Franklin Templeton Canada has launched an actively managed ultra-short duration bond ETF.
Duane Green, President and CEO, Franklin Templeton Canada.
The Franklin Bissett Ultra Short Bond Active ETF (FHIS CN) has been listed on the Toronto Stock Exchange with a management fee of 0.15%.
The fund is managed by Franklin Bissett Investment Management’s fixed income division which oversees approximately $5 billion in assets under management across multi-sector, credit, and duration-targeted strategies.
Day-to-day portfolio management is led by Brian Calder, Vice President, portfolio manager, and senior trader; Sevrika Galipeau, portfolio manager and research analyst; and Darius Taheri, portfolio manager and trader. Calder, Galipeau, and Taheri have 23, 15, and eight years of industry experience, respectively.
The ETF aims to provide a high level of income consistent with the preservation of capital by investing primarily in short-term debt instruments from Canadian issuers, maintaining a weighted average portfolio duration of under two years.
Eligible types of investments include high-interest savings accounts, money market instruments, Treasuries, corporate credit, mortgage and asset-backed securities, syndicated loans, and preferred securities.
Up to 20% of the portfolio may be invested in securities rated below investment grade, while a maximum of 30% may be dedicated to securities denominated in currencies other than the Canadian dollar.
Distributions are made to investors on an annual basis.
Duane Green, President and CEO, Franklin Templeton Canada, said: “With the recent market volatility and rising interest rates, many investors are looking to enhance their cash position while preserving capital. FHIS provides a shorter duration strategy with a comparable yield to Guaranteed Investment Certificates, providing Canadians access to stable income with downside protection and limited sensitivity to interest rate movements.”
Ahmed Farooq, Head of Retail ETF Distribution, Franklin Templeton Canada, added: “For investors looking for more than a money market fund and not wanting to lock in GIC rates at a time when interest rates are expected to rise, FHIS provides the flexibility they desire. The active management of this ETF allows our seasoned Canadian fixed income team to seize investment opportunities arising in the bond market with the benefit of a low management fee of only 15 basis points.”