First Asset 1-5 Year Laddered Government Strip Bond Index ETF BXF:CA)
The First Asset 1-5 Year Laddered Government Strip Bond Index ETF (the "Fund") tracks the performance of a FTSE TMX Canada 1-5 Year Laddered Government Strip Bond Index, net of expenses. This ETF invests in strip bonds derived from Canadian federal and provincial government issues with duration ranging from 1-5 years, making it an ideal solution for those looking to mitigate both interest rate risk and credit risk. Another important feature of strip bonds is that they're priced at discounts to their par values, offering up attractive tax-efficiency relative to other bonds trading at premiums.
IFM Investment Tip:
If you are looking for a bond ETF to hold in your tax-free (TFSA) or tax-deferred (RRSP, RRIF, RESP, etc.) account this may be a great option. Things we like;
- This ETF uses a true 5-bucket schedule for managing bond maturities. One bucket for each year from 1 to 6 years. (Yes, I know the ETF's title says 1-5 years, but the ETF doesn't hold anything under 1 year, so it actually holds bonds out to 6 years in maturity.)
- It holds 5 bonds in each of the 5 buckets.
- Each bucket will be equally weighted - holding the same $ investment in each of the 5 buckets (just like we like them!)
- The maturing bucket of bonds will automatically be reinvested in a new bucket of bonds in the longest index maturities - 5.0 to 5.99 years. (just like a true bond ladder!)
- At 0.20%, the ETF's management fee is very reasonable
- Bonus! The ETF will not charge any management fees until after July 1, 2014.
Note: Our preference is to hold stripped bonds in non-taxable accounts, but investors can buy this stripped bond ETF inside a taxable account without worrying about adverse tax considerations normally accompanying stripped bonds held in taxable accounts. According to First Asset accounting department, BXF will operate exactly the same as any other bond ETF in regards to distributions and tax. In the case of BXF, it will calculate the amount of the taxable interest accrual, make cash distributions equal to that amount (on a quarterly basis), and a buyer of BXF will receive their proportionate distribution (and thus taxable income) based on the number of units they own. This structure should eliminates the income tax reporting headaches normally associated with hold stripped/discount bonds in a taxable account.
Index Note: This ETF originally was set up to track the DEX 1-5 Year Laddered Government Strip Bond Index, but has now changed so it tracks the FTSE TMX Canada 1-5 Year Laddered Government Strip Bond Index.
- Fact Sheet
- TMX Money ETF Screener
- Morningstar ETF Screener
- Underlying Index/Commodity
- FTSE TMX Canada 1-5 Year Laddered Government Strip Bond Index
- Asset Category
- Fixed Income Investments
- Average Duration
- 3.20 Years (September 29, 2017)
- Average Maturity
- 3.20 Years (September 29, 2017)
- Date Established
- June 11, 2013
- Annual Management Fee
- 0.20% Plus 0.02% in Operating expenses (2016)
- Trading Expense Ratio (TER)
- 0.03% (2016)
- Management Expense Ratio (MER)
- 0.25% (2016)
- Additional Performance Fee(s)
- 0.80% servicing fee for Advisor Class Units. Advisor Class Expense Ratio= 0.82% (2016)
- Yes - In 2016, the ETF had a yield equal to 1.12% net of Return of Capital (ROC) payments.
- Distribution Dates
- Quarterly - April, July, October and January
- Distribution Details
- Dividend Reinvestment Plan (DRIP)
- Tax Efficient
- Rebalancing Frequency
- Annually, each June 30th
- Portfolio Turnover Ratio
- Was 30.36% in 2016, 49.73% in 2015 & 21.98% in 2014
- Simplified Prospectus
- Last Updated