The Board specifically considered the many developments during recent years concerning
the services provided by the Investment Manager. Among other things, the Board noted the organization and depth
of the equity and credit research departments. The Board further observed the enhancements to the investment risk management department’s processes, systems and oversight over the past several years. The Board also took into account
the broad scope of services provided by the Investment Manager to the Funds, including, among other services, investment,
risk and compliance oversight. The Board also took into account the information it received concerning the Investment Manager’s ability to attract and retain key portfolio management personnel and that it has sufficient resources to provide
competitive and adequate compensation to investment personnel.
In connection with the Board’s evaluation of the overall package of services provided by the Investment Manager, the Board also considered the nature, quality and range of administrative services provided
to the Funds by the Investment Manager, as well as the achievements in 2024 in the performance of administrative services,
and noted the various enhancements anticipated for 2025. In evaluating the quality of services provided under the Management
Agreements, the Board also took into account the organization and strength of the Funds’ and their service providers’ compliance programs. The Board also reviewed the financial condition of the Investment Manager and its affiliates and each entity’s ability to carry out its responsibilities under the Management Agreements and the Funds’ other service agreements.
In addition, the Board discussed the acceptability of the terms of the Management
Agreements, including the novation agreements (which were not expected to impact the services provided in any material
respect). The Board also noted the wide array of legal and compliance services provided to the Funds under the Management
Agreements.
After reviewing these and related factors (including investment performance as discussed
below), the Board concluded, within the context of their overall conclusions, that the nature, extent and quality
of the services provided to the Funds under the Management Agreements supported the continuation of each of the Management Agreements.
The Board carefully reviewed the investment performance of the Funds, including detailed
reports providing the results of analyses performed by each of the Investment Manager, Broadridge and JDL collectively
showing, for various periods (including since manager inception): (i) the performance of the Funds, (ii) the Funds’ performance relative to peers and benchmarks and (iii) the net assets of the Funds. With respect to Columbia Acorn European
Fund, Columbia Acorn International, and Columbia Acorn International Select, the Board observed the Funds’ underperformance for certain periods, noting that appropriate steps (such as enhancements to the Funds’ investment process and changes to the management teams) had been taken in recent years. With respect to Columbia Acorn Fund, the Board observed that the Fund’s performance for certain periods ranked above median based on information provided
by Broadridge. With respect to Columbia Thermostat Fund, the Board observed that the Fund’s performance was well within the range of that of its peers.
The Board also reviewed a description of the third-party data provider’s methodology for identifying the Funds’ peer groups for purposes of performance and expense comparisons.
The Board also considered the Investment Manager’s performance and reputation generally. After reviewing these and related factors, the Board concluded, within the context of their overall conclusions,
that the performance of the Funds and the Investment Manager, in light of other considerations, supported the continuation
of each of the Management Agreements.
Comparative fees, costs of services provided and the profits realized by the Investment
Manager and its affiliates from their relationships with the Funds
The Board reviewed comparative fees and the costs of services provided under the Management
Agreements. The Board members considered detailed comparative information set forth in an annual report
on fees and expenses, including, among other things, data (based on analyses conducted by Broadridge and JDL) showing a comparison of the Funds’ expenses with median expenses paid by funds in its comparative peer universe, as well as data showing the Funds’ contribution to the Investment Manager’s profitability. With respect to Columbia Acorn Fund, the Board reviewed the fees charged to comparable institutional or other accounts/vehicles managed by the Investment Manager
and discussed differences in how the products are managed and operated, thus explaining many of the differences in
fees.
