TD Asset Management has unveiled a trio of actively managed income-oriented ETFs on the Toronto Stock Exchange.

Bruce Cooper, CEO & CIO, TD Asset Management.

The funds, which target Canadian preferred shares and Canadian and US corporate bonds, seek to provide high levels of income while maintaining capital.

“These new ETFs provide investors with additional choice and flexibility to help manage risk, reduce portfolio volatility and potentially outperform the market,” said Bruce Cooper, CEO & CIO, TD Asset Management.

“As Canada’s largest asset manager, we have extensive experience in managing ETFs for institutional clients and following the introduction of our passive ETFs in 2016 for retail clients, this is a natural extension of our offering.”

Preferred Shares

The TD Active Preferred Share ETF (TPRF CN) invests primarily in Canadian listed preferred shares, although the fund may also hold common shares, government and corporate bonds, and other income-producing securities.

Investments will be concentrated in companies in the financial services, utility and energy sectors and may have redemption, retraction or conversion rights. Up to 5% of the portfolio may be invested in foreign securities.

The fund comes with a management expense ratio (MER) of 0.45%.

Corporate bonds

The TD Select Short Term Corporate Bond Ladder ETF (TCSB CN) invests primarily in a diversified portfolio of Canadian investment grade corporate bonds. The portfolio is approximately equally divided (laddered) into five groupings with staggered maturities from approximately one to five years.

The ETF may also look for added value from bonds denominated in US dollars or Canadian dollars that are rated non-investment grade (as long as the rating is B or higher). No more than a quarter of the fund’s total exposure may be attributed to these bonds at any given time, and currency risk will generally be hedged back to Canadian dollars.

The fund’s MER is 0.25%.

The TD Select US Short Term Corporate Bond Ladder ETF (TUSB CN)  is similar to TCSB but invests primarily in US investment grade corporate bonds.

It too divides its portfolio into five groupings with staggered maturities from approximately one to five years and may invest up to 25% of its portfolio in non-investment grade bonds rated B or higher.

Its MER is also 0.25%, and the fund is also available to trade in a US dollar-denominated share class under the ticker TUSB.U CN.