RBC 1–5 Year Laddered Corporate Bond ETF (RBO) is a straightforward fixed income solution that provides exposure to a diversified portfolio of shorter-term Canadian investment grade corporate bonds. RBO is an equal weighted portfolio of five RBC Target Maturity Corporate Bond ETFs with maturities from one to five years.
Overview
Build and manage a 1–5 year bond ladder, with diversified exposure to shorter-term, investment grade Canadian corporate bonds.
| TSX Symbol | Corporate Bond Ladder ETF | Monthly Update |
|---|---|---|
RBO
|
1–5 Year Laddered Corporate Bond ETF |
Why RBO?
- Exposure to high-quality investment grade corporate bonds
- Attractive regular monthly income
- Broad diversification and a transparent, consistent maturity profile
- Easy access to a buy-and-hold bond ladder
Additional Information
How does it work?
An ETF of ETFs
RBO invests equally in five RBC Target Maturity Corporate Bond ETFs with maturities ranging from one to five years. By combining these five ETFs, RBO offers a broadly diversified one-stop short-term investment grade corporate bond solution.
Monthly Distributions
RBO will pay out all net income on a monthly basis. The payout depends on the income stream from the underlying bonds held, and it may vary from month to month. The distributions are expected to be mostly interest income.
Equal Weighted by Maturity Year
By investing equally (20%) in each of the five underlying ETFs, RBO offers investors a transparent and relatively consistent maturity profile.
Rolling Over and Rebalancing
RBO is designed to maintain its one to five year maturity profile, which allows investors to buy and hold for as long as the solution suits their needs. To achieve this, each year in January, RBO will sell it holdings in the ETF maturing that same year and buy the ETF maturing in five years. For example, in January 2015, RBO will sell the ETF maturing in 2015 (RQC) and will purchase the ETF maturing in 2020 (RQH). Rebalancing to a 20% allocation to each maturity year will occur quarterly.
*Source: RBC GAM, IFIC. Based on AUM including IFIC money market, fixed income, income oriented balanced and income oriented equity mutual fund solutions plus income oriented ETF solutions as of September 30, 2013.
Commissions, management fees and expenses may be associated with investments in exchange-traded funds (ETFs). Please read the prospectus before investing. ETFs are not guaranteed, their values change frequently and past performance may not be repeated. ETF units are bought and sold at market price on a stock exchange and brokerage commissions will reduce returns. RBC ETFs do not seek to return any predetermined amount at maturity. RBC ETFs are managed by RBC Global Asset Management Inc., an indirect wholly-owned subsidiary of Royal Bank of Canada.