RBC iShares has introduced a new suite of target maturity fixed income ETFs built around Canadian government bonds.
Mark Neill, Head of RBC ETFs, RBC Global Asset Management
Unlike conventional fixed income ETFs, which trade in and out of bonds to maintain a broadly static duration exposure, target maturity ETFs acquire a portfolio of bonds with maturity dates in line with the target year and hold them until maturity, at which point the ETF liquidates.
Target maturity bond ETFs provide a toolkit for investors to more accurately manage their duration exposure. As opposed to individual bonds, the funds also benefit from diversification, thereby mitigating potential idiosyncratic risks such as credit rating downgrades or defaults.
Additionally, by combining funds of varying target maturity dates, investors can tailor portfolios to meet specific future cash requirements.
Listed on the Toronto Stock Exchange and managed by RBC Global Asset Management, the new suite consists of six ETFs targeting maturity years between 2024 and 2029. Each fund holds a mix of investment-grade federal, provincial, and agency bonds that mature in its target year.
The suite of funds, each of which comes with a management fee of 0.15%, is outlined below:
RBC Target 2024 Government Bond ETF (RGQL CN)
RBC Target 2025 Government Bond ETF (RGQN CN)
RBC Target 2026 Government Bond ETF (RGQO CN)
RBC Target 2027 Government Bond ETF (RGQP CN)
RBC Target 2028 Government Bond ETF (RGQQ CN)
RBC Target 2029 Government Bond ETF (RGQR CN)
Commenting on the new listings, Mark Neill, Head of RBC ETFs, RBC Global Asset Management, said: “We are committed to providing Canadian advisors and investors with innovative solutions to meet the portfolio construction challenges of today. In today’s volatile market environment, fixed income solutions are playing an increasingly important role in the investment portfolios of our clients. We are expanding one of our most popular RBC iShares solutions to meet more of our clients’ needs by leveraging the investment expertise of the fixed income team at RBC Global Asset Management.”