Harvest launches US corporate bond ETF sub-advised by Amundi

Jan 15th, 2020 | By | Category: Fixed Income

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Canadian fund manager Harvest Portfolios has launched a new actively managed US corporate bond ETF – the Harvest US Investment Grade Bond Plus ETF (HUIB CN) – on Toronto Stock Exchange.

Michael Kovacs, President and CEO of Harvest Portfolios Group

Michael Kovacs, President and CEO of Harvest Portfolio.

Amundi Canada has been retained as the fund’s sub-advisor, with Amundi Pioneer, its US affiliate, performing the day-to-day investment management.

Both Amundi Canada and Amundi Pioneer are part of Amundi, Europe’s largest asset manager and a leading provider of ETFs.

Investment strategy

The Harvest US Investment Grade Bond Plus ETF seeks to provide a combination of monthly income and the opportunity for capital appreciation by investing primarily in investment-grade corporate debt.

According to the fund’s prospectus, the ETF will invest at least two-thirds of its assets in corporate debt denominated in US dollars and at least half of its assets in corporate debt issued by companies that are headquartered in the United States.

The fund may also invest in a range of other fixed income securities including corporate bonds denominated in other currencies, as well as convertible securities, preferred shares, mortgage-backed securities, asset-backed securities, government bonds, agency bonds, municipal bonds, and quasi-sovereign bonds.

No less than 90% of the portfolio’s assets will be invested in securities with an investment-grade rating, and at least 75% of the portfolio will be invested in securities with a rating of BBB or above.

In managing the fund, Amundi employs a range of economic and interest-rate trend models to determine the appropriate credit quality profile for the portfolio.

The firm then utilizes both technical and fundamental analysis to develop a list of individual securities that it believes to be attractively valued.

Security selection is also determined with the assistance of a proprietary environmental, social, and governance (ESG) model that seeks to avoid issuers with high levels of ESG-related risk.

Currency risk between the US dollar and the Canadian dollar will be hedged.

The fund has been listed with seed capital of $10 million and comes with a management fee of 0.48%.

Michael Kovacs, President and CEO of Harvest Portfolios, commented, “We are pleased to partner with Amundi Canada to launch the Harvest US Investment Grade Bond Plus ETF with specific ESG factors that help provide the corporate quality investors are seeking today.”

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