Item 4.
|
Principal Accountant Fees and Services.
|
Fee information below is disclosed for the one series of the
registrant whose report to stockholders is 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 December 31, 2017 and December 31, 2016 are approximately as follows:
|
|
|
2017
|
|
2016
|
$37,400
|
|
$37,000
|
Audit Fees include amounts related to the audit of the registrants 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 December 31, 2017 and December 31, 2016 are approximately as follows:
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 registrants financial statements and are not reported in Audit Fees above. In fiscal year 2016, Audit-Related Fees consist of agreed-upon procedures performed for semi-annual shareholder reports.
During the fiscal years ended December 31, 2017 and December 31, 2016, there were no Audit-Related Fees billed by the registrants principal
accountant to the registrants 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
December 31, 2017 and December 31, 2016 are approximately as follows:
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 December 31, 2017 and December 31, 2016, there were no Tax Fees billed by the registrants principal accountant to the registrants 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 December 31, 2017 and December 31, 2016 are approximately as follows:
All Other Fees include amounts for products and services provided by the principal accountant, other than the
services reported in paragraphs (a) through (c) above.
Aggregate All Other Fees billed by the registrants principal accountant to the
registrants 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
December 31, 2017 and December 31, 2016 are approximately as follows:
|
|
|
2017
|
|
2016
|
$225,000
|
|
$225,000
|
In both fiscal years 2017 and 2016, All Other Fees primarily consist of fees billed for internal control examinations of the
registrants transfer agent and investment advisor.
(e)(1)
Audit Committee
Pre-Approval
Policies and
Procedures
The registrants Audit Committee is required to
pre-approve
the engagement of the
registrants 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 registrants 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 registrants 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 registrants Adviser and its Control Affiliates. A service will require specific
pre-approval
by the Audit Committee if it is to be provided by the Funds 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 SECs 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 Committees 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 Funds 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 Funds 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) 100% of the services
performed for items (b) through (d) above during 2017 and 2016 were
pre-approved
by the registrants Audit Committee.
(f) Not applicable.
(g) The aggregate
non-audit
fees billed by the registrants accountant for services rendered to the registrant, and rendered to the registrants 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 December 31, 2017 and December 31, 2016 are approximately as follows:
|
|
|
2017
|
|
2016
|
$231,200
|
|
$229,700
|
(h) The registrants Audit Committee of the Board of Directors has considered whether the provision of
non-audit
services that were rendered to the registrants 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 accountants independence.
Item 7.
|
Disclosure of Proxy Voting Policies and Procedures for
Closed-End
Management Investment Companies.
|
Proxy Voting Policies and Procedures
General.
The Funds have delegated to the Investment Manager the responsibility to vote proxies relating to portfolio securities held by the
Funds, including Funds managed by subadvisers.
The Investment Manager votes proxies relating to portfolio securities in accordance with a proxy voting
policy and
pre-determined
proxy voting guidelines adopted by the Board. The Funds endeavor to vote all proxies of which they become aware prior to the vote deadline; provided, however, that in certain
circumstances the Funds may refrain from voting securities. For instance, the Funds may refrain from voting foreign securities if the costs of voting outweigh the expected benefits of voting and typically will not vote securities if voting would
impose trading restrictions.
Board Oversight and Retention of Proxy Voting Authority.
The Board may, in its discretion, vote proxies for
the Funds. For instance, the Board may determine to vote on matters that may present a material conflict of interest to the Investment Manager.
The Board
reviews on an annual basis, or more frequently as determined appropriate, the Investment Managers administration of the proxy voting process and its adherence to the approved guidelines.
Voting Guidelines.
The Investment Manager and Board will generally vote in accordance with
pre-determined
voting guidelines adopted by the Board. The voting guidelines indicate whether to vote for, against or abstain from particular proposals, or whether the matter should be considered on a
case-by-case
basis. A committee within the Investment Manager (the Proxy Voting Committee), which is composed of representatives of the Investment Managers equity
investments, equity research, compliance, legal and operations functions, may determine to vote differently from the guidelines on particular proposals in the event it determines that doing so is in the clients best economic interests. The
Board may also determine to vote differently from the guidelines on particular proposals in the event it determines that doing so is appropriate and in the
Funds interests. The Investment Manager and the Board may also consider the voting recommendations of analysts, portfolio managers, subadvisers and information obtained from outside
resources, including one or more third party research providers. When proposals are not covered by the voting guidelines or a voting determination must be made on a
case-by-case
basis, a portfolio manager, subadviser or analyst will make the voting determination based on his or her determination of the clients best economic
interests. In addition, the Proxy Voting Committee or Board may determine proxy votes when proposals require special consideration.
On an annual basis,
or more frequently as determined necessary, the Board reviews recommendations to revise the existing guidelines or add new guidelines. Recommendations are based on, among other things, industry trends and the frequency that similar proposals appear
on company ballots.
Addressing Conflicts of Interest.
If the Investment Manager is subject to a potential material conflict of interest
with respect to a proxy vote, the Board will vote the proxy by administering the guidelines or determining the vote on a
case-by-case
basis. If the Board determines that
its members may be subject to a potential material conflict of interest with respect to a proxy vote, the member is asked to recuse himself or herself from the determination.
Voting Proxies of Affiliated Underlying Funds.
Certain Funds may invest in shares of other Columbia Funds (referred to in this context as
underlying funds) and may own substantial portions of these underlying funds. If such Funds are in a master-feeder structure, the feeder fund will either seek instructions from its shareholders with regard to the voting of proxies with
respect to the master funds shares and vote such proxies in accordance with such instructions or vote the shares held by it in the same proportion as the vote of all other master fund shareholders. With respect to Funds that hold shares of
underlying funds other than in a master-feeder structure, the proxy policy of the Funds is, in general, to ensure that direct public shareholders of underlying funds control the outcome of any shareholder vote. To help manage this potential conflict
of interest, the policy of the Funds is to vote proxies of the underlying funds in the same proportion as the vote of the direct public shareholders; provided, however, that if there are no direct public shareholders of an underlying fund or if
direct public shareholders represent only a minority interest in an underlying fund, the Fund may cast votes in accordance with instructions from the independent members of the Board.
Proxy Voting Agents.
The Investment Manager has retained Institutional Shareholder Services Inc., a third-party vendor, as its proxy voting
administrator to implement the Funds proxy voting process and to provide recordkeeping and vote disclosure services. The Investment Manager has retained both Institutional Shareholder Services Inc. and Glass-Lewis & Co. to provide
proxy research services.
Additional Information.
Information regarding how the Columbia Funds (except certain Columbia Funds that do not
invest in voting securities) voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 will be available by August 31 of this year free of charge: (i) through the Columbia Funds
website at www.columbiathreadneedle.com/us and/or (ii) on the SECs website at www.sec.gov. For a copy of the voting guidelines in effect on the date of this SAI, see Appendix B to this SAI.
Item 8.
|
Portfolio Managers of
Closed-End
Management Investment Companies.
|
Portfolio Managers
|
|
|
|
|
|
|
Portfolio Manager
|
|
Title
|
|
Role with the Corporation
|
|
Managed
the
Corporation
Since
|
Brian Condon, CFA
|
|
Senior Portfolio Manager and Head of Quantitative Strategies
|
|
Co-Portfolio
Manager
|
|
2010
|
Peter Albanese
|
|
Senior Portfolio Manager
|
|
Co-Portfolio
Manager
|
|
2014
|
Yan Jin
|
|
Senior Portfolio Manager
|
|
Co-Portfolio
Manager
|
|
2012
|
David King, CFA
|
|
Senior Portfolio Manager
|
|
Co-Portfolio
Manager
|
|
2011
|
Mr.
Condon
joined one of the Columbia Management legacy firms or acquired business lines in 1999.
Mr. Condon began his investment career in 1993 and earned a B.A. from Bryant University and an M.S. in finance from Bentley University.
Mr.
Albanese
joined the Investment Manager in August 2014. Prior to joining the Investment Manager, Mr. Albanese was a Managing
Director and Senior Portfolio Manager at Robeco Investment Management. Mr. Albanese began his investment career in 1991 and earned a B.S. from Stony Brook University and an M.B.A. from the Stern School of Business at New York University.
Mr.
Jin
joined one of the Columbia Management legacy firms or acquired business lines in 2002. Mr. Jin began his investment
career in 1998 and earned a M.A. in economics from North Carolina State University.
Mr.
King
joined the Investment Manager in
2010. Mr. King began his investment career in 1983 and earned a B.S. from the University of New Hampshire and an M.B.A. from Harvard Business School.
Other Accounts Managed by the Portfolio Managers:
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
Portfolio
Manager
|
|
Other Accounts Managed
|
|
Performance
Based
Accounts
|
|
Ownership of Fund
Shares
|
|
|
Number and type of
account
|
|
Approximate
Total Net Assets
(excluding the
fund)
|
|
|
For fiscal period ending December 31, 2017, unless otherwise
noted
|
|
|
|
|
|
|
Tri-Continental
Corporation
|
|
Brian Condon
|
|
22 RICs
3 PIVs
61 Other accounts
|
|
$12.94 billion
$140.82 million
$6.85 billion
|
|
None
|
|
$100,001 - $500,000
|
|
David King
|
|
3 RICs
6 Other accounts
|
|
$1.39 billion
$26.96 million
|
|
None
|
|
Over $1,000,000
|
|
Yan Jin
|
|
3 RICs
7 Other accounts
|
|
$1.39 billion
$3.47 million
|
|
None
|
|
$100,001 - $500,000
|
|
Peter Albanese
|
|
16 RICs
3 PIVs
56 Other accounts
|
|
$12.88 billion
$140.82 million
$6.85 billion
|
|
None
|
|
$100,001 - $500,000
|
Potential Conflicts of Interest:
Like other investment professionals with multiple clients, a Funds portfolio manager(s) may face certain potential conflicts of interest in connection
with managing both the Fund and other accounts at the same time. The Investment Manager and the Funds have adopted compliance policies and procedures that attempt to address certain of the potential conflicts that portfolio managers face in this
regard. Certain of these conflicts of interest are summarized below.
The management of accounts with different advisory fee rates and/or fee structures, including accounts that pay
advisory fees based on account performance (performance fee accounts), may raise potential conflicts of interest for a portfolio manager by creating an incentive to favor higher fee accounts.
Potential conflicts of interest also may arise when a portfolio manager has personal investments in other accounts that may create an incentive to favor those
accounts. As a general matter and subject to the Investment Managers Code of Ethics and certain limited exceptions, the Investment Managers investment professionals do not have the opportunity to invest in client accounts, other than the
funds.
A portfolio manager who is responsible for managing multiple funds and/or accounts may devote unequal time and attention to the management of
those Funds and/or accounts. The effects of this potential conflict may be more pronounced where Funds and/or accounts managed by a particular portfolio manager have different investment strategies.
A portfolio manager may be able to select or influence the selection of the broker/dealers that are used to execute securities transactions for the Funds. A
portfolio managers decision as to the selection of broker/dealers could produce disproportionate costs and benefits among the Funds and the other accounts the portfolio manager manages.
A potential conflict of interest may arise when a portfolio manager buys or sells the same securities for a Fund and other accounts. On occasions when a
portfolio manager considers the purchase or sale of a security to be in the best interests of a Fund as well as other accounts, the Investment Managers trading desk may, to the extent consistent with applicable laws and regulations, aggregate
the securities to be sold or bought in order to obtain the best execution and lower brokerage commissions, if any. Aggregation of trades may create the potential for unfairness to a Fund or another account if a portfolio manager favors one account
over another in allocating the securities bought or sold. The Investment Manager and its Participating Affiliates (including Threadneedle) may coordinate their trading operations for certain types of securities and transactions pursuant to
personnel-sharing agreements or similar intercompany arrangements. However, typically the Investment Manager does not coordinate trading activities with a Participating Affiliate with respect to accounts of that Participating Affiliate unless such
Participating Affiliate is also providing trading services for accounts managed by the Investment Manager. Similarly, a Participating Affiliate typically does not coordinate trading activities with the Investment Manager with respect to accounts of
the Investment Manager unless the Investment Manager is also providing trading services for accounts managed by such Participating Affiliate. As a result, it is possible that the Investment Manager and its Participating Affiliates may trade in the
same instruments at the same time, in the same or opposite direction or in different sequence, which could negatively impact the prices paid by the Fund on such instruments. Additionally, in circumstances where trading services are being provided on
a coordinated basis for the Investment Managers accounts (including the Funds) and the accounts of one or more Participating Affiliates in accordance with applicable law, it is possible that the allocation opportunities available to the Funds
may be decreased, especially for less actively traded securities, or orders may take longer to execute, which may negatively impact Fund performance.
Cross trades, in which a portfolio manager sells a particular security held by a Fund to another account (potentially saving transaction costs for
both accounts), could involve a potential conflict of interest if, for example, a portfolio manager is permitted to sell a security from one account to another account at a higher price than an independent third party would pay. The Investment
Manager and the Funds have adopted compliance procedures that provide that any transactions between a Fund and another account managed by the Investment Manager are to be made at a current market price, consistent with applicable laws and
regulations.
Another potential conflict of interest may arise based on the different investment objectives and strategies of a Fund and other accounts
managed by its portfolio manager(s). Depending on another accounts objectives and other factors, a portfolio manager may give advice to and make decisions for a Fund that may differ from advice given, or the timing or nature of decisions made,
with respect to another account. A portfolio managers investment decisions are the product of many factors in addition to basic suitability for the particular account involved. Thus, a portfolio manager may buy or sell a particular security
for certain
accounts, and not for a Fund, even though it could have been bought or sold for the Fund at the same time. A portfolio manager also may buy a particular security for one or more accounts when one
or more other accounts are selling the security (including short sales). There may be circumstances when a portfolio managers purchases or sales of portfolio securities for one or more accounts may have an adverse effect on other accounts,
including the Funds.
To the extent a Fund invests in underlying funds, a portfolio manager will be subject to additional potential conflicts of
interest. Because of the structure of
funds-of-funds,
the potential conflicts of interest for the portfolio managers may be different than the potential
conflicts of interest for portfolio managers who manage other Funds. The Investment Manager and its affiliates may receive higher compensation as a result of allocations to underlying funds with higher fees.
A Funds portfolio manager(s) also may have other potential conflicts of interest in managing the Fund, and the description above is not a complete
description of every conflict that could exist in managing the Fund and other accounts. Many of the potential conflicts of interest to which the Investment Managers portfolio managers are subject are essentially the same or similar to the
potential conflicts of interest related to the investment management activities of the Investment Manager and its affiliates.
Structure of
Compensation:
Portfolio manager direct compensation is typically comprised of a base salary, and an annual incentive award that is paid either in the
form of a cash bonus if the size of the award is under a specified threshold, or, if the size of the award is over a specified threshold, the award is paid in a combination of a cash bonus, an equity incentive award, and deferred compensation.
Equity incentive awards are made in the form of Ameriprise Financial restricted stock, or for more senior employees both Ameriprise Financial restricted stock and stock options. The investment return credited on deferred compensation is based on the
performance of specified Columbia Funds, in most cases including the Columbia Funds the portfolio manager manages.
Base salary is typically determined
based on market data relevant to the employees position, as well as other factors including internal equity. Base salaries are reviewed annually, and increases are typically given as promotional increases, internal equity adjustments, or
market adjustments.
Annual incentive awards are variable and are based on (1) an evaluation of the employees investment performance and
(2) the results of a peer and/or management review of the employee, which takes into account skills and attributes such as team participation, investment process, communication, and professionalism. Scorecards are used to measure performance of
Columbia Funds and other accounts managed by the employee versus benchmarks and/or peer groups. Performance versus benchmark and peer group is generally weighted for the rolling one, three, and five year periods. One year performance is weighted
10%, three year performance is weighted 60%, and five year performance is weighted 30%. Relative asset size is a key determinant for fund weighting on a scorecard. Typically, weighting would be proportional to actual assets. Consideration may also
be given to performance in managing client assets in sectors and industries assigned to the employee as part of his/her investment team responsibilities, where applicable. For leaders who also have group management responsibilities, another factor
in their evaluation is an assessment of the groups overall investment performance.
Equity incentive awards are designed to align participants
interests with those of the shareholders of Ameriprise Financial. Equity incentive awards vest over multiple years, so they help retain employees.
Deferred compensation awards are designed to align participants interests with the investors in the Columbia Funds and other accounts they manage. The
value of the deferral account is based on the performance of Columbia Funds. Employees have the option of selecting from various Columbia Funds for their deferral account, however portfolio managers must allocate a minimum of 25% of their incentive
awarded through the deferral program to the Columbia Fund(s) they manage. Deferrals vest over multiple years, so they help retain employees.
Exceptions
to this general approach to bonuses exist for certain teams and individuals. Funding for the bonus pool is determined by management and depends on, among other factors, the levels of compensation generally in the investment management industry
taking into account investment performance (based on market compensation data) and both Ameriprise Financial and Columbia Management profitability for the year, which is largely determined by assets under management.
For all employees the benefit programs generally are the same, and are competitive within the financial services industry. Employees participate in a wide
variety of plans, including options in Medical, Dental, Vision, Health Care and Dependent Spending Accounts, Life Insurance, Long Term Disability Insurance, 401(k), and a cash balance pension plan.
Item 9.
|
Purchases of Equity Securities by
Closed-End
Management Investment Company and Affiliated Purchasers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
|
|
Total
Number
of Shares
Purchased
|
|
|
Average
Price
Paid Per
Share
|
|
|
Total
Number of
Shares
Purchased
as Part of
Publicly
Announced
Plans
or
Programs
(1)
|
|
|
Maximum
Number of
Shares that
May Yet Be
Purchased
Under the
Plans
or
Programs
(1)
|
|
07-01-17
to
07-31-17
|
|
|
264,543
|
|
|
$
|
24.66
|
|
|
|
264,543
|
|
|
|
1,314,261
|
|
08-01-17
to
08-31-17
|
|
|
279,947
|
|
|
$
|
24.93
|
|
|
|
279,947
|
|
|
|
1,034,314
|
|
09-01-17
to
09-30-17
|
|
|
147,092
|
|
|
$
|
25.19
|
|
|
|
147,092
|
|
|
|
887,222
|
|
10-01-17
to
10-31-17
|
|
|
315,427
|
|
|
$
|
25.87
|
|
|
|
315,427
|
|
|
|
571,795
|
|
11-01-17
to
11-30-17
|
|
|
276,396
|
|
|
$
|
25.97
|
|
|
|
276,396
|
|
|
|
295,399
|
|
12-01-17
to
12-31-17
|
|
|
274,020
|
|
|
$
|
26.74
|
|
|
|
274,020
|
|
|
|
21,379
|
|
(1) The registrant has a stock repurchase program. For 2017, the registrant was authorized to repurchase up to 5% of its
outstanding Common Stock directly from stockholders and in the open market, provided that, with respect to shares repurchased in the open market the excess of the net asset value of a share of Common Stock over its market price (the discount) is
greater than 10%. The table reflects trade date + 1, rather than trade date, which is used for financial statement purposes; therefore, shares reflected may vary from capital stock activity presented in the shareholder report.
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 registrants board of directors.