(July 11 – 17:15 ET) – The Toronto Stock Exchange is expecting to list two new exchange-traded bond funds.
Subject to regulatory approval, TSE Inc. and Barclays Global Investors Canada Ltd. will list the iUnits Government of Canada 5-Year Bond Fund and the iUnits Government of Canada 10-Year Bond Fund.
The funds will be structured as mutual fund trusts whose units are listed on the TSE, offering subscriptions in kind (physical bonds in exchange for units) and redemptions in kind or in cash. The funds will only hold cash and either the on-the-run five- and 10-year Government of Canada bonds. Distributions will be made semi-annually.
The funds promise direct tracking of a clearly defined benchmark, professional management, economies of scale on the initial purchase of bonds and subsequent rebalancing, and cash income. They’ll also have the benefits of exchange-traded funds: transparent pricing, liquidity, margin purchases, and the ability to short.
-IE Staff