Columbia Sustainable International Equity Income ETF (ESGN)

ETF Columbia Sustainable International Equity Income ETF (ESIE)

Profile:

Primary Focus: ESIE invests in large- and mid-cap value stocks of international companies that have strong ESG profiles and are expected to pay significant dividends.

Asset Allocation: The fund primarily invests in equity securities (usually at least 90% of its total assets). It may also invest in American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs).

Investment Strategy: ESIE employs a quantitative model to select stocks based on factors including ESG criteria, value metrics, and dividend yield.

Objective:

The ETF's primary investment goal is to achieve long-term capital appreciation and generate current income through dividends.

Issuer:

Issuer: Columbia Threadneedle Investments

Reputation and Reliability: Columbia Threadneedle Investments is a reputable and experienced global asset management firm with over $563 billion in assets under management (as of March 31, 2023). The firm has a long history of managing international and sustainable investment strategies.

Management: The ETF is managed by a team of experienced portfolio managers with expertise in international equities and sustainable investing.

Market Share:

ESIE has a small market share within the international equity income ETF category, representing approximately 0.1% of the total assets in the category.

Total Net Assets:

As of October 26, 2023, ESIE has approximately $82.9 million in total net assets.

Moat:

Unique Strategies: ESIE's quantitative model for stock selection based on ESG, value, and dividend yield is a differentiator within the international equity income ETF space.

ESG Focus: The fund's focus on sustainable investing attracts investors who seek to align their portfolios with their values while seeking financial returns.

Financial Performance:

Historical Performance: Since its inception in December 2021, ESIE has generated a total return of 2.98% (as of October 26, 2023). This compares to a return of 6.77% for the MSCI EAFE Value Index, the ETF's benchmark.

Benchmark Comparison: While ESIE has underperformed its benchmark over the short period since its inception, it is important to note that the fund has a longer-term investment horizon.

Growth Trajectory:

The demand for sustainable investing is growing rapidly. As investors increasingly seek to incorporate ESG considerations into their portfolios, ESIE is well-positioned to benefit from this trend.

Liquidity:

Average Trading Volume: The average daily trading volume for ESIE is approximately 20,000 shares.

Bid-Ask Spread: The average bid-ask spread for ESIE is relatively tight, indicating that the ETF is fairly liquid and easy to trade.

Market Dynamics:

Economic Indicators: Global economic growth prospects and interest rate policies can impact international equity markets and ESIE's performance.

Sector Growth: The performance of the international value stock market will influence ESIE's returns.

Current Market Conditions: Market volatility and investor sentiment can affect ESIE's price and trading volume.

Competitors:

• iShares International Select Dividend ETF (IDV) - 13.8% market share
• Vanguard International Dividend Appreciation ETF (VIGI) - 10.4% market share
• SPDR S&P International Dividend ETF (DWX) - 9.1% market share

Expense Ratio:

The expense ratio for ESIE is 0.40%.

Investment Approach and Strategy:

Strategy: ESIE does not track a specific index. Instead, it uses a quantitative model to select individual stocks based on ESG, value, and dividend yield criteria.

Composition: The ETF primarily holds large- and mid-cap stocks from developed and emerging markets outside the U.S. These companies are typically in value sectors such as financials, energy, and materials.

Key Points:

• Sustainable international equity income ETF
• Focuses on large- and mid-cap value stocks with strong ESG profiles
• Quantitative model for stock selection
• Seeks to provide long-term capital appreciation and current income
• Relatively small market share and short track record

Risks:

• Volatility: International equities can be more volatile than domestic equities.
• Market Risk: ESIE is subject to risks associated with international stock markets, including political and economic uncertainty, currency fluctuations, and interest rate changes.
• ESG Investing: ESIE's focus on ESG investing may limit its investment options and result in performance that differs from non-ESG funds.
• Expense Ratio: The expense ratio of 0.40% is higher than some comparable ETFs.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation and current income from international equities.
• Investors who prioritize sustainable investing and want to align their portfolios with their values.
• Investors with a higher risk tolerance.

Fundamental Rating Based on AI:

Rating: 7/10

Justification: ESIE benefits from a strong issuer, a unique and potentially successful investment strategy, and a growing demand for sustainable investing. However, its small market share, short track record, and higher expense ratio introduce some risk and limit its overall attractiveness.

Resources and Disclaimers:

• Columbia Threadneedle Investments: https://columbiathreadneedleus.com/
• Morningstar: https://www.morningstar.com/etfs/arcx/esie/quote
• ETF Database: https://etfdb.com/etf/ESIE/
• Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.