Columbia Threadneedle Investments has expanded its European product range with the listing of two actively managed UCITS ETFs on the London Stock Exchange.
Sign up to our free newsletters
By ETFWorld.co.uk
Christine Cantrell, Head of Active ETFs, EMEA Distribution, at Columbia Threadneedle
The launches are the first in a series of four planned “Quant Redefined” (QR) equity ETFs for the European market.
The new funds are designed to provide core equity exposure through a disciplined, research-driven active management process.
Investment Strategy and Process
The ETFs employ a proprietary quantitative model, developed over 20 years, which is enhanced by insights from the firm’s global fundamental research team.
The investment process follows three steps:
Research: All stocks in the investable universe are analyzed and rated to identify those with the highest potential to outperform.
Rank: Stocks are ranked from “strong buy to strong sell.” The process excludes those expected to underperform, reducing the potential investment universe by up to two-thirds and resulting in a concentrated portfolio of high-conviction holdings.
Recalibrate: The portfolio is rebalanced every six months, with holdings reviewed daily to manage downside risk.
This approach is designed to achieve a tracking error of 2-4% against the benchmark, indicating a significant active share.
ESG Integration and Article 8 Compliance
Both funds are classified under Article 8 of the Sustainable Finance Disclosure Regulation (SFDR), meaning they promote environmental or social characteristics. Their investment policy integrates a proprietary ESG materiality rating model and applies specific exclusions. The funds will not invest in companies deriving certain revenues from coal or tobacco, nor in companies involved in controversial weapons or those that breach international standards.
The strategy commits to investing at least 50% of assets in companies aligned with environmental or social characteristics and at least 20% in sustainable investments.
Firm Context and Market Launch
The European QR Series launch follows Columbia Threadneedle’s recent expansion of its US ETF lineup, where it added six new active and research-enhanced strategies. The firm now manages 20 US-listed ETFs.
In Europe, the firm plans to follow the US and European equity ETFs with global and emerging market ETFs, completing a core active equity range. The European ETFs are also listed on the Deutsche Börse Xetra and SIX Swiss Exchange.
Key Considerations for Investors
Active Management Risk: The funds may significantly diverge from their benchmarks and could underperform.
ESG Constraints: The exclusionary screens reduce the investable universe, which may affect performance relative to unrestricted benchmarks.
New Funds: As new strategies, they have no operational track record in Europe.
Costs: The Total Expense Ratios (TERs) of 0.25% and 0.20% are competitive for actively managed Article 8 equity ETFs.
| Product Name | CT QR Series European Equity Active UCITS ETF Acc EUR |
| ISIN | IE000SA19OL0 |
| SEDOL | BTQM1C1 |
| Currency | GBP |
| TER | 0.25% |
| Product Name | CT QR Series European Equity Active UCITS ETF Acc EUR |
| ISIN | IE000SA19OL0 |
| SEDOL | BTQM1B0 |
| Currency | EUR |
| TER | 0.25% |
| Product Name | CT QR Series US Equity Active UCITS ETF Acc USD |
| ISIN | IE000953I6Z4 |
| SEDOL | BTQM1H6 |
| Currency | GBP |
| TER | 0.20% |
| Product Name | CT QR Series US Equity Active UCITS ETF Acc USD |
| ISIN | IE000953I6Z4 |
| SEDOL | BTQM1G5 |
| Currency | USD |
| TER | 0.20% |
Source: ETFWorld
Subscribe to Our Newsletter
