Today, Columbia Threadneedle Investments announced in a Press release the launch of their most recent fixed income ETFs with the addition of the Columbia Short Term Bond AND F. This AND F focuses on generating income from four different parts of the debt markets: US investment grade corporations, US investment grade securitized debt, US high yield bonds, and sovereign and quasi-sovereign debt markets emerging.
SBND is a short-lived portfolio that seeks to generate income without taking excessive credit risk or sacrificing return by balancing quality, return and liquidity. The fund takes a rules-based indexing approach that seeks to balance concerns about reduced returns in short-term bond investments.
“In a challenging interest rate environment, investors may need to adjust their fixed income allocations and broaden their set of income opportunities,” said Ronald Stahl, senior portfolio manager and lead short duration and stable value at Columbia Threadneedle Investments in the press release. “Unlike passively managed short-term bond funds that track traditional benchmarks, a strategic beta portfolio that tracks a custom rule-based index designed to mitigate duration risk while capturing higher income opportunities can diversify and further complement client portfolios. “
The fund seeks to track the Beta Advantage Short Term Bond Index, a fixed-weight composite index that is a combination of six different Bloomberg flagship indices, with each sub-index’s holdings weighted to market value.
- The Bloomberg US Corporate Total Return Index contains high quality, fixed rate, taxable, US dollar denominated debt securities with a nominal amount of $ 250 million or more and with a maturity of at least one year. but less than seven years old. This debt can be issued by US and non-US industrial companies, utilities and financial institutions, with a credit rating between BAA1 and BAA3. Among the issuers, the first four issues are selected according to their outstanding amount.
- The Bloomberg US Corporate High Yield Total Return Index is comprised of publicly issued, US dollar denominated, lower quality, fixed rate and taxable securities. They must have a credit rating between BA1 and BA3, an unpaid face value greater than $ 500 million and a remaining maturity of less than five years. This sub-index does not include payment-in-kind or partial payment-in-kind instruments.
- Bloomberg US MBS The Total Return Index is comprised of US agency mortgage securities that are backed by mortgage pools and issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. The securities it contains have a 15-year fixed rate program and were issued 32 months or less ago.
- The Bloomberg non-agency CMBS The Qualifying Aggregate Index is comprised of publicly issued fixed rate mortgage-backed securities denominated in US dollars and unsecured by an agency (CMBS). The Index only holds securities with a weighted average residual maturity of less than five years.
- The American Bloomberg aggregate abs The Total Return Index is comprised of fixed rate, publicly issued, US dollar denominated credit cards, automobiles, device payment plans, equipment and service asset backed securities. stranded cost public (abs). The Index only holds automotive bonds with a weighted average residual maturity of less than five years.
- Bloomberg Emerging Markets USD The Aggregate Total Return Index contains emerging market securities which are fixed rate, non-investment grade sovereign and quasi-sovereign debt securities that have a maturity of at least one year but less than six years. Private issuers are excluded and debt must have a rating between BAA1 and BA3 and have a minimum outstanding amount of at least $ 1 billion. Issuers in the sub-index are capped at a 10% national weighting based on market value.
The index uses a rules-based strategic beta approach and has the following exposure allocations: 30% to US securitized debt, 30% to high-quality US corporate bonds, 20% to high-grade US corporate bonds. yield and 20% to emerging markets sovereign and quasi-sovereign debt. The duration of the index should be 3.5 years or less.
The fund does not invest in assets on the basis of their merits nor does it conduct any investment research or analysis, but only seeks to correlate its performance with the index regardless of market conditions, and it does not take no defensive positioning.
SBND joins two other actively managed strategic beta fixed income ETFs from Columbia Threadneedle: the Columbia Diversified Fixed Income Allocation AND F (DIAL) and the Columbia Multi-Sector Municipal Revenue AND F (MUST).
The fund has an expense ratio of 0.25% and is replenished and rebalanced monthly, and it pays monthly distributions.
For more news, information and strategy visit AND F Tendencies.