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Solactive AG enters the bond space in Canada with the launch of two new indices: the Solactive Canadian Select Universe Bond Index and the Solactive Canadian Select Corporate Bond Index. The former is being used as the underlying index for the Horizons Cdn Select Universe Bond ETF (HBB) sponsored by Horizons ETFs Management (Canada) Inc. and listed today on the Toronto Stock Exchange.
Fixed income exchange-traded funds have seen a tremendous growth in the country, as they now account for 29.3% of the overall CAD 66 billion currently invested in ETFs in Canada,* and are commonly considered by investors as an efficient, low-cost alternative to both mutual funds and buying bonds individually.
Both indices are composed of a relatively small number of components compared to other national benchmarks providing similar performance. As of the 6th of May, the Solactive Canadian Select Universe Bond Index has 180 components for a performance of 6.25% and the Solactive Canadian Select Corporate Bond has a performance of 11.85% (since 3rd January 2012.)
Astrid Ludwig, Head of the Bond & Complex Team, Solactive, said: “These indices have been designed to offer an alternative way of replicating the Canadian investment grade bond market, without considering every single bond being issued. We hope that the launch of a new product in this market will benefit the end-investors.”
Howard Atkinson, President of Horizons ETFs, said: “We’re pleased to be partnering with Solactive on this important ETF launch for our firm. We think Solactive have done a great job in building a fixed income index that offers all the performance characteristics of the broad Canadian Bond Universe, but uses a more focused methodology that allows for easier and cost-efficient replication.”
