Horizons AlphaPro launches Canada's first floating-rate bond ETF

By Angela McDaniels

Tacoma, Wash., Dec. 13 - AlphaPro Management Inc. said it launched Canada's first actively managed floating-rate bond exchange-traded fund, the Horizons AlphaPro ETF. The sub-adviser to the ETF is Natcan Investment Management Inc.

The ETF began trading Monday on the Toronto Stock Exchange under the symbol "HFR."

AlphaPro said the investment objective of the ETF is to generate income that is consistent with prevailing short-term corporate bond yields while stabilizing its market value from the effects of interest-rate fluctuations.

The ETF invests primarily in Canadian debt securities. It may also invest in debt securities of U.S. companies directly or through investments in securities of other investment funds, including ETFs, according to a company news release.

Natcan expects the ETF's initial portfolio will include 25 to 40 issues, have an average duration of less than one year and an average Standard & Poor's credit rating of A-.

The ETF may use derivatives, including interest-rate swaps, to deliver a floating rate of income. It will seek to hedge its non-Canadian dollar currency exposure to the Canadian dollar at all times.

Toronto-based AlphaPro is a financial services company specializing in actively managed ETFs and a subsidiary of BetaPro Management Inc.

Natcan Investment Management Inc. is a Montreal-based subsidiary of the National Bank of Canada.

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