Columbia Threadneedle Investments today announced the expansion
of its strategic beta fixed income exchange-traded fund (ETF)
offerings with the launch of Columbia Short Duration Bond ETF (NYSE
Arca: SBND), a short-duration bond strategy focused on generating
income in four segments of the debt markets. SBND tracks the firm’s
proprietary Beta Advantage® Short Term Bond Index, which provides a
rules-based approach to investing that is diversified and weighted
toward opportunity rather than indebtedness.
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SBND seeks to broaden investors’ income opportunity set by
tracking an index resulting in a short-duration portfolio that does
not sacrifice yield or 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 – U.S.
investment grade corporates, U.S. investment grade securitized
debt, U.S. high yield, and emerging market sovereign and
quasi-sovereign debt – with a balance of yield, quality, and
liquidity. SBND’s rules-based indexed investment approach aims to
address investor concerns that lowering 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 address client needs
around yield and diversification is a barrier to investing in
specific fixed income products.1
"In a challenging interest rate environment, investors may need
to adjust their fixed income allocations and broaden their income
opportunity set," said Ronald Stahl, Senior Portfolio Manager and
Head of Short Duration & Stable Value at Columbia Threadneedle
Investments. "Unlike passively managed short-duration bond funds
that track traditional benchmarks, a strategic beta portfolio that
tracks a customized, rules-based index designed to mitigate
duration risk while capturing higher income opportunities can
further diversify and complement client portfolios."
“Against a backdrop of market uncertainty, we’ve seen investors
increasingly use short-term bond funds to simply ‘park’ their
assets until they decide what to do next,” added Marc Zeitoun, Head
of Strategic Beta at Columbia Threadneedle Investments. “For most,
this will result in an unwanted give-up on yield. We believe a
cost-efficient and thoughtfully diversified strategy offers a
better way to shorten portfolio duration 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 in providing investors with a short-duration version of a
proven diversified bond strategy. MUST targets higher tax-exempt
income and risk-adjusted returns than traditional municipal bond
benchmark funds by strategically diversifying across five municipal
bond sectors.
All three funds are managed by active fixed income investors
whose expertise and insights informed the rules-based approach that
underpins each ETF and reflect a commitment to delivering fixed
income solutions to meet a variety of investor needs. SBND is
managed by Ronald Stahl, Gregory Liechty, and David Janssen. The
fund features monthly reconstitution, rebalancing and
distributions, and is competitively priced at 25 basis points.
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 $593 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 columbiathreadneedleus.com. Follow us on
Twitter.
Columbia Threadneedle Investments (Columbia Threadneedle) is the
global brand name of the Columbia and Threadneedle group of
companies.
1 Survey of 221 financial advisors conducted August 17-24,
2021.
2 As of June 30, 2021. Includes all assets managed by entities
in the Columbia and Threadneedle group of companies.
Investors should carefully consider the investment
objectives, risks, charges and expenses of the Fund before
investing. To obtain 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, illiquidity and reinvestment risks. Interest rate
risk is the risk that fixed income securities will decline in value
because of changes in interest rates. Generally, the value of debt
securities falls as interest rates rise. Fixed income securities
differ in their sensitivities to changes in interest rates. Fixed
income securities with longer effective durations tend to be more
sensitive to changes in interest rates, usually making them more
volatile than securities with shorter effective durations.
Effective duration is determined by a number of factors including
coupon rate, whether the coupon is fixed or floating, time to
maturity, call or put features, and various repayment features.
Below investment-grade securities, or “junk bonds,” are more
likely to pose a credit risk, as the issuers of these securities
are more likely to have problems making interest and principal
payments than issuers of higher-rated securities. Lower-rated
securities may be more susceptible to real or perceived adverse
economic and competitive industry conditions than higher-grade
securities, and prices of these securities may be more sensitive to
adverse economic downturns or individual corporate 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, financial health of
issuers/originators, creditworthiness of entities providing credit
enhancements and the value of underlying assets. Generally, rising
interest rates tend to extend the duration of fixed rate
mortgage-related securities, making them more sensitive to
changes in interest rates. As a result, in a period of rising
interest rates, if the ETF holds mortgage-related securities, it
may exhibit additional volatility. In addition, adjustable and
fixed rate mortgage-related 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 in seeking to track the performance of its
index (investing in only some of the components of the index that
collectively are believed to have an investment profile similar to
that of the index) may not allow the fund to track its index with
the same degree of accuracy as would an investment vehicle
replicating the entire Index. Foreign investments subject
the fund to risks, including political, economic, market, social
and others within a particular country, as well as to currency
instabilities and less stringent financial and accounting standards
generally applicable to U.S. issuers. Foreign currency risks
involve risk of capital loss from unfavorable fluctuation in
currency values, from differences in generally accepted accounting
principles, from economic or political instability in other nations
or increased volatility and lower trading. Risks are enhanced for
sovereign debt issuers. Risks are enhanced for emerging
market issuers. Diversification does not assure a profit or
protect against loss.
ETF shares are bought and sold at market price (not NAV) and are
not individually redeemable. Investors buy and sell shares on a
secondary market. Shares may trade at a premium or discount to the
NAV. Only market makers or "authorized participants" may trade
directly with the Fund(s), typically in blocks of 50,000
shares.
The Beta Advantage® Short Term Bond Index is a fixed weight
composite index that blends six custom sub-indices based off the
following Bloomberg flagship indices: US Corporate, US High Yield,
US MBS, US CMBS, US ABS, and the EM USD Aggregate. It is not
possible to invest directly in an index.
Columbia Management Investment Advisers, LLC serves as the
investment manager to the ETFs. The ETFs are distributed by ALPS
Distributors, Inc., which is not affiliated with Columbia
Management Investment Advisers, LLC or its parent company
Ameriprise Financial, Inc.
AdTrax: 3766112
ALPS: CET001387
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Liz Kennedy 617.897.9343 liz.kennedy@ampf.com
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