Columbia Threadneedle Investments is to license Precidian’s ActiveShares exchange traded fund methodology.
The Precidian model, subject to applicable regulatory approvals, would allow Columbia Threadneedle to deliver its actively-managed investment strategies in an ETF without disclosing the ETF’s portfolio holdings daily, as required of actively managed ETFs. Precidian is currently seeking approval from the Securities and Exchange Commission (SEC) for the use of ActiveShares by asset managers.
Dan Beckman, Head of US Product at Columbia Threadneedle, says: “We are committed to product innovation and delivering our best investment management thinking in a range of vehicles to meet client needs. ActiveShares is an innovative structure that has significant potential as a tax-efficient vehicle for our active investment strategies. We value the optionality this license agreement affords us as we develop and enhance our ETF suite.”
Columbia Threadneedle’s ETF suite consists of 12 funds, including both strategic beta and thematic beta offerings that span US and global equity, emerging market equity and fixed-income strategies. This line-up includes the recently launched Columbia Multi-Sector Municipal Income ETF (NYSE Arca: MUST), the industry’s first strategic beta municipal income ETF.
Columbia Threadneedle joins other leading asset managers in licensing Precidian’s intellectual property. Precidian’s ActiveShares structure seeks to combine the most beneficial aspects of the traditional mutual fund with the efficiencies and flexibilities of an ETF. The patented ETF structure seeks to provide asset managers with the ability to generate alpha without daily disclosure of their proprietary strategies while simultaneously creating significant improvements in tax efficiency, manager flexibility and lower operating costs. Investors also can enjoy significant benefits associated with intraday access to their money through transactions on regulated exchanges and simplified choice through a single share class.