FTSE Russell Canada has introduced a benchmark for the domestic mortgage-backed securities market, providing a new way to access the fixed income investments.
The index provider said Wednesday in a release that the FTSE Canada NHA MBS 975 Index (which stands for National Housing Act mortgage-backed securities) provides a transparent measure for the almost $500-billion market.
It said that BMO Asset Management has already licensed the index for the BMO Canadian MBS Index ETF, which began trading on the Toronto Stock Exchange in February.
“Canadian investors now have access to the asset diversification, risk mitigation and yield opportunities of the Canada mortgage bond market through a transparent, rules-based index,” the release said.
Mortgage-backed securities are insured by the Canada Mortgage Housing Corporation and assigned a AAA rating, it added.