Certified Annual Shareholder Report for Management Investment Companies (n-csr)

 

Item 1. Reports to Stockholders.

 

Q4 2013

Columbia Acorn Family of Funds

Class A, B, C, I, R, R4, R5, Y and Z Shares

Managed by Columbia Wanger Asset Management, LLC

Annual Report

December 31, 2013

n   Columbia
Acorn® Fund

n   Columbia
Acorn International®

n   Columbia
Acorn USA®

n   Columbia
Acorn International Select ^SM

n   Columbia
Acorn Select ^SM

n   Columbia
Thermostat Fund ^SM

n   Columbia
Acorn Emerging Markets Fund ^SM

n   Columbia
Acorn European Fund ^SM

Not FDIC insured • No bank guarantee • May lose value

Columbia Acorn Family of Funds

Descriptions of Indexes Included in this Report

•  50/50 Blended Benchmark, established by the Fund's investment manager, is an equally weighted custom composite of Columbia Thermostat Fund's primary equity and primary debt benchmarks, the S&P 500 Index and the Barclays U.S. Aggregate Bond Index, respectively. The percentage of the Fund's assets allocated to underlying stock and bond portfolio funds will vary, and accordingly the composition of the Fund's portfolio will not always reflect the composition of the 50/50 Blended Benchmark.

•  Barclays U.S. Aggregate Bond Index is a market value-weighted index that tracks the daily price, coupon, pay-downs and total return performance of fixed-rate, publicly placed, dollar-denominated and non-convertible investment grade debt issues with at least $250 million par amount outstanding and with at least one year to final maturity.

•  Euromoney Smaller European Companies (inc UK) Index is a weighted combination of two indexes: the HSBC Smaller Europe (ex UK) Index and the HSBC Smaller UK Index. The index is rebalanced on a quarterly basis.

•  Lipper Indexes include the largest funds tracked by Lipper, Inc. in the named category. Lipper Mid-Cap Growth Funds Index, 30 largest mid-cap growth funds, including Columbia Acorn Fund; Lipper International Small/Mid Growth Funds Index, 10 largest non-U.S. small/mid growth funds, including Columbia Acorn International; Lipper Small-Cap Growth Funds Index, 30 largest small-cap growth funds, including Columbia Acorn USA; Lipper Mid-Cap Core Funds Index, 30 largest mid-cap core funds; Lipper Flexible Portfolio Funds Index, an equal-weighted index of the 30 largest mutual funds within the Flexible Portfolio fund classification, as defined by Lipper. Lipper Emerging Markets Index, 30 largest emerging markets funds; Lipper European Region Index, 10 largest European funds.

•  MSCI Europe, Australasia, Far East (EAFE) Index (Net) is a capitalization-weighted index that tracks the total return of common stocks in 22 developed-market countries within Europe, Australasia and the Far East. The returns of the MSCI EAFE Index (Net) are presented net of the withholding tax rate applicable to foreign non-resident institutional investors in the foreign companies included in the index who do not benefit from double taxation treaties.

•  MSCI Emerging Markets Small Cap Index, a widely recognized international benchmark, is a free float-adjusted market capitalization index that is designed to measure small-cap emerging market equity performance. The MSCI Emerging Markets Small Cap Index currently consists of the following 23 emerging market country indexes: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.

•  Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index.

•  Russell 2500 Index measures the performance of the 2,500 smallest companies in the Russell 3000 Index, which represents approximately 17% of the total market capitalization of the Russell 3000 Index.

•  Standard & Poor's (S&P) 500 Index tracks the performance of 500 widely held, large-capitalization U.S. stocks.

•  Standard & Poor's (S&P) MidCap 400 Index is a market value-weighted index that tracks the performance of 400 mid-cap U.S. companies.

•  S&P Developed Ex-U.S. Between $2B and $10B Index is a subset of the broad market selected by the index sponsor representing the mid-cap developed market, excluding the United States.

•  S&P Emerging Markets Between $500M and $5B Index represents the institutionally investable capital of emerging market countries with market caps ranging between $500 million to $5 billion, as selected by S&P. The index currently consists of the following 20 emerging market country indexes: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand and Turkey.

•  S&P Europe Between $500M and $5B Index represents the institutionally investable capital of European countries with market caps ranging between $500 million to $5 billion, as selected by S&P. The index currently consists of the following 17 developed market country indexes: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

•  S&P Global Ex-U.S. SmallCap Index consists of the bottom 20% of institutionally investable capital of developed and emerging countries, excluding the United States.

•  S&P Global Ex-U.S. Between $500M and $5B Index is a subset of the broad market selected by the index sponsor representing the mid- and small-cap developed and emerging markets, excluding the United States.

Unlike mutual funds, indexes are not managed and do not incur fees or expenses. It is not possible to invest directly in an index.

Returns for Class A shares are shown with and without the maximum initial sales charge of 5.75%. Returns for Class B shares are shown with and without the applicable contingent deferred sales charge (CDSC) of 5.00% in the first year, declining to 1.00% in the sixth year and eliminated thereafter. Returns for Class C shares are shown with and without the maximum CDSC of 1.00% for the first year after purchase. The Funds' other classes are not subject to sales charges and have limited eligibility. Please see the Funds' prospectuses for details. Performance for different share classes will vary based on differences in sales charges and certain fees associated with each class.

All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results may reflect the effect of any fee waivers or reimbursements of Fund expenses by the investment manager and/or any of its affiliates. Absent these fee waivers and/or expense reimbursement arrangements, performance results would have been lower. Please see Pages 126 and 127 of this report for information on contractual fee waiver and expense reimbursement agreements in place for Columbia Thermostat Fund, Columbia Acorn Emerging Markets Fund and Columbia Acorn European Fund and voluntary fee waiver and expense reimbursement arrangements in place for Columbia Acorn International, Columbia Acorn International Select and Columbia Acorn Select as of December 31, 2013.

The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. You may obtain performance information current to the most recent month-end by contacting your financial intermediary, visiting columbiamanagement.com or calling 800.922.6769.

The returns shown include the returns of each Fund's Class Z shares, each Fund's oldest share class, in cases where the inception date of the Fund is earlier than the inception date of the particular share class or where a period shown dates to before the inception date of the share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiamanagement.com/mutual-funds/appended-performance for more information.

Continued on Page 3.

Fund Performance vs. Benchmarks Class Z Average Annual Total Returns through 12/31/13

Class Z Shares				4th quarter*				1 year				5 years				10 years				Life of Fund
Columbia Acorn Fund (ACRNX) (6/10/70)					7.30	%			30.90	%			20.98	%			10.43	%			14.93	%
Russell 2500 Index					8.66	%			36.80	%			21.77	%			9.81	%			NA
S&P 500 Index**					10.51	%			32.39	%			17.94	%			7.41	%			11.02	%
Russell 2000 Index					8.72	%			38.82	%			20.08	%			9.07	%			NA
Lipper Mid-Cap Growth Funds Index					8.50	%			36.52	%			21.31	%			9.49	%			NA
Columbia Acorn International (ACINX) (9/23/92)					6.09	%			22.33	%			18.81	%			12.29	%			11.65	%
S&P Global Ex-U.S. Between $500M and $5B Index					4.06	%			16.77	%			17.45	%			10.62	%			8.81	%
S&P Global Ex-U.S. SmallCap Index					5.18	%			20.71	%			18.27	%			10.40	%			8.30	%
MSCI EAFE Index (Net)					5.71	%			22.78	%			12.44	%			6.91	%			6.51	%
Lipper International Small/Mid Growth Funds Index					6.81	%			27.72	%			20.91	%			11.23	%			NA
Columbia Acorn USA (AUSAX) (9/4/96)					6.82	%			32.72	%			21.20	%			9.27	%			11.24	%
Russell 2000 Index					8.72	%			38.82	%			20.08	%			9.07	%			8.91	%
Lipper Small-Cap Growth Funds Index					7.82	%			40.99	%			22.20	%			8.27	%			7.54	%
Columbia Acorn Int'l Select (ACFFX) (11/23/98)					1.97	%			14.75	%			15.24	%			10.90	%			9.91	%
S&P Developed Ex-U.S. Between $2B and $10B Index					4.42	%			21.70	%			15.27	%			8.90	%			8.08	%
MSCI EAFE Index (Net)					5.71	%			22.78	%			12.44	%			6.91	%			4.78	%
Lipper International Small/Mid Growth Funds Index					6.81	%			27.72	%			20.91	%			11.23	%			11.16	%
Columbia Acorn Select (ACTWX) (11/23/98)					9.64	%			34.16	%			21.83	%			8.91	%			10.82	%
S&P MidCap 400 Index					8.33	%			33.50	%			21.89	%			10.36	%			10.67	%
S&P 500 Index**					10.51	%			32.39	%			17.94	%			7.41	%			5.04	%
Lipper Mid-Cap Core Funds Index					8.69	%			35.04	%			20.68	%			9.14	%			9.24	%
Columbia Thermostat Fund (COTZX) (9/25/02)					1.95	%			9.30	%			15.18	%			6.91	%			8.21	%
S&P 500 Index					10.51	%			32.39	%			17.94	%			7.41	%			9.70	%
Barclays U.S. Aggregate Bond Index					-0.14	%			-2.02	%			4.44	%			4.55	%			4.56	%
Lipper Flexible Portfolio Funds Index					5.37	%			15.55	%			13.55	%			6.63	%			8.37	%
50/50 Blended Benchmark					5.10	%			14.08	%			11.36	%			6.26	%			7.41	%
Columbia Acorn Emerging Markets Fund (CEFZX) (8/19/11)					7.13	%			11.92	%			—				—				14.00	%
S&P Emerging Markets Between $500M and $5B Index					2.71	%			0.67	%			—				—				3.91	%
MSCI Emering Markets Small Cap Index					1.26	%			1.04	%			—				—				1.23	%
Lipper Emerging Markets Index					1.81	%			-1.29	%			—				—				4.30	%
Columbia Acorn European Fund (CAEZX) (8/19/11)					11.28	%			33.98	%			—				—				22.04	%
S&P Europe Between $500M and $5B Index					10.40	%			37.20	%			—				—				23.00	%
Euromoney Smaller European Companies Index					10.30	%			38.18	%			—				—				21.08	%
Lipper European Region Index					9.45	%			30.36	%			—				—				21.03	%

The inception dates for Class A, B and C shares (if offered) are as follows: Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia Acorn International Select and Columbia Acorn Select, 10/16/00; Columbia Thermostat Fund, 3/3/03; Columbia Acorn Emerging Markets Fund and Columbia Acorn European Fund, 8/19/11. The inception dates for Class I shares are as follows: Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia Acorn International Select and Columbia Acorn Select, 9/27/10; Columbia Acorn Emerging Markets Fund and Columbia Acorn European Fund, 8/19/11. The inception date for Class R shares for Columbia Acorn International is 8/2/11. The inception date for Class R4, R5 and Y shares (if offered) is as follows: Columbia Acorn Fund, Columbia Acorn USA, Columbia Acorn International Select, Columbia Acorn Select, Columbia Thermostat Fund, Columbia Acorn Emerging Markets Fund and Columbia Acorn European Fund, 11/8/12, except that Class Y shares of Columbia Acorn Emerging Markets Fund commenced operations on 6/13/13. The inception date for Class R5 shares of Columbia Acorn International is 8/2/11. The inception date for Class R4 and Y shares of Columbia Acorn International is 11/8/12. The inception date for Class Z shares is as follows: Columbia Acorn Fund, 6/10/70; Columbia Acorn International, 9/23/92; Columbia Acorn USA, 9/4/96; Columbia Acorn International Select and Columbia Acorn Select, 11/23/98; Columbia Thermostat Fund, 9/25/02; Columbia Acorn Emerging Markets Fund and Columbia Acorn European Fund, 8/19/11.

*Not annualized

**Although the Fund typically invests in small- and mid-sized companies, the comparison to the S&P 500 Index is presented to show performance against a widely recognized market index over the life of the Fund.

Please see Page 1 for a description of the indexes listed above.

Squirrel Chatter II: Containerized Cargo and the Man Who Popularized It

Born in a small town in North Carolina, Malcom McLean had little formal schooling beyond grade school. He first worked as a farmer and then operated a gas station. When, in 1934, a road builder asked him where he could hire a truck and a driver, Malcom bought a used truck for $150 and signed on. Malcom went on to build McLean Trucking, one of the largest trucking firms in the country. ¹ The company was an early adopter of diesel engines and conveyors, and acquired other truckers in order to transport backhauls under Interstate Commerce Commission rules. ²

Early in his trucking career, McLean personally had the job of delivering cotton to the port of New York and returning with a truck full of roofing material. He grew impatient waiting for the stevedores to unload and reload his truck and thought that switching full containers would save time and money. ³

In 1955, McLean sold his trucking business and bought Pan-Atlantic Steamship Company for $7 million cash. He then bought Pan-Atlantic's former parent company, Waterman, in a $42 million leveraged buyout using Pan-Atlantic as collateral. ⁴ Combined, the companies operated 37 World War II surplus C-2 cargo ships. He also bought four World War II surplus T-2 tankers and had them equipped with spar decks on top, similar to those used during the war to haul large equipment across the Atlantic.

McLean now had the opportunity to put his shipping-by-container idea to work. Until the 1950s, general ocean cargo arrived at ports in crates, boxes, bags and on pallets. It was then meticulously packed by longshoremen; a typical ship took 150 of them four days to load. ⁵ One steamship executive said it cost more to move cargo from the street to the hold of a ship, than it did to move the cargo across the sea. ⁶ McLean decided to save time and space by utilizing detachable truck trailers, and transporting only the container section of the trailer on the vessels. ⁷ In April 1956, service commenced between Port Newark, New Jersey, Miami, Florida and Houston, Texas. Each of the

four ships could accommodate 58 containers that were thirty-three feet long. ⁸

Shipping by container did cost substantially less. As an extreme example, McLean calculated that the cost of hauling bottled beer from Newark to Miami was 94% cheaper by containership than by conventional shipping. More realistically, a government-sponsored study calculated that container shipping cost 39% to 74% less. ⁹ McLean named his intermodal operation Sea-Land Service.

Sea-Land then set about converting six of the C-2 cargo ships in its fleet into dedicated containerships. Containers were to be stacked four high in the hold and two high on the deck, resulting in a capacity of 226 containers per vessel. In order to allow stacking, frames of the containers were strengthened and twist locks were invented to hold adjacent containers in place. The first converted C-2 began hauling containers in October 1957. These containerships could be loaded by a crew of 14 during a single eight-hour shift for a cost nearly 90% less than loading a similar sized break-bulk ship, a ship with cargo loaded individually. ¹⁰

Imitators soon followed. In August 1958 Matson Line began service between California and Hawaii, carrying 20 containers on deck and conventional break-bulk cargo below. In 1960, Matson began launching dedicated containerships, again converted World War II cargo ships, accommodating up to 356 containers each. In 1960, Grace Line inserted mid-sections into C-2 cargo ships and converted them to containerships capable of carrying 476 containers for shipments between the United States and Latin America. But Grace Line abandoned the service within a few years due to labor problems. McLean launched ships that could carry 476 much larger containers in 1962, and put them into service between the East and West coasts of the United States, ¹¹ as well as between the continental United States and Puerto Rico. ¹² On its tenth anniversary in 1966, Sea-Land had 19 containerships. ¹³ By 1969, Sea-Land had also converted C-4s to carry 622 containers. ¹⁴

McLean recognized that to achieve the full benefit of containers, the entire system of ports, labor, trucks and ships would have to change. ¹⁵ Port Elizabeth, New Jersey,