Columbia Threadneedle Emerging Markets ETF: the new CT QR Series Emerging Markets Equity Active UCITS ETF has been listed

The CT QR Series Emerging Markets Equity Active UCITS ETF debuts on Xetra, the LSE and SIX Swiss Exchange with an annual fee of 0.30%

The product is now available on the Deutsche Börse Xetra, London Stock Exchange and SIX Swiss Exchange platforms. It is the fourth addition to the ‘Quant Redefined’ (QR Series) range, characterised by the integration of proprietary quantitative analysis, active stock selection and ESG criteria.

The first phase of the active range is now complete

With this addition, the QR Series family is further consolidated, adding the new emerging markets fund to the existing funds dedicated to global, US and European markets. Columbia Threadneedle’s current range of active ETFs therefore includes:

CT QR Series Global Equity Active UCITS ETF

CT QR Series US Equity Active UCITS ETF

CT QR Series European Equity Active UCITS ETF

CT QR Series Emerging Markets Equity Active UCITS ETF

The company has emphasised that this expansion represents a concrete step in its strategy to strengthen its capabilities in active ETFs, offering clients an additional vehicle to access the asset manager’s active management.

Technical details and objectives of the new fund

The fund aims to generate capital growth by investing in shares of companies in emerging markets. The benchmark adopted is the MSCI Emerging Markets Index (NR USD). The active management aims to keep the tracking error within a moderate range, estimated at between 3% and 5% relative to the benchmark. Below are the key figures provided by the company:

The quantitative core of the strategy

The approach adopted is based on a quantitative model developed in-house by Columbia Threadneedle. Stock selection is based on the analysis of three key factors: quality, catalysts and valuation. These elements are weighted according to the specific return characteristics of each sector and supplemented by proprietary assessments. The stated aim is to identify companies with the highest potential for long-term value creation, generating alpha through a systematic and replicable process.

Christopher Lo, portfolio manager of the new ETF, explained: “ Emerging markets represent one of the most diversified and dynamic areas of the entire global equity universe, but, at the same time, they present significant inefficiencies. Our approach combines systematic research with truly active management to identify the companies most likely to outperform, whilst avoiding those with weaker prospects. Our rigorous investment process offers investors an effective active solution to access emerging market opportunities through the ETF structure. ”

Michaela Collet Jackson, Head of Distribution and Marketing EMEA, added: “Active ETFs are an important component in the evolution of our investment offering. The launch of this fourth active ETF in the region reflects our commitment to building a range that complements our established expertise as active managers, whilst responding to growing client demand for active, transparent and cost-efficient investment strategies. We have seen strong interest in our QR Series since the launch of the first active ETFs last year, and we are delighted to be able to offer this investment opportunity in emerging markets to investors across Europe.”

The complete picture of the QR Series

In addition to the new sub-fund, Columbia Threadneedle’s active range includes the other three ETFs already in operation, the details of which are summarised in the following comparative table:

Future developments

With this listing, Columbia Threadneedle has completed its initial plan to launch the QR Series range, which comprised four ‘core’ active equity ETFs. The company had previously indicated its intention to further expand its range of active ETFs, with the possibility of including fixed-income strategies in the future. However, this prospect has not been updated or confirmed in the context of today’s launch.

Final summary

Columbia Threadneedle has expanded its range of active ETFs with the launch of the CT QR Series Emerging Markets Equity Active UCITS ETF, the fourth fund in the “Quant Redefined” series. Listed on three European exchanges (Xetra, LSE and SIX), the fund charges a total annual fee of 0.30 per cent and tracks the MSCI Emerging Markets (NR USD) index, maintaining an expected tracking error of between 3 per cent and 5 per cent.