Dynamic Funds has expanded its ETF roster with the launch of an actively managed corporate bond fund.

Mark Brisley, Managing Director, Dynamic Funds.

The Dynamic Active Discount Bond ETF (DXDB CN) has been listed on the Toronto Stock Exchange with a management fee of 0.35%.

The fund is led by Marc-André Gaudreau, Vice President and Senior Portfolio Manager, who has more than two decades of investment management experience across the credit spectrum for both retail and institutional clients.

The ETF invests primarily in Canadian investment-grade corporate bonds with a term to maturity between three and seven years. Up to 20% of the portfolio may be allocated to high yield bonds with credit ratings between BB+ and B-.

The ETF targets bonds that are trading below the average price of its benchmark – an equal mix of the ICE BofA 3-5 Year Canada Corporate Index and ICE BofA 5-7 Year Canada Corporate Index. By investing in bonds trading at a discount to par, the ETF aims to deliver an improved upside convexity profile compared to the broader Canadian corporate bond market.

The fund makes distributions to investors on a monthly basis.

Mark Brisley, Managing Director, Dynamic Funds, said: “DXDB is an actively managed, diversified corporate bond ETF that provides the potential for more tax-efficient capital gains along with interest income. It can be used as a complement to the core bond allocation of an investor’s portfolio. With the prevailing challenges and opportunities in fixed income markets, we are pleased to provide investors with this timely addition to the Dynamic Active ETF toolbox to diversify their portfolios.”