Invesco has announced it is planning to change the listing venue of the PowerShares Ultra Liquid Long Term Government Bond Index ETF (PGL) from the Toronto Stock Exchange to Aequitas NEO Exchange.
Jos Schmitt, president and CEO, NEO Exchange.
The move will mark the first ETF migration to NEO for Invesco and the second time an ETF issuer will migrate ETFs from the TSX following the move of certain iShares ETFs to NEO earlier this year.
“We are proud to support competition in Canada’s capital markets because it drives innovation and leads to a well-functioning investments industry,” said Christopher Doll, vice president, PowerShares sales and strategy.
“Invesco’s decision to migrate an ETF to us shows that we are succeeding in our mission to innovate and improve Canada’s capital markets for all investors through competition,” added Jos Schmitt, president and CEO, NEO Exchange. “Invesco’s decision to further expand their presence on NEO for a fourth time not only speaks to the strength of our growing ETF track record, but also to their dedication to a competitive and better Canadian capital market landscape for all investors.”
With the migration of PGL, the number of PowerShares ETFs listed on NEO will grow to five. NEO will then be home to 26 ETFs, comprised of 43 trading lines across six ETF providers. In October 2017, NEO handled more than 25% of all ETF volume traded in Canada, and close to 40% of volume on the entire PowerShares ETF lineup.
PGL tracks the FTSE TMX Canada Ultra Liquid Long Term Government Bond Index which invests in long-term bonds issued by the Canadian government. To be eligible for inclusion in the index, bonds must be rated at least ‘A’ and must have a time to maturity of at least ten years.
Long-term government bonds provide diversification benefits when combined with a traditional balanced portfolio and have historically helped protect portfolios in equity market downturns. Due to their higher duration, long-maturity government bonds outperform (other fixed-income assets) in falling interest rate environments and underperform in rising rate environments.
Bonds rated ‘AAA’ or ‘A’ make up the majority of the index’s exposure, with 38.1% and 37.6% weightings respectively. Bonds rated ‘AA’ account for a 24.3% weight. The index’s weighted average duration is significantly high at 15.6 years.
PGL has a management expense ratio of 0.28% and assets under management of over $400 million.