Smart-beta ETFs are set to grow 19% a year.

Hartford Funds says it has struck a deal to buy smart beta ETF provider Lattice Strategies.

The news comes one week after Columbia Threadneedle, part of Ameriprise Financial (AMP), announced that it is acquiring Emerging Global Advisors, a maker of smart beta portfolios focused on emerging markets.

BlackRock’s iShares business recently projected that smart beta ETF assets will reach $1 trillion globally by 2020 and $2.4 trillion by 2025.

“We are excited to acquire Lattice Strategies’ distinctive ETF offering and investment capabilities, which we foresee being increasingly demanded by financial professionals and their clients,” said Jim Davey, president of Hartford Funds, in a statement. “The strategic beta space is a natural extension of Hartford Funds’ actively managed platform, enabling us to enter a fast-growing category that will serve as a foundation for growth in the future.”

The acquisition is expected to close in the third quarter.

Lattice Strategies now sells strategic-beta ETFs that use a multi-factor approach to security selection and a “deliberate allocation of risk,” according to Hartford. Its current ETF lineup includes Lattice Developed Markets (ex-US) Strategy ETF (RODM), Lattice US Equity Strategy ETF (ROUS), Lattice Global Small Cap Strategy ETF (ROGS) and Lattice Emerging Markets Strategy ETF (ROAM).

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, BlackRock says. “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 last week.

Hartford Funds has some $76 billion in assets invested in about 45 mutual funds.

In addition to its smart-beta strategies, Lattice Strategies works on multi-asset solutions, including liquid products, alternatives, equity and income strategies. After the deal with Hartford is completed, Latice will keep an office in San Francisco, where it has some 20 employees.

“We look forward to joining the Hartford Funds team,” said Ted Lucas, managing partner and chairman of the investment committee for Lattice Strategies, in a press release. “Our firms bring complementary strengths that will provide advisors and their clients with the strategies they need to address the investment challenges they are attempting to solve.”

There have been similar deals in recent years, such as OppenheimerFunds’ purchase of Revenue Shares in 2015 and Janus Capital’s acquisition of VelocityShares in 2014.

— Check out Columbia Threadneedle Moves Into Expanding Smart Beta Field on ThinkAdvisor.