iShares has launched a new exchange-traded fund (ETF).
The iShares Core Short Term High Quality Canadian Bond Index ETF (XSQ) will offer investors low-cost exposure to high-quality, liquid, short-duration Canadian bonds (one to five years), with a credit rating of A or higher.
Similar to the iShares Core High Quality Canadian Bond Index ETF (XQB), XSQ will provide diversified bond exposure with a weighting of 60% government bonds and 40% corporate bonds.
While XQB covers the universe, XSQ will capture the short end of the Canadian bond universe by seeking to replicate, to the extent possible, the performance of the FTSE TMX Canada Liquid Short Term Capped Bond Index.
The ETF has an annual management fee of 0.12%.
“In an environment where rising rates are on the horizon, investors are reconsidering how best to access bonds,” says Noel Archard, managing director, head of BlackRock Canada. “With the addition of XSQ to our iShares Core Series, Canadian investors will have low-cost access to high-quality short-duration bonds that are well suited for the long term as well as for managing against this potential risk.”
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