Columbia Threadneedle Moves Into Expanding Smart Beta Field

Columbia Threadneedle, part of Ameriprise Financial (AMP), says one of its units is acquiring Emerging Global Advisors, a maker of smart-beta portfolios focused on emerging markets. This news emerged just as BlackRock’s iShares business projected that smart-beta ETF assets will reach $1 trillion globally by 2020 and $2.4 trillion by 2025.

Current smart beta ETF assets are about $282 billion, reflecting an annual organic growth rate of 19%, double the growth rate of the overall ETF market. “Minimum volatility and factor (multi and single) funds are expected to be key drivers of future growth and represent over 60% of new smart beta flows through 2025,” according to a statement released by BlackRock iShares on Thursday.

“The team is excited about joining Columbia Threadneedle Investments and building on our complementary strengths to deliver smart-beta strategies across asset classes to investors,” said EGA CEO Marten Hoekstra, who formerly led UBS’ wealth management operations in the Americas, in a statement on Wednesday.

As part of its efforts to enter the smart beta marketplace, Columbia Threadneedle has filed a preliminary registration statement with the Securities and Exchange Commission regarding multiple equity smart-beta ETFs, including the Columbia Sustainable Global Equity Income ETF, Columbia Sustainable International Equity Income ETF and Columbia Sustainable U.S. Equity Income ETF (referred to as Columbia Beta AdvantageETFs).