Columbia International Equity Income ETF (INEQ)

ETF Columbia International Equity Income ETF (CIEL) Summary

Profile:

Focus: CIEL invests in international companies with strong dividend track records, aiming to generate current income and long-term capital growth. Its target sectors include financials, energy, and materials, among others.

Asset Allocation: CIEL focuses on large-cap and mid-cap international equities across developed countries.

Investment Strategy: The fund employs active management, seeking to identify undervalued stocks with solid dividend potential through fundamental analysis.

Objective:

CIEL's primary goal is to achieve high current income with a secondary emphasis on capital appreciation by investing in international dividend-paying stocks.

Issuer:

Issuer: Columbia Threadneedle Investments

Reputation and Reliability:

• Established investment manager founded in 1997, known for their long-term approach, active management, and commitment to sustainability, evidenced by their AUM exceeding £578.8 billion (as of December31st 2022)
• Holds strong ratings from major credit agencies (A+ from A.M. Best and Aa2 from Moody's).

Management:

• Experienced leadership team consisting of industry veterans who manage over $4.2 billion in international equity portfolios.
• Their deep-rooted global research capabilities provide the team with valuable insights for strategic stock selection.

Market Share:

CIEL holds approximately 0.04% of the market share in its category (Morningstar Category: International Large/Mid-Cap Value, as of August 2023).

Total Net Assets:

CIEL boasts $586.87 million in net assets (as of October 27, 2023).

Moat:

Competitive Edge: CIEL stands out due to:

• Its unique focus on undervalued international equity with robust dividend payouts, catering to a specific investor type seeking stable income streams.
  • Its experienced and well-regarded management team, known for its strong performance in managing international equity portfolios.
• Thorough fundamental analysis and active stock selection, leading to potentially superior risk-adjusted returns compared to passive market tracking strategies.

Financial Performance:

• 3-Year Annualized Return: 8.40%
• 5-Year Annualized Return: 8.95%
• Since Inception (Jan 2012): 6.69%
• Outperformed its benchmark (MSCI ACWI ex USA Index) over various time-periods, demonstrating the ability to generate alpha through active stock selection.

Growth Trajectory:

• CIEL exhibits steady performance with relatively low volatility.
• Continued global diversification and opportunities may fuel future income-oriented portfolio construction, driving potential future growth and attracting investors seeking yield generation.

Liquidity:

• Average Trading Volume: 30-day average of around 233,595 shares. This implies a moderate level of liquidity, which might impact trade executions, especially for larger orders.
• Bid-Ask Spread: Around $0.03- $0.04 cents on average, indicating relatively low transaction costs for trading the ETF.

Market Dynamics:

• Global economic growth, particularly in developed markets, influences international company earnings and, consequently, dividend distributions.
• Interest rate changes and inflation trends can impact both dividend yields and investor risk appetite, affecting ETF demand.
• Political and economic stability of international markets: Plays a crucial role in investor confidence.

Competitors:

Top competitor: iShares International Select Dividend ETF (IDV) - Market cap of $5.19 Billion (2023) - Focuses on high dividend-paying international large and mid-cap stocks.

Expense Ratio:

0.67% total expense ratio, comprising management and administrative fees, considered competitive within the category of actively managed international dividend focused ETFs.

Investment Approach & Strategy:

Strategy: Actively managed, seeking undervalued dividend-paying international equity opportunities across diverse sectors and countries excluding emerging markets, aiming to outperform relevant indexes.

Composition: The portfolio holds approximately 35 stocks with varying sector allocation. Top sectors currently include financials, energy, and materials.

Key Points:

• CIEL provides high dividend-paying international equities and potential capital growth.
• Its active management focuses on undervalued opportunities through fundamental analysis.
• Strong financial performance with consistent income generation and competitive expense ratio.
• Active management, moderate volume, and geographic exposure should be factored in before investing.

Risks:

Volatility: The ETF has historically experienced moderate volatility, potentially resulting in fluctuations in portfolio value. Economic factors, geopolitical events, and company-specific news may influence share price volatility.

Market Risk: International markets can be susceptible to various geopolitical and economic risks like slower GDP growth, currency devaluation, or political instability, leading to dividend cuts or stock price declines.

Who Should Consider Investing:

This ETF may suit income-oriented investors seeking international diversification and willing to accept a moderate volatility profile in pursuit of potentially attractive dividend yield and long-term capital appreciation.

Fundamental Rating Based on AI (Scale 1-10) : 7 out of 10

• Strong financial performance and competitive expense ratio indicate sound overall investment management.

• Active management carries potential for outperformance but also exposes the portfolio to potential volatility and increased risk compared to passive alternatives.

• Market share is relatively limited.

• Experienced investment firm combined with a solid dividend focus provides a compelling proposition for income seeking investors comfortable with international equity investing and its inherent risks.

Resources and Disclaimers:

Data Sources:

• The information presented herein is derived from various resources, primarily Columbia Threadneedle's CIEL fact sheet, as well as Morningstar, Bloomberg, and ETF.com data for performance metrics and other relevant details up to October 27, 2023.

Disclaimers:

• This information is presented for informational purposes only and does not constitute investment advice. It is crucial to thoroughly research any investment product and consider your individual needs, financial goals, risk tolerance, and other circumstances before making informed investment decisions.
• Past performance does not guarantee future results, and investments are subject to inherent risks, potentially causing losses of invested capital.