RBC Target 2018 Corporate Bond Index ETF will mature on Nov. 16, Toronto-based RBC Global Asset Management Inc. (RBCGAM) announced Thursday.
Whereas traditional ETFs have a perpetual life, target maturity ETFS differ in that they have a specified maturity date that is established when the ETF is launched and also disclosed in its prospectus, RBCGAM explains in a news release.
When the ETF reaches its maturity date, the ETF’s final net asset value is returned to current unitholders.
A target maturity ETF’s portfolio consists of 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 can be expected to decline as it approaches maturity, reducing sensitivity to interest rate changes.
These ETFs do not seek to return any predetermined amount at maturity.
The RBC family of Target Maturity Corporate Bond ETFs includes six ETFs with maturities ranging from 2018 to 2023.