UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number | 811-22255 | |||||||
| ||||||||
Columbia ETF Trust II | ||||||||
(Exact name of registrant as specified in charter) | ||||||||
| ||||||||
225 Franklin Street |
| 02110 | ||||||
(Address of principal executive offices) |
| (Zip code) | ||||||
| ||||||||
Ryan Larrenaga c/o Columbia Management Investment Advisers, LLC Boston, Massachusetts 02110 | ||||||||
(Name and address of agent for service) | ||||||||
| ||||||||
Registrant’s telephone number, including area code: | (800) 345-6611 |
| ||||||
| ||||||||
Date of fiscal year end: | March 31 |
| ||||||
| ||||||||
Date of reporting period: | September 30, 2016 |
| ||||||
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
SEMIANNUAL REPORT
September 30, 2016
COLUMBIA ETF TRUST II
(formerly EGA Emerging Global Shares Trust)
Columbia Beyond BRICs ETF (formerly EGShares Beyond BRICs ETF)
Columbia EM Core ex-China ETF (formerly EGShares EM Core ex-China ETF)
Columbia EM Quality Dividend ETF (formerly EGShares EM Quality Dividend ETF)
Columbia EM Strategic Opportunities ETF (formerly EGShares EM Strategic Opportunities ETF)
Columbia Emerging Markets Consumer ETF (formerly EGShares Emerging Markets Consumer ETF)
Columbia Emerging Markets Core ETF (formerly EGShares Emerging Markets Core ETF)
Columbia India Consumer ETF (formerly EGShares India Consumer ETF)
Columbia India Infrastructure ETF (formerly EGShares India Infrastructure ETF)
Columbia India Small Cap ETF (formerly EGShares India Small Cap ETF)
PRESIDENT'S MESSAGE
Dear Shareholders,
We are very pleased to welcome you to Columbia Threadneedle Investments. As you know, on September 1, 2016, Emerging Global Advisors, LLC (EGA) was acquired by, and shareholders of the EGSharesSM suite of exchange-traded funds (ETFs) approved as investment manager, Columbia Threadneedle. We believe the experience and knowledge of the EGA team and strong emerging markets ETF products will complement our existing ETF and actively managed product lineup with a unique focus on emerging and frontier markets.
About Us
Columbia Threadneedle Investments is a leading global asset management group that provides a broad range of investment strategies and solutions for individual, institutional and corporate clients around the world. With more than 2,000 people, including over 450 investment professionals based in North America, Europe and Asia, we manage $460 billion* of assets across developed and emerging market equities, fixed income, asset allocation solutions and alternatives.
Our priority is the investment success of our clients. We aim to deliver the investment outcomes you expect through an approach designed to identify opportunities and manage risks. Our culture is dynamic and interactive. By sharing our insights across asset classes and geographies, we generate richer perspectives on global, regional and local investment landscapes. The ability to exchange and debate investment ideas in a collaborative environment enriches our teams' investment processes. More importantly, it results in better informed investment decisions for our clients. We focus on addressing your needs by providing access to sustainable income, asset growth or volatility management.
Rebranded fund names and website
In connection with the acquisition, the EGShares ETFs were rebranded as Columbia ETFs effective October 19, 2016. Also, while the former EGA url (emergingglobaladvisors.com) still provides access to the information you're used to, it now reflects rebranded logos and colors. For access to our broader ETF site, please bookmark columbiathreadneedleetf.com. Product information, fact sheets, white papers and market commentary can be found by visiting columbiathreadneedleetf.com and accessing the Emerging Markets ETFs section or Products tab.
Details of the ETF name and cusip changes are as follows:
Prior to October 19, 2016 | Effective October 19, 2016 | ||||||
EGShares Beyond BRICs ETF Cusip: 268461639 | Columbia Beyond BRICs ETF Cusip: 19762B103 | ||||||
EGShares EM Core ex-China ETF Cusip: 26846L304 | Columbia EM Core ex-China ETF Cusip: 19762B202 | ||||||
EGShares EM Quality Dividend ETF Cusip: 268461654 | Columbia EM Quality Dividend ETF Cusip: 19762B301 | ||||||
EGShares EM Strategic Opportunities ETF Cusip: 268461621 | Columbia EM Strategic Opportunities ETF Cusip: 19762B400 | ||||||
EGShares Emerging Markets Consumer ETF Cusip: 268461779 | Columbia Emerging Markets Consumer ETF Cusip: 19762B509 | ||||||
EGShares Emerging Markets Core ETF Cusip: 268461464 | Columbia Emerging Markets Core ETF Cusip: 19762B608 | ||||||
EGShares India Consumer ETF Cusip: 268461761 | Columbia India Consumer ETF Cusip: 19762B707 | ||||||
EGShares India Infrastructure ETF Cusip: 268461845 | Columbia India Infrastructure ETF Cusip: 19762B806 | ||||||
EGShares India Small Cap ETF Cusip: 268461811 | Columbia India Small Cap ETF Cusip: 19762B889 |
Semiannual Report 2016
PRESIDENT'S MESSAGE (continued)
Business as usual
The changes described above do not result in updated investment strategies or ticker symbols for these products. ALPS Distributors, Inc. continues to serve as distributor for these ETFs and also serves as distributor to Columbia Threadneedle's other ETF products. Bank of New York Mellon continues to provide custodian, transfer agent and fund accounting services.
For more information
If you have any questions or would like additional information on any of these changes, please call 888.800.4347. For additional product information, including fact sheets, white papers and market commentary, please visit columbiathreadneedleetf.com and access the Emerging Markets ETFs section or Products tab.
The world is constantly changing, but our priority remains the same: to help you secure your finances, meet your goals and achieve success. We also encourage you to stay current on the ETF marketplace and our insights by viewing or subscribing to Emerging Perspectives weekly emails. Visit columbiathreadneedleetf.com/emergingmarkets/emergingperspectives/.
Thank you for your continued investment in this suite of exchange-traded funds.
Best regards,
Christopher O. Petersen
President, Columbia ETF Trust II
Investors should consider the investment objectives, risks, charges and expenses of an exchange-traded fund (ETF) carefully before investing. For a free prospectus and summary prospectus, which contains this and other important information about an ETF, visit columbiathreadneedleetf.com. The prospectus and summary prospectus should be read carefully before investing.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies.
*In U.S. dollars as of June 30, 2016. Source: Ameriprise Q2 Earnings Release. Includes all assets managed by entities in the Columbia and Threadneedle group of companies. Contact us for more current data.
The Columbia ETF Trust II is managed by Columbia Management Investment Advisers, LLC and is distributed by ALPS Distributors, Inc., which is not affiliated with Columbia Management Investment Advisers, LLC or its parent company, Ameriprise Financial, Inc.
© 2016 Columbia Management Investment Advisers, LLC. All rights reserved.
Semiannual Report 2016
COLUMBIA ETF TRUST II
TABLE OF CONTENTS
Fund Investment Manager
Columbia Management Investment
Advisers, LLC
225 Franklin Street
Boston, MA 02110
Fund Distributor
ALPS Distributors, Inc.
1290 Broadway
Suite 1100
Denver, CO 80203
ALPS Distributors, Inc. is not affiliated with Columbia Management Investment Advisers, LLC.
Fund Custodian
The Bank of New York Mellon Corp.
101 Barclay Street
New York, NY 10286
Fund Transfer Agent
The Bank of New York Mellon Corp.
101 Barclay Street
New York, NY 10286
The Bank of New York Mellon Corp. is not affiliated with Columbia Management Investment Advisers, LLC.
For more information about any of the ETFs, please visit columbiathreadneedleetf.com or call 888.800.4347.
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia ETF are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Columbia ETF. References to specific securities should not be construed as a recommendation or investment advice.
Columbia Beyond BRICs ETF
Performance Overview | 3 | ||||||
Portfolio Overview | 4 |
Columbia EM Core ex-China ETF
Performance Overview | 6 | ||||||
Portfolio Overview | 7 |
Columbia EM Quality Dividend ETF
Performance Overview | 9 | ||||||
Portfolio Overview | 10 |
Columbia EM Strategic Opportunities ETF
Performance Overview | 12 | ||||||
Portfolio Overview | 13 |
Columbia Emerging Markets Consumer ETF
Performance Overview | 15 | ||||||
Portfolio Overview | 16 |
Columbia Emerging Markets Core ETF
Performance Overview | 17 | ||||||
Portfolio Overview | 18 |
Columbia India Consumer ETF
Performance Overview | 20 | ||||||
Portfolio Overview | 21 |
Columbia India Infrastructure ETF
Performance Overview | 22 | ||||||
Portfolio Overview | 23 |
Columbia India Small Cap ETF
Performance Overview | 24 | ||||||
Portfolio Overview | 25 | ||||||
Understanding Your Fund's Expenses | 26 | ||||||
Frequency Distribution of Premiums and Discounts | 27 | ||||||
Portfolio of Investments | 30 | ||||||
Statement of Assets and Liabilities | 56 | ||||||
Statement of Operations | 59 | ||||||
Statement of Changes in Net Assets | 62 | ||||||
Financial Highlights | 67 | ||||||
Notes to Financial Statements | 76 | ||||||
Supplemental Information | 84 | ||||||
Results of Meeting of Shareholders | 85 | ||||||
Board Considerations in Approving the New Agreement | 87 | ||||||
Board Considerations in Approving the Interim Investment Advisory Agreement | 90 | ||||||
Important Information About This Report | 91 |
Semiannual Report 2016
COLUMBIA ETF TRUST II
PERFORMANCE OVERVIEW
Columbia Beyond BRICs ETF
(Unaudited)
Performance Summary
n Columbia Beyond BRICs ETF (the Fund) returned 1.78% at net asset value and 1.65% at market price for the six-month period that ended September 30, 2016.
n The Fund's Tracked Index returned 2.75% for the same time period.
Average Annual Total Returns (%) (for period ended September 30, 2016)
Inception | 6 Months Cumulative | 1 Year | Life | ||||||||||||||||
Market Price | 08/15/12 | 1.65 | 5.19 | -3.52 | |||||||||||||||
Net Asset Value | 08/15/12 | 1.78 | 5.10 | -3.53 | |||||||||||||||
Tracked Index(1) | 2.75 | 6.89 | -1.61 |
(1) The Tracked Index reflects the Indxx Beyond BRICs Index through October 25, 2013 and the FTSE Beyond BRICs Net of Tax Index USD thereafter.
All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by the Fund's former investment manager or Columbia Management Investment Advisers, LLC (Columbia Management or the Investment Manager). Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting columbiathreadneedleetf.com.
Columbia Management took over portfolio management in September 2016 upon its acquisition of the Fund's previous investment manager.
The price used to calculate Market Price return is based on the midpoint of the 4:00 PM Eastern (U.S.) bid/ask spread on the NYSE and does not represent returns an investor would receive if shares were traded at other times.
The Fund's shares may trade above or below their net asset value. The net asset value of the Fund will generally fluctuate with changes in the market value of the Fund's holdings. The market prices of shares, however, will generally fluctuate in accordance with changes in net asset value as well as the relative supply of, and demand for, shares on the exchange. The trading price of shares may deviate significantly from the net asset value.
The FTSE Beyond BRICs Index is a market capitalization-weighted index designed to represent the performance of a diversified basket of 90 liquid companies in emerging and frontier markets excluding Brazil, Russia, India, China (BRIC), Taiwan and Argentina as defined by FTSE's Country Classification System. The index has 75% exposure to emerging markets and 25% to frontier markets at rebalance.
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Semiannual Report 2016
3
COLUMBIA ETF TRUST II
PORTFOLIO OVERVIEW
Columbia Beyond BRICs ETF
(Unaudited)
Portfolio Management
Christopher Lo, CFA
Frank Vallario
Top Ten Holdings (%) (at September 30, 2016) | |||||||
Naspers, Ltd. N Shares (South Africa) | 3.3 | ||||||
Fomento Economico Mexicano SAB de CV Series UBD (Mexico) | 2.7 | ||||||
PT Telekomunikasi Indonesia Persero Tbk (Indonesia) | 2.4 | ||||||
America Movil SAB de CV Series L (Mexico) | 2.2 | ||||||
Vingroup JSC (Vietnam) | 2.2 | ||||||
Public Bank Bhd (Malaysia) | 2.2 | ||||||
PT Bank Central Asia Tbk (Indonesia) | 2.2 | ||||||
Nigerian Breweries PLC (Nigeria) | 2.1 | ||||||
Safaricom, Ltd. (Kenya) | 2.1 | ||||||
Zenith Bank PLC (Nigeria) | 2.1 |
Percentages indicated are based upon total investments.
For further detail about these holdings, please refer to the section entitled "Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.
Country Breakdown (%) (at September 30, 2016) | |||||||
Bangladesh | 2.6 | ||||||
Chile | 1.0 | ||||||
Colombia | 0.3 | ||||||
Czech Republic | 0.4 | ||||||
Indonesia | 10.0 | ||||||
Kenya | 3.1 | ||||||
Malaysia | 11.1 | ||||||
Mexico | 14.9 | ||||||
Morocco | 3.9 | ||||||
Nigeria | 5.9 | ||||||
Oman | 1.8 | ||||||
Philippines | 4.7 | ||||||
Poland | 2.8 | ||||||
Qatar | 0.7 | ||||||
Romania | 2.0 | ||||||
South Africa | 15.4 | ||||||
Thailand | 7.7 | ||||||
Turkey | 2.9 | ||||||
United Arab Emirates | 2.9 | ||||||
Vietnam | 5.9 | ||||||
Total | 100.0 |
Country Breakdown is based primarily on issuer's place of risk. Percentages indicated are based upon total investments. The Fund's portfolio composition is subject to change.
Semiannual Report 2016
4
COLUMBIA ETF TRUST II
PORTFOLIO OVERVIEW (continued)
Columbia Beyond BRICs ETF
(Unaudited)
Equity Sector Breakdown (%) (at September 30, 2016) | |||||||
Basic Materials | 4.9 | ||||||
Consumer Goods | 11.6 | ||||||
Consumer Services | 10.8 | ||||||
Financials | 38.6 | ||||||
Health Care | 4.3 | ||||||
Industrials | 6.9 | ||||||
Oil & Gas | 4.3 | ||||||
Telecommunication services | 15.8 | ||||||
Utilities | 2.8 | ||||||
Total | 100.0 |
Percentages indicated are based upon total equity investments. The Fund's portfolio composition is subject to change.
Semiannual Report 2016
5
COLUMBIA ETF TRUST II
PERFORMANCE OVERVIEW
Columbia EM Core ex-China ETF
(Unaudited)
Performance Summary
n Columbia EM Core ex-China ETF (the Fund) returned 10.22% at net asset value and 11.83% at market price for the six-month period that ended September 30, 2016.
n The MSCI Emerging Markets Index (Net) returned 9.75% and the Beta Thematic Emerging Markets ex-China Index returned 9.85% for the same time period.
Average Annual Total Returns (%) (for period ended September 30, 2016)
Inception | 6 Months Cumulative | 1 Year | Life | ||||||||||||||||
Market Price | 09/02/15 | 11.83 | 22.67 | 19.61 | |||||||||||||||
Net Asset Value | 09/02/15 | 10.22 | 22.50 | 18.50 | |||||||||||||||
MSCI Emerging Markets Index (Net) | 9.75 | 16.78 | 14.51 | ||||||||||||||||
Beta Thematic Emerging Markets ex-China Index | 9.85 | 21.77 | 18.20 |
All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by the Fund's former investment manager or Columbia Management. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting columbiathreadneedleetf.com.
Columbia Management took over portfolio management in September 2016 upon its acquisition of the Fund's previous investment manager.
The price used to calculate Market Price return is based on the midpoint of the 4:00 PM Eastern (U.S.) bid/ask spread on the NYSE and does not represent returns an investor would receive if shares were traded at other times.
The Fund's shares may trade above or below their net asset value. The net asset value of the Fund will generally fluctuate with changes in the market value of the Fund's holdings. The market prices of shares, however, will generally fluctuate in accordance with changes in net asset value as well as the relative supply of, and demand for, shares on the exchange. The trading price of shares may deviate significantly from the net asset value.
The MSCI Emerging Markets Index (Net) is a free float-adjusted market capitalization index that is designed to measure market performance of emerging markets.
The Beta Thematic Emerging Markets ex-China Index is a market capitalization-weighted index designed to provide broad, core emerging markets equity exposure by measuring the stock performance of up to 700 emerging markets companies, excluding those listed or domiciled in China or Hong Kong.
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Semiannual Report 2016
6
COLUMBIA ETF TRUST II
PORTFOLIO OVERVIEW
Columbia EM Core ex-China ETF
(Unaudited)
Top Ten Holdings (%) (at September 30, 2016) | |||||||
Samsung Electronics Co., Ltd. (South Korea) | 4.9 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. (Taiwan) | 4.3 | ||||||
HDFC Bank, Ltd. ADR (India) | 3.9 | ||||||
Tata Motors, Ltd. ADR (India) | 3.5 | ||||||
Petroleo Brasileiro SA Preference Shares (Brazil) | 3.1 | ||||||
Infosys, Ltd. ADR (India) | 2.8 | ||||||
ICICI Bank, Ltd. ADR (India) | 2.7 | ||||||
Itau Unibanco Holding SA Preference Shares (Brazil) | 2.2 | ||||||
Naspers, Ltd. N Shares (South Africa) | 2.0 | ||||||
LUKOIL PJSC ADR (Russia) | 1.7 |
Percentages indicated are based upon total investments.
For further detail about these holdings, please refer to the section entitled "Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.
Country Breakdown (%) (at September 30, 2016) | |||||||
Brazil | 14.1 | ||||||
Chile | 1.1 | ||||||
India | 12.8 | ||||||
Indonesia | 3.8 | ||||||
Malaysia | 2.9 | ||||||
Mexico | 7.2 | ||||||
Netherlands | 1.3 | ||||||
Peru | 0.7 | ||||||
Philippines | 1.6 | ||||||
Poland | 1.8 | ||||||
Russia | 3.8 | ||||||
South Africa | 8.9 | ||||||
South Korea | 19.6 | ||||||
Taiwan | 14.1 | ||||||
Thailand | 4.1 | ||||||
Turkey | 2.2 | ||||||
Total | 100.0 |
Country Breakdown is based primarily on issuer's place of risk. Percentages indicated are based upon total investments. The Fund's portfolio composition is subject to change.
Portfolio Management
Christopher Lo, CFA
Frank Vallario
Semiannual Report 2016
7
COLUMBIA ETF TRUST II
PORTFOLIO OVERVIEW (continued)
Columbia EM Core ex-China ETF
(Unaudited)
Equity Sector Breakdown (%) (at September 30, 2016) | |||||||
Consumer Discretionary | 11.6 | ||||||
Consumer Staples | 11.2 | ||||||
Energy | 8.2 | ||||||
Financials | 27.1 | ||||||
Health Care | 2.8 | ||||||
Industrials | 5.6 | ||||||
Information Technology | 17.2 | ||||||
Materials | 8.5 | ||||||
Real Estate | 0.8 | �� | |||||
Telecommunication Services | 4.9 | ||||||
Utilities | 2.1 | ||||||
Total | 100.0 |
Percentages indicated are based upon total equity investments. The Fund's portfolio composition is subject to change.
Semiannual Report 2016
8
COLUMBIA ETF TRUST II
PERFORMANCE OVERVIEW
Columbia EM Quality Dividend ETF
(Unaudited)
Performance Summary
n Columbia EM Quality Dividend ETF (the Fund) returned 7.09% at net asset value and 8.02% at market price for the six-month period that ended September 30, 2016.
n The MSCI Emerging Markets Index (Net) returned 9.75% and the Fund's Tracked Index returned 8.88% for the same time period.
Average Annual Total Returns (%) (for period ended September 30, 2016)
Inception | 6 Months Cumulative | 1 Year | 5 Years | Life | |||||||||||||||||||
Market Price | 08/04/11 | 8.02 | 17.98 | -0.75 | -3.71 | ||||||||||||||||||
Net Asset Value | 08/04/11 | 7.09 | 17.69 | -0.87 | -3.71 | ||||||||||||||||||
MSCI Emerging Markets Index (Net) | 9.75 | 16.78 | 3.03 | -1.37 | |||||||||||||||||||
Tracked Index(1) | 8.88 | 20.61 | 0.46 | -2.29 |
(1) The Tracked Index reflects the Indxx Emerging Market High Income Low Beta Index through January 31, 2014, the FTSE Emerging All Cap ex-Taiwan Low Volatility Dividend Net Tax Index from February 3, 2014 through January 23, 2015, and the Beta AdvantageSM Emerging Markets Quality Dividend Index thereafter.
All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by the Fund's former investment manager. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting columbiathreadneedleetf.com.
Columbia Management took over portfolio management in September 2016 upon its acquisition of the Fund's previous investment manager.
The price used to calculate Market Price return is based on the midpoint of the 4:00 PM Eastern (U.S.) bid/ask spread on the NYSE and does not represent returns an investor would receive if shares were traded at other times.
The Fund's shares may trade above or below their net asset value. The net asset value of the Fund will generally fluctuate with changes in the market value of the Fund's holdings. The market prices of shares, however, will generally fluctuate in accordance with changes in net asset value as well as the relative supply of, and demand for, shares on the exchange. The trading price of shares may deviate significantly from the net asset value.
The MSCI Emerging Markets Index (Net) is a free float-adjusted market capitalization index that is designed to measure market performance of emerging markets.
The Beta AdvantageSM Emerging Markets Quality Dividend Index is an equal-weighted index designed to represent a portfolio of approximately 50 companies in developing markets, which is expected to have a higher dividend yield than the average dividend yield of companies included in the developing markets universe as defined by Columbia Management.
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Semiannual Report 2016
9
COLUMBIA ETF TRUST II
PORTFOLIO OVERVIEW
Columbia EM Quality Dividend ETF
(Unaudited)
Portfolio Management
Christopher Lo, CFA
Frank Vallario
Top Ten Holdings (%) (at September 30, 2016) | |||||||
Netcare, Ltd. (South Africa) | 2.1 | ||||||
Thai Union Group PCL NVDR (Thailand) | 2.1 | ||||||
Sasol, Ltd. (South Africa) | 2.1 | ||||||
PT Telekomunikasi Indonesia Persero Tbk (Indonesia) | 2.1 | ||||||
Safaricom, Ltd. (Kenya) | 2.1 | ||||||
Berli Jucker PCL NVDR (Thailand) | 2.1 | ||||||
Banco Bradesco SA Preference Shares (Brazil) | 2.1 | ||||||
Nan Ya Plastics Corp. (Taiwan) | 2.1 | ||||||
Emaar Properties PJSC (United Arab Emirates) | 2.0 | ||||||
PT Bank Rakyat Indonesia Persero Tbk (Indonesia) | 2.0 |
Percentages indicated are based upon total investments.
For further detail about these holdings, please refer to the section entitled "Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.
Country Breakdown (%) (at September 30, 2016) | |||||||
Brazil | 17.7 | ||||||
Chile | 2.0 | ||||||
Hong Kong | 6.0 | ||||||
Indonesia | 8.1 | ||||||
Kenya | 2.1 | ||||||
Malaysia | 9.9 | ||||||
Philippines | 2.0 | ||||||
South Africa | 10.1 | ||||||
Taiwan | 18.0 | ||||||
Thailand | 18.2 | ||||||
Turkey | 3.8 | ||||||
United Arab Emirates | 2.1 | ||||||
Total | 100.0 |
Country Breakdown is based primarily on issuer's place of risk. Percentages indicated are based upon total investments. The Fund's portfolio composition is subject to change.
Semiannual Report 2016
10
COLUMBIA ETF TRUST II
PORTFOLIO OVERVIEW (continued)
Columbia EM Quality Dividend ETF
(Unaudited)
Equity Sector Breakdown (%) (at September 30, 2016) | |||||||
Consumer Discretionary | 13.7 | ||||||
Consumer Staples | 16.0 | ||||||
Energy | 2.1 | ||||||
Financials | 16.0 | ||||||
Health Care | 2.1 | ||||||
Industrials | 11.8 | ||||||
Information Technology | 6.0 | ||||||
Materials | 6.1 | ||||||
Real Estate | 2.0 | ||||||
Telecommunication Services | 16.1 | ||||||
Utilities | 8.1 | ||||||
Total | 100.0 |
Percentages indicated are based upon total equity investments. The Fund's portfolio composition is subject to change.
Semiannual Report 2016
11
COLUMBIA ETF TRUST II
PERFORMANCE OVERVIEW
Columbia EM Strategic Opportunities ETF
(Unaudited)
Performance Summary
n Columbia EM Strategic Opportunities ETF (the Fund) returned 2.45% at net asset value and 3.16% at market price for the six-month period that ended September 30, 2016.
n The Fund's Tracked Index returned 2.81% for the same time period.
Average Annual Total Returns (%) (for period ended September 30, 2016)
Inception | 6 Months Cumulative | 1 Year | Life | ||||||||||||||||
Market Price | 08/15/12 | 3.16 | 4.24 | 0.47 | |||||||||||||||
Net Asset Value | 08/15/12 | 2.45 | 4.01 | 0.46 | |||||||||||||||
Tracked Index(1) | 2.81 | 5.09 | 1.80 |
(1) The Tracked Index reflects the Indxx Emerging Markets Domestic Demand Index through January 21, 2014, and the S&P Emerging Markets Strategic Opportunities IndexSM thereafter.
All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by the Fund's former investment manager or Columbia Management. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting columbiathreadneedleetf.com.
Columbia Management took over portfolio management in September 2016 upon its acquisition of the Fund's previous investment manager.
The price used to calculate Market Price return is based on the midpoint of the 4:00 PM Eastern (U.S.) bid/ask spread on the NYSE and does not represent returns an investor would receive if shares were traded at other times.
The Fund's shares may trade above or below their net asset value. The net asset value of the Fund will generally fluctuate with changes in the market value of the Fund's holdings. The market prices of shares, however, will generally fluctuate in accordance with changes in net asset value as well as the relative supply of, and demand for, shares on the exchange. The trading price of shares may deviate significantly from the net asset value.
The S&P Emerging Markets Strategic Opportunities IndexSM is a 50-stock free-float market capitalization-weighted index designed to measure the performance of companies in emerging markets that are tied to domestic demand, specifically those in consumer staples, consumer discretionary, telecommunications services, health care and the utilities sectors.
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Semiannual Report 2016
12
COLUMBIA ETF TRUST II
PORTFOLIO OVERVIEW
Columbia EM Strategic Opportunities ETF
(Unaudited)
Top Ten Holdings (%) (at September 30, 2016) | |||||||
China Mobile, Ltd. (China) | 5.0 | ||||||
JD.com, Inc. ADR (China) | 5.0 | ||||||
Ambev SA ADR (Brazil) | 5.0 | ||||||
Naspers, Ltd. N Shares (South Africa) | 4.8 | ||||||
Fomento Economico Mexicano SAB de CV ADR (Mexico) | 4.3 | ||||||
PT Telekomunikasi Indonesia Persero Tbk ADR (Indonesia) | 3.9 | ||||||
Steinhoff International Holdings NV (Netherlands) | 3.5 | ||||||
Ctrip.com International, Ltd. ADR (China) | 3.3 | ||||||
MTN Group, Ltd. (South Africa) | 3.2 | ||||||
America Movil SAB de CV Class L ADR (Mexico) | 3.1 |
Percentages indicated are based upon total investments.
For further detail about these holdings, please refer to the section entitled "Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.
Country Breakdown (%) (at September 30, 2016) | |||||||
Brazil | 8.7 | ||||||
China | 25.6 | ||||||
Hong Kong | 1.2 | ||||||
India | 14.5 | ||||||
Indonesia | 6.3 | ||||||
Malaysia | 4.2 | ||||||
Mexico | 12.2 | ||||||
Netherlands | 3.5 | ||||||
Russia | 3.6 | ||||||
South Africa | 15.9 | ||||||
Thailand | 4.3 | ||||||
Total | 100.0 |
Country Breakdown is based primarily on issuer's place of risk. Percentages indicated are based upon total investments. The Fund's portfolio composition is subject to change.
Portfolio Management
Christopher Lo, CFA
Frank Vallario
Semiannual Report 2016
13
COLUMBIA ETF TRUST II
PORTFOLIO OVERVIEW (continued)
Columbia EM Strategic Opportunities ETF
(Unaudited)
Equity Sector Breakdown (%) (at September 30, 2016) | |||||||
Consumer Discretionary | 30.3 | ||||||
Consumer Staples | 29.9 | ||||||
Health Care | 9.1 | ||||||
Telecommunication Services | 26.3 | ||||||
Utilities | 4.4 | ||||||
Total | 100.0 |
Percentages indicated are based upon total equity investments. The Fund's portfolio composition is subject to change.
Semiannual Report 2016
14
COLUMBIA ETF TRUST II
PERFORMANCE OVERVIEW
Columbia Emerging Markets Consumer ETF
(Unaudited)
Performance Summary
n Columbia Emerging Markets Consumer ETF (the Fund) returned 9.12% at net asset value and 9.87% at market price for the six-month period that ended September 30, 2016.
n The Dow Jones Emerging Markets Consumer Titans 30TM Index returned 9.36% for the same time period.
Average Annual Total Returns (%) (for period ended September 30, 2016)
Inception | 6 Months Cumulative | 1 Year | 5 Years | Life | |||||||||||||||||||
Market Price | 09/14/10 | 9.87 | 15.51 | 5.36 | 4.33 | ||||||||||||||||||
Net Asset Value | 09/14/10 | 9.12 | 14.60 | 4.84 | 4.22 | ||||||||||||||||||
Dow Jones Emerging Markets Consumer Titans 30TM Index | 9.36 | 15.52 | 6.03 | 5.54 |
All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by the Fund's former investment manager. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting columbiathreadneedleetf.com.
Columbia Management took over portfolio management in September 2016 upon its acquisition of the Fund's previous investment manager.
The price used to calculate Market Price return is based on the midpoint of the 4:00 PM Eastern (U.S.) bid/ask spread on the NYSE and does not represent returns an investor would receive if shares were traded at other times.
The Fund's shares may trade above or below their net asset value. The net asset value of the Fund will generally fluctuate with changes in the market value of the Fund's holdings. The market prices of shares, however, will generally fluctuate in accordance with changes in net asset value as well as the relative supply of, and demand for, shares on the exchange. The trading price of shares may deviate significantly from the net asset value.
The Dow Jones Emerging Markets Consumer Titans 30TM Index is a free-float market capitalization-weighted index that measures the performance of 30 leading emerging market companies in the Consumer Goods and Consumer Services Industries as defined by S&P Dow Jones Indexes.
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Semiannual Report 2016
15
COLUMBIA ETF TRUST II
PORTFOLIO OVERVIEW
Columbia Emerging Markets Consumer ETF
(Unaudited)
Portfolio Management
Christopher Lo, CFA
Frank Vallario
Top Ten Holdings (%) (at September 30, 2016) | |||||||
Naspers, Ltd. N Shares (South Africa) | 9.8 | ||||||
Ambev SA ADR (Brazil) | 5.6 | ||||||
JD.com, Inc. ADR (China) | 5.4 | ||||||
Fomento Economico Mexicano SAB de CV Series UBD (Mexico) | 4.8 | ||||||
Ctrip.com International, Ltd. ADR (China) | 4.6 | ||||||
Steinhoff International Holdings NV (Netherlands) | 4.5 | ||||||
Tata Motors, Ltd. ADR (India) | 4.0 | ||||||
PT Astra International Tbk (Indonesia) | 3.7 | ||||||
Grupo Televisa SAB Series CPO (Mexico) | 3.6 | ||||||
Magnit PJSC GDR (Russia) | 3.6 |
Percentages indicated are based upon total investments.
For further detail about these holdings, please refer to the section entitled "Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.
Country Breakdown (%) (at September 30, 2016) | |||||||
Brazil | 11.0 | ||||||
Chile | 2.9 | ||||||
China | 21.2 | ||||||
India | 13.5 | ||||||
Indonesia | 3.7 | ||||||
Malaysia | 1.9 | ||||||
Mexico | 11.7 | ||||||
Netherlands | 4.5 | ||||||
Philippines | 2.6 | ||||||
Russia | 3.6 | ||||||
South Africa | 18.0 | ||||||
Thailand | 5.4 | ||||||
Total | 100.0 |
Country Breakdown is based primarily on issuer's place of risk. Percentages indicated are based upon total investments. The Fund's portfolio composition is subject to change.
Equity Sector Breakdown (%) (at September 30, 2016) | |||||||
Consumer Goods | 44.7 | ||||||
Consumer Services | 51.3 | ||||||
Industrials | 4.0 | ||||||
Total | 100.0 |
Percentages indicated are based upon total equity investments. The Fund's portfolio composition is subject to change.
Semiannual Report 2016
16
COLUMBIA ETF TRUST II
PERFORMANCE OVERVIEW
Columbia Emerging Markets Core ETF
(Unaudited)
Performance Summary
n Columbia Emerging Markets Core ETF (the Fund) returned 5.63% at net asset value and 7.31% at market price for the six-month period that ended September 30, 2016.
n The S&P Emerging Markets Core IndexSM returned 6.12% for the same time period.
Average Annual Total Returns (%) (for period ended September 30, 2016)
Inception | 6 Months Cumulative | 1 Year | Life | ||||||||||||||||
Market Price | 10/16/12 | 7.31 | 12.64 | -0.38 | |||||||||||||||
Net Asset Value | 10/16/12 | 5.63 | 11.21 | -0.48 | |||||||||||||||
S&P Emerging Markets Core IndexSM | 6.12 | 12.26 | 0.40 |
All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by the Fund's former investment manager. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting columbiathreadneedleetf.com.
Columbia Management took over portfolio management in September 2016 upon its acquisition of the Fund's previous investment manager.
The price used to calculate Market Price return is based on the midpoint of the 4:00 PM Eastern (U.S.) bid/ask spread on the NYSE and does not represent returns an investor would receive if shares were traded at other times.
The Fund's shares may trade above or below their net asset value. The net asset value of the Fund will generally fluctuate with changes in the market value of the Fund's holdings. The market prices of shares, however, will generally fluctuate in accordance with changes in net asset value as well as the relative supply of, and demand for, shares on the exchange. The trading price of shares may deviate significantly from the net asset value.
The S&P Emerging Markets Core IndexSM is a modified equal-weighted index designed to measure the market performance of up to 116 companies that S&P determines to be representative of all industries domiciled in emerging market countries, subject to a 15% country cap.
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Semiannual Report 2016
17
COLUMBIA ETF TRUST II
PORTFOLIO OVERVIEW
Columbia Emerging Markets Core ETF
(Unaudited)
Portfolio Management
Christopher Lo, CFA
Frank Vallario
Top Ten Holdings (%) (at September 30, 2016) | |||||||
PT Telekomunikasi Indonesia Persero Tbk ADR (Indonesia) | 2.6 | ||||||
CP ALL PCL NVDR (Thailand) | 1.3 | ||||||
Southern Copper Corp. (Peru) | 1.3 | ||||||
LUKOIL PJSC ADR (Russia) | 1.3 | ||||||
MMC Norilsk Nickel PJSC ADR (Russia) | 1.3 | ||||||
PT Astra International Tbk (Indonesia) | 1.3 | ||||||
Emaar Properties PJSC (United Arab Emirates) | 1.3 | ||||||
SM Prime Holdings, Inc. (Philippines) | 1.3 | ||||||
S.A.C.I. Falabella (Chile) | 1.3 | ||||||
Magnit PJSC GDR (Russia) | 1.2 |
Percentages indicated are based upon total investments.
For further detail about these holdings, please refer to the section entitled "Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.
Country Breakdown (%) (at September 30, 2016) | |||||||
Brazil | 8.6 | ||||||
Chile | 1.2 | ||||||
China | 14.0 | ||||||
Hong Kong | 1.1 | ||||||
India | 14.9 | ||||||
Indonesia | 5.1 | ||||||
Malaysia | 6.1 | ||||||
Mexico | 14.3 | ||||||
Netherlands | 1.2 | ||||||
Peru | 1.3 | ||||||
Philippines | 4.9 | ||||||
Poland | 2.3 | ||||||
Russia | 5.0 | ||||||
South Africa | 13.8 | ||||||
Thailand | 3.7 | ||||||
Turkey | 1.2 | ||||||
United Arab Emirates | 1.3 | ||||||
Total | 100.0 |
Country Breakdown is based primarily on issuer's place of risk. Percentages indicated are based upon total investments. The Fund's portfolio composition is subject to change.
Semiannual Report 2016
18
COLUMBIA ETF TRUST II
PORTFOLIO OVERVIEW (continued)
Columbia Emerging Markets Core ETF
(Unaudited)
Equity Sector Breakdown (%) (at September 30, 2016) | |||||||
Consumer Discretionary | 19.9 | ||||||
Consumer Staples | 14.7 | ||||||
Energy | 6.3 | ||||||
Financials | 15.6 | ||||||
Health Care | 7.7 | ||||||
Industrials | 10.1 | ||||||
Information Technology | 6.4 | ||||||
Materials | 7.4 | ||||||
Real Estate | 2.4 | ||||||
Telecommunication Services | 5.8 | ||||||
Utilities | 3.7 | ||||||
Total | 100.0 |
Percentages indicated are based upon total equity investments. The Fund's portfolio composition is subject to change.
Semiannual Report 2016
19
COLUMBIA ETF TRUST II
PERFORMANCE OVERVIEW
Columbia India Consumer ETF
(Unaudited)
Performance Summary
n Columbia India Consumer ETF (the Fund) returned 15.60% at net asset value and 16.14% at market price for the six-month period that ended September 30, 2016.
n The Indxx India Consumer Index returned 16.11% for the same time period.
Average Annual Total Returns (%) (for period ended September 30, 2016)
Inception | 6 Months Cumulative | 1 Year | 5 Years | Life | |||||||||||||||||||
Market Price | 08/10/11 | 16.14 | 15.36 | 15.26 | 12.25 | ||||||||||||||||||
Net Asset Value | 08/10/11 | 15.60 | 15.23 | 14.60 | 12.14 | ||||||||||||||||||
Indxx India Consumer Index | 16.11 | 16.88 | 16.35 | 13.86 |
All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by the Fund's former investment manager. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting columbiathreadneedleetf.com.
Columbia Management took over portfolio management in September 2016 upon its acquisition of the Fund's previous investment manager.
The price used to calculate Market Price return is based on the midpoint of the 4:00 PM Eastern (U.S.) bid/ask spread on the NYSE and does not represent returns an investor would receive if shares were traded at other times.
The Fund's shares may trade above or below their net asset value. The net asset value of the Fund will generally fluctuate with changes in the market value of the Fund's holdings. The market prices of shares, however, will generally fluctuate in accordance with changes in net asset value as well as the relative supply of, and demand for, shares on the exchange. The trading price of shares may deviate significantly from the net asset value.
The Indxx India Consumer Index is a modified equal-weighted index designed to measure the market performance of up to 116 companies that S&P determines to be representative of all industries domiciled in emerging market countries, subject to a 15% country cap.
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Semiannual Report 2016
20
COLUMBIA ETF TRUST II
PORTFOLIO OVERVIEW
Columbia India Consumer ETF
(Unaudited)
Top Ten Holdings (%) (at September 30, 2016) | |||||||
Tata Motors, Ltd. | 6.1 | ||||||
Maruti Suzuki India, Ltd. | 6.1 | ||||||
Zee Entertainment Enterprises, Ltd. | 5.6 | ||||||
Bosch, Ltd. | 5.1 | ||||||
Nestle India, Ltd. | 5.0 | ||||||
Godrej Consumer Products, Ltd. | 4.9 | ||||||
Bajaj Auto, Ltd. | 4.9 | ||||||
Hero MotoCorp, Ltd. | �� | 4.9 | |||||
Mahindra & Mahindra, Ltd. | 4.7 | ||||||
ITC, Ltd. | 4.6 |
Percentages indicated are based upon total investments.
For further detail about these holdings, please refer to the section entitled "Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.
Equity Sector Breakdown (%) (at September 30, 2016) | |||||||
Consumer Goods | 79.5 | ||||||
Consumer Services | 6.6 | ||||||
Industrials | 13.9 | ||||||
Total | 100.0 |
Percentages indicated are based upon total equity investments. The Fund's portfolio composition is subject to change.
Portfolio Management
Christopher Lo, CFA
Frank Vallario
Semiannual Report 2016
21
COLUMBIA ETF TRUST II
PERFORMANCE OVERVIEW
Columbia India Infrastructure ETF
(Unaudited)
Performance Summary
n Columbia India Infrastructure ETF (the Fund) returned 14.75% at net asset value and 15.47% at market price for the six-month period that ended September 30, 2016.
n The Indxx India Infrastructure Index returned 15.89% for the same time period.
Average Annual Total Returns (%) (for period ended September 30, 2016)
Inception | 6 Months Cumulative | 1 Year | 5 Years | Life | |||||||||||||||||||
Market Price | 08/11/10 | 15.47 | 11.53 | -0.63 | -5.89 | ||||||||||||||||||
Net Asset Value | 08/11/10 | 14.75 | 10.61 | -1.47 | -6.04 | ||||||||||||||||||
Indxx India Infrastructure Index | 15.89 | 12.55 | -0.33 | -4.96 |
All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by the Fund's former investment manager. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting columbiathreadneedleetf.com.
Columbia Management took over portfolio management in September 2016 upon its acquisition of the Fund's previous investment manager.
The price used to calculate Market Price return is based on the midpoint of the 4:00 PM Eastern (U.S.) bid/ask spread on the NYSE and does not represent returns an investor would receive if shares were traded at other times.
The Fund's shares may trade above or below their net asset value. The net asset value of the Fund will generally fluctuate with changes in the market value of the Fund's holdings. The market prices of shares, however, will generally fluctuate in accordance with changes in net asset value as well as the relative supply of, and demand for, shares on the exchange. The trading price of shares may deviate significantly from the net asset value.
The Indxx India Infrastructure Index is a maximum 30-stock free-float adjusted market capitalization-weighted index designed to measure the market performance of companies in the infrastructure industry in India, as defined by Indxx's proprietary methodology. The index consists of common stocks listed on the primary exchange of India and ADRs & GDRs.
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Semiannual Report 2016
22
COLUMBIA ETF TRUST II
PORTFOLIO OVERVIEW
Columbia India Infrastructure ETF
(Unaudited)
Top Ten Holdings (%) (at September 30, 2016) | |||||||
Eicher Motors, Ltd. | 5.5 | ||||||
Bharti Infratel, Ltd. | 5.3 | ||||||
Bharti Airtel, Ltd. | 4.9 | ||||||
UltraTech Cement, Ltd. | 4.9 | ||||||
Vedanta, Ltd. | 4.9 | ||||||
Larsen & Toubro, Ltd. | 4.8 | ||||||
Adani Ports and Special Economic Zone, Ltd. | 4.8 | ||||||
NTPC, Ltd. | 4.7 | ||||||
GAIL India, Ltd. | 4.7 | ||||||
Ambuja Cements, Ltd. | 4.7 |
Percentages indicated are based upon total investments.
For further detail about these holdings, please refer to the section entitled "Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.
Equity Sector Breakdown (%) (at September 30, 2016) | |||||||
Basic Materials | 11.8 | ||||||
Consumer Goods | 5.4 | ||||||
Financials | 1.8 | ||||||
Industrials | 47.6 | ||||||
Oil & Gas | 4.7 | ||||||
Telecommunication Services | 14.0 | ||||||
Utilities | 14.7 | ||||||
Total | 100.0 |
Percentages indicated are based upon total equity investments. The Fund's portfolio composition is subject to change.
Portfolio Management
Christopher Lo, CFA
Frank Vallario
Semiannual Report 2016
23
COLUMBIA ETF TRUST II
PERFORMANCE OVERVIEW
Columbia India Small Cap ETF
(Unaudited)
Performance Summary
n Columbia India Small Cap ETF (the Fund) returned 20.60% at both net asset value and at market price for the six-month period that ended September 30, 2016.
n The Indxx India Small Cap Index returned 20.28% for the same time period.
Average Annual Total Returns (%) (for period ended September 30, 2016)
Inception | 6 Months Cumulative | 1 Year | 5 Years | Life | |||||||||||||||||||
Market Price | 07/07/10 | 20.60 | 11.12 | 3.46 | -2.33 | ||||||||||||||||||
Net Asset Value | 07/07/10 | 20.60 | 11.34 | 2.63 | -2.33 | ||||||||||||||||||
Indxx India Small Cap Index | 20.28 | 12.64 | 4.14 | -0.98 |
All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by the Fund's former investment manager. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting columbiathreadneedleetf.com.
Columbia Management took over portfolio management in September 2016 upon its acquisition of the Fund's previous investment manager.
The price used to calculate Market Price return is based on the midpoint of the 4:00 PM Eastern (U.S.) bid/ask spread on the NYSE and does not represent returns an investor would receive if shares were traded at other times.
The Fund's shares may trade above or below their net asset value. The net asset value of the Fund will generally fluctuate with changes in the market value of the Fund's holdings. The market prices of shares, however, will generally fluctuate in accordance with changes in net asset value as well as the relative supply of, and demand for, shares on the exchange. The trading price of shares may deviate significantly from the net asset value.
The Indxx India Small Cap Index is a maximum 75-stock free-float adjusted market capitalization-weighted index designed to measure the market performance of companies in the small cap segment in India. The index consists of securities listed on the primary stock exchange of India.
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Semiannual Report 2016
24
COLUMBIA ETF TRUST II
PORTFOLIO OVERVIEW
Columbia India Small Cap ETF
(Unaudited)
Top Ten Holdings (%) (at September 30, 2016) | |||||||
Federal Bank, Ltd. | 5.6 | ||||||
Bharat Financial Inclusion Ltd. | 4.9 | ||||||
Crompton Greaves, Ltd. | 4.7 | ||||||
Voltas, Ltd. | 4.4 | ||||||
Apollo Tyres, Ltd. | 3.5 | ||||||
Tata Global Beverages, Ltd. | 3.0 | ||||||
SRF, Ltd. | 2.6 | ||||||
Arvind, Ltd. | 2.4 | ||||||
Gujarat Pipavav Port, Ltd. | 2.2 | ||||||
Jubilant Life Sciences, Ltd. | 2.1 |
Percentages indicated are based upon total investments.
For further detail about these holdings, please refer to the section entitled "Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.
Equity Sector Breakdown (%) (at September 30, 2016) | |||||||
Basic Materials | 4.7 | ||||||
Consumer Goods | 16.5 | ||||||
Consumer Services | 4.6 | ||||||
Financials | 25.6 | ||||||
Health Care | 6.3 | ||||||
Industrials | 27.7 | ||||||
Oil & Gas | 3.2 | ||||||
Technology | 5.7 | ||||||
Utilities | 5.7 | ||||||
Total | 100.0 |
Percentages indicated are based upon total equity investments. The Fund's portfolio composition is subject to change.
Portfolio Management
Christopher Lo, CFA
Frank Vallario
Semiannual Report 2016
25
COLUMBIA ETF TRUST II
UNDERSTANDING YOUR FUND'S EXPENSES
(Unaudited)
As a shareholder of a Fund, you incur ongoing costs, including management fees. The following example is intended to help you understand your ongoing costs (in dollars and cents) of investing in a fund and to compare these costs with the ongoing costs of investing in other funds.
The examples are based on an initial investment of $1,000 invested at the beginning of the period and held for the period ended September 30, 2016.
Actual Expenses
The information under each column in the table below entitled "Actual" provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number for your Fund under the heading entitled "Expenses Paid for the Period 4/1/2016 to 9/30/2016" to estimate the expenses you paid on your account during this period.
Hypothetical Example For Comparison Purposes
The information under each column in the table entitled "Hypothetical" provides information about hypothetical account values and hypothetical expenses based on each Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the ending account values and expenses paid for the period in the table is useful in comparing ongoing Fund costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 4/1/2016 ($) | Ending Account Value 9/30/2016 ($) | Expenses Paid For the Period 4/1/2016 to 9/30/2016* ($) | Annualized Expense Ratios for the Period 4/1/2016 to 9/30/2016** (%) | ||||||||||||||||||||||||||||
Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual | |||||||||||||||||||||||||
Columbia Beyond BRICs ETF | 1,000.00 | 1,000.00 | 1,017.80 | 1,022.16 | 2.93 | 2.94 | 0.58 | ||||||||||||||||||||||||
Columbia EM Core ex-China ETF | 1,000.00 | 1,000.00 | 1,102.20 | 1,023.31 | 1.84 | 1.78 | 0.35 | ||||||||||||||||||||||||
Columbia EM Quality Dividend ETF | 1,000.00 | 1,000.00 | 1,070.90 | 1,020.81 | 4.41 | 4.31 | 0.85 | ||||||||||||||||||||||||
Columbia EM Strategic Opportunities ETF | 1,000.00 | 1,000.00 | 1,024.50 | 1,021.81 | 3.30 | 3.29 | 0.65 | ||||||||||||||||||||||||
Columbia Emerging Markets Consumer ETF | 1,000.00 | 1,000.00 | 1,091.20 | 1,020.81 | 4.46 | 4.31 | 0.85 | ||||||||||||||||||||||||
Columbia Emerging Markets Core ETF | 1,000.00 | 1,000.00 | 1,056.30 | 1,021.56 | 3.61 | 3.55 | 0.70 | ||||||||||||||||||||||||
Columbia India Consumer ETF | 1,000.00 | 1,000.00 | 1,156.00 | 1,020.61 | 4.81 | 4.51 | 0.89 | ||||||||||||||||||||||||
Columbia India Infrastructure ETF | 1,000.00 | 1,000.00 | 1,147.50 | 1,020.41 | 5.01 | 4.71 | 0.93 | ||||||||||||||||||||||||
Columbia India Small Cap ETF | 1,000.00 | 1,000.00 | 1,206.00 | 1,020.81 | 4.70 | 4.31 | 0.85 |
*Expenses are calculated using the Fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the Fund's most recent fiscal half-year and divided by 365.
**Expense ratios reflect the net expenses through September 30, 2016.
Had Columbia Management Investment Advisors, LLC or the Fund's former investment manager not waived fees, account values at the end of the period would have been reduced.
Semiannual Report 2016
26
COLUMBIA ETF TRUST II
FREQUENCY DISTRIBUTION OF PREMIUMS AND DISCOUNTS
(Unaudited)
The tables that follow present information about the differences between the daily market price on secondary markets for shares of a Fund and that Fund's net asset value. Net asset value, or "NAV", is the price per share at which each Fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing fund shares. The "Market Price" of each Fund generally is determined using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of such Fund are listed for trading, as of the time that the Fund's NAV is calculated. Each Fund's Market Price may be at, above or below its NAV. The NAV of each Fund will fluctuate with changes in the market value of its portfolio holdings. The Market Price of each Fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.
Premiums or discounts are the differences (expressed as a percentage) between the NAV and Market Price of a Fund on a given day, generally at the time NAV is calculated. A premium is the amount that a Fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that a Fund is trading below the reported NAV, expressed as a percentage of the NAV. The following information shows the frequency distributions of premiums and discounts for each of the Funds.
The information shown for each Fund is for the period from inception date of such Fund through September 30, 2016.
Each line in the table shows the number of trading days in which the Fund traded within the premium/discount range indicated. All data presented here represents past performance, which cannot be used to predict future results.
Market Price Above or Equal to NAV | Market Price Below NAV | ||||||||||||||
Basis Point Differential | Number of Days | Number of Days | |||||||||||||
Columbia Beyond BRICs ETF | |||||||||||||||
August 15, 2012 – September 30, 2016 | |||||||||||||||
0 - 49.9 | 266 | 161 | |||||||||||||
50 - 99.9 | 323 | 110 | |||||||||||||
100 - 199.9 | 116 | 54 | |||||||||||||
> 200 | 5 | 4 | |||||||||||||
Total | 710 | 329 | |||||||||||||
Market Price Above or Equal to NAV | Market Price Below NAV | ||||||||||||||
Basis Point Differential | Number of Days | Number of Days | |||||||||||||
Columbia EM Core ex-China ETF | |||||||||||||||
September 2, 2015 – September 30, 2016 | |||||||||||||||
0 - 49.9 | 84 | 42 | |||||||||||||
50 - 99.9 | 72 | 17 | |||||||||||||
100 - 199.9 | 49 | 5 | |||||||||||||
> 200 | 4 | 0 | |||||||||||||
Total | 209 | 64 |
Semiannual Report 2016
27
COLUMBIA ETF TRUST II
FREQUENCY DISTRIBUTION OF PREMIUMS AND DISCOUNTS (continued)
(Unaudited)
Market Price Above or Equal to NAV | Market Price Below NAV | ||||||||||||||
Basis Point Differential | Number of Days | Number of Days | |||||||||||||
Columbia EM Quality Dividend ETF | |||||||||||||||
August 4, 2011 – September 30, 2016 | |||||||||||||||
0 - 49.9 | 358 | 374 | |||||||||||||
50 - 99.9 | 174 | 227 | |||||||||||||
100 - 199.9 | 48 | 98 | |||||||||||||
> 200 | 8 | 12 | |||||||||||||
Total | 588 | 711 | |||||||||||||
Market Price Above or Equal to NAV | Market Price Below NAV | ||||||||||||||
Basis Point Differential | Number of Days | Number of Days | |||||||||||||
Columbia EM Strategic Opportunities ETF | |||||||||||||||
August 15, 2012 – September 30, 2016 | |||||||||||||||
0 - 49.9 | 307 | 187 | |||||||||||||
50 - 99.9 | 334 | 81 | |||||||||||||
100 - 199.9 | 94 | 30 | |||||||||||||
> 200 | 4 | 2 | |||||||||||||
Total | 739 | 300 | |||||||||||||
Market Price Above or Equal to NAV | Market Price Below NAV | ||||||||||||||
Basis Point Differential | Number of Days | Number of Days | |||||||||||||
Columbia Emerging Markets Consumer ETF | |||||||||||||||
September 14, 2010 – September 30, 2016 | |||||||||||||||
0 - 49.9 | 664 | 337 | |||||||||||||
50 - 99.9 | 305 | 122 | |||||||||||||
100 - 199.9 | 46 | 42 | |||||||||||||
> 200 | 6 | 2 | |||||||||||||
Total | 1021 | 503 | |||||||||||||
Market Price Above or Equal to NAV | Market Price Below NAV | ||||||||||||||
Basis Point Differential | Number of Days | Number of Days | |||||||||||||
Columbia Emerging Markets Core ETF | |||||||||||||||
October 16, 2012 – September 30, 2016 | |||||||||||||||
0 - 49.9 | 293 | 206 | |||||||||||||
50 - 99.9 | 214 | 117 | |||||||||||||
100 - 199.9 | 63 | 91 | |||||||||||||
> 200 | 3 | 9 | |||||||||||||
Total | 573 | 423 |
Semiannual Report 2016
28
COLUMBIA ETF TRUST II
FREQUENCY DISTRIBUTION OF PREMIUMS AND DISCOUNTS (continued)
(Unaudited)
Market Price Above or Equal to NAV | Market Price Below NAV | ||||||||||||||
Basis Point Differential | Number of Days | Number of Days | |||||||||||||
Columbia India Consumer ETF | |||||||||||||||
August 10, 2011 – September 30, 2016 | |||||||||||||||
0 - 49.9 | 287 | 261 | |||||||||||||
50 - 99.9 | 248 | 132 | |||||||||||||
100 - 199.9 | 220 | 81 | |||||||||||||
> 200 | 57 | 9 | |||||||||||||
Total | 812 | 483 | |||||||||||||
Market Price Above or Equal to NAV | Market Price Below NAV | ||||||||||||||
Basis Point Differential | Number of Days | Number of Days | |||||||||||||
Columbia India Infrastructure ETF | |||||||||||||||
August 11, 2010 – September 30, 2016 | |||||||||||||||
0 - 49.9 | 366 | 267 | |||||||||||||
50 - 99.9 | 262 | 227 | |||||||||||||
100 - 199.9 | 214 | 140 | |||||||||||||
> 200 | 37 | 34 | |||||||||||||
Total | 879 | 668 | |||||||||||||
Market Price Above or Equal to NAV | Market Price Below NAV | ||||||||||||||
Basis Point Differential | Number of Days | Number of Days | |||||||||||||
Columbia India Small Cap ETF | |||||||||||||||
July 7, 2010 – September 30, 2016 | |||||||||||||||
0 - 49.9 | 333 | 289 | |||||||||||||
50 - 99.9 | 215 | 240 | |||||||||||||
100 - 199.9 | 186 | 228 | |||||||||||||
> 200 | 34 | 47 | |||||||||||||
Total | 768 | 804 |
Semiannual Report 2016
29
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS
Columbia Beyond BRICs ETF
September 30, 2016 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common Stocks — 99.6%
Issuer | Shares | Value ($) | |||||||||
BANGLADESH — 2.6% | |||||||||||
Bangladesh Steel Re-Rolling Mills, Ltd. | 244,983 | 556,389 | |||||||||
Square Pharmaceuticals, Ltd.(a) | 526,485 | 1,804,323 | |||||||||
Total Bangladesh | 2,360,712 | ||||||||||
CHILE — 1.0% | |||||||||||
Cencosud SA | 145,122 | 435,073 | |||||||||
S.A.C.I. Falabella | 65,092 | 476,333 | |||||||||
Total Chile | 911,406 | ||||||||||
COLOMBIA — 0.3% | |||||||||||
Ecopetrol SA(a) | 659,572 | 286,273 | |||||||||
CZECH REPUBLIC — 0.4% | |||||||||||
CEZ AS | 21,376 | 381,022 | |||||||||
INDONESIA — 10.0% | |||||||||||
PT Astra International Tbk | 2,698,545 | 1,705,846 | |||||||||
PT Bank Central Asia Tbk | 1,626,587 | 1,956,740 | |||||||||
PT Bank Mandiri Persero Tbk | 1,237,081 | 1,061,628 | |||||||||
PT Bank Rakyat Indonesia Persero Tbk | 1,426,178 | 1,333,183 | |||||||||
PT Gudang Garam Tbk | 57,900 | 275,059 | |||||||||
PT Telekomunikasi Indonesia Persero Tbk | 6,693,428 | 2,210,457 | |||||||||
PT Unilever Indonesia Tbk | 152,969 | 522,165 | |||||||||
Total Indonesia | 9,065,078 | ||||||||||
KENYA — 3.1% | |||||||||||
Equity Group Holdings, Ltd. | 3,083,869 | 936,583 | |||||||||
Safaricom, Ltd. | 9,602,703 | 1,892,088 | |||||||||
Total Kenya | 2,828,671 | ||||||||||
MALAYSIA — 11.1% | |||||||||||
Axiata Group Bhd | 607,100 | 766,307 | |||||||||
CIMB Group Holdings Bhd | 746,100 | 849,748 | |||||||||
DiGi.Com Bhd | 498,300 | 600,057 | |||||||||
IHH Healthcare Bhd | 373,200 | 571,238 | |||||||||
Malayan Banking Bhd | 735,100 | 1,333,152 | |||||||||
MISC Bhd | 195,000 | 356,003 | |||||||||
Petronas Chemicals Group Bhd | 379,300 | 609,925 | |||||||||
Petronas Gas Bhd | 105,700 | 558,213 | |||||||||
Public Bank Bhd | 409,820 | 1,964,123 | |||||||||
Sime Darby Bhd | 439,100 | 812,263 |
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
Tenaga Nasional Bhd | 465,800 | 1,610,673 | |||||||||
Total Malaysia | 10,031,702 | ||||||||||
MEXICO — 14.9% | |||||||||||
Alfa SAB de CV Class A | 340,575 | 532,503 | |||||||||
America Movil SAB de CV Series L | 3,547,721 | 2,029,259 | |||||||||
Arca Continental SAB de CV | 34,294 | 204,433 | |||||||||
Cemex SAB de CV Series CPO(a) | 1,686,466 | 1,338,472 | |||||||||
Fomento Economico Mexicano SAB de CV Series UBD | 260,247 | 2,403,656 | |||||||||
Grupo Bimbo SAB de CV Series A | 226,786 | 598,912 | |||||||||
Grupo Financiero Banorte SAB de CV Class O | 273,915 | 1,439,103 | |||||||||
Grupo Financiero Inbursa SAB de CV Class O | 248,905 | 393,546 | |||||||||
Grupo Mexico SAB de CV Series B | 469,945 | 1,150,489 | |||||||||
Grupo Televisa SAB Series CPO | 299,774 | 1,543,208 | |||||||||
Industrias Penoles SAB de CV | 15,055 | 362,562 | |||||||||
Wal-Mart de Mexico SAB de CV | 676,806 | 1,489,054 | |||||||||
Total Mexico | 13,485,197 | ||||||||||
MOROCCO — 3.9% | |||||||||||
Attijariwafa Bank | 48,711 | 1,780,838 | |||||||||
Maroc Telecom | 135,159 | 1,774,892 | |||||||||
Total Morocco | 3,555,730 | ||||||||||
NIGERIA — 5.9% | |||||||||||
Guaranty Trust Bank PLC | 20,444,442 | 1,557,672 | |||||||||
Nigerian Breweries PLC | 3,996,531 | 1,903,110 | |||||||||
Zenith Bank PLC | 38,796,805 | 1,873,331 | |||||||||
Total Nigeria | 5,334,113 | ||||||||||
OMAN — 1.8% | |||||||||||
Bank Muscat SAOG | 1,573,233 | 1,650,873 | |||||||||
PHILIPPINES — 4.7% | |||||||||||
Ayala Corp. | 32,290 | 570,627 | |||||||||
Ayala Land, Inc. | 507,800 | 410,994 | |||||||||
BDO Unibank, Inc. | 182,250 | 412,642 | |||||||||
JG Summit Holdings, Inc. | 396,820 | 609,611 | |||||||||
PLDT, Inc. | 7,450 | 263,004 | |||||||||
SM Investments Corp. | 64,024 | 889,167 | |||||||||
SM Prime Holdings, Inc. | 1,223,800 | 710,382 |
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
30
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (continued)
Columbia Beyond BRICs ETF
September 30, 2016 (Unaudited)
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
Universal Robina Corp. | 110,770 | 406,579 | |||||||||
Total Philippines | 4,273,006 | ||||||||||
POLAND — 2.8% | |||||||||||
Bank Pekao SA | 20,932 | 676,523 | |||||||||
Polski Koncern Naftowy Orlen SA | 42,977 | 729,992 | |||||||||
Polskie Gornictwo Naftowe i Gazownictwo SA | 236,626 | 312,216 | |||||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 115,487 | 787,847 | |||||||||
Total Poland | 2,506,578 | ||||||||||
QATAR — 0.6% | |||||||||||
Qatar National Bank SAQ | 13,542 | 580,053 | |||||||||
ROMANIA — 2.0% | |||||||||||
Banca Transilvania SA | 3,001,219 | 1,792,123 | |||||||||
SOUTH AFRICA — 15.3% | |||||||||||
Aspen Pharmacare Holdings, Ltd.(a) | 37,431 | 843,822 | |||||||||
Barclays Africa Group, Ltd. | 47,781 | 524,674 | |||||||||
FirstRand, Ltd. | 341,717 | 1,180,370 | |||||||||
MTN Group, Ltd. | 197,839 | 1,689,895 | |||||||||
Naspers, Ltd. N Shares | 17,465 | 3,016,687 | |||||||||
Nedbank Group, Ltd. | 24,115 | 389,926 | |||||||||
Remgro, Ltd. | 54,242 | 905,503 | |||||||||
Sanlam, Ltd. | 197,625 | 916,897 | |||||||||
Sasol, Ltd. | 62,370 | 1,705,381 | |||||||||
Shoprite Holdings, Ltd. | 48,425 | 673,979 | |||||||||
Standard Bank Group, Ltd. | 135,692 | 1,388,077 | |||||||||
Vodacom Group, Ltd. | 56,123 | 629,092 | |||||||||
Total South Africa | 13,864,303 | ||||||||||
THAILAND — 7.7% | |||||||||||
Advanced Info Service PCL NVDR | 154,000 | 711,111 | |||||||||
Airports of Thailand PCL NVDR | 57,400 | 660,970 |
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
Bangkok Dusit Medical Services PCL NVDR | 1,118,600 | 703,766 | |||||||||
CP ALL PCL NVDR | 692,900 | 1,229,822 | |||||||||
PTT Exploration & Production PCL NVDR | 185,600 | 433,870 | |||||||||
PTT PCL NVDR | 188,000 | 1,839,307 | |||||||||
Siam Commercial Bank PCL NVDR | 320,000 | 1,366,811 | |||||||||
Total Thailand | 6,945,657 | ||||||||||
TURKEY — 2.8% | |||||||||||
Akbank TAS | 268,054 | 718,217 | |||||||||
KOC Holding AS | 84,735 | 363,993 | |||||||||
Turk Telekomunikasyon AS | 70,130 | 132,515 | |||||||||
Turkcell Iletisim Hizmetleri AS(a) | 105,864 | 342,566 | |||||||||
Turkiye Garanti Bankasi AS | 276,093 | 731,476 | |||||||||
Turkiye Is Bankasi Class C | 180,416 | 285,592 | |||||||||
Total Turkey | 2,574,359 | ||||||||||
UNITED ARAB EMIRATES — 2.9% | |||||||||||
Emaar Properties PJSC | 468,954 | 906,500 | |||||||||
Emirates Telecommunications Group Co. PJSC | 227,107 | 1,236,629 | |||||||||
First Gulf Bank PJSC | 150,376 | 483,103 | |||||||||
Total United Arab Emirates | 2,626,232 | ||||||||||
VIETNAM — 5.8% | |||||||||||
Hoa Phat Group JSC | 547,591 | 1,121,967 | |||||||||
Saigon Securities, Inc.(a) | 455,310 | 455,218 | |||||||||
Vietnam Dairy Products JSC | 273,640 | 1,717,573 | |||||||||
Vingroup JSC(a) | 997,412 | 1,989,950 | |||||||||
Total Vietnam | 5,284,708 | ||||||||||
Total Investments (Cost: $103,620,582) | 90,337,796 | ||||||||||
Other Assets & Liabilities, Net | 344,783 | ||||||||||
Net Assets | 90,682,579 |
Notes to Portfolio of Investments
(a) Non-income producing security.
Abbreviation Legend
NVDR Non-Voting Depositary Receipts
PJSC Private Joint Stock Company
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
31
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (continued)
Columbia Beyond BRICs ETF
September 30, 2016 (Unaudited)
Fair Value Measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund's assumptions about the information market participants would use in pricing an investment. An investment's level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset's or liability's fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
> Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date (including NAV for open-end mutual funds). Valuation adjustments are not applied to Level 1 investments.
> Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.).
> Level 3 — Valuations based on significant unobservable inputs (including the Fund's own assumptions and judgment in determining the fair value of investments).
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment's fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund's Board of Trustees (the Board), the Investment Manager's Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager's organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendation of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third-party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund's investments as of September 30, 2016:
Valuation Inputs | Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |||||||||||||||
Common Stocks | 90,337,796 | — | — | 90,337,796 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
32
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS
Columbia EM Core ex-China ETF
September 30, 2016 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common Stocks — 99.1%
Issuer | Shares | Value ($) | |||||||||
BRAZIL — 14.0% | |||||||||||
Ambev SA | 22,658 | 138,228 | |||||||||
Banco Bradesco SA Preference Shares | 8,169 | 74,603 | |||||||||
Banco do Brasil SA | 5,075 | 35,616 | |||||||||
BM&FBovespa SA — Bolsa de Valores Mercadorias e Futuros | 8,271 | 42,795 | |||||||||
BRF SA | 5,266 | 89,667 | |||||||||
CETIP SA | 3,168 | 41,813 | |||||||||
Cia Brasileira de Distribuicao Preference Shares | 1,889 | 30,874 | |||||||||
Cielo SA | 4,967 | 49,703 | |||||||||
Itau Unibanco Holding SA Preference Shares | 20,933 | 228,863 | |||||||||
Itausa — Investimentos Itau SA Preference Shares | 43,535 | 111,757 | |||||||||
Kroton Educacional SA | 12,411 | 56,500 | |||||||||
Petroleo Brasileiro SA Preference Shares(a) | 76,622 | 320,039 | |||||||||
Telefonica Brasil SA Preference Shares | 5,037 | 72,791 | |||||||||
Ultrapar Participacoes SA | 2,334 | 51,050 | |||||||||
Vale SA Preference Shares | 27,684 | 131,226 | |||||||||
Total Brazil | 1,475,525 | ||||||||||
CHILE — 1.1% | |||||||||||
Cencosud SA | 13,758 | 41,246 | |||||||||
Cia Cervecerias Unidas SA | 3,392 | 34,208 | |||||||||
Empresas COPEC SA | 4,388 | 40,957 | |||||||||
Total Chile | 116,411 | ||||||||||
INDIA — 12.7% | |||||||||||
HDFC Bank, Ltd. ADR | 5,624 | 404,309 | |||||||||
ICICI Bank, Ltd. ADR | 38,153 | 285,003 | |||||||||
Infosys, Ltd. ADR | 18,203 | 287,243 | |||||||||
Tata Motors, Ltd. ADR | 9,015 | 360,420 | |||||||||
Total India | 1,336,975 | ||||||||||
INDONESIA — 3.8% | |||||||||||
PT Astra International Tbk | 131,076 | 82,858 | |||||||||
PT Bank Central Asia Tbk | 114,144 | 137,312 | |||||||||
PT Bank Mandiri Persero Tbk | 97,928 | 84,039 | |||||||||
PT Telekomunikasi Indonesia Persero Tbk | 284,518 | 93,960 | |||||||||
Total Indonesia | 398,169 |
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
MALAYSIA — 2.8% | |||||||||||
IHH Healthcare Bhd | 90,500 | 138,524 | |||||||||
Sime Darby Bhd | 25,700 | 47,541 | |||||||||
Tenaga Nasional Bhd | 32,100 | 110,997 | |||||||||
Total Malaysia | 297,062 | ||||||||||
MEXICO — 7.2% | |||||||||||
Alfa SAB de CV Class A | 42,357 | 66,227 | |||||||||
Cemex SAB de CV Series CPO(a) | 107,996 | 85,712 | |||||||||
Coca-Cola Femsa SAB de CV Series L | 15,613 | 117,500 | |||||||||
Fibra Uno Administracion SA de CV | 22,417 | 41,027 | |||||||||
Fomento Economico Mexicano SAB de CV Series UBD | 5,296 | 48,914 | |||||||||
Grupo Bimbo SAB de CV Series A | 33,673 | 88,926 | |||||||||
Grupo Mexico SAB de CV Series B | 38,911 | 95,259 | |||||||||
Grupo Televisa SAB Series CPO | 20,615 | 106,124 | |||||||||
Wal-Mart de Mexico SAB de CV | 47,302 | 104,070 | |||||||||
Total Mexico | 753,759 | ||||||||||
NETHERLANDS — 1.3% | |||||||||||
Steinhoff International Holdings NV | 24,098 | 137,653 | |||||||||
PERU — 0.6% | |||||||||||
Credicorp, Ltd. | 252 | 38,359 | |||||||||
Southern Copper Corp. | 1,093 | 28,746 | |||||||||
Total Peru | 67,105 | ||||||||||
PHILIPPINES — 1.6% | |||||||||||
JG Summit Holdings, Inc. | 39,150 | 60,144 | |||||||||
PLDT, Inc. | 1,620 | 57,190 | |||||||||
SM Investments Corp. | 3,380 | 46,942 | |||||||||
Total Philippines | 164,276 | ||||||||||
POLAND — 1.7% | |||||||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 15,573 | 106,238 | |||||||||
Powszechny Zaklad Ubezpieczen SA | 12,258 | 78,083 | |||||||||
Total Poland | 184,321 | ||||||||||
RUSSIA — 3.8% | |||||||||||
Gazprom PAO ADR | 21,697 | 91,344 | |||||||||
LUKOIL PJSC ADR | 3,730 | 181,614 | |||||||||
Sberbank of Russia PJSC ADR | 13,165 | 123,461 | |||||||||
Total Russia | 396,419 |
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
33
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (continued)
Columbia EM Core ex-China ETF
September 30, 2016 (Unaudited)
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
SOUTH AFRICA — 8.8% | |||||||||||
Aspen Pharmacare Holdings, Ltd.(a) | 2,982 | 67,224 | |||||||||
Bid Corp., Ltd. | 7,193 | 135,556 | |||||||||
Bidvest Group, Ltd. (The) | 7,392 | 86,858 | |||||||||
FirstRand, Ltd. | 11,625 | 40,155 | |||||||||
MTN Group, Ltd. | 8,831 | 75,432 | |||||||||
Naspers, Ltd. N Shares | 1,214 | 209,691 | |||||||||
Redefine Properties, Ltd. | 45,487 | 37,809 | |||||||||
Remgro, Ltd. | 2,971 | 49,597 | |||||||||
Sanlam, Ltd. | 14,118 | 65,502 | |||||||||
Sasol, Ltd. | 3,576 | 97,779 | |||||||||
Standard Bank Group, Ltd. | 6,084 | 62,237 | |||||||||
Total South Africa | 927,840 | ||||||||||
SOUTH KOREA — 19.4% | |||||||||||
Amorepacific Corp. | 134 | 47,329 | |||||||||
Celltrion, Inc.(a) | 896 | 86,561 | |||||||||
Hana Financial Group, Inc. | 1,651 | 41,749 | |||||||||
Hyundai Motor Co. | 1,223 | 150,467 | |||||||||
KB Financial Group, Inc. | 4,167 | 143,207 | |||||||||
Kia Motors Corp. | 2,800 | 107,160 | |||||||||
Korea Electric Power Corp. | 2,277 | 111,643 | |||||||||
KT&G Corp. | 877 | 99,537 | |||||||||
LG Chem, Ltd. | 210 | 46,048 | |||||||||
LG Household & Health Care, Ltd. | 35 | 30,349 | |||||||||
NAVER Corp. | 127 | 101,821 | |||||||||
POSCO | 532 | 109,651 | |||||||||
Samsung C&T Corp. | 479 | 64,803 | |||||||||
Samsung Electronics Co., Ltd. | 351 | 509,282 | |||||||||
Samsung Fire & Marine Insurance Co., Ltd. | 143 | 36,291 | |||||||||
Shinhan Financial Group Co., Ltd. | 3,991 | 145,493 | |||||||||
SK Hynix, Inc. | 3,351 | 122,314 | |||||||||
SK Telecom Co., Ltd. | 449 | 92,136 | |||||||||
Total South Korea | 2,045,841 |
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
TAIWAN — 14.0% | |||||||||||
Advanced Semiconductor Engineering, Inc. | 42,295 | 50,734 | |||||||||
Cathay Financial Holding Co., Ltd. | 53,376 | 68,283 | |||||||||
China Steel Corp. | 119,717 | 84,406 | |||||||||
Chunghwa Telecom Co., Ltd. | 33,097 | 116,674 | |||||||||
CTBC Financial Holding Co., Ltd. | 91,377 | 53,056 | |||||||||
Far Eastern New Century Corp. | 98,396 | 73,611 | |||||||||
Formosa Chemicals & Fibre Corp. | 17,005 | 45,733 | |||||||||
Formosa Plastics Corp. | 36,822 | 91,393 | |||||||||
Hon Hai Precision Industry Co., Ltd. | 62,262 | 156,919 | |||||||||
MediaTek, Inc. | 8,805 | 67,276 | |||||||||
Nan Ya Plastics Corp. | 52,044 | 102,941 | |||||||||
President Chain Store Corp. | 14,007 | 111,268 | |||||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 77,416 | 450,732 | |||||||||
Total Taiwan | 1,473,026 | ||||||||||
THAILAND — 4.1% | |||||||||||
Airports of Thailand PCL NVDR | 6,500 | 74,849 | |||||||||
BTS Group Holdings PCL NVDR | 274,100 | 68,426 | |||||||||
CP ALL PCL NVDR | 27,700 | 49,165 | |||||||||
PTT PCL | 7,600 | 74,355 | |||||||||
Siam Cement PCL (The) | 4,600 | 68,502 | |||||||||
Siam Commercial Bank PCL (The) | 22,100 | 94,395 | |||||||||
Total Thailand | 429,692 | ||||||||||
TURKEY — 2.2% | |||||||||||
Haci Omer Sabanci Holding AS | 22,064 | 68,309 | |||||||||
Turkiye Garanti Bankasi AS | 35,630 | 94,397 | |||||||||
Turkiye Is Bankasi Class C | 43,485 | 68,835 | |||||||||
Total Turkey | 231,541 | ||||||||||
Total Investments (Cost: $9,580,432) | 10,435,615 | ||||||||||
Other Assets & Liabilities, Net | 93,585 | ||||||||||
Net Assets | 10,529,200 |
Notes to Portfolio of Investments
(a) Non-income producing security.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
34
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (continued)
Columbia EM Core ex-China ETF
September 30, 2016 (Unaudited)
Abbreviation Legend
ADR American Depositary Receipts
NVDR Non-Voting Depositary Receipts
PJSC Private Joint Stock Company
Fair Value Measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund's assumptions about the information market participants would use in pricing an investment. An investment's level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset's or liability's fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
> Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date (including NAV for open-end mutual funds). Valuation adjustments are not applied to Level 1 investments.
> Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.).
> Level 3 — Valuations based on significant unobservable inputs (including the Fund's own assumptions and judgment in determining the fair value of investments).
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment's fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund's Board of Trustees (the Board), the Investment Manager's Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager's organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendation of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third-party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
35
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (continued)
Columbia EM Core ex-China ETF
September 30, 2016 (Unaudited)
Fair Value Measurements (continued)
The following table is a summary of the inputs used to value the Fund's investments as of September 30, 2016:
Valuation Inputs | Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |||||||||||||||
Common Stocks | 10,435,615 | — | — | 10,435,615 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
36
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS
Columbia EM Quality Dividend ETF
September 30, 2016 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common Stocks — 99.9%
Issuer | Shares | Value ($) | |||||||||
BRAZIL — 17.7% | |||||||||||
Ambev SA | 51,200 | 312,352 | |||||||||
Banco Bradesco SA Preference Shares | 35,245 | 321,874 | |||||||||
BM&FBovespa SA — Bolsa de Valores Mercadorias e Futuros | 57,600 | 298,030 | |||||||||
BRF SA | 18,300 | 311,604 | |||||||||
Itausa — Investimentos Itau SA Preference Shares | 121,309 | 311,408 | |||||||||
JBS SA | 81,900 | 297,969 | |||||||||
Kroton Educacional SA | 64,000 | 291,352 | |||||||||
Lojas Renner SA | 40,000 | 301,276 | |||||||||
WEG SA | 57,700 | 313,644 | |||||||||
Total Brazil | 2,759,509 | ||||||||||
CHILE — 2.0% | |||||||||||
Aguas Andinas SA Class A | 491,000 | 314,790 | |||||||||
HONG KONG — 6.0% | |||||||||||
CLP Holdings, Ltd. | 30,659 | 316,830 | |||||||||
Hong Kong & China Gas Co., Ltd. | 165,000 | 311,451 | |||||||||
Hong Kong Exchanges & Clearing, Ltd. | 11,800 | 310,064 | |||||||||
Total Hong Kong | 938,345 | ||||||||||
INDONESIA — 8.1% | |||||||||||
PT Bank Rakyat Indonesia Persero Tbk | 339,800 | 317,643 | |||||||||
PT Hanjaya Mandala Sampoerna Tbk | 1,010,000 | 305,685 | |||||||||
PT Surya Citra Media Tbk | 1,475,900 | 316,644 | |||||||||
PT Telekomunikasi Indonesia Persero Tbk | 985,083 | 325,317 | |||||||||
Total Indonesia | 1,265,289 | ||||||||||
KENYA — 2.1% | |||||||||||
Safaricom, Ltd. | 1,642,400 | 323,614 | |||||||||
MALAYSIA — 9.9% | |||||||||||
AirAsia Bhd | 462,200 | 311,821 | |||||||||
Axiata Group Bhd | 238,400 | 300,918 | |||||||||
Maxis Bhd | 208,000 | 309,825 | |||||||||
Petronas Chemicals Group Bhd | 191,300 | 307,616 | |||||||||
Public Bank Bhd | 65,900 | 315,836 | |||||||||
Total Malaysia | 1,546,016 |
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
PHILIPPINES — 2.0% | |||||||||||
Aboitiz Power Corp. | 330,000 | 310,640 | |||||||||
SOUTH AFRICA — 10.1% | |||||||||||
Netcare, Ltd. | 134,000 | 327,710 | |||||||||
Sasol, Ltd. | 11,905 | 325,518 | |||||||||
Standard Bank Group, Ltd. | 30,000 | 306,888 | |||||||||
Truworths International, Ltd. | 56,700 | 292,752 | |||||||||
Woolworths Holdings, Ltd. | 55,656 | 312,819 | |||||||||
Total South Africa | 1,565,687 | ||||||||||
TAIWAN — 18.0% | |||||||||||
Cathay Financial Holding Co., Ltd. | 242,000 | 309,588 | |||||||||
Chunghwa Telecom Co., Ltd. | 88,000 | 310,220 | |||||||||
Formosa Plastics Corp. | 126,000 | 312,734 | |||||||||
Hon Hai Precision Industry Co., Ltd. | 124,000 | 312,517 | |||||||||
Nan Ya Plastics Corp. | 162,567 | 321,550 | |||||||||
Pegatron Corp. | 119,026 | 306,057 | |||||||||
Taiwan Mobile Co., Ltd. | 86,000 | 308,657 | |||||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 53,231 | 309,922 | |||||||||
Uni-President Enterprises Corp. | 166,000 | 311,394 | |||||||||
Total Taiwan | 2,802,639 | ||||||||||
THAILAND — 18.2% | |||||||||||
Advanced Info Service PCL NVDR | 67,100 | 309,842 | |||||||||
Airports of Thailand PCL NVDR | 27,000 | 310,909 | |||||||||
Berli Jucker PCL NVDR | 251,000 | 322,352 | |||||||||
CP ALL PCL NVDR | 177,000 | 314,156 | |||||||||
Home Product Center PCL NVDR | 1,068,000 | 308,225 | |||||||||
Intouch Holdings PCL NVDR | 199,700 | 311,221 | |||||||||
Robinson Department Store PCL NVDR | 179,000 | 313,831 | |||||||||
Thai Beverage PCL | 444,000 | 315,875 | |||||||||
Thai Union Group PCL NVDR | 529,300 | 326,898 | |||||||||
Total Thailand | 2,833,309 | ||||||||||
TURKEY — 3.7% | |||||||||||
KOC Holding AS | 68,500 | 294,253 | |||||||||
Turkiye Sise ve Cam Fabrikalari AS | 271,000 | 287,193 | |||||||||
Total Turkey | 581,446 |
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
37
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (continued)
Columbia EM Quality Dividend ETF
September 30, 2016 (Unaudited)
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
UNITED ARAB EMIRATES — 2.1% | |||||||||||
Emaar Properties PJSC | 164,800 | 318,562 | |||||||||
Total Investments (Cost: $15,643,947) | 15,559,846 | ||||||||||
Other Assets & Liabilities, Net | 17,787 | ||||||||||
Net Assets | 15,577,633 |
Abbreviation Legend
NVDR Non-Voting Depositary Receipts
PJSC Private Joint Stock Company
Fair Value Measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund's assumptions about the information market participants would use in pricing an investment. An investment's level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset's or liability's fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
> Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date (including NAV for open-end mutual funds). Valuation adjustments are not applied to Level 1 investments.
> Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.).
> Level 3 — Valuations based on significant unobservable inputs (including the Fund's own assumptions and judgment in determining the fair value of investments).
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment's fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund's Board of Trustees (the Board), the Investment Manager's Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager's organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
38
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (continued)
Columbia EM Quality Dividend ETF
September 30, 2016 (Unaudited)
Fair Value Measurements (continued)
are not readily available, including recommendation of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third-party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund's investments as of September 30, 2016:
Valuation Inputs | Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |||||||||||||||
Common Stocks | 15,559,846 | — | — | 15,559,846 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
39
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (Consolidated)
Columbia EM Strategic Opportunities ETF
September 30, 2016 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common Stocks — 99.8%
Issuer | Shares | Value ($) | |||||||||
BRAZIL — 8.7% | |||||||||||
Ambev SA ADR | 109,487 | 666,776 | |||||||||
BRF SA ADR | 17,786 | 303,429 | |||||||||
Telefonica Brasil SA ADR | 13,615 | 197,009 | |||||||||
Total Brazil | 1,167,214 | ||||||||||
CHINA — 25.5% | |||||||||||
Belle International Holdings, Ltd. | 169,777 | 116,454 | |||||||||
BYD Co., Ltd. Class H(a) | 17,000 | 111,566 | |||||||||
China Mengniu Dairy Co., Ltd. | 79,543 | 147,683 | |||||||||
China Mobile, Ltd. | 55,931 | 676,787 | |||||||||
China Telecom Corp., Ltd. Class H | 453,253 | 228,498 | |||||||||
China Unicom Hong Kong, Ltd. | 195,865 | 235,110 | |||||||||
Ctrip.com International, Ltd. ADR(a) | 9,596 | 446,886 | |||||||||
Guangdong Investment, Ltd. | 90,000 | 142,961 | |||||||||
Hengan International Group Co., Ltd. | 22,379 | 185,531 | |||||||||
JD.com, Inc. ADR(a) | 25,650 | 669,209 | |||||||||
New Oriental Education & Technology Group, Inc. ADR(a) | 2,915 | 135,139 | |||||||||
Sinopharm Group Co. Class H | 38,650 | 185,627 | |||||||||
Vipshop Holdings, Ltd. ADR(a) | 10,609 | 155,634 | |||||||||
Total China | 3,437,085 | ||||||||||
HONG KONG — 1.2% | |||||||||||
WH Group, Ltd.(b) | 204,000 | 164,127 | |||||||||
INDIA — 14.5% | |||||||||||
Bharti Airtel, Ltd. | 43,240 | 203,925 | |||||||||
Hindustan Unilever, Ltd. | 20,975 | 273,403 | |||||||||
ITC, Ltd. | 85,186 | 308,796 | |||||||||
Lupin, Ltd. | 7,144 | 159,474 | |||||||||
Mahindra & Mahindra, Ltd. | 7,840 | 165,525 | |||||||||
NTPC, Ltd. | 62,911 | 139,844 | |||||||||
Sun Pharmaceutical Industries, Ltd. | 34,978 | 390,180 | |||||||||
Tata Motors, Ltd. ADR | 5,066 | 202,539 | |||||||||
Zee Entertainment Enterprises, Ltd. | 13,849 | 113,727 | |||||||||
Total India | 1,957,413 | ||||||||||
INDONESIA — 6.3% | |||||||||||
PT Astra International Tbk | 514,834 | 325,445 | |||||||||
PT Telekomunikasi Indonesia Persero Tbk ADR | 7,997 | 528,442 | |||||||||
Total Indonesia | 853,887 |
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
MALAYSIA — 4.2% | |||||||||||
Axiata Group Bhd | 104,800 | 132,283 | |||||||||
IHH Healthcare Bhd | 81,000 | 123,983 | |||||||||
Tenaga Nasional Bhd | 88,000 | 304,292 | |||||||||
Total Malaysia | 560,558 | ||||||||||
MEXICO — 12.2% | |||||||||||
America Movil SAB de CV Class L ADR | 36,938 | 422,571 | |||||||||
Fomento Economico Mexicano SAB de CV ADR | 6,330 | 582,613 | |||||||||
Grupo Televisa SAB ADR | 12,380 | 318,042 | |||||||||
Wal-Mart de Mexico SAB de CV | 144,118 | 317,077 | |||||||||
Total Mexico | 1,640,303 | ||||||||||
NETHERLANDS — 3.5% | |||||||||||
Steinhoff International Holdings NV | 82,655 | 472,142 | |||||||||
RUSSIA — 3.6% | |||||||||||
Magnit PJSC GDR | 8,479 | 353,490 | |||||||||
Mobile TeleSystems PJSC ADR | 16,861 | 128,649 | |||||||||
Total Russia | 482,139 | ||||||||||
SOUTH AFRICA — 15.8% | |||||||||||
Aspen Pharmacare Holdings, Ltd.(a) | 10,416 | 234,812 | |||||||||
Mediclinic International PLC | 11,197 | 134,962 | |||||||||
Mr Price Group, Ltd. | 6,542 | 72,193 | |||||||||
MTN Group, Ltd. | 50,712 | 433,170 | |||||||||
Naspers, Ltd. N Shares | 3,771 | 651,356 | |||||||||
Shoprite Holdings, Ltd. | 11,075 | 154,142 | |||||||||
Tiger Brands, Ltd. | 5,351 | 147,962 | |||||||||
Vodacom Group, Ltd. | 16,532 | 185,310 | |||||||||
Woolworths Holdings, Ltd. | 21,246 | 119,415 | |||||||||
Total South Africa | 2,133,322 | ||||||||||
THAILAND — 4.3% | |||||||||||
Advanced Info Service PCL | 35,000 | 161,616 | |||||||||
CP ALL PCL NVDR | 129,200 | 229,316 | |||||||||
Thai Beverage PCL | 266,900 | 189,881 | |||||||||
Total Thailand | 580,813 | ||||||||||
Total Investments (Cost: $14,300,257) | 13,449,003 | ||||||||||
Other Assets & Liabilities, Net | 27,297 | ||||||||||
Net Assets | 13,476,300 |
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
40
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (Consolidated) (continued)
Columbia EM Strategic Opportunities ETF
September 30, 2016 (Unaudited)
Notes to Portfolio of Investments
(a) Non-income producing security.
(b) Represents privately placed and other securities and instruments exempt from SEC registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. The Fund may invest in private placements determined to be liquid as well as those determined to be illiquid. Private placements may be determined to be liquid under guidelines established by the Fund's Board of Trustees. At September 30, 2016, the value of this security amounted to $164,127, or 1.22% of net assets.
Abbreviation Legend
ADR American Depositary Receipts
GDR Global Depositary Receipts
NVDR Non-Voting Depositary Receipts
PJSC Private Joint Stock Company
Fair Value Measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund's assumptions about the information market participants would use in pricing an investment. An investment's level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset's or liability's fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
> Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date (including NAV for open-end mutual funds). Valuation adjustments are not applied to Level 1 investments.
> Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.).
> Level 3 — Valuations based on significant unobservable inputs (including the Fund's own assumptions and judgment in determining the fair value of investments).
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment's fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund's Board of Trustees (the Board), the Investment Manager's Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager's organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendation of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third-party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
41
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (Consolidated) (continued)
Columbia EM Strategic Opportunities ETF
September 30, 2016 (Unaudited)
Fair Value Measurements (continued)
back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund's investments as of September 30, 2016:
Valuation Inputs | Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |||||||||||||||
Common Stocks | 13,449,003 | — | — | 13,449,003 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
42
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (Consolidated)
Columbia Emerging Markets Consumer ETF
September 30, 2016 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common Stocks — 99.8%
Issuer | Shares | Value ($) | |||||||||
BRAZIL — 11.0% | |||||||||||
Ambev SA ADR | 6,453,962 | 39,304,628 | |||||||||
BRF SA ADR | 1,363,360 | 23,258,922 | |||||||||
Lojas Renner SA | 1,960,384 | 14,765,408 | |||||||||
Total Brazil | 77,328,958 | ||||||||||
CHILE — 2.8% | |||||||||||
S.A.C.I. Falabella | 2,738,728 | 20,041,582 | |||||||||
CHINA — 21.1% | |||||||||||
Belle International Holdings, Ltd. | 21,806,212 | 14,957,426 | |||||||||
China Mengniu Dairy Co., Ltd. | 8,126,620 | 15,088,200 | |||||||||
Ctrip.com International, Ltd. ADR(a) | 703,012 | 32,739,269 | |||||||||
Hengan International Group Co., Ltd. | 2,076,650 | 17,216,279 | |||||||||
JD.com, Inc. ADR(a) | 1,448,133 | 37,781,790 | |||||||||
Vipshop Holdings, Ltd. ADR(a) | 1,217,126 | 17,855,238 | |||||||||
Want Want China Holdings, Ltd. | 21,444,670 | 13,271,671 | |||||||||
Total China | 148,909,873 | ||||||||||
INDIA — 13.5% | |||||||||||
Hindustan Unilever, Ltd. | 1,636,751 | 21,334,550 | |||||||||
ITC, Ltd. | 6,269,203 | 22,725,626 | |||||||||
Maruti Suzuki India, Ltd. | 280,866 | 23,105,848 | |||||||||
Tata Motors, Ltd. ADR | 699,229 | 27,955,175 | |||||||||
Total India | 95,121,199 | ||||||||||
INDONESIA — 3.7% | |||||||||||
PT Astra International Tbk | 41,638,846 | 26,321,391 | |||||||||
MALAYSIA — 1.9% | |||||||||||
Genting Bhd | 7,005,462 | 13,433,276 |
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
MEXICO — 11.7% | |||||||||||
Fomento Economico Mexicano SAB de CV Series UBD | 3,645,244 | 33,667,676 | |||||||||
Grupo Televisa SAB Series CPO | 4,942,328 | 25,442,640 | |||||||||
Wal-Mart de Mexico SAB de CV | 10,647,946 | 23,426,747 | |||||||||
Total Mexico | 82,537,063 | ||||||||||
NETHERLANDS — 4.5% | |||||||||||
Steinhoff International Holdings NV | 5,579,381 | 31,870,585 | |||||||||
PHILIPPINES — 2.6% | |||||||||||
SM Investments Corp. | 1,308,982 | 18,179,181 | |||||||||
RUSSIA — 3.6% | |||||||||||
Magnit PJSC GDR | 605,677 | 25,250,674 | |||||||||
SOUTH AFRICA — 18.0% | |||||||||||
Mr Price Group, Ltd. | 1,008,669 | 11,131,026 | |||||||||
Naspers, Ltd. N Shares | 400,861 | 69,239,747 | |||||||||
Shoprite Holdings, Ltd. | 1,174,566 | 16,347,618 | |||||||||
Tiger Brands, Ltd. | 559,226 | 15,463,328 | |||||||||
Woolworths Holdings, Ltd. | 2,610,686 | 14,673,570 | |||||||||
Total South Africa | 126,855,289 | ||||||||||
THAILAND — 5.4% | |||||||||||
CP ALL PCL | 11,353,483 | 20,151,203 | |||||||||
Thai Beverage PCL | 25,431,700 | 18,092,889 | |||||||||
Total Thailand | 38,244,092 | ||||||||||
Total Investments (Cost: $698,569,878) | 704,093,163 | ||||||||||
Other Assets & Liabilities, Net | 1,303,755 | ||||||||||
Net Assets | 705,396,918 |
Notes to Portfolio of Investments
(a) Non-income producing security.
Abbreviation Legend
ADR American Depositary Receipts
GDR Global Depositary Receipts
PJSC Private Joint Stock Company
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
43
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (Consolidated) (continued)
Columbia Emerging Markets Consumer ETF
September 30, 2016 (Unaudited)
Fair Value Measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund's assumptions about the information market participants would use in pricing an investment. An investment's level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset's or liability's fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
> Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date (including NAV for open-end mutual funds). Valuation adjustments are not applied to Level 1 investments.
> Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.).
> Level 3 — Valuations based on significant unobservable inputs (including the Fund's own assumptions and judgment in determining the fair value of investments).
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment's fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund's Board of Trustees (the Board), the Investment Manager's Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager's organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendation of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third-party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund's investments as of September 30, 2016:
Valuation Inputs | Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |||||||||||||||
Common Stocks | 704,093,163 | — | — | 704,093,163 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
44
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (Consolidated)
Columbia Emerging Markets Core ETF
September 30, 2016 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common Stocks — 99.8%
Issuer | Shares | Value ($) | |||||||||
BRAZIL — 8.5% | |||||||||||
Ambev SA ADR | 9,455 | 57,581 | |||||||||
Banco Bradesco SA Preference Shares ADR | 6,270 | 56,869 | |||||||||
BRF SA ADR | 3,382 | 57,697 | |||||||||
CPFL Energia SA ADR | 3,858 | 57,098 | |||||||||
Itau Unibanco Holding SA Preference Shares ADR | 5,083 | 55,608 | |||||||||
Petroleo Brasileiro SA ADR(a) | 5,878 | 54,842 | |||||||||
Vale SA ADR | 10,385 | 57,117 | |||||||||
Total Brazil | 396,812 | ||||||||||
CHILE — 1.3% | |||||||||||
S.A.C.I. Falabella | 7,939 | 58,096 | |||||||||
CHINA — 13.9% | |||||||||||
AAC Technologies Holdings, Inc. | 1,762 | 17,709 | |||||||||
Alibaba Group Holding, Ltd. ADR(a) | 192 | 20,312 | |||||||||
Baidu, Inc. ADR(a) | 102 | 18,571 | |||||||||
Bank of China, Ltd. Class H | 39,359 | 17,964 | |||||||||
Belle International Holdings, Ltd. | 28,224 | 19,360 | |||||||||
China Communications Construction Co., Ltd. Class H | 17,000 | 17,864 | |||||||||
China Construction Bank Corp. Class H | 24,398 | 18,088 | |||||||||
China Everbright International, Ltd. | 13,866 | 16,483 | |||||||||
China Life Insurance Co., Ltd. ADR | 1,443 | 18,874 | |||||||||
China Mobile, Ltd. ADR | 308 | 18,948 | |||||||||
China Overseas Land & Investment, Ltd. | 5,460 | 18,515 | |||||||||
China Pacific Insurance Group Co., Ltd. Class H | 4,912 | 18,145 | |||||||||
China Railway Signal & Communication Corp., Ltd. Class H(b) | 23,950 | 17,972 | |||||||||
China Resources Land, Ltd. | 6,804 | 18,949 | |||||||||
China Unicom Hong Kong, Ltd. ADR | 1,563 | 19,037 | |||||||||
CITIC, Ltd. | 11,921 | 16,999 | |||||||||
CNOOC, Ltd. | 14,712 | 18,248 | |||||||||
Ctrip.com International, Ltd. ADR(a) | 419 | 19,513 | |||||||||
Guangdong Investment, Ltd. | 12,000 | 19,061 | |||||||||
Haitong Securities Co., Ltd. Class H | 10,568 | 17,877 | |||||||||
Hengan International Group Co., Ltd. | 1,972 | 16,349 | |||||||||
Industrial and Commercial Bank of China, Ltd. Class H | 29,321 | 18,335 | |||||||||
JD.com, Inc. ADR(a) | 710 | 18,524 |
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
Lenovo Group, Ltd. | 28,216 | 18,699 | |||||||||
NetEase, Inc. ADR | 86 | 20,707 | |||||||||
New Oriental Education & Technology Group, Inc. ADR(a) | 424 | 19,657 | |||||||||
PICC Property & Casualty Co., Ltd. Class H | 10,364 | 17,158 | |||||||||
Ping An Insurance Group Co. of China, Ltd. Class H | 3,624 | 18,784 | |||||||||
Semiconductor Manufacturing International Corp.(a) | 169,272 | 18,988 | |||||||||
Shenzhou International Group Holdings, Ltd. | 3,000 | 20,887 | |||||||||
Sinopharm Group Co. Class H | 3,675 | 17,650 | |||||||||
Tencent Holdings, Ltd. | 715 | 19,636 | |||||||||
Want Want China Holdings, Ltd. | 28,150 | 17,421 | |||||||||
Xinyi Solar Holdings, Ltd.(a) | 45,066 | 16,850 | |||||||||
ZTE Corp. Class H | 13,109 | 19,065 | |||||||||
Total China | 647,199 | ||||||||||
HONG KONG — 1.1% | |||||||||||
Alibaba Pictures Group, Ltd.(a) | 82,521 | 17,236 | |||||||||
GCL-Poly Energy Holdings, Ltd. | 132,426 | 17,586 | |||||||||
Haier Electronics Group Co., Ltd. | 10,292 | 17,012 | |||||||||
Hanergy Thin Film Power Group, Ltd.(a)(c) | 60,421 | 604 | |||||||||
Total Hong Kong | 52,438 | ||||||||||
INDIA — 14.9% | |||||||||||
Adani Ports and Special Economic Zone, Ltd. | 10,824 | 41,740 | |||||||||
Dr. Reddy's Laboratories, Ltd. | 950 | 44,338 | |||||||||
Hindustan Unilever, Ltd. | 3,196 | 41,659 | |||||||||
Housing Development Finance Corp., Ltd. | 2,090 | 43,742 | |||||||||
Infosys, Ltd. ADR | 2,759 | 43,537 | |||||||||
ITC, Ltd. | 11,395 | 41,306 | |||||||||
Larsen & Toubro, Ltd. | 1,960 | 42,189 | |||||||||
Lupin, Ltd. | 1,935 | 43,195 | |||||||||
Mahindra & Mahindra, Ltd. | 2,003 | 42,289 | |||||||||
Maruti Suzuki India, Ltd. | 561 | 46,151 | |||||||||
NTPC, Ltd. | 18,539 | 41,210 | |||||||||
Reliance Industries, Ltd. | 2,929 | 47,674 | |||||||||
Sun Pharmaceutical Industries, Ltd. | 3,823 | 42,646 | |||||||||
Tata Consultancy Services, Ltd. | 1,216 | 44,396 | |||||||||
Tata Motors, Ltd. ADR | 1,000 | 39,980 |
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
45
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (Consolidated) (continued)
Columbia Emerging Markets Core ETF
September 30, 2016 (Unaudited)
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
Zee Entertainment Enterprises, Ltd. | 5,599 | 45,979 | |||||||||
Total India | 692,031 | ||||||||||
INDONESIA — 5.1% | |||||||||||
PT Astra International Tbk | 92,714 | 58,608 | |||||||||
PT Telekomunikasi Indonesia Persero Tbk ADR | 1,815 | 119,935 | |||||||||
PT Unilever Indonesia Tbk | 16,629 | 56,764 | |||||||||
Total Indonesia | 235,307 | ||||||||||
MALAYSIA — 6.0% | |||||||||||
Genting Bhd | 29,800 | 57,143 | |||||||||
Genting Malaysia Bhd | 51,800 | 56,992 | |||||||||
IHH Healthcare Bhd | 35,700 | 54,644 | |||||||||
Sime Darby Bhd | 30,100 | 55,680 | |||||||||
Tenaga Nasional Bhd | 16,300 | 56,363 | |||||||||
Total Malaysia | 280,822 | ||||||||||
MEXICO — 14.3% | |||||||||||
Alfa SAB de CV Class A | 35,480 | 55,474 | |||||||||
America Movil SAB de CV Class L ADR | 4,827 | 55,221 | |||||||||
Cemex SAB de CV Series CPO(a) | 69,841 | 55,430 | |||||||||
Fibra Uno Administracion SA de CV | 29,753 | 54,453 | |||||||||
Fomento Economico Mexicano SAB de CV ADR | 620 | 57,065 | |||||||||
Grupo Aeroportuario del Pacifico SAB de CV Class B | 5,700 | 54,224 | |||||||||
Grupo Aeroportuario del Sureste SAB de CV Class B | 3,719 | 54,626 | |||||||||
Grupo Mexico SAB de CV Series B | 22,910 | 56,087 | |||||||||
Grupo Televisa SAB ADR | 2,169 | 55,721 | |||||||||
Kimberly-Clark de Mexico SAB de CV Class A | 23,642 | 53,579 | |||||||||
Megacable Holdings SAB de CV | 14,700 | 56,450 | |||||||||
Wal-Mart de Mexico SAB de CV | 25,380 | 55,839 | |||||||||
Total Mexico | 664,169 | ||||||||||
NETHERLANDS — 1.2% | |||||||||||
Steinhoff International Holdings NV | 9,486 | 54,186 | |||||||||
PERU — 1.3% | |||||||||||
Southern Copper Corp. | 2,267 | 59,622 | |||||||||
PHILIPPINES — 4.9% | |||||||||||
Ayala Land, Inc. | 71,000 | 57,465 |
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
Jollibee Foods Corp. | 11,030 | 56,179 | |||||||||
SM Investments Corp. | 4,090 | 56,802 | |||||||||
SM Prime Holdings, Inc. | 100,100 | 58,105 | |||||||||
Total Philippines | 228,551 | ||||||||||
POLAND — 2.3% | |||||||||||
Cyfrowy Polsat SA(a) | 8,602 | 55,064 | |||||||||
Powszechny Zaklad Ubezpieczen SA | 7,969 | 50,762 | |||||||||
Total Poland | 105,826 | ||||||||||
RUSSIA — 5.0% | |||||||||||
Gazprom PAO ADR | 13,320 | 56,077 | |||||||||
LUKOIL PJSC ADR | 1,216 | 59,207 | |||||||||
Magnit PJSC GDR | 1,386 | 57,782 | |||||||||
MMC Norilsk Nickel PJSC ADR | 3,673 | 58,695 | |||||||||
Total Russia | 231,761 | ||||||||||
SOUTH AFRICA — 13.8% | |||||||||||
Aspen Pharmacare Holdings, Ltd.(a) | 2,145 | 48,356 | |||||||||
FirstRand, Ltd. | 16,446 | 56,808 | |||||||||
Mediclinic International PLC | 4,022 | 48,479 | |||||||||
MTN Group, Ltd. | 6,523 | 55,718 | |||||||||
Naspers, Ltd. N Shares | 306 | 52,855 | |||||||||
Netcare, Ltd. | 22,761 | 55,664 | |||||||||
Remgro, Ltd. | 3,003 | 50,131 | |||||||||
Sanlam, Ltd. | 11,572 | 53,689 | |||||||||
Sasol, Ltd. ADR | 2,024 | 55,296 | |||||||||
Shoprite Holdings, Ltd. | 4,115 | 57,272 | |||||||||
Tiger Brands, Ltd. | 1,930 | 53,367 | |||||||||
Woolworths Holdings, Ltd. | 9,357 | 52,592 | |||||||||
Total South Africa | 640,227 | ||||||||||
THAILAND — 3.7% | |||||||||||
Airports of Thailand PCL NVDR | 5,000 | 57,576 | |||||||||
CP ALL PCL NVDR | 33,600 | 59,636 | |||||||||
Siam Cement PCL NVDR | 3,800 | 56,589 | |||||||||
Total Thailand | 173,801 | ||||||||||
TURKEY — 1.2% | |||||||||||
Haci Omer Sabanci Holding AS | 17,853 | 55,272 |
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
46
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (Consolidated) (continued)
Columbia Emerging Markets Core ETF
September 30, 2016 (Unaudited)
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
UNITED ARAB EMIRATES — 1.3% | |||||||||||
Emaar Properties PJSC | 30,198 | 58,374 | |||||||||
Total Investments (Cost: $4,599,637) | 4,634,494 | ||||||||||
Other Assets & Liabilities, Net | 9,046 | ||||||||||
Net Assets | 4,643,540 |
Notes to Portfolio of Investments
(a) Non-income producing security.
(b) Represents privately placed and other securities and instruments exempt from SEC registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. The Fund may invest in private placements determined to be liquid as well as those determined to be illiquid. Private placements may be determined to be liquid under guidelines established by the Fund's Board of Trustees. At September 30, 2016, the value of this security amounted to $17,972, or 0.39% of net assets.
(c) Fair valued security.
Abbreviation Legend
ADR American Depositary Receipts
GDR Global Depositary Receipts
NVDR Non-Voting Depositary Receipts
PJSC Private Joint Stock Company
Fair Value Measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund's assumptions about the information market participants would use in pricing an investment. An investment's level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset's or liability's fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
> Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date (including NAV for open-end mutual funds). Valuation adjustments are not applied to Level 1 investments.
> Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.).
> Level 3 — Valuations based on significant unobservable inputs (including the Fund's own assumptions and judgment in determining the fair value of investments).
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment's fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
47
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (Consolidated) (continued)
Columbia Emerging Markets Core ETF
September 30, 2016 (Unaudited)
Fair Value Measurements (continued)
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund's Board of Trustees (the Board), the Investment Manager's Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager's organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendation of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third-party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund's investments as of September 30, 2016:
Valuation Inputs | Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |||||||||||||||
Common Stocks | 4,633,890 | — | 604 | 4,634,494 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
Financial assets were transferred from Level 3 to Level 1 as the market for these assets was deemed to be active during the period and fair values were consequently obtained using quoted prices for identical assets rather than being based upon other observable market inputs as of period end.
The following table shows transfers between Level 1 and Level 3 of the fair value hierarchy:
Transfers In | Transfers Out | ||||||||||||||
Level 1 ($) | Level 3 ($) | Level 1 ($) | Level 3 ($) | ||||||||||||
15,914 | — | — | 15,914 |
Transfers between Level 1 and Level 3 are determined based on the fair value at the beginning of the period for security positions held throughout the period.
There were no transfers of financial assets between Levels 1 and 2 during the period.
There were no transfers of financial assets between Levels 2 and 3 during the period.
The Fund's assets assigned to the Level 3 category are valued utilizing the valuation technique deemed the most appropriate in the circumstances. Certain common stock classified as Level 3 securities are valued using the market approach. To determine fair value for these securities, management considered various factors which may have included, but were not limited to, the halt price of the security, discount rates observed in the market for similar assets as well as the movement in certain foreign or domestic market indices. Significant increases (decreases) to any of these inputs would result in a significantly lower (higher) fair value measurement. Generally, a change in observable yields on comparable securities would result in a directionally similar change to discount rates.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
48
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (Consolidated)
Columbia India Consumer ETF
September 30, 2016 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common Stocks — 99.9%
Issuer | Shares | Value ($) | |||||||||
CONSUMER GOODS — 79.5% | |||||||||||
Aditya Birla Fashion and Retail, Ltd.(a) | 185,816 | 384,721 | |||||||||
Bajaj Auto, Ltd. | 95,802 | 4,068,635 | |||||||||
Bosch, Ltd. | 12,319 | 4,218,184 | |||||||||
Colgate-Palmolive India, Ltd. | 203,002 | 2,959,506 | |||||||||
Dabur India, Ltd. | 842,516 | 3,431,816 | |||||||||
Emami, Ltd. | 84,826 | 1,490,507 | |||||||||
Exide Industries, Ltd. | 549,431 | 1,510,151 | |||||||||
GlaxoSmithKline Consumer Healthcare, Ltd. | 17,649 | 1,599,583 | |||||||||
Godrej Consumer Products, Ltd. | 171,286 | 4,081,870 | |||||||||
Hero MotoCorp, Ltd. | 79,271 | 4,064,395 | |||||||||
Hindustan Unilever, Ltd. | 261,988 | 3,414,934 | |||||||||
ITC, Ltd. | 1,041,514 | 3,775,449 | |||||||||
Marico, Ltd. | 700,099 | 2,896,925 | |||||||||
Maruti Suzuki India, Ltd. | 61,309 | 5,043,674 | |||||||||
Motherson Sumi Systems, Ltd. | 671,822 | 3,208,762 | |||||||||
MRF, Ltd. | 3,807 | 2,908,858 | |||||||||
Nestle India, Ltd. | 43,103 | 4,164,541 | |||||||||
Page Industries, Ltd. | 5,804 | 1,317,856 | |||||||||
Procter & Gamble Hygiene & Health Care, Ltd. | 14,511 | 1,483,182 |
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
Rajesh Exports, Ltd. | 80,949 | 555,385 | |||||||||
Titan Co., Ltd. | 487,453 | 2,892,651 | |||||||||
TVS Motor Co., Ltd. | 289,896 | 1,592,948 | |||||||||
United Breweries, Ltd. | 97,047 | 1,317,670 | |||||||||
United Spirits, Ltd.(a) | 85,704 | 3,174,897 | |||||||||
Welspun India, Ltd. | 398,834 | 314,491 | |||||||||
Total | 65,871,591 | ||||||||||
CONSUMER SERVICES — 6.6% | |||||||||||
Sun TV Network, Ltd. | 112,924 | 856,767 | |||||||||
Zee Entertainment Enterprises, Ltd. | 560,046 | 4,599,056 | |||||||||
Total | 5,455,823 | ||||||||||
INDUSTRIALS — 13.8% | |||||||||||
Bharat Forge, Ltd. | 184,523 | 2,524,235 | |||||||||
Mahindra & Mahindra, Ltd. | 182,478 | 3,852,648 | |||||||||
Tata Motors, Ltd. | 629,869 | 5,059,860 | |||||||||
Total | 11,436,743 | ||||||||||
Total Investments (Cost: $71,378,282) | 82,764,157 | ||||||||||
Other Assets & Liabilities, Net | 79,783 | ||||||||||
Net Assets | 82,843,940 |
Notes to Portfolio of Investments
(a) Non-income producing security.
Fair Value Measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund's assumptions about the information market participants would use in pricing an investment. An investment's level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset's or liability's fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
> Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date (including NAV for open-end mutual funds). Valuation adjustments are not applied to Level 1 investments.
> Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.).
> Level 3 — Valuations based on significant unobservable inputs (including the Fund's own assumptions and judgment in determining the fair value of investments).
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
49
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (Consolidated) (continued)
Columbia India Consumer ETF
September 30, 2016 (Unaudited)
Fair Value Measurements (continued)
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment's fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund's Board of Trustees (the Board), the Investment Manager's Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager's organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendation of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third-party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund's investments as of September 30, 2016:
Valuation Inputs | Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |||||||||||||||
Common Stocks | 82,764,157 | — | — | 82,764,157 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
50
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (Consolidated)
Columbia India Infrastructure ETF
September 30, 2016 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common Stocks — 99.7%
Issuer | Shares | Value ($) | |||||||||
BASIC MATERIALS — 11.8% | |||||||||||
JSW Steel, Ltd. | 79,751 | 2,071,454 | |||||||||
NMDC, Ltd. | 644,653 | 1,024,396 | |||||||||
Vedanta, Ltd. | 861,694 | 2,226,711 | |||||||||
Total | 5,322,561 | ||||||||||
CONSUMER GOODS — 5.4% | |||||||||||
Aditya Birla Nuvo, Ltd. | 45,407 | 929,793 | |||||||||
Cummins India, Ltd. | 110,496 | 1,502,766 | |||||||||
Total | 2,432,559 | ||||||||||
FINANCIALS — 1.8% | |||||||||||
DLF, Ltd. | 363,736 | 798,438 | |||||||||
INDUSTRIALS — 47.4% | |||||||||||
ACC, Ltd. | 75,890 | 1,823,560 | |||||||||
Adani Ports and Special Economic Zone, Ltd. | 559,367 | 2,157,066 | |||||||||
Ambuja Cements, Ltd. | 558,504 | 2,111,796 | |||||||||
Ashok Leyland, Ltd. | 1,119,017 | 1,337,846 | |||||||||
Bharat Heavy Electricals, Ltd. | 735,178 | 1,487,361 | |||||||||
Container Corp. of India, Ltd. | 68,480 | 1,418,764 | |||||||||
Eicher Motors, Ltd. | 6,641 | 2,476,441 | |||||||||
Havells India, Ltd. | 168,074 | 1,055,701 | |||||||||
Larsen & Toubro, Ltd. | 100,295 | 2,158,873 | |||||||||
NBCC India, Ltd. | 48,778 | 184,438 | |||||||||
Shree Cement, Ltd. | 6,533 | 1,672,273 |
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
Siemens, Ltd. | 72,446 | 1,349,576 | |||||||||
UltraTech Cement, Ltd. | 38,526 | 2,228,669 | |||||||||
Total | 21,462,364 | ||||||||||
OIL & GAS — 4.7% | |||||||||||
GAIL India, Ltd. | 377,992 | 2,126,986 | |||||||||
TELECOMMUNICATIONS — 13.9% | |||||||||||
Bharti Airtel, Ltd. | 472,689 | 2,229,263 | |||||||||
Bharti Infratel, Ltd. | 433,381 | 2,377,802 | |||||||||
Idea Cellular, Ltd. | 1,015,025 | 1,205,895 | |||||||||
Tata Communications, Ltd. | 57,871 | 491,660 | |||||||||
Total | 6,304,620 | ||||||||||
UTILITIES — 14.7% | |||||||||||
JSW Energy, Ltd. | 245,456 | 269,308 | |||||||||
NTPC, Ltd. | 959,092 | 2,131,956 | |||||||||
Petronet LNG, Ltd. | 243,921 | 1,265,400 | |||||||||
Reliance Infrastructure, Ltd. | 110,389 | 913,967 | |||||||||
Reliance Power, Ltd. | 570,783 | 408,498 | |||||||||
Tata Power Co., Ltd. | 1,471,227 | 1,666,124 | |||||||||
Total | 6,655,253 | ||||||||||
Total Investments (Cost: $41,059,730) | 45,102,781 | ||||||||||
Other Assets & Liabilities, Net | 142,487 | ||||||||||
Net Assets | 45,245,268 |
Fair Value Measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund's assumptions about the information market participants would use in pricing an investment. An investment's level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset's or liability's fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
> Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date (including NAV for open-end mutual funds). Valuation adjustments are not applied to Level 1 investments.
> Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.).
> Level 3 — Valuations based on significant unobservable inputs (including the Fund's own assumptions and judgment in determining the fair value of investments).
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
51
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (Consolidated) (continued)
Columbia India Infrastructure ETF
September 30, 2016 (Unaudited)
Fair Value Measurements (continued)
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment's fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund's Board of Trustees (the Board), the Investment Manager's Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager's organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendation of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third-party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund's investments as of September 30, 2016:
Valuation Inputs | Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |||||||||||||||
Common Stocks | 45,102,781 | — | — | 45,102,781 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
52
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (Consolidated)
Columbia India Small Cap ETF
September 30, 2016 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common Stocks — 99.9%
Issuer | Shares | Value ($) | |||||||||
BASIC MATERIALS — 4.7% | |||||||||||
Jubilant Life Sciences, Ltd. | 47,039 | 434,005 | |||||||||
SRF, Ltd. | 19,576 | 522,684 | |||||||||
Total | 956,689 | ||||||||||
CONSUMER GOODS — 16.5% | |||||||||||
Apollo Tyres, Ltd. | 215,472 | 711,821 | |||||||||
Arvind, Ltd. | 96,219 | 487,165 | |||||||||
Balrampur Chini Mills, Ltd. | 89,883 | 145,462 | |||||||||
Bata India, Ltd. | 43,295 | 318,828 | |||||||||
Ceat, Ltd. | 11,677 | 232,628 | |||||||||
Coffee Day Enterprises, Ltd.(a)(b) | 25,793 | 87,203 | |||||||||
Delta Corp., Ltd. | 72,872 | 183,767 | |||||||||
Godfrey Phillips India, Ltd. | 10,403 | 201,029 | |||||||||
JK Tyre & Industries, Ltd. | 62,690 | 139,777 | |||||||||
Kaveri Seed Co., Ltd.(a) | 18,355 | 98,736 | |||||||||
PC Jeweller, Ltd. | 19,882 | 144,860 | |||||||||
Tata Global Beverages, Ltd. | 296,129 | 620,901 | |||||||||
Total | 3,372,177 | ||||||||||
CONSUMER SERVICES — 4.6% | |||||||||||
Cox & Kings, Ltd. | 57,895 | 192,085 | |||||||||
Jet Airways India, Ltd.(a) | 20,317 | 145,328 | |||||||||
Jubilant Foodworks, Ltd. | 24,067 | 348,462 | |||||||||
TV18 Broadcast, Ltd.(a) | 389,059 | 260,035 | |||||||||
Total | 945,910 | ||||||||||
FINANCIALS — 25.4% | |||||||||||
Allahabad Bank(a) | 159,978 | 184,655 | |||||||||
Andhra Bank | 168,288 | 142,557 | |||||||||
Bank of India(a) | 173,660 | 293,433 | |||||||||
Bharat Financial Inclusion, Ltd.(a) | 75,345 | 996,584 | |||||||||
DCB Bank, Ltd.(a) | 139,833 | 262,843 | |||||||||
Dewan Housing Finance Corp., Ltd. | 93,780 | 399,741 | |||||||||
Federal Bank, Ltd. | 1,068,250 | 1,155,212 | |||||||||
Housing Development & Infrastructure, Ltd.(a) | 182,473 | 218,156 | |||||||||
IFCI, Ltd. | 527,226 | 208,262 | |||||||||
Indiabulls Real Estate, Ltd.(a) | 125,332 | 173,466 | |||||||||
Karnataka Bank, Ltd. (The) | 128,922 | 284,546 | |||||||||
Manappuram Finance, Ltd. | 257,394 | 353,733 | |||||||||
Oriental Bank of Commerce | 82,045 | 154,528 |
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
Syndicate Bank(a) | 145,191 | 159,518 | |||||||||
UCO Bank(a) | 208,851 | 113,867 | |||||||||
Unitech, Ltd.(a) | 1,302,578 | 115,428 | |||||||||
Total | 5,216,529 | ||||||||||
HEALTH CARE — 6.3% | |||||||||||
Dishman Pharmaceuticals & Chemicals, Ltd. | 44,388 | 172,905 | |||||||||
Fortis Healthcare, Ltd.(a) | 69,819 | 175,124 | |||||||||
Granules India, Ltd. | 75,708 | 132,245 | |||||||||
Ipca Laboratories, Ltd.(a) | 40,446 | 364,184 | |||||||||
Marksans Pharma, Ltd. | 148,463 | 117,290 | |||||||||
Sun Pharma Advanced Research Co., Ltd.(a) | 47,818 | 226,521 | |||||||||
Suven Life Sciences, Ltd. | 34,459 | 103,641 | |||||||||
Total | 1,291,910 | ||||||||||
INDUSTRIALS — 27.8% | |||||||||||
Adani Enterprises, Ltd. | 169,033 | 166,799 | |||||||||
BEML, Ltd. | 13,708 | 180,368 | |||||||||
Century Textiles & Industries, Ltd. | 29,658 | 420,081 | |||||||||
Crompton Greaves, Ltd.(a) | 848,500 | 956,442 | |||||||||
Engineers India, Ltd. | 73,913 | 275,814 | |||||||||
Escorts, Ltd. | 39,862 | 224,875 | |||||||||
Gujarat Pipavav Port, Ltd. | 175,596 | 458,902 | |||||||||
Hindustan Construction Co., Ltd.(a) | 330,414 | 173,693 | |||||||||
India Cements, Ltd. | 128,824 | 278,622 | |||||||||
IRB Infrastructure Developers, Ltd. | 106,571 | 392,398 | |||||||||
Jain Irrigation Systems, Ltd. | 210,691 | 283,379 | |||||||||
Jaiprakash Associates, Ltd.(a) | 1,055,914 | 166,523 | |||||||||
NCC, Ltd. | 213,893 | 263,752 | |||||||||
NIIT, Ltd.(a) | 72,317 | 103,457 | |||||||||
Reliance Defence and Engineering, Ltd.(a) | 90,047 | 76,347 | |||||||||
Sintex Industries, Ltd. | 255,827 | 300,860 | |||||||||
Voltas, Ltd. | 159,272 | 906,879 | |||||||||
VRL Logistics, Ltd. | 15,032 | 67,642 | |||||||||
Total | 5,696,833 | ||||||||||
OIL & GAS — 3.2% | |||||||||||
Chennai Petroleum Corp., Ltd. | 34,837 | 150,299 | |||||||||
Suzlon Energy, Ltd.(a) | 1,901,968 | 424,215 |
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
53
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (Consolidated) (continued)
Columbia India Small Cap ETF
September 30, 2016 (Unaudited)
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
Tide Water Oil Co. India, Ltd. | 986 | 82,950 | |||||||||
Total | 657,464 | ||||||||||
TECHNOLOGY — 5.7% | |||||||||||
Hexaware Technologies, Ltd. | 62,055 | 175,782 | |||||||||
Himachal Futuristic Communications, Ltd.(a) | 388,878 | 86,735 | |||||||||
Intellect Design Arena, Ltd.(a) | 42,387 | 110,487 | |||||||||
Just Dial, Ltd.(a) | 17,454 | 112,948 | |||||||||
KPIT Technologies, Ltd. | 86,767 | 161,727 | |||||||||
NIIT Technologies, Ltd. | 28,693 | 180,549 | |||||||||
Polaris Consulting & Services, Ltd.(a) | 33,659 | 80,735 | |||||||||
Tata Elxsi, Ltd. | 12,276 | 256,703 | |||||||||
Total | 1,165,666 |
Common Stocks (continued)
Issuer | Shares | Value ($) | |||||||||
UTILITIES — 5.7% | |||||||||||
Adani Power, Ltd.(a) | 767,964 | 287,208 | |||||||||
CESC, Ltd. | 41,029 | 376,366 | |||||||||
GMR Infrastructure, Ltd.(a) | 1,656,221 | 315,921 | |||||||||
PTC India, Ltd. | 177,434 | 198,407 | |||||||||
Total | 1,177,902 | ||||||||||
Total Investments (Cost: $18,796,553) | 20,481,080 | ||||||||||
Other Assets & Liabilities, Net | 12,604 | ||||||||||
Net Assets | 20,493,684 |
Notes to Portfolio of Investments
(a) Non-income producing security.
(b) Represents privately placed and other securities and instruments exempt from SEC registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. The Fund may invest in private placements determined to be liquid as well as those determined to be illiquid. Private placements may be determined to be liquid under guidelines established by the Fund's Board of Trustees. At September 30, 2016, the value of this security amounted to $87,203, or 0.43% of net assets.
Fair Value Measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund's assumptions about the information market participants would use in pricing an investment. An investment's level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset's or liability's fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
> Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date (including NAV for open-end mutual funds). Valuation adjustments are not applied to Level 1 investments.
> Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.).
> Level 3 — Valuations based on significant unobservable inputs (including the Fund's own assumptions and judgment in determining the fair value of investments).
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment's fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
54
COLUMBIA ETF TRUST II
PORTFOLIO OF INVESTMENTS (Consolidated) (continued)
Columbia India Small Cap ETF
September 30, 2016 (Unaudited)
Fair Value Measurements (continued)
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund's Board of Trustees (the Board), the Investment Manager's Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager's organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendation of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third-party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund's investments as of September 30, 2016:
Valuation Inputs | Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |||||||||||||||
Common Stocks | 20,481,080 | — | — | 20,481,080 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
55
COLUMBIA ETF TRUST II
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2016 (Unaudited)
Columbia Beyond BRICs ETF | Columbia EM Core ex-China ETF | Columbia EM Quality Dividend ETF | |||||||||||||
Assets | |||||||||||||||
Investments, at cost: | $ | 103,620,582 | $ | 9,580,432 | $ | 15,643,947 | |||||||||
Investments, at fair value (Note 2) | 90,337,796 | 10,435,615 | 15,559,846 | ||||||||||||
Cash | — | 77,829 | — | ||||||||||||
Foreign cash* | 55,719 | 564 | 513,230 | ||||||||||||
Receivable for: | |||||||||||||||
Investment sold | 301,498 | — | — | ||||||||||||
Capital shares sold | — | — | — | ||||||||||||
Dividends | 247,389 | 18,229 | 35,120 | ||||||||||||
Spot foreign currency contracts | — | — | — | ||||||||||||
Foreign tax reclaims | 3,340 | — | — | ||||||||||||
Total assets | 90,945,742 | 10,532,237 | 16,108,196 | ||||||||||||
Liabilities | |||||||||||||||
Payable for: | |||||||||||||||
Investment purchased | — | — | — | ||||||||||||
Capital shares purchased | — | — | — | ||||||||||||
Investment management fees | 43,156 | 3,037 | 10,943 | ||||||||||||
Due to custodian | 220,007 | — | 417,189 | ||||||||||||
Income payable | — | — | 102,431 | ||||||||||||
Total liabilities | 263,163 | 3,037 | 530,563 | ||||||||||||
Net assets applicable to outstanding capital stock | $ | 90,682,579 | $ | 10,529,200 | $ | 15,577,633 | |||||||||
Represented by | |||||||||||||||
Paid-in capital | $ | 160,930,882 | $ | 9,771,074 | $ | 43,558,476 | |||||||||
Undistributed net investment income | 2,139,708 | 95,358 | 149,785 | ||||||||||||
Accumulated net realized loss on investments and foreign currency transactions | (59,104,816 | ) | (192,485 | ) | (28,047,522 | ) | |||||||||
Net unrealized appreciation (depreciation) on: | |||||||||||||||
Investments | (13,282,786 | ) | 855,183 | (84,101 | ) | ||||||||||
Foreign currency translations | (409 | ) | 70 | 995 | |||||||||||
Total — representing net assets applicable to outstanding capital stock | $ | 90,682,579 | $ | 10,529,200 | $ | 15,577,633 | |||||||||
Shares outstanding | 5,650,000 | 450,000 | 1,150,000 | ||||||||||||
Net asset value per share | $ | 16.05 | $ | 23.40 | $ | 13.55 | |||||||||
*Cost of foreign cash: | $ | 55,697 | $ | 565 | $ | 513,693 |
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
56
COLUMBIA ETF TRUST II
STATEMENT OF ASSETS AND LIABILITIES (continued)
September 30, 2016 (Unaudited)
Columbia EM Strategic Opportunities ETF (Consolidated) | Columbia Emerging Markets Consumer ETF (Consolidated) | Columbia Emerging Markets Core ETF (Consolidated) | |||||||||||||
Assets | |||||||||||||||
Investments, at cost: | $ | 14,300,257 | $ | 698,569,878 | $ | 4,599,637 | |||||||||
Investments, at fair value (Note 2) | 13,449,003 | 704,093,163 | 4,634,494 | ||||||||||||
Cash | 8,060 | 1,157,765 | 4,144 | ||||||||||||
Foreign cash* | 9,726 | 425,636 | 169 | ||||||||||||
Receivable for: | |||||||||||||||
Investment sold | — | — | — | ||||||||||||
Capital shares sold | — | 6,756,056 | — | ||||||||||||
Dividends | 16,772 | 769,756 | 7,438 | ||||||||||||
Spot foreign currency contracts | — | 42,258 | — | ||||||||||||
Foreign tax reclaims | — | — | — | ||||||||||||
Total assets | 13,483,561 | 713,244,634 | 4,646,245 | ||||||||||||
Liabilities | |||||||||||||||
Payable for: | |||||||||||||||
Investment purchased | — | 7,355,227 | — | ||||||||||||
Capital shares purchased | — | 5,042 | — | ||||||||||||
Investment management fees | 7,261 | 487,447 | 2,705 | ||||||||||||
Due to custodian | — | — | — | ||||||||||||
Income payable | — | — | — | ||||||||||||
Total liabilities | 7,261 | 7,847,716 | 2,705 | ||||||||||||
Net assets applicable to outstanding capital stock | $ | 13,476,300 | $ | 705,396,918 | $ | 4,643,540 | |||||||||
Represented by | |||||||||||||||
Paid-in capital | $ | 17,492,441 | $ | 841,243,622 | $ | 5,273,798 | |||||||||
Undistributed net investment income | 186,414 | 3,406,180 | 52,743 | ||||||||||||
Accumulated net realized loss on investments and foreign currency transactions | (3,351,294 | ) | (144,784,650 | ) | (717,868 | ) | |||||||||
Net unrealized appreciation (depreciation) on: | |||||||||||||||
Investments | (851,254 | ) | 5,523,285 | 34,857 | |||||||||||
Foreign currency translations | (7 | ) | 8,481 | 10 | |||||||||||
Total — representing net assets applicable to outstanding capital stock | $ | 13,476,300 | $ | 705,396,918 | $ | 4,643,540 | |||||||||
Shares outstanding | 700,000 | 28,600,000 | 250,000 | ||||||||||||
Net asset value per share | $ | 19.25 | $ | 24.66 | $ | 18.57 | |||||||||
*Cost of foreign cash: | $ | 9,720 | $ | 421,661 | $ | 169 |
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
57
COLUMBIA ETF TRUST II
STATEMENT OF ASSETS AND LIABILITIES (continued)
September 30, 2016 (Unaudited)
Columbia India Consumer ETF (Consolidated) | Columbia India Infrastructure ETF (Consolidated) | Columbia India Small Cap ETF (Consolidated) | |||||||||||||
Assets | |||||||||||||||
Investments, at cost: | $ | 71,378,282 | $ | 41,059,730 | $ | 18,796,553 | |||||||||
Investments, at fair value (Note 2) | 82,764,157 | 45,102,781 | 20,481,080 | ||||||||||||
Cash | 100,992 | — | 10,836 | ||||||||||||
Foreign cash* | 39,776 | 1,159,136 | 4,604 | ||||||||||||
Receivable for: | |||||||||||||||
Investment sold | — | — | — | ||||||||||||
Capital shares sold | — | — | — | ||||||||||||
Dividends | 121 | 39,037 | 12,487 | ||||||||||||
Spot foreign currency contracts | — | — | — | ||||||||||||
Foreign tax reclaims | — | — | — | ||||||||||||
Total assets | 82,905,046 | 46,300,954 | 20,509,007 | ||||||||||||
Liabilities | |||||||||||||||
Payable for: | |||||||||||||||
Investment purchased | — | 581,078 | — | ||||||||||||
Capital shares purchased | — | — | — | ||||||||||||
Investment management fees | 61,106 | 32,012 | 15,323 | ||||||||||||
Due to custodian | — | 442,596 | — | ||||||||||||
Income payable | — | — | — | ||||||||||||
Total liabilities | 61,106 | 1,055,686 | 15,323 | ||||||||||||
Net assets applicable to outstanding capital stock | $ | 82,843,940 | $ | 45,245,268 | $ | 20,493,684 | |||||||||
Represented by | |||||||||||||||
Paid-in capital | $ | 81,423,291 | $ | 101,991,973 | $ | 33,990,070 | |||||||||
Undistributed net investment income | 103,884 | 1,082,314 | 134,257 | ||||||||||||
Accumulated net realized loss on investments and foreign currency transactions | (10,069,442 | ) | (61,868,985 | ) | (15,315,270 | ) | |||||||||
Net unrealized appreciation (depreciation) on: | |||||||||||||||
Investments | 11,385,875 | 4,043,051 | 1,684,527 | ||||||||||||
Foreign currency translations | 332 | (3,085 | ) | 100 | |||||||||||
Total — representing net assets applicable to outstanding capital stock | $ | 82,843,940 | $ | 45,245,268 | $ | 20,493,684 | |||||||||
Shares outstanding | 2,300,000 | 3,850,000 | 1,250,000 | ||||||||||||
Net asset value per share | $ | 36.02 | $ | 11.75 | $ | 16.39 | |||||||||
*Cost of foreign cash: | $ | 39,445 | $ | 1,159,593 | $ | 4,582 |
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
58
COLUMBIA ETF TRUST II
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 2016 (Unaudited)
Columbia Beyond BRICs ETF | Columbia EM Core ex-China ETF | Columbia EM Quality Dividend ETF | |||||||||||||
Investment Income | |||||||||||||||
Dividends | $ | 1,602,285 | $ | 124,668 | $ | 466,142 | |||||||||
Interest | — | — | 1 | ||||||||||||
Foreign taxes withheld | (158,918 | ) | (18,297 | ) | (53,054 | ) | |||||||||
Total income | 1,443,367 | 106,371 | 413,089 | ||||||||||||
Expenses: | |||||||||||||||
Investment management fees | 403,212 | 27,808 | 66,852 | ||||||||||||
Mauritius taxes paid | — | — | — | ||||||||||||
Total expenses | 403,212 | 27,808 | 66,852 | ||||||||||||
Fees waived by the Investment Manager and its affiliates | (128,079 | ) | (13,904 | ) | — | ||||||||||
Total net expenses | 275,133 | 13,904 | 66,852 | ||||||||||||
Net investment income | 1,168,234 | 92,467 | 346,237 | ||||||||||||
Realized and unrealized gain (loss) — net | |||||||||||||||
Net realized gain (loss) on: | |||||||||||||||
Investments | (4,587,871 | ) | (146,527 | ) | (796 | ) | |||||||||
In-kind transactions | 454,175 | — | 34,949 | ||||||||||||
Foreign currency translations | (376,610 | ) | (27,915 | ) | (62,574 | ) | |||||||||
Net realized gain (loss) | (4,510,306 | ) | (174,442 | ) | (28,421 | ) | |||||||||
Change in net unrealized appreciation (depreciation) on: | |||||||||||||||
Investments | 5,323,562 | 781,681 | 740,829 | ||||||||||||
Foreign currency translations | (8,432 | ) | (103 | ) | (4,607 | ) | |||||||||
Net change in unrealized appreciation (depreciation) | 5,315,130 | 781,578 | 736,222 | ||||||||||||
Net realized and unrealized gain | 804,824 | 607,136 | 707,801 | ||||||||||||
Net increase in net assets resulting from operations | $ | 1,973,058 | $ | 699,603 | $ | 1,054,038 |
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
59
COLUMBIA ETF TRUST II
STATEMENT OF OPERATIONS (continued)
For the Six Months Ended September 30, 2016 (Unaudited)
Columbia EM Strategic Opportunities ETF (Consolidated) | Columbia Emerging Markets Consumer ETF (Consolidated) | Columbia Emerging Markets Core ETF (Consolidated) | |||||||||||||
Investment Income | |||||||||||||||
Dividends | $ | 201,872 | $ | 6,968,593 | $ | 72,879 | |||||||||
Interest | 1 | 12 | 1 | ||||||||||||
Foreign taxes withheld | (19,810 | ) | (520,062 | ) | (8,653 | ) | |||||||||
Total income | 182,063 | 6,448,543 | 64,227 | ||||||||||||
Expenses: | |||||||||||||||
Investment management fees | 60,541 | 2,728,720 | 16,264 | ||||||||||||
Mauritius taxes paid | — | 4,206 | — | ||||||||||||
Total expenses | 60,541 | 2,732,926 | 16,264 | ||||||||||||
Fees waived by the Investment Manager and its affiliates | (14,262 | ) | — | — | |||||||||||
Total net expenses | 46,279 | 2,732,926 | 16,264 | ||||||||||||
Net investment income | 135,784 | 3,715,617 | 47,963 | ||||||||||||
Realized and unrealized gain (loss) — net | |||||||||||||||
Net realized gain (loss) on: | |||||||||||||||
Investments | (625,498 | ) | (20,149,755 | ) | (235,906 | ) | |||||||||
In-kind transactions | 181,021 | 703,408 | 95,453 | ||||||||||||
Foreign currency translations | 3,701 | 112,957 | 775 | ||||||||||||
Net realized gain (loss) | (440,776 | ) | (19,333,390 | ) | (139,678 | ) | |||||||||
Change in net unrealized appreciation (depreciation) on: | |||||||||||||||
Investments | 595,216 | 70,679,351 | 361,233 | ||||||||||||
Foreign currency translations | (1,459 | ) | (1,231 | ) | (194 | ) | |||||||||
Net change in unrealized appreciation (depreciation) | 593,757 | 70,678,120 | 361,039 | ||||||||||||
Net realized and unrealized gain | 152,981 | 51,344,730 | 221,361 | ||||||||||||
Net increase in net assets resulting from operations | $ | 288,765 | $ | 55,060,347 | $ | 269,324 |
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
60
COLUMBIA ETF TRUST II
STATEMENT OF OPERATIONS (continued)
For the Six Months Ended September 30, 2016 (Unaudited)
Columbia India Consumer ETF (Consolidated) | Columbia India Infrastructure ETF (Consolidated) | Columbia India Small Cap ETF (Consolidated) | |||||||||||||
Investment Income | |||||||||||||||
Dividends | $ | 373,065 | $ | 286,900 | $ | 122,331 | |||||||||
Interest | — | — | — | ||||||||||||
Foreign taxes withheld | — | — | — | ||||||||||||
Total income | 373,065 | 286,900 | 122,331 | ||||||||||||
Expenses: | |||||||||||||||
Investment management fees | 342,283 | 183,380 | 85,363 | ||||||||||||
Mauritius taxes paid | 381 | 35,683 | 891 | ||||||||||||
Total expenses | 342,664 | 219,063 | 86,254 | ||||||||||||
Fees waived by the Investment Manager and its affiliates | — | — | — | ||||||||||||
Total net expenses | 342,664 | 219,063 | 86,254 | ||||||||||||
Net investment income | 30,401 | 67,837 | 36,077 | ||||||||||||
Realized and unrealized gain (loss) — net | |||||||||||||||
Net realized gain (loss) on: | |||||||||||||||
Investments | (339,811 | ) | 146,651 | (361,641 | ) | ||||||||||
In-kind transactions | — | — | — | ||||||||||||
Foreign currency translations | (4,863 | ) | (15,637 | ) | 6,477 | ||||||||||
Net realized gain (loss) | (344,674 | ) | 131,014 | (355,164 | ) | ||||||||||
Change in net unrealized appreciation (depreciation) on: | |||||||||||||||
Investments | 11,306,892 | 5,711,627 | 4,155,787 | ||||||||||||
Foreign currency translations | (236 | ) | (3,572 | ) | (245 | ) | |||||||||
Net change in unrealized appreciation (depreciation) | 11,306,656 | 5,708,055 | 4,155,542 | ||||||||||||
Net realized and unrealized gain | 10,961,982 | 5,839,069 | 3,800,378 | ||||||||||||
Net increase in net assets resulting from operations | $ | 10,992,383 | $ | 5,906,906 | $ | 3,836,455 |
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
61
COLUMBIA ETF TRUST II
STATEMENT OF CHANGES IN NET ASSETS
Columbia Beyond BRICs ETF | Columbia EM Core ex-China ETF | ||||||||||||||||||
For the Period April 1, 2016 Through September 30, 2016 (Unaudited) | For the Year Ended March 31, 2016 | For the Period April 1, 2016 Through September 30, 2016 (Unaudited) | For the Period September 2, 2015(a) Through March 31, 2016 | ||||||||||||||||
Operations | |||||||||||||||||||
Net investment income | $ | 1,168,234 | $ | 4,676,451 | $ | 92,467 | $ | 17,020 | |||||||||||
Net realized gain (loss) | (4,510,306 | ) | (69,123,203 | ) | (174,442 | ) | (27,085 | ) | |||||||||||
Net change in unrealized appreciation (depreciation) | 5,315,130 | 8,073,359 | 781,578 | 73,675 | |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 1,973,058 | (56,373,393 | ) | 699,603 | 63,610 | ||||||||||||||
Distributions to shareholders | |||||||||||||||||||
Net investment income | — | (6,442,630 | ) | — | (25,672 | ) | |||||||||||||
Shareholder transactions | |||||||||||||||||||
Proceeds from shares sold | 6,173,307 | 9,095,023 | 8,767,910 | 2,003,012 | |||||||||||||||
Cost of shares redeemed | (9,706,080 | ) | (155,077,249 | ) | — | (979,263 | ) | ||||||||||||
Transaction fees | — | — | — | — | |||||||||||||||
Net increase (decrease) in net assets resulting from shareholder transactions | (3,532,773 | ) | (145,982,226 | ) | 8,767,910 | 1,023,749 | |||||||||||||
Increase (decrease) in net assets | (1,559,715 | ) | (208,798,249 | ) | 9,467,513 | 1,061,687 | |||||||||||||
Net assets | |||||||||||||||||||
Net assets at beginning of period | 92,242,294 | 301,040,543 | 1,061,687 | — | |||||||||||||||
Net assets at end of period | $ | 90,682,579 | $ | 92,242,294 | $ | 10,529,200 | $ | 1,061,687 | |||||||||||
Undistributed (accumulated) net investment income (loss) | $ | 2,139,708 | $ | 971,474 | $ | 95,358 | $ | 2,891 | |||||||||||
Capital stock activity | |||||||||||||||||||
Shares outstanding, beginning of period | 5,850,000 | 15,150,000 | 50,000 | — | |||||||||||||||
Subscriptions | 400,000 | 500,000 | 400,000 | 100,000 | |||||||||||||||
Redemptions | (600,000 | ) | (9,800,000 | ) | — | (50,000 | ) | ||||||||||||
Shares outstanding, end of period | 5,650,000 | 5,850,000 | 450,000 | 50,000 |
(a) Commencement of operations.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
62
COLUMBIA ETF TRUST II
STATEMENT OF CHANGES IN NET ASSETS (continued)
Columbia EM Quality Dividend ETF | Columbia EM Strategic Opportunities ETF (Consolidated) | ||||||||||||||||||
For the Period April 1, 2016 Through September 30, 2016 (Unaudited) | For the Year Ended March 31, 2016 | For the Period April 1, 2016 Through September 30, 2016 (Unaudited) | For the Year Ended March 31, 2016 | ||||||||||||||||
Operations | |||||||||||||||||||
Net investment income | $ | 346,237 | $ | 578,085 | $ | 135,784 | $ | 435,911 | |||||||||||
Net realized gain (loss) | (28,421 | ) | (2,158,928 | ) | (440,776 | ) | (3,529,041 | ) | |||||||||||
Net change in unrealized appreciation (depreciation) | 736,222 | (301,020 | ) | 593,757 | (3,486,431 | ) | |||||||||||||
Net increase (decrease) in net assets resulting from operations | 1,054,038 | (1,881,863 | ) | 288,765 | (6,579,561 | ) | |||||||||||||
Distributions to shareholders | |||||||||||||||||||
Net investment income | (194,468 | ) | (552,553 | ) | — | (428,513 | ) | ||||||||||||
Shareholder transactions | |||||||||||||||||||
Proceeds from shares sold | 647,144 | — | — | 6,892,494 | |||||||||||||||
Cost of shares redeemed | (1,940,631 | ) | (6,487,251 | ) | (1,843,305 | ) | (20,647,452 | ) | |||||||||||
Transaction fees | — | (1,532 | ) | (1,226 | ) | (3,177 | ) | ||||||||||||
Net increase (decrease) in net assets resulting from shareholder transactions | (1,293,487 | ) | (6,488,783 | ) | (1,844,531 | ) | (13,758,135 | ) | |||||||||||
Increase (decrease) in net assets | (433,917 | ) | (8,923,199 | ) | (1,555,766 | ) | (20,766,209 | ) | |||||||||||
Net assets | |||||||||||||||||||
Net assets at beginning of period | 16,011,550 | 24,934,749 | 15,032,066 | 35,798,275 | |||||||||||||||
Net assets at end of period | $ | 15,577,633 | $ | 16,011,550 | $ | 13,476,300 | $ | 15,032,066 | |||||||||||
Undistributed (accumulated) net investment income (loss) | $ | 149,785 | $ | (1,984 | ) | $ | 186,414 | $ | 50,630 | ||||||||||
Capital stock activity | |||||||||||||||||||
Shares outstanding, beginning of period | 1,250,000 | 1,750,000 | 800,000 | 1,550,000 | |||||||||||||||
Subscriptions | 50,000 | — | — | 350,000 | |||||||||||||||
Redemptions | (150,000 | ) | (500,000 | ) | (100,000 | ) | (1,100,000 | ) | |||||||||||
Shares outstanding, end of period | 1,150,000 | 1,250,000 | 700,000 | 800,000 |
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
63
COLUMBIA ETF TRUST II
STATEMENT OF CHANGES IN NET ASSETS (continued)
Columbia Emerging Markets Consumer ETF (Consolidated) | Columbia Emerging Markets Core ETF (Consolidated) | ||||||||||||||||||
For the Period April 1, 2016 Through September 30, 2016 (Unaudited) | For the Year Ended March 31, 2016 | For the Period April 1, 2016 Through September 30, 2016 (Unaudited) | For the Year Ended March 31, 2016 | ||||||||||||||||
Operations | |||||||||||||||||||
Net investment income | $ | 3,715,617 | $ | 6,926,431 | $ | 47,963 | $ | 86,601 | |||||||||||
Net realized gain (loss) | (19,333,390 | ) | (75,169,970 | ) | (139,678 | ) | (580,213 | ) | |||||||||||
Net change in unrealized appreciation (depreciation) | 70,678,120 | (76,773,402 | ) | 361,039 | (227,659 | ) | |||||||||||||
Net increase (decrease) in net assets resulting from operations | 55,060,347 | (145,016,941 | ) | 269,324 | (721,271 | ) | |||||||||||||
Distributions to shareholders | |||||||||||||||||||
Net investment income | — | (6,520,768 | ) | — | (77,847 | ) | |||||||||||||
Shareholder transactions | |||||||||||||||||||
Proceeds from shares sold | 43,382,700 | 73,668,244 | — | 1,008,047 | |||||||||||||||
Cost of shares redeemed | (5,406,315 | ) | (454,930,424 | ) | (899,538 | ) | — | ||||||||||||
Transaction fees | 500 | 1,341 | (1,107 | ) | (2,171 | ) | |||||||||||||
Net increase (decrease) in net assets resulting from shareholder transactions | 37,976,885 | (381,260,839 | ) | (900,645 | ) | 1,005,876 | |||||||||||||
Increase (decrease) in net assets | 93,037,232 | (532,798,548 | ) | (631,321 | ) | 206,758 | |||||||||||||
Net assets | |||||||||||||||||||
Net assets at beginning of period | 612,359,686 | 1,145,158,234 | 5,274,861 | 5,068,103 | |||||||||||||||
Net assets at end of period | $ | 705,396,918 | $ | 612,359,686 | $ | 4,643,540 | $ | 5,274,861 | |||||||||||
Undistributed (accumulated) net investment income (loss) | $ | 3,406,180 | $ | (309,437 | ) | $ | 52,743 | $ | 4,780 | ||||||||||
Capital stock activity | |||||||||||||||||||
Shares outstanding, beginning of period | 27,100,000 | 43,300,000 | 300,000 | 250,000 | |||||||||||||||
Subscriptions | 1,750,000 | 3,100,000 | — | 50,000 | |||||||||||||||
Redemptions | (250,000 | ) | (19,300,000 | ) | (50,000 | ) | — | ||||||||||||
Shares outstanding, end of period | 28,600,000 | 27,100,000 | 250,000 | 300,000 |
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
64
COLUMBIA ETF TRUST II
STATEMENT OF CHANGES IN NET ASSETS (continued)
Columbia India Consumer ETF (Consolidated) | Columbia India Infrastructure ETF (Consolidated) | ||||||||||||||||||
For the Period April 1, 2016 Through September 30, 2016 (Unaudited) | For the Year Ended March 31, 2016 | For the Period April 1, 2016 Through September 30, 2016 (Unaudited) | For the Year Ended March 31, 2016 | ||||||||||||||||
Operations | |||||||||||||||||||
Net investment income | $ | 30,401 | $ | 98,516 | $ | 67,837 | $ | 1,204,099 | |||||||||||
Net realized gain (loss) | (344,674 | ) | (8,230,437 | ) | 131,014 | (8,594,761 | ) | ||||||||||||
Net change in unrealized appreciation (depreciation) | 11,306,656 | (4,436,125 | ) | 5,708,055 | (4,228,116 | ) | |||||||||||||
Net increase (decrease) in net assets resulting from operations | 10,992,383 | (12,568,046 | ) | 5,906,906 | (11,618,778 | ) | |||||||||||||
Distributions to shareholders | |||||||||||||||||||
Net investment income | — | — | — | (369,715 | ) | ||||||||||||||
Shareholder transactions | |||||||||||||||||||
Proceeds from shares sold | 3,382,019 | 18,805,894 | 585,657 | 15,149,937 | |||||||||||||||
Cost of shares redeemed | (3,208,134 | ) | (23,265,499 | ) | (1,183,849 | ) | (10,954,836 | ) | |||||||||||
Transaction fees | (1,508 | ) | (3,264 | ) | (1,694 | ) | (3,988 | ) | |||||||||||
Net increase (decrease) in net assets resulting from shareholder transactions | 172,377 | (4,462,869 | ) | (599,886 | ) | 4,191,113 | |||||||||||||
Increase (decrease) in net assets | 11,164,760 | (17,030,915 | ) | 5,307,020 | (7,797,380 | ) | |||||||||||||
Net assets | |||||||||||||||||||
Net assets at beginning of period | 71,679,180 | 88,710,095 | 39,938,248 | 47,735,628 | |||||||||||||||
Net assets at end of period | $ | 82,843,940 | $ | 71,679,180 | $ | 45,245,268 | $ | 39,938,248 | |||||||||||
Undistributed (accumulated) net investment income (loss) | $ | 103,884 | $ | 73,483 | $ | 1,082,314 | $ | 1,014,477 | |||||||||||
Capital stock activity | |||||||||||||||||||
Shares outstanding, beginning of period | 2,300,000 | 2,500,000 | 3,900,000 | 3,650,000 | |||||||||||||||
Subscriptions | 100,000 | 550,000 | 50,000 | 1,250,000 | |||||||||||||||
Redemptions | (100,000 | ) | (750,000 | ) | (100,000 | ) | (1,000,000 | ) | |||||||||||
Shares outstanding, end of period | 2,300,000 | 2,300,000 | 3,850,000 | 3,900,000 |
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
65
COLUMBIA ETF TRUST II
STATEMENT OF CHANGES IN NET ASSETS (continued)
Columbia India Small Cap ETF (Consolidated) | |||||||||||
For the Period April 1, 2016 Through September 30, 2016 (Unaudited) | For the Year Ended March 31, 2016 | ||||||||||
Operations | |||||||||||
Net investment income | $ | 36,077 | $ | 92,229 | |||||||
Net realized gain (loss) | (355,164 | ) | (5,033,514 | ) | |||||||
Net change in unrealized appreciation (depreciation) | 4,155,542 | (1,213,602 | ) | ||||||||
Net increase (decrease) in net assets resulting from operations | 3,836,455 | (6,154,887 | ) | ||||||||
Distributions to shareholders | |||||||||||
Net investment income | — | (132,552 | ) | ||||||||
Shareholder transactions | |||||||||||
Proceeds from shares sold | — | — | |||||||||
Cost of shares redeemed | (2,373,895 | ) | (3,528,774 | ) | |||||||
Transaction fees | 4,125 | (6,360 | ) | ||||||||
Net increase (decrease) in net assets resulting from shareholder transactions | (2,369,770 | ) | (3,535,134 | ) | |||||||
Increase (decrease) in net assets | 1,466,685 | (9,822,573 | ) | ||||||||
Net assets | |||||||||||
Net assets at beginning of period | 19,026,999 | 28,849,572 | |||||||||
Net assets at end of period | $ | 20,493,684 | $ | 19,026,999 | |||||||
Undistributed net investment income | $ | 134,257 | $ | 98,180 | |||||||
Capital stock activity | |||||||||||
Shares outstanding, beginning of period | 1,400,000 | 1,650,000 | |||||||||
Subscriptions | — | — | |||||||||
Redemptions | (150,000 | ) | (250,000 | ) | |||||||
Shares outstanding, end of period | 1,250,000 | 1,400,000 |
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
66
COLUMBIA ETF TRUST II
FINANCIAL HIGHLIGHTS
Columbia Beyond BRICs ETF
For the Six Months Ended September 30, 2016 | For the Year Ended March 31, | ||||||||||||||||||||||
(Unaudited) | 2016 | 2015 | 2014 | 2013(a) | |||||||||||||||||||
Per share data | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 15.77 | $ | 19.87 | $ | 21.01 | $ | 21.97 | $ | 20.00 | |||||||||||||
Net investment income(b) | 0.20 | 0.40 | 0.56 | 0.99 | 0.17 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 0.08 | (3.83 | ) | (1.43 | ) | (1.77 | ) | 1.91 | |||||||||||||||
Total from investment operations | 0.28 | (3.43 | ) | (0.87 | ) | (0.78 | ) | 2.08 | |||||||||||||||
Less distributions to shareholders: | |||||||||||||||||||||||
Net investment income | — | (0.67 | ) | (0.25 | ) | (0.18 | ) | (0.11 | ) | ||||||||||||||
Net realized gains | — | — | (0.02 | ) | — | — | |||||||||||||||||
Total distribution to shareholders | — | (0.67 | ) | (0.27 | ) | (0.18 | ) | (0.11 | ) | ||||||||||||||
Net asset value, end of period | $ | 16.05 | $ | 15.77 | $ | 19.87 | $ | 21.01 | $ | 21.97 | |||||||||||||
Total Return at NAV(c) | 1.78 | % | (17.05 | )% | (4.16 | )% | (3.51 | )% | 10.41 | % | |||||||||||||
Ratios to average net assets of: | |||||||||||||||||||||||
Expenses, prior to expense reimbursements/waivers(d)(e) | 0.85 | %(f) | 0.85 | % | 0.85 | % | 0.85 | % | 2.43 | %(f) | |||||||||||||
Expenses, net of expense reimbursements/waivers(d)(e) | 0.58 | %(f) | 0.58 | % | 0.58 | % | 0.66 | % | 0.85 | %(f) | |||||||||||||
Net investment income, net of reimbursement/waivers | 2.46 | %(f) | 2.26 | % | 2.65 | % | 4.92 | % | 1.26 | %(f) | |||||||||||||
Supplemental data | |||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 90,683 | $ | 92,242 | $ | 301,041 | $ | 49,385 | $ | 7,688 | |||||||||||||
Portfolio turnover rate(g) | 27 | %(h) | 32 | % | 33 | % | 63 | % | 1 | %(h) |
(a) Based on operations from August 15, 2012 (commencement of operations) through the stated period end.
(b) Based on average shares outstanding.
(c) Total Return at Net Asset Value is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period. Total return calculated for a period of less than one year is not annualized. The total return would have been lower if certain expenses had not been reimbursed/waived by the Investment Manager.
(d) Effective April 1, 2013, EGA replaced the fee and expense structure with a Unitary Fee (as defined in Note 3).
(e) Effective October 1, 2013, the Fund entered into a fee waiver agreement pursuant to which the investment manager has agreed to waive its investment management fee to 0.58% of the Fund's average daily net assets.
(f) Annualized.
(g) Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund's capital shares.
(h) Not annualized.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
67
COLUMBIA ETF TRUST II
FINANCIAL HIGHLIGHTS
Columbia EM Core ex-China ETF
For the Six Months Ended September 30, 2016 (Unaudited) | For the Year Ended March 31, 2016(a) | ||||||||||
Per share data | |||||||||||
Net asset value, beginning of period | $ | 21.23 | $ | 20.00 | |||||||
Net investment income(b) | 0.26 | 0.22 | |||||||||
Net realized and unrealized gain | 1.91 | 1.52 | |||||||||
Total from investment operations | 2.17 | 1.74 | |||||||||
Less distributions to shareholders: | |||||||||||
Net investment income | — | (0.51 | ) | ||||||||
Net asset value, end of period | $ | 23.40 | $ | 21.23 | |||||||
Total Return at NAV(c) | 10.22 | % | 8.98 | % | |||||||
Ratios to average net assets of: | |||||||||||
Expenses, prior to expense waivers | 0.70 | %(d) | 0.70 | %(d) | |||||||
Expenses, net of expense waivers | 0.35 | %(d) | 0.35 | %(d) | |||||||
Net investment income, net of waivers | 2.33 | %(d) | 1.92 | %(d) | |||||||
Supplemental data | |||||||||||
Net assets, end of period (in thousands) | $ | 10,529 | $ | 1,062 | |||||||
Portfolio turnover rate(e) | 33 | %(f) | 45 | %(f) |
(a) Based on operations from September 2, 2015 (commencement of operations) through the stated period end.
(b) Based on average shares outstanding.
(c) Total Return at Net Asset Value is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period. Total return calculated for a period of less than one year is not annualized. The total return would have been lower if certain expenses had not been waived by the Investment Manager.
(d) Annualized.
(e) Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund's capital shares.
(f) Not annualized.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
68
COLUMBIA ETF TRUST II
FINANCIAL HIGHLIGHTS
Columbia EM Quality Dividend ETF
For the Six Months Ended September 30, 2016 | For the Year Ended March 31, | ||||||||||||||||||||||||||
(Unaudited) | 2016 | 2015 | 2014 | 2013 | 2012(a) | ||||||||||||||||||||||
Per share data | |||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 12.81 | $ | 14.25 | $ | 16.15 | $ | 19.80 | $ | 20.09 | $ | 20.00 | |||||||||||||||
Net investment income(b) | 0.29 | 0.38 | 0.77 | 0.64 | 0.86 | 0.33 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 0.61 | (1.45 | ) | (2.08 | ) | (3.61 | ) | (0.09 | ) | 0.13 | |||||||||||||||||
Total from investment operations | 0.90 | (1.07 | ) | (1.31 | ) | (2.97 | ) | 0.77 | 0.46 | ||||||||||||||||||
Less distributions to shareholders: | |||||||||||||||||||||||||||
Net investment income | (0.16 | ) | (0.37 | ) | (0.59 | ) | (0.65 | ) | (1.06 | ) | (0.37 | ) | |||||||||||||||
Return of capital | — | — | — | (0.03 | ) | — | — | ||||||||||||||||||||
Total distribution to shareholders | (0.16 | ) | (0.37 | ) | (0.59 | ) | (0.68 | ) | (1.06 | ) | (0.37 | ) | |||||||||||||||
Net asset value, end of period | $ | 13.55 | $ | 12.81 | $ | 14.25 | $ | 16.15 | $ | 19.80 | $ | 20.09 | |||||||||||||||
Total Return at NAV(c) | 7.09 | % | (7.38 | )% | (8.37 | )% | (15.14 | )% | 4.12 | % | 2.45 | % | |||||||||||||||
Ratios to average net assets of: | |||||||||||||||||||||||||||
Expenses, prior to expense reimbursements/waivers(d) | 0.85 | %(e) | 0.85 | % | 0.89 | %(f) | 0.85 | % | 1.43 | % | 2.07 | %(e) | |||||||||||||||
Expenses, net of expense reimbursements/waivers(d) | 0.85 | %(e) | 0.85 | % | 0.89 | %(f) | 0.85 | % | 0.85 | % | 0.85 | %(e) | |||||||||||||||
Net investment income, net of reimbursement/waivers | 4.40 | %(e) | 2.88 | % | 4.76 | % | 3.54 | % | 4.45 | % | 2.62 | %(e) | |||||||||||||||
Supplemental data | |||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 15,578 | $ | 16,012 | $ | 24,935 | $ | 57,335 | $ | 89,122 | $ | 59,255 | |||||||||||||||
Portfolio turnover rate(g) | 86 | %(h) | 85 | % | 168 | % | 137 | % | 86 | % | 45 | %(h) |
(a) Based on operations from August 4, 2011 (commencement of operations) through the stated period end.
(b) Based on average shares outstanding.
(c) Total Return at Net Asset Value is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period. Total return calculated for a period of less than one year is not annualized. The total return would have been lower if certain expenses had not been reimbursed/waived by the Investment Manager.
(d) Effective April 1, 2013, EGA replaced the fee and expense structure with a Unitary Fee (as defined in Note 3).
(e) Annualized.
(f) The ratio includes 0.04% for the period ended March 31, 2015 attributed to tax expense, which is outside the Unitary Fee (as defined in Note 3).
(g) Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund's capital shares.
(h) Not annualized.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
69
COLUMBIA ETF TRUST II
FINANCIAL HIGHLIGHTS
Columbia EM Strategic Opportunities ETF (Consolidated)
For the Six Months Ended September 30, 2016 | For the Year Ended March 31, | ||||||||||||||||||||||
(Unaudited) | 2016 | 2015 | 2014 | 2013(a) | |||||||||||||||||||
Per share data | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 18.79 | $ | 23.10 | $ | 22.31 | $ | 22.16 | $ | 20.00 | |||||||||||||
Net investment income(b) | 0.18 | 0.32 | 0.34 | 0.23 | 0.13 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 0.28 | (4.06 | ) | 0.73 | 0.14 | 2.11 | |||||||||||||||||
Total from investment operations | 0.46 | (3.74 | ) | 1.07 | 0.37 | 2.24 | |||||||||||||||||
Less distributions to shareholders: | |||||||||||||||||||||||
Net investment income | — | (0.57 | ) | (0.28 | ) | (0.22 | ) | (0.08 | ) | ||||||||||||||
Net asset value, end of period | $ | 19.25 | $ | 18.79 | $ | 23.10 | $ | 22.31 | $ | 22.16 | |||||||||||||
Total Return at NAV(c) | 2.45 | % | (16.10 | )% | 4.82 | % | 1.70 | % | 11.23 | % | |||||||||||||
Ratios to average net assets of: | |||||||||||||||||||||||
Expenses, prior to expense reimbursements/waivers(d)(e) | 0.85 | %(f) | 0.85 | % | 0.85 | % | 0.85 | % | 4.53 | %(f) | |||||||||||||
Expenses, net of expense reimbursements/waivers(d)(e) | 0.65 | %(f) | 0.84 | % | 0.85 | % | 0.85 | % | 0.85 | %(f) | |||||||||||||
Net investment income, net of reimbursement/waivers | 1.90 | %(f) | 1.53 | % | 1.43 | % | 1.09 | % | 1.02 | %(f) | |||||||||||||
Supplemental data | |||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 13,476 | $ | 15,032 | $ | 35,798 | $ | 23,429 | $ | 2,216 | |||||||||||||
Portfolio turnover rate(g) | 15 | %(h) | 38 | % | 8 | % | 159 | % | 57 | %(h) |
(a) Based on operations from August 15, 2012 (commencement of operations) through the stated period end.
(b) Based on average shares outstanding.
(c) Total Return at Net Asset Value is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period. Total return calculated for a period of less than one year is not annualized. The total return would have been lower if certain expenses had not been reimbursed/waived by the Investment Manager.
(d) Effective April 1, 2013, EGA replaced the fee and expense structure with a Unitary Fee (as defined in Note 3).
(e) Effective March 1, 2016, the Fund entered into a fee waiver agreement pursuant to which the investment manager has agreed to waive its investment management fee to 0.65% of the Fund's average daily net assets.
(f) Annualized.
(g) Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund's capital shares.
(h) Not annualized.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
70
COLUMBIA ETF TRUST II
FINANCIAL HIGHLIGHTS
Columbia Emerging Markets Consumer ETF (Consolidated)
For the Six Months Ended September 30, 2016 | For the Year Ended March 31, | ||||||||||||||||||||||||||
(Unaudited) | 2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Per share data | |||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 22.60 | $ | 26.45 | $ | 26.53 | $ | 26.51 | $ | 24.77 | $ | 22.76 | |||||||||||||||
Net investment income(a) | 0.14 | 0.21 | 0.25 | 0.31 | 0.17 | 0.17 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 1.92 | (3.83 | ) | (0.03 | ) | (0.09 | ) | 1.68 | 1.96 | ||||||||||||||||||
Total from investment operations | 2.06 | (3.62 | ) | 0.22 | 0.22 | 1.85 | 2.13 | ||||||||||||||||||||
Less distributions to shareholders: | |||||||||||||||||||||||||||
Net investment income | — | (0.23 | ) | (0.30 | ) | (0.20 | ) | (0.11 | ) | (0.12 | ) | ||||||||||||||||
Net asset value, end of period | $ | 24.66 | $ | 22.60 | $ | 26.45 | $ | 26.53 | $ | 26.51 | $ | 24.77 | |||||||||||||||
Total Return at NAV(b) | 9.12 | % | (13.63 | )% | 0.88 | % | 0.82 | % | 7.46 | % | 9.44 | % | |||||||||||||||
Ratios to average net assets of: | |||||||||||||||||||||||||||
Expenses, prior to expense reimbursements/waivers(c) | 0.85 | %(d)(e) | 0.85 | % | 0.83 | % | 0.84 | % | 1.23 | % | 1.31 | % | |||||||||||||||
Expenses, net of expense reimbursements/waivers(c) | 0.85 | %(d)(e) | 0.85 | % | 0.83 | % | 0.84 | % | 0.85 | % | 0.85 | % | |||||||||||||||
Net investment income, net of reimbursement/waivers | 1.16 | %(d) | 0.86 | % | 0.92 | % | 1.20 | % | 0.68 | % | 0.76 | % | |||||||||||||||
Supplemental data | |||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 705,397 | $ | 612,360 | $ | 1,145,158 | $ | 1,233,683 | $ | 885,476 | $ | 402,466 | |||||||||||||||
Portfolio turnover rate(f) | 12 | %(g) | 32 | % | 12 | % | 14 | % | 7 | % | 3 | % |
(a) Based on average shares outstanding.
(b) Total Return at Net Asset Value is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period. Total return calculated for a period of less than one year is not annualized. The total return would have been lower if certain expenses had not been reimbursed/waived by the Investment Manager.
(c) Effective April 1, 2013, EGA replaced the fee and expense structure with a Unitary Fee (as defined in Note 3).
(d) Annualized.
(e) The ratio includes less than 0.01% for the six months ended September 30, 2016 attributed to tax expense, which is outside the Unitary Fee (as defined in Note 3).
(f) Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund's capital shares.
(g) Not annualized.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
71
COLUMBIA ETF TRUST II
FINANCIAL HIGHLIGHTS
Columbia Emerging Markets Core ETF (Consolidated)
For the Six Months Ended September 30, 2016 | For the Year Ended March 31, | ||||||||||||||||||||||
(Unaudited) | 2016 | 2015 | 2014 | 2013(a) | |||||||||||||||||||
Per share data | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 17.58 | $ | 20.27 | $ | 20.44 | $ | 20.87 | $ | 20.00 | |||||||||||||
Net investment income(b) | 0.19 | 0.30 | 0.38 | 0.36 | 0.09 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 0.80 | (2.73 | ) | (0.13 | ) | (0.44 | ) | 0.82 | |||||||||||||||
Total from investment operations | 0.99 | (2.43 | ) | 0.25 | (0.08 | ) | 0.91 | ||||||||||||||||
Less distributions to shareholders: | |||||||||||||||||||||||
Net investment income | — | (0.26 | ) | (0.42 | ) | (0.35 | ) | (0.04 | ) | ||||||||||||||
Net asset value, end of period | $ | 18.57 | $ | 17.58 | $ | 20.27 | $ | 20.44 | $ | 20.87 | |||||||||||||
Total Return at NAV(c) | 5.63 | % | (11.91 | )% | 1.22 | % | (0.36 | )% | 4.55 | % | |||||||||||||
Ratios to average net assets of: | |||||||||||||||||||||||
Expenses, prior to expense reimbursements/waivers(d) | 0.70 | %(e) | 0.70 | % | 0.71 | %(f) | 0.70 | % | 11.94 | %(e) | |||||||||||||
Expenses, net of expense reimbursements/waivers(d) | 0.70 | %(e) | 0.70 | % | 0.71 | %(f) | 0.70 | % | 0.70 | %(e) | |||||||||||||
Net investment income, net of reimbursement/waivers | 2.07 | %(e) | 1.66 | % | 1.78 | % | 1.76 | % | 0.96 | %(e) | |||||||||||||
Supplemental data | |||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 4,644 | $ | 5,275 | $ | 5,068 | $ | 4,088 | $ | 4,173 | |||||||||||||
Portfolio turnover rate(g) | 22 | %(h) | 38 | % | 20 | % | 16 | % | 3 | %(h) |
(a) Based on operations from October 16, 2012 (commencement of operations) through the stated period end.
(b) Based on average shares outstanding.
(c) Total Return at Net Asset Value is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period. Total return calculated for a period of less than one year is not annualized. The total return would have been lower if certain expenses had not been reimbursed/waived by the Investment Manager.
(d) Effective April 1, 2013, EGA replaced the fee and expense structure with a Unitary Fee (as defined in Note 3).
(e) Annualized.
(f) The ratio includes 0.01% for the year ended March 31, 2015 attributed to tax expense, which is outside the Unitary Fee (as defined in Note 3).
(g) Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund's capital shares.
(h) Not annualized.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
72
COLUMBIA ETF TRUST II
FINANCIAL HIGHLIGHTS
Columbia India Consumer ETF (Consolidated)
For the Six Months Ended September 30, 2016 | For the Year Ended March 31, | ||||||||||||||||||||||||||
(Unaudited) | 2016 | 2015 | 2014 | 2013 | 2012(a) | ||||||||||||||||||||||
Per share data | |||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 31.16 | $ | 35.48 | $ | 24.72 | $ | 22.10 | $ | 19.08 | $ | 20.00 | |||||||||||||||
Net investment income (loss)(b) | 0.01 | 0.04 | (0.12 | ) | 0.11 | (0.00 | )(c) | (0.00 | )(c) | ||||||||||||||||||
Net realized and unrealized gain (loss) | 4.85 | (4.36 | ) | 10.91 | 2.51 | 3.02 | (0.92 | ) | |||||||||||||||||||
Total from investment operations | 4.86 | (4.32 | ) | 10.79 | 2.62 | 3.02 | (0.92 | ) | |||||||||||||||||||
Less distributions to shareholders: | |||||||||||||||||||||||||||
Net investment income | — | — | (0.03 | ) | — | — | — | ||||||||||||||||||||
Net asset value, end of period | $ | 36.02 | $ | 31.16 | $ | 35.48 | $ | 24.72 | $ | 22.10 | $ | 19.08 | |||||||||||||||
Total Return at NAV(d) | 15.60 | % | (12.18 | )% | 43.64 | % | 11.86 | % | 15.83 | % | (4.60 | )% | |||||||||||||||
Ratios to average net assets of: | |||||||||||||||||||||||||||
Expenses, prior to expense reimbursements/waivers(e) | 0.89 | %(f)(g) | 0.89 | % | 0.90 | %(h) | 0.89 | % | 4.31 | % | 6.16 | %(f) | |||||||||||||||
Expenses, net of expense reimbursements/waivers(e) | 0.89 | %(f)(g) | 0.89 | % | 0.90 | %(h) | 0.89 | % | 0.89 | % | 0.89 | %(f) | |||||||||||||||
Net investment income (loss), net of reimbursement/waivers | 0.08 | %(f) | 0.13 | % | (0.36 | )% | 0.50 | % | (0.00 | )%(c) | (0.04 | )%(f) | |||||||||||||||
Supplemental data | |||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 82,844 | $ | 71,679 | $ | 88,710 | $ | 4,945 | $ | 6,631 | $ | 1,908 | |||||||||||||||
Portfolio turnover rate(i) | 4 | %(j) | 47 | % | 82 | % | 43 | % | 50 | % | 104 | %(i) |
(a) Based on operations from August 10, 2011 (commencement of operations) through the stated period end.
(b) Based on average shares outstanding.
(c) Rounds to zero.
(d) Total Return at Net Asset Value is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period. Total return calculated for a period of less than one year is not annualized. The total return would have been lower if certain expenses had not been reimbursed/waived by the Investment Manager.
(e) Effective April 1, 2013, EGA replaced the fee and expense structure with a Unitary Fee (as defined in Note 3).
(f) Annualized.
(g) The ratio includes less than 0.01% for the six months ended September 30, 2016 attributed to tax expense, which is outside the Unitary Fee (as defined in Note 3).
(h) The ratio includes 0.01% for the year ended March 31, 2015 attributed to tax expense, which is outside the Unitary Fee (as defined in Note 3).
(i) Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund's capital shares.
(j) Not annualized.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
73
COLUMBIA ETF TRUST II
FINANCIAL HIGHLIGHTS
Columbia India Infrastructure ETF (Consolidated)
For the Six Months Ended September 30, 2016 | For the Year Ended March 31, | ||||||||||||||||||||||||||
(Unaudited) | 2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Per share data | |||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.24 | $ | 13.08 | $ | 11.35 | $ | 12.27 | $ | 14.99 | $ | 19.40 | |||||||||||||||
Net investment income(a) | 0.02 | 0.30 | 0.12 | 0.13 | 0.07 | 0.06 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 1.49 | (3.04 | ) | 1.65 | (b) | 0.27 | (2.60 | ) | (4.39 | ) | |||||||||||||||||
Total from investment operations | 1.51 | (2.74 | ) | 1.77 | 0.40 | (2.53 | ) | (4.33 | ) | ||||||||||||||||||
Less distributions to shareholders: | |||||||||||||||||||||||||||
Net investment income | — | (0.10 | ) | (0.04 | ) | (1.32 | ) | (0.19 | ) | (0.08 | ) | ||||||||||||||||
Net asset value, end of period | $ | 11.75 | $ | 10.24 | $ | 13.08 | $ | 11.35 | $ | 12.27 | $ | 14.99 | |||||||||||||||
Total Return at NAV(c) | 14.75 | % | (21.00 | )% | 15.59 | % | 4.04 | % | (17.08 | )% | (22.19 | )% | |||||||||||||||
Ratios to average net assets of: | |||||||||||||||||||||||||||
Expenses, prior to expense reimbursements/waivers(d) | 0.93 | %(e)(f) | 0.88 | %(g) | 0.88 | %(h) | 0.86 | %(i) | 1.61 | % | 1.69 | % | |||||||||||||||
Expenses, net of expense reimbursements/waivers(d) | 0.93 | %(e)(f) | 0.88 | %(g) | 0.88 | %(h) | 0.86 | %(i) | 0.85 | % | 0.85 | % | |||||||||||||||
Net investment income, net of reimbursement/waivers | 0.31 | %(e) | 2.68 | % | 0.90 | % | 1.18 | % | 0.53 | % | 0.39 | % | |||||||||||||||
Supplemental data | |||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 45,245 | $ | 39,938 | $ | 47,736 | $ | 17,586 | $ | 51,513 | $ | 60,703 | |||||||||||||||
Portfolio turnover rate(j) | 27 | %(k) | 59 | % | 75 | % | 76 | % | 24 | % | 23 | % |
(a) Based on average shares outstanding.
(b) The realized and unrealized gain or loss on investments and foreign currency translations does not accord with the amounts reported in the Statement of Operations due to the timing of subscriptions or redemptions of Fund shares in relation to the investment performance during the period and contributions made by Authorized Participants to compensate the Fund for additional costs incurred in purchasing securities that were not transferred in-kind.
(c) Total Return at Net Asset Value is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period. Total return calculated for a period of less than one year is not annualized. The total return would have been lower if certain expenses had not been reimbursed/waived by the Investment Manager.
(d) Effective April 1, 2013, EGA replaced the fee and expense structure with a Unitary Fee (as defined in Note 3).
(e) Annualized.
(f) The ratio includes 0.08% for the six months ended September 30, 2016 attributed to tax expense, which is outside the Unitary Fee (as defined in Note 3).
(g) The ratio includes 0.03% for the year ended March 31, 2016 attributed to tax expense, which is outside the Unitary Fee (as defined in Note 3).
(h) The ratio includes 0.03% for the year ended March 31, 2015 attributed to tax expense, which is outside the Unitary Fee (as defined in Note 3).
(i) The ratio includes 0.01% for the year ended March 31, 2014 attributed to tax expense, which is outside the Unitary Fee (as defined in Note 3).
(j) Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund's capital shares.
(k) Not annualized.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
74
COLUMBIA ETF TRUST II
FINANCIAL HIGHLIGHTS
Columbia India Small Cap ETF (Consolidated)
For the Six Months Ended September 30, 2016 | For the Year Ended March 31, | ||||||||||||||||||||||||||
(Unaudited) | 2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Per share data | |||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.59 | $ | 17.48 | $ | 12.74 | $ | 12.45 | $ | 14.39 | $ | 19.29 | |||||||||||||||
Net investment income(a) | 0.03 | 0.06 | 0.05 | 0.26 | 0.10 | 0.14 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 2.77 | (3.86 | ) | 4.77 | 0.25 | (1.94 | ) | (4.88 | ) | ||||||||||||||||||
Total from investment operations | 2.80 | (3.80 | ) | 4.82 | 0.51 | (1.84 | ) | (4.74 | ) | ||||||||||||||||||
Less distributions to shareholders: | |||||||||||||||||||||||||||
Net investment income | — | (0.09 | ) | (0.08 | ) | (0.22 | ) | (0.10 | ) | (0.16 | ) | ||||||||||||||||
Return of Capital | — | — | — | — | (0.00 | )(b) | — | ||||||||||||||||||||
Total distribution to shareholders | — | (0.09 | ) | (0.08 | ) | (0.22 | ) | (0.10 | ) | (0.16 | ) | ||||||||||||||||
Net asset value, end of period | $ | 16.39 | $ | 13.59 | $ | 17.48 | $ | 12.74 | $ | 12.45 | $ | 14.39 | |||||||||||||||
Total Return at NAV(c) | �� | 20.60 | % | (21.78 | )% | 37.86 | % | 4.29 | % | (12.87 | )% | (24.33 | )% | ||||||||||||||
Ratios to average net assets of: | |||||||||||||||||||||||||||
Expenses, prior to expense reimbursements/waivers(d) | 0.85 | %(e)(f) | 0.86 | %(g) | 0.92 | %(h) | 0.86 | %(i) | 2.09 | % | 2.26 | % | |||||||||||||||
Expenses, net of expense reimbursements/waivers(d) | 0.85 | %(e)(f) | 0.86 | %(g) | 0.92 | %(h) | 0.86 | %(i) | 0.85 | % | 0.85 | % | |||||||||||||||
Net investment income, net of reimbursement/waivers | 0.36 | %(e) | 0.40 | % | 0.33 | % | 2.36 | % | 0.76 | % | 0.84 | % | |||||||||||||||
Supplemental data | |||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 20,494 | $ | 19,027 | $ | 28,850 | $ | 16,560 | $ | 21,163 | $ | 26,616 | |||||||||||||||
Portfolio turnover rate(j) | 2 | %(k) | 45 | % | 117 | % | 56 | % | 43 | % | 125 | % |
(a) Based on average shares outstanding.
(b) Rounds to zero.
(c) Total Return at Net Asset Value is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period. Total return calculated for a period of less than one year is not annualized. The total return would have been lower if certain expenses had not been reimbursed/waived by the Investment Manager.
(d) Effective April 1, 2013, EGA replaced the fee and expense structure with a Unitary Fee (as defined in Note 3).
(e) Annualized.
(f) The ratio includes less than 0.01% for the six months ended September 30, 2016 attributed to tax expense, which is outside the Unitary Fee (as defined in Note 3).
(g) The ratio includes 0.01% for the year ended March 31, 2016 attributed to tax expense, which is outside the Unitary Fee (as defined in Note 3).
(h) The ratio includes 0.07% for the year ended March 31, 2015 attributed to tax expense, which is outside the Unitary Fee (as defined in Note 3).
(i) The ratio includes 0.01% for the year ended March 31, 2014 attributed to tax expense, which is outside the Unitary Fee (as defined in Note 3).
(j) Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund's capital shares.
(k) Not annualized.
The accompanying Notes to Financial Statements are an integral part of these financial statements.
Semiannual Report 2016
75
COLUMBIA ETF TRUST II
NOTES TO FINANCIAL STATEMENTS
September 30, 2016 (Unaudited)
Note 1. Organization
Columbia ETF Trust II (the Trust) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Delaware statutory trust. The Trust may issue an unlimited number of shares (without par value).
Information presented in these financial statements pertains to the following series of the Trust (each, a Fund and collectively, the Funds): Columbia Beyond BRICs ETF, Columbia EM Core ex-China ETF, Columbia EM Quality Dividend ETF, Columbia EM Strategic Opportunities ETF, Columbia Emerging Markets Consumer ETF, Columbia Emerging Markets Core ETF, Columbia India Consumer ETF, Columbia India Infrastructure ETF, and Columbia India Small Cap ETF. Each Fund is a diversified fund, except for Columbia EM Core ex-China ETF, Columbia Emerging Markets Consumer ETF, Columbia India Consumer ETF, Columbia India Infrastructure ETF, and Columbia India Small Cap ETF.
On May 11, 2016, Columbia Management Investment Advisers, LLC (Columbia Management or the investment manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial), entered into an agreement to acquire Emerging Global Advisors, LLC, the Funds' former investment manager (EGA), including the business of serving as investment adviser to the Funds (the Transaction). Columbia Management completed the Transaction on September 1, 2016 (the Closing). In connection with the Closing, certain changes have occurred, including a change in the entity serving each as Fund's investment adviser.
On September 14, 2016, the Board of Trustees (the Board) approved changes to the names of the Funds and the Trust effective October 19, 2016. Prior to October 19, 2016, the Trust was named EGA Emerging Global Shares Trust. In addition, the Funds changed their names as follows:
Former Fund Name | Current Fund Name (effective October 19, 2016) | ||||||
EGShares Beyond BRICs ETF | Columbia Beyond BRICs ETF | ||||||
EGShares EM Core ex-China ETF | Columbia EM Core ex-China ETF | ||||||
EGShares EM Quality Dividend ETF | Columbia EM Quality Dividend ETF | ||||||
EGShares EM Strategic Opportunities ETF | Columbia EM Strategic Opportunities ETF | ||||||
EGShares Emerging Markets Consumer ETF | Columbia Emerging Markets Consumer ETF | ||||||
EGShares Emerging Markets Core ETF | Columbia Emerging Markets Core ETF |
Former Fund Name | Current Fund Name (effective October 19, 2016) | ||||||
EGShares India Consumer ETF | Columbia India Consumer ETF | ||||||
EGShares India Infrastructure ETF | Columbia India Infrastructure ETF | ||||||
EGShares India Small Cap ETF | Columbia India Small Cap ETF |
The classifications and presentations within the Schedules of Investments are consistent with other funds in the Columbia Fund family and may not depict the same classifications and presentations in certain marketing materials.
Basis for Consolidation
The Consolidated Schedules of Investments; Consolidated Statements of Assets and Liabilities, of Operations and of Changes in Net Assets; and the Consolidated Financial Highlights of the Funds listed below include the accounts of wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidations.
Funds | Wholly Owned Subsidiary | ||||||
Columbia EM Strategic Opportunities ETF | EG Shares Emerging Markets Domestic Demand Mauritius | ||||||
Columbia Emerging Markets Consumer ETF | EG Shares Consumer Mauritius | ||||||
Columbia Emerging Markets Core ETF | EG Shares Emerging Markets Core Mauritius | ||||||
Columbia EM Quality Dividend ETF* | EG Shares High Income/Low Beta Mauritius* | ||||||
Columbia India Consumer ETF | EG Shares India Consumer Mauritius | ||||||
Columbia India Infrastructure ETF | EG Shares India Infrastructure Mauritius | ||||||
Columbia India Small Cap ETF | EG Shares India Small Cap Mauritius |
*EG Shares High Income/Low Beta Mauritius was closed effective June 23, 2015 and is no longer a subsidiary of the Columbia EM Quality Dividend ETF.
The Columbia EM Strategic Opportunities ETF, Columbia Emerging Markets Consumer ETF and Columbia Emerging Markets Core ETF may each invest its assets in a wholly owned subsidiary in Mauritius, which in turn invests virtually all of its assets in Indian securities, based on the number of Indian securities that are included in each Fund's respective Underlying Index.
The Columbia India Consumer ETF, Columbia India Infrastructure ETF and Columbia India Small Cap ETF invests substantially all of their assets in wholly owned subsidiaries in Mauritius, which in turn invest virtually all of their assets in Indian securities, based on the number of Indian securities that are included in each Fund's respective Underlying Index.
Semiannual Report 2016
76
COLUMBIA ETF TRUST II
NOTES TO FINANCIAL STATEMENTS (continued)
September 30, 2016 (Unaudited)
By investing in a wholly owned subsidiary, the Funds listed in the table above each obtain benefits under the tax treaty between Mauritius and India. Each subsidiary may be subject to withholding taxes imposed by the Indian government on dividends, interest and realized capital gains should new legislation be passed to modify
the current tax treaty with Mauritius. Any change in the provisions of this treaty could result in the imposition of withholding and other taxes on these Funds by authorities in India. This would reduce the return on investment and the return received by each Fund's shareholders.
A summary of each Fund's investment in its corresponding subsidiary is as follows:
Funds | % of Consolidated Fund Net Assets | Net Assets | Net Investment Income (Loss) | Net Realized Gain (Loss) | Net Change in Unrealized Appreciation (Depreciation) | ||||||||||||||||||
Columbia EM Strategic Opportunities ETF | 13.0 | $ | 1,756,091 | $ | 351,833 | $ | (1,470 | ) | $ | (16,845 | ) | ||||||||||||
Columbia Emerging Markets Consumer ETF | 9.6 | 67,491,807 | 19,730,069 | 489,436 | 5,869,495 | ||||||||||||||||||
Columbia Emerging Markets Core ETF | 13.1 | 608,710 | 4,958 | (3,702 | ) | 56,742 | |||||||||||||||||
Columbia India Consumer ETF | 99.9 | 82,804,088 | 56,539 | (344,673 | ) | 11,306,656 | |||||||||||||||||
Columbia India Infrastructure ETF | 100.0 | 45,261,566 | 224,410 | 131,014 | 5,708,055 | ||||||||||||||||||
Columbia India Small Cap ETF | 100.0 | 20,498,417 | 40,395 | (355,164 | ) | 4,155,542 |
Fund Shares
The market prices of each Fund's shares may differ to some degree from the Fund's net asset value (NAV). Unlike conventional mutual funds, each Fund issues and redeems shares on a continuous basis, at NAV, only in a large specified number of shares, each called a "Creation Unit." A Creation Unit consists of 50,000 shares. Creation Units are issued and redeemed generally in-kind for a basket of securities and/or for cash. Investors such as market makers, large investors and institutions who wish to deal in Creation Units directly with a Fund must have entered into an authorized participant agreement (Authorized Participants) with the principal underwriter and the transfer agent, or purchase through a dealer that has entered into such an agreement. Authorized participants may purchase or redeem Fund shares directly from the Fund only in Creation Units. The Funds' shares are also listed on the New York Stock Exchange (NYSE) for which investors can purchase and sell shares on the secondary market through a broker at market prices which may differ from the NAV of the Fund.
Note 2. Summary of Significant Accounting Policies Basis of Preparation
Each Fund is an investment company that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services — Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual amounts could differ from those estimates. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements.
Security Valuation
All equity securities are valued at the close of business of the NYSE. Equity securities are valued at the last quoted sales price on the principal exchange or market on which they trade, except for securities traded on the NASDAQ Stock market, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets.
Foreign equity securities are valued based on the closing price on the foreign exchange in which such securities are primarily traded. If any foreign equity security closing prices are not readily available, the securities are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are generally determined at 4:00 p.m. Eastern (U.S.) time. Many securities markets and exchanges outside the U.S. close prior to the close of the NYSE; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the NYSE. In those situations, foreign securities will be
Semiannual Report 2016
77
COLUMBIA ETF TRUST II
NOTES TO FINANCIAL STATEMENTS (continued)
September 30, 2016 (Unaudited)
fair valued pursuant to a policy adopted by the Board, including, if available, utilizing a third party pricing service to determine these fair values. The third party pricing service takes into account multiple factors, including, but not limited to, movements in the U.S. securities markets, certain depositary receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that reasonably reflects the current market conditions as of the close of the NYSE. The fair value of a security is likely to be different from the quoted or published price, if available.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by and under the general supervision of the Board. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security.
The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine fair value.
GAAP requires disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following the Fund's Portfolio of Investments.
Foreign Currency Transactions and Translations
The values of all assets and liabilities denominated in foreign currencies are generally translated into U.S. dollars at exchange rates determined at the close of the NYSE on any given day. Net realized and unrealized gains (losses) on foreign currency transactions and translations include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes, the Fund does not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations are included with the net
realized and unrealized gains (losses) on investments in the Statement of Operations.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income Recognition
Corporate actions and dividend income are recorded on the ex-dividend date. Interest income is recorded on an accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted.
The Funds may place a debt security on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. A defaulted debt security is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Expenses
General expenses of the Trust are allocated to the Funds based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to a Fund are charged to that Fund.
Federal Income Tax Status
For federal income tax purposes, each Fund is treated as a separate entity. Each Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable income (including net short-term capital gains), if any, for its tax year, and as such will not be subject to federal income taxes. In addition, each Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provisions are recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared and paid each calendar quarter for Columbia EM Quality Dividend ETF. The remaining Funds declare and distribute net investment income annually. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain
Semiannual Report 2016
78
COLUMBIA ETF TRUST II
NOTES TO FINANCIAL STATEMENTS (continued)
September 30, 2016 (Unaudited)
distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.
Guarantees and Indemnifications
Under the Trust's organizational documents and, in some cases by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition, certain of the Funds' contracts with their service providers contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Funds cannot be determined, and the Funds have no historical basis for predicting the likelihood of any such claims.
Note 3. Fees and Other Transactions with Affiliates
Investment Management Fees
Effective September 1, 2016, Columbia Management, under the Investment Management Services Agreement (the New Agreement) for Columbia Beyond BRICs ETF, Columbia EM Core ex-China ETF, Columbia EM Quality Dividend ETF, Columbia Emerging Markets Consumer ETF and Columbia India Small Cap ETF and under the Interim Investment Advisory Agreement for Columbia India Infrastructure ETF, Columbia India Consumer ETF, Columbia Emerging Markets Core ETF and Columbia EM Strategic Opportunities ETF (the Interim Agreement ETFs), determines which securities will be purchased, held or sold. Effective September 30, 2016, shareholders of the Interim Agreement ETFs approved the New Agreement and subsequently, effective October 1, 2016, the Interim Agreement ETFs began operating under the New Agreement. The investment management fee is a unitary fee paid monthly to the Investment Manager at an annual rate based on each Fund's average daily net assets. In return for this fee, the Investment Manager pays the operating costs and expenses of each Fund other than the following expenses (which will be paid by the Fund): taxes; interest incurred on borrowing by the Fund (including but not limited to overdraft fees), if any; brokerage expenses, fees, commission and other portfolio transaction expenses (including but not limited to service fees charged by custodians of depository receipts and scrip fees related to registrations on foreign exchanges); interest and fee expense related to the Fund's participation in inverse floater structures; infrequent and/or unusual expenses, including without limitation litigation expenses (including but not limited to arbitrations and indemnification expenses); distribution
and/or service fees; expenses incurred in connection with lending securities; and any other infrequent and/or unusual expenses approved by the Board.
Prior to September 1, 2016, the Funds also had a unitary fee structure pursuant to which EGA was contractually obligated to pay all ordinary operating expenses of the Funds, except for the fee payment under the investment advisory agreements between EGA and the Trust, payments under each series' Rule 12b-1 plan (if ever implemented), brokerage expenses, taxes, interest, litigation expenses and other non-routine or extraordinary expenses.
The investment management fee is an annual fee that is equal to a percentage of each Fund's average daily net assets and is paid as follows:
Fund | Assets (billions) | Investment Management Fee Rate | |||||||||
Columbia Beyond BRICs ETF | All | 0.85 | % | ||||||||
Columbia EM Core ex-China ETF | All | 0.70 | |||||||||
Columbia EM Quality Dividend ETF | All | 0.85 | |||||||||
Columbia EM Strategic Opportunities ETF | All | 0.85 | |||||||||
Columbia Emerging Markets Core ETF | All | 0.70 | |||||||||
Columbia Emerging Markets Consumer ETF | $ | 0 - $1.0 >$1.0 - $2.0 >$2.0 | 0.85 0.75 0.70 | ||||||||
Columbia India Consumer ETF | All | 0.89 | |||||||||
Columbia India Infrastructure ETF | All | 0.85 |
Columbia India Small Cap ETF | All | 0.85 |
The annualized effective management services fee rate for the six months ended September 30, 2016 was 0.85% of the Columbia Emerging Markets Consumer ETF's average daily net assets.
The Investment Manager has contractually agreed to waive all or a portion of the investment management fee for the periods disclosed below, so that each Fund's investment management fee is limited as a percentage of the respective Fund's average daily net assets:
September 1, 2016 Through August 31, 2018 | Prior to September 1, 2016 | ||||||||||
Columbia Beyond BRICs ETF | 0.58 | % | 0.58 | % | |||||||
Columbia EM Core ex-China ETF | 0.35 | 0.35 | |||||||||
Columbia EM Strategic Opportunities ETF | 0.65 | 0.65 |
Semiannual Report 2016
79
COLUMBIA ETF TRUST II
NOTES TO FINANCIAL STATEMENTS (continued)
September 30, 2016 (Unaudited)
Other Expenses
Other expenses are for, among other things, miscellaneous expenses of the Fund or the Board, including payments to Board Services Corp., a company providing limited administrative services to the Fund and the Board. That company's expenses include boardroom and office expense, employee compensation, employee health and retirement benefits, and certain other expenses. The other expenses allocated to the Fund are payable by the Investment Manager. This arrangement became effective September 1, 2016.
Compensation of Chief Compliance Officer
The Board has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund is allocated a portion of the expenses associated with the Chief Compliance Officer based on relative net assets of the Trust. The expenses of the Chief Compliance Officer allocated to the Fund are payable by the Investment Manager. This arrangement became effective September 1, 2016.
Compensation of Board Members
Board members, who are not officers or employees of the Investment Manager or Ameriprise Financial, are compensated for their services to the Fund as disclosed
in the Statement of Operations. Under a Deferred Compensation Plan (the Plan), these Board members may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of certain funds managed by the Investment Manager. The Fund's liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Plan. All amounts payable under the Plan constitute a general unsecured obligation of the Fund. The expenses of the compensation of Board Members allocated to the Fund are payable by the Investment Manager. This arrangement became effective September 1, 2016.
Distribution and Service Fees
ALPS Distributors, Inc., (the Distributor) serves as the distributor for the Funds. The Funds have adopted a distribution and service plan (the Plan). Under the Plan, the Funds are authorized to pay distribution fees to the Distributor and other firms that provide distribution and shareholder services at the maximum annual rate of 0.25% of average daily net assets of each Fund. No distribution or service fees are currently paid by the Funds and there are no current plans to impose these fees.
Note 4. Federal Tax Information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At September 30, 2016, the cost of investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
Funds | Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | |||||||||||||||
Columbia Beyond BRICs ETF | $ | 109,857,311 | $ | 4,833,352 | $ | (24,352,867 | ) | $ | (19,519,515 | ) | |||||||||
Columbia EM Core ex-China ETF | 9,580,541 | 1,079,796 | (224,722 | ) | 855,074 | ||||||||||||||
Columbia EM Quality Dividend ETF | 15,876,758 | 482,423 | (799,335 | ) | (316,912 | ) | |||||||||||||
Columbia EM Strategic Opportunities ETF | 14,578,853 | 1,032,169 | (2,162,019 | ) | (1,129,850 | ) | |||||||||||||
Columbia Emerging Markets Consumer ETF | 708,144,718 | 98,498,986 | (102,550,541 | ) | (4,051,555 | ) | |||||||||||||
Columbia Emerging Markets Core ETF | 4,631,694 | 461,288 | (458,488 | ) | 2,800 | ||||||||||||||
Columbia India Consumer ETF | 72,183,072 | 12,976,644 | (2,395,559 | ) | 10,581,085 | ||||||||||||||
Columbia India Infrastructure ETF | 47,433,363 | 6,161,071 | (8,491,653 | ) | (2,330,582 | ) | |||||||||||||
Columbia India Small Cap ETF | 19,181,499 | 4,374,785 | (3,075,204 | ) | 1,299,581 |
Semiannual Report 2016
80
COLUMBIA ETF TRUST II
NOTES TO FINANCIAL STATEMENTS (continued)
September 30, 2016 (Unaudited)
The following capital loss carryforward, determined at March 31, 2016, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:
Carryforwards with No Expiration | |||||||||||
Funds | Short-Term Capital Loss Carryforward | Long-Term Capital Loss Carryforward | |||||||||
Columbia Beyond BRICs ETF | $ | 15,371,458 | $ | 18,372,194 | |||||||
Columbia EM Core ex-China ETF | 17,934 | — | |||||||||
Columbia EM Quality Dividend ETF | 21,840,464 | 5,704,194 | |||||||||
Columbia EM Strategic Opportunities ETF | 1,416,331 | 611,766 | |||||||||
Columbia Emerging Markets Consumer ETF | 4,992,867 | 110,883,553 | |||||||||
Columbia Emerging Markets Core ETF | 133,350 | 309,033 | |||||||||
Columbia India Consumer ETF | 2,588,824 | — | |||||||||
Columbia India Infrastructure ETF | 16,709,643 | 38,484,985 | |||||||||
Columbia India Small Cap ETF | 1,935,531 | 9,056,629 |
Capital loss carryforwards with no expiration are required to be utilized prior to any capital losses which carry an expiration date. As a result of this ordering rule, capital loss carryforwards which carry an expiration date may be more likely to expire unused.
Under current tax rules, regulated investment companies can elect to treat certain late-year ordinary losses incurred and post-October capital losses (capital losses realized after October 31) as arising on the first day of the following taxable year. At March 31, 2016, the Funds have elected to treat the following late-year ordinary losses and post-October capital losses as arising on April 1, 2016.
Funds | Late Year Ordinary Losses | Post October Capital Losses | |||||||||
Columbia Beyond BRICs ETF | $ | — | $ | 14,615,561 | |||||||
Columbia EM Core ex-China ETF | — | — | |||||||||
Columbia EM Quality Dividend ETF | — | 241,632 | |||||||||
Columbia EM Strategic Opportunities ETF | — | 603,825 | |||||||||
Columbia Emerging Markets Consumer ETF | 309,437 | — | |||||||||
Columbia Emerging Markets Core ETF | — | 104,272 | |||||||||
Columbia India Consumer ETF | — | 6,331,154 | |||||||||
Columbia India Infrastructure ETF | — | 432,850 | |||||||||
Columbia India Small Cap ETF | — | 3,583,000 |
Management of the Funds has concluded that there are no significant uncertain tax positions in the Funds that would require recognition in the financial statements. However, management's conclusion may be subject to review and adjustments at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally the Funds' federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Semiannual Report 2016
81
COLUMBIA ETF TRUST II
NOTES TO FINANCIAL STATEMENTS (continued)
September 30, 2016 (Unaudited)
Note 5. Portfolio Information
The cost of purchases and proceeds from sales of securities, excluding short-term investments and in-kind transactions, for the six months ended September 30, 2016, were as follows:
Funds | Purchases | Sales | |||||||||
Columbia Beyond BRICs ETF | $ | 26,085,238 | $ | 25,058,041 | |||||||
Columbia EM Core ex-China ETF | 7,621,304 | 2,530,884 | |||||||||
Columbia EM Quality Dividend ETF | 13,458,873 | 14,132,816 | |||||||||
Columbia EM Strategic Opportunities ETF | 2,064,160 | 2,165,599 | |||||||||
Columbia Emerging Markets Consumer ETF | 88,470,645 | 79,636,577 | |||||||||
Columbia Emerging Markets Core ETF | 1,031,426 | 1,187,865 | |||||||||
Columbia India Consumer ETF | 3,602,850 | 3,287,727 | |||||||||
Columbia India Infrastructure ETF | 11,679,263 | 12,175,717 | |||||||||
Columbia India Small Cap ETF | 466,980 | 2,782,216 |
Note 6. Significant Risks
The Funds are subject to emerging markets risk. Investments in emerging market securities are subject to even greater risks than for foreign investments generally, including increased risks of: illiquidity of securities; price volatility; inflation or deflation; restrictions on foreign investment; nationalization; higher taxation; economic and political instability; pervasive corruption and crime; less governmental regulation; and less developed legal systems. These risks may be greater for investments in frontier markets.
Each Fund concentrates its investments in a particular industry or a group of industries to approximately the same extent as its respective underlying index, and as such, may be adversely affected by increased price volatility of securities in those industries, and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting those industries.
Each Fund will invest in specific countries or geographic regions to approximately the same extent as its underlying index. To the extent that a Fund invests a significant portion of its assets in a particular country or a specific geographic region, the Fund will generally have more exposure to that country's or region's economic risks. In the event of economic or political turmoil or a deterioration of diplomatic relations in a country or region where a substantial portion of a Fund's assets are invested, the Fund may experience increased volatility or illiquidity of its portfolio holdings, which may adversely affect that Fund's performance.
Because the Columbia India Infrastructure ETF concentrates its investments in the infrastructure sectors of India, the Fund may be adversely affected by increased price volatility of securities in that sector, and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that sector.
Because the Columbia Consumer ETF and Columbia India Consumer ETF concentrate their investments in the consumer goods and consumer services industries (specifically the consumer goods and consumer services industries of India for the Columbia India Consumer ETF), these Funds may be adversely affected by increased price volatility of securities in those industries, and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting those industries. The success of consumer goods and consumer services suppliers and retailers is tied closely to the performance of the domestic and international economy, interest rates, currency exchange rates, competition, preferences, and consumer confidence.
Because the Columbia EM Strategic Opportunities ETF concentrates its investments in the consumer staples, consumer discretionary, telecommunications services, healthcare and/or utilities industries, the Fund may be adversely affected by increased price volatility of securities in those industries, and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting those industries.
Because the Columbia India Consumer ETF, Columbia India Infrastructure ETF and Columbia India Small Cap
Semiannual Report 2016
82
COLUMBIA ETF TRUST II
NOTES TO FINANCIAL STATEMENTS (continued)
September 30, 2016 (Unaudited)
ETF invest predominantly in Indian securities, their NAVs will be much more sensitive to changes in economic, political and other factors within India than would a fund that invested in a greater variety of countries. Special risks include, among others, political and legal uncertainty, persistent religious, ethnic and border disputes, greater government control over the economy, currency fluctuations or blockage and the risk of nationalization or expropriation of assets.
The Columbia India Small Cap ETF primarily invests in small capitalization companies. Small cap companies may have greater volatility in price than the stocks of large cap companies due to limited product lines or resources or a dependency upon a particular market niche.
Non-Diversification Risk
Columbia EM Core ex-China ETF, Columbia Emerging Markets Consumer ETF, Columbia India Consumer ETF, Columbia India Infrastructure ETF and Columbia India Small Cap ETF are non-diversified funds. A non-diversified fund is permitted to invest a greater percentage of its total assets in fewer issuers than a diversified fund. The Fund may, therefore, have a greater risk of loss from a few issuers than a similar fund that invests more broadly.
Note 7. Subsequent Events
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 8. Information Regarding Pending and Settled Legal Proceedings
Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions, and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Funds are not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates are the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission
(SEC) on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares or other adverse consequences to the Funds. Further, although we believe proceedings are not likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds, these proceedings are subject to uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines, penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.
Semiannual Report 2016
83
COLUMBIA ETF TRUST II
SUPPLEMENTAL INFORMATION
(Unaudited)
At a meeting held on November 14-16, 2016, the Board of Trustees of the Trust, upon recommendation of the Audit Committee, approved the appointment of PricewaterhouseCoopers LLP (PwC) as the independent registered public accounting firm for each of the funds in the Trust (collectively, the Funds) succeeding BBD, LLP, another independent registered public accounting firm, as the auditor for the Funds. The Funds did not consult with PwC during the fiscal periods ended March 31, 2015 and 2016 and through the November meeting.
BBD, LLP's reports on the financial statements of each of the funds in the Trust as of and for the fiscal years ended March 31, 2016 and 2015 contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. During such fiscal periods and through the November meeting, there were no: (1) disagreements between the Funds and BBD, LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to BBD, LLP's satisfaction, would have caused them to make reference to the subject matter of the disagreement in connection with their reports, or (2) reportable events.
Semiannual Report 2016
84
COLUMBIA ETF TRUST II
RESULTS OF MEETING OF SHAREHOLDERS
(Unaudited)
A Special Meeting of Shareholders of the Funds was held on August 12, 2016 and an Adjourned Special Meeting of Shareholders of the Funds was held on August 26, 2016 and on September 30, 2016. Shareholders voted on three proposals. The description of each proposal and number of shares voted are as follows:
Proposal 1: Approval of a new Investment Advisory Agreement
Shareholders were asked to approve a new investment advisory agreement between the Trust, on behalf of their Fund, and Columbia Threadneedle Investments.
Fund | For | Against | Abstain | ||||||||||||
EGShares Beyond BRICs ETF | 4,340,767 | 9,912 | 6,877 | ||||||||||||
EGShares EM Core ex-China ETF | 359,976 | 0 | 0 | ||||||||||||
EGShares EM Quality Dividend ETF | 604,442 | 8,096 | 8,702 | ||||||||||||
EGShares EM Strategic Opportunities ETF | 383,935 | 2,001 | 4,110 | ||||||||||||
EGShares Emerging Markets Core ETF | 112,705 | 101 | 8,304 | ||||||||||||
EGShares Emerging Markets Consumer ETF | 17,063,225 | 75,049 | 30,703 | ||||||||||||
EGShares India Consumer ETF | 912,698 | 31,605 | 25,838 | ||||||||||||
EGShares India Infrastructure ETF | 382,424 | 40,676 | 72,625 | ||||||||||||
EGShares India Small Cap ETF | 546,163 | 14,331 | 13,206 |
Proposal 2: To elect a new Board of Trustees
Shareholders were asked to elect twelve trustees to the Board. The Trust is governed by a Board, which has oversight responsibility for the management of the Trust's business affairs. Trustees establish procedures and oversee and review the performance of the investment adviser, distributor, and others who perform services for the Trust.
Trustee | For | Withheld | |||||||||
Kathleen Blatz | 31,561,361 | 328,998 | |||||||||
Edward J. Boudreau, Jr. | 31,512,778 | 377,581 | |||||||||
Pamela G. Carlton | 31,509,339 | 381,020 | |||||||||
William P. Carmichael | 31,513,269 | 377,090 | |||||||||
Patricia M. Flynn | 31,511,903 | 378,456 | |||||||||
William A. Hawkins | 31,560,940 | 329,419 | |||||||||
R. Glenn Hilliard | 31,561,295 | 329,064 | |||||||||
Catherine James Paglia | 31,560,909 | 329,450 | |||||||||
Minor M. Shaw | 31,561,248 | 329,111 | |||||||||
Alison Taunton-Rigby | 31,507,874 | 382,485 | |||||||||
Anthony M. Santomero | 31,563,640 | 326,719 | |||||||||
William F. Truscott | 31,560,912 | 329,447 |
Semiannual Report 2016
85
COLUMBIA ETF TRUST II
RESULTS OF MEETING OF SHAREHOLDERS (continued)
(Unaudited)
Proposal 3: To approve the Manager of Managers Proposal
Shareholders were asked to approve the Manager of Managers Proposal for each Fund, which would authorize Columbia Threadneedle to enter into and materially amend Fund subadvisory agreements in the future with subadvisers that are not affiliated persons of Columbia Threadneedle, with the approval of the Trust's Board, but without obtaining additional shareholder approval.
Fund | For | Against | Abstain | ||||||||||||
EGShares Beyond BRICs ETF | 3,466,414 | 883,157 | 7,985 | ||||||||||||
EGShares EM Core ex-China ETF | 359,326 | 650 | 0 | ||||||||||||
EGShares EM Quality Dividend ETF | 438,396 | 179,079 | 8,852 | ||||||||||||
EGShares EM Strategic Opportunities ETF | 367,781 | 16,970 | 5,295 | ||||||||||||
EGShares Emerging Markets Core ETF | 104,982 | 7,637 | 8,491 | ||||||||||||
EGShares Emerging Markets Consumer ETF | 6,894,009 | 10,281,204 | 39,282 | ||||||||||||
EGShares India Consumer ETF | 844,980 | 103,817 | 21,344 | ||||||||||||
EGShares India Infrastructure ETF | 850,275 | 580,487 | 64,959 | ||||||||||||
EGShares India Small Cap ETF | 450,967 | 133,310 | 14,156 |
Semiannual Report 2016
86
COLUMBIA ETF TRUST II
BOARD CONSIDERATIONS IN APPROVING THE NEW AGREEMENT
At in-person meetings of the Board held on April 28, 2016, June 2, 2016 and June 13, 2016 (collectively, the "Board Meetings"), the Board, including the independent Board members (The Independent Trustees), discussed and, at the in-person meeting held on June 13, 2016, approved the New Agreement between Columbia Management Investment Advisers, LLC (Columbia Threadneedle) and the Trust, on behalf of each Fund, and determined to recommend that shareholders approve the New Agreement. The Independent Trustees had requested and been provided with detailed materials relating to Columbia Threadneedle, EGA and the Transaction in advance of the Board Meetings. The Independent Trustees met in executive session with their independent legal counsel during the Board Meetings to discuss the proposed Transaction and its possible effect on the Funds. At the Board Meetings, representatives of Columbia Threadneedle and EGA responded to questions from the Board, and discussed, among other things, the strategic rationale for the Transaction and Columbia Threadneedle's general plans and intentions regarding the Funds. The Board, including the Independent Trustees, evaluated the terms of the New Agreement, reviewed the information provided by Columbia Threadneedle and EGA in connection with the consideration of approving the New Agreement on behalf of the Funds, and reviewed the duties and responsibilities of the Board in evaluating and approving the New Agreement.
In considering whether to approve the New Agreement on behalf of the Funds, the Board reviewed the materials provided for the Board Meeting, including: (i) a copy of the New Agreement; (ii) information describing the nature, quality and extent of the services that Columbia Threadneedle expects to provide to the Funds; (iii) information concerning the financial condition, businesses, operations and compliance programs of Columbia Threadneedle; and (iv) a copy of the current Form ADV for Columbia Threadneedle. In addition, the Board received a report compiled by EGA from an unaffiliated third-party proprietary database, comparing the advisory fees, expenses and performance of the Funds with the fees, expenses and performance of other exchange-traded funds ("ETFs") with similar investment objectives and policies. In making its decision to approve the New Agreement, the Board, including the Independent Trustees, concluded that the information furnished was sufficient to form a reasonable business judgment for approval of the New Agreement.
During its review of this information, the Board focused on and analyzed the factors that the Board deemed relevant, including: (i) the nature, quality and extent of the services provided and expected to be provided to each Fund by Columbia Threadneedle; (ii) the personnel and operations of Columbia Threadneedle; (iii) the investment performance of the Funds; (iv) the expected profitability to Columbia Threadneedle under the New Agreement; (v) any "fall-out" benefits to Columbia Threadneedle (i.e., the ancillary benefits realized due to a relationship with the Trust); and (vi) possible conflicts of interest. The following are among the primary factors taken into account by the Board in approving the New Agreement.
The Nature, Extent, and Quality of Services Expected to be Provided to Each Fund by Columbia Threadneedle
The Board reviewed the services that Columbia Threadneedle expects to provide to each Fund. In connection with the advisory services to be provided to each Fund, the Board noted the significant responsibilities as the Funds' investment adviser, including: implementation of the investment management program of each Fund; management of the day-to-day investment and reinvestment of the assets in each Fund; determining daily baskets of deposit securities and cash components; executing portfolio security trades for purchases and redemptions of Fund shares conducted on a cash-in-lieu basis; and oversight of general portfolio compliance with relevant law.
The Board reviewed Columbia Threadneedle's experience, resources, strengths and its prior performance as an investment adviser. The Board also noted Columbia Threadneedle's procedures to manage potential conflicts of interest and Columbia Threadneedle's belief that management of the Funds in the Trust and other funds and accounts managed by Columbia Threadneedle does not present a material conflict of interest.
Based on their consideration and review of the foregoing information, the Board determined that the Funds would likely benefit from the nature, quality and extent of the services to be provided by Columbia Threadneedle, as well as Columbia Threadneedle's ability to render such services based on its experience, personnel, operations and resources.
Semiannual Report 2016
87
COLUMBIA ETF TRUST II
BOARD CONSIDERATIONS IN APPROVING THE NEW AGREEMENT (continued)
Comparison of Services Provided and Fees Charged by Columbia Threadneedle and Other Investment Advisers to Similar Clients
The Board considered the expense comparison data for the Funds. At the Board Meeting, the Board compared both the services to be rendered and the fees to be paid pursuant to the New Agreement to the contractual advisory fees of other U.S.-listed ETFs having similar investment objectives, indexes and underlying holdings, including other EGA-sponsored funds (the "Peer Group"). The Board also discussed the differences in the fees of other ETFs managed by Columbia Threadneedle.
The Board considered the appropriateness of the advisory fees and expense ratios of the Funds under the unitary fee structure under the New Agreement (which is the same as under the Funds' existing investment advisory agreement with EGA) compared to the advisory fees and net expense ratios of the ETFs in each Fund's Peer Group. The Board received information regarding the costs, including operational costs to be borne by Columbia Threadneedle under the unitary fee, and expected profitability of Columbia Threadneedle in connection with serving as adviser to each Fund. The Board also received information regarding the additional costs of operating the Funds that invest in a wholly owned Mauritius subsidiary in order to invest in Indian companies, which increases the operational costs for those Funds. The Board noted Columbia Threadneedle's assumption of the contractual obligation to limit each Fund's ordinary operating expenses through the unitary fee structure under the New Agreement, which cannot be changed without shareholder approval. The Board also noted Columbia Threadneedle's agreement to further waive its advisory fees and assume certain expenses under the New Fee Waiver Agreements.
After comparing each Fund's fees with those of other funds in each Fund's Peer Group and considering the information about fee rates charged to other accounts and clients managed by Columbia Threadneedle, and in light of the nature, quality and extent of services expected to be provided by Columbia Threadneedle, the Board concluded that the level of fees to be paid to Columbia Threadneedle with respect to each Fund is fair and reasonable.
The Board also noted that Columbia Threadneedle has agreed that it will, and will cause each of its affiliates to conduct their business to enable reliance upon the conditions of Section 15(f) of the 1940 Act, including not imposing any "unfair burden" on the Funds for at least two years from the Closing. The Board considered the fact that the fee waivers and expense reimbursements under the New Fee Waiver Agreements would be kept in place for a period of two years after the Closing, and that Columbia Threadneedle did not expect to request that the Board implement the Funds' Rule 12b-1 plans in the foreseeable future.
Columbia Threadneedle's Profitability and the Extent to which Economies of Scale would be Realized as Each Fund Grows and whether Fee Levels would Reflect such Economies of Scale
The Board discussed with the representatives from Columbia Threadneedle the expected costs to be incurred by Columbia Threadneedle in rendering services to the Funds, and the profitability of Columbia Threadneedle in connection with its service as investment adviser to each Fund, including operational costs but excluding costs related to the Transaction or for marketing. The Board acknowledged Columbia Threadneedle's contractual obligation to limit each Fund's expenses through the unitary fee structure under the New Agreement (which is the same as under the Funds' existing investment advisory agreement with EGA), its willingness to further waive fees under the New Fee Waiver Agreements in order to cap the costs paid by the applicable Funds' shareholders, and the effect of such obligation and commitments, respectively, on Columbia Threadneedle's expected profitability, each based on information presented to the Board. The Board discussed with Columbia Threadneedle the experience of the Columbia Threadneedle boards in addressing economies of scale. The Board received information regarding Columbia Threadneedle's financial condition and reviewed Columbia Threadneedle's financial statements. The Board concluded that the expected profitability of Columbia Threadneedle was reasonable for the Funds in relation to the performance and asset sizes of the Funds.
Semiannual Report 2016
88
COLUMBIA ETF TRUST II
BOARD CONSIDERATIONS IN APPROVING THE NEW AGREEMENT (continued)
The Board also considered that Columbia Threadneedle may experience reputational and other "fall-out" benefits (i.e., benefits to affiliates of Columbia Threadneedle) based on the success of the Funds, but that such benefits were not likely to result in an "unfair burden" to the Funds.
Investment Performance of Columbia Threadneedle
The Board considered the investment performance of the Funds, including tracking error and difference, and ability of the portfolio management team of Columbia Threadneedle to continue such performance following the Closing. The Board considered Columbia Threadneedle's investment performance with respect to other mutual funds advised by Columbia Threadneedle. The Board concluded that Columbia Threadneedle's experience in managing passively managed strategies and mutual funds investing in emerging markets, along with Columbia Threadneedle's desire to retain all of the investment advisory personnel of EGA who currently assist in the management of the Funds, except for Robert Holderith, demonstrated that Columbia Threadneedle had the ability to successfully manage the Funds.
Conclusion
No single factor was determinative to the decision of the Board to approve the New Agreement. Based on the foregoing and such other matters as were deemed relevant, such as the New Fee Waiver Agreements, the Board concluded that the advisory fee rates under the New Agreement and the net expense ratios under the New Fee Waiver Agreements were reasonable in relation to the services expected to be provided by Columbia Threadneedle to each Fund, as well as the expected costs incurred and benefits gained by Columbia Threadneedle in providing such services. The Board also found the investment advisory fees under the New Agreement to be reasonable in comparison to the fees charged by advisers to other comparable ETFs of similar size. The Board concluded that the Transaction would not result in an increase in advisory fee rates or net expense ratios, and was not expected to result in a decrease in the quality or quantity of services provided to the Funds, or impose an "unfair burden" on the Funds. The Board further concluded that, after the Transaction, Columbia Threadneedle will have the capabilities, resources, and personnel necessary to provide the investment management services currently provided by EGA to each Fund. As a result, the Board concluded that the approval of the New Agreement between Columbia Threadneedle and the Trust, on behalf of each Fund, is in the best interests of each Fund.
Semiannual Report 2016
89
COLUMBIA ETF TRUST II
BOARD CONSIDERATIONS IN APPROVING THE INTERIM INVESTMENT ADVISORY AGREEMENT
In voting to approve the Interim Investment Advisory Agreement for each Fund, the Trustees considered substantially the same factors (the nature, extent, and quality of services expected to be provided to each Fund by Columbia Threadneedle; comparison of services provided and fees charged by Columbia Threadneedle and other investment advisers to similar clients; Columbia Threadneedle's profitability and the extent to which economies of scale would be realized as each Fund grows and whether fee levels would reflect such economies of scale; and the investment performance of Columbia Threadneedle), as relevant (and as discussed in more detail below), as those that they considered in approving the New Agreement, a summary of which is provided above in the Board Considerations in Approving the New Agreement section above. Following such review of each factor for the Interim Investment Advisory Agreement, the Trustees also took into account the specific considerations under Rule 15a-4 of the Investment Company Act of 1940, as amended (the "1940 Act"), including that:
• The compensation to be received by Columbia Threadneedle under the Interim Investment Advisory Agreement would be no greater that what EGA would have received under the prior advisory agreement;
• The scope and quality of the services to be provided under the Interim Investment Advisory Agreement are at least equivalent to those provided under the prior advisory agreement;
• The Interim Investment Advisory Agreement will terminate at the earlier of 150 days from the date on which the prior advisory terminates, or the implementation of the New Agreement;
• The Interim Investment Advisory Agreement provides that the Board or a majority of the Fund's outstanding voting securities may terminate the Interim Investment Advisory Agreement without the payment of any penalty, on not more than 10 calendar days' written notice to Columbia Threadneedle; and
• The Interim Investment Advisory Agreement contains the same terms and conditions as the prior advisory agreement, except for its effective and termination dates and the terms that are required to comply with Rule 15a-4 (including: (i) that the compensation under the Interim Investment Advisory Agreement will be held in an interest-bearing escrow account with the Fund's custodian or a bank; (ii) that if a majority of the Fund's outstanding voting securities (as defined in the 1940 Act) approve the New Agreement by the end of the 150-day period, the amount in escrow, including interest, will be paid to Columbia Threadneedle; and (iii) if a majority of the Fund's outstanding voting securities do not approve the New Agreement by the end of the 150-day period, Columbia Threadneedle is only entitled to receive the lesser of: (a) any costs incurred in performing the Interim Investment Advisory Agreement, plus interest earned on that amount while in escrow; or (b) the total amount in escrow, including interest).
After considering the foregoing, the Trustees arrived at the same conclusions with respect to each factor considered as they arrived at with respect to the New Agreement, which conclusions can be found in the Board Considerations in Approving the New Agreement section above.
Based on the foregoing, the Board, including all of the Independent Trustees, concluded that the fees to be paid under the Interim Investment Advisory Agreement were fair and reasonable in light of the extent and quality of services to be provided. In reaching this conclusion, no single factor was determinative. On August 11, 2016, the Board, including all of the Independent Trustees, approved the Interim Investment Advisory Agreement.
Semiannual Report 2016
90
COLUMBIA ETF TRUST II
IMPORTANT INFORMATION ABOUT THIS REPORT
Voting Policies, Procedures and Record
A description of the Trust's proxy voting policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities, and each Fund's proxy voting record for the most recent twelve-month period ended June 30 is available, without charge, by visiting columbiathreadneedleetf.com or searching the website of the Securities and Exchange Commission (the SEC) at sec.gov.
Shareholder Reports and Quarterly Portfolio Disclosure
The Funds are required to file their complete schedule of portfolio holdings with the SEC for their first and third quarters on Form N-Q. Copies of the filings are available without charge, upon request on the SEC's website at sec.gov. You can also obtain copies of Form N-Q by (i) visiting the SEC's Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330); (ii) sending your request and a duplicating fee to the SEC's Public Reference Room, Washington, DC 20549-0102; or (iii) sending your request electronically to publicinfo@sec.gov.
Semiannual Report 2016
91
This page intentionally left blank.
Semiannual Report 2016
92
This page intentionally left blank.
Semiannual Report 2016
93
Columbia ETF Trust II
225 Franklin Street
Boston, MA 02110
Investors should consider the investment objectives, risks, charges and expenses of an exchange-traded fund (ETF) carefully before investing. For a free prospectus and summary prospectus, which contains this and other important information about the ETFs, visit columbiathreadneedleetf.com. Read the prospectus and summary prospectus carefully before investing. Columbia Management Investment Advisers, LLC serves as the investment manager to the ETFs. The ETFs are distributed by ALPS Distributors, Inc., which is not affiliated with Columbia Management Investment Advisers, LLC, or its parent company, Ameriprise Financial, Inc.
© 2016 Columbia Management Investment Advisers, LLC.
columbiathreadneedleetf.com
SAR280_03_F01_(11/16)
Item 2. Code of Ethics.
Not applicable for semiannual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semiannual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semiannual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments
(a) The registrant’s “Schedule I — Investments in securities of unaffiliated issuers” (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form N-CSR.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors.
Item 11. Controls and Procedures.
(a) The registrant’s principal executive officer and principal financial officers, based on their evaluation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that material information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant’s management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
(b) There was no change in the registrant’s internal control over financial reporting that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR: Not applicable for semiannual reports.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) |
|
| Columbia ETF Trust II |
| |
|
|
|
| ||
|
|
|
| ||
By (Signature and Title) | /s/ Christopher O. Petersen |
| |||
| Christopher O. Petersen, President and Principal Executive Officer |
| |||
|
|
|
| ||
|
|
|
| ||
Date | November 21, 2016 |
| |||
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title) | /s/ Christopher O. Petersen |
| ||
| Christopher O. Petersen, President and Principal Executive Officer |
| ||
|
|
|
| |
|
|
|
| |
Date | November 21, 2016 |
| ||
|
|
|
|
|
|
|
|
|
|
By (Signature and Title) | /s/ Michael G. Clarke |
| ||
| Michael G. Clarke, Treasurer and Chief Financial Officer |
| ||
|
|
|
| |
|
|
|
| |
Date | November 21, 2016 |
|