BOSTON – (BUSINESS WIRE) – Sep 21, 2021–
Columbia Threadneedle Investments today announced the expansion of its strategic beta fixed income exchange-traded fund (ETF) offering with the launch of Columbia Short Duration Bond ETF (NYSE Arca: SBND), a short-term bond strategy focused on on generating income in four segments of the debt markets. SBND tracks company ownership Beta benefitÂ® Short Term Bond Index, which offers a rules-based, diversified and weighted approach to investing based on opportunity rather than leverage.
SBND seeks to broaden the income opportunities for investors by tracking an index resulting in a short-lived portfolio that does not sacrifice performance and does not take on excessive credit risk. The ETF aims to provide investors with a diversified portfolio of fixed income securities across four income-producing debt segments – US grade corporations, US grade securitized debt, US high yield bonds, and sovereign and quasi-sovereign debt. – sovereign of emerging markets – with a balance of yield, quality and liquidity. SBND’s rule-based index-based investment approach aims to address investor concerns that shortening duration equates to sacrificing yield, regardless of the interest rate environment. Two-thirds of financial advisors surveyed recently by Columbia Threadneedle agree that the inability to meet clients’ needs for performance and diversification is a barrier to investing in specific fixed income products. 1
âIn a challenging interest rate environment, investors may need to adjust their fixed income allocations and broaden their set of income opportunities,â said Ronald Stahl, senior portfolio manager and lead short life and stable value at Columbia Threadneedle Investments. âUnlike passively managed short-term bond funds that track traditional benchmarks, a strategic beta portfolio that tracks a custom rule-based index designed to mitigate duration risk while capturing higher income opportunities can diversify and further complement client portfolios. “
âIn a context of market uncertainty, we have seen investors increasingly using short-term bond funds to simply ‘park’ their assets until they decide what to do next,â added Marc Zeitoun. , Head of Strategic Beta at Columbia Threadneedle Investments. âFor the most part, this will result in unwanted yield dropout. We believe that a profitable and judiciously diversified strategy offers a better way to shorten the duration of the portfolio without sacrificing income potential. “
The launch of SBND adds another compelling fixed income strategic beta solution to a lineup that includes Columbia Diversified Fixed Income Allocation ETF (DIAL), launched in 2017, and Columbia Multi-Sector Municipal Income ETF (MUST), launched in 2018. DIAL is a multi-sector bond strategy that targets more consistent income in any market with a rules-based approach that goes beyond the traditional bond market benchmark. SBND complements DIAL by offering investors a short-lived version of a proven diversified bond strategy. MUST target higher tax-exempt income and risk-adjusted returns than traditional municipal bond benchmarks by strategically diversifying into five municipal bond sectors.
All three funds are managed by active fixed income investors whose expertise and knowledge has informed the rules-based approach behind each ETF and reflect a commitment to providing fixed income solutions to meet a variety of investor needs. The SBND is headed by Ronald Stahl, Gregory Liechtenstein and David Janssen. The fund includes monthly replenishment, rebalancing and distributions, and is priced competitively at 25 basis points.
About Columbia Threadneedle Investments
Columbia Threadneedle Investments is a leading global asset manager providing a broad range of investment strategies and solutions to individuals, institutions and businesses around the world. With more than 2,000 people, including more than 450 investment professionals based in North America, Europe and Asia, we manage $ 593 billion 2 in assets in developed and emerging market equities, securities at fixed income, asset allocation solutions and alternatives.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand of the Columbia and Threadneedle group of companies.
1 Survey of 221 financial advisers conducted from August 17 to 24, 2021.
2 As of June 30, 2021. Includes all assets managed by the Columbia and Threadneedle group of companies entities.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Fund before investing. For a prospectus containing this and other important information, please call 888 800 4347 or visit columbiathreadneedleus.com/etf to view or download a prospectus. Read the prospectus carefully before investing.
Fixed income securities involve interest rate, credit, inflation, liquidity and reinvestment risks. Interest rate risk is the risk that fixed income securities will lose value because of changes in interest rates. Generally, the value of debt securities declines as interest rates rise. Fixed income securities differ in their sensitivity to changes in interest rates. Fixed income securities with longer effective terms tend to be more sensitive to changes in interest rates, which generally makes them more volatile than securities with shorter effective terms. The effective term is determined by a number of factors, including the coupon rate, whether the coupon is fixed or variable, the term to maturity, the buy or sell characteristics and various redemption characteristics. Securities lower than the investment grade, or “junk bonds”, are more likely to be at credit risk because issuers of these securities are more likely to have difficulty paying interest and principal than issuers of higher-rated securities. Lower-rated securities may be more sensitive to actual or perceived adverse economic and competitive conditions in the industry than higher-quality securities, and the prices of such securities may be more sensitive to adverse economic downturns or individual business developments. If the issuer of the securities defaults, the ETF may incur additional expenses to seek recovery. Mortgage and Asset Backed Securities are affected by interest rates, the financial health of issuers / originators, the creditworthiness of the entities providing credit enhancements and the value of the underlying assets. In general, rising interest rates tend to lengthen the duration of fixed rate mortgage securities, which makes them more sensitive to changes in interest rates. Therefore, during times of rising interest rates, if the ETF holds mortgage-backed securities, it may exhibit additional volatility. In addition, variable and fixed rate mortgage securities are subject to prepayment risk. The fund is passively managed and seeks to track the performance of an index. The fund’s use of a “Representative sampling” approach to replicate the performance of its index (by investing only in some of the components of the index which collectively are considered to have an investment profile similar to that of the index) may not allow the fund to replicate its index with the same degree of accuracy as an investment vehicle replicating the entire Index would. Foreigner investments subject the fund to risks, including political, economic, market, social and other risks in a given country, as well as currency instabilities and less stringent financial and accounting standards generally applicable to US issuers. Foreign currency the risks involve a risk of loss of capital resulting from adverse fluctuations in currency values, differences in generally accepted accounting principles, economic or political instability in other countries or increased volatility and decline in trades. Risks are increased for sovereign debt transmitters. Risks are increased for emerging market transmitters. Diversification does not guarantee a profit or protect against loss.
ETF shares are bought and sold at market price (not at NAV) and are not individually redeemable. Investors buy and sell stocks in a secondary market. Shares may be traded at a premium or at a discount to the net asset value. Only Market Makers or âAuthorized Participantsâ may trade directly with the Fund (s), generally in blocks of 50,000 shares.
The Beta Advantage Â® Short Term Bond Index is a fixed-weight composite index that combines six custom sub-indices based on the following Bloomberg flagship indices: US Corporate, US High Yield, US MBS, US CMBS, US ABS and EM USD Aggregate. It is not possible to invest directly in an index.
Columbia Management Investment Advisers, LLC serves as the investment manager for ETFs. ETFs are distributed by ALPS Distributors, Inc., which is not affiliated with Columbia Management Investment Advisers, LLC or its parent company Ameriprise Financial, Inc.
KEYWORD: MASSACHUSETTS UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: FINANCING OF PROFESSIONAL BANKING SERVICES
SOURCE: Columbia Threadneedle Investments
Copyright Business Wire 2021.
PUB: 09/21/2021 09:05 / DISC: 09/21/2021 09:06
Copyright Business Wire 2021.