WisdomTree Canada has teamed up with One Capital Management (OCM) to launch the ONE North American Core Plus Bond ETF (ONEB CN) on the Toronto Stock Exchange.
ONEB provides actively managed core fixed income exposure by investing in a portfolio of bond securities from North American issuers across multiple sectors.
The fund is actively managed by OCM and provides exposure to a core aggregate bond portfolio consisting of securities from North American issuers.
The ETF seeks to provide a stable rate of return, primarily through income and to a lesser extent capital appreciation.
Eligible fixed income securities include those issued by North American corporations, governments (federal and state), government-related entities, and agencies.
These securities will comprise the ‘core’ of the portfolio and amount to at least 70% of the fund’s total exposure.
The prospectus also notes, however, that the ETF may invest in international fixed-income securities, emerging market debt, preferred shares, convertible bonds and non-investment grade bonds at the discretion of the manager.
The ETF may obtain its exposure either through the direct purchase of bonds or through other ETFs.
The fund’s managers will also incorporate a hedging strategy, designed to mitigate the risk of adverse currency fluctuations between the US dollar and the fund’s trading currency, the Canadian dollar.
In order to select securities for inclusion, the fund’s managers analyse fundamental credit research, industry research, growth prospects and long-term trends, and an issuer’s competitive position. These factors are reviewed relative to the issuer’s yield, risk and general market conditions.
The management expense ratio (MER) for the fund is 0.55%.
ONEB is the second ETF collaboration between WisdomTree Canada and OCM following the launch of the ONE Global Equity ETF (ONEQ CN) in September 2015.
ONEQ is also actively managed and provides exposure to a portfolio of equities from developed and emerging markets globally. The fund has approximately C$60 million in assets under management and comes with a MER of 0.92%.
“We’re thrilled to continue the expansion of our ETF line-up and provide Canadian investors increased access to actively managed fixed income strategies,” said Kurt MacAlpine, WisdomTree Executive Vice President and Global Head of Distribution.
He added, “In line with the Canadian ETF industry overall, WisdomTree Canada has seen tremendous growth over the past year, especially in our core fixed income products – CAGG and CAGS – launched just over a year ago. We’re looking forward to expanding our relationship with OCM to launch our newest addition to the fixed income product suite.”