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Portfolio > ETFs

Columbia Threadneedle to Buy Smart-Beta Group

By Janet Levaux

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Columbia Threadneedle, part of Ameriprise Financial, 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 BlackRock iShares’ recent analysis.

“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.

As part of its efforts to enter the smart-beta marketplace, Columbia Threadneedle has filed a preliminary registration statement with the SEC regarding multiple equity smart-beta ETFs, including 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 Advantage ETFs).

BlackRock said recently that it had launched nine new iShares Edge MSCI Multifactor Sector ETFs, which expanded the iShares suite of multifactor ETFs to 15 funds and includes sector exposures for the first time.

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