Class A shares of Columbia Absolute Return Enahnced Multi-Strategy Fund postedquarterly returns of 1.82% (excluding fees), outperforming its benchmark, the Citigroup 3-Month Treasury Index, which returned 0.01%. The fund saw the largest contribution fromthe Global Trend-Followingstrategy, which continued to benefit from its high-quality bondexposure and current long position in equities. The fund’s only detractoduring the quarterwas the Dividend Income strategy. For up-to-date performance information, check onlineat columbiamanagement.com.
Market overviewDuring the quarter, the U.S. economy recovery generated enough solid data to raise
consumer expectations and restore investor confidence.
First quarter 2012 growth
forecasts between 1% and 2% were buoyed mobile database by solid manufacturing activity and improving
job growth. Even though growth remained modest, it continued to broaden across key
sectors. Consumer confidence rose along with higher expectations for business conditionsover the long term.
Against this generally favorable backdrop, U.S. equity markets delivered their strongest
first-quarter gains in more than 10 years. The S&P 500 Index, a broad measure of largecap stock performance, gained 12.59% with dividends reinvested. Financials, technologyand consumer discretionary stocks led the market rally, while utilities stocks declined.
During the period, most major markets experienced strong returns. Greater clarity aroundEuropean debt resolution and economic, jobs and retail data seemed to confirm forinvestors that a recovery was under way. Volatility, as measured by the VIX Index, fellsignificantly during the quarter and hit a 54 month low. While it can be considered a