AGF Investments has launched the AGFiQ Enhanced Core Global Multi-Sector Bond ETF (QGB CN) on Aequitas NEO Exchange.
Florence Narine, Senior Vice-President, Head of Product, AGF Investments.
The fund provides actively managed exposure to investment grade and high yield corporate bonds as well as government bonds issued by developed and emerging market countries.
Constituents are selected bottom-up based on a proprietary multifactor model which ranks bonds using factors such as growth, value, quality, and risk characteristics. In selecting holdings, the fund also considers duration, yield, and other fixed income attributes.
The portfolio incorporates country, industry, group, sector, and individual security constraints to enhance diversification, liquidity, and risk mitigation.
The portfolio will be reconstituted and rebalanced quarterly or on an ad hoc basis if market conditions warrant.
Foreign currency exposure is expected to be hedged back to Canadian dollars.
“Given the current environment in fixed income and longer-term projections for interest rates, investors are looking to diversify existing bond portfolios into strategies that offer access to different areas of the market,” said Kevin McCreadie, President and Chief Investment Officer, AGF Investments. ”While fixed income investing has its roots in mathematics, we are excited to be the first in Canada to apply quantitative factor models to the asset class, focused on better understanding and managing of risk as we seek out opportunities for total return and income across the global bond market.”
“While fixed income ETFs now account for close to a third of ETF assets in Canada, we are proud to launch the first Canadian ETF to use a multi-factor based approach to fixed income investing,” added Florence Narine, Senior Vice-President, Head of Product, AGF Investments. “This ETF was designed for investors looking to gain access to global fixed income securities seeking enhanced returns with an explicit focus on risk management.”
The fund comes with a management expense ratio (MER) of 0.45% and pays dividends on a quarterly basis.
The ETF is the fifth fund in the firm’s ‘Enhanced Core’ suite – cost-effective strategies designed to act as the base of investors’ portfolios. It is also the first fixed income fund in the range. The other ETFs provide exposure to Canadian, US, global ex-North America, and emerging market equities.