Toronto-based Purpose Investments Inc. announced on Wednesday the launch of Purpose Tactical Investment Grade Bond Fund, an exchange-traded fund (ETF) that looks to enhance bond yields while managing duration across a range of Canadian and U.S. government and corporate investment grade fixed-income securities.
“The biggest challenge facing investors and advisors today is how to allocate to fixed income in their portfolios,” says Som Seif, president and CEO of Purpose Investments, in a statement. “Passively holding bonds over the past 30 years has been extremely rewarding. However today, the reward relative to the risk of a ‘buy and hold’ bond portfolio is no longer as attractive.”
The firm’s response to this challenge is to develop an ETF that is meant to enhance return opportunities in bonds through hedging strategies that reduce interest rate and duration risk on the portfolio.
“The result should be a better reward per unit of risk in a bond portfolio,” says Seif.
The ETF units started trading on the Toronto Stock Exchange on Wednesday (TSX:BND).