Columbia Threadneedle Unveils New Fixed-Income Strategic Beta ETF

Oct 12 2017 | 8:40pm ET

Columbia Threadneedle has debuted a new strategic beta liquid alternative ETF that will follow a rules-based approach to invest in six fixed-income sectors.

The new fund, named the Columbia Diversified Fixed Income Allocation ETF, will track Bloomberg’s Beta Advantage Multi-Sector Bond Index, the company said in a statement. However, as a strategic beta ETF, the fund will incorporate active insights and is outcome-oriented. It will trade under the ticker symbol DIAL, the company added.

A departure from the more traditionally segmented active vs. passive approach, Columbia Threadneedle’s strategic beta offering draws upon the company’s expertise as a fixed income manager to create the strategic beta rules that anchor the index.

The fund will seek more sources of income and avoid the overconcentration found in traditional fixed-income benchmarks, the statement continued. Able to serve as a core fixed income allocation, DIAL’s strategy will be focused on balancing yield, quality and liquidity and will engage 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. 

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, the firm added. 

Boston-based Columbia Threadneedle Investments is the global asset management group of Ameriprise Financial. The company provides a broad range of actively managed investment strategies and solutions for individual, institutional and corporate clients around the world. The company manages $473 billion of assets across developed and emerging market equities, fixed income, asset allocation solutions and alternatives.

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