VARIABLE PORTFOLIO - PARTNERS SMALL CAP VALUE FUND - RiverSource
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SEMIANNUAL REPORT June 30, 2021 VARIABLE PORTFOLIO – PARTNERS SMALL CAP VALUE FUND Please remember that you may not buy (nor will you own) shares of the Fund directly. The Fund is available through variable annuity contracts and variable life insurance policies offered by the separate accounts of participating insurance companies as well as qualified pension and retirement plans. Please contact your financial advisor or insurance representative for more information. Not Federally Insured • No Financial Institution Guarantee • May Lose Value
TABLE OF CONTENTS Fund at a Glance .......................................................................................................................................................... 3 Understanding Your Fund’s Expenses .............................................................................................................................. 5 Portfolio of Investments ................................................................................................................................................. 6 Statement of Assets and Liabilities ..................................................................................................................................13 Statement of Operations................................................................................................................................................14 Statement of Changes in Net Assets ................................................................................................................................15 Financial Highlights.......................................................................................................................................................16 Notes to Financial Statements .......................................................................................................................................18 Liquidity Risk Management Program .................................................................................................................................26 Approval of Management and Subadvisory Agreements.........................................................................................................26 Proxy voting policies and procedures The policy of the Board of Trustees is to vote the proxies of the companies in which Variable Portfolio – Partners Small Cap Value Fund (the Fund) holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling 800.345.6611; contacting your financial intermediary or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting columbiathreadneedleus.com/investor/, or searching the website of the SEC at sec.gov. Quarterly schedule of investments The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT. The Fund’s Form N-PORT is available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-PORT, can also be obtained without charge, upon request, by calling 800.345.6611. Additional Fund information Fund investment manager Columbia Management Investment Advisers, LLC (the Investment Manager) 290 Congress Street Boston, MA 02210 Fund distributor Columbia Management Investment Distributors, Inc. 290 Congress Street Boston, MA 02210 Fund transfer agent Columbia Management Investment Services Corp. P.O. Box 219104 Kansas City, MO 64121-9104 Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021
FUND AT A GLANCE
(Unaudited)
Investment objective
The Fund seeks to provide shareholders with long-term capital appreciation.
Average annual total returns (%) (for the period ended June 30, 2021)
Portfolio management 6 Months
Inception cumulative 1 Year 5 Years 10 Years
Segall Bryant & Hamill, LLC
Class 1 05/03/10 21.07 63.59 10.95 8.75
Mark Dickherber, CFA, CPA
Class 2 05/03/10 20.94 63.11 10.67 8.48
Shaun Nicholson
Class 3 08/14/01 21.01 63.36 10.81 8.61
William Blair Investment Management, LLC Russell 2000 Value Index 26.69 73.28 13.62 10.85
(subadviser)*
Performance data quoted represents past performance and current performance may be lower or higher. Past
Investment Counselors of Maryland, LLC performance is no guarantee of future results. The investment return and principal value will fluctuate so that
(sub-subadviser) shares, when redeemed, may be worth more or less than the original cost. For current month-end performance
William Heaphy, CFA information, please contact your financial advisor or insurance representative.
* Effective July 19, 2021, William Blair Investment Performance results reflect the effect of any fee waivers or reimbursements of fund expenses by Columbia
Management, LLC acquired Investment Counselors Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense
of Maryland, LLC and therefore, Investment reimbursement arrangements, performance results would have been lower.
Counselors of Maryland, LLC no longer serves as Investment earnings, if any, are tax-deferred until distributed to shareholders, at which time taxes may become
sub-subadvisor for the Fund. due. Total return performance includes changes in share price and assumes reinvestment of dividends and capital
gains, if any. Performance results reflect the effect of all fund expenses, but do not include any fees and expenses
imposed under your variable annuity contract and/or variable life insurance policy or qualified pension or
retirement plan. If performance results included the effect of these additional charges, they would be lower.
The Fund’s performance prior to May 2021 reflects returns achieved by one or more different subadvisers or a different
allocation of the Fund’s assets among subadvisers. If the Fund’s current subadvisers had been in place for the prior
periods, results shown may have been different.
The Russell 2000 Value Index, an unmanaged index, tracks the performance of those Russell 2000 Index companies
with lower price-to-book ratios and lower forecasted growth values.
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees,
brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Fund performance may be significantly negatively impacted by the economic impact of the
COVID-19 pandemic. The COVID-19 pandemic has adversely impacted economies and
capital markets around the world in ways that will likely continue and may change in
unforeseen ways for an indeterminate period. The COVID-19 pandemic may exacerbate
pre-existing political, social and economic risks in certain countries and globally.
Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021 3FUND AT A GLANCE (continued)
(Unaudited)
Portfolio breakdown (%) (at June 30, 2021) Equity sector breakdown (%) (at June 30, 2021)
Common Stocks 97.8 Communication Services 1.2
Limited Partnerships 0.5 Consumer Discretionary 9.8
Money Market Funds 1.7 Consumer Staples 7.2
Rights 0.0(a) Energy 3.5
Total 100.0 Financials 17.9
(a) Rounds to zero. Health Care 8.0
Percentages indicated are based upon total investments excluding investments in Industrials 21.9
derivatives, if any. The Fund’s portfolio composition is subject to change. Information Technology 14.5
Materials 6.8
Real Estate 6.5
Utilities 2.7
Total 100.0
Percentages indicated are based upon total equity investments. The Fund’s portfolio
composition is subject to change.
4 Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021UNDERSTANDING YOUR FUND’S EXPENSES
(Unaudited)
As an investor, you incur ongoing costs, which generally include management fees, distribution and/or service fees, and
other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing
in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual funds.
The information below does not reflect fees and expenses imposed under your variable annuity contract and/or variable life
insurance policy (collectively, Contracts) or qualified pension and retirement plan (Qualified Plan), if any. The total fees and
expenses you bear may therefore be higher than those shown below.
Analyzing your Fund’s expenses
To illustrate these ongoing costs, we have provided examples and calculated the expenses paid by investors in each share
class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment of
$1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways
and each method provides you with different information. The amount listed in the “Actual” column is calculated using the
Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the
amount invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period
under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before
expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the
hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account
balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for
details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you
can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the
hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you
compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the
ongoing costs of investing in a fund only and do not reflect any transaction costs, such as redemption or exchange fees, or
expenses that apply to the subaccount or the Contract. Therefore, the hypothetical calculations are useful in comparing
ongoing costs only, and will not help you determine the relative total costs of owning different funds. If the fees and expenses
imposed under your Contract or Qualified Plan, if any, were included, your costs would be higher.
January 1, 2021 — June 30, 2021
Account value at the Account value at the
beginning of the end of the Expenses paid during Fund’s annualized
period ($) period ($) the period ($) expense ratio (%)
Actual Hypothetical Actual Hypothetical Actual Hypothetical Actual
Class 1 1,000.00 1,000.00 1,210.70 1,020.43 4.82 4.41 0.88
Class 2 1,000.00 1,000.00 1,209.40 1,019.19 6.19 5.66 1.13
Class 3 1,000.00 1,000.00 1,210.10 1,019.79 5.53 5.06 1.01
Expenses paid during the period are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then
multiplied by the number of days in the Fund’s most recent fiscal half year and divided by 365.
Expenses do not include fees and expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles,
such as mutual funds and exchange-traded funds.
Had Columbia Management Investment Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would
have been reduced.
Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021 5PORTFOLIO OF INVESTMENTS
June 30, 2021 (Unaudited)
(Percentages represent value of investments compared to net assets)
Investments in securities
Common Stocks 97.7% Common Stocks (continued)
Issuer Shares Value ($) Issuer Shares Value ($)
Communication Services 1.2% Textiles, Apparel & Luxury Goods 1.5%
Media 0.7% Gildan Activewear, Inc. 82,690 3,052,915
John Wiley & Sons, Inc., Class A 79,775 4,800,860 Oxford Industries, Inc. 55,838 5,519,028
(a)
Wireless Telecommunication Services 0.5% Under Armour, Inc., Class A 86,415 1,827,677
Telephone and Data Systems, Inc. 150,350 3,406,931 Total 10,399,620
Total Communication Services 8,207,791 Total Consumer Discretionary 67,267,474
Consumer Discretionary 9.6% Consumer Staples 7.1%
Auto Components 0.6% Food Products 3.5%
Standard Motor Products, Inc. 97,280 4,217,088 Cal-Maine Foods, Inc. 97,485 3,529,932
(a)
Automobiles 1.3% Hain Celestial Group, Inc. (The) 334,392 13,415,807
(a)
Harley-Davidson, Inc. 120,979 5,543,258 Landec Corp. 99,315 1,117,293
(a)
Winnebago Industries, Inc. 56,146 3,815,682 TreeHouse Foods, Inc. 147,117 6,549,649
Total 9,358,940 Total 24,612,681
Hotels, Restaurants & Leisure 2.1% Household Products 0.5%
Cracker Barrel Old Country Store, Inc. 24,390 3,620,939 Central Garden & Pet Co., Class A(a) 70,405 3,400,562
(a)
El Pollo Loco Holdings, Inc. 141,395 2,586,115 Personal Products 3.1%
Papa John’s International, Inc. 10,226 1,068,003 Coty, Inc., Class A(a) 1,686,129 15,748,445
(a)
Six Flags Entertainment Corp. 164,191 7,106,187 Edgewell Personal Care Co. 89,075 3,910,392
Total 14,381,244 Inter Parfums, Inc. 27,699 1,994,328
Household Durables 1.7% Total 21,653,165
Taylor Morrison Home Corp., Class A(a) 144,792 3,825,405 Total Consumer Staples 49,666,408
(a)
Tri Pointe Homes, Inc. 242,110 5,188,417 Energy 3.4%
(a)
Universal Electronics, Inc. 57,545 2,790,932 Energy Equipment & Services 1.7%
Total 11,804,754 Dril-Quip, Inc.(a) 189,192 6,400,365
Internet & Direct Marketing Retail 0.4% Frank’s International NV(a) 599,425 1,816,258
Quotient Technology, Inc.(a) 261,173 2,823,280 Helmerich & Payne, Inc. 75,985 2,479,390
(a)
NexTier Oilfield Solutions, Inc. 227,481 1,082,810
Specialty Retail 2.0%
Total 11,778,823
Designer Brands, Inc.(a) 319,926 5,294,775
Group 1 Automotive, Inc. 30,992 4,786,095 Oil, Gas & Consumable Fuels 1.7%
Urban Outfitters, Inc.(a) 101,933 4,201,678 Earthstone Energy, Inc., Class A(a) 147,985 1,638,194
Total 14,282,548 Matador Resources Co. 181,699 6,542,981
PDC Energy, Inc. 86,636 3,967,063
Total 12,148,238
Total Energy 23,927,061
The accompanying Notes to Financial Statements are an integral part of this statement.
6 Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021PORTFOLIO OF INVESTMENTS (continued)
June 30, 2021 (Unaudited)
Common Stocks (continued) Common Stocks (continued)
Issuer Shares Value ($) Issuer Shares Value ($)
Financials 17.1% Insurance 1.0%
Banks 14.6% Argo Group International Holdings Ltd. 83,740 4,340,244
(a)
Ameris Bancorp 76,690 3,882,815 eHealth, Inc. 47,275 2,760,860
Atlantic Union Bankshares Corp. 76,430 2,768,295 Total 7,101,104
Banc of California, Inc. 209,575 3,675,946 Thrifts & Mortgage Finance 0.5%
Berkshire Hills Bancorp, Inc. 103,549 2,838,278 MGIC Investment Corp. 268,010 3,644,936
Community Bank System, Inc. 43,546 3,294,255 Total Financials 120,248,645
ConnectOne Bancorp, Inc. 168,660 4,413,832
Health Care 7.8%
Dime Community Bancshares, Inc. 14,505 487,658
Biotechnology 0.4%
Enterprise Financial Services Corp. 120,496 5,589,810
Alkermes PLC(a) 54,902 1,346,197
First BanCorp 70,155 2,870,041 (a)
Alkermes, Inc. 3,407 83,540
First Bancshares, Inc. (The) 87,395 3,271,195
Arena Pharmaceuticals, Inc.(a) 20,793 1,418,082
First Busey Corp. 82,012 2,022,416
Total 2,847,819
First Merchants Corp. 71,246 2,968,821
Health Care Equipment & Supplies 4.7%
Glacier Bancorp, Inc. 62,576 3,446,686
Angiodynamics, Inc.(a) 63,185 1,714,209
Investors Bancorp, Inc. 121,118 1,727,143
(a)
Chembio Diagnostics, Inc. 101,923 302,711
Lakeland Financial Corp. 63,524 3,915,619
(a)
ICU Medical, Inc. 23,610 4,858,938
National Bank Holdings Corp., Class A 122,240 4,613,338
(a)
Integer Holdings Corp. 19,725 1,858,095
Pacific Premier Bancorp, Inc. 96,125 4,065,126
Lantheus Holdings, Inc.(a) 238,285 6,586,197
Pinnacle Financial Partners, Inc. 42,427 3,745,880
NuVasive, Inc.(a) 46,955 3,182,610
Renasant Corp. 71,109 2,844,360
(a)
Orthofix Medical, Inc. 349,234 14,007,776
Sandy Spring Bancorp, Inc. 71,655 3,162,135
(a)
SurModics, Inc. 10,904 591,542
Seacoast Banking Corp. of Florida 237,828 8,121,826
Total 33,102,078
Simmons First National Corp., Class A 133,160 3,906,914
Sterling Bancorp 116,760 2,894,480 Health Care Providers & Services 2.2%
Texas Capital Bancshares, Inc. (a)
72,175 4,582,391 Ensign Group, Inc. (The) 40,310 3,493,668
Umpqua Holdings Corp. 318,772 5,881,343 Hanger, Inc.(a) 63,269 1,599,441
(a)
United Community Banks, Inc. 149,735 4,793,017 Magellan Health, Inc. 37,316 3,515,167
(a)
Veritex Holdings, Inc. 114,495 4,054,268 Mednax, Inc. 98,401 2,966,790
WesBanco, Inc. 80,319 2,861,766 ModivCare, Inc.(a) 25,145 4,276,410
Total 102,699,654 Total 15,851,476
Capital Markets 0.4% Health Care Technology 0.3%
PJT Partners, Inc. 35,157 2,509,507 Evolent Health, Inc., Class A(a) 88,378 1,866,543
Consumer Finance 0.6% Pharmaceuticals 0.2%
PRA Group, Inc.(a) 111,605 4,293,444 ANI Pharmaceuticals, Inc.(a) 32,170 1,127,559
Total Health Care 54,795,475
The accompanying Notes to Financial Statements are an integral part of this statement.
Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021 7PORTFOLIO OF INVESTMENTS (continued)
June 30, 2021 (Unaudited)
Common Stocks (continued) Common Stocks (continued)
Issuer Shares Value ($) Issuer Shares Value ($)
Industrials 21.5% Machinery 5.5%
Aerospace & Defense 1.0% Albany International Corp., Class A 38,660 3,450,792
(a)
AAR Corp. 93,661 3,629,364 Astec Industries, Inc. 96,128 6,050,296
(a)
Kaman Corp. 71,245 3,590,748 CIRCOR International, Inc. 114,971 3,748,055
Total 7,220,112 Columbus McKinnon Corp. 50,223 2,422,757
Air Freight & Logistics 0.5% Enerpac Tool Group Corp. 95,035 2,529,832
HUB Group, Inc., Class A(a) 56,135 3,703,787 Mueller Water Products, Inc., Class A 161,285 2,325,730
REV Group, Inc. 385,197 6,043,741
Airlines 0.0%
(a)
SPX Corp. 141,405 8,637,017
American Airlines Group, Inc.(a) 8,011 169,913
Standex International Corp. 31,565 2,995,834
Building Products 1.0%
Total 38,204,054
Apogee Enterprises, Inc. 83,876 3,416,269
Marine 0.3%
Quanex Building Products Corp. 139,171 3,457,008
Matson, Inc. 36,886 2,360,704
Total 6,873,277
Professional Services 1.7%
Commercial Services & Supplies 3.8%
CBIZ, Inc.(a) 115,429 3,782,608
ABM Industries, Inc. 67,135 2,977,437
Huron Consulting Group, Inc.(a) 32,304 1,587,742
Deluxe Corp. 99,083 4,733,195
ICF International, Inc. 41,310 3,629,496
Harsco Corp.(a) 170,459 3,480,773
KBR, Inc. 69,432 2,648,831
Herman Miller, Inc. 87,545 4,126,871
Total 11,648,677
KAR Auction Services, Inc.(a) 242,440 4,254,822
SP Plus Corp.(a) 241,684 7,393,114 Road & Rail 0.9%
Total 26,966,212 Marten Transport Ltd. 167,917 2,768,951
Werner Enterprises, Inc. 77,565 3,453,194
Construction & Engineering 1.9%
Total 6,222,145
Dycom Industries, Inc.(a) 27,430 2,044,358
Granite Construction, Inc. 88,730 3,684,957 Trading Companies & Distributors 0.4%
Great Lakes Dredge & Dock Corp. (a)
272,728 3,984,556 Beacon Roofing Supply, Inc.(a) 48,474 2,581,241
Sterling Construction Co., Inc. (a)
145,029 3,499,550 Total Industrials 150,852,311
Total 13,213,421 Information Technology 14.2%
Electrical Equipment 4.5% Communications Equipment 1.8%
AZZ, Inc. 95,862 4,963,734 AudioCodes Ltd. 62,182 2,057,602
(a)
EnerSys 54,420 5,318,466 NETGEAR, Inc. 104,583 4,007,621
(a)
GrafTech International Ltd. 304,072 3,533,317 Netscout Systems, Inc. 126,500 3,610,310
Regal Beloit Corp. 133,872 17,873,251 Sierra Wireless, Inc.(a) 139,915 2,656,986
Total 31,688,768 Total 12,332,519
The accompanying Notes to Financial Statements are an integral part of this statement.
8 Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021PORTFOLIO OF INVESTMENTS (continued)
June 30, 2021 (Unaudited)
Common Stocks (continued) Common Stocks (continued)
Issuer Shares Value ($) Issuer Shares Value ($)
Electronic Equipment, Instruments & Components 4.0% Containers & Packaging 1.3%
Belden, Inc. 165,256 8,356,996 Greif, Inc., Class A 67,330 4,076,832
Benchmark Electronics, Inc. 93,360 2,657,026 Myers Industries, Inc. 72,000 1,512,000
(a)
FARO Technologies, Inc. 111,664 8,684,109 Silgan Holdings, Inc. 91,832 3,811,028
(a)
Knowles Corp. 174,410 3,442,853 Total 9,399,860
Methode Electronics, Inc. 104,330 5,134,079 Metals & Mining 2.4%
Total 28,275,063 Coeur Mining, Inc.(a) 68,739 610,402
IT Services 2.0% Commercial Metals Co. 40,160 1,233,715
Conduent, Inc.(a) 1,008,008 7,560,060 Compass Minerals International, Inc. 126,175 7,477,131
CSG Systems International, Inc. 136,895 6,458,706 Kaiser Aluminum Corp. 10,460 1,291,705
Total 14,018,766 Materion Corp. 50,445 3,801,031
Semiconductors & Semiconductor Equipment 1.5% Schnitzer Steel Industries, Inc., Class A 41,017 2,011,884
Kulicke & Soffa Industries, Inc. 105,140 6,434,568 Total 16,425,868
(a)
Tower Semiconductor Ltd. 148,690 4,375,947 Paper & Forest Products 0.7%
Total 10,810,515 Glatfelter Corp. 365,729 5,109,234
Software 2.9% Total Materials 46,965,119
Cognyte Software Ltd.(a) 84,275 2,064,737 Real Estate 6.4%
Progress Software Corp. 312,101 14,434,671 Equity Real Estate Investment Trusts (REITS) 6.4%
Verint Systems, Inc.(a) 83,595 3,767,627 Brandywine Realty Trust 187,140 2,565,689
Total 20,267,035 CatchMark Timber Trust, Inc., Class A 231,934 2,713,628
Technology Hardware, Storage & Peripherals 2.0% Cousins Properties, Inc. 33,997 1,250,410
NCR Corp. (a)
307,501 14,025,121 Empire State Realty Trust, Inc., Class A 399,423 4,793,076
Total Information Technology 99,729,019 Equity Commonwealth 443,529 11,620,460
Four Corners Property Trust, Inc. 104,800 2,893,528
Materials 6.7%
Kite Realty Group Trust 206,639 4,548,124
Chemicals 2.0%
Pebblebrook Hotel Trust 88,265 2,078,641
Element Solutions, Inc. 121,292 2,835,807
Physicians Realty Trust 293,718 5,424,971
Ferro Corp.(a) 109,034 2,351,863
Retail Opportunity Investments Corp. 75,363 1,330,911
HB Fuller Co. 6,525 415,055
(a)
Sunstone Hotel Investors, Inc. 150,700 1,871,694
Minerals Technologies, Inc. 52,138 4,101,697
UMH Properties, Inc. 162,505 3,545,859
Orion Engineered Carbons SA(a) 221,987 4,215,533
Total 44,636,991
Total 13,919,955
Total Real Estate 44,636,991
Construction Materials 0.3%
Utilities 2.7%
Summit Materials, Inc., Class A(a) 60,551 2,110,202
Electric Utilities 1.0%
Allete, Inc. 47,880 3,350,643
PNM Resources, Inc. 71,334 3,478,959
Total 6,829,602
The accompanying Notes to Financial Statements are an integral part of this statement.
Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021 9PORTFOLIO OF INVESTMENTS (continued)
June 30, 2021 (Unaudited)
Common Stocks (continued) Rights —%
Issuer Shares Value ($) Issuer Shares Value ($)
Gas Utilities 0.9% Health Care —%
New Jersey Resources Corp. 79,371 3,140,711 Biotechnology —%
Spire, Inc. 43,475 3,141,938 Aduro Biotech CVR(a),(b),(c),(d) 4,550 —
Total 6,282,649 Total Health Care —
Multi-Utilities 0.5% Industrials —%
NorthWestern Corp. 55,852 3,363,407 Airlines —%
American Airlines Escrow(a),(b),(d) 185,100 0
Water Utilities 0.3%
Total Industrials 0
California Water Service Group 42,124 2,339,567
Total Rights
Total Utilities 18,815,225
(Cost $—) 0
Total Common Stocks
(Cost $620,931,050) 685,111,519 Money Market Funds 1.7%
Shares Value ($)
Limited Partnerships 0.4%
(e),(f)
Columbia Short-Term Cash Fund, 0.051% 11,810,262 11,809,081
Financials 0.4%
Total Money Market Funds
Diversified Financial Services 0.4% (Cost $11,809,081) 11,809,081
Compass Diversified Holdings 126,945 3,237,097 Total Investments in Securities
Total Financials 3,237,097 (Cost: $636,124,231) 700,157,697
Total Limited Partnerships Other Assets & Liabilities, Net 1,176,396
(Cost $3,384,100) 3,237,097 Net Assets 701,334,093
Notes to Portfolio of Investments
(a) Non-income producing investment.
(b) Represents fair value as determined in good faith under procedures approved by the Board of Trustees. At June 30, 2021, the total value of these securities amounted to $0,
which represents less than 0.01% of total net assets.
(c) Denotes a restricted security, which is subject to legal or contractual restrictions on resale under federal securities laws. Disposal of a restricted investment may involve
time-consuming negotiations and expenses, and prompt sale at an acceptable price may be difficult to achieve. Private placement securities are generally considered to be
restricted, although certain of those securities may be traded between qualified institutional investors under the provisions of Section 4(a)(2) and Rule 144A. The Fund will not
incur any registration costs upon such a trade. These securities are valued at fair value determined in good faith under consistently applied procedures established by the Fund’s
Board of Trustees. At June 30, 2021, the total market value of these securities amounted to $0, which represents less than 0.01% of total net assets. Additional information on
these securities is as follows:
Acquisition
Security Dates Shares Cost ($) Value ($)
Aduro Biotech CVR 10/21/2020 4,550 — —
(d) Valuation based on significant unobservable inputs.
(e) The rate shown is the seven-day current annualized yield at June 30, 2021.
(f) As defined in the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities,
or a company which is under common ownership or control with the Fund. The value of the holdings and transactions in these affiliated companies during the period ended
June 30, 2021 are as follows:
Net change in
unrealized
Beginning appreciation End of Realized gain End of
Affiliated issuers of period($) Purchases($) Sales($) (depreciation)($) period($) (loss)($) Dividends($) period shares
Columbia Short-Term Cash Fund, 0.051%
25,872,839 256,914,024 (270,977,782) — 11,809,081 — 10,310 11,810,262
The accompanying Notes to Financial Statements are an integral part of this statement.
10 Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021PORTFOLIO OF INVESTMENTS (continued)
June 30, 2021 (Unaudited)
Abbreviation Legend
CVR Contingent Value Rights
Fair value measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by
prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data
obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund’s assumptions about the information market participants would use in
pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset’s or liability’s fair value
measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are
generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
䡲 Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not
applied to Level 1 investments.
䡲 Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.).
䡲 Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments).
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or
unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity
for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an
investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the
availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may
be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing
source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment
Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and
comparable company data.
Under the direction of the Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures
approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and
accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information
received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other
things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing
methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are
illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss
additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to
the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to
those described earlier.
The following table is a summary of the inputs used to value the Fund’s investments at June 30, 2021:
Level 1 ($) Level 2 ($) Level 3 ($) Total ($)
Investments in Securities
Common Stocks
Communication Services 8,207,791 — — 8,207,791
Consumer Discretionary 67,267,474 — — 67,267,474
Consumer Staples 49,666,408 — — 49,666,408
Energy 23,927,061 — — 23,927,061
Financials 120,248,645 — — 120,248,645
Health Care 54,795,475 — — 54,795,475
Industrials 150,852,311 — — 150,852,311
Information Technology 99,729,019 — — 99,729,019
Materials 46,965,119 — — 46,965,119
The accompanying Notes to Financial Statements are an integral part of this statement.
Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021 11PORTFOLIO OF INVESTMENTS (continued)
June 30, 2021 (Unaudited)
Fair value measurements (continued)
Level 1 ($) Level 2 ($) Level 3 ($) Total ($)
Real Estate 44,636,991 — — 44,636,991
Utilities 18,815,225 — — 18,815,225
Total Common Stocks 685,111,519 — — 685,111,519
Limited Partnerships
Financials 3,237,097 — — 3,237,097
Total Limited Partnerships 3,237,097 — — 3,237,097
Rights
Health Care — — — —
Industrials — — 0* 0*
Total Rights — — 0* 0*
Money Market Funds 11,809,081 — — 11,809,081
Total Investments in Securities 700,157,697 — 0* 700,157,697
* Rounds to zero.
See the Portfolio of Investments for all investment classifications not indicated in the table.
The Fund does not hold any significant investments (greater than one percent of net assets) categorized as Level 3.
The accompanying Notes to Financial Statements are an integral part of this statement.
12 Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021STATEMENT OF ASSETS AND LIABILITIES
June 30, 2021 (Unaudited)
Assets
Investments in securities, at value
Unaffiliated issuers (cost $624,315,150) $688,348,616
Affiliated issuers (cost $11,809,081) 11,809,081
Receivable for:
Investments sold 1,998,235
Capital shares sold 792
Dividends 509,810
Foreign tax reclaims 1,273
Expense reimbursement due from Investment Manager 102
Prepaid expenses 15,321
Total assets 702,683,230
Liabilities
Due to custodian 496
Payable for:
Investments purchased 1,099,782
Capital shares purchased 60,664
Management services fees 16,370
Distribution and/or service fees 401
Service fees 3,635
Compensation of board members 142,961
Compensation of chief compliance officer 79
Other expenses 24,749
Total liabilities 1,349,137
Net assets applicable to outstanding capital stock $701,334,093
Represented by
Trust capital $701,334,093
Total - representing net assets applicable to outstanding capital stock $701,334,093
Class 1
Net assets $595,087,238
Shares outstanding 16,233,528
Net asset value per share $36.66
Class 2
Net assets $11,418,360
Shares outstanding 320,341
Net asset value per share $35.64
Class 3
Net assets $94,828,495
Shares outstanding 2,625,175
Net asset value per share $36.12
The accompanying Notes to Financial Statements are an integral part of this statement.
Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021 13STATEMENT OF OPERATIONS
Six Months Ended June 30, 2021 (Unaudited)
Net investment income
Income:
Dividends — unaffiliated issuers $4,733,310
Dividends — affiliated issuers 10,310
Interfund lending 17
Foreign taxes withheld (6,315)
Total income 4,737,322
Expenses:
Management services fees 3,378,871
Distribution and/or service fees
Class 2 13,044
Class 3 59,783
Service fees 30,223
Compensation of board members 33,419
Custodian fees 21,659
Printing and postage fees 3,867
Audit fees 14,628
Legal fees 10,161
Interest on interfund lending 53
Compensation of chief compliance officer 83
Other 12,530
Total expenses 3,578,321
Fees waived or expenses reimbursed by Investment Manager and its affiliates (5,981)
Total net expenses 3,572,340
Net investment income 1,164,982
Realized and unrealized gain (loss) — net
Net realized gain (loss) on:
Investments — unaffiliated issuers 210,771,094
Foreign currency translations 21
Net realized gain 210,771,115
Net change in unrealized appreciation (depreciation) on:
Investments — unaffiliated issuers (45,893,594)
Foreign currency translations (36)
Net change in unrealized appreciation (depreciation) (45,893,630)
Net realized and unrealized gain 164,877,485
Net increase in net assets resulting from operations $166,042,467
The accompanying Notes to Financial Statements are an integral part of this statement.
14 Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2021 Year Ended
(Unaudited) December 31, 2020
Operations
Net investment income $1,164,982 $3,827,645
Net realized gain (loss) 210,771,115 (38,892,014)
Net change in unrealized appreciation (depreciation) (45,893,630) 82,369,434
Net increase in net assets resulting from operations 166,042,467 47,305,065
Increase (decrease) in net assets from capital stock activity (223,379,328) 42,154,346
Total increase (decrease) in net assets (57,336,861) 89,459,411
Net assets at beginning of period 758,670,954 669,211,543
Net assets at end of period $701,334,093 $758,670,954
Six Months Ended Year Ended
June 30, 2021 (Unaudited) December 31, 2020
Shares Dollars ($) Shares Dollars ($)
Capital stock activity
Class 1
Subscriptions 1,467,798 49,781,823 3,415,856 80,775,507
Redemptions (7,083,018) (262,559,087) (1,082,276) (29,723,796)
Net increase (decrease) (5,615,220) (212,777,264) 2,333,580 51,051,711
Class 2
Subscriptions 117,053 4,186,162 42,138 1,015,287
Redemptions (72,677) (2,570,705) (58,232) (1,367,078)
Net increase (decrease) 44,376 1,615,457 (16,094) (351,791)
Class 3
Subscriptions 17,869 650,687 230,490 4,597,287
Redemptions (376,078) (12,868,208) (536,145) (13,142,861)
Net decrease (358,209) (12,217,521) (305,655) (8,545,574)
Total net increase (decrease) (5,929,053) (223,379,328) 2,011,831 42,154,346
The accompanying Notes to Financial Statements are an integral part of this statement.
Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021 15FINANCIAL HIGHLIGHTS
The following table is intended to help you understand the Fund’s financial performance. Certain information reflects financial
results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and
distributions, if any. Total return does not reflect any fees and expenses imposed under your Contract and/or Qualified Plan,
as applicable; such fees and expenses would reduce the total returns for all periods shown. Total return and portfolio
turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to
purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included,
the Fund’s portfolio turnover rate may be higher.
Net
realized Increase
Net asset value, Net and from Total from
beginning of investment unrealized payment investment
period income gain (loss) by affiliate operations
Class 1
Six Months Ended 6/30/2021 (Unaudited) $30.28 0.05 6.33 — 6.38
Year Ended 12/31/2020 $29.04 0.16 1.08 — 1.24
Year Ended 12/31/2019 $24.24 0.28 4.52 — 4.80
Year Ended 12/31/2018 $28.01 0.25 (4.02) — (3.77)
Year Ended 12/31/2017 $26.14 0.19 1.68 — 1.87
Year Ended 12/31/2016 $20.81 0.09 5.24 0.00(e) 5.33
Class 2
Six Months Ended 6/30/2021 (Unaudited) $29.47 0.01 6.16 — 6.17
Year Ended 12/31/2020 $28.34 0.10 1.03 — 1.13
Year Ended 12/31/2019 $23.71 0.22 4.41 — 4.63
Year Ended 12/31/2018 $27.48 0.18 (3.95) — (3.77)
Year Ended 12/31/2017 $25.71 0.13 1.64 — 1.77
Year Ended 12/31/2016 $20.51 0.04 5.16 0.00(e) 5.20
Class 3
Six Months Ended 6/30/2021 (Unaudited) $29.85 0.03 6.24 — 6.27
Year Ended 12/31/2020 $28.67 0.13 1.05 — 1.18
Year Ended 12/31/2019 $23.96 0.25 4.46 — 4.71
Year Ended 12/31/2018 $27.73 0.21 (3.98) — (3.77)
Year Ended 12/31/2017 $25.91 0.15 1.67 — 1.82
Year Ended 12/31/2016 $20.64 0.06 5.21 0.00(e) 5.27
Notes to Financial Highlights
(a) In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such
indirect expenses are not included in the Fund’s reported expense ratios.
(b) Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable.
(c) Annualized.
(d) Ratios include interfund lending expense which is less than 0.01%.
(e) Rounds to zero.
(f) The Fund received a payment from an affiliate. Had the Fund not received this payment, the total return would have been lower by 0.01%.
The accompanying Notes to Financial Statements are an integral part of this statement.
16 Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021FINANCIAL HIGHLIGHTS (continued)
Net Total gross Total net Net investment Net
asset expense expense income assets,
value, ratio to ratio to ratio to end of
end of Total average average average Portfolio period
period return net assets(a) net assets(a),(b) net assets turnover (000’s)
Class 1
Six Months Ended 6/30/2021 (Unaudited) $36.66 21.07% 0.88%(c),(d) 0.88%(c),(d) 0.31%(c) 83% $595,087
Year Ended 12/31/2020 $30.28 4.27% 0.90% 0.88% 0.68% 91% $661,480
Year Ended 12/31/2019 $29.04 19.80% 0.89% 0.88% 1.02% 75% $566,653
Year Ended 12/31/2018 $24.24 (13.46%) 0.88% 0.88% 0.88% 60% $574,250
Year Ended 12/31/2017 $28.01 7.16% 0.91% 0.91% 0.72% 115% $686,191
Year Ended 12/31/2016 $26.14 25.61%(f) 1.02% 0.93% 0.40% 60% $712,682
Class 2
Six Months Ended 6/30/2021 (Unaudited) $35.64 20.94% 1.14%(c),(d) 1.13%(c),(d) 0.06%(c) 83% $11,418
Year Ended 12/31/2020 $29.47 3.99% 1.15% 1.13% 0.41% 91% $8,133
Year Ended 12/31/2019 $28.34 19.53% 1.14% 1.13% 0.81% 75% $8,276
Year Ended 12/31/2018 $23.71 (13.72%) 1.13% 1.13% 0.65% 60% $6,673
Year Ended 12/31/2017 $27.48 6.88% 1.16% 1.16% 0.49% 115% $6,814
Year Ended 12/31/2016 $25.71 25.35%(f) 1.25% 1.18% 0.17% 60% $5,749
Class 3
Six Months Ended 6/30/2021 (Unaudited) $36.12 21.01% 1.01%(c),(d) 1.01%(c),(d) 0.18%(c) 83% $94,828
Year Ended 12/31/2020 $29.85 4.12% 1.02% 1.01% 0.54% 91% $89,057
Year Ended 12/31/2019 $28.67 19.66% 1.01% 1.00% 0.92% 75% $94,282
Year Ended 12/31/2018 $23.96 (13.60%) 1.01% 1.00% 0.74% 60% $89,379
Year Ended 12/31/2017 $27.73 7.02% 1.04% 1.04% 0.59% 115% $120,392
Year Ended 12/31/2016 $25.91 25.53%(f) 1.13% 1.05% 0.29% 60% $134,434
The accompanying Notes to Financial Statements are an integral part of this statement.
Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021 17NOTES TO FINANCIAL STATEMENTS June 30, 2021 (Unaudited) Note 1. Organization Variable Portfolio – Partners Small Cap Value Fund (the Fund), a series of Columbia Funds Variable Series Trust II (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. Fund shares The Trust may issue an unlimited number of shares (without par value). The Fund offers Class 1, Class 2 and Class 3 shares to separate accounts funding variable annuity contracts and variable life insurance policies (collectively, Contracts) issued by affiliated and unaffiliated life insurance companies (Participating Insurance Companies) as well as qualified pension and retirement plans (Qualified Plans) and other qualified institutional investors (Qualified Investors) authorized by Columbia Management Investment Distributors, Inc. (the Distributor). You may not buy (nor will you own) shares of the Fund directly. You may invest by participating in a Qualified Plan or by buying a Contract and making allocations to the Fund. Although all share classes generally have identical voting, dividend and liquidation rights, each share class votes separately when required by the Trust’s organizational documents or by law. Different share classes pay different net investment income distribution amounts to the extent the expenses of such share classes differ, and distributions in liquidation will be proportional to the net asset value of each share class. Each share class has its own cost structure and other features. Note 2. Summary of significant accounting policies Basis of preparation The Fund is an investment company that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. Security valuation Equity securities listed on an exchange are valued at the closing price or last trade on their primary exchange at the close of business of the New York Stock Exchange. Securities with a closing price not readily available or not listed on any exchange are valued at the mean between the closing bid and asked prices. Listed preferred stocks convertible into common stocks are valued using an evaluated price from a pricing service. Foreign equity securities are valued based on the closing price or last trade on their primary exchange at the close of business of the New York Stock Exchange. If any foreign equity security closing prices are not readily available, the securities are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are determined at the scheduled closing time of the New York Stock Exchange. Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. In those situations, foreign securities will be fair valued pursuant to a policy adopted by the Board of Trustees. Under the policy, the Fund may utilize a third-party pricing service to determine these fair values. The third-party pricing service takes into account multiple factors, including, but not limited to, movements in the U.S. securities markets, certain depositary receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that reasonably reflects the current market conditions as of the close of the New York Stock Exchange. The fair value of a security is likely to be different from the quoted or published price, if available. Investments in open-end investment companies (other than exchange-traded funds (ETFs)), are valued at the latest net asset value reported by those companies as of the valuation time. 18 Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2021 (Unaudited)
Investments for which market quotations are not readily available, or that have quotations which management believes are
not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is
valued at fair value, such value is likely to be different from the quoted or published price for the security, if available.
The determination of fair value often requires significant judgment. To determine fair value, management may use
assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various
sources may be used to determine fair value.
GAAP requires disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed
following the Fund’s Portfolio of Investments.
Foreign currency transactions and translations
The values of all assets and liabilities denominated in foreign currencies are generally translated into U.S. dollars at
exchange rates determined at the close of regular trading on the New York Stock Exchange. Net realized and unrealized gains
(losses) on foreign currency transactions and translations include gains (losses) arising from the fluctuation in exchange
rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign
currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign
withholding taxes.
For financial statement purposes, the Fund does not distinguish that portion of gains (losses) on investments which is due to
changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations
are included with the net realized and unrealized gains (losses) on investments in the Statement of Operations.
Security transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific
identification method for both financial statement and federal income tax purposes.
Income recognition
Corporate actions and dividend income are generally recorded net of any non-reclaimable tax withholdings, on the ex-dividend
date or upon receipt of an ex-dividend notification in the case of certain foreign securities.
The Fund may receive distributions from holdings in equity securities, business development companies (BDCs),
exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment companies (RICs), and real estate
investment trusts (REITs), which report information as to the tax character of their distributions annually. These distributions
are allocated to dividend income, capital gain and return of capital based on actual information reported. Return of capital is
recorded as a reduction of the cost basis of securities held. If the Fund no longer owns the applicable securities, return of
capital is recorded as a realized gain. With respect to REITs, to the extent actual information has not yet been reported,
estimates for return of capital are made by Columbia Management Investment Advisers, LLC (the Investment Manager), a
wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). The Investment Manager’s estimates are
subsequently adjusted when the actual character of the distributions is disclosed by the REITs, which could result in a
proportionate change in return of capital to shareholders.
Awards from class action litigation are recorded as a reduction of cost basis if the Fund still owns the applicable securities on
the payment date. If the Fund no longer owns the applicable securities on the payment date, the proceeds are recorded as
realized gains.
Expenses
General expenses of the Trust are allocated to the Fund and other funds of the Trust based upon relative net assets or other
expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021 19NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2021 (Unaudited) Determination of class net asset value All income, expenses (other than class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class. Federal income tax status The Fund is treated as a partnership for federal income tax purposes, and the Fund does not expect to make regular distributions. The Fund will not be subject to federal income tax, and therefore, there is no provision for federal income taxes. The partners of the Fund are subject to tax on their distributive share of the Fund’s income and loss. The components of the Fund’s net assets are reported at the partner-level for federal income tax purposes, and therefore, are not presented in the Statement of Assets and Liabilities. Management of the Fund has concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service. Foreign taxes The Fund may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests. Realized gains in certain countries may be subject to foreign taxes at the Fund level, based on statutory rates. The Fund accrues for such foreign taxes on realized and unrealized gains at the appropriate rate for each jurisdiction, as applicable. The amount, if any, is disclosed as a liability on the Statement of Assets and Liabilities. Guarantees and indemnifications Under the Trust’s organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition, certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims. Note 3. Fees and other transactions with affiliates Management services fees The Fund has entered into a Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The Investment Manager is responsible for the ultimate oversight of investments made by the Fund. The Fund’s subadvisers (see Subadvisory agreements below) have the primary responsibility for the day-to-day portfolio management of the Fund. The management services fee is an annual fee that is equal to a percentage of the Fund’s daily net assets that declines from 0.87% to 0.75% as the Fund’s net assets increase. The annualized effective management services fee rate for the six months ended June 30, 2021 was 0.85% of the Fund’s average daily net assets. Subadvisory agreements The Investment Manager has entered into a Subadvisory Agreement with Segal Bryant & Hamill, LLC, which subadvises a portion of the assets of the Fund. Effective May 1, 2021, the Investment Manager has entered into a Subadvisory Agreement with William Blair Investment Management, LLC (William Blair) to serve as a subadviser to a portion of the assets of the Fund. Investment Counselors of Maryland, LLC (ICM), an affiliate of William Blair, assists in providing day-to-day portfolio management of the Fund pursuant to the Sub-Subadvisory Agreement between William Blair and ICM. Effective July 19, 2021, 20 Variable Portfolio – Partners Small Cap Value Fund | Semiannual Report 2021
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