | (2.01%) | 0.97%(c),(e) | 0.94%(c),(e) | 0.61% | 62% | $39,831 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| Columbia Small Cap Value Fund I | 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 | |
| Institutional 3 Class | |||||||
| Year Ended 4/30/2023 | $47.23 | 0.33 | (0.77) | (0.44) | (0.24) | (2.17) | (2.41) |
| Year Ended 4/30/2022 | $56.01 | 0.23 | (2.84) | (2.61) | (0.29) | (5.88) | (6.17) |
| Year Ended 4/30/2021 | $30.53 | 0.39 | 25.43 | 25.82 | (0.31) | (0.03) | (0.34) |
| Year Ended 4/30/2020 | $41.30 | 0.37 | (9.72) | (9.35) | (0.28) | (1.14) | (1.42) |
| Year Ended 4/30/2019 | $45.45 | 0.28 | (1.22) | (0.94) | (0.26) | (2.95) | (3.21) |
| Class R | |||||||
| Year Ended 4/30/2023 | $40.66 | 0.04 | (0.68) | (0.64) | (0.06) | (2.17) | (2.23) |
| Year Ended 4/30/2022 | $49.08 | (0.09) | (2.45) | (2.54) | — | (5.88) | (5.88) |
| Year Ended 4/30/2021 | $26.79 | 0.11 | 22.30 | 22.41 | (0.09) | (0.03) | (0.12) |
| Year Ended 4/30/2020 | $36.50 | 0.10 | (8.56) | (8.46) | (0.11) | (1.14) | (1.25) |
| Year Ended 4/30/2019 | $40.61 | (0.01) | (1.09) | (1.10) | (0.06) | (2.95) | (3.01) |
| Notes to Financial Highlights | |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | Ratios include interfund lending expense which is less than 0.01%. |
| (d) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (e) | Ratios include line of credit interest expense which is less than 0.01%. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 22 | Columbia Small Cap Value Fund I | 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) | |
| Institutional 3 Class | |||||||
| Year Ended 4/30/2023 | $44.38 | (0.53%) | 0.85%(c) | 0.85%(c) | 0.74% | 72% | $176,273 |
| Year Ended 4/30/2022 | $47.23 | (5.55%) | 0.86%(c) | 0.86%(c) | 0.44% | 58% | $184,850 |
| Year Ended 4/30/2021 | $56.01 | 85.03% | 0.90%(c) | 0.88%(c) | 0.96% | 43% | $178,586 |
| Year Ended 4/30/2020 | $30.53 | (23.34%) | 0.93%(c),(e) | 0.89%(c),(e) | 1.01% | 60% | $96,875 |
| Year Ended 4/30/2019 | $41.30 | (1.97%) | 0.92%(c),(e) | 0.89%(c),(e) | 0.64% | 62% | $108,132 |
| Class R | |||||||
| Year Ended 4/30/2023 | $37.79 | (1.14%) | 1.49%(c) | 1.49%(c),(d) | 0.11% | 72% | $1,731 |
| Year Ended 4/30/2022 | $40.66 | (6.17%) | 1.51%(c) | 1.51%(c),(d) | (0.20%) | 58% | $2,003 |
| Year Ended 4/30/2021 | $49.08 | 83.85% | 1.58%(c) | 1.56%(c),(d) | 0.30% | 43% | $2,521 |
| Year Ended 4/30/2020 | $26.79 | (23.87%) | 1.62%(c),(e) | 1.57%(c),(d),(e) | 0.31% | 60% | $1,487 |
| Year Ended 4/30/2019 | $36.50 | (2.67%) | 1.60%(c),(e) | 1.57%(c),(d),(e) | (0.03%) | 62% | $2,048 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Small Cap Value Fund I | Annual Report 2023 | 23 |
Notes to Financial Statements
April 30, 2023
April 30, 2023
Note 1. Organization
Columbia Small Cap Value Fund I
(the Fund), a series of Columbia Funds Series Trust I (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different net investment income distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a
liquidation will be proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A and Class C shares are offered to the general public for investment. Class C shares automatically convert to Class A shares after 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 Small Cap Value Fund I | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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.
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.
| Columbia Small Cap Value Fund I | Annual Report 2023 | 25 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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.
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 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
| 26 | Columbia Small Cap Value Fund I | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 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 0.85% to 0.73% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30,
2023 was 0.81% 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.
Transactions with affiliates
The Fund is permitted to engage in
purchase and/or sale transactions with affiliates and/or accounts that have a common investment manager (or affiliated investment managers), common directors/trustees, and/or common officers under specified conditions
outlined in a policy adopted by the Board, pursuant to Rule 17a-7 under the 1940 Act (cross-trades). The Board relies on quarterly written representation from the Fund’s Chief Compliance Officer that
cross-trades complied with approved policy.
For the year ended April 30, 2023,
the Fund engaged in cross-trades as follows:
| Purchases ($) | Sales ($) | Net realized gain (loss) ($) |
| 55,840,900 | — | — |
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.
| Columbia Small Cap Value Fund I | Annual Report 2023 | 27 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
For the year ended April 30, 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 | 0.15 |
| Advisor Class | 0.15 |
| Class C | 0.15 |
| Institutional Class | 0.15 |
| Institutional 2 Class | 0.06 |
| Institutional 3 Class | 0.01 |
| Class R | 0.15 |
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended April 30, 2023, these minimum account balance fees reduced total expenses of
the Fund by $2,680.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A and Class C shares of the Fund. Also under the Plans, the Fund pays a
monthly distribution fee to the Distributor at the maximum annual rates of 0.75% and 0.50% of the average daily net assets attributable to Class C and Class R shares of the Fund, respectively.
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended April 30, 2023, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 5.75 | 0.50 - 1.00(a) | 101,630 |
| Class C | — | 1.00(b) | 310 |
| (a) | This charge is imposed on certain investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with certain limited exceptions. |
| (b) | This charge applies to redemptions within 12 months after purchase, with certain limited exceptions. |
The Fund’s other share
classes are not subject to sales charges.
| 28 | Columbia Small Cap Value Fund I | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 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:
| Fee rate(s) contractual August 31, 2023 | |
| Class A | 1.27% |
| Advisor Class | 1.02 |
| Class C | 2.02 |
| Institutional Class | 1.02 |
| Institutional 2 Class | 0.93 |
| Institutional 3 Class | 0.88 |
| Class R | 1.52 |
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 April 30, 2023, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, investments in partnerships and/or grantor trusts, post-October capital losses, capital loss carryforwards,
trustees’ deferred compensation, foreign currency transactions and earnings and profits distributed to shareholders on the redemption of shares. To the extent these differences were permanent,
reclassifications were made among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
The following reclassifications
were made:
| Undistributed net investment income ($) | Accumulated net realized (loss) ($) | Paid in capital ($) |
| (242,494) | (1,194,506) | 1,437,000 |
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 Small Cap Value Fund I | Annual Report 2023 | 29 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended April 30, 2023 | Year Ended April 30, 2022 | ||||
| Ordinary income ($) | Long-term capital gains ($) | Total ($) | Ordinary income ($) | Long-term capital gains ($) | Total ($) |
| 5,775,857 | 53,815,308 | 59,591,165 | 28,353,615 | 100,486,629 | 128,840,244 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At April 30, 2023, the components
of distributable earnings on a tax basis were as follows:
| Undistributed ordinary income ($) | Undistributed long-term capital gains ($) | Capital loss carryforwards ($) | Net unrealized appreciation ($) |
| 1,213,710 | 17,235,760 | (6,421,266) | 191,000,766 |
At April 30, 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) ($) | Net unrealized appreciation ($) |
| 1,039,197,895 | 261,190,239 | (70,189,473) | 191,000,766 |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
The following capital loss
carryforwards, determined at April 30, 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 April 30,
2023, capital loss carryforwards utilized, if any, were as follows:
| No expiration short-term ($) | No expiration long-term ($) | Total ($) | Utilized ($) |
| (6,421,266) | — | (6,421,266) | 599,961 |
Under current tax rules, regulated
investment companies can elect to treat certain late-year ordinary losses incurred and post-October capital losses (capital losses realized after October 31) as arising on the first day of the following taxable year.
As of April 30, 2023, the Fund will elect to treat the following late-year ordinary losses and post-October capital losses as arising on May 1, 2023.
| Late year ordinary losses ($) | Post-October capital losses ($) |
| — | 12,341,043 |
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 $997,550,970 and $902,837,488, respectively, for the year ended April 30, 2023. The amount of purchase and
sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
| 30 | Columbia Small Cap Value Fund I | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes
referred to as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
Note 7. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the
Interfund Program during the year ended April 30, 2023 was as follows:
| Borrower or lender | Average loan balance ($) | Weighted average interest rate (%) | Number of days with outstanding loans |
| Borrower | 1,621,429 | 2.82 | 14 |
Interest expense incurred by the
Fund is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at April 30, 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 April 30, 2023.
| Columbia Small Cap Value Fund I | Annual Report 2023 | 31 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Note 9. Significant
risks
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.
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 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, restricted cross-border payments and limited access to investments and/or assets in certain international markets and/or
issuers. These developments and other related events could negatively impact Fund performance.
Shareholder concentration risk
At April 30, 2023, two unaffiliated
shareholders of record owned 44.9% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Affiliated shareholders of
record owned 10.9% 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.
| 32 | Columbia Small Cap Value Fund I | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Small- and mid-cap company risk
Investments in small- and
mid-capitalization companies (small- and mid-cap companies) often involve greater risks than investments in larger, more established companies (larger companies) because small- and mid-cap companies tend to have less
predictable earnings and may lack the management experience, financial resources, product diversification and competitive strengths of larger companies. Securities of small- and mid-cap companies may be less liquid
and more volatile than the securities of larger companies.
Note 10. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 11. Information
regarding pending and settled legal proceedings
Ameriprise Financial and certain
of its affiliates 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 Small Cap Value Fund I | Annual Report 2023 | 33 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust I and Shareholders of Columbia Small Cap Value Fund I
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Small Cap Value Fund I (one of the funds constituting Columbia Funds Series Trust I, referred to hereafter as the "Fund") as of
April 30, 2023, the related statement of operations for the year ended April 30, 2023, the statement of changes in net assets for each of the two years in the period ended April 30, 2023, including the related notes,
and the financial highlights for each of the five years in the period ended April 30, 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 April 30, 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 April 30,
2023 and the financial highlights for each of the five years in the period ended April 30, 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 April 30, 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
June 22, 2023
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
| 34 | Columbia Small Cap Value Fund I | Annual Report 2023 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended April 30, 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 | Capital gain dividend |
| 100.00% | 100.00% | $19,559,632 |
Qualified dividend income. For
taxable, non-corporate shareholders, the percentage of ordinary income distributed during the fiscal year that represents qualified dividend income subject to reduced tax rates.
Dividends received deduction. The
percentage of ordinary income distributed during the fiscal year that qualifies for the corporate dividends received deduction.
Capital gain dividend. The Fund
designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
TRUSTEES AND
OFFICERS
(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 and other relevant Board experience |
| 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 | 174 | 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 Small Cap Value Fund I | Annual Report 2023 | 35 |
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 and other relevant Board experience |
| 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 | 174 | 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 | 174 | 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) (financial services), 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 | 172 | 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 (former mutual fund complex), January 2015-December 2017 |
| 36 | Columbia Small Cap Value Fund I | 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 and other relevant Board experience |
| 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 | 172 | Treasurer, Edinburgh University US Trust Board, since January 2023; Member, HBS Community Action Partners Board, since September 2022; former Director, University of Edinburgh Business School (Member of US Board), 2004-2019; former Director, Boston Public Library Foundation, 2008-2017 |
| 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 | 174 | Former Trustee, MA Taxpayers Foundation, 1997-2022; former Director, The MA Business Roundtable, 2003-2019; former Chairperson, Innovation Index Advisory Committee, MA Technology Collaborative, 1997-2020 |
| 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 | 174 | 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 | 174 | Director, SpartanNash Company since November 2013 (Chair of the Board, since May 2021) (food distributor); Director, Aircastle Limited (Chair of Audit Committee) (aircraft leasing), since August 2006; 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 | 172 | None |
| Columbia Small Cap Value Fund I | 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 and other relevant Board experience |
| 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 | 172 | 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 Senior Adviser to The Carlyle Group (financial services), March 2008-September 2008; former Governance Consultant to Bridgewater Associates, January 2013-December 2015 |
| 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. | 174 | Director, Valmont Industries, Inc. (irrigation systems manufacturer), since 2012; Trustee, Carleton College (on the Investment Committee), since 1987; Trustee, Carnegie Endowment for International Peace (on the Investment Committee), since 2009 |
| 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 | 172 | 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 |
| 38 | Columbia Small Cap Value Fund I | 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 and other relevant Board experience |
| 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 | 174 | Former Director, NAPE (National Alliance for Partnerships in Equity) Education Foundation, October 2016-October 2020; Advisory Board, Jennersville YMCA, since 2022 |
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 and other relevant Board experience |
| 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 | 174 | 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 |
| * | 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 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.
| Columbia Small Cap Value Fund I | Annual Report 2023 | 39 |
TRUSTEES AND OFFICERS (continued)
(Unaudited)
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:
(Unaudited)
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
| 40 | Columbia Small Cap Value Fund I | Annual Report 2023 |
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 |
| 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. |
Liquidity Risk
Management Program
(Unaudited)
Pursuant to Rule 22e-4 under the
1940 Act, the Fund has adopted a liquidity risk management program (Program). The Program’s principal objectives include assessing, managing and periodically reviewing the Fund’s liquidity risk. Liquidity
risk is defined as the risk that the Fund could not meet redemption requests without significant dilution of remaining investors’ interests in the Fund.
The Board has appointed the
Investment Manager as the program administrator for the Fund’s Program. The Investment Manager has delegated oversight of the Program to its Liquidity Risk Management Committee (the Committee). At a board
meeting during the fiscal period, the Committee provided the Board with a report addressing the operations of the program and assessing its adequacy and effectiveness of implementation for the period January 1, 2022,
through December 31, 2022, including:
| • | the Fund had sufficient liquidity to both meet redemptions and operate effectively on behalf of shareholders; |
| • | there were no material changes to the Program during the period; |
| • | the implementation of the Program was effective to manage the Fund’s liquidity risk; and |
| • | the Program operated adequately during the period. |
There can be no assurance that the
Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an
investment in the Fund may be subject.
| Columbia Small Cap Value Fund I | Annual Report 2023 | 41 |
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/
ANN287_04_N01_(06/23)
Columbia Bond
Fund
Not FDIC or NCUA Insured •
No Financial Institution Guarantee • May Lose Value
Table of Contents
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| 8 | |
| 22 | |
| 24 | |
| 25 | |
| 28 | |
| 32 | |
| 47 | |
| 48 | |
| 48 | |
| 54 |
If you elect to receive the
shareholder report for Columbia Bond 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 Bond Fund | Annual Report
2023
Fund at a Glance
(Unaudited)
(Unaudited)
Investment objective
The Fund
seeks current income, consistent with minimal fluctuation of principal.
Portfolio management
Jason Callan
Lead Portfolio Manager
Managed Fund since 2016
Gene Tannuzzo, CFA
Portfolio Manager
Managed Fund since 2017
Alex Christensen, CFA
Portfolio Manager
Managed Fund since 2021
| Columbia Bond Fund | Annual Report 2023 | 3 |
Fund at a Glance (continued)
(Unaudited)
(Unaudited)
Performance of a hypothetical $10,000 investment (April 30, 2013 — April 30, 2023)
The chart above shows the change in
value of a hypothetical $10,000 investment in Class A shares of Columbia Bond Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the
redemption of Fund shares.
| 4 | Columbia Bond Fund | Annual Report 2023 |
Manager Discussion of Fund Performance
(Unaudited)
(Unaudited)
At April 30, 2023, approximately
45.93% 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
April 30, 2023, Class A shares of Columbia Bond Fund returned -2.12% excluding sales charges. The Fund’s benchmark, the Bloomberg U.S. Aggregate Bond Index, returned -0.43% for the same period.
Market overview
Fixed-income returns were muted
for the 12-month period that ended April 30, 2023, as U.S. Treasury yields finished the period higher and credit spreads ended the period wider. Entering the period, geopolitical developments weighed heavily on risk
sentiment, including Russia’s ongoing war against Ukraine and the shuttering of China’s economy in conjunction with the government’s zero-COVID-19 policy. At the same time, policymakers were
confronted with historically high inflation with U.S. consumer price inflation peaking at over 9% in June 2022. With the market concerned over whether the U.S. Federal Reserve’s (Fed) response to inflation would
plunge the economy into recession, returns for credit sensitive assets turned deeply negative.
The Fed aggressively hiked its
benchmark overnight lending rate between May and December 2022, bringing the federal funds target rate to a range of 4.25% to 4.50% at the end of 2022, versus 0% to 0.25% at the beginning of 2022. U.S. Treasury yields
moved sharply higher in response, and the yield curve became inverted as the market anticipated recession.
Entering 2023, risk assets rallied
amid growing optimism that the Fed was coming to the end of its rate hiking cycle. On February 1, the Fed implemented a modest 25 basis point rate increase, bringing the federal funds target rate to a range of 4.50%
to 4.75%. (A basis point is 1/100 of a percent.) In March, the failure of two U.S. banks and the collapse of European giant Credit Suisse raised fears of a financial crisis, leading the market to anticipate Fed
rate cuts over the second half of 2023. The prospect of easier monetary policy and a flight to safety spurred by banking concerns led U.S. Treasury yields lower, enabling bonds to recover some of their earlier
losses.
At its March 2023 meeting, the Fed
went forward with another incremental quarter-point increase, leaving the federal funds target rate at 4.75% to 5.0%. The increase was largely received by financial markets as an indication that the central bank
believed the financial system remained sound overall. The yield on the 10-year Treasury note ended April 2023 at 3.44% versus 2.89% 12 months earlier.
The Fund’s notable
detractors during the period
| • | The Fund’s underperformance relative to the benchmark was largely the result of its positioning with respect to interest rates. Specifically, the Fund had an above-benchmark stance with respect to duration and corresponding interest rate sensitivity as Treasury yields moved higher for much of the period. |
| • | The Fund’s positioning along the yield curve also detracted. |
| • | As rates moved higher, performance for the Fund’s mortgage-backed security holdings suffered as prepayments ground to a halt and durations extended for these issues at a time when investors were seeking to reduce interest rate risk. |
| • | Sector allocation also detracted from relative performance, specifically overweights to commercial mortgage-backed securities, non-agency mortgage-backed securities and agency mortgage-backed securities. |
The Fund’s notable
contributors during the period
| • | Security selection led positive contributions to the Fund’s performance relative to the benchmark. |
| Columbia Bond Fund | Annual Report 2023 | 5 |
Manager Discussion of Fund Performance (continued)
(Unaudited)
(Unaudited)
| • | Most notably, within financials, the Fund favored the largest, global systemically important banks subject to the most rigorous capital requirements while avoiding the regional and second-tier banks that were most negatively impacted by fears of a banking crisis. |
| • | Selection within agency mortgage-backed securities also proved additive. |
Derivative usage
We invested in highly-liquid,
widely traded U.S. Treasury futures and interest rate swaptions to help manage portfolio duration. These enabled us to efficiently implement our yield curve opinions and offset unintended yield curve impacts from
other investments in the portfolio. On a standalone basis, the Fund’s use of derivatives had a negative impact on Fund performance.
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Mortgage- and asset-backed securities are affected by interest rates, financial health of issuers/originators, creditworthiness of entities providing credit enhancements and the value of underlying assets.
Fixed-income securities present issuer default risk. A rise in interest rates may result in a price decline of fixed-income instruments held by the Fund, negatively impacting its performance and NAV. Falling rates may result in the Fund investing
in lower yielding debt instruments, lowering the Fund’s income and yield. These risks may be heightened for longer maturity and duration securities. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise which may
reduce investment opportunities and potential returns. Investing in derivatives is a specialized activity that involves special risks that subject the Fund to significant loss potential, including when used as leverage, and may result in greater
fluctuation in Fund value. See the Fund’s prospectus for 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 Bond 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 Bond Fund | Annual Report 2023 | 7 |
Portfolio of Investments
April 30, 2023
April 30, 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 Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Bond Fund | Annual Report 2023 | 9 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Bond Fund | Annual Report 2023 | 11 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 12 | Columbia Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Bond Fund | Annual Report 2023 | 13 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 14 | Columbia Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Bond Fund | Annual Report 2023 | 15 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 16 | Columbia Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Bond Fund | Annual Report 2023 | 17 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 18 | Columbia Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
| Money Market Funds 9.6% | ||
| Shares | Value ($) | |
| Columbia Short-Term Cash Fund, 5.046%(k),(l) | 92,947,387 | 92,910,208 |
| Total Money Market Funds (Cost $92,910,047) | 92,910,208 | |
| Total Investments in Securities (Cost: $1,240,519,900) | 1,180,087,322 | |
| Other Assets & Liabilities, Net | (216,823,838) | |
| Net Assets | 963,263,484 | |
At April 30, 2023, securities and/or
cash totaling $11,308,984 were pledged as collateral.
Investments in derivatives
| Long futures contracts | ||||||
| Description | Number of contracts | Expiration date | Trading currency | Notional amount | Value/Unrealized appreciation ($) | Value/Unrealized depreciation ($) |
| U.S. Treasury 10-Year Note | 2,004 | 06/2023 | USD | 230,867,063 | 5,936,041 | — |
| U.S. Treasury 5-Year Note | 124 | 06/2023 | USD | 13,608,031 | 317,538 | — |
| U.S. Treasury 5-Year Note | 175 | 06/2023 | USD | 19,204,883 | — | (11,252) |
| U.S. Treasury Ultra Bond | 285 | 06/2023 | USD | 40,300,781 | 1,617,688 | — |
| Total | 7,871,267 | (11,252) | ||||
| Short futures contracts | ||||||
| Description | Number of contracts | Expiration date | Trading currency | Notional amount | Value/Unrealized appreciation ($) | Value/Unrealized depreciation ($) |
| U.S. Treasury 2-Year Note | (282) | 06/2023 | USD | (58,138,265) | 310,029 | — |
| Call option contracts purchased | ||||||||
| Description | Counterparty | Trading currency | Notional amount | Number of contracts | Exercise price/Rate | Expiration date | Cost ($) | Value ($) |
| 10-Year OTC interest rate swap with Citi to receive exercise rate and pay SOFR | Citi | USD | 36,200,000 | 36,200,000 | 2.25 | 05/26/2023 | 742,100 | 3,566 |
Notes to Portfolio of
Investments
| (a) | Represents privately placed and other securities and instruments exempt from Securities and Exchange Commission registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. At April 30, 2023, the total value of these securities amounted to $571,197,651, which represents 59.30% of total net assets. |
| (b) | Valuation based on significant unobservable inputs. |
| (c) | Represents a security purchased on a when-issued basis. |
| (d) | Variable rate security. The interest rate shown was the current rate as of April 30, 2023. |
| (e) | Variable or floating rate security, the interest rate of which adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. The interest rate shown was the current rate as of April 30, 2023. |
| (f) | Represents interest only securities which have the right to receive the monthly interest payments on an underlying pool of mortgage loans. |
| (g) | Non-income producing investment. |
| (h) | Represents a variable rate security with a step coupon where the rate adjusts according to a schedule for a series of periods, typically lower for an initial period and then increasing to a higher coupon rate thereafter. The interest rate shown was the current rate as of April 30, 2023. |
| (i) | This security or a portion of this security has been pledged as collateral in connection with derivative contracts. |
| (j) | Represents fair value as determined in good faith under procedures approved by the Board of Trustees. At April 30, 2023, the total value of these securities amounted to $911,904, which represents 0.09% of total net assets. |
| (k) | The rate shown is the seven-day current annualized yield at April 30, 2023. |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Bond Fund | Annual Report 2023 | 19 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
Notes to Portfolio of Investments (continued)
| (l) | As defined in the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. The value of the holdings and transactions in these affiliated companies during the year ended April 30, 2023 are as follows: |
| Affiliated issuers | Beginning of period($) | Purchases($) | Sales($) | Net change in unrealized appreciation (depreciation)($) | End of period($) | Realized gain (loss)($) | Dividends($) | End of period shares |
| Columbia Short-Term Cash Fund, 5.046% | ||||||||
| 48,458,332 | 487,785,484 | (443,328,581) | (5,027) | 92,910,208 | (9,896) | 1,505,632 | 92,947,387 | |
Abbreviation Legend
| CMO | Collateralized Mortgage Obligation |
| CMT | Constant Maturity Treasury |
| LIBOR | London Interbank Offered Rate |
| SOFR | Secured Overnight Financing Rate |
| TBA | To Be Announced |
Currency Legend
| USD | US Dollar |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
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 accompanying Notes to Financial Statements are
an integral part of this statement.
| 20 | Columbia Bond Fund | Annual Report 2023 |
Portfolio of Investments (continued)
April 30, 2023
April 30, 2023
Fair value measurements (continued)
The following table is a summary of the inputs used to value the Fund’s investments at April 30, 2023:
The following table is a summary of the inputs used to value the Fund’s investments at April 30, 2023:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Asset-Backed Securities — Non-Agency | — | 163,772,594 | 1,995,000 | 165,767,594 |
| Commercial Mortgage-Backed Securities - Agency | — | 5,083,862 | — | 5,083,862 |
| Commercial Mortgage-Backed Securities - Non-Agency | — | 121,413,107 | — | 121,413,107 |
| Common Stocks | ||||
| Consumer Staples | — | 19 | — | 19 |
| Energy | 74 | — | — | 74 |
| Financials | 1,250 | — | — | 1,250 |
| Total Common Stocks | 1,324 | 19 | — | 1,343 |
| Corporate Bonds & Notes | — | 167,350,740 | — | 167,350,740 |
| Residential Mortgage-Backed Securities - Agency | — | 356,857,478 | — | 356,857,478 |
| Residential Mortgage-Backed Securities - Non-Agency | — | 261,648,358 | 9,051,066 | 270,699,424 |
| Call Option Contracts Purchased | — | 3,566 | — | 3,566 |
| Money Market Funds | 92,910,208 | — | — | 92,910,208 |
| Total Investments in Securities | 92,911,532 | 1,076,129,724 | 11,046,066 | 1,180,087,322 |
| Investments in Derivatives | ||||
| Asset | ||||
| Futures Contracts | 8,181,296 | — | — | 8,181,296 |
| Liability | ||||
| Futures Contracts | (11,252) | — | — | (11,252) |
| Total | 101,081,576 | 1,076,129,724 | 11,046,066 | 1,188,257,366 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The Fund’s assets assigned to
the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical
assets.
Futures contracts are valued at
unrealized appreciation (depreciation).
The following table is a
reconciliation of Level 3 assets for which significant observable and unobservable inputs were used to determine fair value:
| Balance as of 04/30/2022 ($) | Increase (decrease) in accrued discounts/ premiums ($) | Realized gain (loss) ($) | Change in unrealized appreciation (depreciation)(a) ($) | Purchases ($) | Sales ($) | Transfers into Level 3 ($) | Transfers out of Level 3 ($) | Balance as of 04/30/2023 ($) | |
| Asset-Backed Securities — Non-Agency | 6,544,011 | 8 | (39,757) | 10,681 | 1,982,631 | (1,154,915) | — | (5,347,659) | 1,995,000 |
| Commercial Mortgage-Backed Securities — Non-Agency | 5,960,625 | — | — | — | — | — | — | (5,960,625) | — |
| Residential Mortgage-Backed Securities — Non-Agency | 18,622,673 | 5 | 4 | (9,251) | — | (9,562,365) | — | — | 9,051,066 |
| Total | 31,127,309 | 13 | (39,753) | 1,430 | 1,982,631 | (10,717,280) | — | (11,308,284) | 11,046,066 |
(a) Change in unrealized
appreciation (depreciation) relating to securities held at April 30, 2023 was $(1,526), which is comprised of Asset-Backed Securities — Non-Agency of $12,361 and Residential Mortgage-Backed Securities —
Non-Agency of $(13,887).
The Fund’s assets assigned to
the Level 3 category are valued utilizing the valuation technique deemed the most appropriate in the circumstances. Certain asset backed securities and residential mortgage backed securities classified as Level 3
securities are valued using the market approach and utilize single market quotations from broker dealers which may have included, but were not limited to, observable transactions for identical or similar assets in the
market and the distressed nature of the security. The appropriateness of fair values for these securities is monitored on an ongoing basis which may include results of back testing, manual price reviews and other
control procedures. Significant increases (decreases) to any of these inputs would have resulted in a significantly higher (lower) valuation measurement.
Financial assets were transferred
from Level 3 to Level 2 as observable market inputs were utilized and management determined that there was sufficient, reliable, and observable market data to value these assets as of period end.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Bond Fund | Annual Report 2023 | 21 |
Statement of Assets and Liabilities
April 30, 2023
April 30, 2023
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $1,146,867,753) | $1,087,173,548 |
| Affiliated issuers (cost $92,910,047) | 92,910,208 |
| Option contracts purchased (cost $742,100) | 3,566 |
| Cash collateral held at broker for: | |
| TBA | 2,627,371 |
| Receivable for: | |
| Investments sold on a delayed delivery basis | 16,305,834 |
| Capital shares sold | 3,008,109 |
| Dividends | 298,763 |
| Interest | 3,517,798 |
| Variation margin for futures contracts | 1,515,594 |
| Expense reimbursement due from Investment Manager | 3,512 |
| Prepaid expenses | 7,572 |
| Trustees’ deferred compensation plan | 199,706 |
| Total assets | 1,207,571,581 |
| Liabilities | |
| Due to custodian | 136,586 |
| Payable for: | |
| Investments purchased | 10,565,951 |
| Investments purchased on a delayed delivery basis | 229,696,785 |
| Capital shares purchased | 597,186 |
| Distributions to shareholders | 2,925,092 |
| Variation margin for futures contracts | 39,893 |
| Management services fees | 13,025 |
| Distribution and/or service fees | 656 |
| Transfer agent fees | 18,535 |
| Compensation of board members | 68,709 |
| Other expenses | 45,973 |
| Trustees’ deferred compensation plan | 199,706 |
| Total liabilities | 244,308,097 |
| Net assets applicable to outstanding capital stock | $963,263,484 |
| Represented by | |
| Paid in capital | 1,140,906,167 |
| Total distributable earnings (loss) | (177,642,683) |
| Total - representing net assets applicable to outstanding capital stock | $963,263,484 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 22 | Columbia Bond Fund | Annual Report 2023 |
Statement of Assets and Liabilities (continued)
April 30, 2023
April 30, 2023
| Class A | |
| Net assets | $78,405,870 |
| Shares outstanding | 2,632,618 |
| Net asset value per share | $29.78 |
| Maximum sales charge | 4.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $31.27 |
| Advisor Class | |
| Net assets | $1,165,631 |
| Shares outstanding | 39,189 |
| Net asset value per share | $29.74 |
| Class C | |
| Net assets | $3,579,495 |
| Shares outstanding | 120,358 |
| Net asset value per share | $29.74 |
| Institutional Class | |
| Net assets | $89,875,295 |
| Shares outstanding | 3,018,045 |
| Net asset value per share | $29.78 |
| Institutional 2 Class | |
| Net assets | $31,527,855 |
| Shares outstanding | 1,061,512 |
| Net asset value per share | $29.70 |
| Institutional 3 Class | |
| Net assets | $752,943,017 |
| Shares outstanding | 25,229,560 |
| Net asset value per share | $29.84 |
| Class R | |
| Net assets | $247,755 |
| Shares outstanding | 8,320 |
| Net asset value per share | $29.78 |
| Class V | |
| Net assets | $5,518,566 |
| Shares outstanding | 185,661 |
| Net asset value per share | $29.72 |
| Maximum sales charge | 4.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class V shares) | $31.20 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Bond Fund | Annual Report 2023 | 23 |
Statement of Operations
Year Ended April 30, 2023
Year Ended April 30, 2023
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $49 |
| Dividends — affiliated issuers | 1,505,632 |
| Interest | 34,524,096 |
| Interfund lending | 5,020 |
| Total income | 36,034,797 |
| Expenses: | |
| Management services fees | 4,631,249 |
| Distribution and/or service fees | |
| Class A | 192,059 |
| Class C | 39,787 |
| Class R | 1,454 |
| Class V | 8,548 |
| Transfer agent fees | |
| Class A | 99,265 |
| Advisor Class | 2,855 |
| Class C | 5,139 |
| Institutional Class | 83,826 |
| Institutional 2 Class | 7,209 |
| Institutional 3 Class | 46,355 |
| Class R | 376 |
| Class V | 7,364 |
| Compensation of board members | 24,266 |
| Custodian fees | 30,831 |
| Printing and postage fees | 32,024 |
| Registration fees | 143,350 |
| Accounting services fees | 40,290 |
| Legal fees | 25,021 |
| Interest on collateral | 25,242 |
| Compensation of chief compliance officer | 174 |
| Other | 25,776 |
| Total expenses | 5,472,460 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (1,243,818) |
| Fees waived by transfer agent | |
| Institutional 2 Class | (945) |
| Institutional 3 Class | (46,355) |
| Expense reduction | (826) |
| Total net expenses | 4,180,516 |
| Net investment income | 31,854,281 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (31,370,925) |
| Investments — affiliated issuers | (9,896) |
| Futures contracts | (48,106,726) |
| Option contracts purchased | 4,482,188 |
| Option contracts written | (8,182,552) |
| Net realized loss | (83,187,911) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | 2,351,949 |
| Investments — affiliated issuers | (5,027) |
| Futures contracts | 28,914,078 |
| Option contracts purchased | (7,117,132) |
| Option contracts written | 8,126,711 |
| Net change in unrealized appreciation (depreciation) | 32,270,579 |
| Net realized and unrealized loss | (50,917,332) |
| Net decrease in net assets resulting from operations | $(19,063,051) |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 24 | Columbia Bond Fund | Annual Report 2023 |
Statement of Changes in Net Assets
| Year Ended April 30, 2023 | Year Ended April 30, 2022 | |
| Operations | ||
| Net investment income | $31,854,281 | $20,201,870 |
| Net realized loss | (83,187,911) | (35,518,353) |
| Net change in unrealized appreciation (depreciation) | 32,270,579 | (97,265,103) |
| Net decrease in net assets resulting from operations | (19,063,051) | (112,581,586) |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (2,382,407) | (1,343,503) |
| Advisor Class | (67,054) | (51,463) |
| Class C | (91,492) | (42,853) |
| Institutional Class | (2,168,440) | (1,380,038) |
| Institutional 2 Class | (435,234) | (239,345) |
| Institutional 3 Class | (26,451,528) | (16,563,854) |
| Class R | (8,241) | (9,374) |
| Class V | (181,843) | (107,146) |
| Total distributions to shareholders | (31,786,239) | (19,737,576) |
| Increase (decrease) in net assets from capital stock activity | (7,025,916) | 19,410,835 |
| Total decrease in net assets | (57,875,206) | (112,908,327) |
| Net assets at beginning of year | 1,021,138,690 | 1,134,047,017 |
| Net assets at end of year | $963,263,484 | $1,021,138,690 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| Columbia Bond Fund | Annual Report 2023 | 25 |
Statement of Changes in Net Assets (continued)
| Year Ended | Year Ended | |||
| April 30, 2023 | April 30, 2022 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Subscriptions | 507,815 | 15,160,104 | 514,592 | 18,041,620 |
| Distributions reinvested | 69,426 | 2,051,769 | 33,550 | 1,162,376 |
| Redemptions | (534,726) | (15,947,139) | (775,565) | (26,774,023) |
| Net increase (decrease) | 42,515 | 1,264,734 | (227,423) | (7,570,027) |
| Advisor Class | ||||
| Subscriptions | 6,582 | 193,361 | 99,979 | 3,516,270 |
| Distributions reinvested | 2,248 | 66,756 | 1,494 | 51,300 |
| Redemptions | (80,530) | (2,318,622) | (50,685) | (1,764,363) |
| Net increase (decrease) | (71,700) | (2,058,505) | 50,788 | 1,803,207 |
| Class C | ||||
| Subscriptions | 27,540 | 810,763 | 40,771 | 1,428,310 |
| Distributions reinvested | 2,893 | 85,203 | 1,149 | 39,800 |
| Redemptions | (67,225) | (2,016,973) | (102,150) | (3,537,125) |
| Net decrease | (36,792) | (1,121,007) | (60,230) | (2,069,015) |
| Institutional Class | ||||
| Subscriptions | 1,502,427 | 44,900,228 | 874,794 | 30,582,605 |
| Distributions reinvested | 66,293 | 1,961,422 | 35,702 | 1,234,732 |
| Redemptions | (982,374) | (29,580,684) | (755,624) | (26,037,919) |
| Net increase | 586,346 | 17,280,966 | 154,872 | 5,779,418 |
| Institutional 2 Class | ||||
| Subscriptions | 871,494 | 25,807,130 | 255,038 | 8,966,455 |
| Distributions reinvested | 14,730 | 435,234 | 6,934 | 239,285 |
| Redemptions | (210,527) | (6,176,709) | (161,269) | (5,513,463) |
| Net increase | 675,697 | 20,065,655 | 100,703 | 3,692,277 |
| Institutional 3 Class | ||||
| Subscriptions | 982,696 | 29,129,632 | 3,064,643 | 107,828,340 |
| Distributions reinvested | 552,905 | 16,392,158 | 295,435 | 10,247,690 |
| Redemptions | (2,902,845) | (87,494,983) | (2,860,357) | (98,964,763) |
| Net increase (decrease) | (1,367,244) | (41,973,193) | 499,721 | 19,111,267 |
| Class R | ||||
| Subscriptions | 2,294 | 68,770 | 4,102 | 144,331 |
| Distributions reinvested | 277 | 8,168 | 260 | 9,131 |
| Redemptions | (5,160) | (152,998) | (25,317) | (889,864) |
| Net decrease | (2,589) | (76,060) | (20,955) | (736,402) |
| Class V | ||||
| Subscriptions | 1,455 | 43,393 | 585 | 20,248 |
| Distributions reinvested | 4,356 | 128,524 | 2,229 | 77,103 |
| Redemptions | (19,519) | (580,423) | (19,809) | (697,241) |
| Net decrease | (13,708) | (408,506) | (16,995) | (599,890) |
| Total net increase (decrease) | (187,475) | (7,025,916) | 480,481 | 19,410,835 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 26 | Columbia Bond 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 ratios of expenses and net investment income are annualized for periods of less than one year. The portfolio turnover rate is
calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be
higher.
| Net asset value, beginning of period | Net investment income | Net realized and unrealized gain (loss) | Total from investment operations | Distributions from net investment income | Distributions from net realized gains | Total distributions to shareholders | |
| Class A | |||||||
| Year Ended 4/30/2023 | $31.39 | 0.93 | (1.62) | (0.69) | (0.92) | — | (0.92) |
| Year Ended 4/30/2022 | $35.38 | 0.50 | (4.00) | (3.50) | (0.49) | — | (0.49) |
| Year Ended 4/30/2021(e) | $34.88 | 0.69 | 1.39 | 2.08 | (0.72) | (0.86) | (1.58) |
| Year Ended 4/30/2020(e) | $33.84 | 0.88 | 1.48 | 2.36 | (0.88) | (0.44) | (1.32) |
| Year Ended 4/30/2019(e) | $33.13 | 0.92 | 0.67 | 1.59 | (0.88) | — | (0.88) |
| Advisor Class | |||||||
| Year Ended 4/30/2023 | $31.34 | 0.94 | (1.54) | (0.60) | (1.00) | — | (1.00) |
| Year Ended 4/30/2022 | $35.33 | 0.58 | (4.00) | (3.42) | (0.57) | — | (0.57) |
| Year Ended 4/30/2021(e) | $34.83 | 0.79 | 1.38 | 2.17 | (0.81) | (0.86) | (1.67) |
| Year Ended 4/30/2020(e) | $33.80 | 0.96 | 1.47 | 2.43 | (0.96) | (0.44) | (1.40) |
| Year Ended 4/30/2019(e) | $33.09 | 1.00 | 0.71 | 1.71 | (1.00) | — | (1.00) |
| Class C | |||||||
| Year Ended 4/30/2023 | $31.34 | 0.69 | (1.59) | (0.90) | (0.70) | — | (0.70) |
| Year Ended 4/30/2022 | $35.33 | 0.24 | (4.01) | (3.77) | (0.22) | — | (0.22) |
| Year Ended 4/30/2021(e) | $34.83 | 0.43 | 1.38 | 1.81 | (0.45) | (0.86) | (1.31) |
| Year Ended 4/30/2020(e) | $33.79 | 0.60 | 1.52 | 2.12 | (0.64) | (0.44) | (1.08) |
| Year Ended 4/30/2019(e) | $33.08 | 0.64 | 0.71 | 1.35 | (0.64) | — | (0.64) |
| Institutional Class | |||||||
| Year Ended 4/30/2023 | $31.38 | 1.01 | (1.61) | (0.60) | (1.00) | — | (1.00) |
| Year Ended 4/30/2022 | $35.37 | 0.59 | (4.01) | (3.42) | (0.57) | — | (0.57) |
| Year Ended 4/30/2021(e) | $34.88 | 0.78 | 1.38 | 2.16 | (0.81) | (0.86) | (1.67) |
| Year Ended 4/30/2020(e) | $33.83 | 0.96 | 1.49 | 2.45 | (0.96) | (0.44) | (1.40) |
| Year Ended 4/30/2019(e) | $33.13 | 1.00 | 0.70 | 1.70 | (1.00) | — | (1.00) |
| Institutional 2 Class | |||||||
| Year Ended 4/30/2023 | $31.30 | 1.06 | (1.64) | (0.58) | (1.02) | — | (1.02) |
| Year Ended 4/30/2022 | $35.28 | 0.61 | (3.99) | (3.38) | (0.60) | — | (0.60) |
| Year Ended 4/30/2021(e) | $34.78 | 0.80 | 1.39 | 2.19 | (0.83) | (0.86) | (1.69) |
| Year Ended 4/30/2020(e) | $33.74 | 1.00 | 1.48 | 2.48 | (1.00) | (0.44) | (1.44) |
| Year Ended 4/30/2019(e) | $33.02 | 1.04 | 0.68 | 1.72 | (1.00) | — | (1.00) |
| Institutional 3 Class | |||||||
| Year Ended 4/30/2023 | $31.45 | 1.04 | (1.61) | (0.57) | (1.04) | — | (1.04) |
| Year Ended 4/30/2022 | $35.45 | 0.63 | (4.01) | (3.38) | (0.62) | — | (0.62) |
| Year Ended 4/30/2021(e) | $34.95 | 0.79 | 1.42 | 2.21 | (0.85) | (0.86) | (1.71) |
| Year Ended 4/30/2020(e) | $33.90 | 1.00 | 1.53 | 2.53 | (1.04) | (0.44) | (1.48) |
| Year Ended 4/30/2019(e) | $33.19 | 1.04 | 0.71 | 1.75 | (1.04) | — | (1.04) |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 28 | Columbia Bond 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 4/30/2023 | $29.78 | (2.12%) | 0.91%(c) | 0.77%(c),(d) | 3.10% | 260% | $78,406 |
| Year Ended 4/30/2022 | $31.39 | (10.02%) | 0.90%(c) | 0.77%(c),(d) | 1.44% | 224% | $81,291 |
| Year Ended 4/30/2021(e) | $35.38 | 5.96% | 0.91%(c) | 0.77%(c),(d) | 1.92% | 227% | $99,681 |
| Year Ended 4/30/2020(e) | $34.88 | 7.05% | 0.97% | 0.80%(d) | 2.50% | 229% | $75,375 |
| Year Ended 4/30/2019(e) | $33.84 | 4.98% | 1.01% | 0.83%(d) | 2.73% | 236% | $49,696 |
| Advisor Class | |||||||
| Year Ended 4/30/2023 | $29.74 | (1.85%) | 0.66%(c) | 0.52%(c),(d) | 3.11% | 260% | $1,166 |
| Year Ended 4/30/2022 | $31.34 | (9.81%) | 0.65%(c) | 0.52%(c),(d) | 1.70% | 224% | $3,475 |
| Year Ended 4/30/2021(e) | $35.33 | 6.20% | 0.66%(c) | 0.52%(c),(d) | 2.19% | 227% | $2,123 |
| Year Ended 4/30/2020(e) | $34.83 | 7.32% | 0.71% | 0.55%(d) | 2.74% | 229% | $1,676 |
| Year Ended 4/30/2019(e) | $33.80 | 5.24% | 0.76% | 0.58%(d) | 3.03% | 236% | $738 |
| Class C | |||||||
| Year Ended 4/30/2023 | $29.74 | (2.82%) | 1.66%(c) | 1.52%(c),(d) | 2.31% | 260% | $3,579 |
| Year Ended 4/30/2022 | $31.34 | (10.71%) | 1.65%(c) | 1.52%(c),(d) | 0.69% | 224% | $4,925 |
| Year Ended 4/30/2021(e) | $35.33 | 5.15% | 1.66%(c) | 1.52%(c),(d) | 1.19% | 227% | $7,680 |
| Year Ended 4/30/2020(e) | $34.83 | 6.26% | 1.72% | 1.55%(d) | 1.74% | 229% | $8,519 |
| Year Ended 4/30/2019(e) | $33.79 | 4.20% | 1.76% | 1.59%(d) | 1.96% | 236% | $4,058 |
| Institutional Class | |||||||
| Year Ended 4/30/2023 | $29.78 | (1.84%) | 0.66%(c) | 0.52%(c),(d) | 3.37% | 260% | $89,875 |
| Year Ended 4/30/2022 | $31.38 | (9.80%) | 0.65%(c) | 0.52%(c),(d) | 1.69% | 224% | $76,311 |
| Year Ended 4/30/2021(e) | $35.37 | 6.19% | 0.66%(c) | 0.52%(c),(d) | 2.18% | 227% | $80,542 |
| Year Ended 4/30/2020(e) | $34.88 | 7.32% | 0.72% | 0.55%(d) | 2.76% | 229% | $68,640 |
| Year Ended 4/30/2019(e) | $33.83 | 5.24% | 0.76% | 0.58%(d) | 2.97% | 236% | $51,185 |
| Institutional 2 Class | |||||||
| Year Ended 4/30/2023 | $29.70 | (1.78%) | 0.59%(c) | 0.45%(c) | 3.58% | 260% | $31,528 |
| Year Ended 4/30/2022 | $31.30 | (9.74%) | 0.58%(c) | 0.45%(c) | 1.76% | 224% | $12,075 |
| Year Ended 4/30/2021(e) | $35.28 | 6.24% | 0.60%(c) | 0.45%(c) | 2.23% | 227% | $10,058 |
| Year Ended 4/30/2020(e) | $34.78 | 7.55% | 0.62% | 0.46% | 2.83% | 229% | $6,038 |
| Year Ended 4/30/2019(e) | $33.74 | 5.24% | 0.64% | 0.47% | 3.20% | 236% | $3,687 |
| Institutional 3 Class | |||||||
| Year Ended 4/30/2023 | $29.84 | (1.74%) | 0.54%(c) | 0.40%(c) | 3.47% | 260% | $752,943 |
| Year Ended 4/30/2022 | $31.45 | (9.70%) | 0.53%(c) | 0.40%(c) | 1.81% | 224% | $836,474 |
| Year Ended 4/30/2021(e) | $35.45 | 6.31% | 0.55%(c) | 0.40%(c) | 2.22% | 227% | $925,195 |
| Year Ended 4/30/2020(e) | $34.95 | 7.47% | 0.57% | 0.40% | 2.91% | 229% | $265,665 |
| Year Ended 4/30/2019(e) | $33.90 | 5.41% | 0.58% | 0.42% | 3.14% | 236% | $257,417 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Bond Fund | Annual Report 2023 | 29 |
Financial Highlights (continued)
| Net asset value, beginning of period | Net investment income | Net realized and unrealized gain (loss) | Total from investment operations | Distributions from net investment income | Distributions from net realized gains | Total distributions to shareholders | |
| Class R | |||||||
| Year Ended 4/30/2023 | $31.38 | 0.84 | (1.59) | (0.75) | (0.85) | — | (0.85) |
| Year Ended 4/30/2022 | $35.38 | 0.41 | (4.01) | (3.60) | (0.40) | — | (0.40) |
| Year Ended 4/30/2021(e) | $34.88 | 0.61 | 1.38 | 1.99 | (0.63) | (0.86) | (1.49) |
| Year Ended 4/30/2020(e) | $33.83 | 0.80 | 1.49 | 2.29 | (0.80) | (0.44) | (1.24) |
| Year Ended 4/30/2019(e) | $33.12 | 0.84 | 0.67 | 1.51 | (0.80) | — | (0.80) |
| Class V | |||||||
| Year Ended 4/30/2023 | $31.33 | 0.95 | (1.61) | (0.66) | (0.95) | — | (0.95) |
| Year Ended 4/30/2022 | $35.31 | 0.53 | (3.99) | (3.46) | (0.52) | — | (0.52) |
| Year Ended 4/30/2021(e) | $34.82 | 0.73 | 1.37 | 2.10 | (0.75) | (0.86) | (1.61) |
| Year Ended 4/30/2020(e) | $33.78 | 0.92 | 1.48 | 2.40 | (0.92) | (0.44) | (1.36) |
| Year Ended 4/30/2019(e) | $33.07 | 0.92 | 0.71 | 1.63 | (0.92) | — | (0.92) |
| 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) | Per share amounts have been adjusted on a retroactive basis to reflect a 4 to 1 reverse stock split completed after the close of business on September 11, 2020. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 30 | Columbia Bond 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 4/30/2023 | $29.78 | (2.33%) | 1.16%(c) | 1.02%(c),(d) | 2.83% | 260% | $248 |
| Year Ended 4/30/2022 | $31.38 | (10.28%) | 1.14%(c) | 1.02%(c),(d) | 1.18% | 224% | $342 |
| Year Ended 4/30/2021(e) | $35.38 | 5.70% | 1.16%(c) | 1.02%(c),(d) | 1.69% | 227% | $1,127 |
| Year Ended 4/30/2020(e) | $34.88 | 6.79% | 1.22% | 1.05%(d) | 2.26% | 229% | $1,225 |
| Year Ended 4/30/2019(e) | $33.83 | 4.71% | 1.26% | 1.08%(d) | 2.51% | 236% | $680 |
| Class V | |||||||
| Year Ended 4/30/2023 | $29.72 | (2.03%) | 0.81%(c) | 0.67%(c),(d) | 3.19% | 260% | $5,519 |
| Year Ended 4/30/2022 | $31.33 | (9.93%) | 0.80%(c) | 0.67%(c),(d) | 1.54% | 224% | $6,246 |
| Year Ended 4/30/2021(e) | $35.31 | 6.10% | 0.81%(c) | 0.67%(c),(d) | 2.04% | 227% | $7,640 |
| Year Ended 4/30/2020(e) | $34.82 | 7.17% | 0.87% | 0.70%(d) | 2.62% | 229% | $8,145 |
| Year Ended 4/30/2019(e) | $33.78 | 4.96% | 0.91% | 0.73%(d) | 2.83% | 236% | $8,242 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Bond Fund | Annual Report 2023 | 31 |
Notes to Financial Statements
April 30, 2023
April 30, 2023
Note 1. Organization
Columbia Bond Fund (the Fund), a
series of Columbia Funds Series Trust I (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company
organized as a Massachusetts business trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different net investment income distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a
liquidation will be proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A and Class C shares are offered to the general public for investment. Class C shares automatically convert to Class A shares after 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. Class V shares are available only to investors who received (and who continuously held) Class V shares in connection with previous fund reorganizations.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
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.
Debt securities generally are
valued based on prices obtained from pricing services, which are intended to reflect market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing
techniques that take into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes.
Debt securities for which quotations are not readily available or not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities
maturing in 60 days or less are valued primarily at amortized market value, unless this method results in a valuation that management believes does not approximate fair value.
Asset- and mortgage-backed
securities are generally valued by pricing services, which utilize pricing models that incorporate the securities’ cash flow and loan performance data. These models also take into account available market data,
including trades, market quotations, and benchmark yield curves for identical or similar securities. Factors used to identify similar securities may include, but are not limited to, issuer, collateral type, vintage,
prepayment speeds, collateral performance, credit ratings, credit enhancement and expected life. Asset-backed securities for which quotations are readily available may
| 32 | Columbia Bond Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
also be valued based upon an over-the-counter or
exchange bid quote from an approved independent broker-dealer. Debt securities maturing in 60 days or less are valued primarily at amortized market value, unless this method results in a valuation that management
believes does not approximate fair value.
Investments in open-end investment
companies (other than exchange-traded funds (ETFs)), are valued at the latest net asset value reported by those companies as of the valuation time.
Futures and options on futures
contracts are valued based upon the settlement price at the close of regular trading on their principal exchanges or, in the absence of a settlement price, at the mean of the latest quoted bid and ask prices.
Option contracts are valued at the
mean of the latest quoted bid and ask prices on their primary exchanges. Option contracts, including over-the-counter option contracts, with no readily available market quotations are valued using mid-market
evaluations from independent third-party vendors.
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security, if
available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Derivative instruments
The Fund invests in certain
derivative instruments, as detailed below, in seeking to meet its investment objectives. Derivatives are instruments whose values depend on, or are derived from, in whole or in part, the value of one or more
securities, currencies, commodities, indices, or other assets or instruments. Derivatives may be used to increase investment flexibility (including to maintain cash reserves while maintaining desired exposure to
certain assets), for risk management (hedging) purposes, to facilitate trading, to reduce transaction costs and to pursue higher investment returns. The Fund may also use derivative instruments to mitigate certain
investment risks, such as foreign currency exchange rate risk, interest rate risk and credit risk. Derivatives may involve various risks, including the potential inability of the counterparty to fulfill its
obligations under the terms of the contract, the potential for an illiquid secondary market (making it difficult for the Fund to sell or terminate, including at favorable prices) and the potential for market movements
which may expose the Fund to gains or losses in excess of the amount shown in the Statement of Assets and Liabilities. The notional amounts of derivative instruments, if applicable, are not recorded in the financial
statements.
A derivative instrument may suffer
a marked-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform its
obligations under the contract. The Fund’s risk of loss from counterparty credit risk on over-the-counter derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by
the Fund and the amount of any variation margin held by the counterparty, plus any replacement costs or related amounts. With exchange-traded or centrally cleared derivatives, there is reduced counterparty credit risk
to the Fund since the clearinghouse or central counterparty (CCP) provides some protection in the case of clearing member default. The clearinghouse or CCP stands between the buyer and the seller of the contract;
therefore, 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 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.
| Columbia Bond Fund | Annual Report 2023 | 33 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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.
Futures contracts
Futures contracts are
exchange-traded and represent commitments for the future purchase or sale of an asset at a specified price on a specified date. The Fund bought and sold futures contracts to manage the duration and yield curve
exposure of the Fund versus the benchmark and to manage exposure to movements in interest rates. These instruments may be used for other purposes in future periods. Upon entering into futures contracts, the Fund bears
risks that it may not achieve the anticipated benefits of the futures contracts and may realize a loss. Additional risks include counterparty credit risk, the possibility of an illiquid market, and that a change in
the value of the contract or option may not correlate with changes in the value of the underlying asset.
Upon entering into a futures
contract, the Fund deposits cash or securities with the broker, known as a futures commission merchant (FCM), in an amount sufficient to meet the initial margin requirement. The initial margin deposit must be
maintained at an established level over the life of the contract. Cash deposited as initial margin is recorded in the Statement of Assets and Liabilities as margin deposits. Securities deposited as initial margin are
designated in the Portfolio of Investments. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily change in the contract value and are
recorded as variation margin receivable or payable and are offset in unrealized gains or losses. The Fund 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.
| 34 | Columbia Bond Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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 manage exposure to fluctuations in interest rates and to manage
convexity risk. 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.
Interest rate swaption contracts
Interest rate swaption contracts
entered into by the Fund typically represent an option that gives the purchaser the right, but not the obligation, to enter into an interest rate swap contract on a future date. Each interest rate swaption contract
will specify if the buyer is entitled to receive the fixed or floating rate if the interest rate is exercised. Changes in the value of a purchased interest rate swaption contracts are reported as unrealized
appreciation or depreciation on options in the Statement of Assets and Liabilities. Gain or loss is recognized in the Statement of Operations when the interest rate swaption contract is closed or expires.
When the Fund writes an interest
rate swaption 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 interest rate swaption contract written. Premiums received from writing interest rate swaption contracts that expire unexercised are recorded by the Fund on the expiration date as
realized gains from options written in the Statement of Operations. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also recorded
as realized gain, or if the premium is less than the amount paid for the closing purchase, as realized loss. These amounts are reflected as net realized gain (loss) on options written in the Statement of
Operations.
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.
| Columbia Bond Fund | Annual Report 2023 | 35 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
The following table is a summary of
the fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) at April 30, 2023:
| Asset derivatives | ||
| Risk exposure category | Statement of assets and liabilities location | Fair value ($) |
| Interest rate risk | Component of total distributable earnings (loss) — unrealized appreciation on futures contracts | 8,181,296* |
| Interest rate risk | Investments, at value — Option contracts purchased | 3,566 |
| Total | 8,184,862 |
| Liability derivatives | ||
| Risk exposure category | Statement of assets and liabilities location | Fair value ($) |
| Interest rate risk | Component of total distributable earnings (loss) — unrealized depreciation on futures contracts | 11,252* |
| * | Includes cumulative appreciation (depreciation) as reported in the tables following the Portfolio of Investments. Only the current day’s variation margin is reported in receivables or payables in the Statement of Assets and Liabilities. |
The following table indicates the
effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended April 30, 2023:
The following table is a summary
of the average outstanding volume by derivative instrument for the year ended April 30, 2023:
| Derivative instrument | Average notional amounts ($)* |
| Futures contracts — long | 301,641,594 |
| Futures contracts — short | 87,140,629 |
| Derivative instrument | Average value ($) |
| Option contracts purchased | 426,981* |
| Option contracts written | (1,041,045)** |
| * | Based on the ending quarterly outstanding amounts for the year ended April 30, 2023. |
| ** | Based on the ending daily outstanding amounts for the year ended April 30, 2023. |
| 36 | Columbia Bond Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
Asset- and mortgage-backed
securities
The Fund may invest in asset-backed
and mortgage-backed securities. The maturity dates shown represent the original maturity of the underlying obligation. Actual maturity may vary based upon prepayment activity on these obligations. All, or a portion,
of the obligation may be prepaid at any time because the underlying asset may be prepaid. As a result, decreasing market interest rates could result in an increased level of prepayment. An increased prepayment rate
will have the effect of shortening the maturity of the security. Unless otherwise noted, the coupon rates presented are fixed rates.
Delayed delivery securities
The Fund may trade securities on
other than normal settlement terms, including securities purchased or sold on a “when-issued” or "forward commitment" basis. This may increase risk to the Fund since the other party to the transaction may
fail to deliver, which could cause the Fund to subsequently invest at less advantageous prices. The Fund designates cash or liquid securities in an amount equal to the delayed delivery commitment.
To be announced securities
The Fund may trade securities on a
To Be Announced (TBA) basis. As with other delayed-delivery transactions, a seller agrees to issue a TBA security at a future date. However, the seller does not specify the particular securities to be delivered.
Instead, the Fund agrees to accept any security that meets specified terms.
In some cases, Master Securities
Forward Transaction Agreements (MSFTAs) may be used to govern transactions of certain forward-settling agency mortgage-backed securities, such as delayed-delivery and TBAs, between the Fund and counterparty. The MSFTA
maintains provisions for, among other things, initiation and confirmation, payment and transfer, events of default, termination, and maintenance of collateral relating to such transactions.
Mortgage dollar roll transactions
The Fund may enter into mortgage
“dollar rolls” in which the Fund sells securities for delivery in the current month and simultaneously contracts with the same counterparty to repurchase similar but not identical securities (same type,
coupon and maturity) on a specified future date. These transactions may increase the Fund’s portfolio turnover rate. During the roll period, the Fund loses the right to receive principal and interest paid on the
securities sold. However, the Fund may benefit because it receives negotiated amounts in the form of reductions of the purchase price for the future purchase plus the interest earned on the cash proceeds of the
securities sold until the settlement date of the forward purchase. The Fund records the incremental difference between the forward purchase and sale of each forward roll as a realized gain or loss. Unless any realized
gains exceed the income, capital appreciation, and gain or loss due to mortgage prepayments that would have been realized on the securities sold as part of the mortgage dollar roll, the use of this technique may
diminish the investment performance of the Fund compared to what the performance would have been without the use of mortgage dollar rolls. Mortgage dollar rolls involve the risk that the market value of the securities
the Fund is obligated to repurchase may decline below the repurchase price, or that the counterparty may default on its obligations. All cash proceeds will be invested in instruments that are permissible investments
for the Fund. The Fund identifies cash or liquid securities in an amount equal to the forward purchase price. The Fund does not currently enter into mortgage dollar rolls that are accounted for as financing
transactions.
Interest only and principal only
securities
The Fund may invest in Interest
Only (IO) or Principal Only (PO) securities. IOs are stripped securities entitled to receive all of the security’s interest, but none of its principal. IOs are particularly sensitive to changes in interest rates
and therefore subject to greater fluctuations in price than typical interest bearing debt securities. IOs are also subject to credit risk because the Fund may not receive all or part of the interest payments if the
issuer, obligor, guarantor or counterparty defaults on its obligation. Payments received for IOs are included in interest income in the Statement of Operations. Because no principal will be received at the maturity of
an IO, adjustments are made to the cost of the security on a monthly basis until maturity. These adjustments are included in interest income in the Statement of Operations. POs are stripped securities entitled to
receive the principal from the underlying obligation, but not the interest. POs are particularly sensitive to changes in interest rates and therefore are subject to fluctuations in price. POs are also subject to
credit risk because the Fund may not receive
| Columbia Bond Fund | Annual Report 2023 | 37 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
all or part of its principal if the issuer,
obligor, guarantor or counterparty defaults on its obligation. The Fund may also invest in IO or PO stripped mortgage-backed securities. Payments received for POs are treated as reductions to the cost and par value of
the securities.
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 April 30, 2023:
| Citi ($) | |
| Assets | |
| Call option contracts purchased | 3,566 |
| Total financial and derivative net assets | 3,566 |
| Total collateral received (pledged) (a) | 3,566 |
| 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
Interest income is recorded on an
accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted. The
Fund classifies gains and losses realized on prepayments received on mortgage-backed securities as adjustments to interest income.
The Fund may place a debt security
on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. The Fund may also adjust
accrual rates when it becomes probable the full interest will not be collected and a partial payment will be received. A defaulted debt security is removed from non-accrual status when the issuer resumes interest
payments or when collectability of interest is reasonably assured.
Corporate actions and dividend
income are recorded on the ex-dividend date.
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.
| 38 | Columbia Bond Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 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.
Distributions to shareholders
Distributions from net investment
income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
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 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 0.50% to 0.34% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30, 2023 was 0.50% of the Fund’s
average daily net assets.
| Columbia Bond Fund | Annual Report 2023 | 39 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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, effective through August 31, 2023, Institutional 2 Class shares are
subject to a contractual transfer agency fee annual limitation of not more than 0.05% and Institutional 3 Class shares are subject to a contractual transfer agency fee annual limitation of not more than 0.00% of the
average daily net assets attributable to each share class.
For the year ended April
30, 2023, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| 40 | Columbia Bond Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 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 April 30, 2023, these minimum account balance fees reduced total expenses of
the Fund by $826.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A and Class C shares of the Fund. Also under the Plans, the Fund pays a
monthly distribution fee to the Distributor at the maximum annual rates of 0.75% and 0.50% of the average daily net assets attributable to Class C and Class R shares of the Fund, respectively.
Shareholder services fees
The Fund has adopted a shareholder
services plan that permits it to pay for certain services provided to Class V shareholders by their selling and/or servicing agents. The Fund may pay shareholder servicing fees up to an aggregate annual rate of 0.40%
of the Fund’s average daily net assets attributable to Class V shares (comprised of up to 0.20% for shareholder services and up to 0.20% for administrative support services). These fees are currently limited to
an aggregate annual rate of not more than 0.15% of the Fund’s average daily net assets attributable to Class V shares.
Sales charges (unaudited)
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the year ended April 30, 2023, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 4.75 | 0.50 - 1.00(a) | 51,550 |
| Class C | — | 1.00(b) | 578 |
| Class V | 4.75 | 0.50 - 1.00(a) | 49 |
| (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.
| Columbia Bond Fund | Annual Report 2023 | 41 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 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:
| Fee rate(s) contractual August 31, 2023 | |
| Class A | 0.77% |
| Advisor Class | 0.52 |
| Class C | 1.52 |
| Institutional Class | 0.52 |
| Institutional 2 Class | 0.45 |
| Institutional 3 Class | 0.40 |
| Class R | 1.02 |
| Class V | 0.67 |
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, effective through August 31, 2023, is the Transfer Agent’s
contractual agreement to limit total transfer agency fees to an annual rate of not more than 0.05% for Institutional 2 Class and 0.00% for Institutional 3 Class of the average daily net assets attributable to each
share class, unless sooner terminated at the sole discretion of the Board of Trustees. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the
Investment Manager or its affiliates in future periods.
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At April 30, 2023, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, derivative investments, tax straddles, principal and/or interest from fixed income securities, capital loss
carryforwards, trustees’ deferred compensation and distributions. To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net
assets. Temporary differences do not require reclassifications.
The following reclassifications
were made:
| Undistributed net investment income ($) | Accumulated net realized (loss) ($) | Paid in capital ($) |
| 246,471 | (246,471) | — |
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.
| 42 | Columbia Bond Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended April 30, 2023 | Year Ended April 30, 2022 | ||||
| Ordinary income ($) | Long-term capital gains ($) | Total ($) | Ordinary income ($) | Long-term capital gains ($) | Total ($) |
| 31,786,239 | — | 31,786,239 | 19,737,576 | — | 19,737,576 |
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At April 30, 2023, the components
of distributable earnings on a tax basis were as follows:
| Undistributed ordinary income ($) | Undistributed long-term capital gains ($) | Capital loss carryforwards ($) | Net unrealized (depreciation) ($) |
| 3,393,253 | — | (115,375,299) | (62,468,188) |
At April 30, 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) ($) | Net unrealized (depreciation) ($) |
| 1,250,725,554 | 3,830,911 | (66,299,099) | (62,468,188) |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
The following capital loss
carryforwards, determined at April 30, 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 April 30,
2023, capital loss carryforwards utilized, if any, were as follows:
| No expiration short-term ($) | No expiration long-term ($) | Total ($) | Utilized ($) |
| (57,211,023) | (58,164,276) | (115,375,299) | — |
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 $2,778,557,867 and $2,833,437,379, respectively, for the year ended April 30, 2023, of which $2,549,705,795
and $2,424,188,588, respectively, were U.S. government securities. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Affiliated money
market fund
The Fund invests in Columbia
Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as
Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a
floating net asset value. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes
referred to as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
| Columbia Bond Fund | Annual Report 2023 | 43 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 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 April 30, 2023 was as follows:
| Borrower or lender | Average loan balance ($) | Weighted average interest rate (%) | Number of days with outstanding loans |
| Lender | 4,712,500 | 4.75 | 8 |
Interest income earned by the Fund
is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at April 30, 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 April 30, 2023.
Note 9. Significant
risks
Credit risk
Credit risk is the risk that the
value of debt instruments in the Fund’s portfolio may decline because the issuer defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial obligations,
such as making payments to the Fund when due. Credit rating agencies assign credit ratings to certain debt instruments to indicate their credit risk. Lower-rated or unrated debt instruments held by the Fund may
present increased credit risk as compared to higher-rated debt instruments.
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
| 44 | Columbia Bond Fund | Annual Report 2023 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
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.
Interest rate risk
Interest rate risk is the risk of
losses attributable to changes in interest rates. In general, if interest rates rise, the values of debt instruments tend to fall, and if interest rates fall, the values of debt instruments tend to rise. Actions by
governments and central banking authorities can result in increases or decreases in interest rates. Higher periods of inflation could lead such authorities to raise interest rates. Increasing interest rates may
negatively affect the value of debt securities held by the Fund, resulting in a negative impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt
security, the greater its sensitivity to changes in interest rates. The Fund is subject to the risk that the income generated by its investments may not keep pace with inflation.
Liquidity risk
Liquidity risk is the risk
associated with a lack of marketability of investments which may make it difficult to sell the investment at a desirable time or price. Changing regulatory, market or other conditions or environments (for example, the
interest rate or credit environments) may adversely affect the liquidity of the Fund’s investments. The Fund may have to accept a lower selling price for the holding, sell other investments, or forego another,
more appealing investment opportunity. Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. A less liquid market can
lead to an increase in Fund redemptions, which may negatively impact Fund performance and net asset value per share, including, for example, if the Fund is forced to sell securities in a down market.
Market 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 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, restricted cross-border payments and limited access to investments and/or assets in certain international markets and/or
issuers. These developments and other related events could negatively impact Fund performance.
Mortgage- and other asset-backed
securities risk
The value of any mortgage-backed
and other asset-backed securities including collateralized debt obligations, if any, held by the Fund may be affected by, among other things, changes or perceived changes in: interest rates; factors concerning the
interests in and structure of the issuer or the originator of the mortgages or other assets; the creditworthiness of the entities that provide any supporting letters of credit, surety bonds or other credit enhancements;
or the market’s assessment of the
| Columbia Bond Fund | Annual Report 2023 | 45 |
Notes to Financial Statements (continued)
April 30, 2023
April 30, 2023
quality of underlying assets. Payment of principal
and interest on some mortgage-backed securities (but not the market value of the securities themselves) may be guaranteed by the full faith and credit of a particular U.S. Government agency, authority, enterprise or
instrumentality, and some, but not all, are also insured or guaranteed by the U.S. Government. Mortgage-backed securities issued by non-governmental issuers (such as commercial banks, savings and loan institutions,
private mortgage insurance companies, mortgage bankers and other secondary market issuers) may entail greater risk than obligations guaranteed by the U.S. Government. Mortgage- and other asset-backed securities are
subject to liquidity risk and prepayment risk. A decline or flattening of housing values may cause delinquencies in mortgages (especially sub-prime or non-prime mortgages) underlying mortgage-backed securities and
thereby adversely affect the ability of the mortgage-backed securities issuer to make principal and/or interest payments to mortgage-backed securities holders, including the Fund. Rising or high interest rates tend to
extend the duration of mortgage- and other asset-backed securities, making their prices more volatile and more sensitive to changes in interest rates.
Shareholder concentration risk
At April 30, 2023, one unaffiliated
shareholder of record owned 31.8% 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 51.6% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the Fund. In the case
of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of less liquid
positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 10. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued 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.
| 46 | Columbia Bond Fund | Annual Report 2023 |
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees of Columbia
Funds Series Trust I and Shareholders of Columbia Bond Fund
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Bond Fund (one of the funds constituting Columbia Funds Series Trust I, referred to hereafter as the "Fund") as of April 30,
2023, the related statement of operations for the year ended April 30, 2023, the statement of changes in net assets for each of the two years in the period ended April 30, 2023, including the related notes, and the
financial highlights for each of the five years in the period ended April 30, 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 April 30, 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 April 30, 2023 and
the financial highlights for each of the five years in the period ended April 30, 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 April 30, 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
June 22, 2023
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
| Columbia Bond Fund | Annual Report 2023 | 47 |
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended April 30, 2023. Shareholders will be notified in early 2024 of the amounts for use in preparing 2023 income tax returns.
| Section 163(j) Interest Dividends | |
| 99.29% |
Section 163(j) Interest Dividends.
The percentage of ordinary income distributed during the fiscal year that shareholders may treat as interest income for purposes of IRC Section 163(j), subject to holding period requirements and other limitations.
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 and other relevant Board experience |
| 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 | 174 | 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 |
| 48 | Columbia Bond 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 and other relevant Board experience |
| 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 | 174 | 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 | 174 | 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) (financial services), 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 | 172 | 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 (former mutual fund complex), January 2015-December 2017 |
| Columbia Bond Fund | Annual Report 2023 | 49 |
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 and other relevant Board experience |
| 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 | 172 | Treasurer, Edinburgh University US Trust Board, since January 2023; Member, HBS Community Action Partners Board, since September 2022; former Director, University of Edinburgh Business School (Member of US Board), 2004-2019; former Director, Boston Public Library Foundation, 2008-2017 |
| 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 | 174 | Former Trustee, MA Taxpayers Foundation, 1997-2022; former Director, The MA Business Roundtable, 2003-2019; former Chairperson, Innovation Index Advisory Committee, MA Technology Collaborative, 1997-2020 |
| 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 | 174 | 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 | 174 | Director, SpartanNash Company since November 2013 (Chair of the Board, since May 2021) (food distributor); Director, Aircastle Limited (Chair of Audit Committee) (aircraft leasing), since August 2006; 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 | 172 | None |
| 50 | Columbia Bond 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 and other relevant Board experience |
| 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 | 172 | 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 Senior Adviser to The Carlyle Group (financial services), March 2008-September 2008; former Governance Consultant to Bridgewater Associates, January 2013-December 2015 |
| 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. | 174 | Director, Valmont Industries, Inc. (irrigation systems manufacturer), since 2012; Trustee, Carleton College (on the Investment Committee), since 1987; Trustee, Carnegie Endowment for International Peace (on the Investment Committee), since 2009 |
| 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 | 172 | 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 |
| Columbia Bond Fund | Annual Report 2023 | 51 |
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 and other relevant Board experience |
| 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 | 174 | Former Director, NAPE (National Alliance for Partnerships in Equity) Education Foundation, October 2016-October 2020; Advisory Board, Jennersville YMCA, since 2022 |
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 and other relevant Board experience |
| 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 | 174 | 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 |
| * | 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 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.
| 52 | Columbia Bond Fund | Annual Report 2023 |
TRUSTEES AND OFFICERS (continued)
(Unaudited)
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:
(Unaudited)
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 Bond Fund | Annual Report 2023 | 53 |
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 |
| 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. |
Liquidity Risk
Management Program
(Unaudited)
Pursuant to Rule 22e-4 under the
1940 Act, the Fund has adopted a liquidity risk management program (Program). The Program’s principal objectives include assessing, managing and periodically reviewing the Fund’s liquidity risk. Liquidity
risk is defined as the risk that the Fund could not meet redemption requests without significant dilution of remaining investors’ interests in the Fund.
The Board has appointed the
Investment Manager as the program administrator for the Fund’s Program. The Investment Manager has delegated oversight of the Program to its Liquidity Risk Management Committee (the Committee). At a board
meeting during the fiscal period, the Committee provided the Board with a report addressing the operations of the program and assessing its adequacy and effectiveness of implementation for the period January 1, 2022,
through December 31, 2022, including:
| • | the Fund had sufficient liquidity to both meet redemptions and operate effectively on behalf of shareholders; |
| • | there were no material changes to the Program during the period; |
| • | the implementation of the Program was effective to manage the Fund’s liquidity risk; and |
| • | the Program operated adequately during the period. |
There can be no assurance that the
Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an
investment in the Fund may be subject.
| 54 | Columbia Bond 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/
ANN121_04_N01_(06/23)
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 six series of the registrant whose reports to stockholders are included in this annual filing.
(a) Audit Fees. Aggregate Audit Fees billed by the principal accountant for professional services rendered during the fiscal years ended April 30, 2023 and April 30, 2022 are approximately as follows:
|
2023 |
2022 |
|
$231,500 |
$238,300 |
Audit Fees include amounts related to the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.
(b) Audit-Related Fees. Aggregate Audit-Related Fees billed to the registrant by the principal accountant for professional services rendered during the fiscal years ended April 30, 2023 and April 30, 2022 are approximately as follows:
|
2023 |
2022 |
|
$25,000 |
$30,500 |
Audit-Related Fees include amounts for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported in Audit Fees above.
During the fiscal years ended April 30, 2023 and April 30, 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 April 30, 2023 and April 30, 2022 are approximately as follows:
|
2023 |
2022 |
|
$75,000 |
$30,300 |
Tax Fees include amounts for the review of annual tax returns, the review of required shareholder distribution calculations and typically include amounts for professional services by the principal accountant for tax compliance, tax advice and tax planning.
During the fiscal years ended April 30, 2023 and April 30, 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 April 30, 2023 and April 30, 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 April 30, 2023 and April 30, 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.
*****
(e)(2) None, or 0%, of the Audit-Related Fees, Tax Fees and All Other Fees paid by the Fund or affiliated entities relating directly to the operations and financial reporting of the Registrant disclosed above were approved by the audit committee pursuant to paragraphs (c)(7)(i)(C) of Rule 2-01 of Regulation S-X (which permits audit committee approval after the start of the engagement with respect to services other than audit, review or attest services, if certain conditions are satisfied).
(f) Not applicable.
(g) The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for the fiscal years ended April 30, 2023 and April 30, 2022 are approximately as follows:
|
2023 |
2022 |
|
$641,000 |
$595,800 |
(h) The registrant’s Audit Committee of the Board of Directors has considered whether the provision of non-audit services that were rendered to the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible with maintaining the principal accountant’s independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments
|
(a) |
The registrant’s “Schedule I – Investments in securities of unaffiliated issuers” (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form N-CSR. |
|
(b) |
Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors.
Item 11. Controls and Procedures.
|
(a) |
The registrant’s principal executive officer and principal financial officer, based on their evaluation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant’s management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. |
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.
|
(registrant) |
Columbia Funds Series Trust I |
|
|
|
|
By (Signature and Title) |
/s/ Daniel J. Beckman |
|
|
Daniel J. Beckman, President and Principal Executive Officer |
|
|
|
|
Date |
June 22, 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 |
June 22, 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 |
June 22, 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 |
June 22, 2023 |
