Liberty All-Star^® Equity Fund

Period Ended March 31, 2023 (Unaudited)

Performance returns for the Fund are total returns, which include dividends. Returns are net of management fees and other Fund expenses.

The return shown for the Lipper Large-Cap Core Mutual Fund Average is based on open-end mutual funds’ total returns, which include dividends, and are net of fund expenses. Returns for the unmanaged Dow Jones Industrial Average, NASDAQ Composite Index and the S&P 500^® Index are total returns, including dividends. A description of the Lipper benchmark and the market indices can be found on page 19.

Past performance cannot predict future results. Performance will fluctuate with market conditions. Current performance may be lower or higher than the performance data shown. Performance information does not reflect the deduction of taxes that shareholders would pay on Fund distributions or the sale of Fund shares. An investment in the Fund involves risk, including loss of principal.

Closed-end funds raise money in an initial public offering and shares are listed and traded on an exchange. Open-end mutual funds continuously issue and redeem shares at net asset value. Shares of closed-end funds frequently trade at a discount to net asset value. The price of the Fund’s shares is determined by a number of factors, several of which are beyond the control of the Fund. Therefore, the Fund cannot predict whether its shares will trade at, below or above net asset value.

Headlines from the first quarter held all the potential needed for a setback in equity markets: stubbornly high inflation and continued interest rate increases capped off by a banking crisis. As events played out, however, stocks proved to be resilient and delivered positive returns for investors to start the year.

The S&P 500^® Index occupied the middle ground with a return of 7.50 percent for the period, a result bracketed by returns of 0.93 percent for the Dow Jones Industrial Average (DJIA) and 17.05 percent for the NASDAQ Composite Index. The NASDAQ advantage over the DJIA was the widest since the fourth quarter of 2001, and it was the NASDAQ’s best three-month period since the second quarter of 2020.

The quarter was highly volatile. January opened on a positive note with what was called a “Goldilocks jobs report”—solid hiring but slower wage growth. That was followed by CPI data showing inflation slowing from a 7.1 percent annual rate in November to 6.5 percent in December. Retail sales softened and producer prices eased. Next, the Federal Reserve’s preferred measure of inflation—the core personal consumption expenditures price index, or PCE, which strips out food and energy—slowed to its lowest annual rate in more than a year. Technology stocks, in particular, were bolstered by the prospect of a pause to interest rate hikes, with the NASDAQ posting its best opening month performance since 2001.

The rally came to an abrupt halt in early February. The Fed increased the fed funds rate by 25 basis points to a range of 4.50 to 4.75 percent and signaled more increases would be coming. That move was expected; what surprised was an increase of 517,000 in January payrolls versus an estimate of 189,000 and a drop in the unemployment rate to 3.4 percent, the lowest since May 1969. Stocks promptly sold off, opening a period in which the DJIA declined for three straight weeks. The selling culminated during the week of February 20, when the S&P 500^®, DJIA and NASDAQ were all down in a range of 2.7 to 3.3 percent. Softer employment data filtered in during early March and bond yields eased, taking pressure off stocks—both factors serving to bolster investor sentiment and lead to a rebound to start the month.

Markets were soon roiled by the collapse of Silicon Valley Bank (SVB), the biggest bank failure since 2008, raising doubts about the health of the banking sector overall. SVB, a prominent financial institution for start-ups, was put under the control of the FDIC and within days was purchased out of receivership by First Citizens Bank. The collapse was the second-biggest bank failure in U.S. history. Although this event would be followed by another failure, Signature Bank, as well as a takeover in Europe of Credit Suisse by UBS, forceful action by regulators staunched the possibility of a systemic banking crisis. Much of the banks’ problem was seen as stemming from the Federal Reserve’s rapid interest rate increases, which took the fed funds rate from near zero in early 2022 to a range of 4.75 to 5.00 percent after another 25-basis-point increase in latter March. With confidence restored, the bond market holding steady and mildly positive economic news, both March and the quarter closed in positive territory.

Growth stocks outperformed value stocks for the quarter, the broad market Russell 3000^® Growth Index returning 13.85 percent, strongly outperforming the 0.91 percent return of its value counterpart. Growth stocks also outperformed value across the capitalization spectrum of small-, mid- and large-cap stocks.

Liberty All-Star^® Equity Fund 

Liberty All-Star Equity Fund navigated the turbulent first quarter to post returns that generally outperformed key benchmarks. For the quarter, the Fund returned 6.75 percent when shares are valued at net asset value (NAV) with dividends reinvested and 11.39 percent when shares are valued at market price with dividends reinvested. (Fund returns are net of expenses.) The NAV return was moderately ahead of the Fund’s primary benchmark, the Lipper Large-Cap Core Mutual Fund Average, which returned 6.37 percent, while the market price return was well ahead of the benchmark. The Fund’s NAV return lagged that of the S&P 500^® by less than one percentage point while the market price return outperformed. Both measures of return were substantially ahead of the DJIA but trailed the strong 17.05 percent return posted by the NASDAQ Composite.

In terms of performance attribution, the Fund was hurt by an overweight to financial stocks and an underweight to technology stocks. Stock selection, however, boosted Fund returns. Key market gauges such as the S&P 500^® and NASDAQ were driven by a few mega-cap growth stocks—Tesla and Apple are examples—and not holding them also hurt performance. The Fund had very limited exposure to regional banking stocks, which suffered in the March bank upheaval. As noted earlier, market returns were characterized by a wide gulf between growth and value stock performance, as exemplified by the return disparity between the DJIA and the NASDAQ.

During the first quarter the range over which Fund shares traded relative to their underlying NAV extended from a premium of 2.3 percent to a discount of -2.2 percent, a narrowing of the range compared with 4Q22 (4.5 percent to -4.4 percent).

In accordance with the Fund’s distribution policy, the Fund paid a distribution of $0.15 per share in the first quarter. The Fund’s distribution policy has been in place since 1988 and is a major component of the Fund’s total return. The Fund has paid distributions of $29.83 per share for a total of more than $3.5 billion since 1987 (the Fund’s first full calendar year of operations). We continue to emphasize that shareholders should include these distributions when determining the total return on their investment in the Fund.

As communicated in the 2022 Annual Report, William “Bill” Parmentier has retired after serving as President of the Fund for 24 years. The Fund’s Board of Trustees named me to succeed Bill and voted to officially confirm my appointment, effective April 3. I previously served as Senior Vice President and have been with the Fund for nearly 30 years. This facilitated a smooth transition while I continue to work closely with a dedicated and experienced team of professionals, all of whom share our core value of serving Fund shareholders and their best interests. I look forward to reporting to you as we carry on the process of managing the Fund as a core equity holding for long-term investors.

Sincerely,

Mark T. Haley, CFA

President

Liberty All-Star Equity Fund

The views expressed in the President’s letter reflect the views of the President as of April 2023 and may not reflect his views on the date this report is first published or anytime thereafter. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the Fund disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for the Fund are based on numerous factors, may not be relied on as an indication of trading intent.

DISTRIBUTION POLICY

The current policy is to pay distributions on its shares totaling approximately 10 percent of its net asset value per year, payable in four quarterly installments of 2.5 percent of the Fund’s net asset value at the close of the New York Stock Exchange on the Friday prior to each quarterly declaration date. Sources of distributions to shareholders may include ordinary dividends, long-term capital gains and return of capital. The final determination of the source of all distributions in 2023 for tax reporting purposes will be made after year end. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. If a distribution includes anything other than net investment income, the Fund provides a Section 19(a) notice of the best estimate of its distribution sources at that time. These estimates may not match the final tax characterization (for the full year’s distributions) contained in shareholder 1099-DIV forms after the end of the year. If the Fund’s ordinary dividends and long-term capital gains for any year exceed the amount distributed under the distribution policy, the Fund may, in its discretion, retain and not distribute capital gains and pay income tax thereon to the extent of such excess.

The following are the largest ($5 million or more) stock changes - both purchases and sales - that were made in the Fund’s portfolio during the first quarter of 2023.

THE FUND’S ASSETS ARE APPROXIMATELY EQUALLY DISTRIBUTED AMONG THREE VALUE MANAGERS AND TWO GROWTH MANAGERS:

ALPS Advisors, Inc., the investment advisor to the Fund, has the ultimate authority (subject to oversight by the Board of Trustees) to oversee the investment managers and recommend their hiring, termination and replacement.

MANAGERS’ DIFFERING INVESTMENT STRATEGIES

ARE REFLECTED IN PORTFOLIO CHARACTERISTICS

The portfolio characteristics table below is a regular feature of the Fund’s shareholder reports. It serves as a useful tool for understanding the value of a multi-managed portfolio. The characteristics are different for each of the Fund’s five investment managers. These differences are a reflection of the fact that each pursues a different investment style. The shaded column highlights the characteristics of the Fund as a whole, while the final column shows portfolio characteristics for the S&P 500^® Index.

PORTFOLIO CHARACTERISTICS As of March 31, 2023 (Unaudited)

	Investment Style Spectrum
	Value				Growth
	PZENA	FIDUCIARY	ARISTOTLE	SUSTAINABLE	TCW	TOTAL FUND	S&P 500® INDEX
Number of Holdings	37	29	43	29	31	145*	503
Percent of Holdings in Top 10	43%	46%	32%	43%	51%	20%	27%
Weighted Average Market Capitalization (billions)	$62	$162	$166	$333	$442	$236	$544
Average Five-Year Earnings Per Share Growth	6%	13%	16%	18%	14%	14%	17%
Dividend Yield	2.5%	1.4%	2.1%	0.7%	0.6%	1.4%	1.6%
Price/Earnings Ratio**	14x	21x	18x	33x	42x	22x	21x
Price/Book Value Ratio	1.5x	3.2x	3.0x	5.7x	4.9x	3.0x	3.8x

See Notes to Schedule of Investments.

See Notes to Schedule of Investments.

See Notes to Schedule of Investments.

See Notes to Schedule of Investments.

See Notes to Schedule of Investments.

See Notes to Schedule of Investments.

See Notes to Schedule of Investments.

See Notes to Schedule of Investments.

Security Valuation 

Equity securities are valued at the last sale price at the close of the principal exchange on which they trade, except for securities listed on the NASDAQ Stock Market LLC (“NASDAQ”), which are valued at the NASDAQ official closing price. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets.

Cash collateral from securities lending activity is reinvested in the State Street Navigator Securities Lending Government Money Market Portfolio (“State Street Navigator”), a registered investment company under the Investment Company Act of 1940 (the “1940 Act”), which operates as a money market fund in compliance with Rule 2a-7 under the 1940 Act. Shares of registered investment companies are valued daily at that investment company’s net asset value (“NAV”) per share.

The Fund’s investments are valued at market value or, in the absence of market value with respect to any portfolio securities, at fair value according to procedures adopted by the Fund's Board of Trustees (the "Board"). The Board approved changes to the Fund’s valuation policy to comply with Rule 2a-5 and designated ALPS Advisors, Inc. (the “Advisor”) as the Fund’s Valuation Designee (as defined in the rule). The Valuation Designee will be responsible for determining fair value in good faith for all Fund investments, subject to oversight by the Board. When market quotations are not readily available, or in management’s judgment they do not accurately reflect fair value of a security, or an event occurs after the market close but before the Fund is priced that materially affects the value of a security, the security will be valued by the Advisor’s Valuation Committee using fair valuation procedures established by the Valuation Designee. Examples of potentially significant events that could materially impact a Fund’s NAV include, but are not limited to: single issuer events such as corporate actions, reorganizations, mergers, spin-offs, liquidations, acquisitions and buyouts; corporate announcements on earnings or product offerings; regulatory news; and litigation and multiple issuer events such as governmental actions; natural disasters or armed conflicts that affect a country or a region; or significant market fluctuations. Potential significant events are monitored by the Advisor, Sub-Advisers and/or the Valuation Committee through independent reviews of market indicators, general news sources and communications from the Fund’s custodian. As of March 31, 2023, the Fund held no securities that were fair valued.

Security Transactions

Security transactions are recorded on 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

Interest income is recorded on the accrual basis. Corporate actions and dividend income are recorded on the ex-date.

The Fund estimates components of distributions from real estate investment trusts (“REITs”). Distributions received in excess of income are recorded as a reduction of the cost of the related investments. Once the REIT reports annually the tax character of its distributions, the Fund revises its estimates. If the Fund no longer owns the applicable securities, any distributions received in excess of income are recorded as realized gains.

Lending of Portfolio Securities

The Fund may lend its portfolio securities only to borrowers that are approved by the Fund’s securities lending agent, State Street Bank & Trust Co. (“SSB”). The Fund will limit such lending to not more than 30% of the value of its total assets. The borrower pledges and maintains with the Fund collateral consisting of cash (U.S. Dollar only), securities issued or guaranteed by the U.S. government or its agencies or instrumentalities, or by irrevocable bank letters of credit issued by a person other than the borrower or an affiliate of the borrower. The initial collateral received by the Fund is required to have a value of no less than 102% of the market value of the loaned securities for securities traded on U.S. exchanges and a value of no less than 105% of the market value for all other securities. The collateral is maintained thereafter, at a market value equal to no less than 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day and any additional required collateral is delivered to the Fund on the next business day. During the term of the loan, the Fund is entitled to all distributions made on or in respect of the loaned securities. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

Any cash collateral received is reinvested in State Street Navigator. Non-cash collateral, in the form of securities issued or guaranteed by the U.S. government or its agencies or instrumentalities, is not disclosed in the Fund’s Schedule of Investments as it is held by the lending agent on behalf of the Fund, and the Fund does not have the ability to re-hypothecate these securities.

The following is a summary of the Fund’s securities lending positions and related cash and non-cash collateral received as of March 31, 2023:

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by SSB. SSB’s indemnity allows for full replacement of securities lent wherein SSB will purchase the unreturned loaned securities on the open market by applying the proceeds of the collateral, or to the extent such proceeds are insufficient or the collateral is unavailable, SSB will purchase the unreturned loan securities at SSB’s expense. However, the Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.

Fair Value Measurements

The Fund discloses the classification of its fair value measurements following a three-tier hierarchy based on the inputs used to measure fair value. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.

Valuation techniques used to value the Fund’s investments by major category are as follows:

Equity securities that are valued based on unadjusted quoted prices in active markets are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the mean of the most recent quoted bid and ask prices on such day and are generally categorized as Level 2 in the hierarchy. Investments in open-end mutual funds are valued at their closing NAV each business day and are categorized as Level 1 in the hierarchy.

Various inputs are used in determining the value of the Fund’s investments as of the end of the reporting period. When inputs used fall into different levels of the fair value hierarchy, the level in the hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments.

These inputs are categorized in the following hierarchy under applicable financial accounting standards:

The following is a summary of the inputs used to value the Fund’s investments as of March 31, 2023:

The Fund did not have any securities that used significant unobservable inputs (Level 3) in determining fair value during the period.

Indemnification

In the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims against the Fund. Also, under the Fund’s organizational documents and by contract, the Trustees and Officers of the Fund are indemnified against certain liabilities that may arise out of their duties to the Fund. However, based on experience, the Fund expects the risk of loss due to these warranties and indemnities to be minimal.

Dow Jones Industrial Average

A price-weighted measure of 30 U.S. blue-chip companies.

Lipper Large-Cap Core Mutual Fund Average

The average of funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) above Lipper’s U.S. domestic equity large-cap floor. These funds typically have average characteristics compared to the S&P 500^® Index.

NASDAQ Composite Index

Measures all NASDAQ domestic and international based common type stocks listed on the NASDAQ Stock Market.

Russell 3000^® Growth Index

Measures the performance of those Russell 3000^® companies with lower book-to-price ratios and higher growth values. The Russell 3000^® Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 96% of the investable U.S. equity market.

Russell 3000^® Value Index

Measures the performance of those Russell 3000^® companies with higher book-to-price ratios and lower growth values.

S&P 500^® Index

A large-cap U.S. equities index that includes 500 leading companies and represents approximately 80% of the total domestic U.S. equity market capitalization.

An investor cannot invest directly in an index.