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Investment Products and Services Launches

Columbia Threadneedle premieres strategic beta bond ETF; and Change Finance launches new sustainable investing ETF.

By Javier Simon editors@strategic-i.com | October 12, 2017
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Columbia Threadneedle Premieres Strategic Beta ETF

The Columbia Diversified Fixed Income Allocation (DIAL) exchange-traded fund (ETF), recently launched by Columbia Threadneedle Investments, will track the Beta Advantage Multi-Sector Bond Index, which provides a rules-based approach to investing in six fixed-income sectors.

These sectors are U.S. Treasurys, global treasurys ex-U.S., U.S. investment-grade corporate bonds, U.S. mortgage-backed securities, U.S. high-yield corporate bonds and emerging market sovereign debt. DIAL’s rules-based, strategic beta investment approach aims to address investor concerns of having consistent income with downside protection, regardless of the interest rate environment.

“As the market enters a new rate regime, investors may need to adjust their fixed-income allocations and broaden their opportunity set,” notes Gene Tannuzzo, senior portfolio manager at Columbia Threadneedle. “Unlike traditional ETFs, strategic beta ETFs do more than track a benchmark. They incorporate active insights and are outcome-oriented.”

“DIAL’s disciplined process is designed to seek more sources of income and avoid the overconcentration found in traditional fixed-income benchmarks,” says Marc Zeitoun, head of strategic beta at the firm.

Columbia Threadneedle drew from its experience as a fixed-income manager to establish the strategic beta rules that are the foundation of the index, the firm says. The index is owned and calculated by Bloomberg Index Services Limited.

DIAL was launched today, October 12,  with a 90-day contractual management fee waiver and is thereafter priced at 28 basis points (bps).

NEXT: Change Finance Launches New Sustainable Investing ETF