Solactive introduces family of Canadian bond indices

Apr 4th, 2017 | By | Category: Fixed Income

Frankfurt-based index provider Solactive has launched the Solactive Canadian Bond Universe Indices, a new suite of broad-based indices targeting a range of Canadian government and corporate investment-grade bond exposures denominated in CAD.

Henning Kahre, Head of Research, Solactive AG

Henning Kahre, Head of Research, Solactive AG.

The indices are the latest addition to Solactive’s portfolio of cost-efficient broad-market strategies and may serve as benchmarks for portfolio performance, starting universes for smart beta indices and active strategies, or as the basis for future investment products such as ETFs.

The new offering is part of a broader family of Canadian indices offered by Solactive catering to investors interested in gaining Canada-specific exposure on both the fixed-income and hybrid sides. The family comprises various sub-indices targeting different segments of the Canadian bond market, as well as a Canadian preferred shares index.

More precisely, the Solactive Short-Term Canadian Bond Universe TR Index represents a subset of the broader Solactive Canadian Bond Universe TR Index and covers investment grade bonds with shorter maturities ranging from one to five years. Constituents must have a minimum amount outstanding of CAD$100 million.

The Solactive 1-5 Year Laddered Canadian Government Bond TR Index and the Solactive 1-5 Year Laddered Canadian Corporate Bond TR Index offer separate exposure to either the government or corporate Canadian bond segments, each following a ladder strategy. Constituents must have a minimum amount outstanding of CAD$300m. Each segment within the laddered portfolio is equal-weighted at time of rebalance.

Finally, the Solactive Canadian Rate Reset Preferred Share Index tracks the performance of reset rate preferred shares listed on the Toronto Stock Exchange with a minimum market-cap of CAD$100m and satisfactory liquidity and quality features.

Henning Kahre, Head of Research, Solactive AG, commented: “The new family of Canada-focused indices offer investors the possibility of gaining exposure to specific sections of the Canadian market. Considering that Canada is one of our most important target markets, broadening our range of indices is a strategic step for Solactive, as it helps strengthen our footprint in Canada.”

The indices have been licensed to Desjardins Global to underlie the firm’s debut range of ETFs, which launched earlier this month.

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