From Global Bonds to Long/Short Equity: What's New in the Canadian ETF Market this Week
New ETFs are shaking up the Canadian market, offering investors everything from global income to long/short equity strategies.
Over the past, we've seen some interesting developments from IA Clarington, First Trust Canada, Picton Investments, and Brompton, each offering a unique twist on how investors can access global markets and income streams. Let's dive into the details of these new offerings and filings.
New ETFs Bring Fresh Investment Strategies
IA Clarington's Global Income Fund Now an ETF
IA Clarington Investments has launched an ETF series of its popular IA Clarington Agile Global Total Return Income Fund (GTRI).
This move makes the fund's actively managed strategy, which focuses on a diverse mix of global fixed-income securities, more accessible to investors who prefer the flexibility and liquidity of an ETF.
The fund has a management fee of 0.65%, offering a relatively low-cost way to get exposure to a global bond portfolio without having to pick individual securities.
First Trust Canada's Long/Short Equity ETF
For investors looking for a more dynamic and potentially less volatile approach to equity investing, First Trust Canada has introduced the First Trust Long/Short Equity ETF (FTLS).
This fund is unique in that it invests in an underlying U.S. ETF, which holds both a long and a short portfolio of U.S. equities and index futures.
This strategy aims to generate returns in both rising and falling markets. However, investors should be aware of the fee structure: the fund charges a 0.15% management fee on top of the 0.95% fee of the underlying fund, bringing the total management expense to a combined 1.1%.
This is a crucial detail for investors to consider when evaluating the potential returns.
Upcoming Filings Hint at Future Offerings
Picton's Planned Income Fund ETF
Picton Investments has filed for ETF units of its PICTON Income Fund, a move that could soon make its actively managed global corporate debt strategy available to a wider audience.
The fund's strategy is to invest primarily in global corporate debt, but it also has the flexibility to hold government bonds, loans, and even a small percentage (up to 25%) in equities and preferred shares.
A notable feature of this fund is its performance fee—20% of any returns that exceed its reference index (75% ICE BofAML Global High Yield Index and 25% ICE BofAML Global Corporate Index), in addition to a 0.9% management fee.
This fee structure is a key differentiator and could be attractive to investors seeking funds where the manager's compensation is tied to outperformance.
Brompton's Aims for New CLO ETF
Brompton is preparing to launch the Brompton Wellington Square BBB CLO ETF (BBBB, BBBB/U), which will focus on investing in Collateralized Loan Obligations (CLOs).
This ETF is designed to provide investors with access to an actively managed portfolio of primarily Investment Grade CLOs.
While at least 75% of the portfolio will be in investment-grade CLOs, the fund has the option to invest up to 25% in non-investment grade CLOs. CLOs are a type of structured finance product that pools together corporate loans and sells them off to different tranches of investors.
This ETF could be a good fit for investors looking for exposure to a less common and potentially higher-yielding segment of the fixed-income market.
Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.
