Core & Value Smart Beta ETFs Filed

Core & Value Smart Beta ETFs Filed

Columbia Threadneedle plans two domestic smart beta funds.

Reviewed by: Heather Bell
Edited by: Heather Bell

In a break with its usual offering, Columbia Threadneedle has filed for two ETFs that offer smart-beta plays on domestic stocks. Currently, only two of the firm’s ETFs cover U.S. securities. But the Columbia Research Enhanced Core ETF (RECS) and the Columbia Research Enhanced Value ETF (REVS) will both track stocks selected from the Russell 1000 Index of large- and midcap stocks.

The filing does not provide a listing exchange or expense ratios.


The underlying index for RECS evaluates the securities of the Russell 1000 based on quality, value and “catalyst,” which the filing indicates is related to earnings and price momentum. Stocks are scored between 1 (best) and 5 (worst), with all stocks rated 4 or 5 excluded from the index. Meanwhile, all stocks rated 1 or 2 are included by sector. Stocks with a 3 rating are included if there are none rated 1 or 2.

Selected companies are weighted by market capitalization, but sector weights are kept consistent with their weights in the original Russell 1000 index, according to the prospectus.

The document also notes that all stocks classified under biotechnology are automatically included in the index. The issuer expects the index to hold anywhere from 325 to 400 of the original Russell 1000 component stocks.

The methodology for REVS is essentially the same, but it derives its components from the Russell 1000 Value Index and is expected to hold between 250 and 290 securities at any given time, according to the fund documents.

Both indexes are rebalanced semiannually.


Columbia Threadneedle seems to be going through a bit of a shakeup in terms of its lineup. It recently announced it would be shutting down four of its 12 existing ETFs as of June 14. The following funds all cover developing markets and have $30 million or less in assets under management:

It also has slashed the expense ratios on two of its ETFs, bringing the price of the Columbia Multi-Sector Municipal Income ETF (MUST) from 0.28% down to 0.23% and the price of the Columbia EM Core ex-China ETF (XCEM) from 0.35% down to 0.16%, a reduction of more than 50%.

With these two domestically focused filings, the firm seems to be changing direction.

Contact Heather Bell at [email protected]

Heather Bell is a former managing editor of She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.