BlackRock Canada has expanded its core ETF series with two new fixed income products, as well as new MSCI index tracking quality dividend funds which have just launched on the Toronto Stock Exchange.
BlackRock reports that the iShares core series is one of the fastest-growing segments in the firm’s ETF line-up, both globally and in Canada.
As Canadian investors continue to search for income in a yield-starved environment, BlackRock believes these funds may provide a low-cost way to access portfolios of high quality companies with above-average dividend yields.
Investors will have the option to choose between Canadian, US, and global portfolios. The funds will seek to replicate MSCI High Dividend Yield Indices and will trade in Canadian dollars while the US and global ETFs will also be offered with CAD-hedged share classes.
“The iShares core funds continue to be embraced by individual investors, advisors, and institutions alike, delivering broad market exposures with superior quality and value,” said Warren Collier, head of iShares, BlackRock Canada. “The addition of the new core dividend funds will provide Canadians with a comprehensive set of options to satisfy their income needs.”
The five new iShares core MSCI dividend index ETFs are noted below, including their management expense ratios (MER).
iShares Core MSCI Canadian Quality Dividend Index ETF (XDIV). MER – 0.10%
iShares Core MSCI US Quality Dividend Index ETF (XDU). MER – 0.14%
iShares Core MSCI Global Quality Dividend Index ETF (XDG). MER – 0.20%
iShares Core MSCI US Quality Dividend Index ETF (CAD-Hedged) (XDUH). MER – 0.14%
iShares Core MSCI Global Quality Dividend Index ETF (CAD-Hedged) (XDGH). MER – 0.20%
The funds emphasise companies with the capacity to sustain dividends into the future by screening for firms that score well on metrics of financial quality such as strong return on equity and low earnings variability.
“In an environment where yield can be hard to find, Canadians are looking for new ways to earn persistent sources of income,” said Pat Chiefalo, head of iShares product, BlackRock Canada. “These new products will provide investors with a cost effective investment that places an emphasis on quality stocks that can help deliver a regular income stream to investors.”
In addition, iShares will further enhance the core series with the inclusion of two existing iShares fixed income funds, the iShares Core Canadian Universe Bond Index ETF (XBB) (formerly the iShares Canadian Universe Bond Index ETF), the first fixed income ETF launched in Canada, and the iShares Core Canadian Short Term Bond Index ETF (XSB) (formerly, the iShares Canadian Short Term Bond Index ETF).
Warren Collier, head of iShares, BlackRock Canada, said: “While the Canadian ETF industry has undergone tremendous growth, including an increase in the types of products offered, the iShares Core family continues to be an important distinguisher, helping investors to more easily identify the foundational funds to hold at the core of their portfolio.”
BlackRock reports that the iShares core series is one of the fastest-growing segments in the firm’s ETF line-up, both globally and in Canada. Since introducing the core to Canadians in March 2014, core exposures have seen a significant growth in assets, both in iShares ETFs and more broadly. During this period, while the majority of new funds launched were in non-core exposures, more than 50% of total Canadian ETF flows have gone into core exposures.