Columbia Threadneedle Investments today announced that the Columbia Diversified Fixed Income Allocation ETF (NYSE Arca: DIAL), the first strategic beta multisector fixed income ETF, reached its three-year anniversary on October 12, 2020, and soon after reached $500 million in assets. DIAL’s strong performance has earned it a five-star Overall Morningstar Rating among 289 ETFs and open-end funds in the U.S. Multisector Bond category, as of October 31, 2020 based on risk-adjusted returns.
Designed and managed by portfolio managers who run a related active multi-sector bond strategy, DIAL is an all-in-one approach to fixed income investing. It provides investors with a diversified portfolio of fixed income securities across six sectors and is designed to serve as a core fixed income allocation focused on balancing yield, quality and liquidity. These sectors include 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. DIAL tracks the Beta Advantage® Multi-Sector Bond Index, which provides a rules-based approach to address investor interest for consistent income with downside protection, regardless of the interest rate environment.
“We launched DIAL in 2017 based on our conviction that few benchmark ETFs on the market appropriately addressed clients’ fixed income needs around yield, quality and liquidity,” said Marc Zeitoun, Head of Strategic Beta. “We’re proud that since its inception, DIAL has done precisely what we set out for it to do by drawing on Columbia Threadneedle’s expertise as a leading active fixed income manager.”
Gene Tannuzzo, Deputy Global Head of Fixed Income and Portfolio Manager of DIAL, said, “We have been pleased to see DIAL deliver on its core investment objective during such a volatile market in 2020. DIAL demonstrates that we can deliver the core investment philosophy of our active fixed income products in a convenient and accessible strategic beta framework.”
Columbia Threadneedle Investments was named Best Smart Beta Fixed Income ETF Issuer ($100M-$10BN) by the ETF Express US Awards 2020, which recognizes excellence among ETF issuers and service providers across a wide range of categories. This year, the ETF Express US Awards 2020 worked with Bloomberg, who pre-selected ETF Issuers based on their 12-month performance in the period leading up to these awards. There were 1,814 votes cast in total with 23% of those coming from investors.
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 $498 billion1 of assets across developed and emerging market equities, fixed income, asset allocation solutions and alternatives.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies.
1As of September 30, 2020. Includes all assets managed by entities in the Columbia and Threadneedle group of companies.
Past performance is not a guarantee of future results.
Carefully consider the fund‘s investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the fund’s prospectus, which may be obtained by calling 888.800.4347 or by visiting the fund‘s website www.columbiathreadneedleus.com/etf to view or download a prospectus. Read the prospectus carefully before investing. Investing involves risks, including possible loss of principal.
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. 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. In addition to the multi-sector bond strategies employed, the fund may invest in other securities, including private placements. The Fund may have portfolio turnover, which may cause an adverse cost impact. There may be additional portfolio turnover risk as active market trading of the fund’s shares may cause more frequent creation or redemption activities that could, in certain circumstances, increase the number of portfolio transactions as well as tracking error to the Index and as high levels of transactions increase brokerage and other transaction costs and may result in increased taxable capital gains. 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 volume.
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The Morningstar Ratings for the Columbia Diversified Fixed Income Allocation ETF as of October 31, 2020 for the overall and three-year period are 5 stars, 5 stars, among 289, 289 Nontraditional Bond funds and are based on a Morningstar Risk-Adjusted Return measure.
For each fund with at least a three-year history, Morningstar calculates a Morningstar RatingTM used to rank the fund against other funds in the same category. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly excess performance, without any adjustments for loads (front-end, deferred, or redemption fees), placing more emphasis on downward variations and rewarding consistent performance. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages). The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics.
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® Multi-Sector Bond Index is a rules-based multi-sector strategic beta approach to measuring the performance of the debt market through representation of six sectors, each focused on yield, quality and liquidity of the particular eligible universe. The index will have exposure to the following six sectors of the debt market: U.S. Treasury securities; global ex-U.S. treasury securities; U.S. agency mortgage-backed securities; U.S. corporate investment-grade bonds; U.S. corporate high-yield bonds; and emerging markets sovereign debt. 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.
© 2020 Columbia Management Investment Advisers, LLC. All rights reserved.