Earn Better Risk-adjusted Returns Through a Balanced Approach
A Barbell Strategy Provides Investors Steady Income and Flexibility
A barbell bond investment strategy allocates the total portfolio equally between short term and long term bonds. The barbell strategy allows the fixed-income investor to receive higher income from long term bonds while the short term bond exposure provides a counter-balance of safety and flexibility.
All three of the First Asset ETFs replicating DEX barbell bond indexes (see below) have 50% invested in short term maturities (less than two years) and floating rate notes, with the other 50% invested in longer term maturities (10-20 years). This approach provides a high current yield but lower overall duration risk than other broad market indexes. All bonds in the ETFs are rated investment grade.
The barbell approach minimizes the need to determine where interest rates are headed. Instead the fixed income investor can rest easier with the higher current income provided by the 50% in longer term bonds, balanced off by the lower risk and flexibility provided by having 50% of the Index invested in floating rate notes and sub-two year maturities.
The First Asset Barbell ETFs will provide choice and diversification by offering a government bond ETF, an investment grade corporate bond ETF and an ETF that combines government and corporate bonds. It is a smart risk adjusted way to invest in investment grade bonds.
Benefits of using First Asset Barbell Bond ETFs
- Low Cost
- Liquidity and transparency of ETF Structure
- Institutional bond pricing for all investors
- Balanced approach offers benefits of long and short dated bond buckets
- High income from Long term bonds, safety of short term bonds
- Diversification across maturities and security offerings (government and corporate)
- DRIP/PACC/SWP program
First Asset Barbell ETFs (Start Trading July 10, 2012) - Also Available in Advisor Series
|Ticker||Name||Management Fee (%)||Distribution Frequency|
|GXF||First Asset DEX Government Bond Barbell Index ETF||0.20%||Monthly|
|KXF||First Asset DEX Corporate Bond Barbell Index ETF||0.25%||Monthly|
|AXF||First Asset DEX All Canada Bond Barbell Index ETF||0.25%||Monthly|