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Announcement

Columbia Threadneedle Investments launches Columbia US Social Bond Fund

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Columbia Threadneedle Investments has launched the Columbia US Social Bond Fund (CONAX), a fixed income mutual fund that seeks total return through investments that aim to support and fund socially beneficial activities and developments.

The fund is designed as a new solution for investors who want to support positive social outcomes while they pursue competitive financial returns. Additionally, the fund offers investors potential tax advantages.

The portfolio managers invest in municipal and corporate bonds. They target municipal bonds in sectors they believe are aimed toward positive environmental and social development, such as education, health care, community services, housing, water and other socially impactful sectors. The portfolio managers, when considering investments in corporate bonds, will review the sustainability and social impact of the issuer’s activities, products and services. The social outcome of each security will be assessed using a proprietary framework. In addition, because a majority of the fund is invested in municipal bonds, it qualifies as a municipal bond fund and the income from the municipal bond holdings will be exempt from federal income taxes.

The fund is managed by James Dearborn, Chad Farrington, CFA and Thomas Murphy, CFA.

“We’re excited about the launch of the Columbia U.S. Social Bond Fund. This fund offers investors the potential for competitive after-tax returns that can be used as part of a core fixed income allocation. We will use the portfolio’s capital to find debt securities that not only meet our rigorous investment standards but also whose proceeds are used to support positive social change,” said James Dearborn, Portfolio Manager and Head of Municipal Bonds at Columbia Threadneedle Investments.

Columbia Threadneedle Investments chose Sustainalytics, a leading provider of environmental, social and governance (ESG) research, to collaborate with the fund’s managers in the development of a proprietary social assessment framework. Within that framework, bonds that have been identified as fundamentally sound investments are then assessed on their positive social impact. Sustainalytics will also produce an independent social impact report for the fund annually.

"We are delighted to be partnering with Columbia Threadneedle Investments on this innovative offering,” said Sustainalytics’ CEO Michael Jantzi. “Enabling investors to achieve competitive financial returns while having a positive impact on society is a fundamental tenet of Sustainalytics’ core ESG research mission. We look forward to working with Columbia Threadneedle Investments to deliver on the fund’s investment strategy.”

In making investment decisions, the fund’s managers draw on Columbia Threadneedle Investments’ rigorous fundamental credit research as well as our global Environmental, Social and Governance (“ESG”) research and investment capabilities. Columbia Threadneedle Investments has integrated ESG considerations into its investment research capabilities and ownership practices globally in the belief that these factors can benefit long-term financial performance. This fund is the second fixed income offering from Columbia Threadneedle Investments for investors interested in supporting positive social outcomes, the first being the Threadneedle UK Social Bond Fund, which launched in December 2013.2

Robert McConnaughey, Global Head of Research at Columbia Threadneedle Investments, added, “Socially responsible investing (“SRI”) has historically come with the perception that investors had to potentially compromise their financial goals to include a focus on social responsibility in their portfolio. We believe that does not have to be the case. There is a growing evolution in SRI from the traditional negative screening approach – or the avoidance of certain investments – to the proactive pursuit of investments in financially sound and well-disciplined companies, municipalities, and other entities that are also seeking to make a positive impact on society. We believe that a research approach that incorporates ESG factors as part of broader fundamental process can provide a more complete perspective on longer term risk and opportunities for investors.”

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