Columbia Threadneedle Investments today announced the expansion of its exchange-traded fund (ETF) offerings with the launch of two actively managed, fully-transparent fixed income ETFs: the Columbia U.S. High Yield ETF (NYSE Arca: NJNK) and the Columbia Short Duration High Yield ETF (NYSE Arca: HYSD). Both ETFs draw on Columbia Threadneedle’s extensive high yield capabilities and are designed to provide investors and allocators with compelling investment options when building portfolios. Launching these strategies as ETFs addresses an increasing market demand for high current income in a low-cost, tax-efficient structure.
Columbia Threadneedle’s fixed income team is made up of more than 180 professionals managing over $210 billion in fixed income assets.1 Under that umbrella, the high yield team has experience managing a broad offering across the high yield spectrum, and these two new ETFs will benefit from their expertise. NJNK is managed by Daniel DeYoung, a high yield senior portfolio manager and David Janssen, a multi-sector fixed income portfolio manager. HYSD is managed by Brett Kaufman and Kris Keller, senior portfolio managers on the high yield team.
“We believe that high yield bonds have an important role to play in a diversified portfolio and that that investors should consider making a long-term allocation to the asset class to capture the high levels of income that it can offer,” says Dan DeYoung, senior portfolio manager, High Yield Fixed Income. “With potential cuts to the federal funds rate on the horizon, the benefits of thoughtful exposure to high yield are compelling.”
Marc Zeitoun, Head of North America Product and Business Intelligence, said: “Our investment teams leverage decades of experience in fundamental research, bottom-up credit selection and risk management to build high yield portfolios aimed at generating strong risk-adjusted returns while intentionally avoiding some of the riskiest segments of the high yield market. This commitment to original, independent research is central to our investment philosophy and how we deliver value to investors. With NJNK and HYSD, we expect to provide clients with investment solutions that offer greater potential for alpha relative to indexed benchmarks, in a wrapper that emphasizes tax efficiency and low cost. These important additions to our ETF range reflect our commitment to offering investors greater choice in how they access our investment strategies.”
Fund Name | Ticker | Performance Benchmark | Portfolio Managers |
Columbia U.S. High Yield ETF | NJNK | Bloomberg U.S. Corporate High Yield Index | Dan DeYoung David Janssen |
Columbia Short Duration High Yield ETF | HYSD | ICE BofA 0-5 Year BB-B U.S. High Yield Constrained Index | Brett Kaufman Kris Keller |
NJNK is a fully transparent, rules-based ETF with a discretionary active overlay designed to pursue strong risk adjusted returns through varying market environments. The Fund seeks to produce high current income with a strategy that focuses on reducing exposure to the lowest quality, highest risk issuers while also avoiding higher- rated yet low-yielding securities.
HYSD is a fully transparent, actively managed ETF that focuses on short duration high yield corporate bonds and floating rate loans. The short duration high yield strategy aims to generate alpha comparable to other high yield portfolios managed by the team, powered by rigorous fundamental credit research. The process strongly emphasizes risk management due to high yield’s asymmetrical risk profile and is designed to limit downside risk. The ETF will leverage the firm’s institutional Short Duration High Yield separate account strategy that has been in place for nearly 10 years.
NJNK and HYSD are the latest additions to Columbia Threadneedle’s actively managed ETF offerings, which also include the Columbia U.S Equity Income ETF (NYSE Arca: EQIN), Columbia International Equity Income ETF (NYSE Arca: INEQ) and the Columbia Semiconductor and Technology ETF (NYSE Arca: SEMI). With the addition of these two new actively managed, fully transparent ETFs, Columbia Threadneedle now offers 14 ETFs across the active/indexed spectrum.
About Columbia Threadneedle Investments
Columbia Threadneedle Investments is a leading global asset manager that provides a broad range of investment strategies and solutions for individual, institutional and corporate clients around the world. With more than 2,500 people, including over 650 investment professionals based in North America, Europe and Asia, we manage $642 billion of assets across developed and emerging market equities, fixed income, asset allocation solutions and alternatives.2
Columbia Threadneedle Investments is the global asset management group of Ameriprise Financial, Inc. (NYSE: AMP). For more information, please visit columbiathreadneedleus.com.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies.
1, 2 As of June 30, 2024
The views expressed are as of the date given, may change as market or other conditions change and may differ from views expressed by other Columbia Management Investment Advisers, LLC (CMIA) associates or affiliates. Actual investments or investment decisions made by CMIA and its affiliates, whether for its own account or on behalf of clients, may not necessarily reflect the views expressed. This information is not intended to provide investment advice and does not take into consideration individual investor circumstances. Investment decisions should always be made based on an investor's specific financial needs, objectives, goals, time horizon and risk tolerance. Asset classes described may not be appropriate for all investors. Past performance does not guarantee future results, and no forecast should be considered a guarantee either. Since economic and market conditions change frequently, there can be no assurance that the trends described here will continue or that any forecasts are accurate.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Funds before investing. To obtain a prospectus containing this and other important information, please visit https://www.columbiathreadneedleus.com/etf to view or download a prospectus. Read the prospectus carefully before investing.
Columbia Management Investment Advisers, LLC serves as the investment manager to the ETFs. The ETFs are distributed by ALPS Distributors, Inc., which is not affiliated with Columbia Management Investment Advisers, LLC, Columbia Management Investment Distributors, Inc. or its parent company Ameriprise Financial, Inc.
General ETF Risks
There are risks involved with investing in ETFs, including the loss of the principal amount that you invest.
ETF shares are bought and sold throughout the trading day at their market price, not their NAV, on the exchange on which they are listed. ETF shares may trade in the market at a premium or discount to their NAV. A financial intermediary (such as a broker) may charge a commission to execute a transaction in ETF shares, and an investor also may incur the cost of the spread between the price at which a dealer will buy ETF shares and the somewhat higher price at which a dealer will sell ETF shares.
ETF shares are not individually redeemable from an ETF. Only market makers or Authorized Participants may trade directly with an ETF, typically in large blocks of shares, as disclosed in each Fund’s prospectus.
Fund Investment Risks
Due to its active management, the Fund could underperform its benchmark index and/or other funds with similar investment objectives and/or strategies.
Fixed income securities Involve interest rate, credit, inflation, illiquidity, and reinvestment risks.
Interest rate risk is the risk that fixed income securities will decline in value because of changes in interest rates. Generally, the value of debt securities falls as interest rates rise. Fixed income securities differ in their sensitivities to changes in interest rates. Fixed income securities with longer effective durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter effective durations. Effective duration is determined by a number of factors including coupon rate, whether the coupon is fixed or floating, time to maturity, call or put features, and various repayment features.
Credit risk is the risk that the value of debt instruments may decline if the borrower or the issuer thereof defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial obligations, such as making payments to the Fund when due. Credit rating agencies assign credit ratings to certain debt instruments to indicate their credit risk. A rating downgrade by such agencies can negatively impact the value of such instruments. Lower-rated or unrated instruments held by the Fund may present increased credit risk as compared to higher-rated instruments. Non-investment grade debt instruments may be subject to greater price fluctuations and are more likely to experience a default than investment grade debt instruments and therefore may expose the Fund to increased credit risk.
Below investment-grade securities, or “junk bonds,” are more likely to pose a credit risk, as the issuers of these securities are more likely to have problems making interest and principal payments than issuers of higher-rated securities. Lower-rated securities may be more susceptible to real or perceived adverse economic and competitive industry conditions than higher-grade securities, and prices of these securities may be more sensitive to adverse economic downturns or individual corporate developments. If the issuer of the securities defaults, the ETF may incur additional expenses to seek recovery.
Floating rate loans typically present greater risk than other fixed-income investments as they are generally subject to legal or contractual resale restrictions, may trade less frequently and experience value impairments during liquidation.
Foreign investments subject the fund to risks, including political, economic, market, social and others within a particular country, as well as to currency instabilities and less stringent financial and accounting standards generally applicable to U.S. issuers.
As a non-diversified fund, holding fewer investments increases the risk that a change in the value of any one investment could affect the overall value of the Fund more than it would affect that of a diversified fund holding a greater number of investments.
Although the Fund’s shares are listed on an exchange, there can be no assurance that an active, liquid or otherwise orderly trading market for shares will be established or maintained. The Fund may have portfolio turnover, which may cause an adverse cost impact.
Investing involves risks, including the risk of loss of principal.
Market risk may affect a single issuer, sector of the economy, industry, or the market as a whole.
Although the Fund’s shares are listed on an exchange, there can be no assurance that an active, liquid or otherwise orderly trading market for shares will be established or maintained. The Fund may have portfolio turnover, which may cause an adverse cost impact.
This fund is new and has limited operating history.
AdTrax: CTNA7001132.1-RUSH
ALPS: CET002183
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