RBC Global Asset Management Inc. Friday announced the final valuation of the RBC Target 2014 Corporate Bond Index ETF (TSX: RQB).
As announced earlier this year, the fund will mature effective the close of business Nov. 21.
The final net asset value (NAV) per unit of the ETF is $18.7720, consisting of $0.0854 of income per unit and $18.6866 of capital per unit.
The maturity proceeds will be paid out of the ETF today to the holders of the remaining outstanding units.
Unlike traditional ETFs, which have a perpetual life, target maturity ETFs have a specified maturity date established when the ETF is launched. When the ETF reaches the maturity date, the ETF’s final net asset value is returned to the current unitholders.
A target maturity ETF’s portfolio contains fixed income securities that mature throughout its stated maturity year. This structure results in a duration profile similar to that of an individual bond, where the ETF’s duration should decline as it approaches maturity, reducing sensitivity to interest rate changes. These ETFs do not seek to return any predetermined amount at maturity.