iShares 1-5 Year Laddered Corporate Bond Index ETF (CBO:CA)
This ETF seeks to replicate the performance of the FTSE TMX Canada 1-5 Year Laddered Corporate Bond Index, net of expenses.
Selected bonds are placed into 5 maturity buckets. Maturity buckets are 1-1.99 years, 2-2.99 years, 3-3.99 years, 4-4.99 years, and 5-5.99 years. On each annual rebalancing on 15 July, the bonds from each maturity roll out to the next lower bucket. Bonds with a remaining maturity of less than one year are sold, with the proceeds being used to invest in the longest maturity bucket.
Each July, the Index is rebalanced into five equally weighted buckets consisting of corporate bonds with staggered maturity dates as set forth below:
% of Bonds
1 yr - 1.99 yrs
2 yrs - 2.99 yrs
3 yrs - 3.99 yrs
4 yrs - 4.99 yrs
5 yrs - 5.99 yrs
During the rebalanced approximately 20% of the portfolio holdings change by selling the bonds from the one-year maturity bucket and investing the proceeds in bonds that would become the new five-year bucket for the upcoming year.
IFM Investment Tip:
This is a good option for investors wishing to add bonds to their investment portfolio. Things we like:
- a low 0.28% annual cost
- A structured, laddered approach to managing the bond money
- rebalancing is done once twice a year - easy- peasy!
- a comfortable duration and maturity fitting most investors desire to own bonds maturing in six years or less.
- as at Sept. 2017, 84.97% of the bonds held in this ETF have a credit rating of "A" or better.
- Fact Sheet
- TMX Money ETF Screener
- Morningstar ETF Screener
- Underlying Index/Commodity
- FTSE TMX Canada 1-5 Year Laddered Corporate Bond Index
- Asset Category
- Fixed Income Investments
- Average Duration
- 3.19 Years (September 30, 2017)
- Average Maturity
- 3.41 Years (September 30, 2017)
- Date Established
- February 25, 2009
- Annual Management Fee
- 0.25% Plus 0.03% in Operating Expenses (2016)
- Trading Expense Ratio (TER)
- 0.00% (2016)
- Management Expense Ratio (MER)
- 0.28% (2016)
- Additional Performance Fee(s)
- 0.50% - Additional fee applicable to Advisor Class shares. (Expense Ratio for Advisor Shares was 0.84% in 2016)
- Yes - In 2016, the ETF had a yield equal to 2.97% net of Return of Capital (ROC) payments.
- Distribution Dates
- Monthly - at the beginning of each month.
- Distribution Details
- Dividend Reinvestment Plan (DRIP)
- Yes Visit ETF Website for details
- Rebalancing Frequency
- Semi-annually in June and January
- Portfolio Turnover Ratio
- Was 35.83% in 2016, 82.73% in 2015, 26.79% in 2014, 36.52% in 2013, 19.96% in 2012, 29.48% in 2011 and 6.68% in 2010.
- Simplified Prospectus
- Last Updated