TORONTO Jan 21 Canadian money manager First
Asset said on Monday it had launched the first exchange-traded
fund designed to track the country's provincial government debt
The ETF, which will aim to replicate the Canadian DEX
Universe Provincial Bond Index less expenses, will hold
investment-grade provincial debt, which offers higher yields
than top AAA-rated federal government bonds.
The First Asset DEX Provincial Bond ETF started
trading on the Toronto Stock Exchange on Monday and stood at
C$10.00 per unit by midday.
In recent years many investors have turned away from
actively managed mutual funds to lower-fee ETFs, a trend that
has spurred a wave of new products.
Canada's ETF market is dominated by BlackRock Inc,
Bank of Montreal and Horizons, which is controlled by
South Korea's Mirae Asset group.
First Asset, an independent investment manager founded in
1996, has more than C$2.6 billion ($2.62 billion) in assets.
The First Asset ETF includes bonds from provinces such as
Ontario, Quebec and British Columbia, with a credit rating of
BBB or higher and a minimum size requirement of C$50 million per
Its expense ratio is 0.25 percent.
Other ETFs, such as BlackRock iShares' Dex Universe Bond
Index, track a combination of Canadian federal, provincial,
municipal and corporate bonds.