Columbia Threadneedle Investments has launched three equity income smart beta exchange-traded funds (ETFs), the first in a series from the new Columbia Beta Advantage family of rules-based, factor-driven, smart beta ETFs.
Columbia Beta Advantage products are thoughtfully constructed by incorporating Columbia Threadneedle’s active investing experience and insight into rules that, in the case of these three ETFs, provide exposure to companies that have certain attributes believed to offer sustainable levels of income, as well as total return opportunity. These funds will track underlying indices calculated by MSCI Inc.
The three new ETFs, which are now trading on NYSE Arca, are: Columbia Sustainable US Equity Income ETF (ESGS); Columbia Sustainable International Equity Income ETF (ESGN); and Columbia Sustainable Global Equity Income ETF (ESGW).
Each ETF’s underlying index is designed to invest in companies based on dividend yield, dividend growth and cash flow factors. These factors are intended to lead to investing in companies that have the financial stability to support and grow future dividend payments. The ETFs will replicate custom-designed indices calculated by MSCI. A distinctive feature of the indices is their “sustainable” focus, which is implemented by screening companies based on their environmental, social and governance (ESG) practices. This sustainability feature further differentiates these ETFs in the smart beta marketplace.
“We’re excited about the launch of our first Beta Advantage funds. We believe that these types of strategies have the potential to help advisors and their clients meet important investment goals, such as generating income, growing assets and managing volatility,” says Colin Moore, global chief investment officer at Columbia Threadneedle Investments.
Columbia Sustainable US Equity Income ETF (ESGS) tracks the Beta Advantage Sustainable US Equity Income 100 Index. The index consists of 100 stocks that provide investors with exposure to US large- and mid-cap companies.
Columbia Sustainable International Equity Income ETF (ESGN) tracks the Beta Advantage Sustainable International Equity Income 100 Index. The index consists of 100 stocks that provide investors with exposure to foreign (developed market) large- and mid-cap companies.
Columbia Sustainable Global Equity Income ETF (ESGW) tracks the Beta Advantage Sustainable Global Equity Income 200 Index. The index consists of 200 stocks that provide investors with exposure to US and foreign (developed market) large- and mid-cap companies.
