Smart beta ETFs help investors gain exposure to time-tested, outperforming factor-based investment styles that many money managers have utilized over the years.
“Columbia Threadneedle has done a such a great job of analyzing and reviewing the drivers of performance of all of its strong funds and that gives us a factor library for us to work with,” Marc Zeitoun, Head of Strategic Beta for Columbia Threadneedle, said at the recent Morningstar ETF Conference.
For example, Columbia Threadneedle offers a line of dividend-themed, smart-beta ETFs that cover environmental, social and governance principles, including the Columbia Sustainable U.S. Equity Income ETF (NYSEArca: ESGS), Columbia Sustainable International Equity Income ETF (NYSEArca: ESGN), Columbia Sustainable Global Equity Income ETF (NYSEArca: ESGW).
The Columbia products provide exposure to companies that may offer sustainable levels of income as well as total return opportunity. Specifically, the underlying indices will screen for companies based on dividend yield, dividend growth and cash flow factors, which could help target those with the ability to support dividend growth. Moreover, the benchmarks include a “sustainable” focus, or companies that adhere to environmental, social and governance (ESG) practices.