Ms. Leah Commisso reports
RBC GLOBAL ASSET MANAGEMENT INC. ANNOUNCES FINAL DETAILS ON MATURITY OF RBC TARGET 2018 CORPORATE BOND INDEX ETF
RBC Global Asset Management Inc. has released final details regarding the scheduled maturity of RBC Target 2018 Corporate Bond Index ETF.
As announced earlier this year, RBC Target 2018 Corporate Bond Index ETF will mature effective at the close of business on Friday, Nov. 16, 2018. In anticipation of its maturity, subscriptions for units of the fund will no longer be accepted after the close of business on Friday, Sept. 14, 2018.
Redemption requests for RBC Target 2018 Corporate Bond Index ETF will be accepted until the close of business on Thursday, Nov. 8, 2018. The fund is anticipated to be voluntarily delisted from the Toronto Stock Exchange, at the request of RBC Global Asset Management, following the close of business on or about Wednesday, Nov. 14, 2018. All units still held by investors following the delisting will be subject to mandatory redemption on the maturity date of Friday, Nov. 16, 2018.
Investors have the option to either invest the proceeds from RBC Target 2018 Corporate Bond Index ETF into a subsequent maturity of an
RBC Target Maturity Corporate Bond exchange-traded fund (ETF) or to utilize the proceeds in a ladder strategy to help manage interest rate and reinvestment risk.
The RBC Global Asset Management family of Target Maturity Corporate Bond ETFs includes seven ETFs with maturities ranging from 2019 to 2025.
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 (NAV) 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.
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