COLUMBIA DAILY INCOME CO, 485BPOS, 1996-02-22

COLUMBIA DAILY INCOME CO
485BPOS, 1996-02-22

Previous: CLARCOR INC, DEF 14A, 1996-02-22

Next: COLUMBIA GROWTH FUND INC, 485BPOS, 1996-02-22

<PAGE>

Reg. Nos. 2-51727/811-2507
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [ X ]

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 46 [ X ]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [ X ]

Amendment No. 46 [ X ]

(Check appropriate box or boxes.)

COLUMBIA DAILY INCOME COMPANY
(Exact Name of Registrant as Specified in Charter)

1301 SW Fifth Avenue, PO Box 1350, Portland, Oregon 97207
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (503) 222-3600

John A. Kemp
1301 SW Fifth Avenue, PO Box 1350, Portland, Oregon 97207
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement.

It is proposed that this filing will become effective (Check appropriate box)

immediately upon filing pursuant to paragraph (b)
-----
X on February 23, 1996 pursuant to paragraph (b)
-----
60 days after filing pursuant to paragraph (a)
-----
on _________________ pursuant to paragraph (a) of Rule 485.
-----
75 days after filing pursuant to paragraph (a)(2)
-----
on __________ pursuant to paragraph (a)(2) of Rule 485
-----

If appropriate, check the following box:
this post-effective amendment designates a new effective date for
----- a previously filed post-effective amendment.

Please forward copies of communications to:

Robert J. Moorman
Stoel Rives LLP
900 SW Fifth Avenue
Portland, Oregon 97204

------------------------

An indefinite number of shares of Common Stock have been registered under the
Securities Act of 1933 by the Registrant. The Rule 24f-2 Notice for the year
ended December 31, 1995 will be filed on or before February 29, 1996.

<PAGE>

COLUMBIA DAILY INCOME COMPANY

CROSS-REFERENCE SHEET

<TABLE>
<CAPTION>
<S> <C>
Item
- ------------------------------------------------------------

Location in
Part A - INFORMATION REQUIRED IN A PROSPECTUS Prospectus
-----------

Item 1. Cover Page . . . . . . . . . . . . . . . . . . . . Cover

Item 2. Synopsis . . . . . . . . . . . . . . . . . . . . . "Fund Expenses"

Item 3. Condensed Financial Information. . . . . . . . . . "Financial Highlights" and
"Performance"

Item 4. General Description of Registrant. . . . . . . . . "Fund Descriptions" and
"Additional Information"

Item 5. Management of the Fund . . . . . . . . . . . . . . "Fund Management"

Item 5A. Management's Discussion of Fund Performance. . . . Contained in the Annual Report
of the Fund

Item 6. Capital Stock and Other Securities . . . . . . . . "Fund Management"; Distributions and "Taxes";
"Investor Services"; "Fund
Descriptions"; and Cover

Item 7. Purchase of Securities Being Offered . . . . . . . "Investor Services"; "Fund Descriptions"
and "Fund Management"

Item 8. Redemption or Repurchase . . . . . . . . . . . . . "Investor Services"

Item 9. Pending Legal Proceedings. . . . . . . . . . . . . Not applicable

Location in State-
Part B - INFORMATION REQUIRED IN A STATEMENT ment of Additional
OF ADDITIONAL INFORMATION Information
------------------

Item 10. Cover Page . . . . . . . . . . . . . . . . . . . . Cover

Item 11. Table of Contents. . . . . . . . . . . . . . . . . "Table of Contents"

Item 12. General Information and History. . . . . . . . . . Not applicable

<PAGE>

Item 13. Investment Objectives and Policies . . . . . . . . "Investment Restrictions" and "Additional Information
Regarding Certain Investments by the Funds." Additional
information is in Prospectus under "Fund Descriptions" and
"Additional Information."

Item 14. Management of the Fund . . . . . . . . . . . . . . "Management"

Item 15. Control Persons and Principal
Holders of Securities. . . . . . . . . . . . . . "Management"

Item 16. Investment Advisory and Other Services . . . . . . "Investment Advisory and Other Fees Paid to Affiliates" and
"Custodians." Additional information is in Prospectus under
"Fund Management."

Item 17. Brokerage Allocation and Other Practices . . . . . "Portfolio Transactions"

Item 18. Capital Stock and Other Securities . . . . . . . . All required information is in Prospectus under "Fund
Management."

Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered. . . . . . . . . . . . . . . . . . "Redemptions." Additional information is in Prospectus under
"Investor Services."

Item 20. Tax Status . . . . . . . . . . . . . . . . . . . . "Taxes." Additional information is in Prospectus
under Distributions and "Taxes."

Item 21. Underwriters . . . . . . . . . . . . . . . . . . . "Management"

Item 22. Calculation of Performance Data. . . . . . . . . . "Yield and Performance"

Item 23. Financial Statements . . . . . . . . . . . . . . . "Accounting Services and Financial Statements"
</TABLE>

3
<PAGE>
PROSPECTUS
-------------------------------

[LOGO]

COLUMBIA FUNDS
February 23, 1996
COLUMBIA COMMON STOCK FUND, INC.
----------------------------------------------------
COLUMBIA GROWTH FUND, INC.
----------------------------------------------------
COLUMBIA INTERNATIONAL STOCK FUND, INC.
----------------------------------------------------
COLUMBIA SPECIAL FUND, INC.
----------------------------------------------------
COLUMBIA REAL ESTATE EQUITY FUND, INC.
----------------------------------------------------
COLUMBIA BALANCED FUND, INC.
----------------------------------------------------
COLUMBIA DAILY INCOME COMPANY
----------------------------------------------------
COLUMBIA U.S. GOVERNMENT SECURITIES FUND, INC.
----------------------------------------------------
COLUMBIA FIXED INCOME SECURITIES FUND, INC.
----------------------------------------------------
COLUMBIA MUNICIPAL BOND FUND, INC.
----------------------------------------------------
COLUMBIA HIGH YIELD FUND, INC.

COLUMBIA FINANCIAL CENTER INCORPORATED
1301 S.W. Fifth Avenue
P.O. Box 1350
Portland, Oregon 97207-1350
1-800-547-1707
<PAGE>

COLUMBIA FUNDS PROSPECTUS
-----------------------------------------------------------------

This Prospectus contains important information about the 11 mutual funds (the
"Funds") managed by Columbia Funds Management Company (the "Advisor"). The
different investment objectives of the Funds are summarized below. More
information about the Funds and the services available to shareholders are
described in detail in this Prospectus.
-- STOCK FUNDS --

COLUMBIA COMMON STOCK FUND, INC.

(the "Common Stock Fund") seeks growth of capital and dividend income through a
diversified portfolio of common stocks issued primarily by larger, well
established companies, many of which have a history of paying dividends.

COLUMBIA GROWTH FUND, INC.

(the "Growth Fund") seeks long-term capital appreciation by investing primarily
in common stocks believed to offer above-average earnings growth.

COLUMBIA INTERNATIONAL STOCK FUND, INC.

(the "International Stock Fund") seeks long-term capital appreciation by
investing primarily in foreign equity securities. Under normal conditions, at
least 65% of its total assets will be invested in at least three countries other
than the United States.

COLUMBIA SPECIAL FUND, INC.

(the "Special Fund") seeks significant capital appreciation by investing in
securities, primarily common stocks, the Advisor believes are more aggressive
and carry a greater degree of risk than the market as a whole (as measured by
the Standard & Poor's 500 Stock Index).

COLUMBIA REAL ESTATE EQUITY FUND, INC.

(the "Real Estate Fund") seeks capital appreciation and above-average current
income, with equal emphasis, by investing primarily in equity securities of
companies that are principally engaged in the real estate industry.
-- BALANCED FUND --

COLUMBIA BALANCED FUND, INC.

(the "Balanced Fund") is designed to provide high total return (growth of
capital and income) by investing in common stocks and fixed income securities.
-- MONEY MARKET FUND --

COLUMBIA DAILY INCOME COMPANY

(the "Money Market Fund") seeks a high level of current income consistent with
the maintenance of liquidity and the preservation of capital by investing in
short-term, money market securities. Income is paid, compounded, and reinvested
daily. SHARES OF THE MONEY MARKET FUND ARE NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. WHILE THE FUND INTENDS TO MAINTAIN A CONSTANT NET ASSET VALUE
OF ONE DOLLAR PER SHARE, THERE IS NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO
SO.

-- BOND FUNDS --

COLUMBIA U.S. GOVERNMENT
SECURITIES FUND, INC.

(the "Government Bond Fund") seeks to provide shareholders with preservation of
capital and a high level of income. It invests substantially all of its assets
in U.S. Government obligations with a maximum maturity of three years. The
Fund's shares are not guaranteed by the U.S. Government.

COLUMBIA FIXED INCOME SECURITIES FUND, INC.

(the "Bond Fund") seeks a high level of income by investing in a broad range of
investment-grade, fixed income securities with intermediate- to long-term
maturities.

COLUMBIA MUNICIPAL BOND FUND, INC.

(the "Municipal Bond Fund") is a tax-exempt bond fund whose goal is to provide a
high level of income exempt from federal and State of Oregon income taxes.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

February 23, 1996

<PAGE>
COLUMBIA FUNDS
----------------------

The Municipal Bond Fund concentrates its investments in obligations of Oregon
issuers, to an extent consistent with its other investment objectives and
restrictions. Therefore, the Municipal Bond Fund's portfolio may be exposed to
special risks that would not affect funds that do not concentrate investments in
obligations of one state. See "Columbia Municipal Bond Fund -- Special
Investment Considerations."

COLUMBIA HIGH YIELD FUND, INC.

(the "High Yield Fund") seeks to provide a high level of current income by
investing primarily in lower-rated fixed income securities, commonly known as
"junk bonds." INVESTMENTS OF THIS TYPE ARE SUBJECT TO GREATER RISK OF LOSS OF
PRINCIPAL AND NONPAYMENT OF INTEREST THAN ARE HIGHER-RATED INVESTMENTS.
INVESTORS SHOULD CAREFULLY CONSIDER THESE RISKS BEFORE INVESTING. SEE "FUND
DESCRIPTIONS -- RISK FACTORS."
------------------------

THIS PROSPECTUS CONTAINS INFORMATION YOU SHOULD KNOW ABOUT THE COLUMBIA FUNDS
BEFORE INVESTING. PLEASE KEEP IT FOR FUTURE REFERENCE. A STATEMENT OF ADDITIONAL
INFORMATION ABOUT THE FUNDS DATED FEBRUARY 23, 1996 HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION AND IS AVAILABLE WITHOUT CHARGE UPON WRITTEN
REQUEST TO THE FUNDS OR BY CALLING 1-800-547-1707. THE STATEMENT OF ADDITIONAL
INFORMATION IS LEGALLY A PART OF (INCORPORATED BY REFERENCE INTO) THIS
PROSPECTUS.

THE FUNDS CHARGE NO SALES LOAD. SHARES OF THE FUNDS ARE SOLD AND REDEEMED AT
THEIR NET ASSET VALUE. HOWEVER, TO DISCOURAGE SHORT-TERM TRADING TO THE
DISADVANTAGE OF OTHER SHAREHOLDERS, ANY REDEMPTION OF SHARES OF THE HIGH YIELD
FUND HELD LESS THAN ONE YEAR WILL BE AT 99% OF THEIR NET ASSET VALUE.

THIS PROSPECTUS CONSTITUTES AN OFFER TO SELL SECURITIES OF A FUND ONLY IN THOSE
STATES WHERE THE FUND'S SHARES HAVE BEEN REGISTERED FOR SALE. A FUND WILL NOT
ACCEPT APPLICATIONS FROM PERSONS RESIDING IN STATES WHERE THE FUND'S SHARES ARE
NOT REGISTERED.

TABLE OF CONTENTS
-------------------------

Fund Expenses..................................................................1

Financial Highlights...........................................................2

About Mutual Funds.............................................................8

Fund Descriptions..............................................................9

Common Stock Fund...........................................................10

Growth Fund.................................................................10

International Stock Fund....................................................11

Special Fund................................................................12

Real Estate Fund............................................................13

Balanced Fund...............................................................15

Money Market Fund...........................................................16

Government Bond Fund........................................................17

Bond Fund...................................................................18

Municipal Bond Fund.........................................................19

High Yield Fund.............................................................22

Risk Factors................................................................24

Performance...................................................................28

Fund Management...............................................................30

Investment Advisor..........................................................30

Investment Team.............................................................31

Personal Trading............................................................33

Other Service Providers.....................................................33

Investor Services.............................................................34

How to Open a New Account...................................................34

How to Purchase Shares......................................................34

Paying for Your Shares......................................................35

How to Redeem (Sell) Shares.................................................35

Payment of Redemption Proceeds..............................................37

How to Exchange Shares......................................................37

Processing Your Order.......................................................37

Determining Your Share Price................................................38

Investor Inquiries..........................................................39

Account Privileges..........................................................39

Distributions and Taxes.......................................................41

Additional Information........................................................44

For further information or
assistance in opening an account,
please call 222-3606 in Portland
or 1-800-547-1707 Nationwide
<PAGE>

FUND EXPENSES
-----------------------------------------------------------------

The following information is provided to assist you in understanding the various
costs and expenses that an investor in each Fund will bear directly or
indirectly. "Annual Fund Operating Expenses" are the expenses incurred by each
Fund for 1995. Expenses paid by the Funds include management fees as well as
audit, transfer agent, custodian and legal fees and other business operating
expenses. For more information about Fund expenses, see "Fund Descriptions -- No
Sales Load or 12b-1 Fees," "Fund Management" and "Investor Services -- How to
Redeem (Sell) Shares."

-- SHAREHOLDER TRANSACTION COSTS --
FOR ALL FUNDS

Sales load imposed on purchases....... None
Sales load imposed on reinvested
dividends........................... None
Redemption fees*...................... None**
Exchange fees......................... None
*WIRE REDEMPTIONS MAY BE SUBJECT TO A FEE OF UP
TO $5, IN ADDITION TO ANY CHARGES BY YOUR BANK.
**THE REDEMPTION (INCLUDING EXCHANGES) OF SHARES
OF THE HIGH YIELD FUND HELD LESS THAN ONE YEAR
WILL BE AT 99% OF THEIR NET ASSET VALUE. THE
REDEMPTION DISCOUNT DOES NOT APPLY TO SHARES
ACQUIRED THROUGH DIVIDEND OR CAPITAL GAIN
REINVESTMENT. FOR DETAILS, PLEASE SEE "INVESTOR
SERVICES -- ACCOUNT PRIVILEGES -- HIGH YIELD
FUND REDEMPTIONS."

</TABLE>

- --------------------------------------------------------------------------------
Annual Fund Operating Expenses
- -----------------------------------------------------------------
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>

International Real Money Government
Common Growth Stock Special Estate Balanced Market Bond
Stock Fund Fund Fund Fund Fund Fund Fund Fund
---------- ---------- ------------ ---------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees .60% .62% 1.00% .86% .75% .50% .48% .50%
12b-1 fees None None None None None None None None
Other expenses* .20% .13% .54% .12% .43% .19% .16% .29%

<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total operating expenses .80% .75% 1.54% .98% 1.18% .69% .64% .79%

<CAPTION>
High
Municipal Yield
Bond Fund Bond Fund Fund
--------- ---------- ---------
<S> <C> <C> <C>
Management fees .50% .50% .60%
12b-1 fees None None None
Other expenses* .15% .07% .40%
<S> <C> <C> <C>
Total operating expenses .65% .57% 1.00%

</TABLE>

*The Advisor has voluntarily agreed to assume ordinary recurring expenses of the
High Yield Fund to the extent these expenses, together with the Fund's
management fee, exceed 1% of the Fund's average net assets. Without the expense
reimbursement, the "Total operating expenses" for the Fund for 1995 would have
been 1.06%.

- --------------------------------------------------------------------------------
Example Of Expenses
- -----------------------------------------------------------------

Assume that you have $1,000 to invest, each Fund has a hypothetical return of 5%
annually, and the above expense ratios remain the same. This table shows the
total expenses that you would pay indirectly if you closed your account after
each of the time periods shown:
<TABLE>
<CAPTION>
International Real Money Government
Common Growth Stock Special Estate Balanced Market Bond
Stock Fund Fund Fund Fund Fund Fund Fund Fund
---------- ---------- ------------ ---------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year $8 $8 $16 $10 $12 $7 $7 $8

<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
3 years $26 $24 $49 $31 $37 $22 $20 $25
5 years $44 $42 $84 $54 $65 $38 $36 $44
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
10 years $99 $93 $183 $120 $143 $86 $80 $98

<CAPTION>
High
Municipal Yield
Bond Fund Bond Fund Fund
--------- ---------- ---------
<S> <C> <C> <C>
1 year $7 $6 $10
<S> <C> <C> <C>
3 years $21 $18 $32
5 years $36 $32 $55
<S> <C> <C> <C>
10 years $81 $71 $123
</TABLE>

This example should not be considered a representation of past or future
expenses or performance; actual expenses and performance may be greater or less
than those shown.

-
1
<PAGE>

FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
The tables below have been audited by Coopers & Lybrand L.L.P., independent
accountants, as stated in their report appearing in the 1995 Annual Report to
Shareholders, which is incorporated by reference into the Statement of
Additional Information. Additional information about the performance of the
Funds for 1995, including a discussion by the investment advisor to the Funds,
is contained in the 1995 Annual Report to Shareholders, a copy of which may be
obtained by writing to the Funds or calling 1-800-547-1707.

_____________________--_COLUMBIA COMMON STOCK FUND, INC._--_____________________
<TABLE>
<CAPTION>
------ ------ ------ ------
1995 1994 1993 1992
<S> <C> <C> <C> <C>

Net asset value, beginning of period $15.16 $15.29 $14.04 $13.15
Income from investment operations:
Net investment income.................................................................. .26 .27 .22 .24
Net realized and unrealized gains on investments....................................... 4.38 .04 2.08 1.06
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations..................................................... 4.64 .31 2.30 1.30
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends (from net investment income)................................................. (.26) (.25) (.21) (.24)
Distributions (from capital gains)..................................................... (.95) (.19) (.84) (.17)
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions.................................................................. (1.21) (.44) (1.05) (.41)

<CAPTION>
<S> <C> <C> <C> <C>
Net asset value, end of period $18.59 $15.16 $15.29 $14.04
Total return............................................................................. 30.84% 2.06% 16.44% 9.99%
Ratios/Supplemental data
Net assets, end of period (in thousands)................................................. $358,523 $124,263 $100,715 $51,049
Ratio of expenses to average net assets.................................................. .80% .84% .84% .86%
Ratio of net investment income to average net assets..................................... 1.68% 1.82% 1.48% 1.97%
Portfolio turnover rate.................................................................. 75.36% 64.21% 90.90% 67.83%

<CAPTION>
--------
1991(1)
<S> <C>
Net asset value, beginning of period $12.00
Income from investment operations:
Net investment income.................................................................. .09
Net realized and unrealized gains on investments....................................... 1.17
- -----------------------------------------------------------------------------------------
Total from investment operations..................................................... 1.26
- -----------------------------------------------------------------------------------------
Less distributions:
Dividends (from net investment income)................................................. (.10 )
Distributions (from capital gains)..................................................... (.01 )
- -----------------------------------------------------------------------------------------
Total distributions.................................................................. (.11 )
<S> <C>
Net asset value, end of period $13.15
Total return............................................................................. 10.25% (2)
Ratios/Supplemental data
Net assets, end of period (in thousands)................................................. $20,457
Ratio of expenses to average net assets.................................................. .86%
Ratio of net investment income to average net assets..................................... 2.48%
Portfolio turnover rate.................................................................. 12.08%

</TABLE>

(1) From inception of operations on September 12, 1991. Ratios and portfolio
turnover rate are annualized.
(2) Not annualized.
- --------------------------------------------------------------------------------

-
2
<PAGE>
FINANCIAL HIGHLIGHTS, continued
---------------------------------------------------------------------------

________________________--_COLUMBIA GROWTH FUND, INC._--________________________
<TABLE>
<CAPTION>

------ ------ ------ ------ ------ ------ ------ ------ ------
1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $24.84 $26.38 $26.18 $26.26 $21.68 $23.40 $21.21 $20.19 $22.88
Income from investment
operations:
Net investment income.......... .31 .29 .16 .17 .32 .45 .48 .52 .32
Net realized and unrealized
gains (losses) on
investments................... 7.86 (.46) 3.24 2.93 7.09 (1.23) 5.65 1.66 2.93
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment
operations.................. 8.17 (.17) 3.40 3.10 7.41 (.78) 6.13 2.18 3.25
- -----------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends (from net investment
income)....................... (.29) (.26) (.18) (.20) (.39) (.48) (.54) (.52) (.61)
Distributions (from capital
gains)........................ (2.87) (1.11) (2.98) (2.98) (2.44) (.46) (3.40) (.64) (5.33)
Distributions (in excess of
capital gains)................ (.01) -- (.04) -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions.......... (3.17) (1.37) (3.20) (3.18) (2.83) (.94) (3.94) (1.16) (5.94)

<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, end of period $29.84 $24.84 $26.38 $26.18 $26.26 $21.68 $23.40 $21.21 $20.19
Total return..................... 32.98% -.63% 13.01% 11.82% 34.26% -3.31% 29.09% 10.81% 14.74%
Ratios/Supplemental data
Net assets, end of period (in
thousands)...................... $848,731 $591,694 $605,401 $518,366 $431,460 $270,667 $266,925 $204,353 $193,515
Ratio of expenses to average net
assets.......................... .75% .81% .82% .86% .90% .96% .96% 1.04% 1.04%
Ratio of net investment income to
average net assets.............. 1.14% 1.12% .66% .77% 1.50% 2.08% 2.14% 2.33% 1.46%
Portfolio turnover rate.......... 94.73% 79.28% 105.64% 116.38% 163.91% 171.80% 166.06% 179.08% 197.38%

<CAPTION>
------
1986
<S> <C>
Net asset value, beginning of
period $28.02
Income from investment
operations:
Net investment income.......... .25
Net realized and unrealized
gains (losses) on
investments................... 1.49
- ---------------------------------
Total from investment
operations.................. 1.74
- ---------------------------------
Less distributions:
Dividends (from net investment
income)....................... (.40 )
Distributions (from capital
gains)........................ (6.48 )
Distributions (in excess of
capital gains)................ --
- ---------------------------------
Total distributions.......... (6.88 )
<S> <C>
Net asset value, end of period $22.88
Total return..................... 6.92%
Ratios/Supplemental data
Net assets, end of period (in
thousands)...................... $200,925
Ratio of expenses to average net
assets.......................... 1.00%
Ratio of net investment income to
average net assets.............. .78%
Portfolio turnover rate.......... 130.55%

</TABLE>

__________________--_COLUMBIA INTERNATIONAL STOCK FUND, INC._--_________________

<TABLE>

<CAPTION>
------ ------ ------
1995 1994 1993
<S> <C> <C> <C>
Net asset value, beginning of period $12.43 $12.96 $9.95
Income from investment operations:
Net investment income (loss)......................................................... .02 (.02) (.02)
Net realized and unrealized gains (losses) on investments and foreign
currency-related transactions....................................................... .62 (.30) 3.34
- -----------------------------------------------------------------------------------------------------------------------
Total from investment operations................................................... .64 (.32) 3.32
- -----------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions (from capital gains)................................................... -- (.21) (.31)
- -----------------------------------------------------------------------------------------------------------------------
Total distributions................................................................ -- (.21) (.31)

<CAPTION>
<S> <C> <C> <C>
Net asset value, end of period $13.07 $12.43 $12.96
Total return........................................................................... 5.15% -2.47% 33.37%
Ratios/Supplemental data
Net assets, end of period (in thousands)............................................... $100,873 $118,484 $73,047
Ratio of expenses to average net assets................................................ 1.54% 1.52% 1.71%
Ratio of net investment income (loss) to average net assets............................ .15% (.21)% (.62)%
Portfolio turnover rate................................................................ 156.09% 138.79% 144.78%

<CAPTION>
--------
1992(1)
<S> <C>
Net asset value, beginning of period $10.00

Income from investment operations:
Net investment income (loss)......................................................... (.03 )

Net realized and unrealized gains (losses) on investments and foreign
currency-related transactions....................................................... .11

- ---------------------------------------------------------------------------------------
Total from investment operations................................................... .08

- ---------------------------------------------------------------------------------------
Less distributions:
Distributions (from capital gains)................................................... (.13 )(2
)
- ---------------------------------------------------------------------------------------
Total distributions................................................................ (.13 )

<S> <C>
Net asset value, end of period $9.95

Total return........................................................................... .60% (3)

Ratios/Supplemental data
Net assets, end of period (in thousands)............................................... $9,745

Ratio of expenses to average net assets................................................ 2.22%

Ratio of net investment income (loss) to average net assets............................ (1.28)%

Portfolio turnover rate................................................................ 25.75%

</TABLE>

(1) From inception of operations on September 10, 1992. Ratios and portfolio
turnover rate are annualized.
(2) Includes amounts distributed from net realized gains on foreign
currency-related transactions taxable as ordinary income.
(3) Not annualized.
- --------------------------------------------------------------------------------

-
3
<PAGE>
FINANCIAL HIGHLIGHTS, continued
---------------------------------------------------------------------------

______________________--_COLUMBIA SPECIAL FUND, INC. (1)_--_____________________
<TABLE>

<CAPTION>
------ ------ ------ ------ ------ ------ ------ ------ ------
1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $18.69 $19.51 $18.79 $17.45 $12.12 $13.85 $11.32 $9.26 $8.99
Income from investment operations:
Net investment income (loss)....... .03 .08 .01 (.03) (.01) .01 .07 .03 (.08)
Net realized and unrealized gains
(losses) on investments........... 5.45 .36 4.04 2.41 6.11 (1.72) 3.52 3.90 .35
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment
operations...................... 5.48 .44 4.05 2.38 6.10 (1.71) 3.59 3.93 .27
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends (from net investment
income)........................... (.02) (.07) -- -- -- (.02) (.01) -- --
Dividends (in excess of net
investment income)................ -- -- (.01) -- -- -- -- -- --
Distributions (from capital
gains)............................ (2.68) (1.16) (3.32) (1.04) (.77) -- (1.05) (1.87) --
Distributions (in excess of capital
gains)............................ (.03) (.03) -- -- -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions.............. (2.73) (1.26) (3.33) (1.04) (.77) (.02) (1.06) (1.87) --

<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, end of period $21.44 $18.69 $19.51 $18.79 $17.45 $12.12 $13.85 $11.32 $9.26
Total return......................... 29.53% 2.29% 21.68% 13.70% 50.46% -12.39% 31.92% 42.55% 3.04%
Ratios/Supplemental data
Net assets, end of period (in
thousands).......................... $1,384,415 $889,526 $772,741 $470,663 $264,358 $121,592 $95,939 $30,471 $20,567
Ratio of expenses to average net
assets.............................. .98% 1.05% 1.12% 1.19% 1.22% 1.32% 1.35% 1.38% 1.44%
Ratio of net investment income (loss)
to average net assets............... .16% .40% .01% (.25)% (.16)% .05% .18% .06% (.63)%
Portfolio turnover rate.............. 182.99% 178.91% 154.68% 116.75% 114.53% 147.04% 124.29% 244.36% 332.85%

<CAPTION>
------
1986
<S> <C>
Net asset value, beginning of period $7.99
Income from investment operations:
Net investment income (loss)....... (.04 )
Net realized and unrealized gains
(losses) on investments........... 1.29
- -------------------------------------
Total from investment
operations...................... 1.25
- -------------------------------------
Less distributions:
Dividends (from net investment
income)........................... --
Dividends (in excess of net
investment income)................ --
Distributions (from capital
gains)............................ (.25 )
Distributions (in excess of capital
gains)............................ --
- -------------------------------------
Total distributions.............. (.25 )
<S> <C>
Net asset value, end of period $8.99
Total return......................... 15.62%
Ratios/Supplemental data
Net assets, end of period (in
thousands).......................... $20,389
Ratio of expenses to average net
assets.............................. 1.54%
Ratio of net investment income (loss)
to average net assets............... (.47)%
Portfolio turnover rate.............. 203.17%

</TABLE>

(1) As of December 31, 1991, historical per share data has been restated to
reflect a 3 for 1 stock split to shareholders of record on January 31,
1992.
- --------------------------------------------------------------------------------

__________________--_COLUMBIA REAL ESTATE EQUITY FUND, INC._--__________________
<TABLE>

<CAPTION>
------
1995
<S> <C>
Net asset value, beginning of period $11.72
Income from investment operations:
Net investment income.................................................................................. .78
Net realized and unrealized gains (losses) on investments.............................................. 1.12
- ---------------------------------------------------------------------------------------------------------------------
Total from investment operations..................................................................... 1.90
- ---------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends (from net investment income)................................................................. (.49)
Dividends (in excess of net investment income)......................................................... --
Distributions (in excess of capital gains)............................................................. (.14)
Tax return of capital.................................................................................. (.28)
- ---------------------------------------------------------------------------------------------------------------------
Total distributions.................................................................................. (.91)

<CAPTION>
<S> <C>
Net asset value, end of period $12.71
Total return............................................................................................. 16.86%
Ratios/Supplemental data
Net assets, end of period (in thousands)................................................................. $21,587
Ratio of expenses to average net assets.................................................................. 1.18%
Ratio of net investment income to average net assets..................................................... 6.71%
Portfolio turnover rate.................................................................................. 53.91%

<CAPTION>
--------

1994(1)

<S> <C>
Net asset value, beginning of period $12.00

Income from investment operations:
Net investment income.................................................................................. .49

Net realized and unrealized gains (losses) on investments.............................................. (.27 )

- ---------------------------------------------------------------------------------------------------------
Total from investment operations..................................................................... .22

- ---------------------------------------------------------------------------------------------------------
Less distributions:
Dividends (from net investment income)................................................................. (.31 )

Dividends (in excess of net investment income)......................................................... (.01 )

Distributions (in excess of capital gains).............................................................
Tax return of capital.................................................................................. (.18 )

- ---------------------------------------------------------------------------------------------------------
Total distributions.................................................................................. (.50 )

<S> <C>
Net asset value, end of period $11.72

Total return............................................................................................. 1.76% (2)

Ratios/Supplemental data
Net assets, end of period (in thousands)................................................................. $17,402

Ratio of expenses to average net assets.................................................................. 1.14%

Ratio of net investment income to average net assets..................................................... 6.28%

Portfolio turnover rate.................................................................................. 7.61%

</TABLE>

(1) From inception of operations on March 16, 1994. Ratios and portfolio
turnover rate are annualized.
(2) Not annualized.
- --------------------------------------------------------------------------------

-
4
<PAGE>
FINANCIAL HIGHLIGHTS, continued
---------------------------------------------------------------------------

_______________________--_COLUMBIA BALANCED FUND, INC._--_______________________
<TABLE>
<CAPTION>

------ ------ ------ ------
1995 1994 1993 1992
<S> <C> <C> <C> <C>
Net asset value, beginning of period $17.28 $17.91 $16.80 $16.05
Income from investment operations:
Net investment income....................................................... .73 .65 .56 .58
Net realized and unrealized gains (losses) on investments................... 3.54 (.64) 1.71 .82
- ------------------------------------------------------------------------------------------------------------------------
Total from investment operations.......................................... 4.27 .01 2.27 1.40
- ------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends (from net investment income)...................................... (.73) (.64) (.56) (.57)
Dividends (in excess of net investment income).............................. -- -- (.01) --
Distributions (from capital gains).......................................... (.74) -- (.59) (.08)
- ------------------------------------------------------------------------------------------------------------------------
Total distributions....................................................... (1.47) (.64) (1.16) (.65)

<CAPTION>
<S> <C> <C> <C> <C>
Net asset value, end of period $20.08 $17.28 $17.91 $16.80
Total return.................................................................. 25.08% .10% 13.62% 8.89%
Ratios/Supplemental data
Net assets, end of period (in thousands)...................................... $486,767 $249,670 $186,589 $90,230
Ratio of expenses to average net assets....................................... .69% .72% .73% .81%
Ratio of net investment income to average net assets.......................... 4.05% 3.82% 3.32% 4.08%
Portfolio turnover rate....................................................... 108.04% 98.48% 107.60% 138.08%

<CAPTION>
--------
1991(1)
<S> <C>
Net asset value, beginning of period $15.00

Income from investment operations:
Net investment income....................................................... .11

Net realized and unrealized gains (losses) on investments................... 1.10

- ------------------------------------------------------------------------------
Total from investment operations.......................................... 1.21

- ------------------------------------------------------------------------------
Less distributions:
Dividends (from net investment income)...................................... (.12 )

Dividends (in excess of net investment income).............................. --

Distributions (from capital gains).......................................... (.04 )

- ------------------------------------------------------------------------------
Total distributions....................................................... (.16 )

<S> <C>
Net asset value, end of period $16.05

Total return.................................................................. 7.80% (2
)
Ratios/Supplemental data
Net assets, end of period (in thousands)...................................... $12,986

Ratio of expenses to average net assets....................................... .62%

Ratio of net investment income to average net assets.......................... 3.41%

Portfolio turnover rate....................................................... 179.80%

</TABLE>

_______________________--_COLUMBIA DAILY INCOME COMPANY_--______________________
<TABLE>
<CAPTION>

------ ------ ------ ------ ------ ------ ------ ------ ------
1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations:
Net investment income.......... .053 .036 .025 .032 .055 .075 .085 .068 .059
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment
operations.................. .053 .036 .025 .032 .055 .075 .085 .068 .059
- -----------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends (from net investment
income)....................... (.053) (.036) (.025) (.032) (.055) (.075) (.085) (.068) (.059)
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions.......... (.053) (.036) (.025) (.032) (.055) (.075) (.085) (.068) (.059)

<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Total return..................... 5.49% 3.68% 2.51% 3.25% 5.66% 7.84% 8.89% 7.07% 6.11%
Ratios/Supplemental data
Net assets, end of period (in
thousands)...................... $800,656 $730,067 $544,500 $591,186 $737,584 $819,926 $703,704 $546,634 $442,496
Ratio of expenses to average net
assets.......................... .64% .70% .75% .71% .69% .69% .73% .76% .81%
Ratio of net investment income to
average net assets.............. 5.34% 3.68% 2.49% 3.22% 5.53% 7.51% 8.49% 6.87% 5.94%

<CAPTION>
------
1986
<S> <C>
Net asset value, beginning of
period $1.00
Income from investment
operations:
Net investment income.......... .060
- ---------------------------------
Total from investment
operations.................. .060
- ---------------------------------
Less distributions:
Dividends (from net investment
income)....................... (.060 )
- ---------------------------------
Total distributions.......... (.060 )
<S> <C>
Net asset value, end of period $1.00
Total return..................... 6.15%
Ratios/Supplemental data
Net assets, end of period (in
thousands)...................... $406,879
Ratio of expenses to average net
assets.......................... .81%
Ratio of net investment income to
average net assets.............. 5.96%

</TABLE>

- --------------------------------------------------------------------------------

-
5
<PAGE>
FINANCIAL HIGHLIGHTS, continued
---------------------------------------------------------------------------

______________--_COLUMBIA U.S. GOVERNMENT SECURITIES FUND, INC._--______________
<TABLE>
<CAPTION>

------ ------ ------ ------ ------ ------ ------ ------ ------
1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $7.99 $8.36 $8.35 $8.47 $8.43 $8.30 $8.17 $8.30 $8.48
Income from investment
operations:
Net investment income.......... .45 .37 .32 .39 .53 .61 .63 .56 .52
Net realized and unrealized
gains (losses) on
investments................... .35 (.37) .17 .09 .50 .13 .13 (.13) (.18)
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment
operations.................. .80 -- .49 .48 1.03 .74 .76 .43 .34
- -----------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends (from net investment
income)....................... (.45) (.37) (.32) (.39) (.53) (.61) (.63) (.56) (.52)
Distributions (from capital
gains)........................ -- -- (.16) (.21) (.46) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions.......... (.45) (.37) (.48) (.60) (.99) (.61) (.63) (.56) (.52)

<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, end of period $8.34 $7.99 $8.36 $8.35 $8.47 $8.43 $8.30 $8.17 $8.30
Total return..................... 10.21% .03% 5.91% 5.81% 12.72% 9.29% 9.63% 5.34% 4.14%
Ratios/Supplemental data
Net assets, end of period (in
thousands)...................... $41,842 $33,512 $35,877 $35,479 $34,867 $22,628 $13,349 $9,112 $7,016
Ratio of expenses to average net
assets.......................... .79% .81% .75% .76% .76% .85% .85% .85% .85%
Ratio of net investment income to
average net assets.............. 5.45% 4.51% 3.74% 4.60% 6.18% 7.33% 7.66% 6.88% 6.34%
Portfolio turnover rate.......... 253.17% 253.80% 254.59% 289.05% 309.13% 221.86% 158.96% 393.59% 146.65%

<CAPTION>
--------
1986(1)
<S> <C>
Net asset value, beginning of
period $8.50
Income from investment
operations:
Net investment income.......... .10
Net realized and unrealized
gains (losses) on
investments................... (.02 )
- ---------------------------------
Total from investment
operations.................. .08
- ---------------------------------
Less distributions:
Dividends (from net investment
income)....................... (.10 )
Distributions (from capital
gains)........................ --
- ---------------------------------
Total distributions.......... (.10 )
<S> <C>
Net asset value, end of period $8.48
Total return..................... 0.70% (2)
Ratios/Supplemental data
Net assets, end of period (in
thousands)...................... $3,521
Ratio of expenses to average net
assets.......................... .96%
Ratio of net investment income to
average net assets.............. 6.35%
Portfolio turnover rate.......... 0.00%

</TABLE>

(1) From inception of operations on October 14, 1986. Ratios and portfolio
turnover rate are annualized.
(2) Not annualized.
- --------------------------------------------------------------------------------

________________--_COLUMBIA FIXED INCOME SECURITIES FUND, INC._--_______________
<TABLE>

<CAPTION>
------ ------ ------ ------ ------ ------ ------ ------ ------
1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $12.16 $13.44 $13.28 $13.59 $12.72 $12.75 $12.11 $12.23 $13.37
Income from investment
operations:
Net investment income.......... .88 .83 .85 .95 1.00 1.03 1.04 1.04 1.03
Net realized and unrealized
gains (losses) on
investments................... 1.35 (1.28) .52 .09 1.05 (.03) .64 (.12) (.87)
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment
operations.................. 2.23 (.45) 1.37 1.04 2.05 1.00 1.68 .92 .16
- -----------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends (from net investment
income)....................... (.88) (.83) (.85) (.95) (1.00) (1.03) (1.04) (1.04) (1.03)
Distributions (from capital
gains)........................ -- -- (.36) (.40) (.18) -- -- -- (.27)
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions.......... (.88) (.83) (1.21) (1.35) (1.18) (1.03) (1.04) (1.04) (1.30)

<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, end of period $13.51 $12.16 $13.44 $13.28 $13.59 $12.72 $12.75 $12.11 $12.23
Total return..................... 18.91% -3.36% 10.47% 7.99% 16.84% 8.30% 14.35% 7.72% 1.35%
Ratios/Supplemental data
Net assets, end of period (in
thousands)...................... $316,259 $252,090 $300,532 $262,647 $207,271 $133,875 $110,525 $102,604 $100,286
Ratio of expenses to average net
assets.......................... .65% .66% .66% .66% .69% .73% .74% .77% .82%
Ratio of net investment income to
average net assets.............. 6.80% 6.53% 6.14% 7.03% 7.63% 8.20% 8.27% 8.44% 8.21%
Portfolio turnover rate.......... 137.41% 139.81% 118.80% 195.67% 158.95% 131.81% 114.00% 133.20% 114.16%

<CAPTION>
------
1986
<S> <C>
Net asset value, beginning of
period $13.05
Income from investment
operations:
Net investment income.......... 1.21
Net realized and unrealized
gains (losses) on
investments................... .32
- ---------------------------------
Total from investment
operations.................. 1.53
- ---------------------------------
Less distributions:
Dividends (from net investment
income)....................... (1.21 )
Distributions (from capital
gains)........................ --
- ---------------------------------
Total distributions.......... (1.21 )
<S> <C>
Net asset value, end of period $13.37
Total return..................... 12.31%
Ratios/Supplemental data
Net assets, end of period (in
thousands)...................... $124,323
Ratio of expenses to average net
assets.......................... .79%
Ratio of net investment income to
average net assets.............. 9.15%
Portfolio turnover rate.......... 97.04%

</TABLE>

- --------------------------------------------------------------------------------

-
6
<PAGE>
FINANCIAL HIGHLIGHTS, continued
---------------------------------------------------------------------------

____________________--_COLUMBIA MUNICIPAL BOND FUND, INC._--____________________
<TABLE>

<CAPTION>
------ ------ ------ ------ ------ ------ ------ ------ ------
1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $11.48 $12.71 $12.17 $12.22 $11.65 $11.64 $11.42 $11.11 $11.75
Income from investment
operations:
Net investment income.......... .63 .64 .66 .69 .72 .75 .76 .77 .77
Net realized and unrealized
gains (losses) on
investments................... .96 (1.23) .62 .07 .60 .02 .23 .34 (.64)
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment
operations.................. 1.59 (.59) 1.28 .76 1.32 .77 .99 1.11 .13
- -----------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends (from net investment
income) (1)................... (.63) (.64) (.66) (.69) (.72) (.75) (.76) (.77) (.77)
Distributions (from capital
gains)........................ (.07) -- (.08) (.12) (.03) (.01) (.01) (.03) --
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions.......... (.70) (.64) (.74) (.81) (.75) (.76) (.77) (.80) (.77)

<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, end of period $12.37 $11.48 $12.71 $12.17 $12.22 $11.65 $11.64 $11.42 $11.11
Total return..................... 14.15% -4.68% 10.73% 6.46% 11.73% 6.89% 8.95% 10.19% 1.23%
Ratios/Supplemental data
Net assets, end of period (in
thousands)...................... $383,796 $339,817 $430,367 $341,924 $285,099 $207,690 $166,590 $140,842 $118,438
Ratio of expenses to average net
assets.......................... .57% .57% .58% .59% .59% .60% .61% .63% .66%
Ratio of net investment income to
average net assets.............. 5.22% 5.36% 5.25% 5.69% 6.07% 6.50% 6.59% 6.71% 6.84%
Portfolio turnover rate.......... 21.45% 19.40% 9.92% 17.82% 15.28% 6.57% 10.61% 10.04% 20.78%

<CAPTION>
------
1986
<S> <C>
Net asset value, beginning of
period $10.82
Income from investment
operations:
Net investment income.......... .84
Net realized and unrealized
gains (losses) on
investments................... .93
- ---------------------------------
Total from investment
operations.................. 1.77
- ---------------------------------
Less distributions:
Dividends (from net investment
income) (1)................... (.84 )
Distributions (from capital
gains)........................ --
- ---------------------------------
Total distributions.......... (.84 )
<S> <C>
Net asset value, end of period $11.75
Total return..................... 16.77%
Ratios/Supplemental data
Net assets, end of period (in
thousands)...................... $118,287
Ratio of expenses to average net
assets.......................... .65%
Ratio of net investment income to
average net assets.............. 7.17%
Portfolio turnover rate.......... 3.19%

</TABLE>

(1) 100% exempt from federal taxation.
- --------------------------------------------------------------------------------

______________________--_COLUMBIA HIGH YIELD FUND, INC._--______________________
<TABLE>

<CAPTION>
------ ------
1995 1994
<S> <C> <C>
Net asset value, beginning of period $9.04 $9.94
Income from investment operations:
Net investment income......................................................................... .82 .80
Net realized and unrealized gains (losses) on investments..................................... .84 (.90)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations............................................................ 1.66 (.10)
- ----------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends (from net investment income)........................................................ (.82) (.80)
- ----------------------------------------------------------------------------------------------------------------------
Total distributions......................................................................... (.82) (.80)

<CAPTION>
<S> <C> <C>
Net asset value, end of period $9.88 $9.04
Total return.................................................................................... 19.12% -.92%
Ratios/Supplemental data
Net assets, end of period (in thousands)........................................................ $23,471 $12,834
Ratio of expenses to average net assets (3)..................................................... 1.00% 1.00%
Ratio of net investment income to average net assets............................................ 8.62% 8.69%
Portfolio turnover rate......................................................................... 51.60% 36.67%

<CAPTION>
--------
1993(1)
<S> <C>
Net asset value, beginning of period $10.00

Income from investment operations:
Net investment income......................................................................... .18

Net realized and unrealized gains (losses) on investments..................................... (.06 )

- ------------------------------------------------------------------------------------------------
Total from investment operations............................................................ .12

- ------------------------------------------------------------------------------------------------
Less distributions:
Dividends (from net investment income)........................................................ (.18 )

- ------------------------------------------------------------------------------------------------
Total distributions......................................................................... (.18 )

<S> <C>
Net asset value, end of period $9.94

Total return.................................................................................... 1.12%(2 )

Ratios/Supplemental data
Net assets, end of period (in thousands)........................................................ $5,940

Ratio of expenses to average net assets (3)..................................................... 1.00%

Ratio of net investment income to average net assets............................................ 7.30%

Portfolio turnover rate......................................................................... 0.00%

</TABLE>

(1) From inception of operations on September 15, 1993. Ratios and portfolio
turnover rate are annualized.
(2) Not annualized.
(3) The ratio was 1.06% in 1995, 1.19% in 1994 and 2.03% in 1993, before
reimbursement of certain expenses by the investment advisor.
- --------------------------------------------------------------------------------

-
7
<PAGE>

MUTUAL FUND FEATURES
-----------------------------------------------------------------

ALTHOUGH THERE ARE RISKS THAT CANNOT BE ELIMINATED IN OWNING SECURITIES, A
MUTUAL FUND OFFERS MANY ADVANTAGES THAT ITS SHAREHOLDERS WOULD FIND HARD TO
OBTAIN AS INDIVIDUAL INVESTORS. THE CHIEF ADVANTAGES INCLUDE:

-- CONTINUOUS PROFESSIONAL --
MANAGEMENT

By sharing the cost of hiring experienced money managers, individual investors
receive professional financial management of their investments.

-- DIVERSIFICATION --
The investment portfolio of each Fund is "diversified" under the Investment
Company Act (other than the Municipal Bond Fund, which concentrates its
investments in Oregon municipal securities), which tends to reduce investment
risks. However, diversification does not ensure a gain or eliminate the risk of
loss.
-- CONVENIENCE --
Compared to owning many individual issues, the problems of recordkeeping, tax
calculation, liquidity, and dividends may be greatly simplified by investing in
a mutual fund.

Suppose, for example, you have $1,000 to invest but don't have the time or
training necessary to monitor securities markets, select securities, maintain
investment records, or keep track of tax information. One possible solution
would be to find a professional money manager to make these decisions for you
and provide full-time supervision of your investment. You could say, "Look, I
have $1,000 I want you to supervise for me, following trends in the economy and
the securities markets, making necessary investment decisions, and trying to
make this money worth more to me or earn income for me. I want you to give my
money the same continuous supervision and care you might give to someone who
invests $100,000 or even $1,000,000. But for that management service, I cannot
afford to pay you more than $5 or $10 each year."

No matter how generous that offer might be for you, it is not likely that the
investment managers could accept your proposal, for their costs would be many
times your fee. But they might suggest that if you could find another thousand
investors like yourself, willing to combine their funds with yours and willing
to pay the same amount for continuous supervision and control, then they might
agree to work for you.

This is much like the agreement upon which mutual funds operate. By combining
the capital of many investors into one large account, it is possible to offer
all the shareholders who make up a mutual fund the kind of professional
investment supervision they desire, at a cost each can afford.

Despite the advantages of mutual funds, investing in them involves certain
risks. Some of these risks are described under "Fund Descriptions -- Risk
Factors" and "Additional Information." As a prospective investor, you are
encouraged to read the entire Prospectus before investing in the Funds.

BY COMBINING THE CAPITAL OF MANY INVESTORS INTO ONE LARGE ACCOUNT, IT IS
POSSIBLE TO OFFER ALL THE SHAREHOLDERS WHO MAKE UP A MUTUAL FUND THE KIND OF
PROFESSIONAL INVESTMENT SUPERVISION THEY DESIRE, AT A COST EACH CAN AFFORD.

-
8
<PAGE>
FUND DESCRIPTIONS
-----------------------------------------------------------------

The Columbia Family of Funds consists of 11 no-load mutual funds designed to
meet a wide range of financial and investment objectives. Each Fund is an
open-end management investment company (that is, a "mutual fund") and, except
for the Municipal Bond Fund, is diversified. Although the Municipal Bond Fund
holds a large number of individual securities, it is not considered
"diversified" as defined under the Investment Company Act because of its
concentration in Oregon municipal securities. Each Fund is managed by Columbia
Funds Management Company (the "Advisor").

-- NO SALES LOAD OR 12B-1 FEES --

Many mutual funds charge fees to compensate sales representatives for
promoting and selling their funds. There are funds, however, that charge no
sales fees when you buy shares. With these funds, all of your money, instead
of just a portion, is invested. In addition, some "no-load" mutual funds
charge an annual 12b-1 fee against fund assets to help pay for the sale of
fund shares. Columbia Funds are sold without sales loads or 12b-1 fees; all
the money you pay to buy shares is invested in the Columbia Fund you select.
-- COLUMBIA'S INVESTMENT APPROACH --
Columbia Funds are managed by the Advisor using an investment team approach
(please see "Fund Management"). The investment team generally selects portfolio
securities using what is sometimes referred to as a "top down, sector rotating"
emphasis. This approach begins with an overall evaluation of the domestic and
international investment environment before focusing on individual security
selection.

The overall investment environment is first analyzed in terms of economic
policy, trends in monetary and fiscal policy, investor sentiment, the supply and
demand for credit, and market momentum.

"SECTOR ROTATING" REFERS TO THE DYNAMIC PROCESS OF OVER- OR UNDERWEIGHTING
INDUSTRY GROUPS OR ASSET CLASSES BASED ON THEIR RELATIVE ATTRACTIVENESS.

For stock securities, specific issues are selected based on:

- - financial condition

- - quality of management

- - dynamics of the relevant industry

- - earnings growth and profit margins

- - sales trends

- - potential for new product development

- - dividend payment history and potential

- - financial ratios -- including price/earnings and
price/book ratios

- - investment for the future in research and facilities

For fixed income securities, a "top down" analysis is used to determine sector
emphasis between different types of instruments used by a Fund (for example,
corporate bonds, Treasuries, or mortgage pass-through securities) and between
desired levels of average quality, maturity, and duration. These determinations
are made in light of each Fund's individual investment objective.

The team adapts its investment strategies to changing market conditions.
Although the Funds will generally emphasize investments for long-term capital
appreciation, a Fund may invest for short-term capital appreciation when
management believes such action is consistent with sound investment practices
and the Fund's overall objective. These determinations will be made without a
vote of the shareholders of the Fund. There is no assurance that the Funds will
achieve their investment objectives.

-
9
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------

-- COLUMBIA COMMON --

_____________________________STOCK FUND_____________________________

The Common Stock Fund was incorporated on June 13, 1991 under Oregon law and
began offering shares to the public on October 1, 1991.

-- INVESTMENT OBJECTIVE --
The investment objective of the Common Stock Fund is to provide growth of
capital and dividend income for shareholders through a professionally managed,
diversified portfolio consisting primarily (at least 65%, and up to 100%, of its
assets under normal investing conditions) of common stocks. This objective may
not be changed without a vote of a majority of the outstanding voting securities
of the Common Stock Fund.

The Common Stock Fund invests primarily in larger companies that are well
established. Many of the common stocks that will make up the Fund's portfolio
are expected to have a history of paying level or rising dividends. The Fund may
invest up to one-third of its portfolio in common stocks issued by companies
located in developed foreign countries, principally those companies located in
North America, Western Europe, or Asia.

-- INVESTMENT RESTRICTIONS AND --
RISK FACTORS

For information about the risks of investing in the Fund, including the risks of
investing in foreign securities, please see "Risk Factors." For information on
the investment by the Fund in repurchase agreements, illiquid securities,
when-issued securities, options, and temporary investments, please see
"Additional Information." A description of other investment restrictions
and certain investment practices of the Common Stock Fund is included in the
Statement of Additional Information. The Common Stock Fund's investment
restrictions include a prohibition on investing more than 5% of its total
assets at cost in either illiquid securities or the securities of
companies that have a record of less than three years of continuous operation.

--_COLUMBIA GROWTH FUND_--

The Growth Fund was incorporated on November 25, 1966 under Oregon law and began
offering shares to the public on June 16, 1967.

-- INVESTMENT OBJECTIVE --
The Growth Fund seeks to increase shareholders' capital by selecting
investments, primarily common stocks, that the Advisor expects to increase in
market value. This objective may not be changed without a vote of a majority of
the outstanding voting securities of the Growth Fund.

The Growth Fund seeks to achieve its objective by investing in companies that
are believed to have above-average earnings growth over the long term. The
Advisor believes that such companies typically have strong competitive positions
within their industry groups. In addition, the Growth Fund may invest in common
stocks issued by companies located in developed foreign countries, principally
those located in North America, Western Europe, or Asia, provided that less than
10% of the value of its assets are so invested.

-- INVESTMENT RESTRICTIONS AND --
RISK FACTORS

For information about the risks of investing in the Fund, including the risks of
investing in foreign securities, please see "Risk Factors." For information on
the investment by the Fund in repurchase agreements, illiquid securities,
when-issued securities, options, and temporary investments, please see
"Additional Information." A description of other investment restrictions and
certain investment practices of the Growth Fund is included in the Statement of
Additional Information. The Growth Fund's investment restrictions include a

-
10
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------
prohibition on investing more than 5% of its total assets at cost in either
illiquid securities or the securities of companies that have a record of less
than three years of continuous operation.

-- COLUMBIA INTERNATIONAL --

________________________________STOCK FUND________________________________

The International Stock Fund was incorporated on June 29, 1992 under Oregon law
and began offering shares to the public on October 1, 1992.

-- INVESTMENT OBJECTIVE --
The International Stock Fund seeks to provide long-term capital appreciation by
investing primarily in equity securities of companies based outside the United
States. This objective may not be changed without a vote of a majority of the
outstanding voting securities of the Fund. Under normal market conditions, the
International Stock Fund will invest at least 65% of its total assets in equity
securities (i.e., common stock and preferred stock), including securities
convertible into equity securities, of issuers from at least three countries
other than the United States.

At least 75% of the Fund's assets invested in equity securities will, under
normal conditions, be invested in securities of well-capitalized, seasoned
companies. The International Stock Fund considers a company well capitalized if
it has an aggregate market valuation of over $500 million. The International
Stock Fund may invest in smaller, less seasoned companies when the Advisor
believes they offer attractive opportunities consistent with the Fund's overall
investment objective. An investment in a less seasoned company may involve
greater risks than an investment in a larger, more established company. See
"Risk Factors -- Investments in Small and Unseasoned Companies." In addition to
investing in equity securities, the Fund may also enter into foreign currency
exchange contracts and purchase other securities to protect against fluctuations
in exchange rates. These securities are described below and under "Additional
Information."

The International Stock Fund may invest in companies located anywhere in the
world but intends to invest principally in the following countries: Austria,
Belgium, Denmark, Finland, France, Germany, Italy, The Netherlands, Norway,
Spain, Sweden, Switzerland, the United Kingdom, Australia, Hong Kong, Japan, New
Zealand, Singapore, Canada, and Mexico. Although the Fund intends to be invested
substantially in equity securities of companies located outside the United
States, it is permitted to invest up to 35% of its total assets in companies
located in the United States. The Fund may invest more heavily in U.S. companies
(up to 35% of its total assets) when the Advisor believes foreign market or
economic conditions or trends in currency exchange rates favor domestic
securities.

-- CURRENCY MANAGEMENT --
The value of the International Stock Fund will fluctuate as a result of changes
in the exchange rates between the U.S. dollar and the currencies in which the
foreign securities or bank deposits held by the Fund are denominated. To reduce
or limit exposure to adverse changes in currency exchange rates (referred to as
"hedging"), the Fund may enter into forward currency exchange contracts that, in
effect, lock in a rate of exchange during the period of the forward contract.
Forward contracts are usually entered into with currency traders, are not traded
on securities exchanges, and usually have a term of less than one year, but can
be renewed. A default on a contract would deprive the Fund of unrealized profits
or force the Fund to cover its commitments for purchase or sale of currency, if
any, at the market price. The Fund will enter into forward contracts only for
hedging purposes and not for speculation. If required by the Investment Company
Act or the Securities and Exchange Commission, the Fund may "cover" its
commitment under forward contracts by segregating cash or liquid high-grade
securities with the Fund's

-
11
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------
custodian in an amount not less than the current value of the Fund's total
assets committed to the consummation of the contracts. Under normal market
conditions, no more than 25% of the International Stock Fund's assets may be
committed to the consummation of currency exchange contracts.

The International Stock Fund may also purchase or sell foreign currencies on a
"spot" (cash) basis or on a forward basis to lock in the U.S. dollar value of a
transaction at the exchange rate or rates then prevailing. The Fund will use
this hedging technique in an attempt to insulate itself against possible losses
and gains resulting from a change in the relationship between the U.S. dollar
and the relevant foreign currency during the period between the date the
security is purchased or sold and the date on which payment is made or received.

Hedging against adverse changes in exchange rates will not eliminate fluctuation
in the prices of the International Stock Fund's portfolio securities or prevent
loss if the prices of those securities decline. In addition, the use of forward
contracts may limit potential gains from an appreciation in the U.S. dollar
value of a foreign currency. The forecasting of short-term currency market
movements is very difficult, and there can be no assurance that short-term
hedging strategies used by the International Stock Fund will be successful.

-- INVESTMENT RESTRICTIONS AND --
RISK FACTORS

For more information about the risks of investing in the Fund, including the
risks of investing in foreign securities, please see "Risk Factors." For
information on the investment by the Fund in repurchase agreements, illiquid
securities, when-issued securities, options, and temporary investments, please
see "Additional Information." A description of other investment restrictions and
certain investment practices of the International Stock Fund is included in the
Statement of Additional Information. The International Stock Fund's investment
restrictions include a prohibition on investing more than 5% of its total assets
in the securities of companies that have a record of less than 3 years of
continuous operations or more than 10% of its total assets in illiquid
securities.

--_COLUMBIA SPECIAL FUND_--

The Special Fund was incorporated on July 18, 1985 under Oregon law and began
offering shares to the public on November 20, 1985.

-- INVESTMENT OBJECTIVE --
The investment objective of the Special Fund is to achieve significant capital
appreciation for shareholders by investing in securities the Advisor believes
are more aggressive than the market as a whole (as measured by the S&P 500 Stock
Index) and therefore carry more risk than the market as a whole. This objective
may be changed by the Board of Directors without shareholder approval upon 30
days written notice. In the unlikely event the Fund changes its investment
objective, shareholders should consider whether the Fund remains an appropriate
investment.

The Special Fund intends to invest primarily in smaller companies (for example,
companies with capitalizations that are less than the average for the companies
included in the S&P 500 Stock Index). However, the Special Fund may invest in
larger companies when the Advisor believes they offer comparable capital
appreciation opportunities or to stabilize the Fund's portfolio. Management
reserves the right to determine the percentage of the Special Fund's assets that
will be invested in smaller companies.

The Special Fund may also invest in special situations such as new issues;
companies that may benefit from technological or product developments or new
management; and companies involved in tender offers, leveraged buy-outs, or
mergers. Up to one-third of the Fund's assets may be invested in foreign
securities.

-
12
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------

-- INVESTMENT RESTRICTIONS AND --
RISK FACTORS

The Special Fund may also invest in securities convertible into or exercisable
for common stock (including preferred stock, warrants, and debentures),
restricted securities, repurchase agreements, and certain options and financial
futures contracts. Investments in unseasoned companies and special situations
may involve greater risks than more traditional equity investments because the
securities may be more likely to experience unexpected fluctuations in price.
For this reason, the Special Fund should only be used as part of a balanced
investment portfolio. The Special Fund is designed for that portion of an
investor's funds that can be appropriately invested in securities with greater
risk but also greater potential for appreciation.

Because the Special Fund focuses on the performance of the portfolio as a whole,
individual security positions may be sold without regard to the length of time
they have been held. This may result in a relatively high rate of portfolio
turnover. High portfolio turnover increases the Fund's transaction costs,
including brokerage commissions. To the extent short-term trades result in gains
on securities held one year or less, shareholders will be subject to taxes at
ordinary income rates. For non-corporate taxpayers, the highest rate that
applies to long-term capital gains is lower than the highest rate that applies
to ordinary income. See "Distributions and Taxes."

For information about the risks of investing in the Fund, including the risks of
investing in smaller companies and foreign securities, please see "Risk
Factors." For information on the investment by the Fund in repurchase
agreements, illiquid securities, when-issued securities, options, and temporary
investments, please see "Additional Information." A description of other
investment restrictions and certain investment practices of the Special Fund is
included in the Statement of Additional Information.

-- COLUMBIA REAL ESTATE --

_______________________________EQUITY FUND______________________________

The Real Estate Fund was incorporated on December 29, 1993 under Oregon law and
began offering shares to the public on April 1, 1994.

-- INVESTMENT OBJECTIVE --
The Real Estate Fund seeks, with equal emphasis, capital appreciation and
above-average current income by investing primarily in the equity securities of
companies in the real estate industry. With respect to current income, the Fund
seeks to provide a yield that exceeds the composite yield of securities
comprising the S&P 500. The Fund's investment objective may not be changed
without a vote of a majority of the outstanding shares of the Fund.

Under normal conditions, the Real Estate Fund will invest at least 65% of its
total assets in the equity securities of companies principally engaged in the
real estate industry. A company is "principally engaged" in the real estate
industry if at least 50% of its gross income or net profits are attributable to
the ownership, construction, management, or sale of residential, commercial, or
industrial real estate. These companies may include, among others: equity real
estate investment trusts ("REITs"), which own primarily commercial income
properties; mortgage REITs, which make construction, development, and long-term
mortgage loans; and real estate brokers or developers. The Fund will not invest
directly in real estate. Equity securities include common stock, preferred
stock, and securities convertible into common stock. The Fund may invest up to
20% of its total assets in foreign real estate industry companies.

The Real Estate Fund may also invest up to 35% of its total net assets in equity
securities of companies outside the real estate industry and in non-convertible
debt securities. The Fund's Advisor anticipates that investments outside the
real estate industry will be primarily

-
13
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------
in securities of companies whose products and services are related to the real
estate industry. They may include manufacturers and distributors of building
supplies, financial institutions that make or service mortgages, or companies
with substantial real estate assets relative to their stock market valuations,
such as certain retailers and railroads.

The types of non-convertible debt securities in which the Real Estate Fund may
invest include corporate debt securities (bonds, debentures, and notes),
asset-backed securities, bank obligations, collateralized bonds, loan and
mortgage obligations, commercial paper, repurchase agreements, savings and loan
obligations, and U.S. Government and agency obligations. The Fund will only
invest in "investment grade" debt securities, which are securities that, at the
time of investment, are rated Baa or higher by Moody's Investors Services, Inc.
("Moody's"), or BBB or higher by Standard & Poor's Corporation ("Standard &
Poor's") or, if unrated, are believed by the Advisor to be equivalent to
securities with those ratings. Although debt securities rated Baa by Moody's or
BBB by Standard & Poor's are believed to have adequate capacity to pay principal
and interest, they have speculative characteristics because they lack certain
protective elements. In addition, the prices of securities rated Baa by Moody's
or BBB by Standard & Poor's may be more sensitive to adverse economic changes
than securities with a higher investment rating. The Fund will evaluate the
appropriateness, in light of the then existing circumstances, of retaining any
security whose credit rating drops below the rating it held when purchased by
the Fund.

The Real Estate Fund may invest without limit in shares of REITs, which pool
investors' funds for investment primarily in income-producing real estate or
real estate-related loans or interests.

A REIT IS NOT TAXED ON INCOME DISTRIBUTED TO SHAREHOLDERS IF IT COMPLIES WITH
SEVERAL REQUIREMENTS RELATING TO ITS ORGANIZATION, OWNERSHIP, ASSETS, AND
INCOME, AND A REQUIREMENT THAT IT DISTRIBUTE TO ITS SHAREHOLDERS AT LEAST 95%
OF ITS TAXABLE INCOME (OTHER THAN NET CAPITAL GAINS) FOR EACH TAXABLE YEAR.

REITs are generally classified as equity REITs, mortgage REITs, and hybrid
REITs. An equity REIT, which invests the majority of its assets directly in real
properties -- such as shopping centers, malls, multi-family housing, and
commercial properties -- derives its income primarily from rents and lease
payments. An equity REIT can also realize capital gains by selling properties
that have appreciated in value. A mortgage REIT, which invests the majority of
its assets in real estate mortgages, derives its income primarily from interest
payments. A hybrid REIT combines the characteristics of equity REITs and
mortgage REITs.
-- INVESTMENT RESTRICTIONS AND --
RISK FACTORS

Although the Real Estate Fund does not invest in real estate directly, the Fund
may be subject to risks similar to those associated with the direct ownership of
real estate (in addition to stock market risk) because of its policy of
concentration in the securities of companies in the real estate industry. For
more information about the risks of investing in the Fund, including the risks
of investing in real estate securities and foreign securities, please see "Risk
Factors." For information on the investment by the Fund in repurchase
agreements, illiquid securities, when-issued securities, options, and temporary
investments, please see "Additional Information." A description of other
investment restrictions and certain investment practices of the Real Estate Fund
is included in the Statement of Additional Information.

-
14
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------

--_COLUMBIA BALANCED FUND_--

The Balanced Fund was incorporated on June 13, 1991 under Oregon law and began
offering shares to the public on October 1, 1991.

-- INVESTMENT OBJECTIVE --
The investment objective of the Balanced Fund is to provide shareholders with a
high total return (growth of capital and income) by investing in common stocks
and fixed income securities. This objective may not be changed without a vote of
a majority of the outstanding voting securities of the Fund.

The Advisor intends to use "top down" analysis to determine appropriate
weightings between common stocks and fixed income securities, based on expected
relative returns for those two classes of assets. The Advisor does not intend to
try to time the markets, and changes between the asset classes normally will be
made gradually. Under normal investing conditions, the assets of the Balanced
Fund will be allocated within the following parameters: 35-65% in common stocks
and 35-65% in fixed income securities. At least 25% of the Balanced Fund's
assets will be invested at all times in nonconvertible fixed income securities.
Individual security selection for each portion of the Balanced Fund is discussed
separately below.

-- COMMON STOCKS --
The Balanced Fund selects equity securities based on the same factors used to
select securities for the Common Stock Fund. See "Columbia Common Stock Fund --
Investment Objective." The Balanced Fund may invest up to one-third of its
common stock portfolio in common stocks issued by companies located in developed
foreign countries, principally those located in North America, Western Europe,
or Asia. Further information regarding securities in which the Balanced Fund may
invest is provided in the Statement of Additional Information.

-- FIXED INCOME SECURITIES --
The Balanced Fund seeks to provide shareholders with significant income through
an investment of a portion of its total assets in fixed income securities,
consisting of the same type of securities that may form the portfolio for the
Bond Fund. For information on the types of fixed income securities that will be
held by the Balanced Fund and the effect of changes in interest rates on the
values of such securities, see "Columbia Fixed Income Securities Fund --
Investment Objective."

The Balanced Fund intends to use cash or cash equivalents to maintain liquidity
and to partially protect against declines in value of common stocks and longer-
term fixed income securities. All of the Balanced Fund's cash equivalent assets
will be invested in short-term obligations maturing within one year. Cash
equivalent investments by the Balanced Fund normally will not exceed 10% of the
Fund's assets and may include: securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities and repurchase agreements
relating to these securities; bank deposits and other financial institution
obligations; commercial paper rated A-1 by Standard & Poor's, Prime 1 by
Moody's, or, if not rated, issued by companies that, at the date of investment,
have an outstanding debt issue rated AA or better by Standard & Poor's or Aa or
better by Moody's; and other corporate obligations, including bonds and notes
that, at the date of investment, are rated AA or better by Standard & Poor's or
Aa or better by Moody's.

-- INVESTMENT RESTRICTIONS AND --
RISK FACTORS

-
15
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------
and certain investment practices of the Balanced Fund is included in the
Statement of Additional Information. The Balanced Fund's investment restrictions
include a prohibition on investing more than 5% of its total assets at cost in
illiquid securities or the equity securities of companies that have a record of
less than three years of continuous operations.

-- COLUMBIA DAILY --

__INCOME COMPANY__

The Money Market Fund was incorporated on July 22, 1974 under Oregon law and
began offering shares to the public on October 1, 1974.
-- INVESTMENT OBJECTIVE --
The investment objective of the Money Market Fund is to provide a high level of
current income consistent with the maintenance of liquidity and the preservation
of capital. This investment objective may not be changed without a vote of a
majority of the outstanding voting securities of the Money Market Fund.

Investments by the Money Market Fund are restricted to the following:

1. Securities issued or guaranteed as to principal and interest by the U.S.
Government or issued or guaranteed by agencies or instrumentalities thereof
and repurchase agreements relating to these securities.

2. Commercial paper which, if rated by Standard & Poor's or Moody's, is rated
A-1 by Standard & Poor's and Prime 1 by Moody's or, if not rated, is
determined to be of comparable quality by the Money Market Fund.

3. Other corporate debt securities with remaining maturities of less than 12
months, including bonds and notes, of an issuer that has received ratings
from Standard & Poor's and Moody's for its other short-term debt obligations
as described in paragraph 2 above, where such corporate debt securities are
comparable in priority and security to the rated short-term debt obligations
or, if no ratings are available, where such corporate debt securities are
determined to be of comparable quality under procedures approved by the
Money Market Fund.

4. Obligations of U.S. banks that are members of the Federal Reserve System and
have capital surplus and undivided profits as of the date of their most
recent published financial statements in excess of $100 million and are
determined by the Money Market Fund to be of comparable quality to the
obligations described in paragraphs 2 or 3 above. Currently, these
obligations are certificates of deposit, bankers' acceptances, and letters
of credit.

All of the Money Market Fund's assets will be invested in short-term debt
obligations maturing within one year. The average dollar-weighted maturity of
the portfolio may not exceed 90 days. The Money Market Fund will buy and sell
securities in an effort to improve current income return from its assets,
trading holdings when there appear to be advantages from moving between
particular instruments within the high-grade money market. The Money Market Fund
may realize capital gains or losses from such trading.

Further information regarding securities in which the Money Market Fund may
invest and the rating systems used by the Money Market Fund in selecting
investments is provided in the Statement of Additional Information.

-- INVESTMENT RESTRICTIONS AND --
RISK FACTORS

A description of the investment restrictions and certain investment practices of
the Money Market Fund is included in the Statement of Additional Information.
The Money Market Fund's portfolio will be affected by general changes in
interest rates, since these changes increase or decrease the value of the assets
held. The value of these assets generally will vary inversely to

-
16
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------
changes in prevailing interest rates. If interest rates increase after an asset
is purchased, the asset, if sold, may be sold at a price below its cost. The
Money Market Fund's normal policy is to hold investments until maturity. The
Money Market Fund anticipates that, except for efforts to improve current
income, only heavy redemptions would cause it to sell securities below their
purchase price.

-- COLUMBIA U.S. GOVERNMENT --
________________________________SECURITIES FUND_______________________________

The Government Bond Fund was incorporated on October 16, 1986 under Maryland law
and began offering shares to the public on November 6, 1986. The Government Bond
Fund was reincorporated under Oregon law on April 29, 1988.
-- INVESTMENT OBJECTIVE --
The Government Bond Fund seeks to provide shareholders with preservation of
capital and a high level of income. This investment objective may not be changed
without a vote of the majority of the outstanding voting securities of the
Government Bond Fund.

To achieve its investment objective, the Government Bond Fund invests
substantially all its assets in direct obligations of the U.S. Government. The
Government Bond Fund may invest up to 10% of its net assets in repurchase
agreements for direct obligations of the U.S. Government. See "Additional
Information."

Direct obligations of the U.S. Government fall into three categories -- bills,
notes, and bonds -- distinguished primarily by their maturity at the time of
issuance. Treasury bills have maturities of one year or less at the time of
issuance. Treasury notes currently have maturities of 1 to 10 years. Treasury
bonds can be issued with any maturity of more than 10 years. Because the
Government Bond Fund will restrict investments to obligations with a maturity of
three years or less, the Government Bond Fund will not acquire Treasury bonds
upon issuance, but may acquire previously issued Treasury bonds that will mature
within three years of the purchase date.

The Government Bond Fund may commit up to 25 percent of its total assets to
when-issued and delayed-delivery purchases. Although the Government Bond Fund
would have ownership rights to these obligations, it will not be required to pay
for them until they are delivered to the Government Bond Fund, normally 15 to 45
days later. Descriptions of when-issued and delayed-delivery purchases are
provided under "Additional Information."

No security in the portfolio will have a maturity in excess of three years.
Securities will be selected on the basis of the Advisor's assessment of interest
rate trends. Generally, securities purchased will be of a shorter maturity when
interest rates are expected to rise and of longer maturity when interest rates
are expected to decline. Shifting the average maturity of the portfolio in
response to anticipated changes in interest rates will generally be carried out
through the sale of securities and the purchase of different securities within
the desired maturity range. This may result in greater realized capital gains
and losses than if the Government Bond Fund generally held all securities to
maturity.

-- INVESTMENT RESTRICTIONS AND --
RISK FACTORS

A description of the investment restrictions and certain investment practices of
the Government Bond Fund is included in the Statement of Additional Information.
The principal risk of an investment in the Government Bond Fund is interest rate
risk, which is discussed under "Risk Factors."

-
17
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------

-- COLUMBIA FIXED INCOME --

______________________________SECURITIES FUND_____________________________

The Bond Fund was incorporated on October 12, 1982 under Delaware law and began
offering shares to the public on February 25, 1983. The Bond Fund was
reincorporated under Oregon law on April 29, 1988.

-- INVESTMENT OBJECTIVE --
The Bond Fund seeks to provide shareholders with a high level of income,
consistent with conservation of capital. To achieve this objective, the Bond
Fund invests in a broad range of fixed income securities, consisting of
corporate debt securities (bonds, debentures, and notes), asset-backed
securities, bank obligations, collateralized bonds, loan and mortgage
obligations, commercial paper, preferred stocks, repurchase agreements, savings
and loan obligations, and U.S. Government and agency obligations. Debt
securities and preferred stocks may be convertible into, or exchangeable for,
common stocks, and may have warrants attached. Information regarding certain of
these securities is provided in the Statement of Additional Information. This
investment objective may not be changed without a vote of a majority of the
outstanding voting securities of the Bond Fund.

TO ACHIEVE ITS INVESTMENT OBJECTIVE, THE BOND FUND EXPECTS TO INVEST A MAJOR
PORTION (NORMALLY AT LEAST 95%) OF ITS ASSETS IN INVESTMENT-GRADE DEBT
SECURITIES.

"Investment-grade" debt securities are considered to be those which, at the time
of investment are: (a) rated Baa or higher by Moody's; (b) rated BBB or higher
by Standard & Poor's; or (c) unrated, but believed by the Advisor to be
equivalent to securities with those ratings. Up to 5% of the Bond Fund's assets
may be invested in lower-grade securities (rated Ba or B by Moody's or BB or B
by Standard & Poor's) when the Advisor believes these securities present
attractive investment opportunities despite their speculative characteristics.

Although bonds rated Baa or BBB are believed to have adequate capacity to pay
principal and interest, they have speculative characteristics because they lack
certain protective elements. In addition, the prices of bonds rated Baa or BBB
may be more sensitive to adverse economic changes or individual corporate
developments than bonds with higher investment ratings. The Fund will evaluate
the appropriateness, in light of the then existing circumstances, of retaining
any security whose credit rating drops below Baa or BBB after its purchase by
the Bond Fund. Additional ratings information is provided under "Additional
Information -- Bond Ratings."

A portion of the Bond Fund's portfolio will ordinarily be invested in
obligations issued by the U.S. Government and its agencies and instrumentalities
(such as the Federal Home Loan Mortgage Corp., the Government National Mortgage
Association, the Federal National Mortgage Association, and the Federal Housing
Administration) and in short-term corporate obligations when the Advisor
believes the issuer is financially sound. The Bond Fund may also invest in
repurchase agreements, which are described under "Additional Information."

The Bond Fund will usually invest some portion of its assets in collateralized
mortgage obligations ("CMOs") issued by a U.S. agency or instrumentality, or in
privately issued CMOs that carry an investment-grade rating. The holder of a CMO
is entitled to interest and/ or principal payments that are fully collateralized
by a portfolio or pool of mortgages or mortgage-backed securities. CMOs are
generally issued in different classes, with different priorities as to the
receipt of interest and/ or principal payments on the underlying mortgages. In
addition to the interest rate risk carried by all fixed income securities,
mortgage-related securities and CMOs are also subject to risks relating to cash
flow uncertainty; that is, the risk that assumed prepayment

-
18
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------
rates on the underlying mortgages will increase or decrease. Changes in assumed
prepayment rates have the effect of shortening or lengthening the effective
maturity of the CMO held by the Fund, which may have an adverse effect on the
value of the CMO. The Bond Fund will invest only in those CMOs whose
characteristics and terms are consistent with the average maturity and market
risk profile of the other fixed income securities held by the Fund.

There are no limitations on the average maturity of the Bond Fund's portfolio.
Securities will be selected on the basis of the Advisor's assessment of interest
rate trends and the liquidity of various instruments under prevailing market
conditions. Shifting the average maturity of the portfolio in response to
anticipated changes in interest rates will generally be carried out through the
sale of securities and the purchase of different securities within the desired
maturity range. This may result in a greater level of realized capital gains and
losses than if the Bond Fund generally held all securities to maturity.
Portfolio decisions will be made solely on the basis of investment, rather than
tax, considerations. Generally, the securities purchased will be of an
intermediate maturity (less than 10 years) when interest rates are expected to
rise and of a relatively long maturity (over 10 years) when interest rates are
expected to decline.

-- INVESTMENT RESTRICTIONS --
AND RISK FACTORS

For information on the risks of investing in the Fund, please see "Risk Factors
- -- Credit and Interest Rate Risk." For information on the investment by the Fund
in repurchase agreements, illiquid securities, when-
issued securities, and temporary investments, please see "Additional
Information." A description of other investment restrictions and certain
investment practices of the Bond Fund is included in the Statement of Additional
Information.

-- COLUMBIA MUNICIPAL --

_______________________________BOND FUND______________________________

The Municipal Bond Fund was incorporated on October 31, 1983 under Delaware law
and began offering shares to the public on July 2, 1984. The Municipal Bond Fund
was reincorporated under Oregon law on April 29, 1988.

-- INVESTMENT OBJECTIVE --

The Municipal Bond Fund seeks to provide shareholders with as high a level of
income exempt from federal income taxes as is consistent with preservation of
capital. Consistent with this primary objective, the Municipal Bond Fund seeks
to provide shareholders with income exempt from State of Oregon income taxes,
and it may concentrate up to 100% of its investments in obligations of Oregon
issuers. These investment objectives may not be changed without a vote of a
majority of the outstanding voting securities of the Municipal Bond Fund.

The Municipal Bond Fund normally expects to invest substantially all of its
assets in municipal securities, of which at least 60% are expected to pay
interest that is exempt from Oregon income taxes. Municipal securities are debt
obligations issued by or on behalf of states, territories, and possessions of
the United States and their political subdivisions, agencies, authorities, and
instrumentalities, the interest from which, in the opinion of bond counsel, is
not includible in gross income for federal income tax purposes. The Municipal
Bond Fund may invest temporarily in other securities for defensive purposes.

All of the Municipal Bond Fund's bond portfolio will be invested in municipal
securities which, at the time of investment, are either:

- - general obligation bonds of Oregon or its political
subdivisions;

-
19
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------

- - rated Baa or higher by Moody's or rated BBB or
higher by Standard & Poor's; or

- - not rated, but believed by its Advisor to be equivalent
to securities with those ratings.

Although bonds rated Baa or BBB are believed to have adequate capacity to pay
principal and interest, they have speculative characteristics because they lack
certain protective elements. In addition, the prices of bonds rated Baa or BBB
may be more sensitive to adverse economic changes than bonds with a higher
investment rating. The Fund will evaluate the appropriateness, in light of the
then existing circumstances, of retaining any security whose credit rating drops
below Baa or BBB after its purchase by the Fund. Additional ratings information
is provided under "Additional Information."

ALTHOUGH THE MUNICIPAL BOND FUND'S PORTFOLIO WILL BE ACTIVELY MANAGED,
THE FUND WILL GENERALLY PURCHASE PORTFOLIO SECURITIES FOR LONG-TERM HOLDINGS.

From time to time, the Municipal Bond Fund may invest temporarily in securities
that produce income subject to federal income tax. These investments may consist
of obligations of the U.S. Government or its agencies or instrumentalities;
obligations of U.S. banks (including certificates of deposit, bankers'
acceptances, and letters of credit) that are members of the Federal Reserve
System and which have capital surplus and undivided profits as of the date of
their most recent published financial statement in excess of $100 million;
commercial paper rated Prime 1 by Moody's, A-1 or better by Standard & Poor's,
or, if not rated, issued by a company that, at the date of investment by the
Municipal Bond Fund, has an outstanding debt issue rated AA or better by
Standard & Poor's or Aa or better by Moody's; and repurchase agreements for any
of these types of investments. Interest earned from these investments will be
taxable to investors. Except for temporary defensive purposes, the Municipal
Bond Fund will not invest more than 20% of its net assets in securities that
produce income subject to federal income tax.

The Municipal Bond Fund will generally have an average portfolio maturity of 10
years or longer, although average maturity may be expected to vary when the
Advisor anticipates general movements in interest rates. Securities may be
purchased or sold at a discount or premium depending upon market conditions at
the time of the transaction.

Although the Municipal Bond Fund intends to concentrate its investments in
municipal securities that are exempt from State of Oregon income taxes, a
portion of the interest earned on municipal securities held by the Municipal
Bond Fund may be subject to State of Oregon income taxes. The Municipal Bond
Fund expects to invest up to 25% of its assets in general obligation bonds of
the State of Oregon, including bonds issued by divisions of the State of Oregon
and backed by the full faith and credit of the State of Oregon, or any higher
percentage permitted from time to time by the Internal Revenue Code.

The Municipal Bond Fund expects to invest all or a portion of the balance of its
assets in municipal securities of other Oregon issuers, for which there may not
be an active trading market, and in obligations of Puerto Rico, Guam, and the
possessions of the United States, the interest on which is exempt from State of
Oregon income taxes. However, the Municipal Bond Fund may, for liquidity
reasons, also invest in actively-traded municipal securities of issuers in other
states, the interest on which will be subject to State of Oregon income taxes.

-- SPECIAL INVESTMENT CONSIDERATIONS --
Subject to its investment restrictions, the Municipal Bond Fund may engage in a
variety of securities transactions, some of which may present special risks as
described below. Further information regarding these matters is provided under
"Additional Information" and in the Statement of Additional Information.

-
20
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------

Concentration in Oregon Bonds. The Municipal Bond Fund's objective is to
concentrate its investments, to the extent possible, in obligations of Oregon
issuers and other obligations the interest on which is exempt from State of
Oregon income taxes. This concentration may cause the Municipal Bond Fund's
portfolio to be exposed to special risks that do not apply to funds that do not
concentrate in obligations of one state. Only investors subject to Oregon
personal income taxes will receive the state tax benefits resulting from the
concentration in obligations of Oregon issuers.

Because most issues of municipal bonds in Oregon, other than certain bonds
issued by the State, are relatively small, the Advisor believes there is not an
active trading market for municipal bonds of Oregon issuers other than general
obligation bonds issued by the State of Oregon. Therefore, relatively small
changes in the supply of, or demand for, bonds of these other Oregon issuers can
have a large impact on the market price of the bonds. If the Municipal Bond Fund
were required to sell bonds held in its portfolio because of redemptions in
large amounts or for other reasons, the sale could significantly reduce the
market value of these securities, which could result in a reduction in the net
asset value of the Fund's shares.

To maintain sufficient liquidity in the Municipal Bond Fund's portfolio for
normal redemptions, management intends to invest a significant portion of the
Municipal Bond Fund's assets in general obligations of the State of Oregon and
in municipal bonds of other issuers for which there is an active trading market.
However, this strategy will not completely insulate the Municipal Bond Fund's
investments from this risk.

Certain municipal securities purchased by the Municipal Bond Fund from Oregon
issuers may rely in whole or in part on ad valorem real property taxes as a
source of revenue for the payment of principal and interest. There are state
constitutional and statutory limitations on the issuance of bonds payable from
tax revenues. In November 1990, Oregon voters passed a statewide initiative
(Measure 5) that limits ad valorem property taxes, subject to certain
exceptions. These exceptions include ad valorem property taxes levied to pay
general obligation indebtedness that is specifically approved by the voters,
general obligation indebtedness outstanding at the time of the adoption of
Measure 5, and general obligation indebtedness specifically authorized by other
provisions of the Oregon Constitution. In addition to limiting the ability to
issue general obligation bonds that do not require voter approval, Measure 5
requires the State of Oregon to replace tax revenues lost by school districts as
a result of the Measure 5 property tax limit. This limitation on ad valorem
property taxes and the revenue replacement requirement have had a significant
effect on the operating funds available to state and local governments. Limiting
the ability of governments to issue new general obligation debt because of
limits on property tax revenues could reduce the number of municipal bonds of
Oregon issuers available for purchase by the Municipal Bond Fund and could
adversely affect the market value of bonds issued by Oregon issuers generally.

Because of the Municipal Bond Fund's concentration in obligations of Oregon
issuers, unfavorable economic conditions in Oregon could adversely affect the
market value of municipal bonds held by the Municipal Bond Fund or the ability
of these issuers to make required payments. Proposed restrictions on the level
of timber harvests on federal and private lands are likely to be adopted and, if
adopted, could have a generally negative economic effect, particularly in
certain rural counties that receive significant direct revenues based on timber
harvests. In addition, proposed restrictions on the use and control of river and
stream waters to protect diminishing salmon runs could adversely affect
electricity rates, agricultural development, commercial and recreational fishing
industries, and the costs of river navigation.

-
21
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------

-- INVESTMENT RESTRICTIONS --
AND RISK FACTORS

For additional information on the risks of investing in the Fund, please see
"Risk Factors -- Credit and Interest Rate Risk." New issues of municipal bonds
are usually offered on a when-issued basis, with delivery and payment normally
taking place within 45 days after the date of the commitment to purchase. The
Municipal Bond Fund may invest in repurchase agreements. Descriptions of
repurchase agreements and when-issued and delayed-delivery purchases are
provided under "Additional Information." A description of other investment
restrictions and certain investment practices of the Municipal Bond Fund is
included in the Statement of Additional Information.

--_COLUMBIA HIGH YIELD FUND_--

The Columbia High Yield Fund was incorporated on June 30, 1993 under Oregon law
and began offering shares to the public on October 1, 1993.
-- INVESTMENT OBJECTIVE --
The High Yield Fund's primary investment objective is to provide shareholders
with a high level of current income by investing primarily in lower-rated fixed
income securities. Capital appreciation is a secondary objective when consistent
with the objective of high current income. The High Yield Fund may invest in the
same types of fixed income securities as the Bond Fund. See "Columbia Fixed
Income Securities Fund -- Investment Objective." The High Yield Fund's objective
may not be changed without a vote of a majority of the outstanding voting
securities of the Fund.

To achieve its investment objective, the High Yield Fund generally will invest
at least 65% of its total assets in high yielding fixed income securities rated
Ba or lower by Moody's or BB or lower by Standard & Poor's. Because the Fund
intends to invest primarily in "upper tier" noninvestment grade securities (that
is, BB- or B-rated), no more than 10% of the Fund's total assets will be
invested in fixed income securities rated Caa or lower by Moody's or CCC or
lower by Standard & Poor's. The Fund may also invest in unrated fixed income
securities when the Advisor believes the security is of comparable quality to
that of securities eligible for purchase by the Fund. If the credit rating of a
security drops below the rating it held when purchased by the Fund, the Fund
will evaluate the appropriateness of retaining that security.

THE FUND INTENDS TO INVEST PRIMARILY IN "UPPER TIER" NONINVESTMENT-GRADE
SECURITIES (THAT IS, BB-OR B-RATED).

Securities rated Ba or less by Moody's or BB or less by Standard & Poor's,
commonly referred to as "junk bonds," are considered noninvestment grade
securities, subject to a high degree of risk, and considered speculative by the
major credit rating agencies with respect to the issuer's ability to meet
principal and interest payments. The High Yield Fund is designed for investors
who are willing to assume substantial risks of significant fluctuations in
principal value in order to achieve a high level of current income. The Fund
should represent only a portion of a balanced investment program. See "Risk
Factors" for a description of the risks of investing in lower-rated securities
and "Additional Information" for a description of corporate bond ratings.

The table below shows the ratings assigned to the fixed income securities held
by the High Yield Fund during 1995. The figures, expressed as a percentage of
total net assets, are dollar-weighted averages of month-end holdings for 1995.
The Fund did not hold any securities unrated by either Moody's or Standard &
Poor's or securities rated above Baa/BBB or below B/B during 1995.

-
22
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------

-- BOND RATINGS, HIGH YIELD FUND --

<TABLE>
<CAPTION>
Moody's Standard & Poor's
- ----------------------- -----------------------
Rating Average Rating Average
- ---------- ----------- ---------- -----------
Baa 0.4% BBB 4.1%
<S> <C> <C> <C> <C>
Ba 56.3% BB 55.0%
B 35.9% B 32.9%
</TABLE>

There are no limitations on the average maturity of the High Yield Fund's
portfolio. Securities will be selected on the basis of the Advisor's assessment
of interest rate trends and the liquidity of various instruments under
prevailing market conditions. Shifting the average maturity of the portfolio in
response to anticipated changes in interest rates generally will be carried out
through the sale of securities and the purchase of different securities within
the desired maturity range. This may result in greater realized capital gains
and losses than if the Fund generally held all securities to maturity. Portfolio
decisions will be made solely on the basis of investment, rather than tax,
considerations.

The High Yield Fund may invest in corporate debt securities or preferred stocks
that are convertible into or exchangeable for common stock. The Fund may acquire
common stock in the following circumstances:

- - in connection with the purchase of a unit of securities
that includes both fixed income securities and common stock;

- - when fixed income securities held by the Fund are
converted by the issuer into common stock;

- - upon the exercise of warrants attached to fixed
income securities held by the Fund; and

- - when purchased as part of a corporate transaction in
which the holders of common stock will receive newly issued fixed income
securities.

Common stock acquired by the Fund in these circumstances may be held to permit
orderly disposition or to establish long-term holding periods for income tax
purposes.

The High Yield Fund may invest up to 10% of its total assets in fixed income
securities of foreign issuers, including foreign governments, denominated in
U.S. dollars.

Special tax considerations are associated with investing in lower-rated debt
securities structured as zero coupon or pay-in-kind securities. A zero coupon
security has no cash coupon payments. Instead, the issuer sells the security at
a substantial discount from its maturity value. The interest equivalent received
by the investor from holding this security to maturity is the difference between
the maturity value and the purchase price. Pay-in-kind securities are securities
that pay interest in either cash or additional securities, at the issuer's
option, for a specified period. The price of pay-in-kind securities is expected
to reflect the market value of the underlying debt plus an amount representing
accrued interest since the last payment. Zero coupon and pay-in-kind securities
are more volatile than cash pay securities. The High Yield Fund accrues income
on these securities prior to the receipt of cash payments. The Fund intends to
distribute substantially all of its income to its shareholders to qualify for
pass-through treatment under the tax laws and may, therefore, need to use its
cash reserves to satisfy distribution requirements.

The High Yield Fund generally will not trade in securities for short-term
profits but, when circumstances warrant, it may purchase and sell securities
without regard to the length of time held. A high portfolio turnover may
increase transaction costs and may affect taxes paid by shareholders to the
extent short-term gains are distributed.

-- INVESTMENT RESTRICTIONS --
AND RISK FACTORS

For information on the risks of investing in the Fund, including the specific
risks of lower-rated securities, please see "Risk Factors." For information on
the investment by the Fund in repurchase agreements, illiquid securities,
when-issued securities, loan transactions, and

-
23
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------
temporary investments, please see "Additional Information." A description of
other investment restrictions and certain investment practices of the High Yield
Fund is included in the Statement of Additional Information.

-- RISK FACTORS --
An investment in any mutual fund, including any of the Columbia Funds, involves
certain risks, some of which are described under the description of each Fund.
General market risk and other specific risks associated with different types of
securities used by the Funds, including foreign securities, lower-rated bonds,
and stocks of small companies, are discussed below.

Stock Market Risk. The principal risk associated with a stock mutual fund is
that the stocks held by the fund will decline in value. Stock values may
fluctuate in response to the activities and financial prospects of an individual
company or in response to general market and economic conditions. Investments in
smaller or unseasoned companies may be both more volatile and more speculative.
See "Investments in Small and Unseasoned Companies."

ALTHOUGH COMMON STOCKS HAVE HISTORICALLY PROVIDED LONG-TERM RETURNS THAT ARE
GREATER THAN OTHER TYPES OF INVESTMENTS, STOCK RETURNS HAVE ALSO BEEN MORE
VOLATILE OVER SHORTER PERIODS OF TIME.

Foreign Securities. The International Stock Fund, and to a much lesser extent
the other Stock Funds and the Balanced Fund, are subject to the risks of
investing in foreign securities. Foreign securities, which are generally
denominated in foreign currencies, and forward currency exchange contracts
involve risks not typically associated with investing in domestic securities.
The value of a Fund's portfolio will be affected by changes in currency exchange
rates and in currency exchange regulations. Foreign securities may be subject to
foreign taxes that would reduce their effective yield. Certain foreign
governments levy withholding taxes against dividend and interest income.
Although in some countries a portion of these taxes is recoverable, the
unrecovered portion of any foreign withholding taxes would reduce the income the
Fund receives from its foreign investments.

Foreign investments involve certain other risks, including possible political or
economic instability of the country of the issuer, the difficulty of predicting
international trade patterns, and the possibility of currency exchange controls.
Foreign securities may also be subject to greater fluctuations in price than
domestic securities. There may be less publicly available information about a
foreign company than about a domestic company. Foreign companies generally are
not subject to uniform accounting, auditing, and financial reporting standards
comparable to those of domestic companies. There is generally less government
regulation of stock exchanges, brokers, and listed companies abroad than in the
United States. In addition, with respect to certain foreign countries, there is
a possibility of the adoption of a policy to withhold dividends at the source,
or of expropriation, nationalization, confiscatory taxation, or diplomatic
developments that could affect investments in those countries. Finally, in the
event of default on a foreign debt obligation, it may be more difficult for a
Fund to obtain or enforce a judgment against the issuers of the obligation. The
Funds will normally execute their portfolio securities transactions on the
principal stock exchange on which the security is traded.

The International Stock Fund may invest a portion of its assets in developing
countries or in countries with new or developing capital markets, such as
countries in Eastern Europe. The considerations noted above regarding the risk
of investing in foreign securities are generally more significant for these
investments. These countries may have relatively unstable governments and
securities markets in which only a small number of securities trade. Markets of
developing countries may generally be more volatile than markets of developed

-
24
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------
countries. Investments in these markets may involve significantly greater risks,
as well as the potential for greater gains.

In addition to investing directly in foreign equity securities, the Funds may
also purchase such securities in the form of American Depository Receipts
("ADRs") and Global Depository Receipts ("GDRs"). ADRs in registered form are
dollar-denominated securities designed for use in the U.S. securities markets.
ADRs are sponsored and issued by domestic banks and represent and may be
converted into underlying foreign securities deposited with the domestic bank or
a correspondent bank. ADRs do not eliminate the risks inherent in investing in
the securities of foreign issuers. By investing in ADRs rather than directly in
the foreign security, however, a Fund may avoid currency risks during the
settlement period for either purchases or sales. There is a large, liquid market
in the United States for most ADRs. GDRs are receipts representing an
arrangement with a major foreign bank similar to that for ADRs. GDRs are not
necessarily denominated in the currency of the underlying security.

Additional costs may be incurred in connection with a Fund's foreign
investments. Foreign brokerage commissions are generally higher than those in
the United States. Expenses may also be incurred on currency conversions when a
Fund moves investments from one country to another. Increased custodian costs as
well as administrative difficulties may be experienced in connection with
maintaining assets in foreign jurisdictions.

Real Estate Securities. The Real Estate Fund may be subject to risks similar to
those associated with the direct ownership of real estate (in addition to
securities market risks) because of its policy of concentrating in the
securities of companies in the real estate industry. These risks include
declines in the value of real estate, risks related to general, local, and
regional economic conditions, dependence on management skills and heavy cash
flow, possible lack of availability of mortgage funds, overbuilding, extended
vacancies of properties, increased competition, increases in property taxes and
operating expenses, changes in zoning laws, losses due to costs resulting from
the clean-up of environmental problems, liability to third parties for damages
resulting from environmental problems, casualty or condemnation losses, natural
disasters, limitations on rents, changes in neighborhood values and the appeal
of properties to tenants, and changes in interest rates. These risks may be more
significant to the extent the Fund's investments are concentrated in a
particular geographic region.

THE REAL ESTATE FUND WILL INVEST ONLY IN SECURITIES ISSUED BY COMPANIES IN THE
REAL ESTATE INDUSTRY. THE FUND WILL NOT INVEST IN REAL ESTATE DIRECTLY.

In addition to these risks, equity REITs may be affected by changes in the value
of the underlying property owned by the REIT, while mortgage REITs may be
affected by the quality of any credit extended. Further, REITs are dependent
upon management skills, may not be diversified, and are subject to heavy cash
flow dependency, defaults by borrowers, and self-liquidation. In addition, a
REIT could fail to qualify for tax-free pass-through of income under the
Internal Revenue Code or fail to maintain its exemption from registration under
the Investment Company Act. The above factors may also adversely affect a
borrower's or a lessee's ability to meets its obligations to the REIT. If a
borrower or lessee defaults, a REIT may experience delays in enforcing its
rights as a mortgagee or lessor and may incur substantial costs associated with
protecting its investments.

Investments in Small and Unseasoned Companies. Investments by the International
Stock Fund and the Special Fund in small or unseasoned companies may be regarded
as speculative. These companies may have limited or unprofitable operating
histories, limited financial resources, and inexperienced management. In
addition, they often face competition from larger or more established firms that
have greater resources. Securities of small and young companies are frequently
traded in the over-the-counter market or on regional exchanges where low trading
volumes may result in

-
25
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------
erratic or abrupt price movements. To dispose of these securities, the
International Stock Fund or the Special Fund may have to sell them over an
extended period of time or below the original purchase price.

Special Situations. Special situations are those in which the Special Fund's
Advisor expects a substantial change in the market value of a company's
securities due to a new development. An example would be a small company
expected to emerge as a leader in a new business area. Other special situations
include acquisitions, mergers, reorganizations, management changes, product
developments, and the awarding of large contracts. Because these types of
situations may involve major corporate changes and a high degree of uncertainty
as to market effects, investments in special situations are characterized by
higher risk as well as the potential for higher returns.

Credit and Interest Rate Risk. All fixed income securities are subject to two
types of risk: credit risk and interest rate risk. Credit risk relates to the
ability of the issuer to meet interest and principal payments when due.
Generally, lower-rated (but higher yielding) bonds, such as those acquired by
the High Yield Fund, are subject to greater credit risk than higher quality (but
lower yielding) bonds, such as those held by the Bond Fund. See "High Yield Fund
- -- Lower-Rated Securities." The ratings of fixed income securities by Moody's
and Standard & Poor's are a generally accepted barometer of credit risk. See
"Additional Information -- Bond Ratings."

Interest rate risk refers to fluctuations in the net asset value of any
portfolio of fixed income securities resulting from the inverse relationship
between the price of fixed income securities and interest rates; that is, when
interest rates rise, bond prices generally fall and, conversely, when interest
rates fall, bond prices generally rise. The change in net asset value depends
upon several factors, including the bond's maturity date. In general, bonds with
longer maturities are more sensitive to interest rate changes than bonds with
shorter maturities.

High Yield Fund -- Lower-Rated Securities. The lower-rated but higher yielding
bonds purchased by the High Yield Fund may be issued in connection with
corporate restructurings, such as leveraged buyouts, mergers, acquisitions, debt
recapitalizations, or similar events. In addition, high yield bonds are often
issued by smaller, less creditworthy companies or by companies with substantial
debt. The securities ratings by Moody's and Standard & Poor's are based largely
on the issuer's historical financial condition and the rating agency's
investment analysis at the time of the rating. As a result, the rating assigned
to a security does not necessarily reflect the issuer's current financial
condition, which may be better or worse than the rating indicates. Credit
ratings are only one factor the Advisor relies on in evaluating lower-rated
fixed income securities. The analysis by the Advisor of a lower-rated security
may also include consideration of the issuer's experience and managerial
strength, changing financial condition, borrowing requirements or debt maturity
schedules, regulatory concerns, and responsiveness to changes in business
conditions and interest rates. The Advisor also may consider relative values
based on anticipated cash flow, interest or dividend coverage, balance sheet
analysis, and earnings prospects. Because of the number of investment
considerations involved in investing in lower-rated securities, achievement of
the Fund's investment objective may be more dependent upon the Advisor's credit
analysis than is the case with investing in higher quality debt securities.

The market for lower-rated debt securities is relatively new and until recently
its growth has paralleled a long economic expansion. Past experience, therefore,
may not provide an accurate indication of future performance of this market,
particularly during an economic recession. An economic downturn or increase in
interest rates is likely to have a greater negative effect on the ability of the
issuers of the High Yield Fund's securities to pay principal and interest, meet
projected business goals, and obtain additional financing. These circumstances
also may result in a higher incidence of defaults compared to higher-rated
securities. As a result, adverse

-
26
<PAGE>
FUND DESCRIPTIONS, continued
---------------------------------------------------------------------------
changes in economic conditions and increases in interest rates may adversely
affect the market for lower-rated debt securities, the value of such securities
in the Fund's portfolio, and, therefore, the Fund's net asset value. As a
result, investment in the Fund is more speculative than investment in shares of
a fund that invests primarily in higher rated debt securities.

Although the High Yield Fund intends generally to purchase lower-rated
securities that have secondary markets, these markets may be less liquid and
less active than markets for higher-rated securities. These factors may limit
the ability of the Fund to sell lower-rated securities at their expected value.
Adverse publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of lower-rated debt securities,
especially in a thinly traded market. If market quotations are not readily
available for the Fund's lower-rated or nonrated securities, these securities
will be valued by a method the Advisor believes accurately reflects fair value.
Judgment plays a greater role in valuing lower-rated debt securities than it
does in valuing securities for which more extensive quotations and last sale
information are available.

-
27
<PAGE>
PERFORMANCE
-----------------------------------------------------------------

This section is designed to help you understand terms used to describe Fund
performance, such as "total return," "average annual total return," and "yield."

-- UNDERSTANDING "RETURN" --

Total return refers to the change in value of an investment in a Fund over a
stated period, assuming the reinvestment of any dividends and capital gains.
"Average annual total return" is a hypothetical rate of return that, if
achieved annually, would have produced the same total return if performance
had been constant over the entire period. Average annual total returns smooth
out the variations in performance but are not the same as actual annual
results.

-- YIELD --

The Money Market Fund, the Common Stock Fund, the Real Estate Fund, the Balanced
Fund, and each of the Bond Funds will, from time to time, advertise or quote
current yields. The current yield of the Money Market Fund refers to the net
income generated by an investment in that Fund over a stated seven-day period.
This income is then annualized. This means that the amount of income generated
by the investment during that week is assumed to be generated each week over a
52-week period and is shown as a percentage of the investment. The Money Market
Fund may also advertise or quote its compounded effective yield, which is
calculated similarly, but, when annualized, the income earned by an investment
in the Fund is assumed to be reinvested. The compounded effective yield will be
slightly higher than the current yield because of the compounding effect of this
assumed reinvestment.

- --------------------------------------------------------------------------------
Fund Performance
- -----------------------------------------------------------------
The table below shows yield and total return performance information for the
periods ended December 31, 1995.
<TABLE>
<CAPTION>
Performance
--------------------------------------------------
Total
Average Annual Total Return Return
Current Compounded ------------------------------------- -----------
Category Yield Yield 1 Year 5 Year 10 Year 1 Year
- ----------------------------------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Stock Funds
Common Stock Fund...................... 1.31% N/A 30.84% 15.89%* N/A 30.84%
Growth Fund............................ N/A N/A 32.98% 17.52% 14.29% 32.98%
International Stock Fund............... N/A N/A 5.15% 10.49%* N/A 5.15%
Special Fund........................... N/A N/A 29.53% 22.50% 18.40% 29.53%
Real Estate Fund....................... 6.43%+ N/A 16.86% 10.10%* N/A 16.86%*

<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Balanced Fund
Balanced Fund.......................... 3.64% N/A 25.08% 12.66%* N/A 25.08%
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Bond Funds
Government Bond Fund................... 4.61% N/A 10.21% 6.84% 6.87%* 10.21%
Bond Fund.............................. 6.20% N/A 18.91% 9.88% 9.29% 18.91%
Municipal Bond Fund.................... 4.41% N/A 14.15% 7.46% 8.07% 14.15%
High Yield Fund........................ 7.48%++ N/A 19.12% 8.37%* N/A 19.12%
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Money Market Fund
Money Market Fund...................... 5.15% 5.29% 5.49% 4.11% 5.65% 5.49%
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Market Comparisons
S&P 500 Stock Index.................... 37.58% 16.59% 14.87% 37.58%
Russell 2000 Stock Index............... 28.44% 21.00% 11.32% 28.44%
Lehman Aggregate Bond Index............ 18.47% 9.48% 9.63% 18.47%

Category 5 Year 10 Year
- -----------------------------------------
<S> <C> <C>
Stock Funds
Common Stock Fund...................... 88.54%* N/A
Growth Fund............................ 124.20% 280.40%
International Stock Fund............... 37.59%* N/A
Special Fund........................... 175.81% 441.32%
Real Estate Fund....................... 18.92%* N/A
<S> <C> <C>
Balanced Fund
Balanced Fund.......................... 66.96%* N/A
<S> <C> <C>
Bond Funds
Government Bond Fund................... 39.18% 84.20%*
Bond Fund.............................. 60.17% 143.19%
Municipal Bond Fund.................... 43.31% 117.38%
High Yield Fund........................ 19.34%* N/A
<S> <C> <C>
Money Market Fund
Money Market Fund...................... 22.33% 73.22%
<S> <C> <C>
Market Comparisons
S&P 500 Stock Index.................... 115.44% 300.14%
Russell 2000 Stock Index............... 159.37% 192.15%
Lehman Aggregate Bond Index............ 57.26% 150.76%
</TABLE>

* PARTIAL PERIODS: GOVERNMENT BOND FUND SINCE 11/6/86; COMMON STOCK FUND AND
BALANCED FUND SINCE 10/1/91; INTERNATIONAL STOCK FUND SINCE 10/1/92.; HIGH
YIELD FUND SINCE 10/1/93; REAL ESTATE FUND SINCE 4/1/94.
+ SOME PORTION OF THE NET INVESTMENT INCOME OF THE REAL ESTATE FUND USED TO
CALCULATE CURRENT YIELD IS A TAX RETURN OF CAPITAL. SEE
"DISTRIBUTIONS AND TAXES."
++ WITHOUT THE REIMBURSEMENT OF CERTAIN EXPENSES BY THE HIGH YIELD FUND'S
ADVISOR, THE CURRENT YIELD WOULD HAVE BEEN 7.42%. SEE "FUND EXPENSES."

-
28
<PAGE>
PERFORMANCE, continued
---------------------------------------------------------------------------

The current yield for the Common Stock Fund, the Real Estate Fund, the Balanced
Fund, and each of the Bond Funds represents the annualization of the Fund's net
investment income over a recent 30-day period divided by that Fund's net asset
value at the end of that period. For additional information on yield and total
return calculations for each of the Funds, see the Statement of Additional
Information.

-- PERFORMANCE COMPARISONS --
The Funds may compare their performance to other mutual funds and to the mutual
fund industry as a whole, as quoted by ranking services such as Lipper
Analytical Services, Inc., or Morningstar, Inc., or as reported in financial
publications such as BARRON'S, BUSINESS WEEK, FORBES, MONEY MAGAZINE, and THE
WALL STREET JOURNAL. The Funds may also compare their performance to that of a
recognized stock or bond index, such as the S&P 500 Stock Index, the Russell
2000 Stock Index, the Lehman Aggregate Bond Index, and other relevant indices.
Unmanaged indices may assume the reinvestment of dividends, but generally do not
reflect deductions for administrative and management costs and expenses.

PERFORMANCE INFORMATION ON THE FUNDS IS HISTORICAL DATA AND IS NOT
INTENDED TO INDICATE FUTURE PERFORMANCE. INVESTMENT RETURNS AND NET ASSET
VALUES (EXCEPT, UNDER NORMAL CIRCUMSTANCES, FOR THE MONEY MARKET FUND) WILL
FLUCTUATE SO THAT YOUR SHARES WHEN REDEEMED MAY BE WORTH MORE OR LESS THAN
THEIR ORIGINAL COST.

In addition, the Funds may also compare their performance to other
income-producing securities such as: (i) money market funds; (ii) various bank
products (such as certificates of deposit and money market deposit accounts);
and (iii) U.S. Treasury bills or notes. There are differences between these
income-producing alternatives and the Funds other than their yields. For
example, the yields of the Funds are not fixed and will fluctuate. In addition,
your investment is not insured and its yield is not guaranteed. Although the
yields of bank money market deposit accounts will fluctuate, principal will not
fluctuate and is insured by the Federal Deposit Insurance Corporation up to
$100,000. Bank passbook savings accounts normally offer a fixed rate of
interest, and their principal and interest are also guaranteed and insured. Bank
certificates of deposit offer fixed or variable rates for a set term. Principal
and fixed rates are guaranteed and insured. There is no fluctuation in principal
value. Withdrawal of these deposits prior to maturity will normally be subject
to a penalty.

-
29
<PAGE>
FUND MANAGEMENT
-----------------------------------------------------------------

-- BOARD OF DIRECTORS --
Each Fund is managed under the supervision of its Board of Directors, which has
responsibility for overseeing decisions relating to the investment policies and
objectives of the Fund. The Board of Directors of each Fund meets quarterly to
review the Fund's investment policies, performance, expenses, and other business
matters.
-- INVESTMENT ADVISOR --
Each Fund has contracted with Columbia Funds Management Company (the "Advisor")
to provide investment advisory services. The Advisor has acted as an investment
advisor since 1982. Until December 1985, the Advisor was a wholly-owned
subsidiary of Columbia Management Co. ("CMC"), which was organized in 1969 and
acts as investment manager for approximately $12 billion of assets of other
institutions. In December 1985, CMC and its subsidiaries were reorganized, and
the Advisor is now owned principally by its employees, including J. Jerry
Inskeep, Jr. and James F. Rippey, who are also principal shareholders of CMC.
The address of the Advisor is 1300 S.W. Sixth Avenue, P.O. Box 1350, Portland,
Oregon 97207-1350.

Under the investment advisory contract with each Fund, the Advisor provides
research, advice, and supervision with respect to investment matters and
determines what securities to purchase or sell and what portion of the Fund's
assets to invest. The Advisor provides office space and pays all executive
salaries and expenses and ordinary office expenses of each Fund (other than the
expenses of clerical services relating to the administration of the Fund).
Certain employees of the Advisor are also officers of the Funds and, subject to
the authority of each Fund's Board of Directors, are responsible for the overall
management of the Funds' business affairs.

The investment advisory fee of each Fund is accrued daily and paid monthly based
on the following fee schedule:
-- ADVISOR FEE SCHEDULE --

<TABLE>
<CAPTION>
Annual Rate
(as a percentage of daily net
Fund assets)
- --------------------- -----------------------------
Balanced Fund .50% on all assets
Government Bond Fund
Bond Fund
Municipal Bond Fund
<S> <C>
- ----------------------------------------------------
Money Market Fund .50% on first $500 million
.45% on next $500 million
.40% on assets over $1
billion
- ----------------------------------------------------
Common Stock Fund .60% on all assets
High Yield Fund
- ----------------------------------------------------
Growth Fund .75% on first $200 million
.625% on next $300 million
.50% on assets over $500
million
- ----------------------------------------------------
Real Estate Fund .75% on all assets
- ----------------------------------------------------
Special Fund 1.00% on first $500 million
.75% on assets over $500
million
- ----------------------------------------------------
International Stock 1.00% on all assets
Fund
</TABLE>

The advisory fees for the Real Estate Fund, the Special Fund, and the
International Stock Fund, while comparable to the fees paid by other mutual
funds with similar investment objectives, are higher than the fees paid by most
mutual funds.

-
30
<PAGE>
FUND MANAGEMENT, continued
---------------------------------------------------------------------------

For the year ended December 31, 1995, the investment advisory fees incurred by
the Funds, expressed as a percentage of average net assets, were as follows:

<TABLE>
<S> <C>
Common Stock Fund 0.60%
Growth Fund 0.62%
International Stock Fund 1.00%
Special Fund 0.86%
Real Estate Fund 0.75%
Balanced Fund 0.50%
Money Market Fund 0.48%
Government Bond Fund 0.50%
Bond Fund 0.50%
Municipal Bond Fund 0.50%
High Yield Fund 0.60%
</TABLE>

The Advisor has entered into an agreement with CMC under which CMC provides the
Advisor with statistical and other factual information, advice regarding
economic factors and trends, and advice as to occasional transactions in
specific securities. CMC, upon receipt of specific instructions from the
Advisor, also contacts brokerage firms to conduct securities transactions for
the Funds. The Advisor pays CMC a fee for these services. A Fund's expenses are
not increased by this arrangement, and no amounts are paid by a Fund to CMC
under this agreement.

Each Fund assumes the following costs and expenses: costs relating to corporate
matters; cost of services to shareholders; transfer and dividend paying agent
fees; custodian fees; legal, auditing, and accounting expenses; disinterested
directors' fees; taxes and governmental fees; interest; brokers' commissions;
transaction expenses; cost of stock certificates and any other expenses
(including clerical expenses) of issue, sale, repurchase, or redemption of its
shares; expenses of registering or qualifying its shares for sale; transfer
taxes; all expenses of preparing its registration statements, prospectuses, and
reports; and the cost of printing and delivering to shareholders its
prospectuses and reports. Third-party administrators of tax-qualified retirement
plans and other entities may establish omnibus accounts with the Funds and
provide sub-transfer agency, recordkeeping, or other services to participants in
the omnibus accounts. In recognition that these arrangements reduce or eliminate
the need for the Fund's transfer agent to provide such services, the Funds may
pay the administrator or entity a sub-transfer agent or recordkeeping fee.

The Advisor has voluntarily agreed to assume the ordinary recurring expenses of
the High Yield Fund for 1996 to the extent these expenses, together with the
Fund's advisory fee, exceed 1% of the Fund's average net assets for those
periods. Information on each Fund's expenses as a percentage of its average net
assets is located under "Fund Expenses" and "Financial Highlights."
-- A TEAM APPROACH TO INVESTING --
The Advisor uses an investment team approach to analyze investment themes and
strategies for the Funds. Members of the Investment Team are responsible for the
analysis of particular industries or types of fixed income securities and for
recommendations on individual securities within those industries or asset
categories. Investment decisions for a Fund are then made by the Investment Team
and the following portfolio managers who are responsible for investment
decisions on behalf of each Fund:

Common Stock Fund. Alan J. Folkman (since 1996), a Senior Vice President and
director of the Advisor. Mr. Folkman is the Chief Investment Officer of the
Investment Team. He joined the Advisor in 1975 and served as the portfolio
manager for the Growth Fund from 1979 to 1984 and the Special Fund from 1985 to
1994. With over 29 years of investment management experience, Mr. Folkman also
supervises the Investment Team in establishing broad investment strategies and
determining portfolio guidelines for each of the Funds.

Growth Fund. Alexander S. Macmillan (since 1992), a Vice President of the
Advisor and a Chartered Financial Analyst. Prior to joining the Investment Team
in 1989, Mr. Macmillan was a Vice President and

-
31
<PAGE>
FUND MANAGEMENT, continued
---------------------------------------------------------------------------
Portfolio Manager for Gardner & Preston Moss (1982-1989). Mr. Macmillan received
a Masters of Business Administration from the Amos Tuck School at Dartmouth in
1980.

International Stock Fund. James M. McAlear (since inception of the Fund in
1992), a Vice President of the Advisor. Prior to joining the Investment Team in
1992, Mr. McAlear was a Senior Vice President of IDS International, Inc.
(1985-1992) and an Executive Director for Merrill Lynch Europe (1972-1985). Mr.
McAlear received an M.A. in Economics from Michigan State University in 1964.

Special Fund. Chad L. Fleischman (since 1995), a Vice President of the Advisor
and a Chartered Financial Analyst. Mr. Fleischman joined the Columbia
organization in 1980 and assisted Mr. Folkman in the management of the Special
Fund from 1989 to June 1994. Prior to assuming responsibility for the Special
Fund in 1995, Mr. Fleischman was the portfolio manager for CMC Small Cap Fund, a
mutual fund managed by CMC, and CTC Small Stock Fund, an investment fund managed
by Columbia Trust Company.

Real Estate Fund. David W. Jellison (since inception of the Fund in 1994), a
Vice President of the Advisor and a Chartered Financial Analyst. Prior to
joining the Investment Team in 1992, Mr. Jellison was a Senior Research
Associate for RCM Capital Management (1987-1992). Mr. Jellison received a Master
of Management from the J. L. Kellogg Graduate School of Management of
Northwestern University in 1984.

Balanced Fund. Michael W. Powers (since inception of the Fund in 1991), a Vice
President of the Advisor and a Chartered Financial Analyst. Mr. Powers served as
Portfolio Manager for the Growth Fund from 1984 to 1986. Prior to joining the
Investment Team in 1979, Mr. Powers was an Assistant Vice President of the Trust
Company of the West (1975-1979). Mr. Powers received a Masters of Business
Administration from the University of California at Los Angeles in 1974.

Money Market Fund and Columbia Bond Funds. Thomas L. Thomsen, a Vice President
and director of the Advisor, has principal oversight responsibility for
investment strategies on behalf of the Money Market Fund (since 1988) and each
of the Columbia Bond Funds (since their respective inceptions). Prior to joining
the Investment Team in 1978, Mr. Thomsen was a Senior Investment Officer for the
Treasury Department of the State of Oregon (1974-1978) and a Fixed Income
Portfolio Manager for First National Bank of Oregon (1969-1973). Mr. Thomsen is
also responsible for overseeing the following managers who implement on a daily
basis the investment strategies for these Funds.

Money Market Fund. Leonard A. Aplet (since 1988), a Vice President of the
Advisor and a Chartered Financial Analyst. Mr. Aplet received a Masters of
Business Administration from the University of California at Berkeley prior to
joining the Investment Team in 1987.

Government Bond Fund. Jeffrey L. Rippey (since 1987), a Vice President of
the Advisor and a Chartered Financial Analyst. Prior to joining the Investment
Team in 1981, Mr. Rippey worked in the Trust Department of Rainier National Bank
(1978-1981).

Bond Fund. Messrs. Aplet and Rippey (both since 1989) share responsibility
for the day-to-day investment decisions for the Bond Fund.

Municipal Bond Fund. Mr. Thomsen and Greta R. Clapp (since 1992), a Vice
President of the Advisor and a Chartered Financial Analyst. Prior to joining the
Investment Team in 1991, Ms. Clapp received her Masters of Business
Administration from the University of Michigan (1990) and was an Assistant Vice
President and Portfolio Manager at The Putnam Companies (1985-1988).

High Yield Fund. Mr. Rippey has had responsibility for the day-to-day
investment decisions for the High Yield Fund since its inception in 1993.

-
32
<PAGE>
FUND MANAGEMENT, continued
---------------------------------------------------------------------------

-- PERSONAL TRADING --
Members of the Investment Team and other personnel of the Funds or the Advisor
are permitted to trade securities for their own or family accounts, subject to
the rules of the Code of Ethics adopted by the Funds and the Advisor. The rules
that govern personal trading by investment personnel are based on the principal
that employees owe a fiduciary duty to conduct their trades in a manner that is
not detrimental to the Funds or their shareholders. The Funds have adopted the
recommendations of the Investment Company Institute, an organization composed of
members of the mutual fund industry, relating to restrictions on personal
trading. For more information on the Code of Ethics and specific trading
restrictions, see the Statement of Additional Information.

-- OTHER SERVICE PROVIDERS --
Transfer Agent. Columbia Trust Company acts as transfer agent and dividend
paying agent for the Funds. Its address is 1301 S.W. Fifth Avenue, P.O. Box
1350, Portland, Oregon 97207-1350. The Advisor is the principal shareholder, and
certain officers of the Funds are minority shareholders, of Columbia Trust
Company.

Columbia Financial Center Incorporated. Columbia Financial Center Incorporated
("Columbia Financial"), a registered securities broker and a member of the
National Association of Securities Dealers, Inc., acts as a distributor of
shares of the Funds. Its address is 1301 S.W. Fifth Avenue, P.O. Box 1350,
Portland, Oregon 97207-1350. You may invest or redeem your investment in a Fund
through Columbia Financial, which will not charge a commission for handling your
order. J. Jerry Inskeep, Jr., director and chairman of each Fund, and James F.
Rippey, director of each Fund, are the principal shareholders of Columbia
Financial.

Custodians. United States National Bank of Oregon, 321 S.W. Sixth Avenue,
Portland, Oregon 97208, serves as general custodian for all Funds other than the
International Stock Fund. Morgan Stanley Trust Company, One Pierrepont Plaza,
Brooklyn, New York, NY 11201, serves as general custodian for the International
Stock Fund and provides custody services to those other Funds that may hold
foreign securities.
-- OTHER INFORMATION --
Voting Rights. Each Fund is a separate corporation. All shares of each Fund
have equal voting, redemption, dividend, and liquidation rights. All issued and
outstanding shares of each Fund are fully paid and nonassessable. Shares have no
preemptive or conversion rights. Fractional shares have the same rights
proportionately as full shares. The shares of each Fund do not have cumulative
voting rights, which means that holders of more than 50 percent of the shares of
a Fund voting for the election of directors can elect all of the directors.

Shareholder Meetings. The Funds are not required to hold annual shareholder
meetings. Special meetings may be called, however, as required or deemed
desirable for purposes such as electing directors, changing fundamental
investment policies, or approving an investment management agreement. The
holders of not less than 10% of the shares of a Fund may request in writing that
a special meeting be called for a specified purpose. If such a special meeting
is called to vote on the removal of one or more directors of a Fund,
shareholders of the Fund will be assisted in communications with other
shareholders of the Fund.

Combined Prospectus. Although each Fund is offering only its own shares, it is
possible that one Fund might become liable for a misstatement in this Prospectus
relating to another Fund. The Board of Directors of each Fund has considered
this factor in approving the use of this single Prospectus.

-
33
<PAGE>
INVESTOR SERVICES
-----------------------------------------------------------------

This section is designed to provide you with information on opening an account
and conducting transactions with Columbia Funds. In addition, information is
provided on the different types of accounts and services offered by the Funds
and the policies relating to those services.

-- HOW TO OPEN A NEW ACCOUNT --
Please complete and sign a Columbia Funds application and make your check
payable to the appropriate Fund for the minimum required investment. See
"Minimum Investments." Please be sure to include a tax identification number on
your application or it may be rejected and returned to you. The completed
application and a check should be mailed to:

Columbia Financial Center
1301 S.W. Fifth Avenue
P.O. Box 1350
Portland, Oregon 97207-1350
Attn.: New Accounts

-- HOW TO PURCHASE SHARES --
Shares of each Fund are offered at the share price, or net asset value ("NAV"),
next determined after an order is accepted. See "Processing Your Order" and
"Determining Your Share Price." Shares can be purchased in the following ways:

In Person: Investments can be made in person by visiting Columbia Funds at 1301
S.W. Fifth Avenue, Portland, Oregon between 7:30 a.m. and 5:00 p.m. on any
business day.

By Mail: Send a check, with either a completed Investment Slip from the bottom
of a confirmation statement, or a letter indicating the account number and
registration, to:

Columbia Financial Center
1301 S.W. Fifth Avenue
P.O. Box 1350
Portland, Oregon 97207-1350
Attn.: Investments

By Wire: You may have your bank wire federal funds. Call the Funds for
instructions and notification that money is being wired:

Portland area 222-3606
Nationwide (toll-free)
1-800-547-1707

By Telephone: You may make additional investments in a Fund by telephone from a
predesignated bank account ("Televest"). The minimum investment that can be made
by Televest is $100. Shareholders must complete the appropriate sections of the
application or call the Funds to have the Televest application sent to you. An
investment using Televest is processed on the day the Fund receives your
investment from your bank, usually the business day following the day of your
telephone call.
-- MINIMUM INVESTMENTS --

All Funds have a minimum investment requirement of $1,000 except the Special
Fund, which has a $2,000 minimum. These minimums are waived for accounts using
the Automatic Investment Plan. Subsequent investments (other than through an
Automatic Investment Plan) must be at least $100 and should always identify
your name, the Fund's name, and your account number. Management of each Fund
may, at its sole discretion, waive the minimum purchase and account size
requirements for certain group plans or accounts opened by agents or
fiduciaries (such as a bank trust department, investment advisor, or
securities broker) or in other circumstances.

By Automatic Investment: Investments in a Fund may be made automatically from
your bank under Columbia's Automatic Investment Plan ("AIP"). Shareholders whose
bank is a member of the National Automated Clearing House Association may choose
to

-
34
<PAGE>
INVESTOR SERVICES, continued
---------------------------------------------------------------------------
have amounts of $50 or more automatically transferred from a bank checking
account to a designated Fund on or about the 5th or 20th, or both, of each
month. Shareholders must complete the AIP section of the application to
participate in the AIP. If you stop investing in a Fund using an AIP, your
account may be closed if you fail to reach or maintain a minimum account
balance. See "Account Privileges -- Involuntary Redemptions."

By Exchange: You may purchase shares of any Fund with the proceeds from a
redemption of shares of any other Columbia Fund with the same account number.
See "How to Exchange" below.

Through Your Broker-Dealer or Bank: You may purchase or redeem shares of a Fund
through your broker, bank, or other financial institution, which may charge a
commission or fee for assisting in handling your order and which may be required
to be registered as a broker or dealer under federal or state securities laws.
-- PAYING FOR YOUR SHARES --
Payment for Fund shares is subject to the following policies:

- - Checks should be drawn on U.S. banks and made
payable to the applicable Fund.

- - Never send cash or cash equivalents; the Funds
will not accept responsibility for their receipt.

- - The Funds reserve the right to reject any order.

- - If your order is canceled because your check did
not clear the bank or the Funds were unable to debit your predesignated bank
account, you will be responsible for any losses or fees imposed by your bank
or attributable to a loss in value of the shares purchased.

- - The Funds may reject any third party checks used
to make an investment or open a new account.
-- HOW TO REDEEM (SELL) SHARES --
You may redeem all or a portion of your investment in a Fund on any business
day. All redemptions of shares of a Fund, except certain shares of the High
Yield Fund, will be at the share price (NAV) computed after receipt of a valid
redemption request, in whatever form, on days when the NYSE is open for
business. To discourage short-term trading, redemptions of shares of the High
Yield Fund that have been held less than one year will be at 99% of the Fund's
NAV. See "Account Privileges -- High Yield Fund Redemptions." In every case,
sufficient full and fractional shares will be redeemed to cover the amount of
the redemption request.

If certificates for Fund shares have been issued to you, they must be returned
to the Fund, properly endorsed, before any redemption request may be processed.
Redemptions from a Columbia-sponsored IRA or retirement plan require the
completion of certain additional forms to ensure compliance with IRS
regulations. If a redemption request cannot be processed for any of these
reasons, the redemption request will be returned to you and no redemption will
be made until a valid request is submitted. Shares can be redeemed in the
following ways:

In Writing: You may redeem shares of a Fund by providing a written instruction
to the Fund either in person or by mail to:

1301 S.W. Fifth Avenue
P.O. Box 1350
Portland, Oregon 97207-1350
Attn.: Redemptions

-
35
<PAGE>
INVESTOR SERVICES, continued
---------------------------------------------------------------------------

-- SIGNATURE POLICY --

Signatures on the request must correspond exactly with those on the account.
Accounts in the names of corporations, fiduciaries, and institutions may
require additional documents. Please contact Columbia Funds if your account
falls into one of these categories.
A written redemption request, whether in person or by mail, is not valid
unless the signature or signatures on the request correspond exactly with
those on your account. The Funds normally require that signatures on written
redemption, transfer, and exchange requests be GUARANTEED by an eligible
guarantor institution, such as a
bank, broker-dealer, credit union, national securities exchange, registered
securities exchange, clearing agency, or savings association.

By Telephone: You may redeem shares by telephone unless you decline this
service by checking the appropriate box on the application. Proceeds from
telephone redemptions may be mailed only to the registered name and address on
your account or transferred to the bank designated on the application or to
another Fund. A maximum of $50,000 may be redeemed by telephone and mailed to
your registered address. There is no such limitation on telephone redemptions
transferred to your bank. Telephone redemptions may be made by calling the Funds
between 7:30 a.m. and 5:00 p.m., Pacific Time, at:

Portland area 222-3606
Nationwide (toll-free)
1-800-547-1707

You may experience some difficulty in implementing a telephone redemption during
periods of drastic economic or financial market changes. Telephone redemption
privileges may be modified or terminated at any time without notice to
shareholders. Please see "Account Privileges -- Telephone Redemptions."

By Draft -- Money Market Fund Only: Redemption by draft is available to Money
Market Fund investors who complete the appropriate section of the application.
The Money Market Fund will provide you with free drafts issued by the Money
Market Fund's bank. You may make drafts payable to the order of any person for
amounts of $500 or more. Your investment will continue to earn income until your
draft is presented to the Money Market Fund's bank for collection. Redemptions
are by draft and, therefore, payment is subject to the Money Market Fund's
approval. The redemption by draft service may be terminated by the bank or the
Money Market Fund upon written notice to the other.

The processing of drafts against the Money Market Fund's account is subject to
the bank's rules and regulations. THESE ARRANGEMENTS DO NOT ESTABLISH A CHECKING
OR OTHER ACCOUNT BETWEEN YOU AND THE BANK FOR THE PURPOSE OF FEDERAL DEPOSIT
INSURANCE OR OTHERWISE. The agreements and procedures described above relate
solely to the bank's intermediary status for redemption of investments in the
Money Market Fund.

YOUR DRAFT WILL NOT BE PAID UNLESS SUFFICIENT COLLECTED FUNDS ARE AVAILABLE IN
YOUR MONEY MARKET FUND ACCOUNT. SEE "PAYMENT OF REDEMPTION PROCEEDS."

By Automatic Withdrawal: If your account value in any Fund is $5,000 or more,
you may elect to receive automatic cash withdrawals of $50 or more from that
Fund in accordance with either of the following withdrawal options:

1. Income earned. You may elect to receive any dividends or capital gains
distributions on your shares, provided such dividends and distributions
exceed $25.
2. Fixed amount. You may elect to receive a monthly or quarterly fixed amount
of $50 or more.

-
36
<PAGE>
INVESTOR SERVICES, continued
---------------------------------------------------------------------------

Automatic withdrawals will be made within seven days after the end of the month
or quarter to which they relate.

To the extent redemptions for automatic withdrawals exceed dividends declared on
shares in your account, the number of shares in your account will be reduced. If
the value of your account falls below the Fund minimum, your account is subject
to being closed on 60 days written notice. The minimum withdrawal amount has
been established for administrative convenience and should not be considered as
recommended for all investors. For tax reporting, a capital gain or loss may be
realized on each fixed-amount withdrawal.

An automatic withdrawal plan may be modified or terminated at any time upon
prior notice by the Fund or the shareholder.
-- PAYMENT OF REDEMPTION PROCEEDS --
Redemption proceeds are normally transmitted in the manner specified in the
redemption request on the business day following the effective date of the
redemption. Except as provided by rules of the Securities and Exchange
Commission, redemption proceeds must be transmitted to you within seven days of
the redemption date.

Redemption of Recently Purchased Shares. Although you may redeem shares of a
Fund (other than the Money Market Fund) that you have recently purchased by
check, the Fund may hold the redemption proceeds until payment for the purchase
of such shares has cleared, which may take up to 15 days from the date of
purchase. No interest is paid on the redemption proceeds after the redemption
date and before the proceeds are sent to you. If you request the redemption (by
draft or other means) of Money Market Fund shares recently purchased by check,
the redemption will not be effective, and proceeds will not be transmitted,
unless the purchase of those shares has cleared. These holding periods do not
apply to the redemption of shares purchased by bank wire or with a cashiers or
certified check.

There is no charge for redemption payments that are mailed. Amounts transferred
by wire must be at least $1,000, and the bank wire cost for each redemption will
be charged against your account. Your bank may also impose an incoming wire
charge.

-- HOW TO EXCHANGE SHARES --
You may use proceeds from the redemption of shares of any Fund to purchase
shares of other Funds offering shares for sale in your state of residence. There
is no charge for this exchange privilege. Before making an exchange, you should
read the portions of the Prospectus relating to the Fund or Funds into which the
shares are to be exchanged. The shares of the Fund to be acquired will be
purchased at the NAV next determined after acceptance of the purchase order by
that Fund in accordance with its policy for accepting investments. The exchange
of shares of one Fund for shares of another Fund is treated, for federal income
tax purposes, as a sale on which you may realize taxable gain or loss. Certain
restrictions may apply to exchange transactions. See "Account Privileges --
Exchange Privilege."

-- PROCESSING YOUR ORDER --
Orders received by a Fund other than the Money Market Fund will be processed the
day they are received. Since the Money Market Fund invests in obligations
normally requiring payment in federal funds, purchase orders will not be
processed unless received in federal funds or until converted by the Fund into
federal funds. Checks or negotiable U.S. bank drafts require one day to convert
into federal funds. Checks drawn on banks that are not members of the Federal
Reserve System may take longer to convert into federal funds. Prior to
conversion into federal funds, your money will not be invested or working for
you. Information about federal funds is available from any U.S. bank that is a
member of the Federal Reserve System.

-
37
<PAGE>
INVESTOR SERVICES, continued
---------------------------------------------------------------------------

Orders received before the close of regular trading on the NYSE (normally 4 p.m.
New York time) will be entered at the Fund's share price computed that day.
Orders received after the close of regular trading on the NYSE will be entered
at the Fund's share price next determined. All investments will be credited to
your account in full and fractional shares computed to the third decimal place.
The Funds reserve the right to reject any order.

Shares purchased will be credited to your account on the record books of the
applicable Fund. The Funds will not issue share certificates except on request.
Certificates for fractional shares will not be issued.

-- DETERMINING YOUR SHARE PRICE --
The share price, or NAV, of each Fund is determined by the Advisor, under
procedures approved by the Fund's Board of Directors, as of the close of regular
trading (normally 4 p.m. New York time) on each day the NYSE is open for
business and at other times determined by the Board of Directors. The NAV is
computed by dividing the value of all assets of the Fund, less its liabilities,
by the number of shares outstanding.

Portfolio securities will be valued according to the market value obtained from
the broadest and most representative markets. These market quotations, depending
on local convention or regulation, may be the last sale price, last bid or asked
price, or the mean between the last bid and asked price as of, in each case, the
close of the applicable exchange or other designated time. Securities for which
market quotations are not readily available and other assets will be valued at
fair value as determined in good faith under procedures established by and under
the general supervision of the Board of Directors of each Fund. These procedures
may include valuing portfolio securities by reference to other securities with
comparable ratings, interest rates, and maturities and by using pricing
services. Fair value for debt securities for which market quotations are not
readily available and with remaining maturities of less than 60 days is based on
cost adjusted for amortization of discount or premium and accrued interest
(unless the Board of Directors believes unusual circumstances indicate another
method of determining fair value should be used).

Trading in securities on many foreign securities exchanges and over-the-counter
markets is completed at various times before the close of the NYSE. In addition,
trading of these foreign securities may not take place on all NYSE business
days. Trading may take place in various foreign markets on Saturday or on other
days the NYSE is not open for business and on which a Fund's NAV is therefore
not calculated. The calculation of a Fund's NAV may not take place
contemporaneously with the determination of the prices of a Fund's portfolio
foreign securities. Events affecting the values of portfolio foreign securities
that occur between the time the prices are determined and the close of the NYSE
will not be reflected in a Fund's calculation of NAV unless the Board of
Directors determines that the event would materially affect the NAV. Assets of
foreign securities are translated from the local currency into U.S. dollars at
the prevailing exchange rates.

Municipal Bond Fund portfolio securities for which market quotations are readily
available will be valued at the bid price. Management of the Municipal Bond Fund
believes that, although substantially all of the Municipal Bond Fund's
securities are readily marketable, a significant portion of the Municipal Bond
Fund's portfolio will not have reliable market quotations readily available on a
timely basis for the daily valuation of the Fund's portfolio.

-
38
<PAGE>
INVESTOR SERVICES, continued
---------------------------------------------------------------------------

-- INVESTOR INQUIRIES --
If you have any questions about this Prospectus, the Funds or your account,
please call the Funds at:

Portland area 222-3606
Nationwide (toll-free) 1-800-547-1707

or write or visit the Funds at:

Columbia Financial Center
1301 S.W. Fifth Avenue
P.O. Box 1350
Portland, Oregon 97207-1350

-- ACCOUNT PRIVILEGES --
Exchange Privilege. Telephone exchange privileges are available to you
automatically unless you decline this service by checking the appropriate box on
the application. Telephone exchanges may be made from one Fund into another Fund
only within the same account number. To prevent the abuse of the exchange
privilege to the disadvantage of other shareholders, each Fund reserves the
right to terminate the exchange privilege of any shareholder who makes more than
four exchanges out of a Fund during the calendar year. The exchange privilege
may be modified or terminated at any time, and any Fund may discontinue offering
its shares generally or in any particular state without notice to shareholders.

High Yield Fund Redemptions. The High Yield Fund can experience substantial
fluctuations in the price of its shares and is intended for long-term investors.
Short-term investors who move in and out of the High Yield Fund because of price
fluctuations cause additional transaction costs that are borne by all
shareholders. For these reasons, the redemption of shares (including exchanges)
of the High Yield Fund held less than one year, other than shares acquired
through the reinvestment of dividends and capital gains, will be at 99% of the
Fund's NAV. The 1% discount is retained by the High Yield Fund to cover
transaction costs and for the benefit of the remaining shareholders. Redemptions
of all other shares will be at the Fund's NAV. For purposes of determining
whether and to what extent the redemption discount will apply, it will be
conclusively presumed by the High Yield Fund that any shares redeemed are: (1)
shares purchased with reinvested dividends and capital gains distributions and
then (2) the earliest shares purchased in an account. The redemption discount
will not apply to redemptions under an automatic withdrawal plan. See "By
Automatic Withdrawal."

Telephone Redemptions. The Funds do not accept responsibility for the
authenticity of telephone instructions, and, accordingly, shareholders who have
approved telephone redemptions assume the risk of any losses due to fraudulent
telephone instructions that a Fund reasonably believes to be genuine. The Funds
employ certain procedures to determine whether telephone instructions are
genuine, including requesting personal shareholder information prior to acting
on telephone instructions, providing written confirmations of each telephone
transaction, and recording all telephone instructions. A Fund may be liable for
losses due to fraudulent telephone instructions if it fails to follow these
procedures. For your protection, the ability to redeem by telephone and have the
proceeds mailed to your registered address may be suspended for up to 30 days
following an account address change. This suspension period will not apply to
redemptions by mail, which can be made at any time. See "How to Redeem (Sell)
Shares."

Involuntary Redemptions. Upon 60 days prior written notice, a Fund may redeem
all of your shares without your consent if:

1. Your account balance falls below $500. However, if you wish to maintain the
account, you may during the 60-day notice period either (i) add to your
account to bring it to the $1,000 minimum, or (ii) establish an Automatic
Investment Plan with a minimum monthly investment of $50.

-
39
<PAGE>
INVESTOR SERVICES, continued
---------------------------------------------------------------------------

2. You are a U.S. shareholder and fail to provide the Fund with a certified
taxpayer identification number.
3. You are a foreign shareholder and fail to provide the Fund with a current
Form W-8, "Certificate of Foreign Status."

If a Fund redeems shares, payment will be made promptly at the current net asset
value, subject to the 1% redemption discount on High Yield Fund shares held less
than one year. A redemption may result in a realized capital gain or loss.

Taxpayer Identification Number. Federal law requires each Fund to withhold 31%
of dividends and redemption proceeds paid to certain shareholders who have not
complied with certain tax regulations. The Funds will generally not accept an
investment to establish a new account that does not comply with these
regulations. You will be asked to certify on your account application that the
social security number or tax identification number provided is correct and that
you are not subject to 31% backup withholding for previous underreporting of
income to the Internal Revenue Service.

Shareholder Statements and Reports. The Funds will send a separate confirmation
of each nonroutine transaction that affects your account balance or
registration. Routine, pre-authorized transactions are confirmed in the monthly
or quarterly account statements provided to shareholders. The types of pre-
authorized transactions that will be confirmed on your account statement
include:

- - Periodic share purchases through an Automatic
Investment Plan

- - Reinvestment of dividends and capital gains
distributions

- - Automatic withdrawals or exchanges between
Funds

Each Fund will mail to its shareholders on or before January 31 of each year a
summary of the federal income tax status of the Fund's distributions for the
preceding year.

Financial reports on the Funds, which include a listing of each Fund's portfolio
securities, are mailed semiannually to shareholders. To reduce Fund expenses,
only one such report and the annually updated prospectus will be mailed to
accounts with the same Tax Identification Number. In addition, shareholders or
multiple accounts at the same mailing address can elect to eliminate duplicate
mailings to that address by filing a SAVMAIL form with the Funds. For a SAVMAIL
form or to receive additional copies of any shareholder report or prospectus,
please call an Investor Services Representative at 1-800-547-1707.

-- IRAS, SEP IRAS, AND --
RETIREMENT PLANS

Investors may invest in each Fund other than the Municipal Bond Fund through the
Columbia IRA and the Columbia Prototype Money Purchase Pension and Profit
Sharing Plan. Please contact Columbia Funds for further information and
application forms. Investments may also be made in these Funds in connection
with established retirement plans.

-- PRIVATE MANAGEMENT ACCOUNTS --
Columbia Trust Company offers Private Management Accounts that provide
investment management tailored to the specific investment objectives of
individuals, institutions, trusts, and estates, using the Funds as investment
vehicles. The annual fee for this service is .75 of 1% of net assets ($1,000
minimum fee) and is in addition to investment advisory fees paid by each Fund to
the Advisor. For additional information, call Columbia Trust Company at
503-222-3600.

-
40
<PAGE>
DISTRIBUTIONS AND TAXES
-----------------------------------------------------------------

-- DISTRIBUTIONS --
Each Fund is required to distribute to shareholders each year all of its net
investment income and any net realized capital gains. Net investment income
(income from dividends, interest and any net realized short-term capital gains)
is distributed by a Fund as a dividend. Any net long-term capital gains realized
on the sale of portfolio securities by a Fund are distributed as capital gains
distributions. Distributions are paid as follows:

<TABLE>
<CAPTION>
Dividends Capital Gains
------------------- -------------------
<S> <C> <C>
Growth Fund Declared and Declared and
International Stock Fund paid in December paid in December
Special Fund
- -------------------------------------------------------------------
Common Stock Fund Declared and paid Declared and paid
Real Estate Fund each calendar in December
Balanced Fund quarter
- -------------------------------------------------------------------
Money Market Fund Declared and paid Declared and paid
daily daily (if any)
- -------------------------------------------------------------------
Bond Funds Declared daily and Declared and paid
paid monthly in December
- -------------------------------------------------------------------
</TABLE>

If you redeem all of your shares of a Columbia Bond Fund, the undistributed
dividends on the redeemed shares will be paid at that time.

All dividends paid on the Money Market Fund will be reinvested automatically in
additional shares at net asset value, which, in effect, compounds the
shareholder's income daily. The Money Market Fund expects normally to have
positive net investment income each day. However, if a sharp rise in interest
rates or some other factor causes it to have a negative net investment income,
the Money Market Fund will reduce the number of shares outstanding. Each
shareholder account will contribute that day to the Money Market Fund that
amount of shares representing the account's negative net income. By this
procedure, the Money Market Fund intends to maintain its net asset value at a
constant one dollar per share.

-- DISTRIBUTION OPTIONS --
Unless you select a different option, all dividends and capital gains
distributions are reinvested on the record date in additional shares at a
reinvestment price equal to the NAV at the close of business on that day minus
the amount of the distribution. You may elect on your account application, or at
any other time by notifying the Funds, to receive your distributions in cash or
to reinvest them in another Columbia Fund.

-- TAXATION OF DISTRIBUTIONS --
The tax character of distributions from a Fund is the same whether they are paid
in cash or reinvested in additional shares. Dividends declared in October,
November, or December to shareholders of record as of a date in one of those
months and paid the following January will be reportable as if received by the
shareholders on December 31. This section is only a brief summary of the major
tax considerations affecting each Fund and its shareholders and is not a
complete or detailed explanation of tax matters. Investors should consult their
tax advisors concerning the tax consequences of investing in the Funds.

Federal Income Taxes -- All Funds except Municipal Bond Fund. Distributions
from the Funds (other than the Municipal Bond Fund) of net investment income or
net realized short-term capital gains are generally taxable to shareholders as
ordinary income. Distributions designated as the excess of net long-term capital
gain over net short-term capital loss are taxable to shareholders as long-term
capital gain, regardless of the length of time the shareholder held the Fund's
shares. A portion of any dividends received from the Growth Fund, the
International Stock Fund (to the extent dividends from U.S. companies constitute
a portion of that Fund's investment income), the Special Fund, the Common Stock
Fund, and the Balanced Fund may be eligible for the dividends received deduction
available to corporate shareholders. To the extent the Real Estate Fund's income
is derived from interest

-
41
<PAGE>
DISTRIBUTIONS AND TAXES, continued
---------------------------------------------------------------------------
and distributions from REITs, distributions from the Fund will not qualify for
the dividends received deduction.

A portion of the income distributions from the Real Estate Fund will include a
tax return of capital because of the nature of the distributions received by the
Fund from its holdings in REITs. A tax return of capital is a nontaxable
distribution that reduces the tax cost basis of your shares in the Fund. The
effect of a return of capital is to defer your tax liability on that portion of
your income distributions until you sell your shares of the Fund. Information on
the tax status of distributions by the Funds is mailed to shareholders each year
on or before January 31.

Federal Income Taxes -- Municipal Bond Fund. The Municipal Bond Fund expects to
distribute all of its net investment income and realized capital gains to
shareholders. Distributions from the Municipal Bond Fund will have the following
federal income tax consequences for shareholders.

- - Distributions properly designated by the
Municipal Bond Fund as representing net tax-exempt interest received on
municipal bonds, including municipal bonds of Puerto Rico, Guam, and certain
other possessions of the United States, ("exempt-interest dividends") will not
be includible by shareholders in gross income for federal income tax purposes.
For purposes of this "Distributions and Taxes" section, municipal bonds are
those obligations that pay interest that is not includible in gross income
under Section 103 of the Internal Revenue Code (the "Code").

- - Distributions representing net taxable interest
received from sources other than municipal bonds, representing the excess of
net short-term capital gain over net long-term capital loss, or representing
taxable accrued market discount on the sale or redemption of municipal bonds,
will be taxable to shareholders as ordinary income.

- - Distributions properly designated by the
Municipal Bond Fund as representing the excess of net long-term capital gain
over net short-term capital loss will be taxable to shareholders as long-term
capital gain, regardless of the length of time the shares of the Municipal
Bond Fund have been held by such shareholders. For noncorporate taxpayers, the
highest rate that applies to long-term capital gains is lower than the highest
rate that applies to ordinary income.

Dividends attributable to interest on certain private activity bonds issued
after August 7, 1986 must be included in alternative minimum taxable income for
the purpose of determining liability, if any, for corporate and individual
alternative minimum taxes. The Municipal Bond Fund does not expect to invest in
any such bonds, although it may do so in the future. Additional information
regarding special tax treatment that applies to corporations that receive
exempt-interest dividends is provided in the Statement of Additional
Information.

The Municipal Bond Fund expects that none of its distributions will qualify for
the dividends received deduction for corporations. Interest on indebtedness
incurred or continued by a shareholder to purchase or carry shares of the
Municipal Bond Fund will not be deductible.

State Income Taxes -- All Funds Except Municipal Bond Fund. In addition to
federal taxes, shareholders of the Funds may be subject to state and local taxes
on distributions from the Funds. Shareholders should consult with their tax
advisors concerning state and local tax consequences of investing in the Funds.
Individuals, trusts, and estates resident in Oregon will generally not be
subject to Oregon personal income taxes on dividends properly designated by the
Government Bond Fund as derived from interest on U.S. Government obligations.
The laws of other states may differ, and persons subject to tax in other states
should consult their personal tax advisors.

-
42
<PAGE>
DISTRIBUTIONS AND TAXES, continued
---------------------------------------------------------------------------

State Income Taxes -- Municipal Bond Fund. Individuals, trusts, and estates
resident in Oregon will not be subject to the Oregon personal income tax on
distributions from the Municipal Bond Fund that are derived from tax-exempt
interest paid on the municipal bonds of Oregon and its political subdivisions
and certain other issuers (including Puerto Rico and Guam). However, such
individuals, trusts, and estates will be subject to the Oregon personal income
tax on distributions derived from other types of income received by the
Municipal Bond Fund. Furthermore, it is expected that corporations subject to
the Oregon corporation excise tax will be subject to that tax on the income from
the Fund, including income that is exempt for federal purposes. Local taxes and
the tax consequences to nonresidents and part-year residents are beyond the
scope of this discussion. For further information, please consult your tax
advisor.

"Buying a Dividend." If you buy shares of a Fund before it pays a distribution,
you will pay the full price of the shares and receive a portion of the purchase
price back in the form of a taxable distribution. The Fund's NAV and your cost
basis in the purchased shares is reduced by the amount of the distribution. The
impact of this tax result is most significant when shares are purchased shortly
before an annual distribution of capital gains or other earnings. This tax
result is extremely unlikely in the case of the Money Market Fund, which
distributes its earnings daily and has few or no capital gains.

-- TAXATION OF THE FUNDS --
Each Fund intends to qualify as a regulated investment company under the Code.
By qualifying and meeting certain other requirements, a Fund generally will not
be subject to federal income taxes to the extent it distributes to its
shareholders its net investment income and realized capital gains. Each Fund
intends to make sufficient distributions to relieve itself from liability for
federal income taxes.

-- FOREIGN TAXATION --
Investment income received by the International Stock Fund and derived from
foreign securities may be subject to foreign income taxes withheld by the
foreign company. The United States has entered into tax treaties with many
foreign countries that entitle a fund to a reduced rate of tax or an exemption
from tax on this income. It is impossible to determine the effective rate of
foreign tax in advance because the amount of the International Stock Fund's
assets to be invested within various countries will fluctuate and the extent to
which foreign tax refunds will be recovered is uncertain. The International
Stock Fund intends to operate so as to qualify for treaty-reduced tax rates
where applicable.

If the International Stock Fund has paid withholding or other taxes to foreign
governments during the year, the taxes will reduce the International Stock
Fund's income. In that event, the International Stock Fund may qualify for and
make an election under the Code so that shareholders will be required to treat
as taxable income their pro rata portion of the income taxes paid by the
International Stock Fund to foreign countries and may, subject to limitations,
be able to claim a credit or deduction for the same amount. Although the
International Stock Fund intends to meet the requirements of the Code to "pass
through" these foreign taxes, there can be no assurance the International Stock
Fund will be able to do so.

-
43
<PAGE>
ADDITIONAL INFORMATION
-----------------------------------------------------------------

-- REPURCHASE AGREEMENTS --
The Funds may enter into repurchase agreements, which are agreements where a
Fund purchases a security and simultaneously commits to resell that security to
the seller (a commercial bank or recognized securities dealer) at a stated price
within a number of days (usually not more than seven) from the date of purchase.
The resale price reflects the purchase price plus a rate of interest which is
unrelated to the coupon rate or maturity of the purchased security. Repurchase
agreements may be considered loans by a Fund collateralized by the underlying
security. The obligation of the seller to pay the stated price is in effect
secured by the underlying security. The seller will be required to maintain the
value of the collateral underlying any repurchase agreement at a level at least
equal to the repurchase agreement. In the case of default by the seller, a Fund
could incur a loss. In the event of a bankruptcy proceeding against the seller,
a Fund may incur costs and delays in realizing upon the collateral. Each Fund
will enter into repurchase agreements only with those banks or securities
dealers who are deemed creditworthy based on criteria adopted by its Board of
Directors. There is no limit on the portion of a Fund's assets that may be
invested in repurchase agreements with maturities of seven days or less.

-- ILLIQUID SECURITIES --
No illiquid securities will be acquired if upon the purchase more than 5% of the
value of the Common Stock Fund's, the Growth Fund's, or the Balanced Fund's, or
more than 10% of the International Stock Fund's, the Special Fund's, the Real
Estate Fund's, or the High Yield Fund's, net assets would consist of these
securities. "Illiquid securities" are securities that may not be sold or
disposed of in the ordinary course of business within seven days at
approximately the price used to determine a Fund's net asset value.

Under current interpretations of the Staff of the Securities and Exchange
Commission, the following securities in which a Fund may invest will be
considered illiquid:

- - repurchase agreements maturing in more than seven
days;

- - restricted securities (securities whose public resale is
subject to legal restrictions);

- - options, with respect to specific securities, not traded
on a national securities exchange that are not readily marketable; and

- - any other securities in which a Fund may invest that
are not readily marketable.

The International Stock Fund, the High Yield Fund, and the Real Estate Fund may
purchase without limit, however, certain restricted securities that can be
resold to qualifying institutions pursuant to a regulatory exemption under SEC
Rule 144A ("Rule 144A securities"). If a dealer or institutional trading market
exists for Rule 144A securities, such securities may be deemed to be liquid and
thus treated as exempt from those Fund's liquidity restrictions. Under the
supervision of the Boards of Directors of the Funds, the Advisor determines the
liquidity of Rule 144A securities and, through reports from the Advisor, the
Boards of Directors monitor trading activity in these securities. In reaching
liquidity decisions, the Advisor will consider, among other things, the
following factors:

- - the frequency of trades and price quotes for the
security;

- - the number of dealers willing to purchase or sell the
security and the number of other potential purchasers;

- - dealer undertakings to make a market in the security;
and

- - the nature of the security and the marketplace trades
(e.g., the time needed to dispose of the security, the method of soliciting
offers, and the procedures for transfer).

-
44
<PAGE>
ADDITIONAL INFORMATION, continued
---------------------------------------------------------------------------

Because institutional trading in Rule 144A securities is relatively new, it is
difficult to predict accurately how these markets will develop. If institutional
trading in Rule 144A securities declines, the liquidity of these Funds could be
adversely affected to the extent any of them are invested in such securities.
-- OPTIONS AND FINANCIAL --
FUTURES TRANSACTIONS

Each of the International Stock Fund, the Special Fund, the Common Stock Fund,
the Growth Fund, the Balanced Fund, the Real Estate Fund, and the High Yield
Fund may invest up to 5% of its net assets in premiums on put and call
exchange-traded options. A call option gives the holder (buyer) the right to
purchase a security at a specified price (the exercise price) at any time until
a certain date (the expiration date). A put option gives the buyer the right to
sell a security at the exercise price at any time until the expiration date.
These Funds may also purchase options on securities indices and foreign
currencies. Options on securities indices are similar to options on a security
except that, rather than the right to take or make delivery of a security at a
specified price, an option on a securities index gives the holder the right to
receive, on exercise of the option, an amount of cash if the closing level of
the securities index on which the option is based is greater than, in the case
of a call, or less than, in the case of a put, the exercise price of the option.
A Fund may enter into closing transactions, exercise its options, or permit the
options to expire. These Funds may only write call options that are covered. A
call option is covered if written on a security that the Fund already owns.
These Funds may write such options on up to 25% of their assets.

These Funds may also engage in financial futures transactions, including foreign
currency financial futures transactions. Financial futures contracts are
commodity contracts that obligate the long or short holder to take or make
delivery of a specified quantity of a financial instrument, such as a security,
or the cash value of a securities index, during a specified future period at a
specified price. Each Fund's investment restrictions do not limit the percentage
of the Fund's assets that may be invested in financial futures transactions.
Each Fund, however, does not intend to enter into financial futures transactions
for which the aggregate initial margin exceeds 5% of the net assets of the Fund
after taking into account unrealized profits and unrealized losses on any such
transactions it has entered into. A Fund may engage in futures transactions only
on commodities exchanges or boards of trade.

The Funds will not engage in transactions in index options, financial futures
contracts, or related options for speculation, but only as an attempt to hedge
against market conditions affecting the values of securities that a Fund owns or
intends to purchase. When a Fund purchases a put on a stock index or on a stock
index future not held by the Fund, the put protects the Fund against a decline
in the value of all securities held by it to the extent that the stock index
moves in a similar pattern to the prices of the securities held. The
correlation, however, between stock indices and price movements of the stocks in
which a Fund will generally invest may be imperfect. Each Fund expects,
nonetheless, that the use of put options that relate to such indices will, in
certain circumstances, protect against declines in values of specific portfolio
securities or a Fund's portfolio generally. Although the purchase of a put
option may partially protect a Fund from a decline in the value of a particular
security or its portfolio generally, the cost of a put will reduce the potential
return on the security or the portfolio if either increases in value.

Upon entering into a futures contract, a Fund would be required to deposit with
its custodian in a segregated account cash or certain U.S. Government securities
in an amount known as the "initial margin." This amount, which is subject to
change, is in the nature of a performance bond or a good faith deposit on the
contract and would be returned to the Fund upon termination of the futures
contract, assuming all contractual obligations have been satisfied.

-
45
<PAGE>
ADDITIONAL INFORMATION, continued
---------------------------------------------------------------------------

The principal risks of options and futures transactions are:

- - imperfect correlation between movements in the
prices of options, currencies, or futures contracts and movements in the
prices of the securities or currencies hedged or used for cover;

- - lack of assurance that a liquid secondary market will
exist for any particular option, futures, or foreign currency contract at any
particular time;

- - the need for additional skills and techniques beyond
those required for normal portfolio management;

- - losses on futures contracts resulting from market
movements not anticipated by the investment adviser; and

- - possible need to defer closing out certain options or
futures contracts in order to continue to qualify for beneficial tax treatment
afforded "regulated investment companies" under the Internal Revenue Code of
1986, as amended.

-- TEMPORARY INVESTMENTS --
When, as a result of market conditions, a Fund determines that a temporary
defensive position is warranted to help preserve capital, the Fund may without
limit temporarily retain cash or invest in prime commercial paper, high-grade
debt securities, securities of the U.S. Government and its agencies and
instrumentalities, and high-quality money market instruments, including
repurchase agreements. Temporary investments by the International Stock Fund,
including cash, may be denominated in U.S. dollars or a foreign currency. When a
Fund assumes a temporary defensive position, it is not invested in securities
designed to achieve its stated investment objective.

-- WHEN-ISSUED SECURITIES --
Delayed-delivery or when-issued transactions arise when securities are purchased
or sold by a Fund, with payment and delivery taking place in the future, to
secure what is considered to be an advantageous price and yield to the Fund at
the time of the transaction. When-issued securities are subject to market
fluctuations, and no interest accrues to a Fund until delivery. The value of the
securities may be less at the time of delivery than it was when the commitment
was made. When a Fund engages in when-issued and delayed-delivery transactions,
the Fund relies on the buyer or seller, as the case may be, to complete the
sale. Failure to do so may result in the Fund missing the opportunity to obtain
a price or yield considered to be advantageous. When-issued and delayed-delivery
transactions typically occur approximately 30 days or more before delivery is
due. However, no payment or delivery is made by a Fund until it receives payment
or delivery from the other party to the transaction. A separate account of
liquid assets consisting of cash, U.S. Government securities, or other high
grade debt obligations and equal to the value of such purchase commitments will
be maintained by the Fund's custodian until payment is made. To the extent a
Fund engages in when-issued and delayed-delivery transactions, it will do so to
acquire portfolio securities consistent with its investment objectives and
policies and not for investment leverage. The Funds may use spot and forward
foreign currency exchange transactions to reduce the risk associated with
fluctuations in exchange rates when securities are purchased or sold on a
when-issued or delayed-delivery basis.

-- PURCHASE OF INVESTMENT --
COMPANIES SECURITIES

The International Stock Fund may purchase securities of closed-end investment
companies that invest in equity securities of a foreign country or countries.
Purchasing the shares of this type of investment company may be the only or most
efficient way to invest in certain countries. The International Stock Fund may
not invest more than 10% of its total assets in other investment companies. See
the Statement of Additional Information for a discussion of additional
investment limitations on these types of investments. The return on

-
46
<PAGE>
ADDITIONAL INFORMATION, continued
---------------------------------------------------------------------------
investment in these securities will be reduced by the operating expenses of
those closed-end investment companies.

-- DOLLAR ROLL TRANSACTIONS --
The Balanced Fund and the Bond Fund may enter into dollar roll transactions with
selected banks and broker-dealers. Dollar roll transactions consist of the sale
by the Fund of mortgage-backed securities, together with a commitment to
purchase similar, but not identical, securities at a future date, at the same
price. In addition, the Fund is paid a fee as consideration for entering into
the commitment to purchase. Dollar rolls may be renewed after cash settlement
and initially involve only a firm commitment agreement by the Fund to buy a
security. The Balanced Fund and the Bond Fund will not use such transactions for
leveraging purposes, and accordingly, will segregate cash, U.S. Government
securities, or other high grade debt obligations in an amount sufficient to meet
their purchase obligations under these transactions.

-- LOAN TRANSACTIONS --
The Bond Fund, the Real Estate Fund, and the High Yield Fund may lend their
portfolio securities to qualified institutional investors for the short-term
purpose of realizing additional income. The aggregate value of all securities
loaned may not exceed 33 1/3% of a Fund's total assets, and such loans will be
collateralized by cash, cash equivalents, or an irrevocable letter of credit in
accordance with regulations adopted by the Securities and Exchange Commission.
While there may be delays in recovery of loaned securities or even a loss of
rights in collateral supplied if the borrower fails financially, loans will be
made only to firms deemed by a Fund's management to have a satisfactory credit
rating. For more information on loan transactions, see the Statement of
Additional Information.

-- BOND RATINGS --
MOODY'S bond ratings:

Aaa -- Best quality; smallest degree of investment risk.

Aa -- High quality by all standards; Aa and Aaa are known as high-grade bonds.

A -- Many favorable investment attributes; considered upper medium-grade
obligations.

Baa -- Medium-grade obligations; neither highly protected nor poorly secured.
Interest and principal appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time.

Ba -- Speculative elements; future payments of interest and principal cannot be
considered well assured. Protection of interest and principal payments may be
very moderate and not well safeguarded during both good and bad times over the
future.

B -- Generally lacking characteristics of a desirable investment. Assurance of
interest and principal payments or of maintenance of other terms of the contract
over any long period of time may be small.

Caa -- Poor standing, may be in default; elements of danger with respect to
principal or interest.

Ca -- Speculative to a high degree; often in default or have other marked
shortcomings.

C -- Lowest rated class of bonds; extremely poor prospects of ever attaining any
real investment standing.

-
47
<PAGE>
ADDITIONAL INFORMATION, continued
---------------------------------------------------------------------------

STANDARD & POOR'S bond ratings:

AAA -- Highest rating; extremely strong capacity to pay principal and interest.

AA -- Also high-quality with a very strong capacity to pay principal and
interest; differ from AAA issues only by a small degree.

A -- Strong capacity to pay principal and interest; somewhat more susceptible to
the adverse effects of changes in circumstances and economic conditions.

BBB -- Adequate capacity to pay principal and interest; normally exhibit
adequate protection parameters, but adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay principal
and interest than for higher-rated bonds.

Bonds rated AAA, AA, A, and BBB are considered investment grade bonds.

BB -- Less near-term vulnerability to default than other speculative grade debt;
face major ongoing uncertainties or exposure to adverse business, financial, or
economic conditions that could lead to inadequate capacity to meet timely
interest and principal payments.

B -- Greater vulnerability to default but presently have the capacity to meet
interest payments and principal repayments; adverse business, financial, or
economic conditions would likely impair capacity or willingness to pay interest
and repay principal.

CCC -- Current identifiable vulnerability to default and dependent upon
favorable business, financial, and economic conditions to meet timely payments
of interest and repayments of principal. In the event of adverse business,
financial, or economic conditions, they are not likely to have the capacity to
pay interest and repay principal.

CC -- Typically subordinated to senior debt that is assigned an actual or
implied CCC rating.

C -- Typically subordinated to senior debt that is assigned an actual or implied
CCC-debt rating.

C1 -- No interest is being paid.

Bonds rated BB, B, CCC, CC, and C are regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and repay
principal. BB indicates the least degree of speculation and C the highest degree
of speculation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.

-
48
<PAGE>
[LOGO]

COLUMBIA FUNDS

------------------------------------------------------------------
DIRECTORS
--------------------------------------------

James C. George
J. Jerry Inskeep, Jr.
John A. Kemp
Thomas R. Mackenzie
James F. Rippey
Richard L. Woolworth

------------------------------------------------------------------
OFFICERS
--------------------------------------------

J. Jerry Inskeep, Jr., Chairman
John A. Kemp, President
George L. Hanseth, Senior Vice President
Albert D. Corrado, Vice President
Lawrence S. Viehl, Vice President
Jeff B. Curtis, Secretary

------------------------------------------------------------------
INVESTMENT ADVISOR
--------------------------------------------

COLUMBIA FUNDS MANAGEMENT COMPANY
1300 S.W. Sixth Avenue
P.O. Box 1350
Portland, Oregon 97207-1350

------------------------------------------------------------------
LEGAL COUNSEL
--------------------------------------------

STOEL RIVES L.L.P.
900 S.W. Fifth Avenue, Suite 2300
Portland, Oregon 97204-1268

------------------------------------------------------------------
AUDITORS
--------------------------------------------

COOPERS & LYBRAND L.L.P.
2700 First Interstate Tower
Portland, Oregon 97201

------------------------------------------------------------------
TRANSFER AGENT
--------------------------------------------

COLUMBIA TRUST COMPANY
1301 S.W. Fifth Avenue
P.O. Box 1350
Portland, Oregon 97207-1350
<PAGE>

________________________________________________________________________________

COLUMBIA COMMON STOCK FUND, INC.
COLUMBIA GROWTH FUND, INC.
COLUMBIA INTERNATIONAL STOCK FUND, INC.
COLUMBIA SPECIAL FUND, INC.
COLUMBIA REAL ESTATE EQUITY FUND, INC.
COLUMBIA BALANCED FUND, INC.
COLUMBIA DAILY INCOME COMPANY
COLUMBIA U.S. GOVERNMENT SECURITIES FUND, INC.
COLUMBIA FIXED INCOME SECURITIES FUND, INC.
COLUMBIA MUNICIPAL BOND FUND, INC.
COLUMBIA HIGH YIELD FUND, INC.
________________________________________________________________________________

STATEMENT OF ADDITIONAL INFORMATION

Columbia Financial Center

1301 S.W. Fifth Avenue
P.O. Box 1350
Portland, Oregon 97207
1-800-547-1707

This Statement of Additional Information contains information relating to
eleven mutual funds: Columbia Common Stock Fund, Inc. (the "Common Stock
Fund"), Columbia Growth Fund, Inc. (the "Growth Fund"), Columbia International
Stock Fund, Inc. (the "International Stock Fund"), Columbia Special Fund, Inc.
(the "Special Fund"), Columbia Real Estate Equity Fund, Inc. (the "Real Estate
Fund"), Columbia Balanced Fund, Inc. (the "Balanced Fund"), Columbia Daily
Income Company (the "Money Market Fund"), Columbia U.S. Government Securities
Fund, Inc. (the "Government Bond Fund"), Columbia Fixed Income Securities Fund,
Inc. (the "Bond Fund"), Columbia Municipal Bond Fund, Inc. (the "Municipal Bond
Fund"), and Columbia High Yield Fund, Inc. (the "High Yield Fund"). The terms
Fund or Funds when used in this Statement of Additional Information refer to
these funds. Each of the Funds is an open-end investment company of the
management type. Each Fund is a diversified fund except for the Municipal Bond
Fund, which is a nondiversified fund due to its concentration in Oregon
municipal bonds. Each Fund is a separate Oregon corporation and has a specific
investment objective.

This Statement of Additional Information is not a Prospectus. It relates
to a Prospectus dated February 22, 1996 (the "Prospectus") and should be read in
conjunction with the Prospectus. Copies of the Prospectus are available without
charge upon written request to any of the Funds or by calling 1-800-547-1707.

February 23, 1996
<PAGE>
________________________________________________________________________________

TABLE OF CONTENTS
________________________________________________________________________________

Management . . . . . . . . . . . . . . . . . . . . . . . 2
Investment Advisory and Other Fees Paid to Affiliates. . 4
Portfolio Transactions . . . . . . . . . . . . . . . . . 5
Redemptions. . . . . . . . . . . . . . . . . . . . . . . 6
Custodians . . . . . . . . . . . . . . . . . . . . . . . 7
Accounting Services and Financial Statements . . . . . . 8
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 8
Yield and Performance. . . . . . . . . . . . . . . . . . 15
Investment Restrictions. . . . . . . . . . . . . . . . . 18
Additional Information Regarding Certain
Investments by the Funds . . . . . . . . . . . . . . . 33

______________________________________________________________________________

MANAGEMENT
______________________________________________________________________________

The directors and officers of the Funds are listed below, together with
their principal business occupations. All principal business occupations have
been held for more than five years, except that positions with the Common
Stock Fund and the Balanced Fund, the International Stock Fund, the High Yield
Fund, and the Real Estate Fund have been held since July 1991, July 1992, July
1993, and January 1994, respectively, and except as otherwise indicated.

J. JERRY INSKEEP, JR.,*+ Chairman and Director of each Fund; Chairman,
Director, and a principal shareholder of Columbia Funds Management Company
(the "Advisor") and Columbia Management Co.; Chairman and Director of Columbia
Trust Company (the "Trust Company"); Director of Columbia Financial Center
Incorporated ("Columbia Financial"); Chairman and Trustee of CMC Fund Trust
("CMC Trust").

JAMES F. RIPPEY,*+ Director of each Fund; President, Director, and a principal
shareholder of the Advisor and Columbia Management Co.; President and a
Director of the Trust Company; President and Trustee of CMC Trust.

JAMES C. GEORGE, Director of each Fund (since June 1994). Mr. George, the
former Investment Manager of the Oregon State Treasury (1962-1992), is an
investment consultant; 1001 S.W. Fifth Avenue, Portland, Oregon 97204.

JOHN A. KEMP,* Director (since June 1994) and President of each Fund; Senior
Vice President and Director of the Advisor, Columbia Management Co., and the
Trust Company; Senior Vice President, Treasurer, and Director of Columbia
Financial; Vice President and Trustee of CMC Trust.

THOMAS R. MACKENZIE, Director of each Fund. Mr. Mackenzie is Chairman of the
Board of Directors of Mackenzie Engineering Incorporated, consulting
engineers; 0690 S.W. Bancroft Street, Portland, Oregon 97201.

RICHARD L. WOOLWORTH,+ Director of each Fund (since January 1992). Mr.
Woolworth is Chairman, President and Chief Executive Officer of The Benchmark
Group, health insurers; 100 S.W. Market Street, Portland, Oregon 97201.

GEORGE L. HANSETH,* Senior Vice President and Treasurer of each Fund; Vice
President and Director of the Advisor, Columbia Management Co., and the Trust
Company; President and Director of Columbia Financial; Vice President and
Trustee of CMC Trust.

2
<PAGE>

ALBERT D. CORRADO,* Vice President of each Fund; Vice President of the Advisor
and the Trust Company.

LAWRENCE S. VIEHL,* Vice President of each Fund, the Advisor, Columbia
Management Co., the Trust Company, and CMC Trust.

JEFF B. CURTIS,* Secretary of each Fund and CMC Trust (since April 1994);
General Counsel and Secretary of the Advisor, Columbia Management Co., the
Trust Company, and Columbia Financial (since March 1993). Attorney with Stoel
Rives (1986-1993), a law firm in Portland, Oregon

*These officers and directors are "interested persons" as defined by the
Investment Company Act of 1940 and receive no directors fees or salaries from
the Funds. Their business address is 1300 S.W. Sixth Avenue, P.O. Box 1350,
Portland, Oregon 97207.

+Members of the Executive Committee. The Executive Committee has all
powers of the Board of Directors when the Board is not in session, except as
limited by law.

Columbia Financial, a registered securities broker and a member of the
National Association of Securities Dealers, Inc., is authorized under a
distribution agreement with each Fund to sell shares of that Fund. Columbia
Financial does not charge any fees or commissions to investors or the Funds
for the sale of shares of a Fund.

At February 1, 1996, officers and directors of each of the respective
Funds owned of record or beneficially the aggregate number of shares of each
of the respective Funds as set forth below.

PERCENTAGE OF
TOTAL SHARES
FUND SHARES* OUTSTANDING
---- ------ -------------

Common Stock Fund 274,790.774 1.4%
Growth Fund 316,021.438 1.1%
International Stock Fund 136,554.735 1.7%
Special Fund 308,511.199 0.5%
Real Estate Fund 240,701.803 13.2%
Balanced Fund 266,787.299 1.1%
Money Market Fund 33,377,791.890 4.3%
Government Bond Fund 71,771.918 1.4%
Bond Fund 152,412.536 0.6%
Municipal Bond Fund 1,018,309.569 3.3%
High Yield Fund 135,642.015 5.5%

* Includes shares held by the Advisor and Columbia Management Co.

At January 31, 1996, to the knowledge of the Funds, no person owned of
record or beneficially more than 5 percent of the outstanding shares of any
Fund except as follows: Charles Schwab & Co., Inc., 101 Montgomery Street,
San Francisco, California 94104, which owned 1,619,579.069 shares of the Bond
Fund (6.9 percent of the total shares outstanding), and 5,832,724.296 shares
of the Special Fund (8.9 percent of the total shares outstanding); Standard
Insurance Co., P.O. Box 711, Portland, Oregon 97207, which owned 664,588.143
shares of the Government Bond Fund (13.1 percent of the total shares
outstanding); Brigham Young University, C-242 ASB, Provo, Utah 84602, which
owned 1,115,573.551 shares of the Common Stock Fund (5.6 percent of the total
shares outstanding); J. Jerry Inskeep, Jr., P.O. Box 1350, Portland, Oregon
97207, who owned 104,410.124 shares of the Real Estate Fund (5.7 percent of
the total shares outstanding); Bankers Trust Co. of CA as Trustee, 300 S.
Grand Ave., Los Angeles, CA 90071, which which owned 4,629,993.826 shares of
the Common Stock Fund (23.2 percent of the total shares outstanding); and
First Interstate Bank, as Trustee, PO Box 9800, Calabasas, CA 91302, which
owned 1,497,164.065 shares of the Balanced Fund (6.0 percent of the total
shares outstanding).

3
<PAGE>
______________________________________________________________________________

INVESTMENT ADVISORY AND OTHER FEES
PAID TO AFFILIATES
______________________________________________________________________________

Information regarding services performed by the Advisor for the Funds
and the formula for calculating the fees are set forth in the Prospectus under
"Fund Management." Advisory fees paid by each of the Funds for each of the
last three years were:

FUND 1995 1994 1993
- ---- ---- ---- ----

Common Stock Fund $1,453,843 $698,094 $481,722
Growth Fund $4,483,699 $3,848,301 $3,719,730
International Stock Fund $1,013,873 $1,166,165 $349,780
Special Fund $10,125,466 $7,771,263 $5,932,986
Real Estate Fund $138,673 $77,003 * ---
Balanced Fund $1,871,284 $1,146,605 $699,672
Money Market Fund $3,611,202 $3,060,583 $2,693,420
Government Bond Fund $187,343 $172,703 $183,335
Bond Fund $1,413,769 $1,345,156 $1,465,680
Municipal Bond Fund $1,840,676 $1,921,227 $1,975,560
High Yield Fund $109,022 $56,944 $7,114 *
__________
* For that portion of the year the Fund was in operation.

The Advisor has entered into an agreement with Columbia Management Co.
pursuant to which Columbia Management Co. provides the Advisor with
statistical and other factual information, advice regarding economic factors
and trends, and advice as to occasional transactions in specific securities.
Columbia Management Co., upon receipt of specific instructions from the
Advisor, contacts brokerage firms to effect securities transactions for the
Funds. The Advisor pays Columbia Management Co. a fee for this service. No
amounts are paid by the Funds to Columbia Management Co. pursuant to the
agreement, and Fund expenses are not increased as a result of this agreement.

The Trust Company, of which the Advisor is a principal shareholder and
certain officers of the Funds are minority shareholders, acts as custodian of
certain Individual Retirement Accounts (IRAs) and sponsor of Prototype Money
Purchase Pension and Profit Sharing Plans that invest in the Funds. The Trust
Company charges account holders an annual fee of $25 per IRA account (fee is
waived for accounts over $25,000) and a retirement plan setup fee of $100 and
an annual fee of $50.

The Trust Company also acts as transfer agent and dividend crediting
agent for each of the Funds. Its address is 1301 S.W. Fifth Avenue, P.O. Box
1350, Portland, Oregon 97207. It issues certificates for shares of the Funds
upon request and records and disburses dividends. Each Fund, other than the
Money Market Fund, pays the Trust Company a per-account fee of $1.00 per month
for each shareholder account existing at any time during the month. The Money
Market Fund pays the Trust Company a per-account fee of $1.50 per month for
the first 25,000 accounts existing at any time during the month, $1.00 per
month for the next 25,000 accounts, $.75 per month for the next 25,000
accounts, and $.50 per month for all accounts in excess of 75,000. In
addition, each Fund pays the Trust Company for extra administrative services
performed at cost in accordance with a schedule set forth in the agreements
and reimburses the Trust Company for certain out-of-pocket expenses incurred
in carrying out its duties under the agreements. Fees paid to the Trust
Company for services performed in 1995 under the transfer agent agreements
were $151,994 for the Common Stock Fund, $445,028 for the Growth Fund,
$178,755 for the International Stock Fund, $590,067 for the Special Fund,
$17,103 for the Real Estate Fund, $232,573 for the Balanced Fund, $559,551 for
the Money Market Fund, $32,348 for the Government Bond Fund,

4
<PAGE>

$163,387 for the Bond Fund, $83,607 for the Municipal Bond Fund, and $15,324
for the High Yield Fund.

_______________________________________________________________________________

PORTFOLIO TRANSACTIONS
_______________________________________________________________________________

Each Fund will not generally invest in securities for short-term capital
appreciation but, when business and economic conditions, market prices, or a
Fund's investment policy warrant, individual security positions may be sold
without regard to the length of time they have been held. The historical
portfolio turnover rates for each Fund is disclosed in the Prospectus under
"Financial Highlights."

Securities owned by the Funds may be purchased with brokerage
commissions or on a principal basis without brokerage commissions. The Funds
may also purchase securities from underwriters, the price of which will
include a commission or concession paid by the issuer to the underwriter. The
purchase price of securities purchased from dealers serving as market makers
will include the spread between the bid and asked prices. Each Fund that may
purchase foreign securities pursuant to its investment policy anticipates that
its brokerage transactions involving securities of companies domiciled in
countries other than the United States will normally be conducted on the
principal stock exchanges of those countries. In most international markets,
commission rates are not negotiable and may be higher than negotiated
commission rates available in the United States. There is generally less
government supervision and regulation of foreign stock exchanges and broker-
dealers than in the United States.

Prompt execution of orders at the most favorable price will be the
primary consideration of the Funds in transactions where brokerage fees are
involved. Research, statistical, and other services also may be taken into
consideration in selecting broker-dealers. These services may include:
advice concerning the value of securities, the advisability of investing in,
purchasing, or selling securities, and the availability of securities or the
purchasers or sellers of securities; and furnishing analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategies, and performance of accounts. While the Funds have no
arrangements or formulas as to either the allocation of brokerage transactions
or commission rates paid thereon, a commission in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction may be paid by a Fund if management of that Fund determines in
good faith that the commission is reasonable in relation to the value of the
brokerage and research services provided, viewed in terms of either that
particular transaction or management's overall responsibilities with respect
to that Fund.

Allocation of transactions to obtain research services for the Advisor
enables the Advisor to supplement its own research and analysis with the
statistics, information, and views of others. While it is not possible to
place a dollar value on these services, it is the opinion of the Advisor that
the receipt of such services will not reduce the overall expenses for its
research or those of its affiliated companies. The fees paid to the Advisor
by a Fund would not be reduced as a result of the receipt of such information
and services by a Fund. The receipt of research services from brokers or
dealers might be useful to the Advisor and its affiliates in rendering
investment management services to the Funds or other clients; and, conversely,
information provided by brokers or dealers who have executed orders on behalf
of other clients might be useful to the Advisor in carrying out its
obligations to a Fund. Total brokerage commissions paid by each of the
respective Funds for each of the last three years were:

FUND 1995 1994 1993
- ---- ---- ---- ----

Common Stock Fund $686,464 $228,382 $262,438
Growth Fund $1,718,227 $1,123,285 $1,349,280
International Stock Fund $925,886 $861,944 $448,263

<PAGE>

Special Fund $5,161,705 $4,276,852 $2,402,001
Real Estate Fund $47,879 $37,624 * ---
Balanced Fund $472,821 $251,005 $265,988
__________
* For that portion of the year the Fund was in operation.

No brokerage commissions were paid by the Money Market Fund, the Government
Bond Fund, the Bond Fund, the Municipal Bond Fund, or the High Yield Fund
during the last three years.

The Board of Directors of each Fund will from time to time review
whether the recapture for the benefit of the Fund of some portion of the
brokerage commissions or similar fees paid by the Fund on portfolio
transactions is legally permissible and, if so, determine, in the exercise of
its business judgment, whether it would be advisable for the Fund to seek such
recapture.

Although the officers and directors of each Fund are the same,
investment decisions for each Fund are made independently from those of the
other Funds or accounts managed by Columbia Management Co. The same security
is sometimes held in the portfolio of more than one fund or account.
Simultaneous transactions are inevitable when several funds or accounts are
managed by the same investment advisor, particularly when the same security is
suitable for the investment objective of more than one fund or account. In
the event of simultaneous transactions, allocations among the Funds or
accounts will be made on an equitable basis.

Since 1967, the Advisor and the Funds have had a Code of Ethics (the
"Code") that sets forth general and specific standards relating to the
securities trading activities of all employees of the Advisor and the Funds.
The purpose of the Code is to ensure that all employees conduct their personal
transactions in a manner that does not interfere with the portfolio
transactions of the Funds or take unfair advantage of their relationship with
the Advisor or the Funds. The specific standards included in the Code (as
amended) include, among others, a requirement that all employee trades be pre-
cleared; a prohibition on investing in initial public offerings; required pre-
approval on private placements; a prohibition on portfolio managers trading in
a security seven days before or after a trade in the same security by a Fund
over which the manager exercises investment discretion; and a prohibition on
realizing any profit on the trading of a security held less than 60 days.
Certain securities and transactions, such as mutual fund shares or U. S.
Treasuries and purchases of options on securities indexes or securities under
an automatic dividend reinvestment plan, are exempt from the restrictions in
the Code because they present little or no potential for abuse. Certain
transactions involving the stocks of large capitalization companies are exempt
from the seven day black-out period and short-term trading prohibitions
because such transactions are highly unlikely to affect the price of these
stocks. In addition to the trading restrictions, the Code contains reporting
obligations that are designed to ensure compliance and allow the Advisor's
Ethics Committee to monitor that compliance.

The Advisor and the Funds have also adopted a Policy and Procedures
Designed to Detect and Prevent Insider Trading (the "Insider Trading Policy").
The Insider Trading Policy prohibits any employee of the Advisor or the Funds
from trading, either personally or on behalf of others (including the Funds),
on material nonpublic information. All employees are required to certify each
year that they have read and complied with the provisions of the Code and the
Insider Trading Policy.

______________________________________________________________________________

REDEMPTIONS
______________________________________________________________________________

Information regarding redemptions is set forth in the Prospectus under
"Investor Services -- How to Redeem (Sell) Shares." As discussed under
"Investor Services -- Account Privileges -- Telephone Redemptions" in the
Prospectus, the Funds do not accept responsibility for the authenticity of
telephone instructions relating to redemptions and, accordingly, shareholders
who have approved telephone redemption assume the risk of any losses due to
fraudulent telephone instructions that a Fund reasonably believes to be
genuine. The Funds employ certain procedures to determine if telephone
instructions are genuine, including requesting personal shareholder
information prior to acting on telephone instructions, providing written
confirmations of each

6
<PAGE>

telephone transaction, and recording all telephone instructions. A Fund may
be liable for losses due to fraudulent telephone instructions if it fails to
follow these procedures.

A Fund may suspend the determination of net asset value and the right of
redemption for any period (1) when the New York Stock Exchange is closed,
other than customary weekend and holiday closings, (2) when trading on the New
York Stock Exchange is restricted, (3) when an emergency exists as a result of
which disposal of securities owned by the Fund is not reasonably practicable
or it is not reasonably practicable for the Fund to determine the value of its
net assets, or (4) as the Securities and Exchange Commission may by order
permit for the protection of security holders, provided that applicable rules
and regulations of the Securities and Exchange Commission which govern as to
whether the conditions prescribed in (2) or (3) exist are complied with. The
New York Stock Exchange observes the following holidays: New Year's Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving, and Christmas. In the case of suspension of the right to
redeem, shareholders may withdraw their redemption request or receive payment
based upon the net asset value computed upon the termination of the
suspension.

______________________________________________________________________________

CUSTODIANS
______________________________________________________________________________

United States National Bank of Oregon ("USNB" or "Custodian"), 321 S.W.
Sixth Avenue, Portland, Oregon 97208, acts as the general Custodian for each
Fund, except the International Stock Fund. USNB provides custody services to
the International Stock Fund with respect to domestic securities held by that
Fund. Morgan Stanley Trust Company ("Morgan Stanley" or "Custodian"), One
Pierrepont Plaza, Brooklyn, New York 11201, acts as the general Custodian for
the International Stock Fund and provides custody services to those Funds that
invest in foreign securities. The Custodians hold all securities and cash of
the Funds, receive and pay for securities purchased, deliver (against payment)
securities sold, receive and collect income from investments, make all
payments covering expenses of the Funds, and perform other administrative
duties, all as directed by authorized officers of the Funds. The Custodians
do not exercise any supervisory function in the purchase and sale of portfolio
securities or payment of dividends.

Portfolio securities purchased in the United States are maintained in
the custody of the Fund's Custodian. Portfolio securities purchased outside
the United States are maintained in the custody of foreign banks, trust
companies, or depositories that have sub-custodian arrangements with Morgan
Stanley (the "foreign sub-custodians"). Each of the domestic and foreign
custodial institutions holding portfolio securities of the Funds has been
approved by the Board of Directors of the Funds in accordance with regulations
under the Investment Company Act of 1940.

The Board of Directors reviews, at least annually, whether it is in the
best interest of the Funds and their shareholders to maintain Fund assets, in
each of the countries in which the Funds invest, with particular foreign sub-
custodians in those countries, pursuant to contracts between the foreign sub-
custodians and Morgan Stanley. The review includes an assessment of the risk
of holding Fund assets in that country (including risks of expropriation or
imposition of exchange controls), the operational capability and reliability
of the foreign sub-custodian, and the impact of local laws on the custody
arrangement. The Board of Directors of each Fund that may purchase foreign
securities is aided in its review by Morgan Stanley, which has assembled the
network of foreign sub-custodians used by those Funds, as well as by the
Advisor and counsel. With respect to foreign sub-custodians, however, there
can be no assurance that the Funds, and the value of their shares, will not be
adversely affected by acts of foreign governments, financial or operational
difficulties of the foreign sub-custodians, difficulties and costs of
obtaining jurisdiction over, or enforcing judgments against, the foreign sub-
custodians, or the application of foreign law to a Fund's foreign sub-
custodial arrangement. Accordingly, an investor should recognize that the
administrative risks involved in holding assets abroad are greater than those
associated with investing in the United States.

7
<PAGE>
______________________________________________________________________________

ACCOUNTING SERVICES AND FINANCIAL STATEMENTS
______________________________________________________________________________

The financial statements of each Fund for the year ended December 31,
1995, the selected per share data and ratios under the caption "Financial
Highlights," and the report of Coopers & Lybrand L.L.P., independent
accountants, are included in the 1995 Annual Report to Shareholders of the
Funds. A copy of the 1995 Annual Report to Shareholders accompanies this
Statement of Additional Information and is incorporated herein by reference.
Coopers & Lybrand L.L.P., 2700 First Interstate Tower, Portland, Oregon 97201,
in addition to examining the financial statements of the Funds, assists in the
preparation of the tax returns of the Funds and in certain other matters.

______________________________________________________________________________

TAXES
______________________________________________________________________________

FEDERAL INCOME TAXES

Each Fund intends and expects to meet continuously the tests for
qualification as a regulated investment company under Part I of Subchapter M
of the Internal Revenue Code of 1986, as amended (the "Code"). Each Fund
believes it satisfies the tests to qualify as a regulated investment company.

To qualify as a regulated investment company for any taxable year, each
Fund must, among other things:

(a) derive at least 90 percent of its gross income from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock, securities, or foreign currencies, or other income
(including but not limited to gains from options, futures, or forward
contracts) derived with respect to its business of investing in such stock,
securities, or currencies (the "90 Percent Test");

(b) derive less than 30 percent of its gross income from the sale or
other disposition of any of the following, if held for less than three months:
stock, securities, foreign currencies (or options, futures, or forward
contracts on foreign currencies) that are not directly related to the Fund's
principal business of investing in stocks or securities (or options and
futures with respect to stocks or securities), or certain other assets (the
"30 Percent Test"); and

(c) diversify its holdings so that, at the end of each quarter, (i) 50
percent or more of the value of the assets of the Fund is represented by cash,
government securities, and other securities limited, in respect of any one
issuer of such other securities, to an amount not greater than 5 percent of
the value of the assets of the Fund and 10 percent of the outstanding voting
securities of such issuer, and (ii) not more than 25 percent of the value of
the assets of the Fund is invested in the securities (other than government
securities) of any one issuer or of two or more issuers that the Fund
"controls" within the meaning of Section 851 of the Code and that meet certain
requirements (the "Diversification Test"). In addition, a Fund must file, or
have filed, a proper election with the Internal Revenue Service.

SPECIAL ASPECTS OF 90 PERCENT TEST WITH RESPECT TO FOREIGN CURRENCY.
For purposes of the 90 Percent Test, foreign currency gains that are not
directly related to a Fund's principal business of investing in stocks or
securities (or options and futures with respect to stock or securities) may be
excluded from qualifying income by regulation. No such regulations, however,
have been issued.

Unless an exception applies, a Fund may be required to recognize some
income with respect to foreign currency contracts under the mark-to-market
rules of Section 1256 even though

8
<PAGE>

that income is not realized. Special rules under Sections 1256 and 988 of
the Code determine the character of any income, gain, or loss on foreign
currency contracts.

Two possible exceptions to marking-to-market relate to hedging
transactions and mixed straddles. A hedging transaction is defined for
purposes of Section 1256 as a transaction (1) that a Fund properly identifies
as a hedging transaction, (2) that is entered into in the normal course of
business primarily to reduce the risk of price changes or currency
fluctuations with respect to the Fund's investments, and (3) results in
ordinary income or loss. A mixed straddle is a straddle where (1) at least
one (but not all) of the straddle positions are Section 1256 contracts and (2)
the Fund properly identifies each position forming part of the straddle. A
straddle for these purposes generally is offsetting positions with respect to
personal property. A Fund holds offsetting positions generally if there is a
substantial diminution of the Fund's risk of loss from holding a position by
reason of its holding one or more other positions.

SPECIAL ASPECTS OF 30 PERCENT TEST WITH RESPECT TO FOREIGN CURRENCY. A
Fund may choose to defer the closing out of a forward currency contract beyond
the time when it would otherwise be advantageous to do so to avoid realizing
excessive gains on securities or currencies held less than three months and
not directly related to the Fund's principal business of investing in stock or
securities (or options and futures with respect to stocks or securities). In
the case of a designated hedge, increases and decreases during the period of
the hedge in the value of positions that are part of the designated hedge are
netted for purposes of the 30 Percent Test. A designated hedge for these
purposes is generally an option to sell or a contract that reduces a
taxpayer's risk of loss and that the taxpayer clearly identifies.

Part I of Subchapter M of the Code will apply to a Fund during a taxable
year only if it meets certain additional requirements. Among other things,
the Fund must: (a) have a deduction for dividends paid (without regard to
capital gain dividends) at least equal to the sum of 90 percent of its
investment company taxable income (computed without any deduction for
dividends paid) and 90 percent of its tax-exempt interest in excess of certain
disallowed deductions (unless the Internal Revenue Service waives this
requirement), and (b) either (i) have been subject to Part I of Subchapter M
for all taxable years ending after November 8, 1983 or (ii) as of the close of
the taxable year have no earnings and profits accumulated in any taxable year
to which Part I of Subchapter M did not apply.

A regulated investment company that meets the requirements described
above is taxed only on its "investment company taxable income," which
generally equals the undistributed portion of its ordinary net income and any
excess of net short-term capital gain over net long-term capital loss. In
addition, any excess of net long-term capital gain over net short-term capital
loss that is not distributed is taxed to a Fund at corporate capital gain tax
rates. The policy of each Fund is to apply capital loss carry-forwards as a
deduction against future capital gains before making a capital gain
distribution to shareholders. Under rules that are beyond the scope of this
discussion, certain capital losses and certain net foreign currency losses
resulting from transactions occurring in November and December of a taxable
year may be taken into account either in that taxable year or in the following
taxable year.

If any net long-term capital gains in excess of net short-term capital
losses are retained by a Fund, requiring federal income taxes to be paid
thereon by the Fund, the Fund may elect to treat such capital gains as having
been distributed to shareholders. In the case of such an election,
shareholders will be taxed on such amounts as long-term capital gains, will be
able to claim their proportional share of the federal income taxes paid by the
Fund on such gains as credits against their own federal income tax
liabilities, and generally will be entitled to increase the adjusted tax basis
of their shares in the Fund by the differences between their pro rata shares
of such gains and their tax credits.

MUNICIPAL BOND FUND. In certain cases, Subchapter M permits the
character of tax-exempt interest received and distributed by a regulated
investment company to flow through for federal tax purposes as tax-exempt
interest to its shareholders, provided that 50 percent or more of the value of
its assets at the end of each quarter is invested in municipal bonds. For
purposes of this Statement of Additional Information, the term "municipal
bonds" refers to obligations that pay interest that is tax-exempt under
Section 103 of the Code. For purposes of this Statement of

9
<PAGE>

Additional Information, the term "tax-exempt interest" refers to interest
that is not includible in gross income for federal income tax purposes. As
discussed below, however, tax-exempt interest may result in an increase in
the taxes of the recipient because of the alternative minimum tax, the
environmental tax, the branch profits tax, or under other provisions of the
Code that are beyond the scope of this Statement of Additional Information.
The Municipal Bond Fund intends to have at least 50 percent of the value of
its total assets at the close of each quarter of its taxable year consist of
obligations the interest on which is not includible in gross income for
federal income tax purposes under Section 103 of the Code. As a result, the
Municipal Bond Fund's dividends payable from net tax-exempt interest earned
from municipal bonds should qualify as exempt-interest dividends.

Distributions properly designated by the Municipal Bond Fund as
representing net tax-exempt interest received on municipal bonds (including
municipal bonds of Guam, Puerto Rico, and certain other possessions of the
United States) will not be includible by shareholders in gross income for
federal income tax purposes (except for shareholders who are, or are related
to, "substantial users," as discussed below). Distributions representing net
taxable interest received by the Municipal Bond Fund from sources other than
municipal bonds, representing the excess of net short-term capital gain over
net long-term capital loss, or representing taxable accrued market discount on
the sale or redemption of municipal bonds will be taxable to shareholders as
ordinary income.

Any loss realized upon the redemption of shares of the Municipal Bond
Fund less than six months from the date of purchase of the shares and
following receipt of an exempt-interest dividend will be disallowed to the
extent of such exempt-interest dividend. Section 852(b)(4) of the Code
contains special rules on the computation of a shareholder's holding period
for this purpose.

Interest on indebtedness incurred or continued by shareholders to
purchase or carry shares of the Municipal Bond Fund will not be deductible for
federal income tax purposes. Under rules issued by the Internal Revenue
Service, the purchase of such shares may be considered to have been made with
borrowed funds even though the borrowed funds are not directly traceable to
the purchase of shares. Special rules that are beyond the scope of this
Statement of Additional Information limit the deduction of interest paid by
financial institutions. Investors with questions regarding these issues
should consult their tax advisors.

Dividends attributable to interest on certain private activity bonds
issued after August 7, 1986 will be items of tax preference and must be
included in alternative minimum taxable income for the purpose of determining
liability, if any, for the 26-28% alternative minimum tax for individuals and
the 20% alternative minimum tax for corporations. Furthermore, the
alternative minimum taxable income for corporations includes an adjustment
equal to 75 percent of the excess of "adjusted current earnings" over the
corporation's other federal alternative minimum taxable income (computed
without regard to "adjusted current earnings" and without regard to any
"alternative tax net operating loss"). See Section 56(g) of the Code. For
the purpose of alternative minimum tax for corporations, ALL exempt-interest
dividends, less any interest expense incurred to purchase or carry shares
paying exempt interest dividends, must be taken into account as "adjusted
current earnings." In addition, exempt-interest dividends paid to corporate
investors may be subject to tax under the environmental tax, which applies at
the rate of 0.12% on the excess of the "modified alternative minimum taxable
income" of the corporation over $2 million. See Section 59A of the Code.

In some cases, exempt-interest dividends paid by the Municipal Bond Fund
may indirectly affect the amount of Social Security benefits or railroad
retirement benefits that are taxable income to an investor. See Section 86 of
the Code.

Certain foreign corporations may be subject to the "branch profits tax"
under Section 884 of the Code. The receipt of dividends from the Municipal
Bond Fund may increase the liability of the foreign corporation under the
branch profits tax, even if such dividends are generally tax-exempt.

"Substantial users" (or persons related thereto) of facilities financed
by certain governmental obligations are not allowed to exclude from gross
income interest on such obligations. No investigation as to the substantial
users of the facilities financed by bonds in the

10
<PAGE>

Municipal Bond Fund's portfolio will be made by the Municipal Bond Fund.
Potential investors who may be, or may be related to, substantial users of
such facilities should consult their tax advisors before purchasing shares of
the Municipal Bond Fund.

At the respective times of issuance of the municipal bonds, opinions
relating to the validity thereof and to the exemption of interest thereon from
federal income tax generally were or will be rendered by bond counsel engaged
by the respective issuing authorities. The Municipal Bond Fund will not make
any review of the issuance of the municipal bonds or of the basis for such
opinions. An opinion concerning tax-exempt interest generally assumes
continuing compliance with applicable standards and restrictions. Certain
circumstances or actions by an issuer after the date of issuance can cause
interest on municipal bonds to become includible in gross income. In some
cases, the interest on such bonds could become taxable from the date of
issuance. The Municipal Bond Fund will not monitor any issuers or any
municipal bonds to attempt to ensure that the interest remains tax-exempt.

If the Municipal Bond Fund declares dividends attributable to taxable
interest it has received, it intends to designate as taxable the same
percentage of the day's dividend that the actual taxable income earned on that
day bears to total income earned on that day. Thus, the percentage of the
dividend designated as taxable, if any, may vary from day to day.

Shares of the Municipal Bond Fund generally would not be a suitable
investment for a tax-exempt institution, a tax-exempt retirement plan, or an
individual retirement account. To the extent that such an entity or account
is tax-exempt, no additional benefit would result from receiving tax-exempt
dividends.

From time to time, proposals have been introduced before Congress to
restrict or eliminate the federal income tax exemption for interest on
municipal bonds. Similar proposals may be introduced in the future. If such
a proposal were enacted, the availability of municipal bonds for investment by
the Municipal Bond Fund and the value of portfolio securities held by the
Municipal Bond Fund would be affected.

OTHER FUNDS. Shareholders of Funds other than the Municipal Bond Fund
are taxed on distributions of net investment income, or of any excess of net
short-term capital gain over net long-term capital loss, as ordinary income.
Income distributions to corporate shareholders from the Common Stock Fund, the
Growth Fund, the International Stock Fund, the Special Fund, and the Balanced
Fund may qualify, in whole or part, for the federal income tax dividends-
received deduction, depending on the amount of qualifying dividends received
by the Fund. Qualifying dividends may include those paid to a Fund by
domestic corporations but do not include those paid by foreign corporations.
The dividends-received deduction equals 70 percent of eligible dividends
received from a Fund by a shareholder. However, distributions from the Money
Market Fund, the Bond Fund, the Government Bond Fund and the High Yield Fund
are unlikely to so qualify because the income of these Funds consists largely
or entirely of interest rather than dividends. In addition, to the extent the
Real Estate Fund's income is derived from interest and distributions from real
estate investment trusts ("REITS"), distributions from that Fund will not
qualify for the dividends-received deduction. Distributions of any excess of
net long-term capital gain over net short-term capital loss from a Fund are
ineligible for the dividends-received deduction.

GENERAL CONSIDERATIONS. Distributions properly designated by any Fund
as representing the excess of net long-term capital gain over net short-term
capital loss are taxable to shareholders as long-term capital gain, regardless
of the length of time the shares of the Fund have been held by shareholders.
For noncorporate taxpayers, the highest rate that applies to long-term capital
gains is lower than the highest rate that applies to ordinary income. Any
loss that is realized and allowed on redemption of shares of the Fund less
than 6 months from the date of purchase of the shares and following the
receipt of a capital gain dividend will be treated as a long-term capital loss
to the extent of the capital gain dividend. For this purpose, Section
852(b)(4) of the Code contains special rules on the computation of a
shareholder's holding period.

11
<PAGE>

the Real Estate Fund. The effect of a return of capital is to defer your tax
liability on that portion of your income distributions until you sell your
shares of the Real Estate Fund.

Distributions of taxable net investment income and net realized capital
gains will be taxable as described above, whether paid in shares or in cash.
Each distribution is accompanied by a brief explanation of the form and
character of the distribution. Within 60 days after the close of each
calendar year, each Fund issues to each shareholder a statement of the federal
income tax status of all distributions, including a statement of the prior
calendar year's distributions which the Fund has designated to be treated as
long-term capital gain and, in the case of the Municipal Bond Fund, as tax-
exempt interest, or in the case of the Real Estate Fund, as a tax return of
capital.

A distribution may be taxable to a shareholder even if the distribution
reduces the net asset value of the shares held below their cost (and is in an
economic sense a return of the shareholder's capital). This tax result is
most likely when shares are purchased shortly before an annual distribution of
capital gains or other earnings. This tax result is extremely unlikely in the
case of the Money Market Fund, which distributes its earnings daily and has
few or no capital gains.

Each Fund is generally required to obtain from its shareholders a
certification of the shareholder's taxpayer identification number and certain
other information. Each Fund generally will not accept an investment to
establish a new account that does not comply with this requirement. If a
shareholder fails to certify such number and other information, or upon
receipt of certain notices from the Internal Revenue Service, the Fund may be
required to withhold 31 percent of any reportable interest or dividends, or
redemption proceeds, payable to the shareholder, and to remit such sum to the
Internal Revenue Service, for credit toward the shareholder's federal income
taxes. A shareholder's failure to provide a social security number or other
tax identification number may subject the shareholder to a penalty of $50
imposed by the Internal Revenue Service. In addition, that failure may
subject the Fund to a separate penalty of $50. This penalty will be charged
against the shareholder's account, which will be closed. Closure of the
account may result in a capital gain or loss.

If a Fund declares a dividend in October, November, or December payable
to shareholders of record on a certain date in such a month and pays the
dividend during January of the following year, the shareholders will be taxed
as if they had received the dividend on December 31 of the year in which the
dividend was declared. Thus, a shareholder may be taxed on the dividend in a
taxable year prior to the year of actual receipt.

A special tax may apply to a Fund if it fails to make enough
distributions during the calendar year. The required distributions for each
calendar year generally equal the sum of (a) 98 percent of the ordinary income
for the calendar year plus (b) 98 percent of the capital gain net income for
the one-year period that ends on October 31 during the calendar year (or for
the calendar year itself if the Fund so elects), plus (c) an adjustment
relating to any shortfall for the prior taxable year. If the actual
distributions are less than the required distributions, a tax of 4 percent
applies to the shortfall.

The Code allows the deduction by certain individuals, trusts, and
estates of "miscellaneous itemized deductions" only to the extent that such
deductions exceed 2 percent of adjusted gross income. The limit on
miscellaneous itemized deductions will NOT apply, however, with respect to the
expenses incurred by any "publicly offered regulated investment company."
Each Fund believes that it is a publicly offered regulated investment company
because its shares are continuously offered pursuant to a public offering
(within the meaning of Section 4 of the Securities Act of 1933, as amended).
Therefore, the limit on miscellaneous itemized deductions should not apply to
expenses incurred by any of the Funds.

The Funds may purchase zero coupon bonds and payment-in-kind ("PIK")
bonds. With respect to zero coupon bonds, a fund recognizes original-issue-
discount income ratably over the life of the bond even though the fund
receives no payments on the bond until the bond matures. With respect to PIK
bonds, a fund recognizes interest income equal to the fair market value of the
bonds distributed as interest. Because a fund must distribute 90 percent of
its income to remain qualified as a registered investment company, a Fund may
be forced to liquidate a portion of its portfolio to

12
<PAGE>

generate cash to distribute to its shareholders with respect to
original-issue-discount income from zero coupon bonds and interest income
from PIK bonds.

FOREIGN INCOME TAXES

The International Stock Fund invests in the securities of foreign
corporations and issuers. To a lesser extent, the Common Stock Fund, the
Growth Fund, the Special Fund, the Balanced Fund, and the High Yield Fund may
also invest in such foreign securities. Foreign countries may impose income
taxes, generally collected by withholding, on foreign-source dividends and
interest paid to a Fund. These foreign taxes will reduce a Fund's distributed
income. The Funds generally expect to incur, however, no foreign income taxes
on gains from the sale of foreign securities.

The United States has entered into income tax treaties with many foreign
countries to reduce or eliminate the foreign taxes on certain dividends and
interest received from corporations in those countries. The Funds intend to
take advantage of such treaties where possible. It is impossible to predict
with certainty in advance the effective rate of foreign taxes that will be
paid by a Fund since the amount invested in particular countries will
fluctuate and the amounts of dividends and interest relative to total income
will fluctuate.

U.S. FOREIGN TAX CREDITS OR DEDUCTIONS FOR SHAREHOLDERS OF THE
INTERNATIONAL STOCK FUND. Section 853 of the Code allows a regulated
investment company to make a special election relating to foreign income taxes
if more than 50 percent of the value of the company's total assets at the
close of its taxable year consists of stock or securities in foreign
corporations. The International Stock Fund generally expects, if necessary,
to qualify for and to make the election permitted under Section 853 of the
Code. Although the International Stock Fund intends to meet the requirements
of the Code to "pass through" such foreign taxes, there can be no assurance
that the Fund will be able to do so. The International Stock Fund will elect
under Section 853 of the Code only if it believes that it is in the best
interests of its shareholders to do so. None of the other Columbia Funds that
may invest in foreign securities will qualify under Section 853 of the Code.

As a result of the Section 853 election, shareholders of the
International Stock Fund will be able to claim a credit or deduction on their
income tax returns for, and will be required to include in income in addition
to taxable distributions actually received, their pro rata portions of the
income taxes paid by the Fund to foreign countries. A shareholder's use of
the credits resulting from the election will be subject to the limits of
Section 904 of the Code. In general, those limits will prevent a shareholder
from using foreign tax credits to reduce U.S. taxes on U.S. source income.
Each shareholder should discuss the use of foreign tax credits and the Section
904 limits with an individual tax advisor.

No deduction for foreign taxes may be claimed under the Code by
individual shareholders who do not elect to itemize deductions on their
federal income tax returns, although such a shareholder may claim a credit for
foreign taxes and in any event will be treated as having taxable income in the
amount of the shareholder's pro rata share of foreign taxes paid by the Fund.

Each year, the International Stock Fund will provide a statement to each
shareholder showing the amount of foreign taxes for which a credit or a
deduction may be available.

INVESTMENT IN PASSIVE FOREIGN INVESTMENT COMPANIES. If a Fund invests
in certain non-U.S. corporations that receive at least 75 percent of their
annual gross income from passive sources (such as sources that produce certain
interest, dividends, royalties, capital gains, or rental income) or hold at
least 50 percent of their assets in such passive sources ("passive foreign
investment companies"), the Fund could be subject to federal income tax and
additional interest charges on "excess distributions" received from such
companies or gain from the sale of stock in such companies, even if all income
or gain actually received by a Fund is distributed to its shareholders in a
timely manner. A Fund would not be able to pass through to its shareholders
any credit or deduction for such tax. Accordingly, each Fund expects to limit
its investments in such passive foreign investment companies and expects to
attempt to undertake appropriate actions to limit its tax liability, if any,
with respect to such investments. The Internal Revenue Service has proposed
regulations that, if adopted, will allow a regulated investment company to
avoid the

13
<PAGE>
tax and interest charge with respect to a passive foreign investment company
by electing to mark the stock to market each year.

INVESTMENTS IN REAL ESTATE INVESTMENT TRUSTS THAT INVEST IN REMICS.

The Real Estate Fund may invest in REITs that hold residual interests in
real estate mortgage investment conduits ("REMICs"). Under Treasury
regulations that have not yet been issued, but may apply retroactively, a
portion of the Real Estate Fund's income from a REIT that is attributable to
the REIT's residual interest in a REMIC (referred to in the Code as an "excess
inclusion") will be subject to federal income tax in all events. These
regulations are also expected to provide that excess exclusion income of a
regulated investment company, such as the Real Estate Fund, will be allocated
to shareholders of the regulated investment company in proportion to the
dividends received by such shareholders, with the same consequences as if the
shareholders held the related REMIC residual interest directly. In general,
excess inclusion income allocated to shareholders (i) cannot be offset by net
operating losses (subject to a limited exception for certain thrift
institutions), (ii) will constitute unrelated business taxable income to
entities (including a qualified pension plan, an individual retirement
account, a 401(k) plan, a Keogh plan or other tax-exempt entity) subject to
tax on unrelated business income, thereby potentially requiring such an entity
that is allocated excess inclusion income, and otherwise might not be required
to file a tax return, to file a tax return and pay tax on such income, and
(iii) in the case of a foreign shareholder, will not qualify for any reduction
in U.S. federal withholding tax. In addition, if at any time during any
taxable year a "disqualified organization" (as defined in the Code) is a
record holder of a share in a regulated investment company, then the regulated
investment company will be subject to a tax equal to that portion of its
excess inclusion income for the taxable year that is allocable to the
disqualified organization, multiplied by the highest federal income tax rate
imposed on corporations. The Real Estate Fund does not intend to invest in
REITs, a substantial portion of the assets of which consists of residual
interests in REMICs.

STATE INCOME TAXES

MUNICIPAL BOND FUND. Individuals, trusts, and estates resident in
Oregon will not be subject to the Oregon personal income tax on distributions
from the Municipal Bond Fund that are derived from tax-exempt interest paid on
the municipal bonds of Oregon and its political subdivisions and certain other
issuers (including Puerto Rico and Guam). However, these individuals, trusts,
and estates will be subject to the Oregon personal income tax on distributions
from the Municipal Bond Fund that are derived from other types of income,
including interest on the municipal bonds of states other than Oregon.
Furthermore, it is expected that CORPORATIONS subject to the Oregon
corporation excise tax will be subject to that tax on income from the
Municipal Bond Fund, including income that is exempt for federal purposes.
Local taxes and the tax consequences to nonresidents and part-year residents
are beyond the scope of this discussion.

The exemption of certain interest income for federal income tax purposes
will not necessarily result in a similar exemption under the laws of a
particular state or local taxing authority. Each shareholder should consult a
tax advisor in this regard. Capital gains distributed to shareholders will
generally be subject to state and local taxes. The Municipal Bond Fund will
report annually to its shareholders the percentage and source, on a state-by-
state basis, of interest income on municipal bonds received by the Municipal
Bond Fund during the preceding year.

Oregon generally taxes corporations on interest income from municipal
bonds. The Municipal Bond Fund is a corporation. However, ORS 317.309(2)
provides that a regulated investment company may deduct from such interest
income the exempt-interest dividends that are paid to shareholders. The
Municipal Bond Fund expects to distribute its interest income so that it will
not be liable for Oregon corporation excise taxes.

GOVERNMENT BOND FUND. Individuals, trusts, and estates resident in
Oregon will not be subject to Oregon personal income taxes on dividends
properly designated by the Government Bond Fund as derived from interest on
U.S. government obligations. See ORS 316.683. If a shareholder pays
deductible interest on debt incurred to carry shares of the Government Bond
Fund, the amount of the tax-exempt dividends for state tax purposes will be
reduced. If a

14
<PAGE>

shareholder sells shares of the Government Bond Fund at a loss after holding
them for six months or less, the loss will be disallowed for state purposes
to the extent of the tax-exempt dividends received by the shareholder. The
laws of other states may differ, and persons subject to tax in other states
should consult their personal tax advisors.

OTHER FUNDS. The state tax consequences of investments in the Funds,
other than Oregon state tax consequences with respect to the Municipal Bond
Fund and the Government Bond Fund, are beyond the scope of the tax discussions
in the Prospectus and this Statement of Additional Information.

ADDITIONAL INFORMATION

The foregoing summary and the summary included in the Prospectus under
"Taxes" of tax consequences of investment in the Funds are necessarily general
and abbreviated. No attempt has been made to present a complete or detailed
explanation of tax matters. Furthermore, the provisions of the statutes and
regulations on which they are based are subject to change by legislative or
administrative action. Local taxes are beyond the scope of this discussion.
Prospective investors in the Funds are urged to consult their own tax advisors
regarding specific questions as to federal, state, or local taxes.

This discussion applies only to general U.S. shareholders. Foreign
investors and U.S. shareholders with particular tax issues or statuses should
consult their own tax advisors regarding the special rules that may apply to
them.

______________________________________________________________________________

YIELD AND PERFORMANCE
______________________________________________________________________________

The Funds will from time to time advertise or quote their respective
yields and total return performance. These figures represent historical data
and are calculated according to Securities and Exchange Commission ("SEC")
rules standardizing such computations. The investment return and principal
value (except, under normal circumstances, for the Money Market Fund) will
fluctuate so that shares when redeemed may be worth more or less than their
original cost.

THE MONEY MARKET FUND

Current yield is calculated by dividing the net change in the value of
an account of one share during an identified seven-calendar-day period by the
value of the one share account at the beginning of the same period ($1.00) and
multiplying that base period return by 365/7, I.E.:

NET CHANGE IN VALUE OF ACCOUNT OF ONE SHARE x 365 = Current
---
value of account at beginning of period 7 Yield

Compounded effective yield is calculated by daily compounding of the
base period return referred to above. This calculation is made by adding 1 to
the base period return, raising the sum to a number equal to 365 divided by 7,
and subtracting 1 from the result, I.E.:

365
---
(base period return + 1) 7 -1 = Compounded Effective Yield

The determination of net change in the value of an account for purposes
of the Money Market Fund yield calculations reflects the value of additional
shares purchased with income dividends from the original share and income
dividends declared on both the original share and the additional shares. The
determination of net change does not reflect realized gains or losses from the
sale of securities or unrealized appreciation or depreciation. The Money
Market Fund includes unrealized appreciation or depreciation, as well as
realized gains or losses, in the

15
<PAGE>

determination of actual daily dividends. Therefore, the quoted yields as
calculated above may differ from the actual dividends paid.

THE COMMON STOCK FUND, THE REAL ESTATE FUND, THE BALANCED FUND, AND THE BOND
FUNDS

Current yields of the Common Stock Fund, the Real Estate Fund, the
Balanced Fund, the Government Bond Fund, the Bond Fund, the Municipal Bond
Fund, and the High Yield Fund are calculated by dividing the net investment
income per share earned during an identified 30-day period by the maximum
offering price per share on the last day of the same period, according to the
following formula:

6
Yield = 2 [( a-b + 1) -1]
---
cd

Where: a = dividends and interest earned during the period.

b = expenses accrued for the period.

c = the average daily number of shares outstanding during the
period that were entitled to receive dividends.

d = the maximum offering price per share on the last day of the
period.

The Funds use generally accepted accounting principles in determining
actual income paid, and these principles differ in some instances from SEC
rules for computing income for the above yield calculations. Therefore, the
quoted yields as calculated above may differ from the actual dividends paid.

The Municipal Bond Fund may publish a tax equivalent yield for Oregon
shareholders that represents the yield that an investor must receive on a
fully taxable investment to achieve the same after-tax results at the highest
then existing marginal combined Oregon and federal income tax rates,
calculated according to the following formula:

Tax Equivalent Yield = a + c + e
--- ---
1-b 1-d

Where:a = that portion of the current yield of the Fund that is exempt
from federal and Oregon income tax.

b = highest then-existing marginal combined Federal and Oregon
income tax rate.

c = that portion of the current yield of the Fund that is only
exempt from federal gross income tax.

d = highest then-existing federal income tax rate.

e = that portion of the current yield of the Fund that is not
tax exempt.

The Municipal Bond Fund may also publish a tax equivalent yield for
nonresidents of Oregon that represents the yield that an investor must receive
on a fully taxable investment to achieve the same after-tax results of the
highest then-existing marginal federal income tax rate, calculated according
to the following formula:

Tax Equivalent Yield = a + c
---
1-b

Where: a = that portion of the current yield of the Fund that is exempt
from federal income tax.

16
<PAGE>

b = highest then-existing marginal federal income tax rate.

c = that portion of the current yield of the Fund that is not
tax exempt.

The Government Bond Fund may publish a tax equivalent yield for Oregon
shareholders that represents the yield that an investor must receive on a
fully taxable investment to achieve the same after-tax results at the highest
then existing marginal Oregon income tax rate, calculated according to the
following formula:

Tax Equivalent Yield = a + c
---
1-b

Where: a = that portion of the current yield of the Fund that is exempt
from Oregon income tax.

b = highest then existing marginal Oregon income tax rate.

c = that portion of the current yield of the Fund that is not
exempt from Oregon income tax.

The Funds may also publish average annual total return quotations for
recent 1, 5, and 10-year periods (or a fractional portion thereof) computed by
finding the average annual compounded rates of return over the 1, 5, and 10-
year periods that would equate the initial amount invested to the ending
redeemable value, according to the following formula:

P(1+T)n = ERV

Where: P = a hypothetical initial payment of $1000

T = average annual total return

n = number of years

ERV = ending redeemable value of a hypothetical $1000 payment made
at the beginning of the 1, 5, and 10-year periods (or fractional
portion thereof)

Total return figures may also be published for recent 1, 5, and 10-year
periods where the total return figures represent the percentage return for the
1, 5, and 10-year periods that would equate the initial amount invested to the
ending redeemable value.

If a Fund's registration statement under the Investment Company Act of
1940 has been in effect less than 1, 5, or 10 years, the time period during
which the registration statement has been in effect will be substituted for
the periods stated.

The Funds may compare their performance to other mutual funds with
similar investment objectives and to the mutual fund industry as a whole, as
quoted by ranking services and publications of general interest. For example,
these services or publications may include Lipper Analytical Services, Inc.,
Schabacker's Total Investment Service, Barron's, Business Week, Changing
Times, The Financial Times, Financial World, Forbes, Investor's Daily, Money,
Morningstar, Inc., Personal Investor, The Economist, The Wall Street Journal,
and USA Today. These ranking services and publications rank the performance of
the Funds against all other funds over specified periods and against funds in
specified categories.

The Funds may also compare their performance to that of a recognized
stock or bond index including the Standard & Poor's 500, Dow Jones, Russell,
and Nasdaq stock indices, the NAREIT Equity Index, and the Shearson Lehman and
Salomon bond indices, or, with respect to the International Stock Fund, a
suitable international index, such as the Morgan Stanley Capital International
Europe, Australia, Far East Index or the FT-Actuaries Europe-Pacific Index.
The comparative material found in advertisements, sales literature, or in
reports to shareholders may contain past or present performance ratings. This
is not to be considered representative or

17
<PAGE>

indicative of future results or future performance. Unmanaged indices may
assume the reinvestment of dividends, but generally do not reflect deductions
for administrative and management costs and expenses.

In addition, the Funds may also compare their performance to other
income-producing securities such as (i) money market funds; (ii) various bank
products (based on average rates of bank and thrift institution certificates
of deposit, money market deposit accounts, and other accounts as reported by
the Bank Rate Monitor and other financial reporting services, including
newspapers); and (iii) U.S. treasury bills or notes. There are differences
between these income-producing alternatives and the Funds other than their
yields, some of which are summarized below.

The yields of the Funds are not fixed and will fluctuate. The principal
value of your investment in each Fund (except, under normal circumstances, the
Money Market Fund) at redemption may be more or less than its original cost.
In addition, your investment is not insured and its yield is not guaranteed.
Although the yields of bank money market deposit and other similar accounts
will fluctuate, principal will not fluctuate and is insured by the Federal
Deposit Insurance Corporation up to $100,000. Bank passbook savings accounts
normally offer a fixed rate of interest, and their principal and interest are
also guaranteed and insured. Bank certificates of deposit offer fixed or
variable rates for a set term. Principal and fixed rates are guaranteed and
insured. There is no fluctuation in principal value. Withdrawal of these
deposits prior to maturity will normally be subject to a penalty.

______________________________________________________________________________

INVESTMENT RESTRICTIONS
______________________________________________________________________________

The Prospectus sets forth the investment objectives and certain
restrictions applicable to each Fund. The following is a list of investment
restrictions applicable to each Fund. If a percentage limitation is adhered
to at the time of an investment by a Fund, a later increase or decrease in
percentage resulting from any change in value or net assets will not result in
a violation of the restriction. A Fund may not change these restrictions
without the approval of a majority of its shareholders, which means the vote
at any meeting of shareholders of a Fund of (i) 67 percent or more of the
shares present or represented by proxy at the meeting (if the holders of more
than 50 percent of the outstanding shares are present or represented by proxy)
or (ii) more than 50 percent of the outstanding shares, whichever is less.

COLUMBIA COMMON STOCK FUND, INC.

The Common Stock Fund may not:

1. Buy or sell commodities. However, the Common Stock Fund may
invest in futures contracts relating to broadly based stock indices, subject
to the restrictions in paragraph 15.

2. Concentrate investments in any industry. However, the Common
Stock Fund may (a) invest up to 25 percent of the value of the total assets in
any one industry and (b) invest for temporary defensive purposes up to 100
percent of the value of the total assets in securities issued or guaranteed by
the U.S. Government or its agencies or instrumentalities.

3. Buy or sell real estate. However, the Common Stock Fund may
purchase or hold readily marketable securities issued by companies, such as
real estate investment trusts, which operate in real estate or interests
therein.

4. Make loans to other persons (except by purchase of short-term
commercial paper, bonds, debentures, or other debt securities constituting
part of an issue).

5. The Common Stock Fund may not purchase a repurchase agreement with
a maturity greater than seven days or a security that is subject to legal or
contractual restrictions on

18
<PAGE>

resale or for which there are no readily available market quotations if, as a
result of such purchase, more than 5 percent of the assets of the Common
Stock Fund (taken at current value) is invested in such securities.

6. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the outstanding voting securities
of that issuer to be held in the Common Stock Fund.

7. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the value of the total assets of
the Common Stock Fund at market value to be invested in the securities of that
issuer (other than obligations of the U.S. Government and its agencies and
instrumentalities), with reference to 75 percent of the assets of the Common
Stock Fund.

8. Purchase securities of other open-end investment companies.

9. Issue senior securities, bonds, or debentures.

10. Underwrite securities of other issuers, except that the Common
Stock Fund may acquire portfolio securities under circumstances where, if the
securities are later publicly offered or sold by the Common Stock Fund, it
might be deemed to be an underwriter for purposes of the Securities Act of
1933.

11. Borrow money in excess of 5 percent of its net asset value. Any
borrowing must only be temporarily from banks and for extraordinary or
emergency purposes.

12. Invest its funds in the securities of any company if the purchase,
at the time thereof, would cause more than 5 percent of the value of the
Common Stock Fund's total assets to be invested in companies which, including
predecessors and parents, have a record of less than three years' continuous
operation.

13. Invest in companies for the purpose of exercising control or
management.

14. Engage in short sales of securities except to the extent that it
owns other securities convertible into an equivalent amount of such
securities. Such transactions may only be made to protect a profit in or to
attempt to minimize a loss with respect to convertible securities. In any
event, no more than 5 percent of the value of the Common Stock Fund's net
assets taken at market may, at any time, be held as collateral for such sales.

15. Buy and sell puts and calls as securities, stock index futures or
options on stock index futures, or financial futures or options on financial
futures, unless such options are written by other persons and the options or
futures are offered through the facilities of a national securities
association or are listed on a national securities or commodities exchange.

16. Invest directly in oil, gas, or other mineral development or
exploration programs or leases; although, the Fund may own securities of
companies engaged in those businesses.

Some of the policies described above prohibit particular practices.
Other policies (paragraphs 5, 11, 12, and 14) permit specified practices but
limit the portion of the Common Stock Fund's assets that may be so invested.
During the last year, the Common Stock Fund did not engage in any of these
permitted practices and has no current intention of doing so in the
foreseeable future.

COLUMBIA GROWTH FUND, INC.

The Growth Fund may not:

1. Buy or sell commodities or commodity contracts.

2. Concentrate more than 25 percent of its investments in any one
industry.

19
<PAGE>

3. Buy or sell real estate. (However, the Growth Fund may buy
readily marketable securities such as Real Estate Investment Trusts.)

4. Make loans, except through the purchase of a portion of an issue
of publicly distributed debt securities.

5. Hold more than 5 percent of the voting securities of any one
company.

6. Purchase the securities of any issuer if the purchase at the time
thereof would cause more than 5 percent of the assets of the Growth Fund
(taken at value) to be invested in the securities of that issuer, except U.S.
Government bonds.

7. Purchase securities of any issuer when those officers and
directors of the Growth Fund who individually own 1/2 of 1 percent of the
securities of that issuer together own 5 percent or more.

8. Purchase securities of other open-end investment companies.

9. Issue senior securities, bonds, or debentures.

10. Underwrite securities issued by others except as it may be deemed
to be an underwriter of restricted securities.

11. Borrow money in excess of 5 percent of its net asset value. Any
borrowing must only be temporarily from banks for extraordinary or emergency
purposes.

12. Invest more than 5 percent of its total assets at cost in the
securities of companies which (with predecessor companies) have a record of
less than three years of continuous operation and equity securities which are
not readily marketable.

13. Invest in companies for purposes of control or management.

14. Buy securities on margin or make short sales.

15. Invest more than 5 percent of the value of its assets in
securities which are subject to legal or contractual restrictions on resale or
are otherwise not saleable.

16. Invest directly in oil, gas, or other mineral development or
exploration programs or leases; although, the Fund may own securities of
companies engaged in those businesses.

Some of the policies described above prohibit particular practices.
Other policies (paragraphs 11, 12, and 15) permit specified practices but
limit the portion of the Growth Fund's assets that may be so invested. During
the last year, the Growth Fund did not engage in any of these permitted
practices and has no current intention of doing so in the foreseeable future.

COLUMBIA INTERNATIONAL STOCK FUND, INC.

The International Stock Fund may not:

1. Buy or sell commodities. However, the International Stock Fund
may invest in futures contracts or options on such contracts relating to
broadly based stock indices, subject to the restrictions in paragraph 15, and
may enter into foreign currency transactions.

2. Concentrate investments in any industry. However, the
International Stock Fund may (a) invest up to 25 percent of the value of its
assets in any one industry and (b) invest for temporary defensive purposes up
to 100 percent of the value of its assets in securities issued or guaranteed
by the United States or its agencies or instrumentalities.

<PAGE>

3. Buy or sell real estate. However, the International Stock Fund
may purchase or hold readily marketable securities issued by companies, such
as real estate investment trusts, which operate in real estate or interests
therein.

4. Make loans to other persons, except by purchase of short-term
commercial paper, bonds, debentures, or other debt securities constituting
part of an issue and except to the extent the entry into repurchase agreements
in accordance with the Fund's investment restrictions may be deemed a loan.

5. The International Stock Fund may not purchase a repurchase
agreement with a maturity greater than seven days or a security that is
subject to legal or contractual restrictions on resale or for which there are
no readily available market quotations if, as a result of such purchase, more
than 10 percent of the assets of the Fund (taken at current value) is invested
in such securities. Certain restricted securities that can be resold to
qualifying institutions pursuant to a regulatory exemption under Rule 144A of
the Securities Act of 1933 and for which a dealer or institutional trading
market exists may be deemed to be liquid securities by the Board of Directors
of the International Stock Fund and, therefore, are not subject to the above
investment restriction.

6. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 10 percent of the outstanding voting securities
of that issuer to be held by the International Stock Fund.

7. Purchase the securities of any issuer (including any foreign
government issuer) if the purchase, at the time thereof, would cause more than
5 percent of the value of the total assets of the Fund at market value to be
invested in the securities of that issuer (other than obligations of the U.S.
government and its agencies and instrumentalities), with reference to 75
percent of the assets of the International Stock Fund.

8. Purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition, or reorganization, or by
purchase in the open market of securities of closed-end investment companies
where no underwriter or dealer's commission or profit, other than customary
broker's commission, is involved and only if immediately thereafter not more
than (i) 3 percent of the total outstanding voting stock of such company is
owned by the Fund, (ii) 5 percent of the International Stock Fund's total
assets would be invested in any one such company, and (iii) 10 percent of the
International Stock Fund's total assets would be invested in such securities.

9. Issue senior securities, bonds, or debentures.

10. Underwrite securities of other issuers, except that the
International Stock Fund may acquire portfolio securities in circumstances
where, if the securities are later publicly offered or sold by the
International Stock Fund, it might be deemed to be an underwriter for purposes
of the Securities Act of 1933.

11. Borrow money, except temporarily for extraordinary or emergency
purposes. For all amounts borrowed, the Fund will maintain an asset coverage
of 300 percent. The International Stock Fund will not make any additional
investments while borrowings exceed 5 percent of the Fund's total assets.

12. Invest its funds in the securities of any company if the purchase
would cause more than 5 percent of the value of the International Stock Fund's
total assets to be invested in companies which, including predecessors and
parents, have a record of less than three years continuous operation.

13. Invest in companies for the purpose of exercising control or
management.

14. Engage in short sales of securities except to the extent that the
International Stock Fund owns other securities convertible into an equivalent
amount of such securities. Such transactions may only be made to protect a
profit in or to attempt to minimize a loss with respect

21
<PAGE>

to convertible securities. In any event, no more than 5 percent of the value
of the International Stock Fund's net assets taken at market may, at any
time, be held as collateral for such sales.

15. Buy and sell puts and calls as securities, stock index futures or
options on stock index futures, or financial futures or options on financial
futures, unless such options are written by other persons and the options or
futures are offered through the facilities of a recognized securities
association or are listed on a recognized securities or commodities exchange
or similar entity.

16. Invest directly in oil, gas, or other mineral development or
exploration programs or leases; although, the Fund may own securities of
companies engaged in those businesses.

Some of the policies described above prohibit particular practices.
Other policies (paragraphs 5, 8, 11, 12, and 14) permit specified practices
but limit the portion of the International Stock Fund's assets that may be so
invested. Subject to the investment restriction, the International Stock Fund
expects to engage in the practices described in paragraphs 5 (restricted
securities) and 8 (investment companies). The International Stock Fund has no
intention of engaging in the other permitted practices in the foreseeable
future.

COLUMBIA SPECIAL FUND, INC.

The Special Fund may not:

1. Buy or sell commodities. However, the Special Fund may invest in
futures contracts relating to broadly based stock indices, subject to the
restrictions in paragraph 15.

2. Concentrate investments in any industry. However, the Special
Fund may (a) invest up to 25 percent of the value of the total assets in any
one industry and (b) invest for temporary defensive purposes up to 100 percent
of the value of the total assets in securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities.

3. Buy or sell real estate. However, the Special Fund may purchase
or hold readily marketable securities issued by companies such as real estate
investment trusts, which operate in real estate or interests therein.

4. Make loans to other persons (except by purchase of short-term
commercial paper, bonds, debentures, or other debt securities constituting
part of an issue).

5. The Special Fund may not purchase a repurchase agreement with a
maturity greater than seven days or a security that is subject to legal or
contractual restrictions on resale or for which there are no readily available
market quotations if, as a result of such purchase, more than 10 percent of
the assets of the Special Fund (taken at current value) is invested in such
securities.

6. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 10 percent of the outstanding voting securities
of that issuer to be held in the Special Fund.

7. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the value of the total assets of
the Special Fund at market value to be invested in the securities of that
issuer (other than obligations of the U.S. Government and its agencies and
instrumentalities), with reference to 75 percent of the assets of the Special
Fund.

8. Purchase securities of other open-end investment companies.

9. Issue senior securities, bonds, or debentures.

10. Underwrite securities of other issuers, except that the Special
Fund may acquire portfolio securities under circumstances where, if the
securities are later publicly offered or sold

22
<PAGE>

by the Special Fund, it might be deemed to be an underwriter for purposes of
the Securities Act of 1933.

11. Borrow money in excess of 5 percent of its net assets value. Any
borrowing must only be temporarily from banks and for extraordinary or
emergency purposes.

12. Invest its funds in the securities of any company if the purchase,
at the time thereof, would cause more than 10 percent of the value of the
Special Fund's total assets to be invested in companies which, including
predecessors and parents, have a record of less than three years' continuous
operation.

13. Invest in companies for the purpose of exercising control or
management.

14. Engage in short sales of securities except to the extent that it
owns other securities convertible into an equivalent amount of such
securities. Such transactions may only be made to protect a profit in or to
attempt to minimize a loss with respect to convertible securities. In any
event, no more than 10 percent of the value of the Special Fund's net assets
taken at market may, at any time, be held as collateral for such sales.

16. Invest directly in oil, gas, or other mineral development or
exploration programs or leases; although, the Fund may own securities of
companies engaged in those businesses.

Some of the policies described above prohibit particular practices.
Other policies (paragraphs 5, 11, 12, and 14) permit specified practices but
limit the portion of the Special Fund's assets that may be so invested. Other
than paragraph 12, the Special Fund did not engage in any of these permitted
practices during the last year and has no current intention of doing so in the
foreseeable future.

COLUMBIA REAL ESTATE EQUITY FUND, INC.

The Real Estate Fund may not:

1. Buy or sell commodities or commodity futures contracts.

2. Buy or sell real estate. However, the Real Estate Fund may
purchase or hold readily marketable securities issued by companies, such as
real estate investment trusts, that operate in real estate or interests
therein, and participation interests in pools of real estate mortgage loans.

3 Make loans to other persons (except by purchase of short-term
commercial paper, bonds, debentures, or other debt securities constituting
part of an issue). The Real Estate Fund may lend portfolio securities to
broker-dealers or other institutional investors if, as a result thereof, the
aggregate value of all securities loaned does not exceed 33 1/3% of its total
assets.

4. Purchase illiquid securities, including restricted securities and
repurchase agreements of more than seven days maturity, if upon the purchase
more than 10 percent of the value of the Real Estate Fund's net assets would
consist of these securities. "Illiquid securities" are securities that may
not be sold or disposed of in the ordinary course of business within seven
days at approximately the price used to determine the Real Estate Fund's net
asset value and include restricted securities that are subject to legal or
contractual restrictions on resale. Certain restricted securities that can be
resold to qualifying institutions pursuant to a regulatory exemption under
Rule 144A of the Securities Act of 1933 and for which a dealer or
institutional trading market exists may be deemed to be liquid securities by
the Board of Directors of the Real Estate Fund and, in that event, will not be
subject to the above investment restriction.

23
<PAGE>

5. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 10% of the outstanding voting securities of
that issuer to be held in the Real Estate Fund.

6. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5% of the value of its total assets at market
value to be invested in the securities of that issuer (other than obligations
of the U.S. Government and its instrumentalities), with reference to 75% of
the assets of the Real Estate Fund.

7. Purchase or retain securities of an issuer if those officers or
directors of the Real Estate Fund or the Advisor who individually own more
than 1/2 of 1% of the outstanding securities of that issuer together own more
than 5% of such securities.

8. Purchase securities of other open-end investment companies.

9. Issue senior securities, bonds, or debentures.

10. Underwrite securities of other issuers, except the Real Estate Fund
may acquire portfolio securities in circumstances where, if the securities are
later publicly offered or sold by the Real Estate Fund, it might be deemed to
be an underwriter for purposes of the Securities Act of 1933.

11. Borrow money except as a temporary measure for extraordinary or
emergency purposes. The Real Estate Fund's borrowings may not exceed 5% of
its gross assets valued at the lesser of cost or market value, nor may it
pledge, mortgage, or hypothecate assets if the market value of such assets
exceeds 10% of the gross assets, valued at cost, of the Real Estate Fund.

12. Invest in the securities of any company if the purchase, at the
time thereof, would cause more than 5% of the value of the Real Estate Fund's
total assets to be invested in companies which, including predecessors and
parents, have a record of less than three years of continuous operation.

13. Invest in companies to exercise control or management.

14. Buy any securities or other property on margin, except for short-
term credits necessary for clearing transactions and except that margin
payments and other deposits in connection with transactions in options,
futures, and forward contracts shall not be deemed to constitute purchasing
securities on margin.

15. Engage in short sales of securities except to the extent that it
owns other securities convertible into an equivalent amount of such
securities. These short sales may only be made to protect a profit in or to
attempt to minimize a loss with respect to convertible securities. In any
event no more than 10% of the Real Estate Fund's net assets valued at market
may, at any time, be held as collateral for such sales.

16. Invest directly in oil, gas, or other mineral development or
exploration programs or leases; although, the Real Estate Fund may own
securities of companies engaged in those businesses.

17. Concentrate investments in any one industry, except that the Real
Estate Fund will invest at least 65% of the value of its total assets in
securities of companies principally engaged in the real estate industry.

Some of the practices described above prohibit particular practices.
Certain policies described in paragraphs 3, 4, 5, 11, 12, and 15 permit
specified practices but limit the portion of the Real Estate Fund's assets
that may be so invested. During the last year, the Real Estate Fund did not
engage in any of these permitted practices, other than paragraph 12, and has
no current intention of doing so in the foreseeable future.

24
<PAGE>

COLUMBIA BALANCED FUND, INC.

The Balanced Fund may not:

1. Buy or sell commodities. However, the Balanced Fund may invest in
futures contracts relating to broadly based stock indices, subject to the
restrictions in paragraph 15

2. Concentrate investments in any industry. However, the Balanced
Fund may (a) invest up to 25 percent of the value of the total assets in any
one industry and (b) invest for temporary defensive purposes up to 100 percent
of the value of the total assets in securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities.

3. Buy or sell real estate. However, the Balanced Fund may purchase
or hold readily marketable securities issued by companies such as real estate
investment trusts, which operate in real estate or interests therein.

4. Make loans to other persons (except by purchase of short-term
commercial paper, bonds, debentures, or other debt securities constituting
part of an issue).

5. The Balanced Fund may not purchase a repurchase agreement with a
maturity greater than seven days or a security that is subject to legal or
contractual restrictions on resale or for which there are no readily available
market quotations if, as a result of such purchase, more than 5 percent of the
assets of the Balanced Fund (taken at current value) is invested in such
securities.

6. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the outstanding voting securities
of that issuer to be held in the Balanced Fund.

7. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the value of the total assets of
the Balanced Fund at market value to be invested in the securities of that
issuer (other than obligations of the U.S. Government and its agencies and
instrumentalities), with reference to 75 percent of the assets of the Balanced
Fund.

8. Purchase securities of other open-end investment companies.

9. Issue senior securities, bonds, or debentures.

10. Underwrite securities of other issuers, except that the Balanced
Fund may acquire portfolio securities under circumstances where, if the
securities are later publicly offered or sold by the Balanced Fund, it might
be deemed to be an underwriter for purposes of the Securities Act of 1933.

11. Borrow money in excess of 5 percent of its net assets value. Any
borrowing must only be temporarily from banks and for extraordinary or
emergency purposes.

12. Invest its funds in the securities of any company if the purchase,
at the time thereof, would cause more than 5 percent of the value of the
Balanced Fund's total assets to be invested in companies which, including
predecessors and parents, have a record of less than three years' continuous
operation.

13. Invest in companies for the purpose of exercising control or
management.

14. Engage in short sales of securities except to the extent that it
owns other securities convertible into an equivalent amount of such
securities. Such transactions may only be made to protect a profit in or to
attempt to minimize a loss with respect to convertible securities. In any
event, no more than 5 percent of the value of the Balanced Fund's net assets
taken at market may, at any time, be held as collateral for such sales.

25
<PAGE>

17.Invest directly in oil, gas, or other mineral development or
exploration programs or leases; although, the Fund may own securities of
companies engaged in those businesses.

Some of the policies described above prohibit particular practices.
Other policies (paragraphs 5, 11, 12, and 14) permit specified practices but
limit the portion of the Balanced Fund's assets that may be so invested.
Subject to the investment restriction, the Balanced Fund expects to engage in
the practices described in paragraph 5 (restricted securities). (See the
Prospectus for additional information.) The Balanced Fund has no intention of
engaging in the other permitted practices in the foreseeable future.

COLUMBIA DAILY INCOME COMPANY

The Money Market Fund may not:

1. Borrow money to improve portfolio yield except as a temporary
measure to avoid disruptive redemptions, and not for investment purposes.
Borrowings will not exceed 33 1/3 percent of total assets and will be repaid
from the proceeds of sales of the Money Market Fund's shares or as maturities
allow.

2. Underwrite securities issued by others except as it may be deemed
to be an underwriter in a sale of restricted securities.

3. Invest more than 5 percent of its assets (exclusive of obligations
issued or guaranteed as to principal and interest by the U.S. Government or
any agency or instrumentality thereof) in the securities of any one issuer.
The Money Market Fund may invest up to 100 percent of its total assets in
obligations of U.S. banks which are members of the Federal Reserve System.
However, the Money Market Fund will not invest more than 25 percent of its
assets in any other single industry.

4. Buy or sell real estate.

5. Buy or sell commodities or commodity contracts.

6. Make loans to others (the purchase of obligations in which the
Money Market Fund is authorized to invest will not constitute loans) except
that the Money Market Fund may purchase and simultaneously resell for later
delivery obligations issued or guaranteed as to principal and interest by the
United States Government or any agency or instrumentality thereof if no more
than 10 percent of the Money Market Fund's total assets would be subject to
such repurchase agreements maturing in more than seven days.

7. Purchase common stocks, preferred stocks, warrants, or other
equity securities.

8. Purchase securities on margin.

9. Sell securities short.

10. Write or purchase put or call options.

11. Purchase a security which is subject to legal or contractual
restrictions on resale or for which there is no readily available market,
except that 10 percent of the Money Market Fund's total assets may be invested
in repurchase agreements maturing in more than seven days.

12. Invest in companies to exercise control or management.

26
<PAGE>

13. Invest in the securities of other investment companies, except
those acquired as part of a merger, consolidation, or acquisition of assets.

Some of the policies described above prohibit particular practices.
Other policies (paragraphs 1, 6, and 11) permit specified practices but limit
the portion of the Money Market Fund's assets that may be so invested. The
Money Market Fund has not engaged in these permitted practices during the last
year and has no current intention of doing so in the foreseeable future.

INVESTMENT RESTRICTIONS UNDER RULE 2a-7

Rule 2a-7 under the Investment Company Act of 1940 requires that all
portfolio securities of a money market fund have at the time of purchase a
maximum remaining maturity (as defined in the rule) of 13 months and that the
fund maintain a dollar-weighted average portfolio maturity of not more than 90
days. The Money Market Fund, however, will be invested in short-term debt
obligations maturing within 12 months. Rule 2a-7 further requires that
investments by a money market fund must present minimal credit risk and, if
rated, must be rated within one of the two highest rating categories for
short-term debt obligations by at least two major rating agencies assigning a
rating to the securities or issuer or, if only one rating agency has assigned
a rating, by that agency. Purchases of securities which are unrated or rated
by only one rating agency must be approved or ratified by the board of
directors of the fund. Securities that are rated (or that have been issued by
an issuer that is rated with respect to a class of short-term debt
obligations, or any security within that class, comparable in priority and
quality with such securities) in the highest category by at least two major
rating agencies are designated "First Tier Securities." Securities rated in
the top two categories by at least two major rating agencies, but which are
not rated in the highest category by two or more major rating agencies, are
designated "Second Tier Securities." Securities which are unrated may be
purchased only if they are deemed to be of comparable quality to rated
securities. Under Rule 2a-7, a fund may not invest more than the greater of 1
percent of its total assets or one million dollars, measured at the time of
investment, in the securities of a single issuer that were Second Tier
Securities when acquired by the fund. In addition, a money market fund may
not under Rule 2a-7 invest more than 5 percent of its total assets in
securities that were Second Tier Securities when acquired.

The Money Market Fund may not invest more than 5 percent of its total
assets in the securities of any one issuer, except this limitation shall not
apply to U.S. Government securities and repurchase agreements thereon. The
Money Market Fund may, however, invest more than 5 percent of its total assets
in the First Tier Securities of a single issuer for up to three business days,
although the Money Market Fund may not make more than one such investment at
any one time.

Investment policies by the Money Market Fund are in certain
circumstances more restrictive than the restrictions under Rule 2a-7. In
particular, investments by the Money Market Fund are restricted to the
following:

1. Securities issued or guaranteed as to principal and interest by
the U.S. Government or issued or guaranteed by agencies or instrumentalities
thereof and repurchase agreements relating to these securities.

2. Commercial paper which, if rated by Standard & Poor's Corporation
("S&P") or Moody's Investor Services, Inc. ("Moody's"), is rated A-1 by S&P's
and Prime 1 by Moody's or, if not rated, is determined to be of comparable
quality by the Board of Directors of the Money Market Fund.

3. Other corporate debt securities with remaining maturities of less
than 12 months, including bonds and notes, of an issuer that has received
ratings from S&P's and Moody's for its other short-term debt obligations as
described in paragraph 2 above, where such corporate debt securities are
comparable in priority and security to the rated short-term debt obligations
or, if no ratings are available, where such corporate debt securities are
determined to be of comparable quality under procedures approved by the Board
of Directors of the Money Market Fund.

27
<PAGE>

4. Obligations of U.S. banks that are members of the Federal Reserve
System and have capital surplus and undivided profits as of the date of their
most recent published financial statements in excess of $100 million and are
determined by the Board of Directors of the Money Market Fund to be of
comparable quality to the obligations described in paragraphs 2 or 3 above.
Currently these obligations are certificates of deposit, bankers' acceptances,
and letters of credit.

COLUMBIA U.S. GOVERNMENT SECURITIES FUND, INC.

The Government Bond Fund may not:

1. Issue senior securities, bonds, or debentures.

2. Buy securities on margin, make short sales, or write put or call
options.

3. Borrow money in excess of five percent of its net asset value.
Any borrowing must only be temporarily from banks or other lending
institutions for extraordinary or emergency purposes.

4. Pledge, hypothecate, or transfer in any manner, as security for
indebtedness, any securities owned by the Government Bond Fund, except as
necessary in connection with borrowings described in subparagraph 3 above.
Any such pledge, hypothecation, or transfer may not exceed 10 percent of the
Government Bond Fund's total assets, at the lesser of cost or market value.

5. Underwrite securities of other issuers or acquire securities that
must be registered under the Securities Act of 1933, as amended, before they
may be sold to the public.

6. Purchase securities that are other than direct obligations of the
U.S. Government and repurchase agreements with respect to those obligations.

7. Invest more than 10 percent of total assets in repurchase
agreements.

8. Purchase or sell real estate or real estate contracts, including
futures contracts.

9. Purchase or sell commodities or commodities contracts, including
futures contracts.

10. Purchase securities with maturities in excess of three years from
the date of purchase.

11. Make loans to other persons except by purchase of debt obligations
in which the Government Bond Fund may invest and repurchase agreements with
respect to those obligations.

12. Purchase securities of other investment companies.

Some of the policies described above prohibit particular practices.
Other policies (paragraphs 3, 4, and 7) permit specified practices but limit
the portion of the Government Bond Fund's assets that may be so invested.
Other than the practices indicated in paragraph 7, the Government Bond Fund
has not engaged in any of these permitted practices during the last year and
has no current intention of doing so in the foreseeable future.

COLUMBIA FIXED INCOME SECURITIES FUND, INC.

The Bond Fund may not:

1. Buy or sell commodities or commodity futures contracts.

28
<PAGE>

instrumentalities, and (c) invest for defensive purposes up to 80 percent of
the value of its total assets in certificates of deposit (C/D's) and bankers'
acceptances with maturities not greater than one year. C/D's and banker's
acceptances will be limited to domestic banks which have total assets in
excess of one billion dollars and are subject to regulatory supervision by the
U.S. Government or state governments. Commitments to purchase securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities on a "when-issued" basis may not exceed 20 percent of the
total assets of the Bond Fund. Emphasis on investments in securities of a
particular industry will be shifted whenever the Advisor determines that such
action is desirable for investment reasons. The Board of Directors will
periodically review these decisions of the Advisor.

3. Buy or sell real estate. However, the Bond Fund may purchase or
hold readily marketable securities issued by companies such as real estate
investment trusts, which operate in real estate or interests therein, and
participation interests in pools of real estate mortgage loans.

4. Make loans to other persons (except by purchase of short-term
commercial paper, bonds, debentures, or other debt securities constituting
part of an issue). The Bond Fund may lend portfolio securities to broker-
dealers or other institutional investors if, as a result thereof, the
aggregate value of all securities loaned does not exceed 33 1/3 percent of its
total assets.

5. The Bond Fund may not purchase a repurchase agreement with a
maturity greater than seven days or a security that is subject to legal or
contractual restrictions on resale or for which there are no readily available
market quotations, if, as a result of such purchase, more than 10 percent of
its total assets (taken at current value) are invested in such securities.

6. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 10 percent of the outstanding voting securities
of that issuer to be held in the Bond Fund.

7. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the value of its total assets at
market value to be invested in the securities of that issuer (other than
obligations of the U.S. Government and its instrumentalities), with reference
to 75 percent of the assets of the Bond Fund.

8. Purchase or retain securities issued by an issuer, any of whose
officers or directors or security holders is an officer or director of the
Bond Fund or of its advisor if, or so long as, the officers and directors of
the Bond Fund and of its advisor together own beneficially more than 5 percent
of any class of securities of the issuer.

9. Purchase securities of other open-end investment companies.

10. Issue senior securities, bonds, or debentures.

11. Underwrite securities of other issuers, except the Bond Fund may
acquire portfolio securities in circumstances where, if the securities are
later publicly offered or sold by the Bond Fund, it might be deemed to be an
underwriter for purposes of the Securities Act of 1933.

12. Borrow money except as a temporary measure for extraordinary or
emergency purposes. Its borrowings may not exceed 5 percent of the value of
the gross assets of the Bond Fund taken at the lesser of cost or market value,
nor may it pledge, mortgage, or hypothecate assets taken at market to an
extent greater than 10 percent of the value of the gross assets taken at cost
of the Bond Fund.

13. Invest in the securities of any company if the purchase, at the
time thereof, would cause more than 5 percent of the value of the Bond Fund's
total assets to be invested in companies which, including predecessors and
parents, have a record of less than three years of continuous operation.

14. Invest in companies to exercise control or management.

29
<PAGE>

15. Buy any securities or other property on margin, or purchase or
sell puts or calls, or combinations thereof.

16. Engage in short sales of securities except to the extent that it
owns other securities convertible into an equivalent amount of such
securities. These short sales may only be made to protect a profit in or to
attempt to minimize a loss with respect to convertible securities. In any
event no more than 10 percent of the value of the Bond Fund's net assets taken
at market may, at any time, be held as collateral for such sales.

Some of the practices described above prohibit particular practices.
Other policies (paragraphs 2, 4, 5, 12, 13, and 16) permit specified practices
but limit the portion of the Bond Fund's assets that may be so invested.
Subject to the investment restriction, the Bond Fund expects to engage in the
practices described in paragraph 5 (restricted securities). (See the
Prospectus for additional information.) The Bond Fund has no intention of
engaging in the other permitted practices in the foreseeable future.

COLUMBIA MUNICIPAL BOND FUND, INC.

The Municipal Bond Fund may not:

1. Buy or sell real estate, but this shall not prevent the Municipal
Bond Fund from investing in municipal obligations secured by real estate or
interests therein.

2. Make loans to other persons except by purchase of debt securities
constituting all or part of an issue or through the loan of portfolio
securities and as otherwise permitted by the Municipal Bond Fund's investment
restrictions.

3. Purchase more than 10 percent of the voting securities of any
issuer.

4. Buy or sell commodities or commodity future contracts.

5. Purchase securities of other investment companies if, as a result
of the purchase, more than 10 percent of the assets of the Municipal Bond Fund
is invested in such securities.

6. Issue senior securities, bonds, or debentures.

7. Sell securities short or buy any securities or other property on
margin, except for short-term credits necessary for clearing transactions.

8. Lend portfolio securities to broker-dealers or other institutional
investors if, as a result, the aggregate value of all securities loaned
exceeds 33 1/3 percent of the total assets of the Municipal Bond Fund.

9. Underwrite securities of other issuers, except that the Municipal
Bond Fund may acquire portfolio securities in circumstances where, if the
securities are later publicly offered or sold by the Municipal Bond Fund, it
might be deemed an underwriter for purposes of the Securities Act of 1933.

10. Borrow money except temporarily for extraordinary or emergency
purposes; nor may it pledge, mortgage, or hypothecate assets having a market
value greater than 10 percent of the cost of the gross assets of the Municipal
Bond Fund. For amounts borrowed, the Municipal Bond Fund shall maintain an
asset coverage of 300 percent for all borrowings. This restriction means that
the Municipal Bond Fund may not borrow money in an amount exceeding 50 percent
of its gross assets. The Municipal Bond Fund will not make any additional
investments while borrowings exceed 5 percent of the value of the Fund's total
assets.

11. Invest more than 25 percent of its assets in a single industry.

Some of the policies described above prohibit particular practices.
Other policies (paragraphs 5, 8, and 10) permit specified practices but limit
the portion of the Municipal Bond

30
<PAGE>

Fund's assets that may be so invested. Other than the practices indicated in
paragraph 5, the Municipal Bond Fund has not engaged in any of these
permitted practices during the last year and has no current intention of
doing so in the foreseeable future.

COLUMBIA HIGH YIELD FUND, INC.

The High Yield Fund may not:

1. Buy or sell commodities or commodity futures contracts.

2. Concentrate investments in any industry. However, it may (a)
invest up to 25 percent of the value of its total assets in any one industry,
(b) invest up to 100 percent of the value of its total assets in securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, and (c) invest for defensive purposes up to 80 percent of
the value of its total assets in certificates of deposit (CD's) and bankers'
acceptances with maturities not greater than one year. CD's and banker's
acceptances will be limited to domestic banks which have total assets in
excess of $1 billion and are subject to regulatory supervision by the U.S.
Government or state governments. Commitments to purchase securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities on a
"when-issued" basis may not exceed 20 percent of the total assets of the High
Yield Fund. Emphasis on investments in securities of a particular industry
will be shifted whenever the Advisor determines that such action is desirable
for investment reasons. The Board of Directors will periodically review these
decisions of the Advisor.

3. Buy or sell real estate. However, the High Yield Fund may purchase
or hold readily marketable securities issued by companies, such as real estate
investment trusts, that operate in real estate or interests therein, and
participation interests in pools of real estate mortgage loans.

4. Make loans to other persons (except by purchase of short-term
commercial paper, bonds, debentures, or other debt securities constituting
part of an issue). The High Yield Fund may lend portfolio securities to
broker-dealers or other institutional investors if, as a result thereof, the
aggregate value of all securities loaned does not exceed 33 1/3 percent of its
total assets.

5. Purchase illiquid securities, including restricted securities and
repurchase agreements of more than seven days maturity, if upon the purchase
more than 10 percent of the value of the High Yield Fund's net assets would
consist of these securities. "Illiquid securities" are securities that may
not be sold or disposed of in the ordinary course of business within seven
days at approximately the price used to determine the Fund's net asset value
and include restricted securities that are subject to legal or contractual
restrictions on resale. Certain restricted securities that can be resold to
qualifying institutions pursuant to a regulatory exemption under Rule 144A of
the Securities Act of 1933 and for which a dealer or institutional trading
market exists may be deemed to be liquid securities by the Board of Directors
of the Fund and, therefore, are not subject to the above investment
restriction.

6. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 10 percent of the outstanding voting securities
of that issuer to be held in the High Yield Fund.

8. Purchase or retain securities of an issuer if those officers or
directors of the High Yield Fund or the Advisor who individually own more than
1/2 of 1% of the outstanding securities of that issuer together own more than
5% of such securities.

9. Purchase securities of other open-end investment companies.

31
<PAGE>

10.Issue senior securities, bonds, or debentures.

11.Underwrite securities of other issuers, except the High Yield Fund
may acquire portfolio securities in circumstances where, if the securities are
later publicly offered or sold by the Fund, it might be deemed to be an
underwriter for purposes of the Securities Act of 1933.

12.Borrow money except as a temporary measure for extraordinary or
emergency purposes. Its borrowings may not exceed 5 percent of the gross
assets of the High Yield Fund valued at the lesser of cost or market value,
nor may it pledge, mortgage, or hypothecate assets valued at market to an
extent greater than 10 percent of the gross assets valued at cost of the Fund.

13.Invest in the securities of any company if the purchase, at the
time thereof, would cause more than 5 percent of the value of the High Yield
Fund's total assets to be invested in companies which, including predecessors
and parents, have a record of less than three years of continuous operation.

14.Invest in companies to exercise control or management.

15.Buy any securities or other property on margin, except for short-
term credits necessary for clearing transactions and except that margin
payments and other deposits in connection with transactions in options,
futures, and forward contracts shall not be deemed to constitute purchasing
securities on margin.

16.Engage in short sales of securities except to the extent that it
owns other securities convertible into an equivalent amount of such
securities. These short sales may only be made to protect a profit in or to
attempt to minimize a loss with respect to convertible securities. In any
event no more than 10 percent of the High Yield Fund's net assets valued at
market may, at any time, be held as collateral for such sales.

17.Invest directly in oil, gas, or other mineral development or
exploration programs or leases; although, the Fund may own securities of
companies engaged in those businesses.

Some of the practices described above prohibit particular practices.
Certain policies described in paragraphs 4, 5, 12, 13, and 16 permit specified
practices but limit the portion of the High Yield Fund's assets that may be so
invested. Except for the practices described in paragraph 5, the Fund has no
current intention of engaging in any of these permitted practices in the
foreseeable future.

OTHER RESTRICTIONS

To permit the sale of shares of a Fund in certain states, a Fund may
make commitments more restrictive than the fundamental restrictions described
above. If the Board of Directors of that Fund determines that a commitment is
no longer in the best interests of that Fund and its shareholders, it will
revoke the commitment, terminate sales of its shares in the state(s) involved,
and notify the affected shareholders.

32
<PAGE>

______________________________________________________________________________

ADDITIONAL INFORMATION REGARDING CERTAIN
INVESTMENTS BY THE FUNDS
______________________________________________________________________________

INVESTMENTS BY THE BALANCED FUND, THE BOND FUND, AND THE HIGH YIELD FUND

Securities held in the portfolios of the Balanced Fund, the Bond Fund,
and the High Yield Fund may include a variety of fixed income debt securities,
such as bonds, debentures, notes, equipment trust certificates, short-term
obligations (those having maturities of 12 months or less), such as prime
commercial paper and bankers' acceptances, domestic certificates of deposit,
obligations of or guaranteed by the U.S. Government and its agencies or
instrumentalities, Government National Mortgage Association (GNMA) mortgage-
backed certificates and other similar securities representing ownership in a
pool of loans ("pass-through securities"), and repurchase agreements with
banks or securities dealers relating to these securities. Portfolio
securities may have variable or "floating" interest rates. Information
regarding certain of these securities is included below. Investments may also
be made in fixed income preferred stocks. Debt securities and preferred
stocks may be convertible into, or exchangeable for, common stocks, and may
have warrants attached.

Depending on prevailing market conditions, debt securities may be
purchased at a discount from face value, producing a yield of more than the
coupon rate, or at a premium over face value, producing a yield of less than
the coupon rate. In making investment decisions, a Fund's advisor will
consider factors other than current yield, such as preservation of capital,
maturity, and yield to maturity. Common stocks acquired through exercise of
conversion rights or warrants or acceptance of exchange or similar offers will
not be retained in the portfolio. Orderly disposition of these equity
securities will be made consistent with management's judgment as to the best
obtainable price.

To achieve its investment objective, each of the Balanced Fund and the
Bond Fund expects to invest a major portion (normally at least 95 percent) of
its fixed income assets in investment grade debt securities. "Investment
grade" debt securities are considered to be those which at the time of the
investment are (a) rated BAA or higher by Moody's Investor Services, Inc.
(Moody's), (b) rated BBB or higher by Standard and Poor's Corporation (S&P),
or (c) unrated, but believed by the Advisor for the Balanced Fund and the Bond
Fund to be equivalent to securities with those ratings. See the Prospectus
under "Additional Information -- Bond Ratings" for information regarding
investment-grade securities. Up to five percent of such of the Balanced
Fund's and Bond Fund's assets may be invested in lower grade securities (rated
Ba or B by Moody's or BB or B by S&P) when the Balanced Fund's or Bond Fund's
Advisor believes these securities present attractive investment opportunities
notwithstanding their speculative characteristics. See the Prospectus under
"Risk Factors" for a description of the risks of investing in lower-rated
securities and under "Additional Information" for a description of corporate
bond ratings.

To achieve its investment objective, the High Yield Fund generally will
invest at least 65% of its total assets in high yielding fixed income
securities rated Ba or lower by Moody's or BB or lower by S&P. No more than
10% of the Fund's total assets may be invested in fixed income securities
rated Caa or lower by Moody's or CCC or lower by S&P. The High Yield Fund may
also invest in unrated fixed income securities when the Fund's Advisor
believes the security is of comparable quality to that of securities eligible
for purchase by the Fund. Securities rated Ba or less by Moody's or BB or
less by S&P, commonly referred to as "junk bonds," are considered
noninvestment grade securities, subject to a high degree of risk, and
considered speculative by the major credit rating agencies with respect to the
issuer's ability to meet principal and interest payments. The High Yield Fund
is designed for investors who are willing to assume substantial risks of
significant fluctuations in principal value in order to achieve a high level
of current income. The High Yield Fund should represent only a portion of a
balanced investment program. See the Prospectus under "Risk Factors" for a
description of the risks of investing in lower-rated securities and under
"Additional Information" for a description of corporate bond ratings.

33
<PAGE>

GOVERNMENT SECURITIES

Government securities may be either direct obligations of the U.S.
Government or may be the obligations of an agency or instrumentality of the
United States.

TREASURY OBLIGATIONS. The U.S. Treasury issues a variety of marketable
securities that are direct obligations of the U.S. Government. These
securities fall into three categories - bills, notes, and bonds -
distinguished primarily by their maturity at time of issuance. Treasury bills
have maturities of one year or less at the time of issuance, Treasury notes
currently have maturities of 1 to 10 years, and Treasury bonds can be issued
with any maturity of more than 10 years.

OBLIGATIONS OF AGENCIES AND INSTRUMENTALITIES. Agencies and
instrumentalities of the U.S. Government are created to fill specific
governmental roles. Their activities are primarily financed through
securities whose issuance has been authorized by Congress. Agencies and
instrumentalities include Export Import Bank, Federal Housing Administration,
Government National Mortgage Association, Tennessee Valley Authority, Banks
for Cooperatives, Farmers Home Administration, Federal Home Loan Banks,
Federal Intermediate Credit Banks, Federal Land Banks, Federal National
Mortgage Association, Federal Home Loan Mortgage Corp., U.S. Postal System,
and Federal Finance Bank. Although obligations of "agencies" and
"instrumentalities" are not direct obligations of the U.S. Treasury, payment
of the interest or principal on these obligations is generally backed directly
or indirectly by the U.S. Government. This support can range from the backing
of the full faith and credit of the United States to U.S. Treasury guarantees,
or to the backing solely of the issuing instrumentality itself.

MORTGAGE-BACKED CERTIFICATES

GNMA (Government National Mortgage Association) Certificates
("Certificates") are mortgage-backed securities. The Certificates evidence
part ownership of a pool of mortgage loans. The Certificates which the Bond
Fund may purchase are of the "modified pass-through" type. "Modified pass-
through" Certificates entitle the holder to receive all interest and principal
payments owed on the mortgage pool, net of fees paid to the servicing agent
and GNMA, regardless of whether or not the mortgagor actually makes the
payment.

THE GNMA GUARANTEE. The National Housing Act authorizes GNMA to
guarantee the timely payment of principal of and interest on securities backed
by a group (or pool) of mortgages insured by the FHA or guaranteed by the VA.
The GNMA guarantee is backed by the full faith and credit of the United
States. GNMA is also empowered to borrow without limitation from the U.S.
Treasury to make any payments required under its guarantee.

THE LIFE OF GNMA CERTIFICATES. The average life of GNMA Certificates is
likely to be substantially less than the original maturity of the mortgage
pools underlying the securities. Regular payments and prepayments of principal
by mortgagors and mortgage foreclosures will result in the return of the
greater part of principal invested well before the maturity of the mortgages
in the pool. (Because of the GNMA guarantee, foreclosures impose no risk to
principal investment.)

Because prepayment rates of individual mortgage pools will vary widely,
it is not possible to predict accurately the average life of a particular
issue of GNMA Certificates. However, statistics published by the FHA are
normally used as an indicator of the expected average life of GNMA
Certificates. These statistics indicate that the average life of single-
family dwelling mortgages with 25-30 year maturities, the type of mortgages
backing the vast majority of GNMA Certificates, is approximately 12 years.
For this reason, it is standard practice to treat GNMA Certificates as 30-year
mortgage-backed securities which prepay fully in the 12th year.

YIELD CHARACTERISTICS OF GNMA CERTIFICATES. The coupon rate of interest
of GNMA Certificates is lower than the interest rate paid on the VA-guaranteed
or FHA-insured mortgages underlying the Certificates, but only by the amount
of the fees paid to GNMA and the servicing agent. For the most common type of
mortgage pool, containing single-family dwelling mortgages, GNMA receives an
annual fee of 0.06 of 1 percent of the outstanding principal for providing its

34
<PAGE>

guarantee, and the issuer is paid an annual fee of 0.44 of 1 percent for
assembling the mortgage pool and for passing through monthly payments of
interest and principal to Certificate holders.

The coupon rate by itself, however, does not indicate the yield which
will be earned on the Certificates for the following reasons:

1. Certificates may be issued at a premium or discount rather than at
par.

2. After issuance, certificates may trade in the secondary market at
a premium or discount.

3. Interest is earned monthly, rather than semi-annually as for
traditional bonds. Monthly payment has the effect of raising the effective
yield earned on GNMA Certificates.

4. The actual yield of each GNMA Certificate is influenced by the
prepayment experience of the mortgage pool underlying the Certificate. That
is, if borrowers pay off their mortgages early, the principal returned to
Certificate holders may be reinvested at more or less favorable rates.

In quoting yields for GNMA Certificates, the standard practice is to
assume that the Certificates will have a 12-year life. Compared on this
basis, GNMA Certificates have historically yielded roughly .50 of 1 percent
more than high-grade corporate bonds and 1 percent more than U.S. Government
and U.S. Government Agency bonds. As the life of individual pools may vary
widely, however, the actual yield earned on any issue of GNMA Certificates may
differ significantly from the yield estimated on the assumption of a 12-year
life.

MARKET FOR GNMA CERTIFICATES. Since the inception of the GNMA Mortgage-
Backed Securities program in 1970, the amount of GNMA Certificates outstanding
has grown rapidly. The size of the market and the active participation in the
secondary market by securities dealers and many types of investors make the
GNMA Certificates a highly liquid instrument. Prices of GNMA Certificates are
readily available from securities dealers and depend on, among other things,
the level of market interest rates, the Certificate's coupon rate, and the
prepayment experience of the pool of mortgages backing each Certificate.

OTHER PASS-THROUGH CERTIFICATES. The Funds may invest in other pass-
through securities. These are mortgage-backed securities for which the
payments on the underlying mortgages are passed from the mortgage holder
through the servicing agent, net of fees paid to the servicing agent, to the
Fund. These securities may be "modified pass-through certificates" (like GNMA
certificates), whereby the Fund would receive interest and principal payments
regardless of whether the mortgagors make the payments, or they may be
"straight pass-through certificates", whereby the Bond Fund would receive
interest and principal only to the extent actually collected by the servicing
agent. The servicing agent may be an instrumentality or agency of the U.S.
Government or may be an institution such as a bank or savings and loan
association. The underlying mortgages may be conventional mortgages as well as
mortgages guaranteed by federal agencies or instrumentalities. Straight pass-
through securities involve additional risks because payments are not
guaranteed. However, this risk may be mitigated to the extent that the
underlying mortgages are guaranteed by a federal agency or instrumentality or
by a private insurance company. Examples of pass-through securities that the
Funds may purchase are: Federal National Mortgage Association; Federal Home
Loan Mortgage Corporation (Participation Certificates); Conventional Mortgage
Pass-Through Certificates (CONNIE MAC); Residential Funding Corp.
Participation Certificates and Federal Housing Administration Insured Project
Pass-Through Pools.

FLOATING OR VARIABLE RATE SECURITIES

Floating or variable rate securities have interest rates that
periodically change according to the rise and fall of a specified interest
rate index or a specific fixed-income security that is used as a benchmark.
The interest rate typically changes every six months, but for some securities
the rate may fluctuate weekly, monthly, or quarterly. The index used is often
the rate for 90 or 180-day Treasury Bills. Variable-rate and floating-rate
securities may

35
<PAGE>

have interest rate ceilings or caps that fix the interest rate on such a
security if, for example, a specified index exceeds a predetermined interest
rate. If an interest rate on a security held by a Fund becomes fixed as a
result of a ceiling or cap provision, the interest income received by the
Fund will be limited by the rate of the ceiling or cap. In addition, the
principal values of these types of securities will be adversely affected if
market interest rates continue to exceed the ceiling or cap rate.

COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS")

CMOs are obligations fully collateralized by a portfolio of mortgages or
mortgage-related securities. Payments of principal and interest on the
mortgages are passed through to the holders of the CMOs on the same schedule
as they are received, although certain classes of CMOs have priority over
others with respect to the receipt of prepayments on the mortgages.
Therefore, depending on the type of CMOs in which a Fund invests, the
investment may be subject to a greater or lesser risk of prepayment than other
types of mortgage-related securities. Changes in assumed prepayment rates
have the effect of shortening or lengthening the effective maturity of the CMO
held by a Fund. CMOs may also be less marketable than other securities. A
Fund will only invest in CMOs issued by agencies or instrumentalities of the
U.S. Government or privately-issued CMOs carrying investment-grade ratings.
In addition, a Fund will invest only in those CMOs whose characteristics and
terms are consistent with the average maturity and market risk profile of the
other fixed income securities held by the Fund.

INVESTMENTS BY COLUMBIA MUNICIPAL BOND FUND, INC.

Municipal bonds are issued to obtain funds for various public purposes.
The two principal classifications of municipal bonds are "general obligation"
bonds and "revenue" or "special tax" bonds. General obligation bonds are
secured by the issuer's pledge of its full faith, credit, and taxing power for
the payment of principal and interest. Revenue and special tax bonds are
payable only from the revenue derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise or other
tax.

Industrial development, pollution control, or other private activity
bonds backed by private corporations do not generally have the pledge of the
credit of the issuing body but are secured only by the credit of the
corporation benefiting from the facilities being financed. For the purpose of
the Municipal Bond Fund's investment restrictions, identification of the
"issuer" of municipal bonds that are not general obligation bonds is made by
the Advisor on the basis of the characteristics of the obligation as described
above, the most significant of which is the source of funds for payment of
principal and interest on such bonds. The Municipal Bond Fund may invest more
than 25 percent of its assets in industrial development bonds or private
activity bonds.

The yields of municipal bonds are dependent on a variety of factors,
including general money market conditions, general conditions of the municipal
bond market, size of the offering, the maturity of the obligation, whether
interest on the obligation is subject to alternative minimum tax, and rating
of the issue. The ratings of Moody's and S&P represent their opinions of the
quality of the municipal bonds they undertake to rate. These ratings,
however, are general and not absolute standards of quality. Consequently,
municipal bonds with the same maturity, coupon, and rating may have different
yields, while municipal bonds of the same maturity and coupon with different
ratings may have the same yield. The yield on municipal bonds is generally
lower than on corporate issues, but the interest paid is not includible in
gross income for federal income tax purposes.

The Municipal Bond Fund's investment restrictions permit it to borrow
money temporarily for extraordinary or emergency purposes in an amount not
exceeding 50 percent of its gross assets. During any period in which large
borrowings are outstanding, the interest paid by the Municipal Bond Fund on
such borrowings would reduce the yield to shareholders. Accordingly, in the
event of large borrowings the yield to shareholders is expected to be lower
than that of mutual funds that restrict borrowings to a lower percentage of
assets.

36
<PAGE>

SECURITIES RATING AGENCIES

Subsequent to its purchase by a Fund, an issue may cease to be rated, or
its rating may be reduced below the criteria set forth for that Fund. Neither
event would require the elimination of bonds from the Fund's portfolio, but
the Advisor will consider that event in its determination of whether the Fund
should continue to hold such security in its portfolio. To the extent the
ratings accorded by S&P or Moody's for securities may change as a result of
changes in such organizations or changes in the rating systems, the Funds will
attempt to use comparison ratings as standards for its investments in bonds in
accordance with the policies described herein.

COMMERCIAL PAPER RATINGS. A1 and Prime 1 are the highest commercial
paper ratings issued by S&P and Moody's respectively.

Commercial paper rated A1 by S&P has the following characteristics: (1)
liquidity ratios are adequate to meet cash requirements; (2) long-term senior
debt is rated A or better; (3) the issuer has access to at least two
additional channels of borrowing; (4) basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances; (5) typically, the
issuer's industry is well established and the issuer has a strong position
within the industry; and (6) the reliability and quality of management are
unquestioned.

Among the factors considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; (3) evaluation
of the issuer's products in relation to competition and customer acceptance;
(4) liquidity; (5) amount and quality of long-term debt; (6) trend of earnings
over a period of 10 years; (7) financial strength of a parent company and the
relationships which exist with the issuer; and (8) recognition by the
management of obligations which may be present or may rise as a result of
public interest questions and preparation to meet such obligations.

BOND RATINGS. See the Prospectus under "Additional Information -- Bond
Ratings" for a description of the ratings used by Moody's and S&P.

LOAN TRANSACTIONS

Loan transactions involve the lending of securities to a broker-dealer
or institutional investor for its use in connection with short sales,
arbitrage, or other securities transactions. Loans of portfolio securities of
a Fund that is permitted under its investment restrictions to make loans will
be made (if at all) in strictest conformity with applicable federal and state
rules and regulations. The purpose of a qualified loan transaction is to
afford a Fund the opportunity to continue to earn income on the securities
loaned and at the same time to earn income on the collateral held by it.

Management of the Funds understands that it is the view of the Staff of
the Securities and Exchange Commission that a Fund is permitted to engage in
loan transactions only if the following conditions are met: (1) the Fund must
receive at least 100 percent collateral in the form of cash, cash equivalents,
E.G., U.S. Treasury bills or notes, or an irrevocable letter of credit; (2)
the borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the level of the
collateral; (3) the Fund must be able to terminate the loan, after notice, at
any time; (4) the Fund must receive reasonable interest on the loan or a flat
fee from the borrower, as well as amounts equivalent to any dividends,
interest, or other distributions on the securities loaned and any increase in
market value; (5) the Fund may pay only reasonable custodian fees in
connection with the loan; (6) voting rights on the securities loaned may pass
to the borrower; however, if a material event affecting the investment occurs,
the Directors must be able to terminate the loan and vote proxies or enter
into an alternative arrangement with the borrower to enable the Directors to
vote proxies. Excluding items (1) and (2), these practices may be amended
from time to time as regulatory provisions permit.

While there may be delays in recovery of loaned securities or even a
loss of rights in collateral supplied if the borrower fails financially, loans
will be made only to firms deemed by a Fund's management to be of good
standing and will not be made unless, in the judgment of the

37
<PAGE>

Fund's management, the consideration to be earned from such loans would
justify the risk. Such loan transactions are referred to in this section as
"qualified loan transactions."

CERTIFICATES OF DEPOSIT

Certificates of Deposit are receipts issued by a U.S. bank in exchange
for the deposit of funds. The U.S. bank agrees to pay the amount deposited,
plus interest, to the bearer of the receipt on the date specified on the
certificate. Because the certificate is negotiable, it can be traded in the
secondary market before maturity. Under current FDIC regulations, $100,000 is
the maximum insured amount of Certificates of Deposit issued to a Fund by any
one bank. Therefore, Certificates of Deposit purchased by a Fund may not be
fully insured.

BANKERS' ACCEPTANCES

Time drafts are drawn on a U.S. bank by an exporter or importer to
obtain a stated amount of funds to pay for specific merchandise or, less
frequently, foreign exchange. The draft is then "accepted" by the U.S. bank
(the drawee) which in effect unconditionally guarantees to pay the face value
of the instrument on its maturity date. The face of the instrument specifies
the dollar amount involved, the maturity date and the nature of the underlying
transaction.

LETTERS OF CREDIT

Letters of Credit are issued by banks and authorize the beneficiary to
draw drafts upon such banks for acceptance and payment under specified
conditions.

COMMERCIAL PAPER

Commercial paper is an unsecured short-term note of indebtedness issued
in bearer form by business or banking firms to finance their short-term credit
needs.

WARRANTS

Warrants are in effect longer-term call options. They give the holder
the right to purchase a given number of shares of a particular company at
specified prices within certain periods of time. The purchaser of a warrant
expects that the market price of the security will exceed the purchase price
of the warrant plus the exercise price of the warrant, thus giving him a
profit. Since the market price may never exceed the exercise price before the
expiration date of the warrant, the purchaser of the warrant risks the loss of
the purchase price of the warrant. Warrants generally trade in the open
market and may be sold rather than exercised. Warrants are sometimes sold in
unit form with other securities of an issuer. Units of warrants and common
stock may be employed in financing young, unseasoned companies. The purchase
price of a warrant varies with the exercise price of the warrant, the current
market value of the underlying security, the life of the warrant, and various
other investment factors. Each Fund's investment restrictions do not limit
the percentage of the Fund's assets that may be invested in warrants, but each
Fund does not intend to invest more than 5 percent of its assets in warrants
or more than 2 percent of its assets in warrants that are not listed on the
New York Stock Exchange or American Stock Exchange.

DOLLAR ROLL TRANSACTIONS

The Balanced Fund and the Bond Fund may enter into "dollar roll"
transactions, which consist of the sale by the Fund to a bank or broker-dealer
(the "counterparty") of GNMA certificates or other mortgage-backed securities
together with a commitment to purchase from the counterparty similar, but not
identical, securities at a future date and at the same price. The
counterparty receives all principal and interest payments, including
prepayments, made on the security while it is the holder. The Fund receives a
fee from the counterparty as consideration for entering into the commitment to
purchase. Dollar rolls may be renewed over a period of several months with a
new purchase and repurchase price fixed and a cash settlement made at each
renewal without physical delivery of securities. Moreover, the transaction
may be preceded by a

38
<PAGE>

firm commitment agreement pursuant to which the Balanced
Fund or the Bond Fund agrees to buy a security on a future date.

The Balanced Fund and the Bond Fund will not use such transactions for
leveraging purposes and, accordingly, will segregate cash, U.S. Government
securities or other high grade debt obligations in an amount sufficient to
meet their purchase obligations under the transactions. The Funds will also
maintain asset coverage of at least 300% for all outstanding firm commitments,
dollar rolls and other borrowings.

Dollar rolls may be treated for purposes of the Investment Company Act
of 1940 (the "1940 Act") as borrowings of the Fund because they involve the
sale of a security coupled with an agreement to repurchase. Like all
borrowings, a dollar roll involves costs to the Fund. For example, while the
Fund receives a fee as consideration for agreeing to repurchase the security,
the Fund forgoes the right to receive all principal and interest payments
while the counterparty holds the security. These payments to the counterparty
may exceed the fee received by the Fund, thereby effectively charging the Fund
interest on its borrowing. Further, although the Fund can estimate the amount
of expected principal prepayment over the term of the dollar roll, a variation
in the actual amount of prepayment could increase or decrease the cost of the
Fund's borrowing.

The entry into dollar rolls involves potential risks of loss which are
different from those related to the securities underlying the transactions.
For example, if the counterparty becomes insolvent, the Fund's right to
purchase from the counterparty might be restricted. Additionally, the value
of such securities may change adversely before the Fund is able to purchase
them. Similarly, the Fund may be required to purchase securities in
connection with a dollar roll at a higher price than may otherwise be
available on the open market. Since, as noted above, the counterparty is
required to deliver a similar, but not identical security to the Fund, the
security which the Fund is required to buy under the dollar roll may be worth
less than an identical security. Finally, there can be no assurance that the
Balanced Fund's or the Bond Fund's use of the cash that it receives from a
dollar roll will provide a return that exceeds borrowing costs.

<PAGE>

COLUMBIA DAILY INCOME COMPANY

PART C

OTHER INFORMATION

Item 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements:

Financial Highlights are located on page 5 of the Prospectus. The
Schedule of Investments and Statement of Assets and Liabilities as of
December 31, 1995, the related Statement of Operations for the year ended
December 31, 1995, the Statements of Changes in Net Assets for the years
ended December 31, 1995 and 1994, the selected per share data and ratios
under the caption "Financial Highlights," and the notes thereto, and the
report of Independent Accountants are included in the Annual Report to
Shareholders for the year ended December 31, 1995, which is incorporated
into the Statement of Additional Information by reference.

(b) Exhibits:

(1) Registrant's Articles of Incorporation. Incorporated by
reference to Exhibit 1 to Post-Effective Amendment No. 29,
File No. 2-51727 ("Amendment No. 29").

(2) Restated Bylaws. Incorporated by reference to Exhibit 2 to
Post-Effective Amendment No. 44, File No. 2-51727
("Amendment No. 44").

(4A) Specimen Stock Certificate. Incorporated by reference to
Exhibit 4 to Amendment No. 29.

(4B) Application. Incorporated by reference to Exhibit 4B to
Amendment No. 44.

(5) Restated Investment Advisory Contract.

(6) Distribution Agreement. Incorporated by reference to
Exhibit 6 to Post-Effective Amendment No. 40, File
No. 2-51727

(8) Custodian Contract with United States National Bank of
Oregon. Incorporated by reference to Exhibit 8 to Amendment
No. 44.

(9) Restated Transfer Agent Agreement. Incorporated by
reference to Exhibit 9 to Post-Effective Amendment No. 35,
File No. 2-51727.

(11) Consent of Accountants.

(12A) See paragraph (a) of Item 24.

(12B) Annual Report to Shareholders.

(14) IRA and retirement plan booklets. Incorporated by reference
to Exhibit 14 to Post-Effective Amendment No. 35, File
No. 2-51727.

C-1
<PAGE>

(17) All Powers of Attorney have been previously filed and are
incorporated herein by reference.

(27) Financial Data Schedule.

Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

The Registrant, Columbia Common Stock Fund, Inc., Columbia Balanced Fund,
Inc., Columbia Growth Fund, Inc., Columbia International Stock Fund, Inc.,
Columbia Special Fund, Inc., Columbia Fixed Income Securities Fund, Inc.,
Columbia Municipal Bond Fund, Inc., Columbia U.S. Government Securities Fund,
Inc., Columbia Real Estate Equity Fund, Inc., and Columbia High Yield Fund,
Inc., each an Oregon corporation, (the "Columbia Funds") have investment
advisory contracts with Columbia Funds Management Company (the "Advisor"), an
Oregon corporation. Columbia Trust Company, an Oregon corporation, is 79% owned
by the Advisor. J. Jerry Inskeep, Jr. and James F. Rippey own 14.9% and 27.2%,
respectively, of the voting securities of the Advisor; 32.3% each of the voting
securities of Columbia Financial Center Incorporated, an Oregon corporation;
41.1% each of the voting securities of Columbia Management Co., an Oregon
corporation; and 3.7% and 1.2%, respectively, of the voting securities of
Columbia Trust Company. See "Management" in Part B. The Registrant does not
have any subsidiaries.

Item 26. NUMBER OF HOLDERS OF SECURITIES

Number of Record Holders
Title of Class at December 31, 1995
--------------- ------------------------

Common Stock 33,644

Item 27. INDEMNIFICATION

Oregon law and the bylaws of the Registrant provide that any director or
officer of the Company may be indemnified by the Registrant against all expenses
incurred by him in connection with any claim, action, suit or proceeding, civil
or criminal, by reason of his being an officer or director of the Registrant,
provided that he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Registrant and, with respect
to any criminal action or proceeding, had no reasonable cause to believe that
his conduct was unlawful.

No indemnification is available in the case of a proceeding by or in the
right of the Registrant in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable for negligence or misconduct
in the performance of his duty to the Registrant, unless otherwise authorized by
the court in which such action or suit was brought.

An officer or director who has been successful on the merits with respect
to any such action, suit or proceeding, or claim, issue or matter therein, is
entitled to indemnification as of right; otherwise, any indemnification shall be
made at the discretion of the Registrant but only if (1) the Board of Directors,
acting by a majority vote of a quorum consisting of directors who are not
"interested persons" as that term is defined in the Investment Company Act of
1940 and who were not parties to such action, suit or proceeding, shall find
that the director or officer involved has met the applicable standards of
conduct, (2) independent legal counsel shall deliver to the Company a written
opinion that such person has met the applicable standards, or (3) the
shareholders vote approval.

Expenses incurred with respect to any such claim, action or proceeding may
be advanced by the Registrant under certain circumstances providing assurance of
repayment or likely entitlement to indemnification upon receipt of an
undertaking by the recipient to repay the advance unless it is ultimately

C-2
<PAGE>

determined that he is entitled to indemnification. The rights of
indemnification provided by the bylaws are not exclusive of any rights to which
any director or officer may otherwise be entitled.

Insofar as reimbursement or indemnification for expenses incurred by a
director or officer in legal proceedings arising under the Securities Act of
1933 may be permitted by the above provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
reimbursement or indemnification is against public policy as expressed in the
Act and therefore unenforceable. In the event that any claim for
indemnification under the above provisions is asserted by an officer or director
in connection with the securities being registered, the Registrant, unless in
the opinion of its counsel the matter has already been settled by controlling
precedent, will (except insofar as such claim seeks reimbursement of expenses
paid or incurred by an officer or director in the successful defense of any such
action, suit or proceeding or claim, issue, or matter therein) submit to a court
of appropriate jurisdiction the question whether indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

The Registrant's directors and officers are also named insureds under an
insurance policy issued by ICI Mutual Insurance Company.

Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR

Information regarding the businesses of the Advisor and its officers and
directors is set forth under "Fund Management" in the Prospectus and under
"Management" and "Investment Advisory and Other Fees Paid to Affiliates" in the
Statement of Additional Information and is incorporated herein by reference.
Columbia Trust Company also acts as trustee and/or agent for the investment of
the assets of pension and profit sharing plans in pooled accounts.

Item 29. PRINCIPAL UNDERWRITERS

Pursuant to a distribution agreement with each of the Columbia Funds,
Columbia Financial is authorized to sell shares of each Fund to the public. No
commission or other compensation is received by Columbia Financial in connection
with the sale of shares of a Fund. Certain information on each director and
officer of Columbia Financial is set forth below:

Name and Principal Positions and Offices Positions and Offices
Business Address with Columbia Financial with Registrant
- --------------------- ----------------------- ----------------------

J. Jerry Inskeep, Jr. Director Chairman and Director
1301 SW Fifth Avenue
Portland, OR 97201

George L. Hanseth President and Director Senior Vice President
1301 SW Fifth Avenue and Treasurer
Portland, OR 97201

John A. Kemp Senior Vice President, President and Director
1301 SW Fifth Avenue Treasurer and Director
Portland, OR 97201

Jeff B. Curtis General Counsel and Secretary
1301 SW Fifth Avenue Secretary
Portland, OR 97201

C-3
<PAGE>

Item 30. LOCATION OF ACCOUNTS AND RECORDS

The records required to be maintained under Section 31(a) of the Investment
Company Act of 1940 and Rules 31a-1 to 31a-3 thereunder are maintained by
Columbia Daily Income Company, Columbia Funds Management Company and Columbia
Trust Company at 1301 SW Fifth Avenue, Portland, Oregon 97201. Records relating
to the Registrant's portfolio securities are also maintained by United States
National Bank of Oregon, 321 SW Sixth Avenue, Portland, Oregon 97208.

Item 31. MANAGEMENT SERVICES

Not applicable.

Item 32. UNDERTAKINGS

The Registrant hereby undertakes to promptly call a meeting of the
shareholders of the Registrant for the purpose of voting on the removal of any
director of the Registrant when requested in writing by shareholders of at least
10 percent of the outstanding shares of Common Stock of the Registrant. The
Registrant undertakes to assist its shareholders in communicating with other
shareholders of the Registrant to the extent required by Section 16 of the
Investment Company Act of 1940 or any regulations promulgated thereunder.

The Registrant hereby undertakes, upon request and without charge, to
furnish a copy of the Registrant's annual report to shareholders to each person
to whom a prospectus is delivered.

C-4

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-
Effective Amendment to the Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in this City of Portland and State
of Oregon on the 20th day of February, 1996.

COLUMBIA DAILY INCOME COMPANY

By JOHN A. KEMP
---------------------------------------------
John A. Kemp
President

Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement has been signed below on the
20th day of February, 1996 by the following persons in the capacities indicated.

(i) Principal executive officer:

JOHN A. KEMP President and Director
- ----------------------------------------
John A. Kemp

(ii) Principal accounting and
financial officer:

GEORGE L. HANSETH Senior Vice President
- ----------------------------------------
George L. Hanseth

(iii) Directors:

* JAMES C. GEORGE Director
- ----------------------------------------
James C. George

* J. JERRY INSKEEP, JR. Chairman of the Board and Director
- ----------------------------------------
J. Jerry Inskeep, Jr.

* THOMAS R. MACKENZIE Director
- ----------------------------------------
Thomas R. Mackenzie

* JAMES F. RIPPEY Director
- ----------------------------------------
James F. Rippey

* RICHARD L. WOOLWORTH Director
- ----------------------------------------
Richard L. Woolworth

* By JOHN A. KEMP
---------------------------------
John A. Kemp
as Attorney-in-fact

C-5
<PAGE>

COLUMBIA DAILY INCOME COMPANY

EXHIBIT INDEX

Exhibit No. Description
- ----------- -----------

(1) Registrant's Articles of Incorporation. Incorporated by
reference to Exhibit 1 to Post-Effective Amendment No. 29, File
No. 2-51727 ("Amendment No. 29").

(2) Restated Bylaws. Incorporated by reference to Exhibit 2 to Post-
Effective Amendment No. 44, File No. 2-51727 ("Amendment
No. 44").

(4A) Specimen Stock Certificate. Incorporated by reference to Exhibit
4 to Amendment No. 29.

(4B) Application. Incorporated by reference to Exhibit 4B to
Amendment No. 44.

(5) Restated Investment Advisory Contract.

(6) Distribution Agreement. Incorporated by reference to Exhibit 6
to Post-Effective Amendment No. 40, File No. 2-51727

(8) Custodian Contract with United States National Bank of Oregon.
Incorporated by reference to Exhibit 8 to Amendment No. 44.

(9) Restated Transfer Agent Agreement. Incorporated by reference to
Exhibit 9 to Post-Effective Amendment No. 35, File No. 2-51727.

(11) Consent of Accountants.

(12A) See paragraph (a) of Item 24.

(12B) Annual Report to Shareholders.

(14) IRA and retirement plan booklets. Incorporated by reference to
Exhibit 14 to Post-Effective Amendment No. 35, File No. 2-51727.

(17) All Powers of Attorney have been previously filed and are
incorporated herein by reference.

(27) Financial Data Schedule.

C-6

<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE AUDITED ANNUAL REPORT OF THE COLUMBIA FUNDS DATED 12/31/95, AND
THE AUDITED ANNUAL REPORT OF THE COLUMBIA FUNDS DATED 12/31/94, AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 806,898,061
<INVESTMENTS-AT-VALUE> 806,898,061
<RECEIVABLES> 1,859,362
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 3,800,000
<TOTAL-ASSETS> 812,557,423
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,901,901
<TOTAL-LIABILITIES> 11,901,901
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 800,655,522
<SHARES-COMMON-STOCK> 800,655,522
<SHARES-COMMON-PRIOR> 730,067,002
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 800,655,522
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 44,653,912
<OTHER-INCOME> 0
<EXPENSES-NET> (4,759,157)
<NET-INVESTMENT-INCOME> 39,894,755
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 39,894,755
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (39,894,755)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,191,109,050
<NUMBER-OF-SHARES-REDEEMED> (1,160,387,368)
<SHARES-REINVESTED> 39,866,838
<NET-CHANGE-IN-ASSETS> 70,588,520
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,611,202
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,759,157
<AVERAGE-NET-ASSETS> 746,933,770
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .053
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.053)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .64
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>

EXHIBIT 99.5

COLUMBIA DAILY INCOME COMPANY

RESTATED INVESTMENT ADVISORY CONTRACT

This Restated Agreement is made the 20th day of April, 1993 between
COLUMBIA DAILY INCOME COMPANY, an Oregon corporation (the "Company"), and
COLUMBIA FUNDS MANAGEMENT COMPANY, an Oregon corporation having its principal
place of business in Portland, Oregon (the "Advisor").

A. The Company is registered as an open-end investment company
pursuant to the Investment Company Act of 1940 (the "Act"). The Advisor is
registered as an investment advisor pursuant to the Investment Advisers Act of
1940:

B. The Fund and the Advisor have entered into an Amended Investment
Advisory Contract dated March 11, 1981 relating to services to be performed by
the Advisor with respect to the Company (the "Amended Agreement"); and

C. The parties desire to restate the Amended Agreement to make
certain typographical corrections, including the change of the name of the name
of the Advisor to Columbia Funds Management Company.

Therefore, the parties agree as follows:

1. DUTIES OF ADVISOR. The Advisor shall regularly provide the Company
with research, advice and supervision with respect to investment matters and
shall furnish continuously an investment program, determine what securities
shall be purchased or sold and what portion of the Company's assets shall be
held invested or uninvested, subject always to the provisions of the Company's
Articles of Incorporation and By-Laws and amendments thereto, which amendments
shall be furnished to the Advisor by the Company, and the Act. The Advisor
shall take such steps as are necessary or appropriate to carry out its decisions
in regard to the foregoing matters and the general conduct of the business of
the Company. The Advisor may take into consideration receipt of research and
statistical information and other services rendered to the Company in the
allocation of commissions from portfolio brokerage business.

2. ALLOCATION OF CHARGES AND EXPENSES. The Advisor shall pay or
reimburse the Company for payments made by it for all executive salaries and
executive expenses, office rent of the Company, marketing expenses and ordinary
office expenses (other than the expense of clerical services relating to the
administration of the Company). The Advisor shall provide investment advisory,
statistical and research facilities, and all clerical services relating to
research, statistical and investment work. The Advisor shall not be required to
pay any expenses of the Company other than those enumerated in this Restated
Agreement.

1
<PAGE>

The Company will assume all other costs, including the cost of its
custodian, legal, auditing and accounting expenses, disinterested directors'
fees, taxes and governmental fees, interest, brokers' commissions, transaction
expenses, cost of stock certificates and any other expenses (including clerical
expenses) of issue, sale, repurchase or redemption of shares, expenses of
registering or qualifying shares for sale, transfer taxes, and all expenses of
preparing the Company's registration statement and prospectus, and the cost of
printing and delivering to shareholders prospectuses and reports.

3. COMPENSATION OF THE ADVISOR. For the services to be rendered, the
facilities to be furnished and the payments to be made by the Advisor, as
provided in Sections 1 and 2 hereof, for each calendar month the Company shall
pay to the Advisor a fee based on the daily net assets and computed as follows:

at the annual rate of .5 of 1% of daily net assets up to
$500,000,000;

at the annual rate of .45 of 1% of daily net assets between
$500,000,001 and $1,000,000,000; and

at the annual rate of .4 of 1% of daily net assets in excess of
$1,000,000,000.

Each monthly payment shall be made promptly after the end of the month to which
it relates. If, pursuant to Article VII of the Articles of Incorporation, the
asset value is not required to be determined on any particular business day,
then for the purposes of this paragraph 3 the asset value of a share as last
determined shall be deemed to be the asset value of a share as of the close of
business on that day. If there is no business day in any calendar month, such
fee shall be computed on the basis of the asset value of a share as last
determined, multiplied by the average number of shares outstanding on the last
day of the month.

4. COVENANTS OF THE ADVISOR. In connection with purchases or sale of
portfolio securities for the account of the Company, neither the Advisor nor any
officer, director or employee of the Advisor shall act as principal. The
Advisor covenants that it and its employees will comply with the investment
restrictions of the Company's By-Laws applicable to them. It is understood
that, if an occasion should arise in which the Advisor may give any advice to
its clients concerning the stock of the Company, it will act solely as
investment counsel for clients and not on behalf of the Company.

5. LIMITATION OF LIABILITY OF ADVISOR. The Advisor shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Company in connection with the matters to which this Restated Agreement relates,
except a loss resulting from willful malfeasance, bad faith or gross negligence
on part of the Advisor in the performance of its duties or from reckless
disregard by the Advisor of its obligations and duties under this Restated
Agreement.

2
<PAGE>

6. DURATION AND TERMINATION OF THIS RESTATED AGREEMENT. This Restated
Agreement shall remain in force for one year from the date hereof, and may be
continued from year to year if approved annually by a vote of a majority of the
outstanding voting securities of the Company or by its Directors and, in either
case, a vote of a majority of Directors, who are not parties to the contract or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.

This Restated Agreement may be terminated at any time without the
payment of any penalty by vote of the Board of Directors of the Company or by
vote of a majority of the outstanding voting securities of the Company, or by
the Advisor, on sixty (60) days' written notice to the other party.

This Restated Agreement shall automatically terminate in the event of
its assignment.

The terms "assignment," "vote of a majority of the outstanding voting
securities" and "interested persons," when used herein, shall have the meanings
specified in the Act.

The Advisor shall notify the Company of any change in the officers or
directors of the Advisor within a reasonable time after the change.

7. AMENDMENTS OF THIS AGREEMENT. No amendment of this Restated Agreement
shall be effective until approved by vote of a majority of the outstanding
voting securities of the Company.

IN WITNESS WHEREOF, the parties have caused this Restated Agreement to
be executed as of the day and year first written above.

COLUMBIA DAILY INCOME COMPANY

By _____________________________
John A. Kemp, President

COLUMBIA FUNDS MANAGEMENT COMPANY

By _____________________________
James F. Rippey, President

<PAGE>

EXHIBIT 99.11

CONSENT OF INDEPENDENT ACCOUNTANTS

To the Directors of Columbia Daily Income Company:

We consent to the inclusion in Post-Effective Amendment No. 46 to the
Registration Statement of Columbia Daily Income Company on Form N-1A (File No.
2-51727) of our report dated January 31, 1996 on our audit of the financial
statements and the financial highlights of the Fund, which report is included in
the Annual Report to Shareholders for the year ended December 31, 1995 which is
included in the Post-Effective Amendment to the Registration Statement. We also
consent to the reference to our Firm under the caption "Independent
Accountants."

COOPERS & LYBRAND L.L.P.
Portland, Oregon
January 31, 1996

<PAGE>
1995 ANNUAL REPORT
---------------------------------------------------

[LOGO]

COLUMBIA FUNDS
COLUMBIA COMMON STOCK FUND, INC.
----------------------------------------------------
COLUMBIA GROWTH FUND, INC.
----------------------------------------------------
COLUMBIA INTERNATIONAL STOCK FUND, INC.
----------------------------------------------------
COLUMBIA SPECIAL FUND, INC.
----------------------------------------------------
COLUMBIA REAL ESTATE EQUITY FUND, INC.
----------------------------------------------------
COLUMBIA BALANCED FUND, INC.
----------------------------------------------------
COLUMBIA DAILY INCOME COMPANY
----------------------------------------------------
COLUMBIA U.S. GOVERNMENT SECURITIES FUND, INC.
----------------------------------------------------
COLUMBIA FIXED INCOME SECURITIES FUND, INC.
----------------------------------------------------
COLUMBIA MUNICIPAL BOND FUND, INC.
----------------------------------------------------
COLUMBIA HIGH YIELD FUND, INC.

COLUMBIA FINANCIAL CENTER INCORPORATED
1301 S.W. Fifth Avenue
P.O. Box 1350
Portland, Oregon 97207-1350
1-800-547-1707
<PAGE>
Letter to Shareholders

Dear Columbia Investor,

We are pleased to present the Columbia Funds 1995 Annual Report. Inside, you
will find a discussion of the economy and financial markets in addition to
performance and investment information for each Columbia Fund.

1995 proved to be an excellent year for investors. Both the stock and bond
markets enjoyed tremendous results during the year, as discussed in greater
detail in "An Overview of the Markets." We hope that you find this information
helpful in evaluating your investments.

As we look to the year ahead, we will continue seeking opportunities to
expand our investor services and systems areas, with an eye toward saving your
Funds money. If you have any questions or want to let us know how we are doing,
please do not hesitate to write or call us toll-free at 1-800-547-1707.

We appreciate your investment in Columbia Funds, and we look forward to
serving your investment needs in the months and years ahead.

Sincerely,

J. Jerry Inskeep
CHAIRMAN

John A. Kemp
PRESIDENT
<PAGE>
AN OVERVIEW OF THE MARKETS
-----------------------------------------------------------------

At this time last year, we said that the long-term outlook for stocks and
bonds seemed more promising and under appreciated than we had observed in a long
time. Even though rising interest rates caused us to question the strength of
the economy at the beginning of 1995, favorable productivity trends, a benign
inflationary environment, and a more fiscally responsible government created an
extremely hospitable environment for financial assets. Long-term interest rates
fell more than expected, and stock prices benefited from the fall in bond yields
as well as from earnings that were far better than expected. And while economic
activity was uneven throughout the year, growth generally met the Federal
Reserve Board's objectives of advancing slowly without inflationary pressures.

<TABLE>
<CAPTION>
Benchmark Performance Comparisons
Average Annual Total Returns
FOR THE PERIODS ENDED DECEMBER 31, 1995

1 year 3 year 5 year 10 year
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Standard & Poor's 500 37.58% 15.35% 16.59% 14.87%
Lehman Aggregate 18.47% 8.07% 9.48% 9.63%
Lehman Bros. Gov't./Corp. 19.24% 8.51% 9.81% 9.65%
Russell 2000 28.44% 14.46% 21.00% 11.32%
Financial Times/S&P
Actuaries
Euro-Pacific 10.62% 16.67% 9.30% N/A
</TABLE>

As we enter 1996, an uncertainty exists as to how aggressive the Fed will be
in lowering interest rates. One view is that the Fed needs to be aggressive in
continuing to lower rates to ensure that the economy recovers from the current
slowdown and avoids recession. Others believe that the underlying economy is
growing at a rate of 2% to 2 1/2% and that only modest easing is necessary. Even
after the rate cut in January, however, short-term rates at 5 1/4% seem high
compared to inflation at 2 1/2% to 3%. This suggests that the Fed has the
flexibility to be aggressive in lowering rates if necessary, particularly since
the dollar has stabilized and interest rates overseas are continuing to decline.

When short-term rates go down, they tend to influence long-term rates
downward as well. Lower long-term rates, in turn, argue for somewhat higher
price/earnings (P/E) ratios. Compared to inflation and bond yields, P/E ratios
seem fairly valued -- but not cheap. This is surprising given the exceptional
gain in stock prices during 1995.

Cautious Optimism

We do not expect earnings growth to match last year's spectacular showing.
In fact, we believe the rate of earnings gain could be flat to up 5% in 1996,
since much of the corporate restructuring that drove earnings growth last year
has been completed and nominal sales growth is so low. Finally, continued
declines in interest rates cannot begin to match the dramatic declines of last
year.
Nevertheless, we remain optimistic about the financial markets for 1996, and
we view the long-range outlook as favorable. The number of Americans reaching
their peak savings years is on the rise. The government drive to reduce budget
deficits seems more serious than at any other time in recent history; it's less
a question of whether to balance the budget, but how quickly to do it. Declining
interest rates and low inflation in the U.S. and throughout the industrial world
suggest the possibility of global pickup in economic activity in late 1996 or
early 1997.
Our main concern is that many of the investors lured into the stock market
over the last several years may have been spoiled by low volatility and constant
gains. With this in mind, a short-term sell-off might be healthy for the
long-term outlook. But as events stand today, the long-term bull market seems
intact, even if stock prices don't increase as much or as rapidly as last year.

1
<PAGE>
AN OVERVIEW OF THE MARKETS, continued
---------------------------------------------------------------------------

Current Strategy

With the economy growing slowly, inflation under control, low interest
rates, and good cash flow into mutual funds, we believe that this is a favorable
environment for financial assets. However, upside earnings surprises will be
more difficult to uncover. Companies that stand out will be those that continue
to innovate, cut costs, compete globally, react to technological changes, and
effectively manage their labor force.
Our research will focus on identifying companies that can meet these
challenges and enjoy above-average earnings growth. Other themes or sectors that
we find attractive at this time include overcapitalized industries with the
prospects of restructuring (such as insurance, business and consumer services
organizations), smaller capitalized companies, and more defensive, dividend-
paying industries such as real estate investment trusts (REITs). We also believe
energy companies, certain technology stocks with favorable product cycles, and
industries benefiting from the aging of America (e.g., health care) offer
attractive opportunities.

The following pages contain discussions of the investment activity occurring
in the Columbia Funds (except for the Money Market Fund) during 1995, along with
graphs illustrating the growth of $10,000 during various time periods. Each Fund
compares its performance to its relevant benchmark index. Unlike the Funds,
however, the indices are not actively managed and have no operating expenses,
portfolio transaction costs, or cash flows.
As always, we appreciate your continuing confidence in Columbia Funds.

The Investment Team
Columbia Funds Management Company
February 1996

2
<PAGE>
INVESTMENT REVIEW
-----------------------------------------------------------------

COLUMBIA COMMON STOCK FUND
Columbia Common Stock Fund had a total return of 30.84% for the twelve
months ended December 31, 1995. The Fund was underweighted in technology issues
early in the year, a period when these stocks were among the leaders of the
market's advance. In addition, the Fund did not benefit from its greater than
market weightings in REITs and energy stocks until the second half of the year.
Beginning in the third quarter, we became increasingly concerned about the
pace of economic activity and the implications of slower earnings growth for
economically sensitive companies. Accordingly, we reduced our portoflio exposure
to cyclical issues and increased our investments in more stable growth
industries such as health care and financial services. In addition, during price
weakness in the technology sector, we increased our weighting in selected issues
that we believed would benefit from very favorable product cycles. Combined with
our continued overweighting in energy, these strategic moves enabled the Fund to
outperform the S&P 500 during the fourth quarter.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CCSF S&P 500
<S> <C> <C>
10/1/91 10,000 10,000
31/91 11,025 10,838
31/92 12,126 11,664
31/93 14,120 12,840
31/94 14,411 13,009
12/31/95 18,855 17,898
CCSF S&P 500
Value on 18,855 17,898
12/31/1995
Average Annual Total Returns
CCSF S&P 500
1 Year 30.84% 37.58%
Since Inception 15.89% 14.50%
$10,000 Investment
made on 10/1/91
(Inception Date)
Past performance is not predictive of future
performance.
</TABLE>

COLUMBIA GROWTH FUND
Columbia Growth Fund posted a total return of 32.98% during the twelve
months ended December 31, 1995.
During the year, the Fund sought out opportunities in those industries
undergoing restructuring or consolidation, such as retail, gaming and health
care. During the second half, as earnings growth slowed, we emphasized companies
with steady and visible growth, as well as financial issues that we believed
would benefit from a declining interest rate environment. Investments in these
areas contributed positively to Fund performance.
The Fund seeks value by focusing on companies with superior earnings growth
and profitability characteristics at reasonable prices. Currently, we believe
sectors that meet this criteria are insurance, business and consumer services,
energy, health care, and certain technology stocks with favorable product
cycles.
We are positive about the outlook for inflation and interest rates in the
year ahead. Earnings growth is not expected to be nearly as strong as it was
throughout 1995. While we are optimistic about the prospects for equities in the
long run, we do not expect returns to be as exceptional as they were in 1995.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CGF 20 Years S&P 20 Years
<S> <C> <C>
12/31/75 10,000 10,000
31/76 13,082 12,393
31/77 13,068 11,488
31/78 14,118 12,227
31/79 19,846 14,471
31/80 27,761 19,152
31/81 26,820 18,204
31/82 39,307 22,118
31/83 47,742 27,077
31/84 45,078 28,744
31/85 59,534 37,816
31/86 63,654 44,865
31/87 73,037 47,230
31/88 80,932 55,046
31/89 104,475 72,446
31/90 101,017 70,236
31/91 135,626 91,638
31/92 151,657 98,620
31/93 171,387 108,561
31/94 170,307 109,994
12/31/95 226,475 151,330
Average Annual Total Returns
CGF S&P 500
1 Year 32.98% 37.58%
5 Years 17.52% 16.59%
10 Years 14.29% 14.87%
20 Years 16.88% 14.55%
Value on CGF S&P 500
12/31/95 $226,475 $151,330
$10,000 Investment
made on 12/31/75
Past performance is not predictive of future
performance.
</TABLE>

3
<PAGE>
INVESTMENT REVIEW, continued
---------------------------------------------------------------------------

COLUMBIA INTERNATIONAL STOCK FUND
Columbia International Stock Fund posted a total return of 5.15% for 1995.
Following a difficult first half, the Fund's performance improved significantly
in the final two quarters. While the declining stock market in Japan and a hedge
against the yen hurt performance during the first six months of the year, our
exposure in Japan helped returns during the second half.
The Japanese stock market struggled during the first quarter after the Kobe
earthquake, which upset economic forecasts. In addition, the yen experienced a
sharp increase against the dollar, contrary to nearly all expectations. These
factors affected investor confidence and Japanese companies found it difficult
to compete worldwide. In the second half, conditions in Japan began to show
signs of improvement. The Bank of Japan acted to reverse the strength of the yen
versus the dollar, and the Japanese banking crisis began moving toward
resolution. As a result, we increased emphasis on Japanese exporters such as
autos and electronics.
The Fund also gained ground in the U.K., Germany, and Switzerland. During
the fourth quarter, we focused on interest rate-sensitive issues, which
responded to the declining trend in interest rates. Also, during the fourth
quarter we increased somewhat our investments in emerging markets, many of which
had struggled for two years, focusing primarily on Brazil and Hong Kong.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CISF FTA Euro-Pac S&P 500
<S> <C> <C> <C>
10/1/92 10,000 10,000 10,000
31/92 10,060 9,628 10,503
31/93 10,747 10,861 10,962
30/93 10,848 11,931 11,016
30/93 11,808 12,738 11,300
31/93 13,415 12,664 11,562
31/94 13,363 13,282 11,124
30/94 13,653 13,991 11,171
30/94 13,623 13,965 11,717
31/94 13,084 13,819 11,714
31/95 12,327 14,020 12,855
30/95 12,401 14,074 14,083
30/95 13,317 14,661 15,203
12/31/95 13,759 15,287 16,118
Average Annual Total Returns
CISF FTA S&P 500
1 Year 5.15% 10.62% 37.58%
Since Inception 10.49% 14.18% 16.09%
Value on CISF FTA S&P 500
12/31/95 $13,759 $15,287 $16,118
$10,000 Investment
made on 10/1/92
(Inception Date)
Past performance is not predictive of future
performance.
</TABLE>

COLUMBIA SPECIAL FUND
For the year ended December 31, 1995, Columbia Special Fund was up 29.53%,
outperforming the Russell 2000 Stock Index at 28.44%. In the first half of the
year, the Fund benefited from holdings in technology, energy and machinery
companies, as well as from interest rate-sensitive financial services stocks. At
the same time, weak performance in consumer-related sectors, such as retailing,
detracted from performance early in the year.
During the second half, positions in natural gas, energy, health care and
business services helped performance, while our holdings in brokerage, consumer
credit, and retailing held back returns. A slowing economy and moderate
inflation level are expected to set a positive stage for interest rates. Until
the Federal Reserve responds more aggressively to slower growth, low inflation
and, perhaps a credible budget balancing act, we will continue to concentrate on
issues with earnings visibility. As further easing occurs, we will seek out
small growth companies in niche industries whose spending cycles are not
completely dependent on the pace of the economy. Our focus, therefore, remains
on the production side of the economy versus the consumer-oriented sectors.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CSF S&P 500 Russell 2000
<S> <C> <C> <C>
12/31/85 10,000 10,000 10,000
31/86 11,562 11,864 10,568
31/87 11,913 12,489 9,641
31/88 16,983 14,556 12,041
31/89 22,404 19,157 13,996
31/90 19,628 18,573 11,266
31/91 29,532 24,232 16,453
31/92 33,578 26,079 19,484
31/93 40,857 28,708 23,167
31/94 41,793 29,087 22,745
12/31/95 54,135 40,017 29,214
Value on
12/31/95
CSF $54,132
S&P 500 $40,014
Russel 2000 $29,214
Average Annual Total Returns
CSF S&P 500 Russell 2000
1 Year 29.53% 37.58% 28.44%
5 Year 22.50% 16.59% 21.00%
Since Inception 18.40% 14.87% 11.32%
$10,000 Investment
made on 12/31/85
Past performance is not predictive of future
performance.
</TABLE>

4
<PAGE>
INVESTMENT REVIEW, continued
---------------------------------------------------------------------------

COLUMBIA REAL ESTATE EQUITY FUND
Columbia Real Estate Equity Fund posted a total return of 16.86% for the
year ended December 31, 1995, which compares to 15.27% for the NAREIT Equity
Index for the same period.
During the first half of the year, the strong momentum and price gains of
the S&P 500 kept investors' attention away from the real estate market and real
estate equities, which limited the Fund's performance. In the second half, as
investors became increasingly aware of softness in the economy, and began to
focus more on defensive, dividend-generating securities, such as real estate
investment trusts (REITs), Fund returns improved. This is particularly true in
the fourth quarter, the strongest quarter of the year for the Fund.
Above-market weightings in the office, industrial and hotel sectors
contributed positively to Fund performance, as did our commitment to certain
residential issues that we indentified as being undervalued. We limited our
exposure to the depressed retail sector, reflecting our view that fundamentals
remain soft for these properties.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CREF NAREIT
<S> <C> <C>
4/1/94 10,000 10,000
30/94 10,134 10,184
30/94 9,907 9,976
31/94 10,175 9,978
31/95 9,967 9,961
30/95 10,560 10,547
30/95 11,063 11,044
12/31/95 11,891 11,501
Average Annual Total Returns
CREF NAREIT
1 Year 16.86% 15.27%
Since Inception 10.10% 8.08%
Value on 12/31/95
CREF NAREIT
$11,891 $11,501
$10,000 Investment
made on 4/1/94
(Inception Date)
Past performance is not predictive of future
performance.
</TABLE>

COLUMBIA BALANCED FUND
Columbia Balanced Fund posted a total return of 25.08% during 1995. On
December 31, 1995, the Fund had an asset allocation of 53% stocks, 42% bonds,
and 5% cash equivalents.
Because the Fund uses the same investment criteria as Columbia Common Stock
Fund and Columbia Fixed Income Securities Fund, please refer to pages 3 and 6
for additional information about how the Fund was managed during the year.
As 1995 progressed, we looked for gradual slowing of economic momentum. We
emphasized sectors likely to produce steady earnings gains such as health care,
and others poised to benefit from falling interest rates such as banking and
financial services. The Fund's holdings in cyclical areas, including technology,
were generally underweighted versus the market.
We look for further economic deceleration, and have maintained a significant
exposure in the financial services area, most recently adding to holdings in
insurance. Anticipating that steady earnings gains will command greater investor
attention, we have added to health care and consumer staples holdings. Finally,
we have gradually begun to increase our exposure in certain technology issues,
which enjoy favorable product cycle prospects that are not fully discounted and
offer good value.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CBF S&P Lehman Agg
<S> <C> <C> <C>
10/1/91 10,000 10,000 10,000
31/91 10,780 10,838 10,507
31/92 11,738 11,664 11,285
31/93 13,337 12,840 12,385
31/94 13,350 13,009 12,023
12/31/95 16,699 17,898 14,244
Average Annual Total Returns
Lehman
CBF S&P 500 Agg
1 Year 25.08% 37.58% 18.47%
Since
Inception 12.66% 14.50% 8.57%
Value on 12/31/95
CBF $16,696
S&P 500 $17,898
Lehman Agg $14,244
$10,000 Investment
made on 10/1/91
(Inception Date)
Past performance is not predictive of future
performance.
</TABLE>

5
<PAGE>
INVESTMENT REVIEW, continued
---------------------------------------------------------------------------

COLUMBIA U.S. GOVERNMENT
SECURITIES FUND
The U.S. Government Securities Fund posted a total return of 10.21% for the
twelve months ended December 31, 1995. Throughout the period, the bond market
enjoyed a strong rally driven by declining interest rates. During the year, for
example, yields dropped by roughly 2.50% for 3-year Treasuries, the maximum
maturity allowed for the Fund.
The Federal Reserve Board eased interest rates twice during the year. On
July 6, the Fed lowered the Federal Fund's rate from 6% to 5 3/4% and eased
another .25% on December 19. To capitalize on declining rates, the Fund
maintained a relatively long average maturity, closing the year with an average
maturity of 2.45 years.
Looking ahead, we believe the bond market should respond favorably to the
government's drive to reduce budget deficits. Due to weak economic growth and
inflationary pressure, we expect short-term rates to continue declining as the
Fed eases again in the coming months. Therefore, we plan to maintain an average
maturity in the Fund of approximately 2.5 years.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CUSG MLT 1-3 CPI
<S> <C> <C> <C>
11/6/86 10,000.0 10,000.0 10,000.0
31/86 10,070 10,088 10,018
31/87 10,487 10,658 10,510
31/88 11,047 11,322 10,938
31/89 12,111 12,553 11,479
31/90 13,236 13,774 12,223
31/91 14,919 15,383 12,570
31/92 15,786 16,352 12,952
31/93 16,719 17,237 13,293
31/94 16,714 17,335 13,642
12/31/95 18,421 19,242 14,003
Average Annual Total Returns
CUSG MLT 1-3 CPI
1 Year 10.21% 11.00% ?
5 Year 6.84% 6.92% ?
Since
Inception 6.87% 7.37% ?
Value on 12/31/95
CUSG $18, 420
MLT 1-3 $19, 242
CPI $14, 003
$10,000 Investment
made on 11/6/86
Past performance is not predictive of future
performance.
</TABLE>

COLUMBIA FIXED INCOME
SECURITIES FUND
Columbia Fixed Income Securities Fund returned 18.91% in 1995, versus 18.47%
by the Lehman Aggregate Bond Index for the same period.
Early in the year, a weakening economy and Federal Reserve stimulus pushed
interest rates lower, triggering a bond market rally that lasted well into the
second half. In this environment, the Fund benefited from a duration that was
slightly longer than the Lehman Aggregate Bond Index. The Fund also benefited
from an overweighting in corporate bonds and mortgage-backed securities.
Throughout the period, we maintained an average maturity of 6.5 years and a
duration of slightly over 5 years.
Over the next three to six months, we expect moderate economic growth, which
should cause interest rates to remain stable or modestly decline. Inflation
should remain subdued, enabling the Federal Reserve Board to lower short-term
interest rates as it deems necessary.
We continue to seek above-average returns while maintaining our conservative
investing strategy regarding credit quality, derivatives, diversification, and
intermediate average maturity. The Fund's average credit quality remains high,
with approximately 88% of the Fund's securities rated A or better at year-end.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CFIS Lehman Agg CPI
<S> <C> <C> <C>
12/31/85 10,000 10,000 10,000
31/86 11,231 11,526 10,113
31/87 11,383 11,844 10,610
31/88 12,261 12,779 11,041
31/89 14,021 14,635 11,588
31/90 15,185 15,947 12,339
31/91 17,742 18,498 12,689
31/92 19,159 19,867 13,075
31/93 21,165 21,804 13,419
31/94 20,454 21,167 13,772
12/31/95 24,322 25,077 14,135
Average Annual Total Returns
Lehman
CFIS Agg CPI
1 Year 18.91% 18.47% ?
5 Years 9.88% 9.48% ?
Since
Inception 9.29% 9.63% ?
Value on 12/31/95
Lehman
CFIS Agg CPI
$ 24,322 $ 25,077 $ 14,135
$10,000 Investment
made on 12/31/85
Past performance is not predictive of future
performance.
</TABLE>

6
<PAGE>
INVESTMENT REVIEW, continued
---------------------------------------------------------------------------

COLUMBIA MUNICIPAL BOND FUND
Columbia Municipal Bond Fund posted a total return of 14.15% for the year
ended December 31, 1995. While the Fund participated in the powerful bond market
rally of 1995, the municipal sector continued to experience somewhat dampened
performance due to the various tax reform proposals currently under discussion
by Congress. It is difficult to predict which plan, if any, will ultimately pass
or how such plans will affect the value of municipal securities, but the
resulting uncertainty continues to worry investors.
The overall strategy of the Fund remains conservative. Currently, 98% of the
portfolio is rated A or better. The Fund devotes more than half its portfolio to
general obligation bonds, based on our belief that their returns and credit
quality are more solid than other municipal issues. The average maturity remains
intermediate term; that is, approximately 10 years. Duration continues to hover
around 6.5 years. At year-end, the Fund held 246 different issues, and was
broadly diversified within the State of Oregon. We believe that Columbia
Municipal Bond Fund will provide a high after-tax return to investors over a
full interest rate cycle, and will do so with a low level of credit and
volatility risk.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CMBF Leh G.O. CPI
<S> <C> <C> <C>
12/31/85 10,000 10,000 10,000
31/86 11,677 11,798 10,113
31/87 11,821 11,980 10,610
31/88 13,025 12,899 11,041
31/89 14,191 14,203 11,588
31/90 15,169 15,164 12,339
31/91 16,948 16,893 12,689
31/92 18,043 18,374 13,075
31/93 19,979 20,530 13,419
31/94 19,044 19,569 13,772
12/31/95 21,738 22,731 14,135
Average Annual Total Returns
CMBF Lehman G.O. CPI
1 Year 14.15% 16.16% ?
5 Years 7.46% 8.43% ?
Since
Inception 8.07% 8.56% ?
$10,000 Investment
made on 12/31/85
Past performance is not predictive of future
performance.
</TABLE>

COLUMBIA HIGH YIELD FUND
Columbia High Yield Fund was up 19.12% for the 12 months ended December 31,
1995. The high yield bond market benefited from declining interest rates
throughout most of the year. Yields of 10-year Treasury notes, for example,
dropped .60% during the fourth quarter alone, with a total decline of 2.25% for
the year. (When interest rates fall, bond prices rise).
Slow economic growth, a weak retail sector, and a slight increase in overall
bankruptcy filings had a negative effect on the high yield market. However,
because of the high credit quality of the high yield bonds held in the
portfolio, the Fund continued to outperform many of its peers during the period.
In sector emphasis, the Fund focused on forest products, metals and mining, and
hotels and gaming during the first half and gradually rotated to health care and
media during the second half. At year-end, the Fund held 52 different issues.
Looking ahead, the Fund expects to continue emphasizing health care, energy
and manufacturing. With slow but steady economic growth, combined with low
absolute yields available from alternative investments, this Fund should remain
attractive to investors seeking high yield and diversification in their
portfolios.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CHYF Lipper HY Salomon BB
<S> <C> <C> <C>
10/1/93 10,000 10,000 10,000
31/93 10,112 10,498 10,185
31/94 9,909 10,387 9,937.50
30/94 9,845 10,249 9,840.12
30/94 10,018 10,246 10,007.40
31/94 10,019 10,113 10,047.43
31/95 10,521 10,603 10,693.48
30/95 11,106 11,151 11,453.78
30/95 11,462 11,520 11,798.54
12/31/95 11,935 11,824 12,321.22
Average Annual Total Returns
CHYF Lipper HY Salomon BB
1 Year 19.12% 16.92% 22.62%
Since Inception 8.37% 7.91% 9.95%
Value on 12/31/95
CHYF Lipper HY Salomon BB
$11,935 $11,824 $12,321
$10,000 Investment
made on 10/1/93
(Inception Date)
Past performance is not predictive of future
performance.
</TABLE>

7
<PAGE>
FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
COLUMBIA COMMON STOCK FUND, INC.

<TABLE>
<CAPTION>
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991(1)
--------- --------- --------- --------- ---------
Net asset value, beginning of period.......... $ 15.16 $ 15.29 $ 14.04 $ 13.15 $ 12.00
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income....................... .26 .27 .22 .24 .09
Net realized and unrealized gains on
investments................................ 4.38 .04 2.08 1.06 1.17
--------- --------- --------- --------- ---------
Total from investment operations.......... 4.64 .31 2.30 1.30 1.26
--------- --------- --------- --------- ---------
Less distributions:
Dividends (from net investment income)...... (.26) (.25) (.21) (.24) (.10)
Distributions (from capital gains).......... (.95) (.19) (.84) (.17) (.01)
--------- --------- --------- --------- ---------
Total distributions....................... (1.21) (.44) (1.05) (.41) (.11)
--------- --------- --------- --------- ---------
Net asset value, end of period................ $ 18.59 $ 15.16 $ 15.29 $ 14.04 $ 13.15
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total return.................................. 30.84% 2.06% 16.44% 9.99% 10.25%(2)
Ratios/Supplemental data
Net assets, end of period (in thousands)...... $ 358,523 $ 124,263 $ 100,715 $ 51,049 $ 20,457
Ratio of expenses to average net assets....... .80% .84% .84% .86% .86%
Ratio of net investment income to average net
assets....................................... 1.68% 1.82% 1.48% 1.97% 2.48%
Portfolio turnover rate....................... 75.36% 64.21% 90.90% 67.83% 12.08%
</TABLE>

(1) From inception of operations on September 12, 1991. Ratios and portfolio
turnover rates are annualized.
(2) Not annualized.
COLUMBIA GROWTH FUND, INC.

<TABLE>
<CAPTION>
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
Net asset value, beginning of period.......... $ 24.84 $ 26.38 $ 26.18 $ 26.26 $ 21.68
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income......................... .31 .29 .16 .17 .32
Net realized and unrealized gains (losses) on
investments.................................. 7.86 (.46) 3.24 2.93 7.09
--------- --------- --------- --------- ---------
Total from investment operations.......... 8.17 (.17) 3.40 3.10 7.41
--------- --------- --------- --------- ---------
Less distributions:
Dividends (from net investment income)...... (.29) (.26) (.18) (.20) (.39)
Distributions (from capital gains).......... (2.87) (1.11) (2.98) (2.98) (2.44)
Distributions (in excess of capital
gains)..................................... (.01) -- (.04) -- --
--------- --------- --------- --------- ---------
Total distributions....................... (3.17) (1.37) (3.20) (3.18) (2.83)
--------- --------- --------- --------- ---------
Net asset value, end of period................ $ 29.84 $ 24.84 $ 26.38 $ 26.18 $ 26.26
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total return.................................. 32.98% -.63% 13.01% 11.82% 34.26%
Ratios/Supplemental data
Net assets, end of period (in thousands)...... $ 848,731 $ 591,694 $ 605,401 $ 518,366 $ 431,460
Ratio of expenses to average net assets....... .75% .81% .82% .86% .90%
Ratio of net investment income to average net
assets....................................... 1.14% 1.12% .66% .77% 1.50%
Portfolio turnover rate....................... 94.73% 79.28% 105.64% 116.38% 163.91%
</TABLE>

8
<PAGE>
FINANCIAL HIGHLIGHTS, continued
---------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD

COLUMBIA INTERNATIONAL STOCK FUND, INC.

<TABLE>
<CAPTION>
--------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992(1)
--------- --------- --------- ---------
Net asset value, beginning of period........... $ 12.43 $ 12.96 $ 9.95 $ 10.00
--------- --------- --------- ---------
Income from investment operations:
Net investment income (loss)................. .02 (.02) (.02) (.03)
Net realized and unrealized gains (losses) on
investments and foreign currency related
transactions................................ .62 (.30) 3.34 .11
--------- --------- --------- ---------
Total from investment operations........... .64 (.32) 3.32 .08
--------- --------- --------- ---------
Less distributions:
Distributions (from capital gains)........... -- (.21) (.31) (.13 (2)
--------- --------- --------- ---------
Total distributions........................ -- (.21) (.31) (.13)
--------- --------- --------- ---------
Net asset value, end of period................. $ 13.07 $ 12.43 $ 12.96 $ 9.95
--------- --------- --------- ---------
--------- --------- --------- ---------
Total return................................... 5.15% -2.47% 33.37% .60%(3)
Ratios/Supplemental data
Net assets, end of period (in thousands)....... $ 100,873 $ 118,484 $ 73,047 $ 9,745
Ratio of expenses to average net assets........ 1.54% 1.52% 1.71% 2.22%
Ratio of net investment income (loss) to
average net assets............................ .15% (.21)% (.62)% (1.28)%
Portfolio turnover rate........................ 156.09% 138.79% 144.78% 25.75%
</TABLE>

(1) From inception of operations on September 10, 1992. Ratios and portfolio
turnover rates are annualized.
(2) Includes amounts distributed from net realized gains on foreign currency
related transactions taxable as ordinary income.
(3) Not annualized.
COLUMBIA SPECIAL FUND, INC. (1)

<TABLE>
<CAPTION>
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
Net asset value, beginning of period......... $ 18.69 $ 19.51 $ 18.79 $ 17.45 $ 12.12
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income (loss)............... .03 .08 .01 (.03) (.01)
Net realized and unrealized gains on
investments............................... 5.45 .36 4.04 2.41 6.11
--------- --------- --------- --------- ---------
Total from investment operations......... 5.48 .44 4.05 2.38 6.10
--------- --------- --------- --------- ---------
Less distributions:
Dividends (from net investment income)..... (.02) (.07) -- -- --
Dividends (in excess of net investment
income)................................... -- -- (.01) -- --
Distributions (from capital gains)......... (2.68) (1.16) (3.32) (1.04) (.77)
Distributions (in excess of capital
gains).................................... (.03) (.03) -- -- --
--------- --------- --------- --------- ---------
Total distributions...................... (2.73) (1.26) (3.33) (1.04) (.77)
--------- --------- --------- --------- ---------
Net asset value, end of period............... $ 21.44 $ 18.69 $ 19.51 $ 18.79 $ 17.45
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total return................................. 29.53% 2.29% 21.68% 13.70% 50.46%
Ratios/Supplemental data
Net assets, end of period (in thousands)..... $1,384,415 $ 889,526 $ 772,741 $ 470,663 $ 264,358
Ratio of expenses to average net assets...... .98% 1.05% 1.12% 1.19% 1.22%
Ratio of net investment income (loss) to
average net assets.......................... .16% .40% .01% (.25)% (.16)%
Portfolio turnover rate...................... 182.99% 178.91% 154.68% 116.75% 114.53%
</TABLE>

(1) As of December 31, 1991, historical per share data has been restated to
reflect a 3 for 1 stock split to shareholders of record on January 31, 1992.

9
<PAGE>
FINANCIAL HIGHLIGHTS, continued
---------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD

COLUMBIA REAL ESTATE EQUITY FUND, INC.

<TABLE>
<CAPTION>
--------- -----------
<S> <C> <C> <C> <C> <C>
1995 1994(1)
--------- -----------
Net asset value, beginning of period............. $ 11.72 $ 12.00
--------- -----------
Income from investment operations:
Net investment income.......................... .78 .49
Net realized and unrealized gains (losses) on
investments................................... 1.12 (.27)
--------- -----------
Total from investment operations............. 1.90 .22
--------- -----------
Less distributions:
Dividends (from net investment income)......... (.49) (.31)
Dividends (in excess of net investment
income)....................................... -- (.01)
Distributions (in excess of capital gains)..... (.14) --
Tax return of capital.......................... (.28) (.18)
--------- -----------
Total distributions.......................... (.91) (.50)
--------- -----------
Net asset value, end of period................... $ 12.71 $ 11.72
--------- -----------
--------- -----------
Total return..................................... 16.86% 1.76%(2)
Ratios/Supplemental data
Net assets, end of period (in thousands)......... $ 21,587 $ 17,402
Ratio of expenses to average net assets.......... 1.18% 1.14%
Ratio of net investment income to average net
assets.......................................... 6.71% 6.28%
Portfolio turnover rate.......................... 53.91% 7.61%
</TABLE>

(1) From inception of operations on March 16, 1994. Ratios and portfolio
turnover rate are annualized.
(2) Not annualized.
COLUMBIA BALANCED FUND, INC.

<TABLE>
<CAPTION>
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991(1)
--------- --------- --------- --------- ---------
Net asset value, beginning of period........... $ 17.28 $ 17.91 $ 16.80 $ 16.05 $ 15.00
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income........................ .73 .65 .56 .58 .11
Net realized and unrealized gains (losses) on
investments................................. 3.54 (.64) 1.71 .82 1.10
--------- --------- --------- --------- ---------
Total from investment operations........... 4.27 .01 2.27 1.40 1.21
--------- --------- --------- --------- ---------
Less distributions:
Dividends (from net investment income)....... (.73) (.64) (.56) (.57) (.12)
Dividends (in excess of net investment
income)..................................... -- -- (.01) -- --
Distributions (from capital gains)........... (.74) -- (.59) (.08) (.04)
--------- --------- --------- --------- ---------
Total distributions........................ (1.47) (.64) (1.16) (.65) (.16)
--------- --------- --------- --------- ---------
Net asset value, end of period................. $ 20.08 $ 17.28 $ 17.91 $ 16.80 $ 16.05
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total return................................... 25.08% .10% 13.62% 8.89% 7.80%(2)
Ratios/Supplemental data
Net assets, end of period (in thousands)....... $ 486,767 $ 249,670 $ 186,589 $ 90,230 $ 12,986
Ratio of expenses to average net assets........ .69% .72% .73% .81% .62%
Ratio of net investment income to average net
assets........................................ 4.05% 3.82% 3.32% 4.08% 3.41%
Portfolio turnover rate........................ 108.04% 98.48% 107.60% 138.08% 179.80%
</TABLE>

(1) From inception of operations of September 12, 1991. Ratios and portfolio
turnover rate are annualized.
(2) Not annualized.

10
<PAGE>
FINANCIAL HIGHLIGHTS, continued
---------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD

COLUMBIA DAILY INCOME COMPANY

<TABLE>
<CAPTION>
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
Net asset value, beginning of period........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income........................ .053 .036 .025 .032 .055
--------- --------- --------- --------- ---------
Total from investment operations........... .053 .036 .025 .032 .055
--------- --------- --------- --------- ---------
Less distributions:
Dividends (from net investment income)....... (.053) (.036) (.025) (.032) (.055)
--------- --------- --------- --------- ---------
Total distributions........................ (.053) (.036) (.025) (.032) (.055)
--------- --------- --------- --------- ---------
Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total return................................... 5.49% 3.68% 2.51% 3.25% 5.66%
Ratios/Supplemental data
Net assets, end of period (in thousands)....... $ 800,656 $ 730,067 $ 544,500 $ 591,186 $ 737,584
Ratio of expenses to average net assets........ .64% .70% .75% .71% .69%
Ratio of net investment income to average net
assets........................................ 5.34% 3.68% 2.49% 3.22% 5.53%
</TABLE>

COLUMBIA U.S. GOVERNMENT SECURITIES FUND, INC.

<TABLE>
<CAPTION>
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
Net asset value, beginning of period........... $ 7.99 $ 8.36 $ 8.35 $ 8.47 $ 8.43
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income........................ .45 .37 .32 .39 .53
Net realized and unrealized gains (losses) on
investments................................. .35 (.37) .17 .09 .50
--------- --------- --------- --------- ---------
Total from investment operations........... .80 -- .49 .48 1.03
--------- --------- --------- --------- ---------
Less distributions:
Dividends (from net investment income)....... (.45) (.37) (.32) (.39) (.53)
Distributions (from capital gains)........... -- -- (.16) (.21) (.46)
--------- --------- --------- --------- ---------
Total distributions........................ (.45) (.37) (.48) (.60) (.99)
--------- --------- --------- --------- ---------
Net asset value, end of period................. $ 8.34 $ 7.99 $ 8.36 $ 8.35 $ 8.47
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total return................................... 10.21% -.03% 5.91% 5.81% 12.72%
Ratios/Supplemental data
Net assets, end of period (in thousands)....... $ 41,842 $ 33,512 $ 35,877 $ 35,479 $ 34,867
Ratio of expenses to average net assets........ .79% .81% .75% .76% .76%
Ratio of net investment income to average net
assets........................................ 5.45% 4.51% 3.74% 4.60% 6.18%
Portfolio turnover rate........................ 253.17% 253.80% 254.59% 289.05% 309.13%
</TABLE>

11
<PAGE>
FINANCIAL HIGHLIGHTS, continued
---------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD

COLUMBIA FIXED INCOME SECURITIES FUND, INC.

<TABLE>
<CAPTION>
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
Net asset value, beginning of period........... $ 12.16 $ 13.44 $ 13.28 $ 13.59 $ 12.72
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income........................ .88 .83 .85 .95 1.00
Net realized and unrealized gains (losses) on
investments................................. 1.35 (1.28) .52 .09 1.05
--------- --------- --------- --------- ---------
Total from investment operations........... 2.23 (.45) 1.37 1.04 2.05
--------- --------- --------- --------- ---------
Less distributions:
Dividends (from net investment income)....... (.88) (.83) (.85) (.95) (1.00)
Distributions (from capital gains)........... -- -- (.36) (.40) (.18)
--------- --------- --------- --------- ---------
Total distributions........................ (.88) (.83) (1.21) (1.35) (1.18)
--------- --------- --------- --------- ---------
Net asset value, end of period................. $ 13.51 $ 12.16 $ 13.44 $ 13.28 $ 13.59
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total return................................... 18.91% -3.36% 10.47% 7.99% 16.84%
Ratios/Supplemental data
Net assets, end of period (in thousands)....... $ 316,259 $ 252,090 $ 300,532 $ 262,647 $ 207,271
Ratio of expenses to average net assets........ .65% .66% .66% .66% .69%
Ratio of net investment income to average net
assets........................................ 6.80% 6.53% 6.14% 7.03% 7.63%
Portfolio turnover rate........................ 137.41% 139.81% 118.80% 195.67% 158.95%
</TABLE>

COLUMBIA MUNICIPAL BOND FUND, INC.

<TABLE>
<CAPTION>
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
Net asset value, beginning of period........... $ 11.48 $ 12.71 $ 12.17 $ 12.22 $ 11.65
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income........................ .63 .64 .66 .69 .72
Net realized and unrealized gains (losses) on
investments................................. .96 (1.23) .62 .07 .60
--------- --------- --------- --------- ---------
Total from investment operations........... 1.59 (.59) 1.28 .76 1.32
--------- --------- --------- --------- ---------
Less distributions:
Dividends (from net investment income) (1)... (.63) (.64) (.66) (.69) (.72)
Distributions (from capital gains)........... (.07) -- (.08) (.12) (.03)
--------- --------- --------- --------- ---------
Total distributions........................ (.70) (.64) (.74) (.81) (.75)
--------- --------- --------- --------- ---------
Net asset value, end of period................. $ 12.37 $ 11.48 $ 12.71 $ 12.17 $ 12.22
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total return................................... 14.15% -4.68% 10.73% 6.46% 11.73%
Ratios/Supplemental data
Net assets, end of period (in thousands)....... $ 383,796 $ 339,817 $ 430,367 $ 341,924 $ 285,099
Ratio of expenses to average net assets........ .57% .57% .58% .59% .59%
Ratio of net investment income to average net
assets........................................ 5.22% 5.36% 5.25% 5.69% 6.07%
Portfolio turnover rate........................ 21.45% 19.40% 9.92% 17.82% 15.28%
</TABLE>

(1) 100% exempt from federal taxation.

12
<PAGE>
FINANCIAL HIGHLIGHTS, continued
---------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD

COLUMBIA HIGH YIELD FUND, INC.

<TABLE>
<CAPTION>
--------- --------- -----------
<S> <C> <C> <C> <C> <C>
1995 1994 1993(1)
--------- --------- -----------
Net asset value, beginning of period................ $ 9.04 $ 9.94 $ 10.00
--------- --------- -----------
Income from investment operations:
Net investment income............................. .82 .80 .18
Net realized and unrealized gains (losses) on
investments...................................... .84 (.90) (.06)
--------- --------- -----------
Total from investment operations................ 1.66 (.10) .12
--------- --------- -----------
Less distributions:
Dividends (from net investment income)............ (.82) (.80) (.18)
--------- --------- -----------
Total distributions............................. (.82) (.80) (.18)
--------- --------- -----------
Net asset value, end of period...................... $ 9.88 $ 9.04 $ 9.94
--------- --------- -----------
--------- --------- -----------
Total return........................................ 19.12% -.92% 1.12%(2)
Ratios/Supplemental data
Net assets, end of period (in thousands)............ $ 23,471 $ 12,834 $ 5,940
Ratio of expenses to average net assets (3)......... 1.00% 1.00% 1.00%
Ratio of net investment income to average net
assets............................................. 8.62% 8.69% 7.30%
Portfolio turnover rate............................. 51.60% 36.67% 0.00%
</TABLE>

13
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA COMMON STOCK FUND, INC.
<TABLE>
<CAPTION>
Shares or
Principal
December 31, 1995 Amount Value(1)
------------ --------------
<S> <C> <C>
Common Stocks (97.7%)
Banking & Finance (12.3%)
Ahmanson (H.F.) & Co. ................................................................ 93,000 $ 2,464,500
American Express Co. ................................................................. 186,900 7,732,987
Federal Home Loan Mortgage Corp. ..................................................... 100,000 8,350,000
Federal National Mortgage Assn. ...................................................... 30,500 3,785,813
Fleet Financial Group, Inc. .......................................................... 83,800 3,414,850
Greenpoint Financial Corp. ........................................................... 130,000 3,477,500
Morgan (J.P.) & Co., Inc. ............................................................ 92,200 7,399,050
PNC Bank Corp. ....................................................................... 229,700 7,407,825
--------------
44,032,525
--------------
Building & Forestry Products (1.6%)
Champion International Corp. ......................................................... 135,700 5,699,400
--------------
Business Services (3.9%)
*ADT Ltd. ............................................................................ 220,000 3,300,000
Service Corp. International........................................................... 244,000 10,736,000
--------------
14,036,000
--------------
Chemical (3.7%)
Grace (W.R.) & Co. ................................................................... 102,600 6,066,225
Hercules, Inc. ....................................................................... 128,100 7,221,637
--------------
13,287,862
--------------
Consumer Durable (2.6%)
Ford Motor Co. ....................................................................... 203,100 5,889,900
Harley-Davidson, Inc. ................................................................ 125,000 3,593,750
--------------
9,483,650
--------------
Consumer Non-Durable (8.7%)
*Circus Circus Enterprises, Inc. ..................................................... 132,000 3,679,500
*Federated Department Stores, Inc. ................................................... 201,600 5,544,000
Mattel, Inc. ......................................................................... 216,000 6,642,000
Nike, Inc. (Class B).................................................................. 58,400 4,066,100
*Payless Cashways, Inc. .............................................................. 252,700 1,073,975
Rykoff-Sexton, Inc. .................................................................. 102,000 1,785,000
Sears, Roebuck & Co. ................................................................. 164,800 6,427,200
Wendy's International, Inc. .......................................................... 88,000 1,870,000
--------------
31,087,775
--------------
Consumer Staples (9.4%)
Gillette Co. ......................................................................... 123,400 6,432,225
Philip Morris Cos., Inc. ............................................................. 80,000 7,240,000
Pioneer Hi-Bred International, Inc. .................................................. 61,900 3,443,187
Procter & Gamble Co. ................................................................. 77,500 6,432,500
Sunbeam Corp. ........................................................................ 230,400 3,513,600
Sysco Corp. .......................................................................... 200,000 6,500,000
--------------
33,561,512
--------------

<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>
Energy (7.6%)
Chevron Corp. ........................................................................ 70,000 $ 3,675,000
Exxon Corp. .......................................................................... 20,900 1,674,612
Louisiana Land & Exploration Co. ..................................................... 74,000 3,172,750
Mobil Corp. .......................................................................... 45,400 5,084,800
Noble Affiliates, Inc. ............................................................... 56,500 1,687,938
Royal Dutch Petroleum Co. ADR......................................................... 52,400 7,394,950
Unocal Corp. ......................................................................... 159,000 4,630,875
--------------
27,320,925
--------------
Energy Services (0.9%)
Baker Hughes, Inc. ................................................................... 139,000 3,388,125
--------------
Entertainment & Media (5.2%)
Capital Cities/ABC, Inc. ............................................................. 33,000 4,071,375
Reader's Digest Association, Inc.
(Class A non vtg.)................................................................... 78,200 4,007,750
Time Warner, Inc. .................................................................... 121,700 4,609,387
*Viacom, Inc. (Class B)............................................................... 123,100 5,831,863
--------------
18,520,375
--------------
Health (12.2%)
*Amgen, Inc. ......................................................................... 129,400 7,683,125
Bausch & Lomb, Inc. .................................................................. 189,400 7,504,975
Becton, Dickinson & Co. .............................................................. 50,400 3,780,000
Johnson & Johnson..................................................................... 86,500 7,406,562
U.S. HealthCare, Inc. ................................................................ 75,800 3,524,700
United Healthcare Corp. .............................................................. 132,700 8,691,850
Warner-Lambert Co. ................................................................... 53,700 5,215,613
--------------
43,806,825
--------------
Insurance (4.9%)
Aetna Life & Casualty Co. ............................................................ 27,000 1,869,750
American International Group, Inc. ................................................... 64,300 5,947,750
Berkley (W.R.) Corp. ................................................................. 70,000 3,762,500
TIG Holdings, Inc. ................................................................... 213,000 6,070,500
--------------
17,650,500
--------------
Machinery & Capital Spending (5.0%)
Case Corp. ........................................................................... 81,700 3,737,775
Emerson Electric Co. ................................................................. 85,400 6,981,450
General Electric Co. ................................................................. 97,700 7,034,400
--------------
17,753,625
--------------
Metal Mining & Steel (1.0%)
Worthington Industries, Inc. ......................................................... 169,000 3,517,313
--------------
Real Estate Securities (4.3%)
American Health Properties, Inc. ..................................................... 120,000 2,580,000
Associated Estates Realty Corp. ...................................................... 84,000 1,806,000
</TABLE>

14
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA COMMON STOCK FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>
Common Stocks (Continued)
Beacon Properties Corp. .............................................................. 45,000 $ 1,035,000
Equity Residential Properties Trust................................................... 42,000 1,286,250
JP Realty, Inc. ...................................................................... 97,500 2,132,813
Manufactured Home Communities, Inc. .................................................. 49,000 857,500
National Health Investors, Inc. ...................................................... 100,000 3,312,500
Simon Property Group, Inc. ........................................................... 45,000 1,096,875
Sun Communities, Inc. ................................................................ 50,400 1,329,300
--------------
15,436,238
--------------
Technology (9.8%)
Adobe Systems, Inc. .................................................................. 75,300 4,668,600
Boeing Co. ........................................................................... 50,000 3,918,750
*Cisco Systems, Inc. ................................................................. 54,900 4,096,913
*Computer Sciences Corp. ............................................................. 95,000 6,673,750
Ericsson (L.M.) Telephone Co. (Class B) Spon. ADR..................................... 270,000 5,265,000
General Motors Corp. (Class E)........................................................ 125,000 6,500,000
Hewlett-Packard Co. .................................................................. 11,800 988,250
*Sun Microsystems, Inc. .............................................................. 68,000 3,102,500
--------------
35,213,763
--------------
Transportation (1.6%)
Norfolk Southern Corp. ............................................................... 51,000 4,048,125
Southwest Airlines Co. ............................................................... 72,600 1,687,950
--------------
5,736,075
--------------
Utilities/Communications (2.4%)
AT&T Corp. ........................................................................... 40,000 2,590,000
Vodafone Group plc ADR................................................................ 166,200 5,858,550
--------------
8,448,550
--------------
Utilities/Electric/Gas (0.6%)
NIPSCO Industries, Inc. ................................................................ 60,000 2,295,000
--------------
Total Common Stocks
(Cost $298,816,482).................................................................. 350,276,038
--------------
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>

Convertible Preferred Stock (0.9%)
Technology (0.9%)
American Express Co.
(Cost $2,433,700).................................................................... 60,000 $ 3,330,000
--------------
Total investments, excluding temporary cash investment
(Cost $301,250,182).................................................................. 353,606,038
--------------
Repurchase Agreement (1.0%)
Goldman Sachs Corp.
5.447% dated 12/29/1995,
due 01/02/1996 in the
amount of $3,450,244.
Collateralized by U.S. Treasury Bond
8.750% due 11/15/2008
(Cost $3,448,186).................................................................... $ 3,448,186 3,448,186
--------------
Total Investments (99.6%)
(Cost $304,698,368)...................................................................... 357,054,224
Receivables less liabilities (0.4%)....................................................... 1,468,500
--------------
Net Assets (100.0%)....................................................................... $ 358,522,724
--------------
--------------
</TABLE>

(1) See Note 1 of Notes to Financial Statements.
* Non-income producing

The accompanying notes are an integral part
of the financial statements.

15
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA GROWTH FUND, INC.
<TABLE>
<CAPTION>
Shares or
Principal
December 31, 1995 Amount Value(1)
------------ --------------
<S> <C> <C>
Common Stocks (99.1%)
Banking & Finance (8.1%)
BankAmerica Corp. .................................................................... 136,300 $ 8,825,425
Barnett Banks, Inc. .................................................................. 137,800 8,130,200
Bear Stearns Cos., Inc. .............................................................. 194,306 3,861,832
Dean Witter, Discover & Co. .......................................................... 175,440 8,245,680
Federal Home Loan Mortgage Corp. ..................................................... 187,300 15,639,550
Federal National Mortgage Assn. ...................................................... 76,700 9,520,387
First USA, Inc. ...................................................................... 150,000 6,656,250
Morgan Stanley Group, Inc. ........................................................... 100,000 8,062,500
--------------
68,941,824
--------------
Building & Forestry Products (0.6%)
*Crown Vantage, Inc. ................................................................. 366,320 5,220,060
--------------
Business & Consumer Services (1.6%)
*Mail-Well, Inc. ..................................................................... 400,000 4,900,000
Service Corp. International........................................................... 200,000 8,800,000
--------------
13,700,000
--------------
Chemical (2.0%)
Grace (W.R.) & Co. ................................................................... 100,000 5,912,500
Hercules, Inc. ....................................................................... 201,000 11,331,375
--------------
17,243,875
--------------
Consumer Non-Durable (17.5%)
*AutoZone, Inc. ...................................................................... 275,000 7,940,625
*Borders Group, Inc. ................................................................. 213,300 3,946,050
*Central Tractor Farm & Country, Inc. ................................................ 275,000 2,818,750
*Corporate Express, Inc. ............................................................. 262,300 7,901,787
*Eckerd Corp. (Del.).................................................................. 165,000 7,363,125
*Federated Department Stores, Inc. ................................................... 491,600 13,519,000
*HFS, Inc. ........................................................................... 175,000 14,306,250
Home Depot, Inc. ..................................................................... 175,000 8,378,125
Intimate Brands, Inc. (Class A)....................................................... 350,000 5,250,000
Mattel, Inc. ......................................................................... 501,200 15,411,900
McDonald's Corp. ..................................................................... 168,400 7,599,050
*Office Depot, Inc. .................................................................. 220,400 4,352,900
Rite Aid Corp. ....................................................................... 148,600 5,089,550
Sears, Roebuck & Co. ................................................................. 300,000 11,700,000
Warnaco Group, Inc. (Class A)......................................................... 1,301,200 32,530,000
--------------
148,107,112
--------------

<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>

Consumer Staples (9.7%)
First Brands Corp. ................................................................... 97,100 $ 4,624,388
Gillette Co. ......................................................................... 400,000 20,850,000
Libbey, Inc. ......................................................................... 300,000 6,750,000
PepsiCo, Inc. ........................................................................ 100,000 5,587,500
Philip Morris Cos., Inc. ............................................................. 300,500 27,195,250
Quaker Oats Co. ...................................................................... 300,000 10,350,000
Sunbeam Corp. ........................................................................ 274,300 4,183,075
Wrigley (Wm.) Jr. Co. ................................................................ 46,400 2,436,000
--------------
81,976,213
--------------
Energy (5.0%)
Amoco Corp. .......................................................................... 95,000 6,828,125
Anadarko Petroleum Corp. ............................................................. 172,500 9,336,562
Apache Corp. ......................................................................... 138,700 4,091,650
British Petroleum Co. plc ADR......................................................... 94,391 9,639,681
Burlington Resources, Inc. ........................................................... 125,000 4,906,250
Chevron Corp. ........................................................................ 150,000 7,875,000
--------------
42,677,268
--------------
Energy Services (2.1%)
Halliburton Co. ...................................................................... 163,000 8,251,875
Schlumberger Ltd...................................................................... 135,500 9,383,375
--------------
17,635,250
--------------
Entertainment & Media (4.4%)
Reader's Digest Association, Inc.
(Class A non vtg.)................................................................... 165,800 8,497,250
Time Warner, Inc. .................................................................... 499,700 18,926,138
*Viacom, Inc. (Class B)............................................................... 215,000 10,185,625
--------------
37,609,013
--------------
Health (10.4%)
*Amgen, Inc. ......................................................................... 332,800 19,760,000
*Apria Healthcare Group, Inc. ........................................................ 1,231,520 34,790,440
*Ethical Holdings Ltd. Spon. ADR...................................................... 300,000 2,700,000
*Genesis Health Ventures, Inc. ....................................................... 175,000 6,387,500
*Inhale Therapeutic Systems........................................................... 140,000 1,365,000
Johnson & Johnson..................................................................... 75,000 6,421,875
*PacifiCare Health Systems, Inc.
(Class A)............................................................................ 85,000 7,395,000
*Penederm, Inc. ...................................................................... 147,200 1,674,400
Warner-Lambert Co. ................................................................... 78,800 7,653,450
--------------
88,147,665
--------------
</TABLE>

16
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA GROWTH FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
Common Stocks (Continued)
<S> <C> <C>
Hotels & Gaming (6.1%)
*Circus Circus Enterprises, Inc. ..................................................... 613,500 $ 17,101,313
*Host Marriott Corp. ................................................................. 400,000 5,300,000
Marriott International, Inc. ......................................................... 200,000 7,650,000
*Mirage Resorts, Inc. ................................................................ 100,000 3,450,000
*Rio Hotel & Casino, Inc. ............................................................ 500,400 5,942,250
*Station Casinos, Inc. ............................................................... 862,600 12,615,525
--------------
52,059,088
--------------
Insurance (3.4%)
Allstate Corp. ....................................................................... 300,000 12,337,500
American International Group, Inc. ................................................... 96,150 8,893,875
*ITT Hartford Group, Inc. ............................................................ 150,000 7,256,250
--------------
28,487,625
--------------
Machinery & Capital Spending (5.6%)
*American Standard Cos., Inc. ........................................................ 231,400 6,479,200
Case Corp. ........................................................................... 225,000 10,293,750
Emerson Electric Co. ................................................................. 200,000 16,350,000
General Electric Co. ................................................................. 200,000 14,400,000
--------------
47,522,950
--------------
Real Estate Securities (5.4%)
Amli Residential Properties Trust..................................................... 180,500 3,610,000
Beacon Properties Corp. .............................................................. 345,000 7,935,000
Camden Property Trust................................................................. 166,250 3,969,219
Duke Realty Investments, Inc. ........................................................ 84,100 2,638,637
Equity Residential Properties Trust................................................... 355,000 10,871,875
JP Realty, Inc. ...................................................................... 350,000 7,656,250
Simon Property Group, Inc. ........................................................... 194,300 4,736,063
TriNet Corporate Realty Trust, Inc. .................................................. 146,000 3,978,500
--------------
45,395,544
--------------
Technology (15.4%)
Adobe Systems, Inc. .................................................................. 250,300 15,518,600
*Bay Networks, Inc. .................................................................. 200,350 8,239,394
Boeing Co. ........................................................................... 100,000 7,837,500
*Cabletron Systems, Inc. ............................................................. 53,500 4,333,500
*Cisco Systems, Inc. ................................................................. 135,000 10,074,375
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>

*Compaq Computer Corp. ............................................................... 170,000 $ 8,160,000
*Computer Sciences Corp. ............................................................. 250,400 17,590,600
*Dell Computer Corp. ................................................................. 100,000 3,462,500
Ericsson (L.M.) Telephone Co. (Class B) Spon. ADR..................................... 682,300 13,304,850
General Motors Corp. (Class E)........................................................ 155,900 8,106,800
Hewlett-Packard Co. .................................................................. 58,300 4,882,625
*Oracle Corp. ........................................................................ 198,900 8,428,387
*Sun Microsystems, Inc. .............................................................. 200,000 9,125,000
*Tellabs, Inc. ....................................................................... 168,300 6,227,100
*3Com Corp. .......................................................................... 123,800 5,772,175
--------------
131,063,406
--------------
Utilities/Communications (1.8%)
*Paging Network, Inc. ................................................................ 400,000 9,750,000
Vodafone Group plc ADR................................................................ 150,000 5,287,500
--------------
15,037,500
--------------
Total Common Stocks
(Cost $680,853,085).................................................................. 840,824,393
--------------
Repurchase Agreement (1.2%)
Goldman Sachs Corp.
5.447% dated 12/29/1995,
due 01/02/1996 in the
amount of $10,447,456.
Collateralized by U.S. Treasury Bond
8.750% due 11/15/2008
(Cost $10,441,223).................................................................. $ 10,441,223 10,441,223
--------------
Total Investments (100.3%)
(Cost $691,294,308)...................................................................... 851,265,616
Receivables less liabilities (-0.3%)...................................................... (2,534,764)
--------------
Net Assets (100.0%)....................................................................... $ 848,730,852
--------------
--------------
</TABLE>

(1) See Note 1 of Notes to Financial Statements.

* Non-income producing

The accompanying notes are an integral part
of the financial statements.

17
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA INTERNATIONAL STOCK FUND, INC.
<TABLE>
<CAPTION>
Shares or
Principal
December 31, 1995 Amount Value(1)
------------ --------------
<S> <C> <C>
Common Stocks (90.7%)
Brazil (0.8%)
Companhia Energetica de Minas Gerais SA, ADR (Utilities-Electric)..................... 22,776 $ 498,225
Usinas Siderurgicas de Minas Gerais SA, ADR (Metals, Mining & Steel).................. 45,000 360,000
--------------
858,225
--------------
Canada (2.9%)
Bombardier, Inc. (Class B) (Manufacturing-Diversified Industries)..................... 80,000 1,056,028
*Future Shop Ltd., The (Retail)....................................................... 65,800 711,756
Magna International, Inc. (Class A) (Motor Vehicles & Parts).......................... 11,000 473,929
NOVA Corp. (Chemicals)................................................................ 85,000 680,000
--------------
2,921,713
--------------
Finland (2.4%)
Finnair Oy (Transportation)........................................................... 70,000 516,331
Kesko Oy (Retail)..................................................................... 57,000 710,809
Valmet Oy (Class A) (Machinery & Capital Spending).................................... 50,000 1,244,727
--------------
2,471,867
--------------
France (5.9%)
Alcatel Alsthom SA (Electrical Equipment)............................................. 2,000 172,697
AXA SA (Insurance).................................................................... 14,000 944,882
BIC SA (Consumer Products)............................................................ 7,000 712,956
Brioche Pasquier SA (Food Processing)................................................. 3,000 365,068
Carrefour SA (Retail)................................................................. 1,400 850,680
Cie General des Eaux (Utilities)...................................................... 3,400 339,965
GrandOptical-PhotoService SA (Retail)................................................. 4,000 391,042
LVMH Moet Hennessy Louis Vuitton SA (Consumer Products)............................... 2,800 584,109
Societe Nationale d'Exploitation Industrielle des Tabacs et Allumettes (Consumer
Products)............................................................................ 17,000 617,139
Societe Generale SA (Banking)......................................................... 7,600 940,382
--------------
5,918,920
--------------

<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>

Germany (5.9%)
Allianz Holding AG (Insurance)........................................................ 500 $ 977,281
Bayer AG (Chemicals).................................................................. 3,000 793,778
Daimler-Benz AG (Motor Vehicles & Parts).............................................. 1,000 504,719
Gehe AG (Wholesale Distributor)....................................................... 1,800 918,560
Karstadt AG (Retail).................................................................. 1,500 613,422
Mannesmann AG (Machinery & Capital Spending).......................................... 2,400 766,221
*SGL Carbon AG (Metals, Mining &
Steel)............................................................................... 12,000 931,143
Siemens AG (Electrical Equipment)..................................................... 800 439,007
--------------
5,944,131
--------------
Hong Kong (6.7%)
Cheung Kong Holdings Ltd. (Real Estate)............................................... 300,000 1,827,541
Florens Group Ltd. (Container Leasing)................................................ 920,000 600,903
HSBC Holdings plc (Banking)........................................................... 122,855 1,859,104
Hutchison Whampoa Ltd. (Consumer Products)............................................ 135,000 822,394
Sun Hung Kai Properties Ltd. (Real Estate)............................................ 70,000 572,642
Swire Pacific Ltd. (Class A) (Transportation)......................................... 140,000 1,086,436
--------------
6,769,020
--------------
India (2.4%)
Bajaj Auto Ltd., GDR (Motor Vehicles & Parts)......................................... 12,400 313,100
*Indian Hotels Co. Ltd., GDS, The (Entertainment & Leisure)........................... 30,000 570,000
Larsen & Toubro Ltd., GDR (Engineering & Construction)................................ 40,000 690,000
Tata Engineering & Locomotive Co., Ltd., GDS (Motor Vehicles & Parts)................. 66,400 854,900
--------------
2,428,000
--------------
Italy (1.5%)
*De Rigo S.p.A., ADS (Consumer Products).............................................. 24,000 546,000
*Gucci Group NV (Consumer Products)................................................... 25,000 971,875
--------------
1,517,875
--------------
</TABLE>

18
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA INTERNATIONAL STOCK FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
Common Stocks (Continued)
<S> <C> <C>
Japan (34.3%)
Ajinomoto Co., Inc. (Food & Beverages)................................................ 20,000 $ 223,084
BRIDGESTONE CORP. (Motor Vehicles & Parts)............................................ 22,000 349,951
CANON, INC. (Electronics)............................................................. 48,000 870,611
Daiwa Securities Co., Ltd. (Financial Services)....................................... 45,000 689,622
Daiwabo Information System Co., Ltd. (Technology)..................................... 9,000 234,821
East Japan Railway Co. (Transportation)............................................... 74 360,310
Fuji Bank Ltd., The (Banking)......................................................... 35,000 774,006
Fuji Photo Film Co., Ltd. (Entertainment & Leisure)................................... 11,000 317,944
FUJICOPIAN CO., LTD. (Machinery & Capital Spending)................................... 21,000 157,042
Industrial Bank of Japan Ltd., The (Banking).......................................... 27,000 819,690
ITO-YOKADO CO., LTD. (Retail)......................................................... 7,000 431,814
JUSCO CO., LTD. (Retail).............................................................. 25,000 652,279
KAJIMA CORP. (Construction)........................................................... 32,000 316,586
Kao Corp. (Consumer Products)......................................................... 20,000 248,303
Kawasaki Steel Corp. (Metals, Mining & Steel)......................................... 158,000 551,697
KEYENCE CORP. (Electronics)........................................................... 12,000 1,385,063
Kinki Nippon Railway Co., Ltd. (Transportation)....................................... 39,000 295,053
KOMATSU LTD. (Machinery & Capital Spending)........................................... 30,000 247,333
KUBOTA CORP. (Machinery & Capital Spending)........................................... 70,000 451,503
Laox Co., Ltd. (Retail)............................................................... 26,000 524,539
Marubeni Corp. (Wholesale Distributor)................................................ 106,000 574,724
Mitsubishi Bank Ltd., The (Banking)................................................... 33,000 777,789
Mitsubishi Chemical Corp. (Chemicals)................................................. 76,000 370,049
Mitsubishi Estate Co., Ltd. (Real Estate)............................................. 72,000 900,873
Mitsubishi Heavy Inds., Ltd. (Machinery & Capital Spending)........................... 120,000 957,905
Mitsubishi Trust & Banking Corp., The (Banking)....................................... 23,000 383,705
Mitsui Fudosan Co., Ltd. (Real Estate)................................................ 100,000 1,231,814
MITSUMI ELECTRIC CO., LTD. (Electronics).............................................. 24,000 579,631
MORI SEIKI CO., LTD. (Machinery & Capital Spending)................................... 25,000 564,985
NEC Corp. (Electronics)............................................................... 40,000 488,846
NICHICON CORP. (Electronics).......................................................... 18,000 265,373
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>

Nintendo Co., Ltd. (Entertainment & Leisure).......................................... 3,000 $ 228,419
NIPPON STEEL CORP. (Metals, Mining & Steel)........................................... 200,000 686,712
NIPPON TELEGRAPH & TELEPHONE CORP. (Utilities-Communication).......................... 200 1,620,597
Nippon Yusen Kabushiki Kaisha (Transportation)........................................ 55,000 319,544
NIPPONDENSO CO., LTD. (Motor Vehicles & Parts)........................................ 23,000 430,553
NISSAN MOTOR CO., LTD. (Motor Vehicles & Parts)....................................... 47,000 361,503
NISSHO ELECTRONICS CORP. (Electronics)................................................ 50,000 1,188,167
Nomura Securities Co., Ltd., The (Financial Services)................................. 42,000 916,586
NSK Ltd. (Machinery & Capital Spending)............................................... 164,000 1,193,016
NTN CORP. (Machinery & Capital Spending).............................................. 161,000 1,077,498
NTT Data Communications Systems Corp. (Business Services)............................. 35 1,177,983
OMRON CORP. (Electronics)............................................................. 10,000 230,844
OSG CORP. (Machinery & Capital Spending).............................................. 13,000 89,273
ROHM CO., LTD. (Electronics).......................................................... 17,000 961,300
SANKYO CO., LTD. (Pharmaceuticals).................................................... 12,000 270,029
Sanwa Bank Ltd., The (Banking)........................................................ 35,000 712,900
Sekisui Chemical Co., Ltd. (Chemicals)................................................ 82,000 1,208,923
SHIMIZU CORP. (Construction).......................................................... 30,000 305,529
Shin-Etsu Chemical Co., Ltd. (Chemicals).............................................. 20,000 415,131
SONY CORP. (Electronics).............................................................. 10,000 600,388
Takeda Chemical Inds., Ltd. (Pharmaceuticals)......................................... 27,000 445,199
Tokio Marine & Fire Insurance Co., Ltd., The (Insurance).............................. 65,000 851,115
TORAY INDUSTRIES, INC. (Chemicals).................................................... 75,000 494,665
TOYOTA MOTOR CORP. (Motor Vehicles & Parts)........................................... 37,000 785,936
TRANS COSMOS, INC. (Business Services)................................................ 6,000 393,404
Tsuchiya Home Co., Ltd. (Construction)................................................ 35,000 594,083
--------------
34,556,242
--------------
</TABLE>

19
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA INTERNATIONAL STOCK FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
Common Stocks (Continued)
<S> <C> <C>
Korea (2.3%)
*CITC Seoul Excel Trust, IDR (Investment Trust)....................................... 130,000 $ 1,293,500
Daehan Blue-Chip Index Trust, IDR (Investment Trust).................................. 45,000 1,023,300
--------------
2,316,800
--------------
Netherlands (4.4%)
Aegon NV (Insurance).................................................................. 25,000 1,107,437
*BE Semiconductor Inds. NV (Electronics).............................................. 60,000 780,000
Elsevier NV (Publishing).............................................................. 80,000 1,068,131
Heineken NV (Food & Beverages)........................................................ 3,800 674,981
Royal Dutch Petroleum Co. (Energy).................................................... 5,500 769,341
--------------
4,399,890
--------------
Norway (1.3%)
UNI-Storebrand AS (Class A) (Insurance)............................................... 240,000 1,330,314
--------------
Switzerland (5.2%)
Alusuisse-Lonza Holding AG (Bearer) (Metals, Mining & Steel).......................... 1,200 953,739
BBC Brown Boveri Ltd. (Series A) (Bearer) (Electrical Equipment)...................... 750 873,913
Ciba-Geigy AG (Bearer) (Pharmaceuticals).............................................. 1,150 1,010,000
Roche Holding Ltd. (Genusssheine) (Pharmaceuticals)................................... 140 1,110,870
Swiss Reinsurance Co. (Registered) (Insurance)........................................ 560 653,496
Zurich Insurance Co. (Registered) (Insurance)......................................... 2,000 600,000
--------------
5,202,018
--------------
United Kingdom (14.7%)
Abbey National plc (Banking).......................................................... 50,000 493,377
B.A.T Inds. plc (Consumer/Business Services).......................................... 80,000 704,381
Barclays plc (Banking)................................................................ 40,000 458,623
BOC Group plc, The (Chemicals)........................................................ 25,000 349,475
British Aerospace plc (Aircraft & Aerospace).......................................... 48,000 592,645
British Petroleum Co. plc (Energy).................................................... 154,835 1,293,620
British Sky Broadcasting Group plc (Media)............................................ 100,000 630,685
Compass Group plc (Food & Beverages).................................................. 46,000 348,994
Electrocomponents plc (Electronics)................................................... 86,000 479,677
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>

Glaxo Wellcome plc (Pharmaceuticals).................................................. 35,000 $ 496,868
Hays plc (Business Services).......................................................... 120,000 700,037
Lloyds TSB Group plc (Banking)........................................................ 189,280 972,041
Next plc (Retail)..................................................................... 160,000 1,131,974
Provident Financial plc (Financial Services).......................................... 66,000 838,136
Prudential Corp. (Insurance).......................................................... 81,155 521,905
Reed International plc (Publishing)................................................... 37,000 563,435
Reuters Holdings plc (Business Services).............................................. 100,000 914,609
Sage Group plc, The (Business
Services)............................................................................ 100,000 511,995
Siebe plc (Machinery & Capital Spending).............................................. 71,190 876,431
SmithKline Beecham plc (Class A) (Pharmaceuticals).................................... 60,000 660,939
THORN EMI plc (Entertainment & Leisure)............................................... 42,795 1,006,902
Vodafone Group plc (Utilities-Communication).......................................... 90,000 322,557
--------------
14,869,306
--------------
Total Common Stocks
(Cost $81,259,082)................................................................... 91,504,321
--------------
Preferred Stocks (4.4%)
Brazil (2.1%)
Companhia Cervejaria Brahma SA (Food & Beverages)..................................... 770,000 316,978
*DIXIE TOGA SA (Receipts) (Containers)................................................ 437,500 382,706
Refrigeracao Parana SA (Consumer Products)............................................ 112,500,000 224,607
Telecomunicacoes Brasileiras SA (Utilities-Communication)............................. 25,000,000 1,204,075
--------------
2,128,366
--------------
Germany (2.3%)
Fresenius AG (Pharmaceuticals)........................................................ 8,500 808,109
Jil Sander AG (Consumer Products)..................................................... 765 564,191
Systeme, Anwendungen, Produkte in der Dattenverarbeitung AG (Business Services)....... 6,000 910,171
--------------
2,282,471
--------------
Total Preferred Stocks
(Cost $3,727,581).................................................................... 4,410,837
--------------
</TABLE>

20
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA INTERNATIONAL STOCK FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
Warrants (1.8%)
<S> <C> <C>
Germany (0.6%)
*Veba AG (04/06/1998) (Utilities-
Electric)........................................................................... 4,000 $ 631,947
--------------
Japan (1.2%)
*Kyocera Corp. #2 (01/23/1998) (Electronics).......................................... 865 1,081,250
*Mr. Max Corp. (02/17/1998) (Retail).................................................. 5,000 107,608
--------------
1,188,858
--------------
Total Warrants
(Cost $1,782,383).................................................................... 1,820,805
--------------
Total investments, excluding temporary cash investment
(Cost $86,769,046)................................................................... 97,735,963
--------------
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>

Repurchase Agreement (2.8%)
Goldman Sachs Corp.
5.447% dated 12/29/1995,
due 01/02/1996 in the
amount of $2,820,406.
Collateralized by U.S. Treasury Bond
8.750% due 11/15/2008
(Cost $2,818,723).................................................................... $ 2,818,723 $ 2,818,723
--------------
Total Investments (99.7%)
(Cost $89,587,769)....................................................................... 100,554,686
Cash and receivables less liabilities (0.3%).............................................. 318,774
--------------
Net Assets (100.0%)....................................................................... $ 100,873,460
--------------
--------------
</TABLE>

(1) See Note 1 of Notes to Financial Statements.

* Non-income producing

The accompanying notes are an integral part
of the financial statements.

21
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA SPECIAL FUND, INC.
<TABLE>
<CAPTION>
Shares or
Principal
December 31, 1995 Amount Value(1)
------------ --------------
<S> <C> <C>
Common Stocks (97.9%)
Aerospace (0.7%)
*BE Aerospace, Inc. .................................................................. 505,000 $ 5,365,625
*Wyman-Gordon Co. .................................................................... 350,000 4,812,500
--------------
10,178,125
--------------
Banking & Finance (9.6%)
Aames Financial Corp. ................................................................ 360,000 10,035,000
ADVANTA Corp. (Class B)............................................................... 330,000 12,003,750
Alex. Brown, Inc. .................................................................... 250,000 10,500,000
Citicorp.............................................................................. 225,000 15,131,250
Great Western Financial Corp. ........................................................ 295,000 7,522,500
Green Tree Financial Corp. ........................................................... 600,000 15,825,000
Morgan Stanley Group, Inc. ........................................................... 85,000 6,853,125
Schwab (Charles) Corp. ............................................................... 400,000 8,050,000
Standard Federal Bancorp.............................................................. 350,000 13,781,250
U.S. Bancorp (Ore.)................................................................... 442,000 14,862,250
Washington Federal, Inc. ............................................................. 350,000 8,968,750
Washington Mutual, Inc. .............................................................. 325,000 9,384,375
--------------
132,917,250
--------------
Building & Forestry Products (0.7%)
*Fort Howard Corp. ................................................................... 450,000 10,125,000
--------------
Business & Consumer Services (7.6%)
*American Management Systems, Inc. ................................................... 370,000 11,100,000
*BISYS Group, Inc. ................................................................... 400,000 12,300,000
*CBT Group Public Ltd. plc Spon. ADR.................................................. 102,500 5,432,500
*CKS Group, Inc. ..................................................................... 10,000 390,000
*CompDent Corp. ...................................................................... 220,000 9,130,000
Danka Business Systems plc ADR........................................................ 421,000 15,577,000
DENTSPLY International, Inc. ......................................................... 340,000 13,600,000
*First Commonwealth, Inc. ............................................................ 100,000 2,600,000
*FIserv, Inc. ........................................................................ 320,000 9,600,000
*Learning Tree International, Inc. ................................................... 136,000 2,125,000
Paychex, Inc. ........................................................................ 300,000 14,962,500
*United Dental Care, Inc. ............................................................ 209,000 8,621,250
--------------
105,438,250
--------------
Chemical (1.0%)
Potash Corp. of Saskatchewan, Inc. ................................................... 200,000 14,175,000
--------------
Consumer Durable (1.7%)
Harley-Davidson, Inc. ................................................................ 500,000 14,375,000
Polaris Industries, Inc. ............................................................. 50,000 1,468,750
*Ultralife Batteries, Inc. ........................................................... 285,000 6,840,000
--------------
22,683,750
--------------

<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>

Consumer Non-Durable (5.0%)
*Borders Group, Inc. ................................................................. 600,000 $ 11,100,000
*Eastbay, Inc. ....................................................................... 355,000 7,011,250
*General Nutrition Cos., Inc. ........................................................ 350,000 8,050,000
Intimate Brands, Inc. (Class A)....................................................... 250,000 3,750,000
*Micro Warehouse, Inc. ............................................................... 100,000 4,325,000
*Neostar Retail Group, Inc. .......................................................... 590,000 4,351,250
*OfficeMax, Inc. ..................................................................... 420,000 9,397,500
Quality Food Centers, Inc. ........................................................... 250,000 5,500,000
*Sports Authority, Inc., The.......................................................... 350,000 7,131,250
*Zale Corp. .......................................................................... 490,000 7,901,250
--------------
68,517,500
--------------
Consumer Staples (0.5%)
DEKALB Genetics Corp. (Class B)....................................................... 150,000 6,768,750
--------------
Energy (3.8%)
Anadarko Petroleum Corp. ............................................................. 475,000 25,709,375
Apache Corp. ......................................................................... 545,000 16,077,500
Burlington Resources, Inc. ........................................................... 100,000 3,925,000
*Cairn Energy USA, Inc. .............................................................. 500,000 7,000,000
--------------
52,711,875
--------------
Energy Services (6.9%)
*BJ Services Co. ..................................................................... 400,000 11,600,000
*Grant Geophysical, Inc. ............................................................. 400,000 1,000,000
Halliburton Co. ...................................................................... 250,000 12,656,250
*Input/Output, Inc. .................................................................. 260,000 15,015,000
*Landmark Graphics Corp. ............................................................. 300,000 6,975,000
*Nabors Industries, Inc. ............................................................. 700,000 7,787,500
*Noble Drilling Corp. ................................................................ 900,000 8,100,000
*Oceaneering International, Inc. ..................................................... 630,000 8,111,250
*Smith International, Inc. ........................................................... 625,000 14,687,500
Sonat Offshore Drilling, Inc. ........................................................ 220,000 9,845,000
--------------
95,777,500
--------------
Entertainment & Media (4.8%)
Citicasters, Inc. (Class A)........................................................... 300,000 7,087,500
*Electronic Arts, Inc. ............................................................... 310,000 8,098,750
*Evergreen Media Corp. (Class A)...................................................... 420,000 13,440,000
*GT Interactive Software Corp. ....................................................... 225,000 3,150,000
*Hollywood Entertainment Corp. ....................................................... 250,000 2,093,750
Nelson (Thomas), Inc. ................................................................ 420,000 5,460,000
*Regal Cinemas, Inc. ................................................................. 380,000 11,305,000
*SFX Broadcasting, Inc. (Class A)..................................................... 250,000 7,562,500
*Softkey International, Inc. ......................................................... 335,000 7,746,875
--------------
65,944,375
--------------
</TABLE>

22
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA SPECIAL FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
Common Stocks (Continued)
<S> <C> <C>
Health (12.0%)
*Apria Healthcare Group, Inc. ........................................................ 630,000 $ 17,797,500
*Boston Scientific Corp. ............................................................. 300,000 14,700,000
*Elan Corp. plc ADR................................................................... 400,000 19,450,000
*Gilead Sciences, Inc. ............................................................... 300,000 9,600,000
HBO & Co. ............................................................................ 155,000 11,876,875
*Health Care & Retirement Corp. (Del.)................................................ 275,000 9,625,000
*Interneuron Pharmaceuticals, Inc. ................................................... 134,400 3,427,200
*Medic Computer Systems, Inc. ........................................................ 180,000 10,890,000
*Mid-Atlantic Medical Services, Inc. ................................................. 300,000 7,275,000
Omnicare, Inc. ....................................................................... 220,000 9,845,000
*OrNda Healthcorp..................................................................... 430,000 9,997,500
*Oxford Health Plans, Inc. ........................................................... 130,000 9,603,750
*Renal Treatment Centers, Inc. ....................................................... 275,000 12,100,000
*ResMed, Inc. ........................................................................ 529,000 6,877,000
Stryker Corp. ........................................................................ 250,000 13,125,000
--------------
166,189,825
--------------
Hotels & Gaming (0.9%)
*Red Lion Hotels, Inc. ............................................................... 120,000 2,100,000
*Station Casinos, Inc. ............................................................... 700,000 10,237,500
--------------
12,337,500
--------------
Insurance (3.1%)
Berkley (W.R.) Corp. ................................................................. 172,200 9,255,750
Foremost Corp. of America............................................................. 254,000 12,890,500
Mutual Risk Management Ltd. .......................................................... 230,000 10,522,500
PMI Group, Inc., The.................................................................. 220,000 9,955,000
--------------
42,623,750
--------------
Machinery & Capital Spending (8.2%)
AGCO Corp. ........................................................................... 300,000 15,300,000
*American Standard Cos., Inc. ........................................................ 300,000 8,400,000
Applied Power, Inc. (Class A)......................................................... 250,000 7,500,000
*Avondale Industries, Inc. ........................................................... 250,000 3,625,000
*Checkpoint Systems, Inc. ............................................................ 450,000 16,818,750
Duriron Co., Inc. .................................................................... 225,000 5,259,375
*Elsag Bailey Process Automation N.V.................................................. 550,000 14,781,250
*Jacobs Engineering Group, Inc. ...................................................... 402,000 10,050,000
Measurex Corp. ....................................................................... 550,000 15,537,500
*Rauma Oy Spon. ADR................................................................... 350,000 6,606,250
Titan Wheel International, Inc. ...................................................... 600,000 9,750,000
--------------
113,628,125
--------------
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>

Metal Mining & Steel (2.1%)
*Alumax, Inc. ........................................................................ 300,000 $ 9,187,500
Freeport-McMoRan Copper & Gold, Inc. (Class A)........................................ 330,000 9,240,000
Schnitzer Steel Industries, Inc.
(Class A)............................................................................ 345,000 10,522,500
--------------
28,950,000
--------------
Pollution Control (2.3%)
*Air & Water Technologies Corp. (Class A)............................................. 467,500 2,863,437
*Osmonics, Inc. ...................................................................... 460,000 9,372,500
*Tetra Tech, Inc. .................................................................... 295,700 6,727,175
*U.S. Filter Corp. ................................................................... 500,000 13,312,500
--------------
32,275,612
--------------
Real Estate Securities (0.8%)
Equity Residential Properties Trust................................................... 360,000 11,025,000
--------------
Technology (23.2%)
Adobe Systems, Inc. .................................................................. 375,000 23,250,000
*Andrew Corp. ........................................................................ 350,000 13,387,500
*Ascend Communications, Inc. ......................................................... 270,000 21,903,750
*Asyst Technologies, Inc. ............................................................ 130,000 4,582,500
*Bay Networks, Inc. .................................................................. 170,000 6,991,250
*Cabletron Systems, Inc. ............................................................. 110,000 8,910,000
*Cascade Communications Corp. ........................................................ 160,000 13,640,000
*Cisco Systems, Inc. ................................................................. 220,000 16,417,500
*Coherent Communications Systems Corp. ............................................... 445,000 8,566,250
*Comshare, Inc. ...................................................................... 215,000 5,590,000
*Dell Computer Corp. ................................................................. 200,000 6,925,000
*Diamond Multimedia Systems, Inc. .................................................... 100,000 3,587,500
*Digital Link Corp. .................................................................. 305,000 4,308,125
ECI Telecommunications Ltd. .......................................................... 335,000 7,642,188
Ericsson (L.M.) Telephone Co. (Class B) Spon. ADR..................................... 300,000 5,850,000
*Harmonic Lightwaves, Inc. ........................................................... 490,000 5,390,000
*HNC Software, Inc. .................................................................. 175,000 8,356,250
*Integrated Measurement Systems, Inc. ................................................ 200,000 2,950,000
*Komag, Inc. ......................................................................... 180,000 8,302,500
*MEMC Electronic Materials, Inc. ..................................................... 375,000 12,234,375
*National Instruments Corp. .......................................................... 160,000 3,240,000
*Novadigm, Inc. ...................................................................... 385,000 10,924,375
*PLATINUM Technology, Inc. ........................................................... 400,000 7,350,000
*Premisys Communications, Inc. ....................................................... 300,000 16,800,000
*Seagate Technology, Inc. ............................................................ 270,000 12,825,000
*Security Dynamics Technologies, Inc. ................................................ 200,000 10,900,000
*Silicon Valley Group, Inc. .......................................................... 185,000 4,671,250
</TABLE>

23
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA SPECIAL FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
Common Stocks (Continued)
<S> <C> <C>
*Softdesk, Inc. ...................................................................... 290,000 $ 5,727,500
*StrataCom, Inc. ..................................................................... 200,000 14,700,000
*Sun Microsystems, Inc. .............................................................. 360,000 16,425,000
System Software Associates, Inc. ..................................................... 187,500 4,078,125
*Tellabs, Inc. ....................................................................... 250,000 9,250,000
*3Com Corp. .......................................................................... 330,000 15,386,250
--------------
321,062,188
--------------
Transportation (1.3%)
Airborne Freight Corp. ............................................................... 500,000 13,312,500
*Celadon Group, Inc. ................................................................. 560,000 5,040,000
--------------
18,352,500
--------------
Utilities/Communications (1.7%)
Cincinnati Bell, Inc. ................................................................ 210,000 7,297,500
*CommNet Cellular, Inc. .............................................................. 350,000 10,106,250
*Mobile Telecommunication Technologies Corp. ......................................... 300,000 6,412,500
--------------
23,816,250
--------------
Total Common Stocks
(Cost $1,154,264,142)................................................................ 1,355,498,125
--------------
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>

Repurchase Agreement (1.8%)
Goldman Sachs Corp.
5.447% dated 12/29/1995,
due 01/02/1996 in the
amount of $24,213,292.
Collateralized by U.S. Treasury Bond
8.750% due 11/15/2008
(Cost $24,198,846)................................................................... $ 24,198,846 $ 24,198,846
--------------
Total Investments (99.7%) (Cost $1,178,462,988)........................................... 1,379,696,971
Receivables less liabilities (0.3%)....................................................... 4,718,064
--------------
Net Assets (100.0%)....................................................................... $1,384,415,035
--------------
--------------
</TABLE>

(1) See Note 1 of Notes to Financial Statements.

* Non-Income Producing

The accompanying notes are an integral part
of the financial statements.

24
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA REAL ESTATE EQUITY FUND, INC.
<TABLE>
<CAPTION>
Shares or
Principal
December 31, 1995 Amount Value(1)
------------ ---------------
<S> <C> <C>
Common Stocks (94.1%)
Real Estate
Apartments (33.3%)
Amli Residential Properties Trust.... 30,800 $ 616,000
Associated Estates Realty Corp. ..... 38,000 817,000
Avalon Properties, Inc. ............. 36,000 774,000
Camden Property Trust................ 35,300 842,787
Equity Residential Properties
Trust............................... 20,300 621,687
Evans Withycombe Residential,
Inc. ............................... 36,000 774,000
Oasis Residential, Inc. ............. 34,800 791,700
Prime Residential, Inc. ............. 38,000 703,000
Smith (Charles E.) Residential
Realty, Inc. ....................... 22,500 531,563
Wellsford Residential Property
Trust............................... 31,125 715,875
---------------
7,187,612
---------------
Office (11.0%)
Beacon Properties Corp. ............. 33,900 779,700
Cali Realty Corp. ................... 37,100 811,562
Reckson Associates Realty Corp. ..... 27,000 793,125
---------------
2,384,387
---------------
Industrial (18.7%)
First Industrial Realty Trust,
Inc. ............................... 35,200 792,000
Liberty Property Trust............... 38,400 796,800
Spieker Properties, Inc. ............ 32,100 806,513
Storage Trust Realty................. 37,700 857,675
TriNet Corporate Realty Trust,
Inc. ............................... 28,800 784,800
---------------
4,037,788
---------------
Manufactured Homes (7.5%)
Chateau Properties, Inc. ............ 37,800 850,500
Sun Communities, Inc. ............... 29,000 764,875
---------------
1,615,375
---------------
Community Centers (9.0%)
Excel Realty Trust, Inc. ............ 37,500 768,750
Haagen (Alexander) Properties,
Inc. ............................... 49,000 600,250
JP Realty, Inc. ..................... 25,900 566,563
---------------
1,935,563
---------------

<CAPTION>
Shares or
Principal
Amount Value(1)
------------ ---------------
<S> <C> <C>

Shopping Malls (6.1%)
Macerich Co. ........................ 30,700 $ 614,000
Simon Property Group, Inc. .......... 28,500 694,688
---------------
1,308,688
---------------
Other (8.5%)
*Bristol Hotel Co. .................. 40,000 975,000
Starwood Lodging Trust............... 29,000 862,750
---------------
1,837,750
---------------
Total Common Stocks
(Cost $18,771,237).................. 20,307,163
---------------
Repurchase Agreements (7.0%)
Goldman Sachs Corp.
5.447% dated 12/29/1995,
due 01/02/1996 in the
amount of $1,053,900.
Collateralized by U.S. Treasury Bond
8.750% due 11/15/2008............... $ 1,053,271 1,053,271
J.P. Morgan Securities, Inc.
5.879% dated 12/29/1995,
due 01/02/1996 in the
amount of $450,290.
Collateralized by U.S. Treasury Note
6.750% due 05/31/1999............... 450,000 450,000
---------------
Total Repurchase Agreements
(Cost $1,503,271)................... 1,503,271
---------------
Total Investments (101.1%)
(Cost $20,274,508)...................... 21,810,434
Receivables less liabilities (-1.1%)..... (223,234)
---------------
Net Assets (100.0%)...................... $ 21,587,200
---------------
---------------
</TABLE>

(1) See Note 1 of Notes to Financial Statements.

* Non-income producing

The accompanying notes are an integral part
of the financial statements.

25
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA BALANCED FUND, INC.
<TABLE>
<CAPTION>
Shares or
Principal
December 31, 1995 Amount Value(1)
------------ --------------
<S> <C> <C>
Common Stocks (52.2%)
Banking & Finance (6.4%)
Ahmanson (H.F.) & Co. ............. 77,000 $ 2,040,500
American Express Co. .............. 130,200 5,387,025
Federal Home Loan Mortgage
Corp. ............................ 70,000 5,845,000
Federal National Mortgage Assn. ... 20,200 2,507,325
Fleet Financial Group, Inc. ....... 59,700 2,432,775
Greenpoint Financial Corp. ........ 120,000 3,210,000
Morgan (J.P.) & Co., Inc. ......... 57,700 4,630,425
PNC Bank Corp. .................... 160,000 5,160,000
--------------
31,213,050
--------------
Building & Forestry Products (0.9%)
Champion International Corp. ...... 100,600 4,225,200
--------------
Business Services (1.9%)
*ADT Ltd. ......................... 211,400 3,171,000
Service Corp. International........ 133,600 5,878,400
--------------
9,049,400
--------------
Chemical (1.9%)
Grace (W.R.) & Co. ................ 63,900 3,778,087
Hercules, Inc. .................... 93,100 5,248,513
--------------
9,026,600
--------------
Consumer Durable (1.3%)
Ford Motor Co. .................... 143,000 4,147,000
Harley-Davidson, Inc. ............. 82,000 2,357,500
--------------
6,504,500
--------------
Consumer Non-Durable (4.8%)
*Circus Circus Enterprises,
Inc. ............................. 89,600 2,497,600
*Federated Department Stores,
Inc. ............................. 131,900 3,627,250
Mattel, Inc. ...................... 157,800 4,852,350
Nike, Inc. (Class B)............... 61,800 4,302,825
*Payless Cashways, Inc. ........... 239,700 1,018,725
Rykoff-Sexton, Inc. ............... 81,000 1,417,500
Sears, Roebuck & Co. .............. 109,900 4,286,100
Wendy's International, Inc. ....... 65,000 1,381,250
--------------
23,383,600
--------------
Consumer Staples (4.8%)
Gillette Co. ...................... 85,400 4,451,475
Philip Morris Cos., Inc. .......... 51,400 4,651,700
Pioneer Hi-Bred International,
Inc. ............................. 43,700 2,430,812
Procter & Gamble Co. .............. 53,300 4,423,900
Sunbeam Corp. ..................... 165,300 2,520,825
Sysco Corp. ....................... 146,000 4,745,000
--------------
23,223,712
--------------

<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>
Energy (4.2%)
Chevron Corp. ..................... 50,600 $ 2,656,500
Exxon Corp. ....................... 14,850 1,189,856
Louisiana Land & Exploration
Co. .............................. 64,000 2,744,000
Mobil Corp. ....................... 36,800 4,121,600
Noble Affiliates, Inc. ............ 28,800 860,400
Royal Dutch Petroleum Co. ADR...... 43,450 6,131,881
Unocal Corp. ...................... 100,000 2,912,500
--------------
20,616,737
--------------
Energy Services (0.5%)
Baker Hughes, Inc. ................ 105,000 2,559,375
--------------
Entertainment & Media (3.3%)
Capital Cities/ABC, Inc. .......... 36,000 4,441,500
Reader's Digest Association, Inc.
(Class A non vtg.)................ 50,400 2,583,000
Time Warner, Inc. ................. 128,800 4,878,300
*Viacom, Inc. (Class B)............ 86,600 4,102,675
--------------
16,005,475
--------------
Health (6.1%)
*Amgen, Inc. ...................... 101,800 6,044,375
Bausch & Lomb, Inc. ............... 128,700 5,099,738
Becton, Dickinson & Co. ........... 34,700 2,602,500
*Humana, Inc. ..................... 86,000 2,354,250
Johnson & Johnson.................. 45,800 3,921,625
U.S. HealthCare, Inc. ............. 53,600 2,492,400
United Healthcare Corp. ........... 61,700 4,041,350
Warner-Lambert Co. ................ 33,200 3,224,550
--------------
29,780,788
--------------
Insurance (2.6%)
Aetna Life & Casualty Co. ......... 20,000 1,385,000
American International Group,
Inc. ............................. 44,800 4,144,000
Berkley (W.R.) Corp. .............. 50,000 2,687,500
TIG Holdings, Inc. ................ 150,000 4,275,000
--------------
12,491,500
--------------
Machinery & Capital Spending (2.6%)
Case Corp. ........................ 58,000 2,653,500
Emerson Electric Co. .............. 59,100 4,831,425
General Electric Co. .............. 68,300 4,917,600
--------------
12,402,525
--------------
Metal Mining & Steel (0.5%)
Worthington Industries, Inc. ...... 123,000 2,559,938
--------------
Real Estate Securities (2.9%)
American Health Properties,
Inc. ............................. 73,600 1,582,400
</TABLE>

26
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA BALANCED FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
Common Stocks (Continued)
<S> <C> <C>
Associated Estates Realty Corp. ... 76,200 $ 1,638,300
Beacon Properties Corp. ........... 45,000 1,035,000
Equity Residential Properties
Trust............................. 48,500 1,485,312
JP Realty, Inc. ................... 97,500 2,132,812
Manufactured Home Communities,
Inc. ............................. 78,000 1,365,000
National Health Investors, Inc. ... 72,000 2,385,000
Simon Property Group, Inc. ........ 52,500 1,279,688
Sun Communities, Inc. ............. 54,700 1,442,713
--------------
14,346,225
--------------
Technology (5.0%)
Adobe Systems, Inc. ............... 58,000 3,596,000
Boeing Co. ........................ 35,000 2,743,125
*Cisco Systems, Inc. .............. 39,200 2,925,300
*Computer Sciences Corp. .......... 63,200 4,439,800
Ericsson (L.M.) Telephone Co.
(Class B) Spon. ADR............... 173,000 3,373,500
General Motors Corp. (Class E)..... 82,400 4,284,800
Hewlett-Packard Co. ............... 13,000 1,088,750
*Sun Microsystems, Inc. ........... 46,000 2,098,750
--------------
24,550,025
--------------
Transportation (0.8%)
Norfolk Southern Corp. ............ 33,400 2,651,125
Southwest Airlines Co. ............ 51,700 1,202,025
--------------
3,853,150
--------------
Utilities/Communications (1.3%)
AT&T Corp. ........................ 45,000 2,913,750
Vodafone Group plc ADR............. 92,000 3,243,000
--------------
6,156,750
--------------
Utilities/Electric/Gas (0.4%)
NIPSCO Industries, Inc. ........... 51,400 1,966,050
--------------
Total Common Stocks
(Cost $210,794,217)................. 253,914,600
--------------
Convertible Preferred Stock (0.4%)
Technology (0.4%)
American Express Co.
(Cost $1,470,000)................. 40,000 2,220,000
--------------
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>

U.S. Government, Federal Agency Obligations (25.1%)
U.S. Treasury Bonds & Notes (10.3%)
U.S. Treasury Bonds
12.000% 08/15/2013............... $ 4,350,000 $ 6,714,399
8.125% 08/15/2019................ 12,230,000 15,397,326
U.S. Treasury Notes
6.125% 07/31/1996................ 6,195,000 6,229,444
6.875% 08/31/1999................ 14,780,000 15,540,579
7.250% 05/15/2004................ 5,740,000 6,378,058
--------------
50,259,806
--------------
Government National Mortgage Association (GNMA) (3.9%)
7.500% 11/20/2025 - 12/20/2025
(GNMA II)......................... 2,663,245 2,723,168
8.000% 07/15/2025 - 09/15/2025..... 2,161,304 2,252,511
8.000% 08/20/2025 - 11/20/2025
(GNMA II)......................... 9,176,322 9,505,753
8.750% 08/15/2024.................. 1,530,079 1,621,883
9.000% 01/15/2030.................. 1,028,832 1,095,387
9.375% 11/15/2029 - 02/15/2035..... 1,691,391 1,818,634
--------------
19,017,336
--------------
Federal Housing Administration (FHA) (1.3%)
FHA Insured Project Pool #12
7.430% 12/01/2021................ 922,420 965,645
FHA Insured Project Pool #23-11059
7.700% 08/01/2028................ 1,631,427 1,670,581
FHA Insured Project Pool #42
7.430% 09/01/2022................ 1,240,489 1,305,949
FHA Insured Project Pool #53
7.430% 02/01/2022................ 1,067,856 1,122,766
FHA Insured Project Pool #53-43077
9.125% 07/25/2033................ 1,106,058 1,170,431
--------------
6,235,372
--------------
Federal National Mortgage Association (FNMA) (0.2%)
8.173% 05/01/2025 (ARM).......... 800,937 826,968
--------------
Federal Home Loan Mortgage Corp. (FHLMC) (0.3%)
8.500% 10/01/2024 - 03/01/2025... 1,473,964 1,539,371
--------------
Agency Collateralized Mortgage Obligations (9.1%)
Bear Stearns Secured Inv., Inc.
Series 88-6 Cl. B
0.000% 03/20/1996................ 272,081 268,765
Collateralized Mortgage Obligation
Trust 22 Cl. Y
7.950% 05/01/2017................ 1,857,800 1,936,200
FHLMC Multiclass Mtg. Partn.
</TABLE>

27
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA BALANCED FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
U.S. Government, Federal Agency Obligations (Continued)
<S> <C> <C>
Ctfs. Gtd. Series 1203 Cl. F
6.750% 07/15/2003................ $ 720,052 $ 722,521
FHLMC Multiclass Mtg. Partn.
Ctfs. Gtd. Series 1339 Cl. C
8.000% 08/15/2006................ 750,000 823,125
FHLMC Multiclass Mtg. Partn.
Ctfs. Gtd. Series 1552 Cl. GA
6.000% 12/15/2021................ 2,000,000 1,965,000
FHLMC Multiclass Mtg. Partn.
Ctfs. Gtd. Series 1694 Cl. MA
6.100% 05/15/2023................ 2,430,954 2,394,101
FHLMC Multiclass Mtg. Partn.
Ctfs. Gtd. Series 1730 Cl. A
7.000% 07/15/2017................ 1,950,024 1,979,274
FHLMC Multiclass Mtg. Partn.
Ctfs. Gtd. Series 1761 Cl. G
8.000% 06/15/2021................ 340,000 360,291
FHLMC Multiclass Mtg. Partn.
Ctfs. Gtd. Series 1761 Cl. H
8.250% 09/15/2023................ 6,025,000 6,550,259
FHLMC Multiclass Mtg. Partn.
Ctfs. Gtd. Series 1763 Cl. H
8.250% 07/15/2023................ 130,000 141,171
FHLMC Multiclass Mtg. Partn.
Ctfs. Gtd. Series 1782 Cl. A
6.300% 05/15/2008................ 2,340,000 2,286,414
FHLMC Multiclass Mtg. Partn.
Ctfs. Gtd. Series 1782 Cl. C
6.500% 03/15/2009................ 1,894,308 1,872,144
FHLMC Multiclass Mtg. Partn.
Ctfs. Gtd. Series 1793 Cl. A
6.500% 08/15/2008................ 680,000 671,500
FNMA Gtd. REMIC Pass Thru Ctf.
REMIC Tr. 1991-G35 Cl. M
8.750% 10/25/2021................ 1,920,000 2,094,893
FNMA Gtd. REMIC Pass Thru Ctf.
REMIC Tr. 1993-205 Cl. D
0.000% 04/25/2004................ 1,990,000 1,332,106
FNMA Gtd. REMIC Pass Thru Ctf.
REMIC Tr. 1993-235 Cl. C
0.000% 10/25/1997................ 1,050,000 966,326
FNMA Gtd. REMIC Pass Thru Ctf.
REMIC Tr. 1993-225 Cl. WE
6.500% 12/25/2013................ 500,000 480,650
FNMA Gtd. REMIC Pass Thru Ctf.
REMIC Tr. 1994-91 Cl. C
6.500% 12/25/2012................ 1,450,000 1,423,755
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>
FNMA Gtd. REMIC Pass Thru Ctf.
REMIC Tr. 1995-23D Cl. G
6.500% 06/25/2008................ $ 490,000 $ 479,073
FNMA Gtd. REMIC Pass Thru Ctf.
REMIC Tr. 1989-39 Cl. D
0.000% 05/25/2009................ 1,260,000 941,094
GNMA Gtd. REMIC Pass Thru
Secs. REMIC Tr. 1994-1 Cl. PE
7.500% 07/16/2022................ 3,515,000 3,744,565
GNMA Gtd. REMIC Pass Thru
Secs. REMIC Tr. 1994-3 Cl. PG
7.250% 08/16/2019................ 1,370,000 1,443,199
GNMA Gtd. REMIC Pass Thru
Secs. REMIC Tr. 1994-5 Cl. PC
7.493% 10/16/2018................ 420,000 447,825
GNMA Gtd. REMIC Pass Thru
Secs. REMIC Tr. 1994-7 Cl. PG
6.500% 08/16/2017................ 1,550,000 1,572,754
Goldman Sachs Trust 7
Series C Cl. 2
9.100% 04/27/2017................ 11,970 11,944
Merrill Lynch Trust 25 Cl. B
8.750% 03/20/2019................ 41,895 41,816
Puerto Rico Housing Finance
Corp. Series A Cl. 4
9.000% 07/20/2017................ 745,598 745,598
U.S. VA Vendee Mtg. Gtd. REMIC
Pass Thru Ctf. 1993-2 Cl. D
6.750% 02/15/2013................ 480,000 488,549
U.S. VA Vendee Mtg. Gtd. REMIC
Pass Thru Ctf. 1993-3 Cl. 2E
6.000% 11/15/2016................ 550,000 533,335
U.S. VA Vendee Mtg. Gtd. REMIC
Pass Thru Ctf. 1994-3 Cl. 1D
6.500% 06/15/2012................ 1,178,000 1,189,073
U.S. VA Vendee Mtg. Gtd. REMIC
Pass Thru Ctf. 1995-1D Cl. 4
8.855% 02/15/2025................ 2,257,597 2,490,806
U.S. VA Vendee Mtg. Gtd. REMIC
Pass Thru Ctf. 1995-3 Cl. 1F
7.250% 12/15/2021................ 1,640,000 1,692,316
--------------
44,090,442
--------------
Total U.S. Government,
Federal Agency Obligations
(Cost $116,944,995)............... 121,969,295
--------------
</TABLE>

28
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA BALANCED FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
Other Securitized Loans (4.7%)
<S> <C> <C>
Collateralized Mortgage Obligations (2.2%)
CMC Securities Corp. I
Series 1992-B Cl. B2
7.375% 11/25/2023................ $ 2,728,253 $ 2,774,716
Residential Funding Mtg. Sec., Inc.
Series 1995-S14 Cl. A-2
7.500% 09/25/2025................ 2,300,000 2,349,680
Ryland Mortgage Sec. Corp.
Three Series 1992-D Cl. 2-A-4
8.200% 09/25/2022................ 2,745,000 2,871,956
Securitized Asset Sales, Inc.
Mtg. Pass Thru Ctf. Series
1993-3 Cl. A2
7.301% 11/25/2023................ 745,641 761,001
Securitized Asset Sales, Inc.
Mtg. Pass Thru Ctf. Series
1995-B Cl. A3
7.410% 09/25/2024................ 500,000 509,550
Securitized Asset Sales, Inc.
Mtg. Pass Thru Ctf. Series
1995-B Cl. A8
7.410% 09/25/2024................ 456,693 464,822
Structured Mtg. Asset Res. Tr.
Series 1992-6A Multiclass Ctf.
Cl. AF
8.150% 07/25/2008................ 1,000,000 1,025,000
Structured Mtg. Asset Res. Tr.
Series 1993-2A Multiclass Ctf.
Cl. AB
6.300% 07/25/2004................ 7,705 7,679
--------------
10,764,404
--------------
Asset Backed Securities (2.5%)
Advanta Mortgage Loan Trust
Series 1995-3 Cl. A-6
7.150% 09/25/2026................ 997,346 1,009,812
First Alliance Mortgage Trust
Series 1994-2 Cl. A-1
7.625% 07/25/2025................ 2,240,630 2,333,393
GE Capital Mtg. Services, Inc.
Series 1995-HE1 Cl. A6
7.500% 09/25/2010................ 3,825,846 3,921,492
Prudential Secs. Financial
Asset Funding Corp. Pass Thru
Ctf. 1994-2 Cl. A
6.350% 11/15/2014................ 4,955,458 4,959,323
--------------
12,224,020
--------------
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>
Total Other Securitized Loans
(Cost $22,259,017)................ 22,988,424
--------------
Corporate Bonds (12.0%)
Industrial (6.7%)
American President Co. Ltd.
8.000% 01/15/2024................ $ 2,025,000 $ 2,094,842
Columbia/HCA Healthcare Corp.
7.190% 11/15/2015................ 2,350,000 2,431,145
Continental Cablevision, Inc.
9.000% 09/01/2008................ 300,000 315,000
Emerson Electric Co. Euro
7.875% 06/05/1998................ 380,000 398,859
Ethan Allen, Inc.
8.750% 03/15/2001................ 500,000 515,000
Federated Department Stores, Inc.
10.000% 02/15/2001............... 1,000,000 1,080,000
Freeport-McMoRan Resource Partners
L.P.
8.750% 02/15/2004................ 400,000 408,000
Lenfest Communications, Inc.
8.375% 11/01/2005................ 1,400,000 1,405,250
Louis Dreyfus Natural Gas Corp.
9.250% 06/15/2004................ 300,000 323,673
Louisiana Land & Exploration Co.
7.650% 12/01/2023................ 1,930,000 2,017,448
Magma Copper Co.
8.700% 05/15/2005................ 400,000 456,000
Nabisco, Inc.
6.700% 06/15/2002................ 2,000,000 2,033,780
News America Holdings, Inc.
7.600% 10/11/2015................ 3,900,000 3,988,725
Riverwood International Corp.
10.750% 06/15/2000............... 200,000 215,000
Royal Caribbean Cruises Ltd.
11.375% 05/15/2002............... 1,300,000 1,417,000
Rykoff Sexton, Inc.
8.875% 11/01/2003................ 425,000 420,750
Seagull Energy Corp.
8.625% 08/01/2005................ 250,000 242,500
Sears Roebuck Acceptance Corp.
Medium Term Note
5.820% 12/07/1998................ 2,450,000 2,455,758
Southern Pacific Rail Corp.
9.375% 08/15/2005................ 350,000 379,750
Stop & Shop Cos., Inc.
9.750% 02/01/2002................ 215,000 237,038
Tele-Communications, Inc.
8.250% 01/15/2003................ 3,500,000 3,783,990
</TABLE>

29
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA BALANCED FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
Corporate Bonds (Continued)
<S> <C> <C>
Temple Inland, Inc.
Medium Term Note
9.000% 04/20/1998................ $ 200,000 $ 214,648
Time Warner Entertainment Co. L.P.
9.625% 05/01/2002................ 1,900,000 2,200,903
8.875% 10/01/2012................ 1,240,000 1,395,980
Union Oil Co. of California
6.375% 02/01/2004................ 2,275,000 2,289,173
--------------
32,720,212
--------------
Financial (4.1%)
Associates Corp. N.A.
7.250% 05/15/1998................ 450,000 466,425
CIT Group Holdings, Inc.
Medium Term Note
7.000% 09/30/1997................ 1,040,000 1,065,605
CP Limited Partnership
8.750% 03/02/2000................ 1,450,000 1,539,363
Commercial Credit Group, Inc.
6.625% 06/01/2015................ 1,250,000 1,291,275
ERP Operating Limited Partnership
(144A)
8.500% 05/15/1999................ 800,000 847,944
Equitable Cos., Inc.
9.000% 12/15/2004................ 1,900,000 2,233,241
First Security Corp. (Del.)
7.875% 10/15/1999................ 800,000 850,576
Fleet Mortgage Group, Inc.
6.500% 09/15/1999................ 550,000 561,836
Ford Motor Credit Co.
6.250% 11/08/2000................ 440,000 446,195
General Electric Capital Corp.
Medium Term Note
7.640% 01/23/1997................ 1,500,000 1,535,055
Goldman Sachs Group L.P. (144A)
7.800% 07/15/2002................ 1,250,000 1,335,700
Household Finance Corp.
6.750% 06/01/2000................ 1,500,000 1,551,840
International Lease Finance Corp.
4.750% 07/15/1996................ 1,200,000 1,193,784
Morgan Stanley Group, Inc.
Medium Term Note
7.790% 02/03/1997................ 1,905,000 1,950,339
Spieker Properties
6.800% 12/15/2001................ 1,460,000 1,463,665
Wachovia Bank Medium Term Note
6.000% 03/15/1999................ 1,425,000 1,441,701
--------------
19,774,544
--------------
<CAPTION>
Shares or
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>
Utility (0.4%)
GTE Corp.
8.850% 03/01/1998................ $ 750,000 $ 799,612
GTE North, Inc.
5.500% 02/15/1999................ 1,000,000 993,550
--------------
1,793,162
--------------
Yankee (0.8%)
Hydro-Quebec
8.000% 02/01/2013................ 1,520,000 1,688,082
Manitoba Province
7.750% 02/01/2002................ 700,000 765,436
Province Ontario
7.375% 01/27/2003................ 1,300,000 1,408,264
Rogers Cantel Mobile, Inc.
10.750% 11/01/2001............... 150,000 157,875
--------------
4,019,657
--------------
Total Corporate Bonds
(Cost $56,049,815)................ 58,307,575
--------------
Total investments, excluding
temporary cash investment
(Cost $407,518,044)............... 459,399,894
--------------
Repurchase Agreement (5.2%)
Goldman Sachs Corp.
5.447% dated 12/29/1995,
due 01/02/1996 in the
amount of $25,207,291.
Collateralized by U.S. Treasury
Bond
8.750% due 11/15/2008
(Cost $25,192,252)................ 25,192,252 25,192,252
--------------
Total Investments (99.6%)
(Cost $432,710,296)................... 484,592,146
Receivables less liabilities (0.4%).... 2,175,347
--------------
Net Assets (100.0%).................... $ 486,767,493
--------------
--------------
</TABLE>

(1) See Note 1 of Notes to Financial Statements.

* Non-Income Producing

The accompanying notes are an integral part
of the financial statements.

30
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA DAILY INCOME COMPANY
<TABLE>
<CAPTION>
Principal
December 31, 1995 Amount Value(1)
------------ --------------
<S> <C> <C>
Commercial Paper (93.9%)
Abbott Laboratories, Inc.
5.700% 01/10/1996................ $ 6,820,000 $ 6,809,202
Alabama Power Co.
5.630% 02/08/1996................ 5,000,000 4,969,504
American Express Credit Corp.
5.670% 01/19/1996................ 10,000,000 9,970,075
5.680% 02/07/1996................ 5,000,000 4,970,023
5.670% 02/12/1996................ 5,000,000 4,966,137
5.640% 02/16/1996................ 5,000,000 4,963,183
American General Finance Corp.
5.640% 02/06/1996................ 5,000,000 4,971,017
5.570% 03/05/1996................ 7,000,000 6,929,602
5.590% 03/26/1996................ 12,000,000 11,839,754
Ameritech Capital Funding Corp.
5.700% 01/16/1996................ 10,000,000 9,974,667
Amgen, Inc.
5.710% 02/09/1996................ 6,000,000 5,961,934
Anheuser-Busch Cos., Inc.
5.630% 01/18/1996................ 5,000,000 4,985,925
Archer-Daniels-Midland Co.
6.100% 01/03/1996................ 10,000,000 9,994,917
Associates Corp. of North America
5.850% 01/02/1996................ 22,000,000 21,992,850
Avco Financial Services, Inc.
5.710% 01/18/1996................ 5,000,000 4,985,725
5.710% 02/07/1996................ 5,000,000 4,969,864
5.690% 02/27/1996................ 7,000,000 6,935,830
Barclays U.S. Funding Corp.
5.690% 01/11/1996................ 15,000,000 14,973,921
5.670% 01/19/1996................ 8,000,000 7,976,060
BellSouth Capital Funding Corp.
5.630% 02/06/1996................ 8,000,000 7,953,709
Beneficial Corp.
5.640% 02/13/1996................ 8,000,000 7,944,853
5.540% 03/06/1996................ 10,000,000 9,898,434
Brown-Forman Corp.
5.720% 01/16/1996................ 5,000,000 4,987,289
5.570% 03/11/1996................ 5,000,000 4,945,074
5.580% 03/12/1996................ 6,013,000 5,945,895
CIT Group Holdings, Inc.
5.700% 01/29/1996................ 5,000,000 4,977,042
5.640% 02/16/1996................ 5,000,000 4,963,183
5.600% 03/07/1996................ 10,000,000 9,895,778
5.550% 03/22/1996................ 5,000,000 4,936,792
Cargill, Inc.
5.670% 01/17/1996................ 5,000,000 4,986,612
5.550% 03/05/1996................ 6,500,000 6,434,865

<CAPTION>
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>
Chevron Transport Co.
5.730% 02/01/1996................ $ 10,000,000 $ 9,949,067
5.680% 02/05/1996................ 8,000,000 7,954,560
5.480% 03/19/1996................ 7,000,000 6,915,822
Clorox Co.
5.580% 03/13/1996................ 2,500,000 2,471,712
5.590% 03/14/1996................ 6,000,000 5,931,057
5.590% 03/18/1996................ 12,000,000 11,854,660
Coca-Cola Co.
5.520% 03/15/1996................ 10,000,000 9,885,000
Colgate-Palmolive Co.
5.700% 01/08/1996................ 8,000,000 7,989,867
Deere (John) Capital Corp.
5.690% 01/22/1996................ 5,000,000 4,982,614
5.630% 02/23/1996................ 12,000,000 11,898,660
Dow Jones & Co., Inc.
5.470% 03/11/1996................ 5,000,000 4,946,060
Ford Motor Credit Co.
5.690% 01/23/1996................ 5,000,000 4,981,824
5.680% 01/29/1996................ 5,000,000 4,977,122
5.670% 02/01/1996................ 5,000,000 4,974,800
5.550% 03/04/1996................ 5,000,000 4,950,667
General Electric Capital Corp.
5.700% 01/09/1996................ 10,000,000 9,985,750
General Electric Capital Services,
Inc.
5.540% 03/08/1996................ 8,000,000 7,916,284
5.550% 03/29/1996................ 10,000,000 9,862,792
Gillette Co., The
5.680% 02/02/1996................ 15,000,000 14,921,900
Glaxo Wellcome plc
5.700% 01/23/1996................ 5,000,000 4,981,792
5.640% 02/21/1996................ 10,000,000 9,918,534
5.650% 02/28/1996................ 5,500,000 5,449,072
5.570% 03/11/1996................ 4,500,000 4,450,566
Goldman Sachs Group L.P.
6.050% 01/05/1996................ 5,000,000 4,995,799
5.680% 01/26/1996................ 15,000,000 14,938,467
5.640% 02/22/1996................ 5,000,000 4,958,483
5.650% 03/06/1996................ 5,000,000 4,948,208
Hewlett-Packard Co.
5.650% 01/18/1996................ 10,000,000 9,971,750
5.610% 02/20/1996................ 10,000,000 9,920,525
Household Finance Corp.
5.680% 02/05/1996................ 10,000,000 9,943,200
5.680% 02/15/1996................ 10,000,000 9,927,423
Indianapolis Power & Light Co.
5.670% 02/08/1996................ 5,000,000 4,969,287
Knight-Ridder, Inc.
5.700% 01/12/1996................ 5,000,000 4,990,500
</TABLE>

31
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA DAILY INCOME COMPANY, CONTINUED
<TABLE>
<CAPTION>
Principal
Amount Value(1)
------------ --------------
Commercial Paper (Continued)
<S> <C> <C>
Lilly (Eli) & Co.
5.670% 01/17/1996................ $ 10,000,000 $ 9,973,225
5.620% 02/15/1996................ 5,000,000 4,964,095
MetLife Funding, Inc.
5.640% 01/25/1996................ 5,000,000 4,980,417
5.650% 02/21/1996................ 5,000,000 4,959,195
5.540% 03/04/1996................ 10,000,000 9,901,512
Monsanto Co.
5.680% 01/24/1996................ 10,000,000 9,962,134
5.650% 02/13/1996................ 8,000,000 7,944,756
Morgan (J.P.) & Co., Inc.
5.580% 03/15/1996................ 8,000,000 7,907,000
Morgan Stanley Group, Inc.
6.000% 01/04/1996................ 6,000,000 5,996,000
5.750% 01/05/1996................ 10,000,000 9,992,014
5.720% 01/22/1996................ 8,000,000 7,972,036
National Rural Utilities
Cooperative
Finance Corp.
5.740% 01/12/1996................ 5,000,000 4,990,433
5.680% 01/25/1996................ 10,000,000 9,960,556
5.650% 02/27/1996................ 8,000,000 7,927,178
Norfolk Southern Corp.
5.650% 02/09/1996................ 5,000,000 4,968,611
5.630% 02/12/1996................ 5,000,000 4,966,377
Norwest Corp.
5.670% 02/08/1996................ 10,000,000 9,938,575
PHH Corp.
5.670% 01/18/1996................ 5,000,000 4,985,825
5.700% 01/30/1996................ 5,000,000 4,976,250
Pacific Bell
5.800% 01/04/1996................ 5,000,000 4,996,778
5.650% 01/10/1996................ 10,000,000 9,984,306
Pacific Telesis Group
5.650% 01/11/1996................ 10,000,000 9,982,736
PacifiCorp
5.720% 01/24/1996................ 5,000,000 4,980,933
5.700% 01/31/1996................ 4,000,000 3,980,367
PepsiCo, Inc.
5.650% 02/16/1996................ 5,000,000 4,963,118
Pitney Bowes Credit Corp.
5.650% 01/31/1996................ 5,000,000 4,975,674
5.640% 02/07/1996................ 8,000,000 7,952,373
Procter & Gamble Co.
5.580% 02/28/1996................ 7,000,000 6,935,985
5.570% 03/01/1996................ 10,000,000 9,905,620
St. Paul Cos., Inc.
5.700% 01/12/1996................ 10,000,000 9,981,000
<CAPTION>
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>
Smithkline Beecham Corp.
5.660% 01/30/1996................ $ 10,000,000 $ 9,952,833
Southern California Gas Co.
5.620% 02/22/1996................ 9,400,000 9,322,226
Southern New England Telephone Co.
5.700% 01/23/1996................ 3,907,000 3,892,772
Texaco, Inc.
5.950% 01/04/1996................ 10,000,000 9,993,389
USAA Capital Corp.
5.630% 02/14/1996................ 10,000,000 9,929,625
5.560% 03/01/1996................ 5,000,000 4,952,895
Weyerhaeuser Real Estate Co.
5.750% 01/31/1996................ 5,000,000 4,975,243
--------------
Total Commercial Paper
(Cost $751,647,602)............... 751,647,602
--------------
U.S. Government Agency Discount Notes (4.3%)
Federal Home Loan Mortgage Corp.
5.510% 02/26/1996................ 10,000,000 9,912,759
Federal National Mortgage
Association
5.560% 02/09/1996................ 10,000,000 9,938,223
5.530% 02/29/1996................ 15,000,000 14,861,750
--------------
Total U.S. Government Agency
Discount Notes
(Cost $34,712,732)................ 34,712,732
--------------
Repurchase Agreement (2.6%)
Goldman Sachs Corp.
5.447% dated 12/29/1995,
due 01/02/1996 in the
amount of $20,549,987.
Collateralized by U.S. Treasury
Bond
8.750% due 11/15/2008
(Cost $20,537,727)............... 20,537,727 20,537,727
--------------
Total Investments (100.8%)
(Cost $806,898,061, including
$5,508,563 accrued interest
receivable)......................... 806,898,061
Cash and receivables less liabilities
(-0.8%)............................... (6,242,539)
--------------
Net Assets (100.0%).................... $ 800,655,522
--------------
--------------
</TABLE>

(1) See Note 1 of Notes to Financial Statements.

The accompanying notes are an integral part
of the financial statements.

32
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA U.S. GOVERNMENT SECURITIES FUND, INC.

<TABLE>
<CAPTION>
Principal
December 31, 1995 Amount Value(1)
------------ --------------
<S> <C> <C>
U.S. Treasury Notes (97.3%)
5.625% 01/31/1998................... $ 15,775,000 $ 15,908,141
4.750% 08/31/1998................... 19,300,000 19,073,804
4.750% 10/31/1998................... 5,800,000 5,727,500
--------------
Total U.S. Treasury Notes
(Cost $40,097,690)................. 40,709,445
Repurchase Agreement (1.2%)
Goldman Sachs Corp.
5.447% dated 12/29/1995,
due 01/02/1996 in the
amount of $515,121.
Collateralized by U.S. Treasury
Bond
8.750% due 11/15/2008
(Cost $514,814).................... 514,814 514,814
--------------
Total Investments (98.5%)
(Cost $40,612,504)..................... 41,224,259
Receivables less liabilities (1.5%)..... 618,125
--------------
Net Assets (100.0%)..................... $ 41,842,384
--------------
--------------
</TABLE>

(1) See Note 1 of Notes to Financial Statements.

The accompanying notes are an integral part
of the financial statements.

33
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA FIXED INCOME SECURITIES FUND, INC.
<TABLE>
<CAPTION>
Principal
December 31, 1995 Amount Value(1)
------------ ---------------
<S> <C> <C>
U.S. Government, Federal Agency Obligations (59.7%)
U.S. Treasury Bonds & Notes (22.8%)
U.S. Treasury Bonds
12.000% 08/15/2013............... $ 5,620,000 $ 8,674,695
8.875% 08/15/2017............... 510,000 683,221
8.125% 08/15/2019............... 27,605,000 34,754,143
U.S. Treasury Notes
6.125% 07/31/1996............... 4,990,000 5,017,744
7.000% 04/15/1999............... 10,870,000 11,427,414
7.250% 05/15/2004............... 10,350,000 11,500,506
---------------
72,057,723
---------------
Other Government Agency Obligation (1.8%)
Farm Credit Systems Financial
Assistance Corp. Series A
9.375% 07/21/2003................ 4,660,000 5,665,535
---------------
Government National Mortgage Association (GNMA) (4.4%)
7.500% 11/20/2025 (GNMA II)........ 2,199,136 2,248,617
8.000% 10/15/2024 - 06/15/2025..... 4,617,652 4,812,517
8.000% 07/20/2025 - 10/20/2025
(GNMA II)......................... 6,649,559 6,888,278
---------------
13,949,412
---------------
Government National Mortgage Association
Graduated Payment Mortgage (GNMA GPM) (0.2%)
9.000% 05/15/2009.................. 682,098 718,334
---------------
Federal Housing Administration (FHA) (5.2%)
FHA Insured Project Pool #40
7.430% 08/01/2021................ 2,745,437 2,876,257
FHA Insured Project Pool #42
7.430% 09/01/2022................ 5,737,259 6,040,014
FHA Insured Project Pool #44
7.430% 08/01/2022................ 1,310,665 1,379,828
FHA Insured Project Pool #2022
7.430% 12/01/2020................ 1,473,379 1,518,081
FHA Insured Project Pool #1984-D
9.680% 02/01/2024................ 1,430,728 1,500,476
FHA Insured Project Pool #051-11078
8.350% 04/01/2030................ 2,240,000 2,324,314
FHA Insured Project Pool #092-35499
8.450% 11/15/2031................ 796,918 833,027
---------------
16,471,997
---------------
Federal National Mortgage Association (FNMA) (2.3%)
8.173% 05/01/2025 (ARM)............ 6,927,024 7,152,153
---------------

<CAPTION>
Principal
Amount Value(1)
------------ ---------------
<S> <C> <C>

Agency Collateralized Mortgage Obligations (23.0%)
American Southwest Financial Corp.
Series 64 Cl. E
8.500% 06/17/2019................ $ 1,146,370 $ 1,164,277
FHLMC Multiclass Mtg. Partn. Ctfs.
Gtd. Series 1118 Cl. H
8.250% 07/15/2001................ 696,744 700,228
FHLMC Multiclass Mtg. Partn. Ctfs.
Gtd. Series 1547 Cl. C
5.750% 04/15/2023................ 398,962 377,458
FHLMC Multiclass Mtg. Partn. Ctfs.
Gtd. Series 1641 Cl. WE
6.500% 12/15/2013................ 1,214,600 1,158,607
FHLMC Multiclass Mtg. Partn. Ctfs.
Gtd. Series 1694 Cl. MA
6.100% 05/15/2023................ 5,968,104 5,877,627
FHLMC Multiclass Mtg. Partn. Ctfs.
Gtd. Series 1730 Cl. A
7.000% 07/15/2017................ 1,192,648 1,210,538
FHLMC Multiclass Mtg. Partn. Ctfs.
Gtd. Series 1761 Cl. D
7.625% 08/15/2016................ 2,445,000 2,530,575
FHLMC Multiclass Mtg. Partn. Ctfs.
Gtd. Series 1761 Cl. G
8.000% 06/15/2021................ 4,460,000 4,726,173
FHLMC Multiclass Mtg. Partn. Ctfs.
Gtd. Series 1761 Cl. H
8.250% 09/15/2023................ 10,575,000 11,496,928
FHLMC Multiclass Mtg. Partn. Ctfs.
Gtd. Series 1763 Cl. H
8.250% 07/15/2023................ 552,000 599,433
FHLMC Multiclass Mtg. Partn. Ctfs.
Gtd. Series 1779 Cl. G
9.500% 12/15/2023................ 1,000,000 1,091,400
FHLMC Multiclass Mtg. Partn. Ctfs.
Gtd. Series 1782 Cl. A
6.300% 05/15/2008................ 3,610,000 3,527,331
FHLMC Multiclass Mtg. Partn. Ctfs.
Gtd. Series 1782 Cl. C
6.500% 03/15/2009................ 1,973,650 1,950,559
FHLMC Multiclass Mtg. Partn. Ctfs.
Gtd. Series 1793 Cl. A
6.500% 08/15/2008................ 2,780,000 2,745,250
FHLMC GNMA Multiclass Mtg. Partn.
Ctfs.
Gtd. Series 31 Cl. A
0.000% 09/25/1996................ 638,601 625,031
FHLMC GNMA Multiclass Mtg. Partn.
Ctfs.
Gtd. Series 35 Cl. PH
7.750% 03/17/2023................ 1,580,000 1,700,965
</TABLE>

34
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA FIXED INCOME SECURITIES FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Principal
Amount Value(1)
------------ ---------------
U.S. Government, Federal Agency Obligations (Continued)
<S> <C> <C>
FNMA Gtd. REMIC Pass Thru Ctf.
REMIC Tr. 1989-39 Cl. D
0.000% 05/25/2009................ $ 2,340,000 $ 1,747,746
FNMA Gtd. REMIC Pass Thru Ctf.
REMIC Tr. 1991-94 Cl. C
0.000% 01/25/1999................ 2,969,467 2,594,571
FNMA Gtd. REMIC Pass Thru Ctf.
REMIC Tr. 1992-214 Cl. PL
7.500% 05/25/2021................ 1,700,000 1,790,304
FNMA Gtd. REMIC Pass Thru Ctf.
REMIC Tr. 1993-92 Cl. A
0.000% 03/25/1996................ 277,560 275,043
FNMA Gtd. REMIC Pass Thru Ctf.
REMIC Tr. 1993-176 Cl. A
0.000% 06/26/1996................ 930,147 910,084
FNMA Gtd. REMIC Pass Thru Ctf.
REMIC Tr. 1993-205 Cl. D
0.000% 04/25/2004................ 7,040,000 4,712,576
FNMA Gtd. REMIC Pass Thru Ctf.
REMIC Tr. 1993-225 Cl. WE
6.500% 12/25/2013................ 2,000,000 1,922,600
FNMA Gtd. REMIC Pass Thru Ctf.
REMIC Tr. 1994-20 Cl. PJ
5.800% 05/25/2004................ 410,000 409,487
FNMA Gtd. REMIC Pass Thru Ctf.
REMIC Tr. 1995-11 Cl. B
0.000% 12/25/2003................ 2,587,000 1,586,866
GNMA Gtd. REMIC Pass Thru Secs.
REMIC Tr. 1994-1 Cl. PE
7.500% 07/16/2022................ 7,500,000 7,989,825
Merrill Lynch Trust 25 Cl. B
8.750% 03/20/2019................ 146,631 146,355
Puerto Rico Housing Finance Corp.
Series A Cl. 4
9.000% 07/20/2017................ 1,350,138 1,350,138
U.S. VA Vendee Mtg. Gtd. REMIC
Pass Thru Ctf. 1994-3 Cl. 1D
6.500% 06/15/2012................ 1,260,000 1,271,844
U.S. VA Vendee Mtg. Gtd. REMIC
Pass Thru Ctf. 1995-1C Cl. 3E
8.000% 07/15/2018................ 870,000 940,644
U.S. VA Vendee Mtg. Gtd. REMIC
Pass Thru Ctf. 1995-1D Cl. 4
8.855% 02/15/2025................ 2,142,315 2,363,616
<CAPTION>
Principal
Amount Value(1)
------------ ---------------
<S> <C> <C>
U.S. VA Vendee Mtg. Gtd. REMIC
Pass Thru Ctf. 1995-3 Cl. 1F
7.250% 12/15/2021................ $ 1,220,000 $ 1,258,918
---------------
72,752,997
---------------
Total U.S. Government,
Federal Agency Obligations
(Cost $178,994,832)............. 188,768,151
---------------
Other Securitized Loans (11.7%)
Collateralized Mortgage Obligations (9.1%)
CMC Securities Corp. I
Series 1992-B Cl. B2
7.375% 11/25/2023................ 5,589,809 5,685,003
Chase Mortgage Financial Corp.
Series 1993-L Cl. 2A-6
8.000% 10/25/2024................ 2,000,000 2,084,600
First Bank Systems Mortgage Corp.
Series 1993-E Cl. A-3
7.200% 01/25/2023................ 1,842,080 1,861,422
Independent National Mortgage Corp.
Series 1995-H Cl. A13
8.350% 06/25/2025................ 5,392,000 5,571,554
Residential Funding Mtg. Sec., Inc.
Series 1993-S45 Cl. A-10
8.000% 12/23/2023................ 1,250,000 1,316,250
Securitized Asset Sales, Inc.
Mtg. Pass Thru Ctf.
Series 1995-B Cl. A8
7.410% 09/25/2024................ 9,200,455 9,364,222
Structured Mtg. Asset Res. Tr.
Series 1992-6A Multiclass Ctf. Cl.
AF
8.150% 07/25/2008................ 2,385,000 2,444,625
Structured Mtg. Asset Res. Tr.
Series 1993-2A Multiclass Ctf. Cl.
AB
6.300% 07/25/2004................ 327,481 326,368
---------------
28,654,044
---------------
Asset Backed Securities (2.6%)
Advanta Home Equity Loan Trust
Series 1993-1 Cl. A2
5.950% 05/25/2009................ 2,293,128 2,272,948
First Alliance Mortgage Trust
Series 1994-2 Cl. A-1
7.625% 07/25/2025................ 3,008,846 3,133,413
</TABLE>

35
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA FIXED INCOME SECURITIES FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Principal
Amount Value(1)
------------ ---------------
Other Securitized Loans (Continued)
<S> <C> <C>
GE Capital Mtg. Services, Inc.
Series 1995-HE1 Cl. A6
7.500% 09/25/2010................ $ 2,869,385 $ 2,941,119
---------------
8,347,480
---------------
Total Other Securitized Loans
(Cost $36,293,193)................ 37,001,524
---------------
Corporate Bonds (25.7%)
Industrial (15.2%)
American President Co. Ltd.
8.000% 01/15/2024................ 2,925,000 3,025,883
American Standard, Inc.
Step-Up Coupon
0.000% to 06/01/1998,
then 10.500% to 06/01/2005....... 500,000 428,750
Continental Cablevision, Inc.
9.000% 09/01/2008................ 700,000 735,000
Ethan Allen, Inc.
8.750% 03/15/2001................ 475,000 489,250
Federated Department Stores, Inc.
10.000% 02/15/2001............... 600,000 648,000
Freeport-McMoRan Resource Partners
L.P.
8.750% 02/15/2004................ 300,000 306,000
Harrahs Operating, Inc.
10.875% 04/15/2002............... 1,000,000 1,075,000
Honeywell, Inc.
Medium Term Note
7.350% 05/15/2000................ 4,150,000 4,393,522
Hospital Corp. America
0.000% 06/01/1997................ 1,750,000 1,611,837
Host Marriott Travel Plazas, Inc.
9.500% 05/15/2005................ 300,000 297,000
La Quinta Inns, Inc.
9.250% 05/15/2003................ 375,000 397,500
Lenfest Communications, Inc.
8.375% 11/01/2005................ 2,100,000 2,107,875
Louis Dreyfus Natural Gas Corp.
9.250% 06/15/2004................ 650,000 701,291
Marriott International, Inc.
6.750% 12/01/2009................ 3,000,000 2,970,000
Nabisco, Inc.
6.700% 06/15/2002................ 3,750,000 3,813,338
News America Holdings, Inc.
7.600% 10/11/2015................ 6,250,000 6,392,188
<CAPTION>
Principal
Amount Value(1)
------------ ---------------
<S> <C> <C>
Occidental Petroleum Corp.
10.125% 11/15/2001............... $ 1,285,000 $ 1,536,847
Royal Caribbean Cruises Ltd.
11.375% 05/15/2002............... 1,725,000 1,880,250
Schering Plough Corp. Euro
7.750% 05/15/1996................ 2,220,000 2,235,962
Sears Roebuck & Co.
Medium Term Note
7.820% 02/23/1998................ 4,525,000 4,720,616
Southern Pacific Rail Corp.
9.375% 08/15/2005................ 550,000 596,750
Temple Inland, Inc.
Medium Term Note
8.850% 03/20/1997................ 3,350,000 3,479,545
Time Warner Entertainment Co. L.P.
8.875% 10/01/2012................ 2,265,000 2,549,914
Union Oil Co. of California
6.375% 02/01/2004................ 1,625,000 1,635,124
---------------
48,027,442
---------------
Financial (6.1%)
Ahmanson (H.F.) & Co.
8.250% 10/01/2002................ 2,500,000 2,766,950
Ford Motor Credit Co.
6.250% 02/26/1998................ 3,070,000 3,115,773
General Motors Acceptance Corp.
6.625% 10/01/2002................ 3,240,000 3,327,221
Goldman Sachs Group L.P. (144A)
7.800% 07/15/2002................ 2,375,000 2,537,830
International Lease Finance Corp.
4.750% 07/15/1996................ 2,100,000 2,089,122
Mellon Financial Co.
7.625% 11/15/1999................ 5,200,000 5,528,016
---------------
19,364,912
---------------
Utility (1.4%)
California Energy, Inc.
9.875% 06/30/2003................ 350,000 367,500
Northern Indiana Public Service Co.
Medium Term Note
6.900% 06/01/2000................ 1,250,000 1,295,500
6.750% 06/01/2000................ 2,500,000 2,577,575
---------------
4,240,575
---------------
</TABLE>

36
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA FIXED INCOME SECURITIES FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Principal
Amount Value(1)
------------ ---------------
Corporate Bonds (Continued)
<S> <C> <C>
Yankee (3.0%)
Manitoba Province
7.750% 02/01/2002................ $ 2,685,000 $ 2,935,994
Province Ontario
7.375% 01/27/2003................ 5,625,000 6,093,450
Rogers Cantel Mobile, Inc.
10.750% 11/01/2001............... 550,000 578,875
---------------
9,608,319
---------------
Total Corporate Bonds
(Cost $78,609,570)................ 81,241,248
---------------
Total investments, excluding
temporary cash investment
(Cost $293,897,595)............... 307,010,923
<CAPTION>
Principal
Amount Value(1)
------------ ---------------
<S> <C> <C>

Repurchase Agreement (2.3%)
Goldman Sachs Corp.
5.447% dated 12/29/1995,
due 01/02/1996 in the
amount of $7,384,951.
Collateralized by U.S. Treasury
Bond
8.750% due 11/15/2008
(Cost $7,380,545)................ $ 7,380,545 $ 7,380,545
---------------
Total Investments (99.4%)
(Cost $301,278,140)................. 314,391,468
Receivables less liabilities (0.6%).... 1,867,335
---------------
Net Assets (100.0%).................... $ 316,258,803
---------------
---------------
</TABLE>

(1) See Note 1 of Notes to Financial Statements.

The accompanying notes are an integral part
of the financial statements.

37
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA MUNICIPAL BOND FUND, INC.
<TABLE>
<CAPTION>
Principal
December 31, 1995 Amount Value(1)
------------ --------------
<S> <C> <C>
State of Oregon General Obligation Bonds (11.8%)
Board of Higher Education Series A
6.350% 08/01/2014................. $ 1,535,000 $ 1,669,312
Department of Environmental Quality
Series D
5.625% 08/01/2006................. 430,000 448,275
5.700% 08/01/2007................. 455,000 474,906
5.750% 08/01/2008................. 485,000 505,006
Elderly & Disabled Housing Refunding
Series B
6.250% 08/01/2013................. 1,000,000 1,071,250
Pollution Control Series C
5.625% 06/01/2013................. 1,735,000 1,758,856
5.900% 06/01/2014................. 5,735,000 6,000,244
Veterans' Welfare
0.000% 07/01/2001................. 1,200,000 940,500
5.850% 10/01/2015................. 1,105,000 1,149,200
7.700% 07/01/1998................. 1,025,000 1,113,406
11.250% 10/01/1998................. 2,860,000 3,385,525
9.000% 04/01/1999................. 1,570,000 1,797,650
11.000% 06/01/1999................. 765,000 929,475
7.000% 07/01/2000................. 1,350,000 1,506,938
9.000% 10/01/2000................. 1,000,000 1,202,500
11.000% 12/01/2000................. 1,330,000 1,725,675
7.250% 01/01/2007................. 600,000 728,250
8.000% 01/01/2008................. 400,000 508,500
6.000% 08/01/2002................. 2,000,000 2,187,500
6.000% 02/01/2004................. 695,000 762,763
9.000% 04/01/2005................. 950,000 1,250,438
6.750% 05/01/2005................. 2,000,000 2,317,500
9.000% 10/01/2005................. 240,000 319,200
9.200% 04/01/2007................. 1,020,000 1,398,675
9.200% 10/01/2007................. 1,095,000 1,515,206
7.300% 07/01/2008................. 500,000 611,875
8.000% 07/01/2008................. 125,000 160,156
6.875% 12/01/2013................. 3,320,000 3,602,200
7.000% 12/01/2015................. 2,125,000 2,313,594
Veterans' Welfare Series 73F
5.150% 12/01/2017................. 2,000,000 2,000,000
--------------
Total State of Oregon
General Obligation Bonds (Cost
$42,066,950)....................... 45,354,575
--------------
Oregon General Obligation Bonds (25.5%)
Clackamas & Washington Counties
School District #3JT
West Linn-Wilsonville
5.875% 08/01/2009................. 1,000,000 1,047,500
5.875% 10/01/2009................. 2,500,000 2,637,500

<CAPTION>
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>
Clackamas County School District #1
6.250% 07/01/2002................. $ 925,000 $ 1,011,719
6.300% 07/01/2003................. 700,000 767,375
6.500% 07/01/2004................. 1,235,000 1,366,219
6.500% 07/01/2005................. 1,355,000 1,498,969
6.500% 07/01/2006................. 1,485,000 1,639,069
Clackamas County School
District #7J Lake Oswego Series A
5.300% 06/15/2005................. 1,000,000 1,055,000
5.500% 06/15/2006................. 1,000,000 1,062,500
5.700% 06/15/2010................. 1,515,000 1,569,919
Clackamas County School
District #12 North Clackamas
4.650% 06/01/2004................. 750,000 751,875
5.000% 06/01/2011................. 1,500,000 1,443,750
Clackamas Community College District
5.250% 12/01/2009................. 1,270,000 1,290,637
Deschutes County Administrative
School District #1 Bend-Lapine
0.000% 02/01/2000................. 1,175,000 984,062
0.000% 02/01/2001................. 1,135,000 910,837
0.000% 02/01/2002................. 1,445,000 1,110,844
5.800% 02/01/2004................. 780,000 836,550
5.900% 02/01/2005................. 980,000 1,048,600
Jackson County School District
#549C Medford
5.375% 06/01/2012................. 1,200,000 1,219,500
Lane Community College
4.850% 06/01/2008................. 4,080,000 4,059,600
Lane County School District
#4J Eugene
0.000% 01/01/2003................. 1,345,000 975,125
0.000% 01/01/2005................. 1,395,000 906,750
Lane County School District
#4J Eugene Refunding Series A
0.000% 07/01/2001................. 2,015,000 1,576,737
0.000% 07/01/2003................. 1,480,000 1,048,950
0.000% 07/01/2005................. 2,325,000 1,476,375
5.250% 07/01/2008................. 2,440,000 2,491,850
Lane County School District
#19 Springfield Refunding
0.000% 02/01/1997................. 470,000 450,542
0.000% 02/01/1999................. 470,000 412,425
Metro Open Spaces Program
Series C
5.100% 09/01/2009................. 2,375,000 2,380,937
Multnomah-Clackamas Counties
School District #28-302JT
0.000% 12/01/2004................. 750,000 492,187
</TABLE>

38
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA MUNICIPAL BOND FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Principal
Amount Value(1)
------------ --------------
Oregon General Obligation Bonds (Continued)
<S> <C> <C>
Multnomah County Public
Improvements
5.250% 10/01/2013................. $ 1,800,000 $ 1,806,750
Multnomah County School
District #1 Portland Refunding
6.000% 12/15/1997................. 645,000 664,350
Multnomah County School
District #1J Portland
4.250% 06/01/2003................. 5,000,000 4,931,250
Multnomah County School
District #4 Gresham
6.100% 01/01/2008................. 3,000,000 3,206,250
6.100% 01/01/2009................. 200,000 212,750
Multnomah County School
District #7 Reynolds
6.900% 01/01/2000................. 250,000 250,000
5.250% 06/01/2011................. 1,500,000 1,473,750
Multnomah County School
District #40 David Douglas
7.100% 06/01/2002................. 880,000 1,008,700
Port of Portland Series A
4.500% 03/01/2006................. 2,000,000 1,935,000
0.000% 03/01/2007................. 5,000,000 2,868,750
Portland Public Improvements
Series A
5.750% 06/01/2014................. 2,975,000 3,105,156
5.000% 06/01/2004................. 240,000 243,900
Portland Public Improvements
Series B
4.625% 12/01/2010................. 3,815,000 3,805,462
Portland Water Refunding
5.000% 10/01/2008................. 1,500,000 1,496,250
Portland Recreational
Facilities Improvements Series A
5.750% 06/01/2012................. 1,370,000 1,436,788
5.750% 06/01/2013................. 1,345,000 1,410,569
5.750% 06/01/2015................. 1,155,000 1,202,644
Portland Recreational
Facilities Improvements Series B
5.500% 06/01/2009................. 2,115,000 2,173,163
5.750% 06/01/2014................. 1,750,000 1,828,750
5.750% 06/01/2015................. 2,955,000 3,076,894
Portland Community College District
0.000% 07/01/2000................. 800,000 660,000
0.000% 07/01/2007................. 2,025,000 1,141,594
Portland Community College
District Series A
6.000% 07/01/2012................. 1,500,000 1,569,375
<CAPTION>
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>
Salem-Keizer School District #24J
5.400% 06/01/2006................. $ 1,000,000 $ 1,041,250
Tri-County Metropolitan
Transportation
District Light Rail Extension
Series A
6.000% 07/01/2012................. 3,495,000 3,665,381
Tualatin Hills Park &
Recreation District
5.500% 03/01/2006................. 1,000,000 1,043,750
5.700% 03/01/2009................. 1,340,000 1,413,700
5.750% 03/01/2010................. 730,000 766,500
Washington County Criminal
Justice Facilities Improvements
6.000% 12/01/2013................. 2,000,000 2,107,500
Washington County Refunding
6.200% 12/01/2007................. 1,500,000 1,618,125
Washington & Clackamas Counties
School District #23J Tigard
Refunding
5.400% 01/01/2010................. 1,705,000 1,754,019
6.200% 08/01/2007................. 1,000,000 1,066,250
Washington County School
District #48J Beaverton
7.800% 06/01/2003................. 1,200,000 1,449,000
Washington County School District
#48J Beaverton Series B
6.150% 06/01/2008................. 1,000,000 1,058,750
--------------
Total Oregon General Obligation
Bonds
(Cost $94,031,940)................. 98,016,223
--------------
Oregon Revenue Bonds (20.9%)
Clackamas County Hospital Facility
Authority Elderly Housing
Willamette View Income Project
7.000% 11/15/2011................. 1,750,000 1,822,187
Clackamas County Hospital Facility
Authority GNMA Collateral
Jennings Lodge
7.500% 10/20/2031................. 1,030,000 1,140,725
Deschutes County Hospital
Facility Authority
5.750% 01/01/2009................. 1,670,000 1,755,587
Deschutes Valley Water District
5.875% 09/01/2005................. 1,220,000 1,294,725
Eugene Electric Utility
5.000% 08/01/2017................. 1,450,000 1,390,187
Eugene Electric Utility Refunding
5.800% 08/01/2008................. 1,435,000 1,508,544
5.800% 08/01/2009................. 1,300,000 1,358,500
Eugene Electric Utility Series C
5.750% 08/01/2011................. 715,000 741,813
</TABLE>

39
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA MUNICIPAL BOND FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Principal
Amount Value(1)
------------ --------------
Oregon Revenue Bonds (Continued)
<S> <C> <C>
Eugene Trojan Nuclear Project
5.750% 09/01/1997................. $ 1,500,000 $ 1,505,460
5.750% 09/01/1998................. 1,500,000 1,504,485
Eugene Water Refunding
6.600% 08/01/2005................. 365,000 376,717
6.600% 08/01/2006................. 890,000 918,311
Grants Pass Urban Renewal
Agency Tax Increment
6.125% 08/01/2012................. 750,000 780,000
Gresham Sewer
5.350% 06/01/2006................. 860,000 895,475
Gresham Stormwater
6.100% 10/01/2009................. 1,115,000 1,204,200
Lebanon Wastewater Refunding
5.750% 06/01/2011................. 1,225,000 1,229,594
Metro General Refunding Metro
Regional Center Project Series A
5.000% 08/01/2009................. 500,000 494,375
Metropolitan Service District
Metro Central Transfer Station A
5.125% 07/01/2009................. 2,360,000 2,389,500
North Clackamas Parks & Recreation
District Recreational Facilities
5.700% 04/01/2013................. 1,660,000 1,705,650
Northern Wasco County People's
Utility District Electric
0.000% 02/01/2006................. 610,000 358,375
0.000% 02/01/2007................. 585,000 318,825
0.000% 02/01/2008................. 610,000 308,050
0.000% 02/01/2011................. 500,000 203,125
Oregon City Sewer
6.500% 10/01/2007................. 500,000 560,000
Oregon Health, Housing, Educational
& Cultural Facilities Authority
Reed
College Project Series A
5.300% 07/01/2011................. 500,000 501,250
Oregon Housing Agency Mortgage
Single-Family Mortgage Project
Series A
7.375% 07/01/2010................. 865,000 902,844
Oregon Housing & Community Services
Department Housing Finance Assisted
Insured Multi-Unit B
6.800% 07/01/2013................. 8,270,000 8,776,538
Oregon Housing & Community Services
Department Mortgage Single-Family
Mortgage Program Series A
6.800% 07/01/2016................. 2,485,000 2,609,250
<CAPTION>
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>
Oregon Housing & Community Services
Department Mortgage Single-Family
Mortgage Program Series B
5.375% 07/01/2017................. $ 1,020,000 $ 1,002,150
Oregon Housing & Community Services
Department Mortgage Single-Family
Mortgage Program Series D
6.700% 07/01/2013................. 1,000,000 1,042,500
Oregon Housing & Community Services
Department Mortgage Single-Family
Mortgage Program Series E
6.750% 07/01/2016................. 3,715,000 3,872,888
Portland Hydroelectric Power
6.800% 10/01/2004................. 465,000 469,236
Portland Parking Refunding
6.375% 10/01/2012................. 1,700,000 1,810,500
Portland Sewer System Revenue
Refunding Series A
5.000% 03/01/2006................. 3,035,000 3,076,731
5.100% 03/01/2007................. 1,485,000 1,505,419
Portland Sewer System Revenue
Series A
6.100% 06/01/2010................. 510,000 553,350
6.200% 06/01/2012................. 6,540,000 7,087,725
6.250% 06/01/2015................. 4,670,000 5,043,600
Portland Water System
5.250% 08/01/2013................. 2,615,000 2,624,806
Prineville Sewer First Lien
6.500% 07/01/2004................. 500,000 546,250
6.800% 07/01/2012................. 1,000,000 1,121,250
Reedsport Water
7.000% 10/01/2014................. 520,000 586,300
South Fork Water Board First Lien
5.450% 02/01/2014................. 1,300,000 1,300,000
Tri-County Metropolitan
Transportation District
Refunding Series A
5.700% 08/01/2013................. 5,175,000 5,323,781
Warm Springs Reservation,
Confederated Tribes Health &
Wellness Center
5.000% 04/01/2002................. 400,000 414,000
5.100% 04/01/2003................. 400,000 416,000
Washington County Unified
Sewer Agency Revenue Series A
6.200% 10/01/2010................. 3,400,000 3,676,250
--------------
Total Oregon Revenue Bonds
(Cost $75,781,779)................. 80,027,028
--------------
</TABLE>

40
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA MUNICIPAL BOND FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Principal
Amount Value(1)
------------ --------------
Oregon Insured Bonds (24.2%)
<S> <C> <C>
Albany Water Revenue Refunding
2nd Lien Series B
4.875% 08/01/2007................. $ 1,000,000 $ 995,000
Central Oregon Community
College District
5.800% 06/01/2007................. 760,000 802,750
Clackamas County Health Facility
Authority Revenue Refunding
Adventist Health A
6.350% 03/01/2009................. 1,500,000 1,623,750
Clackamas County School
District #115 Gladstone
6.150% 06/01/2014................. 1,000,000 1,072,500
Clatsop County Administrative
School District #10
5.850% 07/01/2010................. 550,000 570,625
5.850% 07/01/2011................. 590,000 610,650
5.875% 07/01/2012................. 630,000 653,625
Columbia River People's
Utility District Refunding
7.250% 05/01/2009................. 1,870,000 1,888,363
Crook County School District
4.900% 02/01/2009................. 1,165,000 1,143,156
Deschutes & Jefferson Counties
School
District #2J Redmond Refunding
5.600% 06/01/2009................. 1,000,000 1,030,000
Hood River County School District
5.650% 06/01/2008................. 1,020,000 1,072,275
Josephine County School
District #7 Grants Pass
5.700% 06/01/2013................. 2,000,000 2,065,000
Lane County School District
#19 Springfield
6.150% 10/15/2009................. 1,500,000 1,631,250
Lane County School District
#52 Bethel
6.250% 12/01/2007................. 500,000 560,000
6.400% 12/01/2009................. 750,000 831,562
Lincoln County School District
6.000% 06/15/2007................. 1,855,000 2,033,544
6.000% 06/15/2008................. 1,150,000 1,259,250
6.000% 06/15/2009................. 1,465,000 1,600,512
5.600% 06/15/2010................. 2,430,000 2,548,462
5.250% 06/15/2012................. 2,900,000 2,910,875
Malheur County School District
#26 Nyssa
5.750% 06/01/2015................. 1,910,000 1,979,237
<CAPTION>
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>
Marion & Linn County Elementary
School District #77J Stayton
6.250% 07/01/2013................. $ 1,260,000 $ 1,370,250
Marion County Solid Waste & Electric
Revenue Ogden Martin System
Marion Income
7.700% 10/01/2009................. 2,305,000 2,414,211
Medford Hospital Facility Authority
Revenue Gross-Rogue Valley
Health Services
6.800% 12/01/2011................. 1,310,000 1,444,275
Morrow County School District #1
6.000% 06/01/2006................. 880,000 958,100
Multnomah County School
District #3 Parkrose
5.400% 12/01/2005................. 1,010,000 1,071,862
5.700% 12/01/2008................. 1,130,000 1,199,213
5.700% 12/01/2009................. 1,085,000 1,143,319
5.500% 12/01/2011................. 1,000,000 1,023,750
Oregon Department of General
Services
Certificates Participation Series C
5.800% 03/01/2015................. 840,000 858,900
Oregon Department of Administrative
Services Certificates Participation
Series A
5.375% 11/01/2004................. 1,500,000 1,580,625
Oregon Veterans' Welfare
7.200% 03/01/1997................. 1,000,000 1,038,750
Oregon Health, Housing, Educational
& Cultural Facilities Authority
Lewis & Clark College
6.000% 10/01/2013................. 965,000 1,024,106
Port of Portland Airport Revenue
Portland International Airport
Series 7-A
6.500% 07/01/2004................. 500,000 549,375
6.750% 07/01/2015................. 2,790,000 3,069,000
Port of Portland Airport
Revenue Series 9-A
5.500% 07/01/2006................. 500,000 520,000
Portland Hospital Facility Authority
Legacy Health Systems Series A
6.100% 05/01/1998................. 1,000,000 1,051,250
6.625% 05/01/2011................. 1,620,000 1,769,850
Portland Hospital Facility Authority
Legacy Health Systems Series B
6.625% 05/01/2011................. 3,830,000 4,184,275
6.700% 05/01/2021................. 2,955,000 3,220,950
</TABLE>

41
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA MUNICIPAL BOND FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Principal
Amount Value(1)
------------ --------------
Oregon Insured Bonds (Continued)
<S> <C> <C>
Portland Sewer System Revenue
Series A
6.000% 10/01/2012................. $ 2,075,000 $ 2,215,063
Suburban East Salem Water
District Refunding
5.700% 09/01/2009................. 890,000 924,488
Tillamook County
6.250% 01/01/2014................. 960,000 1,039,200
Umatilla County School
District #8R Hermiston
6.000% 12/01/2010................. 695,000 736,700
Union Health District
5.350% 02/01/2005................. 400,000 413,000
5.450% 02/01/2006................. 425,000 438,813
5.550% 02/01/2007................. 460,000 474,950
5.650% 02/01/2008................. 480,000 495,600
5.750% 02/01/2010................. 1,070,000 1,099,425
Washington County Unified
Sewer Agency Revenue Series A
0.000% 10/01/2003................. 1,000,000 702,500
0.000% 10/01/2005................. 5,230,000 3,288,363
5.900% 10/01/2006................. 3,730,000 4,047,050
0.000% 10/01/2007................. 4,835,000 2,719,688
6.125% 10/01/2012................. 8,010,000 8,590,725
Western Lane Hospital District
Facility
Authority Revenue Refunding
Sisters St. Joseph Peace
5.625% 08/01/2007................. 2,000,000 2,125,000
Yamhill County School District
#29J Newberg
5.500% 06/01/2010................. 1,360,000 1,392,300
6.100% 06/01/2011................. 3,355,000 3,589,850
--------------
Total Oregon Insured Bonds
(Cost $87,722,421)................. 92,667,162
--------------
Oregon Pre-Refunded Bonds (7.2%)
Beaverton Water Revenue Series A
7.150% 06/01/2004................. 455,000 508,462
Clackamas County School District
#7J Lake Oswego Series A
7.000% 06/15/2008................. 1,250,000 1,393,750
7.100% 06/15/2010................. 750,000 839,062
Clackamas County School
District #12 North Clackamas
6.500% 06/01/2005................. 1,000,000 1,093,750
6.500% 06/01/2007................. 1,455,000 1,591,406
6.500% 06/01/2009................. 1,655,000 1,810,156
6.500% 06/01/2011................. 1,885,000 2,061,719
<CAPTION>
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>
Clackamas County Elementary
School District #86
6.500% 07/01/2003................. $ 1,535,000 $ 1,653,962
6.500% 07/01/2004................. 1,585,000 1,707,838
Eugene Electric Utility Revenue
4.000% 08/01/1998................. 340,000 343,400
Jackson County School District
#4 Refunding
6.700% 06/01/2004................. 420,000 446,250
Metropolitan Service District
Convention Center
6.900% 12/01/1999................. 750,000 791,250
Metropolitan Service District
General
Revenue Metro Headquarters Building
Project A
6.600% 07/01/2011................. 785,000 861,538
Metropolitan Service District
Metro East Transfer Station A
7.000% 01/01/2001................. 500,000 559,375
Oregon Department of General
Services
Certificates Participation Series A
7.200% 01/15/2015................. 1,100,000 1,241,625
Oregon Department of General
Services
Certificates Participation Series B
7.200% 01/15/2015................. 670,000 756,263
Oregon Department of General
Services
Certificates Participation Series F
7.500% 09/01/2015................. 2,330,000 2,696,975
Oregon Veterans' Welfare
12.500% 09/01/2001................ 480,000 516,701
12.500% 09/01/2003................ 1,200,000 1,291,752
12.500% 09/01/2004................ 515,000 554,377
Oregon Housing, Educational &
Cultural Facilities Authority
Reed College Project Series A
6.350% 07/01/2002................. 320,000 356,000
6.400% 07/01/2003................. 280,000 312,200
Oregon Housing, Educational &
Cultural Facilities Authority
Revenue
Lewis & Clark College Project A
7.000% 07/01/2010................. 1,100,000 1,245,750
Portland Airport Way Urban Renewal &
Redevelopment Tax Increment Series
A
7.300% 06/01/2010................. 1,400,000 1,576,750
Washington County
7.800% 12/01/2007................. 1,245,000 1,333,706
--------------
Total Oregon Pre-Refunded Bonds
(Cost $24,930,058)................. 27,544,017
--------------
</TABLE>

42
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA MUNICIPAL BOND FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Principal
Amount Value(1)
------------ --------------
Oregon Other Bonds (2.9%)
<S> <C> <C>
Lane County Special Obligation
Series A
5.250% 03/01/2008................. $ 400,000 $ 402,000
Lane County School District #4J
Eugene Certificates Participation
6.900% 10/01/2000................. 500,000 557,500
Lebanon Special Obligation
Revenue Refunding Lease Water
5.400% 10/01/2013................. 755,000 759,719
Multnomah County School District #1J
Portland Special Obligation Series
A
4.500% 03/01/2003................. 350,000 347,375
5.000% 03/01/2007................. 1,340,000 1,348,375
Newberg Certificates Participation
5.900% 12/01/1998................. 365,000 379,600
6.000% 12/01/1999................. 390,000 409,500
6.100% 12/01/2000................. 410,000 435,112
6.200% 12/01/2001................. 410,000 439,725
Oregon Health, Housing, Educational
&
Cultural Facilities Authority
OMSI-A
5.900% 10/01/2016................. 500,000 508,420
5.900% 10/01/2021................. 500,000 508,420
Portland Building Refunding
Series A
4.750% 04/01/2007................. 2,000,000 1,977,500
Portland Airport Way Urban Renewal &
Redevelopment Tax Increment Series
C
5.900% 06/01/2006................. 860,000 914,825
Portland Urban Renewal &
Redevelopment Refunding,
Downtown Waterfront Series L
6.400% 06/01/2008................. 2,085,000 2,262,225
--------------
Total Oregon Other Bonds
(Cost $10,714,403)................. 11,250,296
--------------
Other Bonds (5.0%)
Puerto Rico Commonwealth
Public Improvements
6.250% 07/01/2009................. 3,000,000 3,393,750
6.250% 07/01/2013................. 1,000,000 1,125,000
Puerto Rico Commonwealth Aquaduct
& Sewer Authority Revenue Series A
9.000% 07/01/2009................. 5,060,000 6,774,075
<CAPTION>
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>

Puerto Rico Housing Finance Corp.
Single Family Mortgage Revenue
Portfolio 1 Series B
7.500% 10/15/2012................. $ 1,040,000 $ 1,106,300
Puerto Rico Housing Finance Corp.
Single Family Mortgage Revenue
Portfolio 1 Series C
6.750% 10/15/2013................. 710,000 756,150
Puerto Rico Housing Finance Corp.
Multi Family Mortgage Revenue
Portfolio A-1
7.500% 04/01/2022................. 1,680,000 1,785,000
Puerto Rico Industrial, Medical &
Environmental Pollution Control
Facilities Financing Authority
Revenue FHA Insured Mortgage Dr.
Pila Hospital Project A
7.700% 08/01/2008................. 2,000,000 2,217,500
Puerto Rico Housing Bank & Finance
Agency Single Family Mortgage
Revenue FHA Homeownership 5th
Portfolio
7.500% 12/01/2015................. 610,000 691,587
Virgin Islands Public Finance
Authority Revenue Unrefunded
Balance Series A
7.300% 10/01/2018................. 1,105,000 1,401,969
--------------
Total Other Bonds
(Cost $17,722,705)................. 19,251,331
--------------
Total investments, excluding
temporary cash investment
(Cost $352,970,256)................ 374,110,632
Tax-Exempt Money Market Investment (1.3%)
SEI Tax Exempt Trust
(Cost $4,958,852)................. 4,958,852 4,958,852
--------------
Total Investments (98.8%)
(Cost $357,929,108).................. 379,069,484
Receivables less liabilities (1.2%)..... 4,726,434
--------------
Net Assets (100.0%)..................... $ 383,795,918
--------------
--------------
</TABLE>

(1) See Note 1 of Notes to Financial Statements.

The accompanying notes are an integral part
of the financial statements.

43
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA HIGH YIELD FUND, INC.
<TABLE>
<CAPTION>
Principal
December 31, 1995 Amount Value(1)
------------ --------------
<S> <C> <C>
U.S. Treasury Bond (4.4%)
7.625% 02/15/2025
(Cost $1,005,641)................. $ 850,000 $ 1,040,332
--------------
Corporate Bonds (90.6%)
Basic Industry (10.7%)
Chemicals (4.7%)
Freeport-McMoRan Resource Partners L.P.
Senior Subordinated Notes
8.750% 02/15/2004.................... 600,000 612,000
IMC Global, Inc.
Series B Senior Notes
10.125% 06/15/2001................... 450,000 493,875
--------------
1,105,875
--------------
Forest Products (1.4%)
Riverwood International Corp.
Senior Notes
10.750% 06/15/2000................... 300,000 322,500
--------------
Metals/Mining (4.6%)
Armco, Inc.
Senior Notes
9.375% 11/01/2000.................... 400,000 396,000
Inland Steel Industries, Inc.
Notes
12.750% 12/15/2002................... 250,000 281,250
Magma Copper Co.
Senior Subordinated Notes
8.700% 05/15/2005.................... 350,000 399,000
--------------
1,076,250
--------------
Total Basic Industry................. 2,504,625
--------------
Consumer Related (25.4%)
Hotel/Gaming (7.9%)
Harrahs Operating, Inc.
Senior Subordinated Notes
10.875% 04/15/2002................... 450,000 483,750
Host Marriott Travel Plazas, Inc.
Senior Secured Notes
9.500% 05/15/2005.................... 400,000 396,000
La Quinta Inns, Inc.
Senior Subordinated Notes
9.250% 05/15/2003.................... 350,000 371,000
Station Casinos, Inc.
Senior Subordinated Notes
9.625% 06/01/2003.................... 615,000 605,775
--------------
1,856,525
--------------

<CAPTION>
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>
Healthcare (12.3%)
Abbey Healthcare Group, Inc.
Senior Subordinated Notes
9.500% 11/01/2002.................... $ 500,000 $ 532,500
Community Health Systems, Inc.
Senior Subordinated Debenture
10.250% 11/30/2003................... 400,000 432,000
Genesis Health Ventures, Inc.
Senior Subordinated Notes
9.750% 06/15/2005.................... 500,000 530,000
HEALTHSOUTH Rehabilitation Corp.
Senior Subordinated Notes
9.500% 04/01/2001.................... 300,000 320,250
Quorum Health Group, Inc.
Senior Subordinated Notes
8.750% 11/01/2005.................... 500,000 517,500
Tenet Healthcare Corp.
Senior Note
9.625% 09/01/2002.................... 500,000 550,000
--------------
2,882,250
--------------
Other (5.2%)
Royal Caribbean Cruises Ltd.
Senior Subordinated Notes
11.375% 05/15/2002................... 400,000 436,000
Rykoff Sexton, Inc.
Senior Subordinated Notes
8.875% 11/01/2003.................... 450,000 445,500
Westpoint Stevens, Inc.
Senior Note
8.750% 12/15/2001.................... 350,000 350,000
--------------
1,231,500
--------------
Total Consumer Related............... 5,970,275
--------------
Energy (11.6%)
Global Marine, Inc.
Notes
12.750% 12/15/1999................... 285,000 314,925
Gulf Canada Resources Ltd.
Subordinated Debentures
9.625% 07/01/2005.................... 400,000 422,000
Louis Dreyfus Natural Gas Corp.
Senior Subordinated Notes
9.250% 06/15/2004.................... 500,000 539,455
Maxus Energy Corp.
Notes
9.875% 10/15/2002.................... 500,000 502,500
</TABLE>

44
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA HIGH YIELD FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Principal
Amount Value(1)
------------ --------------
Corporate Bonds (Continued)
<S> <C> <C>
Noble Drilling Corp.
Senior Notes
9.250% 10/01/2003.................... $ 250,000 $ 262,500
Santa Fe Energy Resource, Inc.
Senior Subordinated Debentures
11.000% 05/15/2004................... 400,000 436,000
Seagull Energy Corp.
Senior Subordinated Notes
8.625% 08/01/2005.................... 250,000 242,500
--------------
Total Energy......................... 2,719,880
--------------
Housing Related (2.7%)
Toll Corp.
Senior Subordinated Notes
10.500% 03/15/2002................... 250,000 263,125
USG Corp.
Senior Note
8.500% 08/01/2005.................... 350,000 362,250
--------------
Total Housing Related................ 625,375
--------------
Manufacturing (16.0%)
American Standard, Inc.
Senior Subordinated Discount
Debenture Step-Up Coupon
0.000% to 06/01/1998, then 10.500% to
06/01/2005.......................... 750,000 643,125
Blount, Inc.
Senior Subordinated Notes
9.000% 06/15/2003.................... 200,000 210,000
Easco Corp.
Senior Notes, Series B
10.000% 03/15/2001................... 350,000 349,125
Exide Corp.
Senior Notes
10.000% 04/15/2005................... 350,000 379,750
Hayes Wheels International, Inc.
Notes
9.250% 11/15/2002.................... 275,000 295,625
Mark IV Industries, Inc.
Subordinated Notes
8.750% 04/01/2003.................... 200,000 208,000
Rohr, Inc.
Senior Note
11.625% 05/15/2003................... 600,000 643,500
<CAPTION>
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>
SPX Corp.
Senior Subordinated Notes
11.750% 06/01/2002................... $ 350,000 $ 371,000
Wolverine Tube, Inc.
Senior Subordinated Notes
10.125% 09/01/2002................... 625,000 662,500
--------------
Total Manufacturing.................. 3,762,625
--------------
Media (12.5%)
Continental Cablevision, Inc.
Debentures
9.000% 09/01/2008.................... 500,000 525,000
Jones Intercable, Inc.
Senior Notes
9.625% 03/15/2002.................... 350,000 376,250
Lenfest Communications, Inc.
Senior Secured Notes
8.375% 11/01/2005.................... 500,000 501,875
Mobilemedia Corp.
Senior Subordinated Notes
9.375% 11/01/2007.................... 500,000 515,000
Rogers Cantel Mobile, Inc.
Notes
10.750% 11/01/2001................... 400,000 421,000
Rogers Communications, Inc.
Debenture
10.875% 04/15/2004................... 200,000 209,000
United International Holdings, Inc.
Senior Note with Warrants
0.000% 11/15/1999.................... 650,000 390,000
--------------
Total Media.......................... 2,938,125
--------------
Retail (7.6%)
Supermarkets (4.0%)
Kroger Co.
Senior Secured Debenture
9.250% 01/01/2005.................... 300,000 325,500
Safeway, Inc.
Debenture
10.000% 12/01/2001................... 300,000 339,000
Stop & Shop Cos., Inc.
Senior Subordinated Notes
9.750% 02/01/2002.................... 250,000 275,625
--------------
940,125
--------------
</TABLE>

45
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
COLUMBIA HIGH YIELD FUND, INC., CONTINUED
<TABLE>
<CAPTION>
Principal
Amount Value(1)
------------ --------------
Corporate Bonds (Continued)
<S> <C> <C>
Other (3.6%)
Ethan Allen, Inc.
Senior Notes
8.750% 03/15/2001.................... $ 400,000 $ 412,000
Federated Department Stores, Inc.
Senior Notes
10.000% 02/15/2001................... 400,000 432,000
--------------
844,000
--------------
Total Retail......................... 1,784,125
--------------
Transportation (2.3%)
Other (2.3%)
Southern Pacific Rail Corp.
Senior Notes
9.375% 08/15/2005.................... 500,000 542,500
--------------
Utility (1.8%)
California Energy, Inc.
Senior Secured Note
9.875% 06/30/2003.................... 400,000 420,000
--------------
Total Corporate Bonds
(Cost $20,449,549).................... 21,267,530
--------------
<CAPTION>
Principal
Amount Value(1)
------------ --------------
<S> <C> <C>
Total investments, excluding
temporary cash investment
(Cost $21,455,190).................... $22,307,862
Repurchase Agreement (3.3%)
Goldman Sachs Corp.
5.447% dated 12/29/1995,
due 01/02/1996
in the amount of $762,538.
Collateralized by U.S. Treasury Bond
8.750% due 11/15/2008
(Cost $762,083)...................... $ 762,083 762,083
--------------
Total Investments (98.3%)
(Cost $22,217,273)........................ 23,069,945
Receivables less liabilities (1.7%)........ 401,022
--------------
Net Assets (100.0%)........................ $ 23,470,967
--------------
--------------
</TABLE>

(1) See Note 1 of Notes to Financial Statements.

The accompanying notes are an integral part
of the financial statements.

46
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
-----------------------------------------------------------------
<TABLE>
<CAPTION>
Columbia
Columbia Columbia International
Common Stock Growth Stock
December 31, 1995 Fund, Inc. Fund, Inc. Fund, Inc.
-------------- ----------- -----------------
<S> <C> <C> <C>
ASSETS:
Investments at identified cost.......................................... $301,250,182 $680,853,085 $ 86,769,046
- -------------------------------------------------------------------------- -------------- ----------- -----------------
Investments at value (Notes 1 and 2).................................... $353,606,038 $840,824,393 $ 97,735,963
Temporary cash investments, at cost (Note 1)............................ 3,448,186 10,441,223 2,818,723
Cash.................................................................... 112,354
Cash denominated in foreign currencies (cost $644,615) (Note 1)......... 645,940
Receivable for:
Interest.............................................................. 13,076 53,667 7,932
Dividends............................................................. 598,598 1,426,356 140,083
Investments sold...................................................... 3,714,326 1,018,750
Capital stock sold.................................................... 725,948 1,195,259 407,637
-------------- ----------- -----------------
Total assets............................................................ 362,106,172 853,940,898 102,887,382
-------------- ----------- -----------------
LIABILITIES:
Payable for:
Capital stock redeemed................................................ 123,349 467,770 105,639
Dividends and distributions........................................... 117,524 3,470,303
Investments purchased................................................. 3,025,450 605,090 1,731,574
Investment management fee (Note 4).................................... 180,209 433,294 84,874
Accrued expenses...................................................... 136,916 233,589 91,835
-------------- ----------- -----------------
Total liabilities....................................................... 3,583,448 5,210,046 2,013,922
-------------- ----------- -----------------
Net assets applicable to outstanding shares............................... $358,522,724 $848,730,852 $ 100,873,460
-------------- ----------- -----------------
-------------- ----------- -----------------
Net assets consist of:
Undistributed net investment income................................... $ 395,967 $ 1,523,877
Unrealized appreciation on:
Investments......................................................... 52,355,856 159,971,308 $ 10,966,917
Translation of assets and liabilities in foreign currencies......... 5,720
Undistributed net realized loss from:
Investments......................................................... (42,896) (1,015,931) (1,055,061)
Capital shares (Note 3)............................................... 284,392
Capital paid in (Notes 1 and 3)....................................... 305,813,797 687,967,206 90,955,884
-------------- ----------- -----------------
$358,522,724 $848,730,852 $ 100,873,460
-------------- ----------- -----------------
-------------- ----------- -----------------
Shares of capital stock outstanding (Note 3).............................. 19,288,675 28,439,194 7,716,168
-------------- ----------- -----------------
-------------- ----------- -----------------
Net asset value, offering and redemption price per share (1).............. $ 18.59 $ 29.84 $ 13.07
-------------- ----------- -----------------
-------------- ----------- -----------------

Columbia
Special
December 31, 1995 Fund, Inc.
-------------
<S> <C>
ASSETS:
Investments at identified cost.......................................... $1,154,264,142
- -------------------------------------------------------------------------- -------------
Investments at value (Notes 1 and 2).................................... $1,355,498,125
Temporary cash investments, at cost (Note 1)............................ 24,198,846
Cash....................................................................
Cash denominated in foreign currencies (cost $644,615) (Note 1).........
Receivable for:
Interest.............................................................. 153,790
Dividends............................................................. 617,940
Investments sold...................................................... 32,742,719
Capital stock sold.................................................... 2,298,798
-------------
Total assets............................................................ 1,415,510,218
-------------
LIABILITIES:
Payable for:
Capital stock redeemed................................................ 3,231,177
Dividends and distributions........................................... 8,455,988
Investments purchased................................................. 18,078,664
Investment management fee (Note 4).................................... 979,604
Accrued expenses...................................................... 349,750
-------------
Total liabilities....................................................... 31,095,183
-------------
Net assets applicable to outstanding shares............................... $1,384,415,035
-------------
-------------
Net assets consist of:
Undistributed net investment income................................... $ (51,817)
Unrealized appreciation on:
Investments......................................................... 201,233,983
Translation of assets and liabilities in foreign currencies.........
Undistributed net realized loss from:
Investments......................................................... (2,440,560)
Capital shares (Note 3)............................................... 645,737
Capital paid in (Notes 1 and 3)....................................... 1,185,027,692
-------------
$1,384,415,035
-------------
-------------
Shares of capital stock outstanding (Note 3).............................. 64,573,734
-------------
-------------
Net asset value, offering and redemption price per share (1).............. $ 21.44
-------------
-------------
</TABLE>

(1) The net asset value per share is computed by dividing net assets applicable
to outstanding shares by shares of capital stock outstanding.

The accompanying notes are an integral part of the financial statements.

47
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
-----------------------------------------------------------------
<TABLE>
<CAPTION>
Columbia
Real Estate Columbia Columbia
Equity Balanced Daily Income
December 31, 1995 Fund, Inc. Fund, Inc. Company
---------------- ----------- ------------
<S> <C> <C> <C>
ASSETS:
Investments at identified cost...................................... $ 18,771,237 $407,518,044 8$06,898,061
- ---------------------------------------------------------------------- ---------------- ----------- ------------
Investments at value (Notes 1 and 2)................................ $ 20,307,163 $459,399,894 8$06,898,061
Temporary cash investments, at cost (Note 1)........................ 1,503,271 25,192,252
Cash................................................................ 3,800,000
Receivable for:
Interest.......................................................... 6,435 2,935,461 13,954
Dividends......................................................... 206,968 439,429
Investments sold.................................................. 2,486,885
Capital stock sold................................................ 260,404 598,554 1,845,408
---------------- ----------- ------------
Total assets........................................................ 22,284,241 491,052,475 812,557,423
---------------- ----------- ------------
LIABILITIES:
Payable for:
Capital stock redeemed............................................ 625,862 247,138 11,225,749
Dividends and distributions....................................... 33,282 126,681
Investments purchased............................................. 3,493,780
Investment management fee (Note 4)................................ 13,200 202,649 324,674
Accrued expenses.................................................. 24,697 214,734 351,478
---------------- ----------- ------------
Total liabilities................................................... 697,041 4,284,982 11,901,901
---------------- ----------- ------------
Net assets applicable to outstanding shares........................... $ 21,587,200 $486,767,493 8$00,655,522
---------------- ----------- ------------
---------------- ----------- ------------
Net assets consist of:
Undistributed net investment income............................... $ 2,476 $ 211,082
Unrealized appreciation on investments............................ 1,535,926 51,881,850
Undistributed net realized gain (loss) from investments........... (50,216) 21,339
Capital shares (Note 3)........................................... $ 800,656
Capital paid in (Notes 1 and 3)................................... 20,099,014 434,653,222 799,854,866
---------------- ----------- ------------
$ 21,587,200 $486,767,493 8$00,655,522
---------------- ----------- ------------
---------------- ----------- ------------
Shares of capital stock outstanding (Note 3).......................... 1,698,923 24,241,479 800,655,522
---------------- ----------- ------------
---------------- ----------- ------------
Net asset value, offering and redemption price per share (1).......... $ 12.71 $ 20.08 $ 1.00
---------------- ----------- ------------
---------------- ----------- ------------

<CAPTION>
Columbia U.S.
Government
Securities
December 31, 1995 Fund, Inc.
--------------------
<S> <C>
ASSETS:
Investments at identified cost...................................... $ 40,097,690
- ---------------------------------------------------------------------- --------------------
Investments at value (Notes 1 and 2)................................ $ 40,709,445
Temporary cash investments, at cost (Note 1)........................ 514,814
Cash................................................................
Receivable for:
Interest.......................................................... 730,489
Dividends.........................................................
Investments sold..................................................
Capital stock sold................................................ 1,317
--------------------
Total assets........................................................ 41,956,065
--------------------
LIABILITIES:
Payable for:
Capital stock redeemed............................................ 56,897
Dividends and distributions....................................... 9,868
Investments purchased.............................................
Investment management fee (Note 4)................................ 17,660
Accrued expenses.................................................. 29,256
--------------------
Total liabilities................................................... 113,681
--------------------
Net assets applicable to outstanding shares........................... $ 41,842,384
--------------------
--------------------
Net assets consist of:
Undistributed net investment income...............................
Unrealized appreciation on investments............................ $ 611,755
Undistributed net realized gain (loss) from investments........... (496,594)
Capital shares (Note 3)........................................... 50,160
Capital paid in (Notes 1 and 3)................................... 41,677,063
--------------------
$ 41,842,384
--------------------
--------------------
Shares of capital stock outstanding (Note 3).......................... 5,016,001
--------------------
--------------------
Net asset value, offering and redemption price per share (1).......... $ 8.34
--------------------
--------------------
</TABLE>

(1) The net asset value per share is computed by dividing net assets applicable
to outstanding shares by shares of capital stock outstanding.

The accompanying notes are an integral part of the financial statements.

48
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
-----------------------------------------------------------------
<TABLE>
<CAPTION>
Columbia Fixed
Income Columbia
Securities Municipal Bond
December 31, 1995 Fund, Inc. Fund, Inc.
---------------- ---------------
<S> <C> <C>
ASSETS:
Investments at identified cost............................................................ $293,897,595 $ 352,970,256
- -------------------------------------------------------------------------------------------- ---------------- ---------------
Investments at value (Notes 1 and 2)...................................................... $307,010,923 $ 374,110,632
Temporary cash investments, at cost (Note 1).............................................. 7,380,545 4,958,852
Receivable for:
Interest................................................................................ 4,098,497 5,536,704
Investments sold........................................................................ 47,995
Capital stock sold...................................................................... 394,121 327,596
---------------- ---------------
Total assets.............................................................................. 318,932,081 384,933,784
---------------- ---------------
LIABILITIES:
Payable for:
Capital stock redeemed.................................................................. 892,556 450,660
Dividends and distributions............................................................. 178,768 418,700
Investments purchased................................................................... 1,364,187 46,352
Investment management fee (Note 4)...................................................... 132,834 162,746
Accrued expenses........................................................................ 104,933 59,408
---------------- ---------------
Total liabilities......................................................................... 2,673,278 1,137,866
---------------- ---------------
Net assets applicable to outstanding shares................................................. $316,258,803 $ 383,795,918
---------------- ---------------
---------------- ---------------
Net assets consist of:
Unrealized appreciation on investments.................................................. $ 13,113,328 $ 21,140,376
Undistributed net realized loss from investments........................................ (3,614,749) (39,875)
Capital shares (Note 3)................................................................. 234,158 310,142
Capital paid in (Notes 1 and 3)......................................................... 306,526,066 362,385,275
---------------- ---------------
$316,258,803 $ 383,795,918
---------------- ---------------
---------------- ---------------
Shares of capital stock outstanding (Note 3)................................................ 23,415,807 31,014,220
---------------- ---------------
---------------- ---------------
Net asset value, offering and redemption price per share (1)................................ $ 13.51 $ 12.37
---------------- ---------------
---------------- ---------------

Columbia
High Yield
December 31, 1995 Fund, Inc.
----------
<S> <C>
ASSETS:
Investments at identified cost............................................................ $21,455,190
- -------------------------------------------------------------------------------------------- ----------
Investments at value (Notes 1 and 2)...................................................... $22,307,862
Temporary cash investments, at cost (Note 1).............................................. 762,083
Receivable for:
Interest................................................................................ 414,734
Investments sold........................................................................
Capital stock sold...................................................................... 32,188
----------
Total assets.............................................................................. 23,516,867
----------
LIABILITIES:
Payable for:
Capital stock redeemed.................................................................. 4,151
Dividends and distributions............................................................. 16,612
Investments purchased...................................................................
Investment management fee (Note 4)...................................................... 11,830
Accrued expenses........................................................................ 13,307
----------
Total liabilities......................................................................... 45,900
----------
Net assets applicable to outstanding shares................................................. $23,470,967
----------
----------
Net assets consist of:
Unrealized appreciation on investments.................................................. $ 852,672
Undistributed net realized loss from investments........................................ (190,638)
Capital shares (Note 3).................................................................
Capital paid in (Notes 1 and 3)......................................................... 22,808,933
----------
$23,470,967
----------
----------
Shares of capital stock outstanding (Note 3)................................................ 2,375,540
----------
----------
Net asset value, offering and redemption price per share (1)................................ $ 9.88(2)
----------
----------
</TABLE>

(1) The net asset value per share is computed by dividing net assets applicable
to outstanding shares by shares of capital stock outstanding.
(2) Redemption of Columbia High Yield Fund shares held less than one year, other
than shares acquired through the reinvestment of dividends and capital
gains, will be at 99% of the net asset value.

The accompanying notes are an integral part of the financial statements.

49
<PAGE>
STATEMENTS OF OPERATIONS
-----------------------------------------------------------------
<TABLE>
<CAPTION>
Columbia Columbia Columbia
Common Stock Growth International
Year Ended December 31, 1995 Fund, Inc. Fund, Inc. Stock Fund, Inc.
-------------- ----------- -----------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Income:
Interest............................................................... $ 986,480 $ 1,472,781 $ 347,468
Dividends.............................................................. 4,925,301 12,106,308 1,607,048
Foreign taxes withheld (net of reclaims)............................... (228,538)
-------------- ----------- -----------------
Total income......................................................... 5,911,781 13,579,089 1,725,978
-------------- ----------- -----------------
Expenses:
Investment management fees (Note 4).................................... 1,453,843 4,483,699 1,013,873
Shareholder servicing costs (Note 4)................................... 209,719 471,919 201,826
Reports to shareholders................................................ 59,253 204,780 72,056
Accounting expense..................................................... 40,042 51,156 96,954
Financial information and subscriptions................................ 4,657 16,829 5,058
Custodian fees......................................................... 8,437 24,769 95,224
Bank transaction and checking fees..................................... 12,289 18,768 32,148
Registration fees...................................................... 96,277 82,582 21,649
Legal, insurance and auditing fees..................................... 25,362 38,232 28,518
Other.................................................................. 4,483 13,355 3,641
-------------- ----------- -----------------
Total expenses....................................................... 1,914,362 5,406,089 1,570,947
-------------- ----------- -----------------
Net investment income (Note 1)........................................... 3,997,419 8,173,000 155,031
-------------- ----------- -----------------
Realized gain (loss) and unrealized appreciation from investment and
foreign currency transactions:
Net realized gain (loss) from:
Investments (Note 2)................................................... 17,260,066 73,961,335 (286,889)
Foreign currency transactions (Note 1)................................. (1,246,443)
-------------- ----------- -----------------
Net realized gain (loss)............................................. 17,260,066 73,961,335 (1,533,332)
-------------- ----------- -----------------
Net unrealized appreciation on:
Investments (Note 1)................................................... 44,119,110 120,496,613 5,614,702
Translation of assets and liabilities in foreign currencies (Note 1)... 92
-------------- ----------- -----------------
Net unrealized appreciation during the period........................ 44,119,110 120,496,613 5,614,794
-------------- ----------- -----------------
Net gain on investment and foreign currency related transactions (Note
1)...................................................................... 61,379,176 194,457,948 4,081,462
-------------- ----------- -----------------
Net increase in net assets resulting from operations..................... $ 65,376,595 $202,630,948 $ 4,236,493
-------------- ----------- -----------------
-------------- ----------- -----------------

<CAPTION>
Columbia
Special
Year Ended December 31, 1995 Fund, Inc.
-----------
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................................................... $ 5,047,489
Dividends.............................................................. 8,295,374
Foreign taxes withheld (net of reclaims)...............................
-----------
Total income......................................................... 13,342,863
-----------
Expenses:
Investment management fees (Note 4).................................... 10,125,466
Shareholder servicing costs (Note 4)................................... 674,584
Reports to shareholders................................................ 270,067
Accounting expense..................................................... 71,513
Financial information and subscriptions................................ 22,268
Custodian fees......................................................... 41,841
Bank transaction and checking fees..................................... 73,415
Registration fees...................................................... 167,078
Legal, insurance and auditing fees..................................... 47,268
Other.................................................................. 21,129
-----------
Total expenses....................................................... 11,514,629
-----------
Net investment income (Note 1)........................................... 1,828,234
-----------
Realized gain (loss) and unrealized appreciation from investment and
foreign currency transactions:
Net realized gain (loss) from:
Investments (Note 2)................................................... 154,437,430
Foreign currency transactions (Note 1).................................
-----------
Net realized gain (loss)............................................. 154,437,430
-----------
Net unrealized appreciation on:
Investments (Note 1)................................................... 148,707,165
Translation of assets and liabilities in foreign currencies (Note 1)...
-----------
Net unrealized appreciation during the period........................ 148,707,165
-----------
Net gain on investment and foreign currency related transactions (Note
1)...................................................................... 303,144,595
-----------
Net increase in net assets resulting from operations..................... $304,972,829
-----------
-----------
</TABLE>

The accompanying notes are an integral part of the financial statements.

50
<PAGE>
STATEMENTS OF OPERATIONS
-----------------------------------------------------------------
<TABLE>
<CAPTION>
Columbia
Real Estate Columbia Columbia
Equity Fund, Balanced Daily Income
Year Ended December 31, 1995 Inc. Fund, Inc. Company
---------------- ---------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Income:
Interest........................................................... $ 55,792 $13,405,453 $44,653,912
Dividends.......................................................... 1,403,153 4,162,846
---------------- ---------- ------------
Total income..................................................... 1,458,945 17,568,299 44,653,912
---------------- ---------- ------------
Expenses:
Investment management fees (Note 4)................................ 138,673 1,871,284 3,611,202
Shareholder servicing costs (Note 4)............................... 24,369 317,522 645,042
Reports to shareholders............................................ 9,055 103,146 154,325
Accounting expense................................................. 15,658 56,157 90,366
Financial information and subscriptions............................ 722 17,276 15,799
Custodian fees..................................................... 696 12,872 25,264
Bank transaction and checking fees................................. 571 22,026 84,801
Registration fees.................................................. 14,395 114,555 76,538
Legal, insurance and auditing fees................................. 14,489 30,492 42,681
Other.............................................................. 245 7,488 13,139
---------------- ---------- ------------
Total expenses................................................... 218,873 2,552,818 4,759,157
---------------- ---------- ------------
Net investment income (Note 1)....................................... 1,240,072 15,015,481 39,894,755
---------------- ---------- ------------
Realized gain (loss) and unrealized appreciation from
investment transactions:
Net realized gain (loss) from investments (Note 2)................... (132) 20,555,403
Net unrealized appreciation on investments during the period (Note
1).................................................................. 1,834,154 47,270,141
---------------- ----------
Net gain on investments (Note 1)..................................... 1,834,022 67,825,544
---------------- ---------- ------------
Net increase in net assets resulting from operations................. $3,074,094 $82,841,025 $39,894,755
---------------- ---------- ------------
---------------- ---------- ------------

<CAPTION>
Columbia U.S.
Government
Securities Fund,
Year Ended December 31, 1995 Inc.
--------------------
<S> <C>
INVESTMENT INCOME:
Income:
Interest........................................................... $2,331,015
Dividends..........................................................
-----------
Total income..................................................... 2,331,015
-----------
Expenses:
Investment management fees (Note 4)................................ 187,343
Shareholder servicing costs (Note 4)............................... 40,973
Reports to shareholders............................................ 12,879
Accounting expense................................................. 13,579
Financial information and subscriptions............................ 1,180
Custodian fees..................................................... 1,257
Bank transaction and checking fees................................. 649
Registration fees.................................................. 16,859
Legal, insurance and auditing fees................................. 19,107
Other.............................................................. 736
-----------
Total expenses................................................... 294,562
-----------
Net investment income (Note 1)....................................... 2,036,453
-----------
Realized gain (loss) and unrealized appreciation from
investment transactions:
Net realized gain (loss) from investments (Note 2)................... 571,638
Net unrealized appreciation on investments during the period (Note
1).................................................................. 1,000,875
-----------
Net gain on investments (Note 1)..................................... 1,572,513
-----------
Net increase in net assets resulting from operations................. $3,608,966
-----------
-----------
</TABLE>

The accompanying notes are an integral part of the financial statements.

51
<PAGE>
STATEMENTS OF OPERATIONS
-----------------------------------------------------------------
<TABLE>
<CAPTION>
Columbia Fixed
Income Columbia
Securities Fund, Municipal Bond
Year Ended December 31, 1995 Inc. Fund, Inc.
---------------- ---------------
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest................................................................................ $ 21,119,106 $21,307,223
---------------- ---------------
Total income.......................................................................... 21,119,106 21,307,223
---------------- ---------------
Expenses:
Investment management fees (Note 4)..................................................... 1,413,769 1,840,676
Shareholder servicing costs (Note 4).................................................... 192,151 90,846
Reports to shareholders................................................................. 76,274 30,624
Accounting expense...................................................................... 38,467 17,244
Financial information and subscriptions................................................. 16,984 44,181
Custodian fees.......................................................................... 9,567 12,266
Bank transaction and checking fees...................................................... 9,638 43
Registration fees....................................................................... 38,423 9,964
Legal, insurance and auditing fees...................................................... 33,170 32,203
Other................................................................................... 4,906 6,252
---------------- ---------------
1,833,349 2,084,299
Expenses reimbursed by investment advisor (1)...........................................
---------------- ---------------
Total expenses........................................................................ 1,833,349 2,084,299
---------------- ---------------
Net investment income (Note 1)............................................................ 19,285,757 19,222,924
---------------- ---------------
Realized gain (loss) and unrealized appreciation from investment transactions:
Net realized gain (loss) from investments (Note 2)........................................ 7,333,401 2,099,378
Net unrealized appreciation on investments during the period (Note 1)..................... 22,005,760 27,002,836
---------------- ---------------
Net gain on investments (Note 1).......................................................... 29,339,161 29,102,214
---------------- ---------------
Net increase in net assets resulting from operations...................................... $ 48,624,918 $48,325,138
---------------- ---------------
---------------- ---------------

Columbia
High Yield
Year Ended December 31, 1995 Fund, Inc.
-----------
<S> <C>
INVESTMENT INCOME:
Income:
Interest................................................................................ $1,742,294
-----------
Total income.......................................................................... 1,742,294
-----------
Expenses:
Investment management fees (Note 4)..................................................... 109,022
Shareholder servicing costs (Note 4).................................................... 16,590
Reports to shareholders................................................................. 6,849
Accounting expense...................................................................... 17,526
Financial information and subscriptions................................................. 4,772
Custodian fees.......................................................................... 607
Bank transaction and checking fees...................................................... 1,304
Registration fees....................................................................... 17,743
Legal, insurance and auditing fees...................................................... 16,473
Other................................................................................... 356
-----------
191,242
Expenses reimbursed by investment advisor (1)........................................... (10,219)
-----------
Total expenses........................................................................ 181,023
-----------
Net investment income (Note 1)............................................................ 1,561,271
-----------
Realized gain (loss) and unrealized appreciation from investment transactions:
Net realized gain (loss) from investments (Note 2)........................................ (31,194)
Net unrealized appreciation on investments during the period (Note 1)..................... 1,544,937
-----------
Net gain on investments (Note 1).......................................................... 1,513,743
-----------
Net increase in net assets resulting from operations...................................... $3,075,014
-----------
-----------
</TABLE>

(1) The advisor of Columbia High Yield Fund has voluntarily agreed to assume
ordinary recurring expenses of the Fund to the extent these expenses,
together with the Fund's management fee, exceed 1% of the Fund's average net
assets.

The accompanying notes are an integral part of the financial statements.

52
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
-----------------------------------------------------------------
<TABLE>
<CAPTION>
Columbia Columbia
Common Stock Growth
Years Ended December 31, Fund, Inc. Fund, Inc.
------------------------ ------------------------
<S> <C> <C> <C> <C>
1995 1994 1995 1994
----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss)..................................... $ 3,997,419 $ 2,103,636 $ 8,173,000 $ 6,656,618
Net realized gain (loss) from:
Investments (Note 2)........................................... 17,260,066 1,543,445 73,961,335 25,753,811
Foreign currency transactions (Note 1).........................
Change in net unrealized appreciation (depreciation) on:
Investments.................................................... 44,119,110 (1,339,989) 120,496,613 (36,404,981)
Translation of assets and liabilities in Foreign
currencies (Note 1)...........................................
----------- ----------- ----------- -----------
Net increase (decrease) in net assets resulting from
operations...................................................... 65,376,595 2,307,092 202,630,948 (3,994,552)
Distributions to shareholders:
From net investment income....................................... (3,764,094) (1,944,648) (7,437,014) (5,880,690)
In excess of net investment income............................... (4,119)* (31,322)*
From net realized gain from investment transactions.............. (17,260,066) (1,528,338) (73,961,335) (25,106,027)
In excess of net realized gain from investment transactions...... (17,932)* (206,957)*
Capital share transactions, net (Note 3)........................... 189,924,932 24,718,553 136,042,951 21,274,002
----------- ----------- ----------- -----------
Net increase (decrease) in net assets............................ 234,259,435 23,548,540 257,037,271 (13,707,267)
NET ASSETS:
Beginning of period................................................ 124,263,289 100,714,749 591,693,581 605,400,848
----------- ----------- ----------- -----------
End of period (1).................................................. $358,522,724 $124,263,289 $848,730,852 $591,693,581
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
- ---------------------------------------------------------------------
----------- ----------- ----------- -----------

<CAPTION>
Columbia
International Stock
Years Ended December 31, Fund, Inc.
------------------------
<S> <C> <C>
1995 1994
----------- -----------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss)..................................... $ 155,031 $ (237,133)
Net realized gain (loss) from:
Investments (Note 2)........................................... (286,889) 5,355,530
Foreign currency transactions (Note 1)......................... (1,246,443) (4,405,623)
Change in net unrealized appreciation (depreciation) on:
Investments.................................................... 5,614,702 (5,188,078)
Translation of assets and liabilities in Foreign
currencies (Note 1)........................................... 92 (159,098)
----------- -----------
Net increase (decrease) in net assets resulting from
operations...................................................... 4,236,493 (4,634,402)
Distributions to shareholders:
From net investment income.......................................
In excess of net investment income...............................
From net realized gain from investment transactions.............. (1,937,123)
In excess of net realized gain from investment transactions...... (34,209)*
Capital share transactions, net (Note 3)........................... (21,847,478) 52,043,582
----------- -----------
Net increase (decrease) in net assets............................ (17,610,985) 45,437,848
NET ASSETS:
Beginning of period................................................ 118,484,445 73,046,597
----------- -----------
End of period (1).................................................. $100,873,460 $118,484,445
----------- -----------
----------- -----------
- ---------------------------------------------------------------------
----------- -----------
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
(1) Includes undistributed net investment income (loss) of: $ 395,967 $ 162,642 $ 1,523,877 $ 819,213
* On a tax basis, there was no return of capital.

<CAPTION>
(1) Includes undistributed net investment income (loss) of: $ -- $ (28,910)
<S> <C> <C>
* On a tax basis, there was no return of capital.
</TABLE>

The accompanying notes are an integral part of the financial statements.

53
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
-----------------------------------------------------------------
<TABLE>
<CAPTION>
Columbia Columbia Columbia
Special Real Estate Equity Balanced
Years Ended December 31, Fund, Inc. Fund, Inc. Fund, Inc.
-------------------------- ---------------------- -----------
<S> <C> <C> <C> <C> <C>
1995 1994 1995 1994(2) 1995
------------- ----------- ---------- ---------- -----------
INCREASE IN NET ASSETS:
Operations:
Net investment income.............................. $ 1,828,234 $ 3,456,005 $1,240,072 $ 642,745 $15,015,481
Net realized gain (loss) from investments (Note
2)................................................ 154,437,430 51,779,847 (132) (6,499) 20,555,403
Change in net unrealized appreciation
(depreciation) on investments..................... 148,707,165 (41,675,166) 1,834,154 (298,228) 47,270,141
------------- ----------- ---------- ---------- -----------
Net increase in net assets resulting from
operations........................................ 304,972,829 13,560,686 3,074,094 338,018 82,841,025
Distributions to shareholders:
From net investment income......................... (1,151,123) (3,128,013) (774,447) (405,620) (14,812,967)
In excess of net investment income................. (11,481)* (46,117)*
From net realized gain from investment
transactions...................................... (154,437,430) (51,779,847) (17,052,999)
In excess of net realized gain from investment
transactions...................................... (1,539,578)* (1,396,366)* (235,252)*
From tax return of capital......................... (451,668) (237,125)
Capital share transactions, net (Note 3)............. 347,044,146 159,528,287 2,572,289 17,718,392 186,168,310
------------- ----------- ---------- ---------- -----------
Net increase in net assets......................... 494,888,844 116,784,747 4,185,016 17,402,184 237,097,252
NET ASSETS:
Beginning of period.................................. 889,526,191 772,741,444 17,402,184 249,670,241
------------- ----------- ---------- ---------- -----------
End of period (1).................................... $1,384,415,035 $889,526,191 $21,587,200 $17,402,184 $486,767,493
------------- ----------- ---------- ---------- -----------
------------- ----------- ---------- ---------- -----------
- -------------------------------------------------------
------------- ----------- ---------- ---------- -----------
(1) Includes undistributed net investment income (loss)
of:................................................... $ (51,817) $ (226,836) $ 2,476 $ (11,481) $ 211,082
(2) From inception of operations on March 16, 1994.
* On a tax basis, there was no return of capital.

<CAPTION>
Years Ended December 31,
<S> <C>
1994
-----------
INCREASE IN NET ASSETS:
Operations:
Net investment income.............................. $ 8,699,173
Net realized gain (loss) from investments (Note
2)................................................ (3,479,941)
Change in net unrealized appreciation
(depreciation) on investments..................... (4,914,068)
-----------
Net increase in net assets resulting from
operations........................................ 305,164
Distributions to shareholders:
From net investment income......................... (8,528,093)
In excess of net investment income................. (64,270)*
From net realized gain from investment
transactions......................................
In excess of net realized gain from investment
transactions......................................
From tax return of capital.........................
Capital share transactions, net (Note 3)............. 71,368,736
-----------
Net increase in net assets......................... 63,081,537
NET ASSETS:
Beginning of period.................................. 186,588,704
-----------
End of period (1).................................... $249,670,241
-----------
-----------
- -------------------------------------------------------
-----------
(1) Includes undistributed net investment income (loss)
of:................................................... $ 54,685
(2) From inception of operations on March 16, 1994.
* On a tax basis, there was no return of capital.
</TABLE>

The accompanying notes are an integral part of the financial statements.

54
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
-----------------------------------------------------------------
<TABLE>
<CAPTION>
Columbia
Columbia Columbia Fixed Income
Daily Income U.S. Government Securities
Years Ended December 31, Company Securities Fund, Inc. Fund, Inc.
-------------------------- ------------------------ ------------
<S> <C> <C> <C> <C> <C>
1995 1994 1995 1994 1995
------------ ------------ ----------- ----------- ------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income............................... $ 39,894,755 $ 23,002,486 $ 2,036,453 $ 1,555,509 $ 19,285,757
Net realized gain (loss) from investments (Note
2)................................................. 571,638 (1,051,398) 7,333,401
Change in net unrealized appreciation (depreciation)
on investments..................................... 1,000,875 (428,478) 22,005,760
------------ ------------ ----------- ----------- ------------
Net increase (decrease) in net assets resulting from
operations......................................... 39,894,755 23,002,486 3,608,966 75,633 48,624,918
Distributions to shareholders:
From net investment income.......................... (39,894,755) (23,002,486) (2,036,453) (1,555,509) (19,285,757)
Capital share transactions, net (Note 3).............. 70,588,520 185,567,215 6,758,002 (885,283) 34,830,059
------------ ------------ ----------- ----------- ------------
Net increase (decrease) in net assets............... 70,588,520 185,567,215 8,330,515 (2,365,159) 64,169,220
NET ASSETS:
Beginning of period................................... 730,067,002 544,499,787 33,511,869 35,877,028 252,089,583
------------ ------------ ----------- ----------- ------------
End of period......................................... $800,655,522 $730,067,002 $41,842,384 $33,511,869 $316,258,803
------------ ------------ ----------- ----------- ------------
------------ ------------ ----------- ----------- ------------

Years Ended December 31,

<S> <C>
1994
------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income............................... $ 17,677,556
Net realized gain (loss) from investments (Note
2)................................................. (10,832,491)
Change in net unrealized appreciation (depreciation)
on investments..................................... (17,001,971)
------------
Net increase (decrease) in net assets resulting from
operations......................................... (10,156,906)
Distributions to shareholders:
From net investment income.......................... (17,677,556)
Capital share transactions, net (Note 3).............. (20,607,880)
------------
Net increase (decrease) in net assets............... (48,442,342)
NET ASSETS:
Beginning of period................................... 300,531,925
------------
End of period......................................... $252,089,583
------------
------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

55
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
-----------------------------------------------------------------
<TABLE>
<CAPTION>
Columbia Columbia
Municipal Bond High Yield
Years Ended December 31, Fund, Inc. Fund, Inc.
------------------------ ----------
<S> <C> <C> <C>
1995 1994 1995
----------- ----------- ----------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income............................................................ $19,222,924 $20,638,374 $1,561,271
Net realized gain (loss) from investments (Note 2)............................... 2,099,378 91,018 (31,194)
Change in net unrealized appreciation (depreciation) on investments.............. 27,002,836 (41,231,934) 1,544,937
----------- ----------- ----------
Net increase (decrease) in net assets resulting from operations.................. 48,325,138 (20,502,542) 3,075,014
Distributions to shareholders:
From net investment income....................................................... (19,222,924) (20,638,374) (1,561,271)
From net realized gain from investment transactions.............................. (2,099,378)
In excess of net realized gain from investment transaction....................... (52,790)*
Capital share transactions, net (Note 3)........................................... 17,029,241 (49,409,756) 9,123,656
----------- ----------- ----------
Net increase (decrease) in net assets............................................ 43,979,287 (90,550,672) 10,637,399
NET ASSETS:
Beginning of period................................................................ 339,816,631 430,367,303 12,833,568
----------- ----------- ----------
End of period...................................................................... $383,795,918 $339,816,631 $23,470,967
----------- ----------- ----------
----------- ----------- ----------

Years Ended December 31,

<S> <C>
1994
----------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income............................................................ $ 818,604
Net realized gain (loss) from investments (Note 2)............................... (159,444)
Change in net unrealized appreciation (depreciation) on investments.............. (689,630)
----------
Net increase (decrease) in net assets resulting from operations.................. (30,470)
Distributions to shareholders:
From net investment income....................................................... (818,604)
From net realized gain from investment transactions..............................
In excess of net realized gain from investment transaction.......................
Capital share transactions, net (Note 3)........................................... 7,742,417
----------
Net increase (decrease) in net assets............................................ 6,893,343
NET ASSETS:
Beginning of period................................................................ 5,940,225
----------
End of period...................................................................... $12,833,568
----------
----------
</TABLE>
<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------

* On a tax basis, there was no return of capital.

The accompanying notes are an integral part of the financial statements.

56
<PAGE>
NOTES TO FINANCIAL STATEMENTS
-----------------------------------------------------------------

1. Significant accounting policies:
The Columbia Funds (the Funds) consist of Columbia Common Stock Fund, Inc.
(CCSF), Columbia Growth Fund, Inc. (CGF), Columbia International Stock Fund,
Inc. (CISF), Columbia Special Fund, Inc. (CSF), Columbia Real Estate Equity
Fund, Inc. (CREF), Columbia Balanced Fund, Inc. (CBF), Columbia Daily Income
Company (CDIC), Columbia U.S. Government Securities Fund, Inc. (CUSG), Columbia
Fixed Income Securities Fund, Inc. (CFIS), Columbia Municipal Bond Fund, Inc.
(CMBF), and Columbia High Yield Fund, Inc. (CHYF). All Funds, except CMBF, are
open-end, diversified investment companies registered under the Investment
Company Act of 1940, as amended. CMBF is an open-end, non-diversified investment
company registered under the Investment Company Act of 1940, as amended. The
policies described below are consistently followed by the Funds in the
preparation of their financial statements in conformity with generally accepted
accounting principles.

Investment valuation - The values of CCSF, CGF, CISF, CSF, CREF and CBF
equity investments are based on the last sale prices reported by the principal
securities exchanges on which the investments are traded, or, in the absence of
recorded sales, at the closing bid prices on such exchanges or over-the-counter
markets. Temporary cash investments in short-term securities (principally
repurchase agreements) are valued at cost, which approximates market.
CDIC investments are carried at values deemed best to reflect their fair
values as determined in good faith by or under the supervision of officers of
CDIC specifically so authorized by its Directors. These values are based on cost
adjusted for amortization of discount or premium and accrued interest, unless
unusual circumstances indicate that another method of determining fair value
should be considered.
CBF, CUSG, CFIS, CMBF and CHYF fixed income investments are carried at
values deemed best to reflect their fair values as determined in good faith by
or under the supervision of officers of CBF, CUSG, CFIS, CMBF and CHYF,
specifically so authorized by their Directors. These values are based on market
value as quoted by dealers who are market makers in these securities or by an
independent pricing service unless unusual circumstances indicate that another
method of determining fair value should be considered. Market values for CBF,
CUSG, CFIS and CHYF fixed income investments are based on the average of bid and
ask prices and market value for CMBF is based on bid prices, or by reference to
other securities with comparable ratings, interest rates and maturities.
Temporary cash investments in short-term securities (principally repurchase
agreements) are valued at cost, which approximates market.

Futures contracts - CSF occasionally utilizes futures contracts to hedge
against market conditions affecting the value of securities that CSF owns or
intends to purchase. Futures contracts are marked to market daily and the
variation margin is recorded as an unrealized gain or loss. When a futures
contract is closed, a realized gain or loss is recorded equal to the difference
between the opening and closing value of the contract. Net realized losses
arising from such transactions were not significant for the year ended December
31, 1995 and are included in realized losses on investment transactions. CSF had
no outstanding contracts at December 31, 1995.

Forward foreign currency exchange contracts - In connection with portfolio
purchases and sales of securities denominated in a foreign currency, CISF enters
into forward foreign currency exchange contracts (contracts). Additionally, CISF
enters into contracts to hedge certain other foreign currency denominated
assets. Contracts are recorded at market value. CISF could be exposed to risks
if counterparties to the contracts are unable to meet the terms of their
contracts or if the value of the foreign currency changes unfavorably. Net
realized losses arising from such transactions amounted to $1,420,747 and are
included in net realized loss from foreign currency related transactions. CISF
had no outstanding hedge contracts at December 31, 1995.

57
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
---------------------------------------------------------------------------

1. Significant accounting policies (continued):
Foreign currency translations - The books and records of CISF are maintained
in U.S. dollars. Foreign currency transactions are translated into U.S. dollars
on the following basis:
(i) market value of investment securities, other assets, and
liabilities at the daily rates of exchange, and
(ii) purchases and sales of investment securities, dividend and interest
income and certain expenses at the rates of exchange prevailing on
the respective dates of such transactions.
CISF does not separate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest, and
foreign withholding taxes recorded on CISF's books and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of assets and
liabilities, other than investments in securities, resulting from changes in
exchange rates.

Interest and dividend income - Interest income is recorded on the accrual
basis and dividend income is recorded on the ex-dividend date. The majority of
dividend income recorded by CREF is from Real Estate Investment Trusts (REITs).
For tax purposes, a portion of these dividends consist of capital gains and
return of capital. For financial reporting purposes, these dividends are
recorded as dividend income. For the year ended December 31, 1995, the return of
capital portion of such distributions amounted to approximately 31%.

Shareholder distributions - CCSF, CREF and CBF distribute net investment
income quarterly and any net realized gains from investment transactions
annually. CGF, CISF and CSF distribute net investment income and any net
realized gains annually. CDIC distributes its net investment income daily -
including any realized investment gains or losses. CUSG, CFIS, CMBF and CHYF
distribute their net investment income monthly and any net realized gains
annually. Distributions to shareholders are recorded on the record date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
foreign currency transactions, net operating losses, deferral of losses from
wash sales and return of capital received from Real Estate Investment Trusts.

Federal income taxes - The Funds have made no provision for federal income
taxes on net investment income or net realized gains from sales of securities,
since it is the intention of the Funds to comply with the provisions of the
Internal Revenue Code available to certain investment companies, and to make
distributions of income and security profits sufficient to relieve them from
substantially all federal income taxes.
As of December 31, 1995, certain Funds have capital loss carryovers
available to offset future capital gains as follows:

<TABLE>
<CAPTION>
Year Carryover Expires CISF CUSG CFIS CHYF
- ----------------------------------------------------------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
2002....................................................... $ 479,759 $ 3,284,789 $ 159,444
2003....................................................... $ 294,185 31,194
----------- ----------- ------------- -----------
$ 294,185 $ 479,759 $ 3,284,789 $ 190,638
----------- ----------- ------------- -----------
----------- ----------- ------------- -----------
</TABLE>

To the extent that the capital loss carryovers are used to offset any
capital gains, it is unlikely that the gains so offset will be distributed to
shareholders.

58
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
---------------------------------------------------------------------------

1. Significant accounting policies (continued):
Other - Investment transactions are accounted for on the date the
investments are purchased or sold. The cost of investments sold is determined by
the use of the specific identification method for both financial reporting and
income tax purposes. Realized gains and losses from investment transactions and
unrealized appreciation or depreciation of investments are reported on the basis
of identified costs. The Funds, through their custodians, receive delivery of
underlying securities collateralizing repurchase agreements (included in
temporary cash investments). Market values of these securities are required to
be at least 100% of the cost of the repurchase agreements. The Funds' investment
advisor determines that the value of the underlying securities is at all times
at least equal to the resale price. In the event of default or bankruptcy by the
other party to the agreement, realization and/or retention of the collateral may
be subject to legal proceedings.
CHYF invests in lower rated debt securities, which may be more susceptible
to adverse economic conditions than investment grade holdings. These securities
are often subordinated to the prior claims of other senior lenders, and
uncertainties exist as to an issuer's ability to meet principal and interest
payments. At December 31, 1995, 95% of the Fund's portfolio was invested in
securities rated Ba (58%) or B (37%) by Moody's Investor Services, Inc.; the
remaining 5% of the portfolio was invested in a U.S. Treasury Bond.

2. Investment transactions:
Aggregate purchases, sales and maturities, net realized gain (loss) and
unrealized appreciation (depreciation) of securities, including temporary cash
investments for CDIC and excluding temporary cash investments for all other
Funds, as of and for the period ended December 31, 1995, were as follows:
<TABLE>
<CAPTION>
Columbia
Columbia Common International
Stock Fund, Inc. Columbia Growth Stock
(CCSF) Fund, Inc. (CGF) Fund, Inc. (CISF)
----------------- ---------------- -----------------
<S> <C> <C> <C>
Purchases:
Investment securities other than U.S. Government obligations... $ 346,197,213 $747,095,468 $ 148,072,448
----------------- ---------------- -----------------
----------------- ---------------- -----------------
Sales and Maturities:
Investment securities other than U.S. Government obligations... $ 169,888,876 $662,797,667 $ 166,905,505
----------------- ---------------- -----------------
----------------- ---------------- -----------------
Net Realized Gain (Loss):
Investment securities other than U.S. Government obligations... $ 17,260,066 $ 73,961,335 $ (286,889)
----------------- ---------------- -----------------
----------------- ---------------- -----------------
Unrealized Appreciation (Depreciation) as of December 31, 1995:
Appreciation................................................... $ 57,772,788 $175,844,768 $ 13,064,543
Depreciation................................................... (5,416,932) (15,873,460) (2,097,626)
----------------- ---------------- -----------------
Net unrealized appreciation.................................. $ 52,355,856 $159,971,308 $ 10,966,917
----------------- ---------------- -----------------
----------------- ---------------- -----------------
Unrealized Appreciation (Depreciation)
for federal income tax purposes as of December 31, 1995:
Appreciation................................................... $ 58,036,355 $176,658,318 $ 12,398,529
Depreciation................................................... (5,339,834) (16,170,268) (2,137,926)
----------------- ---------------- -----------------
Net unrealized appreciation.................................. $ 52,696,521 $160,488,050 $ 10,260,603
----------------- ---------------- -----------------
----------------- ---------------- -----------------
For federal income tax purposes, the cost of investments owned at
December 31, 1995............................................... $ 300,909,517 $680,336,343 $ 87,475,360
----------------- ---------------- -----------------
----------------- ---------------- -----------------

Columbia
Special Fund,
Inc. (CSF)
---------------
<S> <C>
Purchases:
Investment securities other than U.S. Government obligations... $2,253,815,949
---------------
---------------
Sales and Maturities:
Investment securities other than U.S. Government obligations... $2,004,583,075
---------------
---------------
Net Realized Gain (Loss):
Investment securities other than U.S. Government obligations... $ 154,437,430
---------------
---------------
Unrealized Appreciation (Depreciation) as of December 31, 1995:
Appreciation................................................... $ 249,496,752
Depreciation................................................... (48,262,769)
---------------
Net unrealized appreciation.................................. $ 201,233,983
---------------
---------------
Unrealized Appreciation (Depreciation)
for federal income tax purposes as of December 31, 1995:
Appreciation................................................... $ 249,436,009
Depreciation................................................... (50,288,978)
---------------
Net unrealized appreciation.................................. $ 199,147,031
---------------
---------------
For federal income tax purposes, the cost of investments owned at
December 31, 1995............................................... $1,156,351,094
---------------
---------------
</TABLE>

The net realized gain for CGF and CSF includes proceeds of approximately
$372,000 and $617,000, respectively, from shareholder class action suits related
to securities held by those Funds.

59
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
---------------------------------------------------------------------------

2. Investment transactions (continued):
<TABLE>
<CAPTION>
Columbia
Real Estate Columbia Columbia
Equity Fund, Balanced Fund, Daily Income
Inc. (CREF) Inc. (CBF) Company (CDIC)
---------------- --------------- ----------------
<S> <C> <C> <C>
Purchases:
Investment securities other than U.S. Government
obligations................................................ $ 11,549,479 $ 310,893,650 $8,765,471,361
U.S. Government obligations................................. 214,984,335 132,997,843
---------------- --------------- ----------------
Total purchases........................................... $ 11,549,479 $ 525,877,985 $8,898,469,204
---------------- --------------- ----------------
---------------- --------------- ----------------
Sales and Maturities:
Investment securities other than U.S. Government
obligations................................................ $ 9,485,226 $ 189,253,289 $8,651,791,176
U.S. Government obligations................................. 182,028,057 176,177,079
---------------- --------------- ----------------
Total sales and maturities................................ $ 9,485,226 $ 371,281,346 $8,827,968,255
---------------- --------------- ----------------
---------------- --------------- ----------------
Net Realized Gain (Loss):
Investment securities other than U.S. Government
obligations................................................ $ (132) $ 17,195,677
U.S. Government obligations................................. 3,359,726
---------------- ---------------
Total net realized gain (loss) $ (132) $ 20,555,403
---------------- ---------------
---------------- ---------------
Unrealized Appreciation (Depreciation) as of December 31,
1995:
Appreciation................................................ $ 1,700,526 $ 55,548,255
Depreciation................................................ (164,600) (3,666,405)
---------------- ---------------
Net unrealized appreciation............................... $ 1,535,926 $ 51,881,850
---------------- ---------------
---------------- ---------------
Unrealized Appreciation (Depreciation)
for federal income tax purposes as of December 31, 1995:
Appreciation................................................ $ 2,056,659 $ 55,769,038
Depreciation................................................ (62,873) (3,560,483)
---------------- ---------------
Net unrealized appreciation............................... $ 1,993,786 $ 52,208,555
---------------- ---------------
---------------- ---------------
For federal income tax purposes, the cost of investments owned
at December 31, 1995......................................... $ 18,313,377 $ 407,191,339 $ 806,898,061
---------------- --------------- ----------------
---------------- --------------- ----------------

<CAPTION>
Columbia U.S.
Government
Securities Fund,
Inc. (CUSG)
--------------------
<S> <C>
Purchases:
Investment securities other than U.S. Government
obligations................................................
U.S. Government obligations................................. $106,366,414
--------------------
Total purchases........................................... $106,366,414
--------------------
--------------------
Sales and Maturities:
Investment securities other than U.S. Government
obligations................................................
U.S. Government obligations................................. $100,153,457
--------------------
Total sales and maturities................................ $100,153,457
--------------------
--------------------
Net Realized Gain (Loss):
Investment securities other than U.S. Government
obligations................................................
U.S. Government obligations................................. $ 571,638
--------------------
Total net realized gain (loss) $ 571,638
--------------------
--------------------
Unrealized Appreciation (Depreciation) as of December 31,
1995:
Appreciation................................................ $ 611,755
Depreciation................................................
--------------------
Net unrealized appreciation............................... $ 611,755
--------------------
--------------------
Unrealized Appreciation (Depreciation)
for federal income tax purposes as of December 31, 1995:
Appreciation................................................ $ 611,755
Depreciation................................................
--------------------
Net unrealized appreciation............................... $ 611,755
--------------------
--------------------
For federal income tax purposes, the cost of investments owned
at December 31, 1995......................................... $ 40,097,690
--------------------
--------------------
</TABLE>

60
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
---------------------------------------------------------------------------

2. Investment transactions (continued):
<TABLE>
<CAPTION>
Columbia Fixed
Income Columbia
Securities Fund, Municipal Bond
Inc. (CFIS) Fund, Inc. (CMBF)
---------------- -----------------
<S> <C> <C>
Purchases:
Investment securities other than U.S. Government obligations.................... $136,432,334 $ 90,547,626
U.S. Government obligations..................................................... 272,207,018
---------------- -----------------
Total purchases............................................................... $408,639,352 $ 90,547,626
---------------- -----------------
---------------- -----------------
Sales and Maturities:
Investment securities other than U.S. Government obligations.................... $115,770,042 $ 76,696,109
U.S. Government obligations..................................................... 257,680,793
---------------- -----------------
Total sales and maturities.................................................... $373,450,835 $ 76,696,109
---------------- -----------------
---------------- -----------------
Net Realized Gain (Loss):
Investment securities other than U.S. Government obligations.................... $ 1,901,406 $ 2,099,378
U.S. Government obligations..................................................... 5,431,995
---------------- -----------------
Total net realized gain (loss)................................................ $ 7,333,401 $ 2,099,378
---------------- -----------------
---------------- -----------------
Unrealized Appreciation (Depreciation) as of December 31, 1995:
Appreciation.................................................................... $ 13,239,666 $ 21,361,180
Depreciation.................................................................... (126,338) (220,804)
---------------- -----------------
Net unrealized appreciation................................................... $ 13,113,328 $ 21,140,376
---------------- -----------------
---------------- -----------------
Unrealized Appreciation (Depreciation)
for federal income tax purposes as of December 31, 1995:
Appreciation.................................................................... $ 13,021,794 $ 21,361,180
Depreciation.................................................................... (126,338) (220,804)
---------------- -----------------
Net unrealized appreciation................................................... $ 12,895,456 $ 21,140,376
---------------- -----------------
---------------- -----------------
For federal income tax purposes, the cost of investments owned
at December 31, 1995............................................................. $294,115,467 $ 352,970,256
---------------- -----------------
---------------- -----------------

Columbia
High Yield
Fund, Inc. (CHYF)
-----------------
<S> <C>
Purchases:
Investment securities other than U.S. Government obligations.................... $ 14,660,694
U.S. Government obligations..................................................... 2,881,891
-----------------
Total purchases............................................................... $ 17,542,585
-----------------
-----------------
Sales and Maturities:
Investment securities other than U.S. Government obligations.................... $ 6,873,947
U.S. Government obligations..................................................... 1,897,852
-----------------
Total sales and maturities.................................................... $ 8,771,799
-----------------
-----------------
Net Realized Gain (Loss):
Investment securities other than U.S. Government obligations.................... $ (52,796)
U.S. Government obligations..................................................... 21,602
-----------------
Total net realized gain (loss)................................................ $ (31,194)
-----------------
-----------------
Unrealized Appreciation (Depreciation) as of December 31, 1995:
Appreciation.................................................................... $ 899,527
Depreciation.................................................................... (46,855)
-----------------
Net unrealized appreciation................................................... $ 852,672
-----------------
-----------------
Unrealized Appreciation (Depreciation)
for federal income tax purposes as of December 31, 1995:
Appreciation.................................................................... $ 899,527
Depreciation.................................................................... (46,855)
-----------------
Net unrealized appreciation................................................... $ 852,672
-----------------
-----------------
For federal income tax purposes, the cost of investments owned
at December 31, 1995............................................................. $ 21,455,190
-----------------
-----------------
</TABLE>

61
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
---------------------------------------------------------------------------

3. Capital stock:
<TABLE>
<CAPTION>
Columbia
International
Columbia Columbia Stock
Common Stock Growth Fund, Inc.
Fund, Inc. (CCSF) Fund, Inc. (CGF) (CISF)
------------------------ -------------------------- -----------
1995 1994 1995 1994 1995
----------- ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Shares:
Shares sold......................................... 12,907,792 3,682,715 6,481,595 4,615,526 3,176,713
Shares issued for reinvestment of dividends......... 1,137,709 226,986 2,636,586 1,199,800 --
----------- ----------- ------------ ------------ -----------
14,045,501 3,909,701 9,118,181 5,815,326 3,176,713
Less shares redeemed................................ (2,953,090) (2,300,962) (4,495,529) (4,945,078) (4,992,567)
----------- ----------- ------------ ------------ -----------
Net increase (decrease) in shares................... 11,092,411 1,608,739 4,622,652 870,248 (1,815,854)
----------- ----------- ------------ ------------ -----------
----------- ----------- ------------ ------------ -----------
Amounts:
Sales............................................... $221,012,822 $56,500,667 $187,801,317 $120,942,572 $38,698,162
Reinvestment of dividends........................... 20,863,972 3,433,537 78,122,044 29,707,040 --
----------- ----------- ------------ ------------ -----------
241,876,794 59,934,204 265,923,361 150,649,612 38,698,162
Less redemptions.................................... (51,951,862) (35,215,651) (129,880,410) (129,375,610) (60,545,640)
----------- ----------- ------------ ------------ -----------
Net increase (decrease)............................. $189,924,932 $24,718,553 $136,042,951 $ 21,274,002 $(21,847,478)
----------- ----------- ------------ ------------ -----------
----------- ----------- ------------ ------------ -----------
Capital stock authorized (shares)................... 100,000,000 100,000,000 100,000,000
Par Value........................................... no par $.01 no par

<CAPTION>
1994
-----------
<S> <C>
Shares:
Shares sold......................................... 7,451,585
Shares issued for reinvestment of dividends......... 157,112
-----------
7,608,697
Less shares redeemed................................ (3,712,084)
-----------
Net increase (decrease) in shares................... 3,896,613
-----------
-----------
Amounts:
Sales............................................... $98,676,874
Reinvestment of dividends........................... 1,951,331
-----------
100,628,205
Less redemptions.................................... (48,584,623)
-----------
Net increase (decrease)............................. $52,043,582
-----------
-----------
Capital stock authorized (shares)...................
Par Value...........................................
</TABLE>
<TABLE>
<CAPTION>
Columbia
Columbia Columbia Balanced
Special Real Estate Equity Fund, Inc.
Fund, Inc. (CSF) Fund, Inc. (CREF) (CBF)
------------------------ ------------------------ -----------
1995 1994 1995 1994(1) 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Shares:
Shares sold.......................................... 24,380,701 28,466,146 745,236 1,626,036 12,164,908
Shares issued for reinvestment of dividends.......... 7,030,821 2,783,927 116,209 55,087 1,603,299
----------- ----------- ----------- ----------- -----------
31,411,522 31,250,073 861,445 1,681,123 13,768,207
Less shares redeemed................................. (14,439,180) (23,254,058) (647,683) (195,962) (3,974,088)
----------- ----------- ----------- ----------- -----------
Net increase in shares............................... 16,972,342 7,996,015 213,762 1,485,161 9,794,119
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Amounts:
Sales................................................ $507,005,537 $564,106,978 $ 8,920,599 $19,353,479 $230,627,211
Reinvestment of dividends............................ 148,631,551 51,753,189 1,402,375 638,352 31,608,126
----------- ----------- ----------- ----------- -----------
655,637,088 615,860,167 10,322,974 19,991,831 262,235,337
Less redemptions..................................... (308,592,942) (456,331,880) (7,750,685) (2,273,439) (76,067,027)
----------- ----------- ----------- ----------- -----------
Net increase......................................... $347,044,146 $159,528,287 $ 2,572,289 $17,718,392 $186,168,310
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Capital stock authorized (shares).................... 100,000,000 100,000,000 100,000,000
Par Value............................................ $.01 no par no par

<CAPTION>
1994
-----------
<S> <C>
Shares:
Shares sold.......................................... 7,663,751
Shares issued for reinvestment of dividends.......... 481,500
-----------
8,145,251
Less shares redeemed................................. (4,116,129)
-----------
Net increase in shares............................... 4,029,122
-----------
-----------
Amounts:
Sales................................................ $135,254,333
Reinvestment of dividends............................ 8,338,614
-----------
143,592,947
Less redemptions..................................... (72,224,211)
-----------
Net increase......................................... $71,368,736
-----------
-----------
Capital stock authorized (shares)....................
Par Value............................................
</TABLE>

(1) From inception of operations on March 16, 1994.

62
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
---------------------------------------------------------------------------

3. Capital stock (continued):
<TABLE>
<CAPTION>
Columbia
Fixed
Income
Columbia Columbia U.S. Securities
Daily Income Gov't Securities Fund, Inc.
Fund, Inc. (CDIC) Fund, Inc. (CUSG) (CFIS)
------------------------------ ------------------------ -----------
1995 1994 1995 1994 1995
-------------- -------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Shares:
Shares sold..................................... 1,191,109,050 1,294,012,916 2,438,332 3,000,274 6,735,955
Shares issued for reinvestment of dividends..... 39,866,838 22,994,899 229,910 174,819 1,319,739
-------------- -------------- ----------- ----------- -----------
1,230,975,888 1,317,007,815 2,668,242 3,175,093 8,055,694
Less shares redeemed............................ (1,160,387,368) (1,131,440,600) (1,843,924) (3,277,333) (5,373,406)
-------------- -------------- ----------- ----------- -----------
Net increase (decrease) in shares............... 70,588,520 185,567,215 824,318 (102,240) 2,682,288
-------------- -------------- ----------- ----------- -----------
-------------- -------------- ----------- ----------- -----------
Amounts:
Sales........................................... $1,191,109,050 $1,294,012,916 $19,955,069 $24,536,810 $86,697,840
Reinvestment of dividends....................... 39,866,838 22,994,899 1,885,143 1,423,095 17,119,289
-------------- -------------- ----------- ----------- -----------
1,230,975,888 1,317,007,815 21,840,212 25,959,905 103,817,129
Less redemptions................................ (1,160,387,368) (1,131,440,600) (15,082,210) (26,845,188) (68,987,070)
-------------- -------------- ----------- ----------- -----------
Net increase (decrease)......................... $ 70,588,520 $ 185,567,215 $ 6,758,002 $ (885,283) $34,830,059
-------------- -------------- ----------- ----------- -----------
-------------- -------------- ----------- ----------- -----------
Capital stock authorized (shares)............... 2,000,000,000 100,000,000 200,000,000
Par Value....................................... $.001 $ .01 $ .01

<CAPTION>
1994
------------
<S> <C>
Shares:
Shares sold..................................... 5,778,520
Shares issued for reinvestment of dividends..... 1,244,614
------------
7,023,134
Less shares redeemed............................ (8,652,209)
------------
Net increase (decrease) in shares............... (1,629,075)
------------
------------
Amounts:
Sales........................................... $ 73,805,629
Reinvestment of dividends....................... 15,689,020
------------
89,494,649
Less redemptions................................ (110,102,529)
------------
Net increase (decrease)......................... $(20,607,880)
------------
------------
Capital stock authorized (shares)...............
Par Value.......................................
</TABLE>
<TABLE>
<CAPTION>
Columbia Columbia
Municipal Bond High Yield
Fund, Inc. (CMBF) Fund, Inc. (CHYF)
------------------------ ------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Shares:
Shares sold..................................... 5,057,133 6,856,898 1,176,046 931,402
Shares issued for reinvestment of dividends..... 1,460,826 1,422,578 146,858 83,757
----------- ----------- ----------- -----------
6,517,959 8,279,476 1,322,904 1,015,159
Less shares redeemed............................ (5,096,815) (12,549,998) (367,495) (192,577)
----------- ----------- ----------- -----------
Net increase (decrease) in shares............... 1,421,144 (4,270,522) 955,409 822,582
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Amounts:
Sales........................................... $60,766,673 $83,098,663 $11,217,136 $ 8,749,569
Reinvestment of dividends....................... 17,726,251 16,933,561 1,406,479 779,126
----------- ----------- ----------- -----------
78,492,924 100,032,224 12,623,615 9,528,695
Less redemptions................................ (61,463,683) (149,441,980) (3,499,959) (1,786,278)
----------- ----------- ----------- -----------
Net increase (decrease)......................... $17,029,241 $(49,409,756) $ 9,123,656 $ 7,742,417
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Capital stock authorized (shares)............... 100,000,000 100,000,000
Par Value....................................... $.01 no par

<CAPTION>
<S> <C>
Shares:
Shares sold.....................................
Shares issued for reinvestment of dividends.....
Less shares redeemed............................
Net increase (decrease) in shares...............
Amounts:
Sales...........................................
Reinvestment of dividends.......................
Less redemptions................................
Net increase (decrease).........................
Capital stock authorized (shares)...............
Par Value.......................................
</TABLE>

63
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
---------------------------------------------------------------------------

4. Transactions with affiliates and related parties:
<TABLE>
<CAPTION>
Columbia
Columbia Common Columbia Int'l Stock
Stock Fund, Inc. Growth Fund, Inc.
(CCSF) Fund, Inc. (CGF) (CISF)
----------------- --------------------- -------------
<S> <C> <C> <C>
Investment management fees incurred...................... $1,453,843 $4,483,699 $1,013,873
Investment management fee computation basis (percentage
of
daily net assets per annum)............................. .60 of 1% .75 of 1% to 1%
$200,000,000 daily
net assets; .625 of
1% between
$200,000,000 and
$500,000,000; and .50
of 1% in excess of
$500,000,000

Transfer agent fee (included in shareholder servicing
costs).................................................. $151,994 $445,028 $178,755
Fees earned by directors not affiliated with each Fund's
investment advisor, transfer agent, or Columbia
Management Co........................................... $3,294 $10,226 $1,468
Value of investments held at December 31, 1995 by:
Columbia Management Co................................. $425,842 $90,738 $58,573
Columbia Funds Management Company...................... $78,712 $39,966 $14,353

Columbia
Special Fund, Inc.
(CSF)
---------------------
<S> <C>
Investment management fees incurred...................... $10,125,466
Investment management fee computation basis (percentage
of
daily net assets per annum)............................. 1% to $500,000,000
daily net assets; .75
of 1% in excess of
$500,000,000

Transfer agent fee (included in shareholder servicing
costs).................................................. $590,067
Fees earned by directors not affiliated with each Fund's
investment advisor, transfer agent, or Columbia
Management Co........................................... $16,704
Value of investments held at December 31, 1995 by:
Columbia Management Co................................. $1,752,771
Columbia Funds Management Company...................... $812,613
</TABLE>
<TABLE>
<CAPTION>
Columbia
Real Estate Columbia Columbia
Equity Balanced Fund, Daily Income
Fund, Inc. (CREF) Inc. (CBF) Fund, Inc. (CDIC)
----------------- ---------------- ---------------------
<S> <C> <C> <C>
Investment management fees incurred....................... $138,673 $1,871,284 $3,611,202
Investment management fee computation basis (percentage of
daily net assets per annum).............................. .75 of 1% .50 of 1% .50 of 1% to
$500,000,000 daily
net assets; .45 of 1%
between $500,000,000
and $1,000,000,000;
and .40 of 1% in
excess of
$1,000,000,000

Transfer agent fee (included in shareholder servicing
costs)................................................... $17,103 $232,573 $559,551
Fees earned by directors not affiliated with each Fund's
investment advisor, transfer agent, or Columbia
Management Co............................................ $262 $5,214 $10,704
Value of investments held at December 31, 1995 by:
Columbia Management Co.................................. $123,183 $10,419,106
Columbia Funds Management Company....................... $22,097 $4,935,281

Columbia U.S.
Gov't Securities
Fund, Inc. (CUSG)
------------------
<S> <C>
Investment management fees incurred....................... $187,343
Investment management fee computation basis (percentage of
daily net assets per annum).............................. .50 of 1%

Transfer agent fee (included in shareholder servicing
costs)................................................... $32,348
Fees earned by directors not affiliated with each Fund's
investment advisor, transfer agent, or Columbia
Management Co............................................ $534
Value of investments held at December 31, 1995 by:
Columbia Management Co.................................. $407,477
Columbia Funds Management Company....................... $63,761
</TABLE>

64
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
---------------------------------------------------------------------------

4. Transactions with affiliates and related parties (continued):
<TABLE>
<CAPTION>
Columbia Fixed
Income
Securities Columbia
Fund, Inc. Municipal Bond
(CFIS) Fund, Inc. (CMBF)
---------------- -----------------
<S> <C> <C>
Investment management fees incurred............................................... $1,413,769 $1,840,676
Investment management fee computation basis (percentage of daily net assets per .50 of 1% .50 of 1%
annum)...........................................................................
Transfer agent fee (included in shareholder servicing costs)...................... $163,387 $83,607
Fees earned by directors not affiliated with each Fund's investment advisor,
transfer agent, or Columbia Management Co........................................ $4,048 $5,290
Value of investments held at December 31, 1995 by:
Columbia Management Co.......................................................... $896,789 $1,665,449
Columbia Funds Management Company............................................... $281,938 $234,086

Columbia
High Yield
Fund, Inc. (CHYF)
-----------------
<S> <C>
Investment management fees incurred............................................... $109,022
Investment management fee computation basis (percentage of daily net assets per .60 of 1%
annum)...........................................................................
Transfer agent fee (included in shareholder servicing costs)...................... $15,324
Fees earned by directors not affiliated with each Fund's investment advisor,
transfer agent, or Columbia Management Co........................................ $256
Value of investments held at December 31, 1995 by:
Columbia Management Co.......................................................... $298,345
Columbia Funds Management Company............................................... $286,777
</TABLE>

The investment advisor of the Funds is Columbia Funds Management Company.
The transfer agent for the Funds is Columbia Trust Company, a subsidiary of
Columbia Funds Management Company. The transfer agent is compensated based on a
per account fee. The contracts for investment advisory and transfer agent
services for the Funds must be renewed annually by a majority vote of the Funds'
shareholders or by the directors of the Funds. Certain officers and directors of
the Funds are also officers and directors of Columbia Funds Management Company,
Columbia Trust Company and Columbia Management Co. They did not receive any
direct payments from the Funds. At December 31, 1995, certain officers and
directors of the Funds held investments of $2,828,800 in CREF. At December 31,
1995, CSF had investments in securities of U.S. Bancorp and Morgan Stanley
Group, Inc., both of which provide primarily custodial services to CSF.

65
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
-----------------------------------------------------------------

To the Directors and Shareholders,
Columbia Common Stock Fund, Inc. (CCSF)
Columbia Growth Fund, Inc. (CGF)
Columbia International Stock Fund, Inc. (CISF)
Columbia Special Fund, Inc. (CSF)
Columbia Real Estate Equity Fund, Inc. (CREF)
Columbia Balanced Fund, Inc. (CBF)
Columbia Daily Income Company (CDIC)
Columbia U.S. Government Securities Fund, Inc. (CUSG)
Columbia Fixed Income Securities Fund, Inc. (CFIS)
Columbia Municipal Bond Fund, Inc. (CMBF)
Columbia High Yield Fund, Inc. (CHYF)

We have audited the accompanying statements of assets and liabilities,
including the schedules of investments for each of the eleven funds comprising
Columbia Funds, as of December 31, 1995, the related statements of operations
for the year then ended, the statements of changes in net assets for each of the
two years in the period then ended, except for CREF which is for the period from
inception, March 16, 1994 to December 31, 1994 and for the year ended December
31, 1995, and the financial highlights for the periods indicated therein. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the custodian, and confirmation by
correspondence with brokers as to securities purchased but not received at that
date, or other auditing procedures where confirmations from brokers were not
received. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
eleven funds comprising Columbia Funds as of December 31, 1995, the results of
their operations for the year then ended, the changes in their net assets for
each of the two years in the period then ended, except for CREF which is for the
period from inception March 16, 1994 to December 31, 1994 and for the year ended
December 31, 1995, and the financial highlights for the periods indicated
therein, in conformity with generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.
Portland, Oregon
January 31, 1996

66
<PAGE>
[LOGO]