The appetite for fixed-income investments remains strong among Canadian investors despite a prolonged period of record-low yields. When interest rates eventually rise, many Canadian fixed-income investors may be surprised by the negative effect on their portfolios.
Historically, a laddered bond strategy has helped reduce the risks associated with rising interest rates, but managing a fixed-income portfolio requires expertise.
PowerShares Canada today announced the listing of two new smart beta exchange-traded funds (ETFs) on the Toronto Stock Exchange (TSX) that aim to help investors interested in fixed income strategies.
One of them, the PowerShares LadderRite U.S. 0-5 Year Corporate Bond Index ETF, is based on the new NASDAQ LadderRite 0-5 Year USD Corporate Bond Index . The index is designed to give investors exposure to a laddered basket of U.S.-dollar-denominated, investment-grade corporate bonds. USB has a low management fee of 0.25%. The ticker symbol "USB" represents Canadian-dollar-denominated units, while "USB.U" represents U.S.-dollar-denominated units.
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