Two players in the Canadian ETF space have announced new fixed-income offerings for investors.
WisdomTree Canada has launched the ONE North American Core Plus Bond ETF. The fund is trading on the TSX under the ticker symbol ONEB.
With a management fee of 0.55%, ONEB seeks to provide a stable rate of return through income and, to a lesser extent, capital appreciation. It will be invested, directly or through ETFs, in investment-grade North American fixed-income securities from corporations governments (federal and state/provincial), and government-related entities.
The fund is advised by One Capital Management (OCM), an investment-management firm that manages $1.8 billion in assets in Canada and the US. OCM will use an active management strategy with proprietary fundamental credit research and analysis, as well as direct the fund’s currency-hedging strategy.
“We're thrilled to continue the expansion of our ETF lineup and provide Canadian investors increased access to actively managed fixed income strategies," said WisdomTree Executive Vice President and Global Head of Distribution Kurt MacAlpine.
Evolve ETFs has also filed a preliminary prospectus with the Canadian securities regulators for its own Evolve Active Global Fized Income ETF (EARN). The fund is an active strategy that invests primarily in global debt securities of corporate issuers.
EARN seeks to provide positive returns throughout interest-rate and economic cycles by allocating to different credit asset classes and using bottom-up individual security selection. It aims for long-term returns exceeding the 3-month US dollar London Interbank Offered Rate.
Allianz Global Investors (AllianzGI), which had approximately US$612 billion in AUM including US$36 billion in global fixed income as of June 30, is the sub-advisor for EARN.
“We are very pleased to partner with Allianz Global Investors, one of the world's leading active investment managers," said Evolve ETFs President and CEO Raj Lala. “AllianzGI provides extensive global resources and investment expertise, as fixed income securities continue to be a core component of investor portfolios.”
According to Lala, advisor and investor appetites for active fixed-income strategies is growing, with an emphasis on security selection, credit analysis, and risk management. “Last year 40% of all Canadian fixed income ETF inflows were into active ETFs,” he said.
“The opportunity to expand our presence in the Canadian market through this partnership with Evolve ETFs feels both well-timed and well-matched,” said David Newman, head of Global High Yield at AllianzGI. “Together, we can create a strong foothold in Canada with active management being the driving force that aligns us in sub-advising our first active ETF and delivering value to financial advisors and Evolve's clients."
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