425 1 d434142d425.htm COLUMBIA FUNDS SERIES TRUST II Columbia Funds Series Trust II

Filing by Columbia Funds Series Trust II pursuant to Rule 425 under the Securities Act of 1933, and deemed filed under

Rule 14a-12(b) under the Securities Exchange Act of 1934.

Subject Companies:

Columbia Funds Series Trust I

(SEC File No. 811-04367)

 

November 1, 2012

Proposed fund merger comparison

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Columbia High Yield Opportunity Fund proposed to merge into Columbia High Yield Bond Fund

At Columbia Management, our goal is to provide products and services that meet the needs of our investors. For that reason, Columbia Management recently recommended, and the fund boards approved, several fund mergers, one of which is the merger of Columbia High Yield Opportunity Fund into Columbia High Yield Bond Fund. Shareholders of Columbia High Yield Opportunity Fund will be asked to approve this merger of funds at a special meeting of shareholders anticipated to be held in early 2013. In the case of this proposed fund merger, the funds are substantially similar in many regards, including those comparisons noted in the summary below. For more information relating to this proposed fund merger, including a discussion of differences between the funds, as well as pro-forma information, please see the prospectus/proxy statement when available, as discussed further below.

 

Data as of

September 30, 2012

  

Acquired Fund

High Yield Opportunity Fund                 LOGO

  

Acquiring Fund

Columbia High Yield Bond Fund

Benchmark

   BofAML U.S. High Yield Cash Pay Constrained Index    BofAML U.S. High Yield Cash Pay Constrained Index

Lipper category

   High Yield Funds    High Yield Funds

Portfolio managers

   Brian Lavin, Jennifer Ponce de Leon    Brian Lavin, Jennifer Ponce de Leon

Avg. effective duration (years)

   4.47    4.40

Total net assets

   $372 million    $1,780 million

Gross / net expense ratio (Class A)*

   1.20 / 1.08    1.10 / 1.08

Objective

   The fund seeks to total return, consisting of current income and capital appreciation.    The fund seeks to provide shareholders with a high level of current income with capital growth as a secondary objective.

Process/strategy

   The fund’s investment approach employs bottom-up and top-down analysis, in-house credit research and a proprietary risk and relative value rating system that helps optimize the overall portfolio on a risk-adjusted basis.    The fund’s investment approach employs bottom-up and top-down analysis, in-house credit research and a proprietary risk and relative value rating system that helps optimize the overall portfolio on a risk-adjusted basis.

Asset allocation

     

Domestic bonds

   88.9    89.3

Foreign bonds

   10.1    10.0

Cash and cash equivalents

   1.0    0.7

Domestic stock

   0    0.1

Source: Columbia Management.

* Fund expense ratios are calculated based on the fund’s average net assets during the fund’s most recently completed fiscal year (or based on estimated amounts for funds that have been in existence less than one year), and have not been adjusted for current asset levels. If adjusted for any decrease or increase in assets, expense ratios would be higher or lower, respectively, than the numbers shown above. The investment manager and certain of its affiliates have contractually (for at least the current fiscal year) and/or voluntarily agreed to waive certain fees and/or to reimburse certain expenses of the fund, as described in the fund’s prospectus, unless sooner terminated at the sole discretion of the fund’s board. Net expense ratios reflect this fee waiver/expense cap. Fee waivers/expense caps would limit the impact that any decrease in assets would have on net expense ratios in the current fiscal year. Voluntary waivers/reimbursement arrangements, if any, may be discontinued at any time. If the fund merger is approved by shareholders of the acquired fund, the pro-forma net expense ratio for the combined fund’s Class A shares will be limited to 1.08% through September 30, 2014, through a contractual fee waiver/expense reimbursement arrangement, which is further described in the prospectus/proxy statement that will be made available as described below.

 

© 2012 Columbia Management Investment Advisers, LLC. All rights reserved.

   Not FDIC insured Ÿ No bank guarantee Ÿ May lose value

225 Franklin Street, Boston, MA 02110-2804

columbiamanagement.com

  

800.426.3750

   (11/12)


Proposed fund merger comparison

Investment Risks

There are risks associated with an investment in a bond fund, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is more pronounced for longer-term securities. Non-investment grade securities, commonly called “high-yield” or “junk” bonds, have more volatile prices and carry more risk to principal and income than investment grade securities.

The Merrill Lynch U.S. High Yield, Cash Pay Constrained Index measures the performance of below investment grade U.S. dollar denominated corporate bonds publicly issued in the U.S. domestic market. Qualifying bonds must have at least one year remaining term to maturity, a minimum amount outstanding of $100 billion and a fixed coupon schedule.

The foregoing is not an offer to sell, nor a solicitation of an offer to buy, shares of the Acquiring Fund, nor is it a solicitation of any proxy. For information regarding the Acquiring Fund, or to receive a free copy of a prospectus/proxy statement relating to the proposed merger once a registration statement relating to the proposed merger has been filed with the Securities and Exchange Commission (SEC) and becomes effective, please call the acquired fund’s proxy solicitor, Computershare Fund Services, toll free at 800.708.7953. The prospectus/proxy statement (when available) will contain important information about fund objectives, strategies, fees, expenses and risk considerations. The prospectus/proxy statement will also be available for free on the SEC’s website (www.sec.gov). Please read the prospectus/proxy statement carefully before making any decision to invest or when considering the merger proposal.

This material is distributed by Columbia Management Investment Distributors, Inc. (member FINRA), which is also the distributor of the Columbia Funds. The Columbia Funds are managed by Columbia Management Investment Advisers, LLC.

 

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