The combination of an Average People Pillar rating and a Below Average Process Pillar rating limit  Columbia Seligman Semiconductor&TechETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a cost advantage over competitors, priced within the second-lowest fee quintile among peers.  

 The strategy receives a Below Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in liquidity exposure and yield exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a high yield exposure is rooted in holding high dividend-paying or buyback stocks. The strategy’s management team earns an Average People Pillar rating. The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Lam Research

Broadcom

SPDR S&P Semiconductor ETF

Semtech

Analog Devices

Microchip Technology

ON Semiconductor

Applied Materials

Western Digital

KLA-Tencor

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Columbia Seligman Semiconductor&TechETF earns a Below Average Process Pillar rating. 

The process benefits from the size of its portfolio management team. With four portfolio managers at the helm, the fund is reasonably well-resourced. However, the rating is weakened by the parent firm's five-year retention rate of 67%, which suggests it could do more to retain its portfolio managers. The parent firm's five-year risk-adjusted success ratio of 50% also holds the rating back. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup.

 This strategy tends to hold smaller, more value-oriented companies than its average peer in the Technology Morningstar Category. Analyzing additional factors, this strategy has consistently tilted toward companies with relatively higher trading volumes in the last few years. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. The managers have also tended to overweight yield during recent years, shown by the portfolio's high exposure to dividends or buybacks. High-yield stocks tend to be associated with more mature, profitable businesses that can grow as well as provide a stream of income. Such stocks could suffer, however, if setbacks force them to cut their dividends. Compared with category peers, the strategy also had more exposure to the Yield factor in the most recent month. Additionally, the managers have consistently taken on more risk, demonstrated by higher volatility exposure than peers. Such exposure tends to pay off when markets are hot and to be costly when they are not. In this month, the strategy also had more exposure to the Volatility factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in technology by 15.8 percentage points in terms of assets compared with the category average, and its industrials allocation is similar to the category. The sectors with low exposure compared to category peers are communication services and consumer cyclical, underweight the average by 7.6 and 4.4 percentage points of assets, respectively. The strategy owns 37 securities and is less top-heavy than peers. Specifically, 50.0% of the strategy's assets are concentrated within the top 10 fund holdings, compared to the category average's 52.3%. And finally, in terms of portfolio turnover, on a year-over-year basis, 26% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Below Average

Process

Columbia Seligman Semiconductor&TechETF earns an Average People Pillar rating. Paul H. Wick’s veteran status, with over 25 years of listed portfolio management experience, brings a wealth of experience to the table. The average Morningstar Rating of the strategies they manage is 4.1 stars, demonstrating excellent risk-adjusted performance compared to category peers. Paul H. Wick is supported by an experienced team, being able to draw on three additional listed managers, who average 20 years of listed portfolio management experience.  

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

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 Seligman Semiconductor and Technology ETF

SEMI is an actively-managed, non-transparent fund that seeks capital appreciation by investing in domestic or foreign semiconductor and technology-related companies. The fund utilizes the Fidelity non-transparent model.

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Columbia Threadneedle Investments has launched the first actively managed ETF that offers focused exposure to the semiconductor industry. The Columbia Seligman Semiconductor and Technology ETF (SEMI), listed on the NYSE on March 30 with a 75 basis point expense ratio, is a thematic, growth-focused technology strategy that will invest primarily in the securities of semiconductor, [.

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BOSTON--(BUSINESS WIRE)---- $SEMI--Columbia Threadneedle Investments today announced the expansion of its exchange-traded fund (ETF) offerings with the launch of its first actively managed, semi-transparent ETF, the Columbia Seligman Semiconductor and Technology ETF (NYSE Arca: SEMI). SEMI is a thematic, growth-focused technology strategy that will invest primarily in the securities of semiconductor, semiconductor equipment and related technology companies. SEMI is managed by Paul Wick, Sanjay Devgan, Sh

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