BlackRock and Dynamic Funds partner on Canadian floating rate bond ETF

Mar 28th, 2018 | By | Category: Fixed Income

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BlackRock Canada and Dynamic Funds have launched the Dynamic iShares Active Investment Grade Floating Rate ETF (DXV CN) on Toronto Stock Exchange.

Mark Brisley, managing director, Dynamic Funds

Mark Brisley, managing director, Dynamic Funds.

The actively managed fund invests primarily in investment grade, floating rate corporate bonds from Canadian issuers. The ETF may also invest in high yield securities as long as the weighted average credit rating of the ETF remains BBB- or above.

Floating rate bonds offer coupons that adjust to reflect changes in interest rates, compared with traditional bonds which pay fixed coupons. This feature provides the fund with a degree of protection against rising interest rates. The fund further seeks to mitigate the effects of interest rate fluctuations through the use of interest rate derivatives.

“Investors looking to diversify their fixed income holdings in a climate of rising Canadian interest rates will find DXV a compelling and relevant solution,” said Mark Brisley, managing director, Dynamic Funds. “Portfolio manager Marc-André Gaudreau has a long history of using this investment approach so we are excited to offer this mandate in the ETF format.”

DXV has a management fee of 0.30%, and distributions are made to investors on a monthly basis.

The fund is the ninth ETF launched as a collaboration between BlackRock Canada and Dynamic Funds with previous offerings providing exposure to broad fixed income, crossover bonds, preferred shares, Canadian dividend payers, US dividend payers, global dividend payers, US mid-caps, and global financial services firms.

“We’re seeing significant uptake in actively managed ETFs, particularly for fixed income,” said Pat Chiefalo, head of iShares Canada at BlackRock. “We’re excited to expand our successful partnership with Dynamic Funds to launch an innovative and timely solution for Canadian investors.”

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