Columbia Threadneedle Investments today announced the expansion
of its strategic beta exchange-traded fund (ETF) offerings, with
the launch of Columbia Diversified Fixed Income Allocation ETF
(NYSE Arca: DIAL). DIAL will track the Beta Advantage® Multi-Sector
Bond Index, which provides a rules-based approach to investing in
six fixed income sectors. Columbia Threadneedle drew upon its
expertise as a leading, fixed income manager to create the
strategic beta rules that are the foundation of the index. The
index is owned and calculated by Bloomberg Index Services
Limited.
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The Columbia Diversified Fixed Income
Allocation ETF (DIAL) can help broaden your opportunity set.
(Graphic: Columbia Threadneedle Investments)
An all-in-one approach to fixed income investing, DIAL provides
investors with a diversified portfolio of fixed income securities
across six sectors that is designed to serve as a core fixed income
allocation, creating a multi-sector bond strategy focused on
balancing yield, quality and liquidity. These sectors include U.S.
Treasuries, global treasuries 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 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. Unlike traditional ETFs, strategic beta ETFs do more than
track a benchmark,” said Gene Tannuzzo, CFA, senior portfolio
manager at Columbia Threadneedle Investments. “They incorporate
active insights and are outcome-oriented.”
The traditional benchmark fixed income index does not foster
diversification, with an outsized weighting to sovereign bonds and
high correlation between its two largest sectors, U.S. Treasuries
and U.S. mortgage-backed securities.
“DIAL’s disciplined process is designed to seek more sources of
income and avoid the overconcentration found in traditional fixed
income benchmarks,” said Marc Zeitoun, CFA, head of strategic beta
at Columbia Threadneedle Investments. “Few strategic beta fixed
income ETFs on the market today effectively address clients’ fixed
income needs around yield, quality and liquidity in a thoughtful
way.”
While the strategic beta fixed income ETF market is in the early
stages of adoption, according to a recent Columbia Threadneedle
Investments survey of financial advisors and investment managers,
over half would consider investing in a strategic beta fixed income
ETF. Respondents ranked expertise as an active fixed income manager
and track record as the top considerations (both 20 percent) when
purchasing a fixed income strategic beta product.
The survey was conducted online during the month of June 2017
among 220 financial advisors and investment professionals. More
than 49 percent of survey participants manage more than $100
million in assets.
DIAL launches today with a 90-day contractual management fee
waiver and is thereafter competitively priced at 28 basis
points.1
About Columbia Threadneedle Investments:Columbia
Threadneedle Investments is a leading global asset manager that
provides a broad range of investment strategies and solutions for
individual, institutional and corporate clients around the world.
With more than 2,000 people, including over 450 investment
professionals based in North America, Europe and Asia, we manage
$473 billion2 of assets across developed and emerging market
equities, fixed income, asset allocation solutions and
alternatives.
Columbia Threadneedle Investments is the global asset management
group of Ameriprise Financial, Inc. (NYSE: AMP).
For more information, please visit
https://www.columbiathreadneedleus.com/.For more information about
our ETFs, please visit
http://www.columbiathreadneedleetf.com/.Follow us on Twitter.
1Columbia Management Investment Advisers, LLC has contractually
agreed to waive its entire 0.28% management fee for a period of 90
calendar days, commencing from October 12, 2017 and ending on
January 9, 2018.2As of June 30, 2017.
Carefully consider the fund's investment objectives, risk
factors and charges and expenses before investing. This and other
information can be found in the fund’s prospectus, which may be
obtained by calling 888.800.4347 or by visiting the fund’s
website www.columbiathreadneedleetf.com to view or
download a prospectus. Read the prospectus carefully before
investing. Investing involves risk, including possible loss of
principal.
The Columbia Diversified Fixed Income Allocation ETF (the Fund)
seeks investment results that, before fees and expenses, closely
correspond to the performance of the Beta Advantage® Multi-Sector
Bond Index.
Investment risks — Fixed income securities involve interest
rate, credit, inflation, illiquidity and reinvestment risks. As
interest rates rise, the value of fixed income securities falls.
High yield investments possess greater price volatility,
illiquidity, and possibility of default. International investments
are subject to special risks, including currency fluctuations, and
social, economic and political uncertainties, which could increase
volatility. These risks are magnified in emerging markets.
Asset-backed, mortgage-backed or mortgage-related securities are
subject to prepayment and extension risks. Although the Fund's
shares are listed on the Exchange, there can be no assurance that
an active, liquid or otherwise orderly trading market for shares
will be established or maintained. In addition to the multi-sector
bond strategies employed, the Fund may invest in other securities,
including private placements. The Fund may have portfolio turnover,
which may cause an adverse cost impact.
This fund is newly organized and does not have an operating
history. There is no guarantee that the investment objectives will
be achieved or that return expectations will be met.
Shares are not individually redeemable. Investors buy and sell
shares on a secondary market. Only market makers or “authorized
participants” may trade directly with the Fund(s), typically in
blocks of 50,000 shares.
Shares are not FDIC insured, may lose value and have no bank
guarantee.
BLOOMBERG® is a trademark and service mark of Bloomberg Finance
L.P. and its affiliates (collectively “Bloomberg”). BARCLAYS® is a
trademark and service mark of Barclays Bank Plc (collectively with
its affiliates, “Barclays”), used under license. Bloomberg or
Bloomberg’s licensors, including Barclays, own all proprietary
rights in the Bloomberg Barclays Indices. Neither Bloomberg nor
Barclays is affiliated with Columbia Management Investment
Advisers, LLC, and neither approves, endorses, reviews or
recommends the Columbia Diversified Fixed Income Allocation ETF.
Neither Bloomberg nor Barclays guarantees the timeliness,
accurateness or completeness of any data or information relating to
Beta Advantage® Multi-Sector Bond Index, and neither shall be
liable in any way to the Columbia Diversified Fixed Income
Allocation ETF, investors in Columbia Diversified Fixed Income
Allocation ETF or other third parties in respect of the use or
accuracy of the Beta Advantage® Multi-Sector Bond Index or any data
included therein.
The fund is distributed by ALPS Distributors, Inc., and
managed by Columbia Management Investment Advisers, LLC. (CMIA).
ALPS is not affiliated with CMIA.
Investment products are not federally or FDIC-insured, deposits
or obligations of or guaranteed by any financial institution and
involve risks, including possible loss of principal and fluctuation
in value.
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© 2017 Columbia Management Investment Advisers, LLC. All rights
reserved.
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version on businesswire.com: http://www.businesswire.com/news/home/20171012005744/en/
For Columbia Threadneedle InvestmentsCarlos Melville,
617-897-9384carlos.melville@ampf.comorLiz Kennedy,
617-897-9394liz.kennedy@ampf.com
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