The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  Columbia Research Enhanced Rl Estt ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The team managing the passive strategy earns a Below Average People Pillar. The strategy gets an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an underweight position in momentum exposure and quality exposure compared with category peers. Momentum is the premise that stocks that have recently outperformed will continue to do so. With low momentum exposure, the portfolio is holding stocks that managers believe to be undervalued. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The strategy's parent organization earns the firm an Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

American Tower

Simon Property Group

Crown Castle International

Equinix

Realty Income Corp

Digital Realty Trust

AvalonBay Communities

Mid-America Apartment Communities

Invitation Homes

Iron Mountain

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. Columbia Research Enhanced Rl Estt ETF earns an Average Process Pillar rating. The main driver of the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Low expenses across its parent firm's funds, whose fees, on average, rank in the middle quintile of their respective category, also support the process. The pattern of low fees at the firm suggests that it is focused on delivering strong results for investors. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 49%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup.

The investment strategy as stated in the fund's prospectus is:  The investment seeks investment results that, before fees and expenses, closely correspond to the performance of the Beta Advantage® Lionstone Research Enhanced REIT Index (the index).  The fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in the component securities of the index. The index reflects a rules-based strategic beta approach to investing in the companies that comprise the FTSE Nareit All Equity REITs Index (the Starting Universe), and which is a broad measure of the performance of publicly listed U.S. real estate investment trusts (REITs). The fund is non-diversified. 

 The portfolio is overweight in real estate by 3.5 percentage points in terms of assets compared with the category average, and its healthcare allocation is similar to the category. The sectors with low exposure compared to category peers are consumer cyclical and financial services; however, the allocations are similar to the category. The portfolio is composed of 73 holdings and is diversified among those holdings. In its most recent portfolio, 56.6% of the portfolio's assets were concentrated in the top 10 fund holdings, compared to the category average's 61.5%. And in closing, in terms of portfolio turnover, this portfolio turns over its holdings less quickly than peers, potentially leading to lower costs for investors and eliminating a drag on performance.

Average

Process

Columbia Threadneedle’s team earns a Below Average People Pillar rating. The team benefits from the strategy's costs, which rank in its category's least expensive quintile. A higher expense ratio reduces net returns, so low costs give this team an advantage. However, the rating is limited by the parent firm's five-year success ratio of 49%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median return for the period. The parent's subpar success ratio suggests that the firm could do better across its fund lineup. The parent firm's five-year retention rate of 67% also holds the team back.

Below Average

People

Columbia Threadneedle is undergoing significant transitions on the personnel and operational fronts, underpinning an Average rating.

Colin Moore, Columbia CIO for nearly 20 years, retired at the end of 2021; William Davies, who had been CIO of global equities, replaced him. Moore had worked over the past several years to promote collaboration across his investment teams, including compelling portfolio managers to work with a centralized research pool and to act within consistent risk guardrails. The firm also made moves to streamline its product offerings, including merging or liquidating 28 strategies from January 2020 through March 2022.
These are sensible efforts, though there remain ongoing areas of uncertainty for Davies and CEO Ted Truscott to navigate. Though the firm's fixed-income team is mostly stable, its domestic-equity team has struggled for years with elevated turnover. Adding to this complexity, Columbia closed on its acquisition of Bank of Montreal's European investment business in November 2021, gaining numerous new U.S., U.K., and European-domiciled equity strategies, a compelling environmental, social, and governance capability, and a staff of 700 people. Though there are opportunities for Columbia to draw additional resources and capabilities from BMO, including specialists such as Pyrford International, it will take time to assess how these two firms mesh as a combined entity.

Parent

Columbia Research Enhanced Real Estate ETF

Forestar Petroleum Corp. explores for oil and gas. It is an independent oil and gas exploration company and is engaged in the exploration for and the acquisition, development and marketing of crude oil and natural gas in the Mid-Continent and Rocky Mountain regions. The company was founded by James T. Huffman in 1978 and is headquartered in Austin, TX.

CRED tracks an index comprised of US REITs. The strategy is based on a multi-factor criteria evaluated by Columbia Threadneedle and Lionstone Investments.

Alexandria Real Estate Equities

JPMorgan BetaBuilders MSCI US REIT ETF

Principal Real Estate Active Opportunities ETF

CareTrust REIT

Dimensional US Real Estate ETF

Dimensional Global Real Estate ETF

iShares Environmentally Aware Real Estate ETF

Fidelity MSCI Real Estate ETF

First Trust S&P REIT Index Fund

Franklin Street Properties Corp.

Generation Income Properties

Goldman Sachs Future Real Estate And Infrastructure Equity ETF

Home Appreciation US REIT ETF

Hudson Pacific Properties

iShares Cohen & Steers REIT ETF

Pacer Benchmark Industrial Real Estate SCTR ETF

InvenTrust Properties Corp

iShares U.S. Real Estate ETF

JPMorgan Realty Income ETF

Janus Henderson U.S. Real Estate ETF

Invesco KBW Premium Yield Equity REIT ETF

NETLease Corporate Real Estate ETF

Nuveen Short-Term REIT ETF

OUTFRONT Media

REITs bounced back from a rough start to the year with a strong +3.26% average total return in March. Mid cap (+5.04%), small cap (+3.90%) and large cap REITs (+2.32%) averaged gains in March, while micro caps (-0.32%) saw yet another month in the red. 78.06% of REIT securities had a positive total return in March.

The State Of REITs: April 2024 Edition

American Homes 4 Rent

Brandywine Realty

Chatham Lodging Trust

Healthpeak Properties Inc

EPR Properties

Medical Properties Trust

REITs fell slightly deeper into the red in 2024 with a -0.81% total return in February. Mid cap (+1.46%) and large cap REITs (+1.04%) averaged gains in February outperforming small caps (-1.33%) and micro caps (-6.98%). Only 50.64% of REIT securities had a positive total return in February.

The State Of REITs: March 2024 Edition

iShares Russell 1000 ETF

Vanguard Real Estate ETF

Before becoming an ETF analyst, I spent approximately a decade as a fundamental stock research analyst. For me, the success of the Columbia Threadneedle ETFs is indeed worthy of celebration.

Stock Research-Driven ETFs Warrant Attention

The Columbia Research Enhanced Real Estate ETF (CRED) made its debut on 04/26/2023, and is a smart beta exchange traded fund that provides broad exposure to the Real Estate ETFs category of the market.

Is Columbia Research Enhanced Real Estate ETF (CRED) a Strong ETF Right Now?

Columbia Threadneedle Investments launched the Columbia Research Enhanced Real Estate ETF (NYSE Arca: CRED), which gives investors exposure to the real estate sector in a thoughtful, accessible way. The strategy incorporates the firm's research and insights into real estate.

Columbia Threadneedle Gains CRED With Research Enhanced Real Estate ETF

BOSTON--(BUSINESS WIRE)--Columbia Threadneedle Investments today announced the expansion of its exchange-traded fund (ETF) suite with the launch of the Columbia Research Enhanced Real Estate ETF (NYSE Arca: CRED). Designed for investors seeking a thoughtfully constructed and accessible way to gain exposure to the real estate sector, the strategy incorporates the firm's research intensity and proprietary insights in real estate in a cost-effective vehicle.

Columbia Threadneedle Investments Launches Columbia Research Enhanced Real Estate ETF (CRED)

News for Columbia Research Enhanced Real Estate ETF ETF (CRED)