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RBC Target 2013 Corporate Bond Index ETF to mature on 22 November

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RBC Global Asset Management has announced that the RBC Target 2013 Corporate Bond Index ETF (RQA) will mature on 22 November 2013.

This will be the first RBC Target Maturity Corporate Bond ETF to mature.

“Target maturity ETFs are still relatively new to Canadian investors,” says Mark Neill, head of RBC ETFs. “By providing the maturity date of the RBC Target 2013 Corporate Bond Index ETF well in advance, our goal is to help investors make informed decisions with respect to their bond portfolio. This includes deciding whether to move their holdings into a subsequent maturity of an RBC ETF or hold them through to maturity.”

The suite of RBC Target Maturity Corporate Bond ETFs includes nine fixed income corporate bond ETFs with maturities spanning from 2013 to 2021. These ETFs provide target maturity exposure, enabling investors to build customised portfolios tailored to their specific investment needs.

Unlike traditional ETFs, which have a perpetual life, target maturity ETFs have a specified maturity date that is 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 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. These ETFs do not seek to return any predetermined amount at maturity.

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