FlexShares Exchange Traded Funds sponsored and managed by Northern Trust, begun trading a new Core Select Bond ETF, the FlexShares Core Select Bond Fund (Nyse Arca: BNDC), on Tuesday, November 22, 2016. Here is a synopsis of the new ETF:
|Symbol: BNDC||Exchange: NYSE ARCA|
|Name: FlexShares Core Select Bond Fund||Net Expense Ratio: 0.35%|
The FlexShares Core Select Bond Fund is an actively managed fund which seeks total return and preservation of capital. The Fund seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets in U.S. dollar-denominated investment-grade fixed-income securities either directly or indirectly through ETFs and other registered investment companies (Underlying Funds).
The Fund primarily invests in fixed-rate securities of varying maturities, including bonds, debt securities and other similar instruments issued by U.S. public and U.S and non-U.S. private sector entities. Such issuers include, without limitation, U.S. governments and their agencies, instrumentalities or sponsored enterprises, and U.S. and non-U.S. private-sector entities, such as corporations and banks. The Fund may invest in fixed income securities of any maturity.
The Fund seeks to provide attractive risk-adjusted performance by investing in a portfolio of fixed-income securities that is designed to achieve optimal potential for total return after taking into account various sources of investment risk. The Fund adjusts its allocations to securities based on Northern Trust Investments’ (NTI) (Investment Adviser) assessment of potential changes in interest rate levels, the shape of the yield curve and credit spread relationships. The Fund also seeks to balance the potential for return and risk while emphasizing liquidity and diversification across a spectrum of U.S. dollar-denominated investment-grade fixed income securities.
The Fund may invest, without limitation, in mortgage- or asset-backed securities, including to-be-announced (TBA) transactions, and purchase and sell securities on a when issued, delayed delivery or forward commitment basis. The Fund also may, without limitation, seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts (such as buy backs or mortgage dollar rolls). When necessary to manage the Fund’s exposure to interest-rate risks, the Fund may take short or long positions in U.S. Treasury futures or transact in interest rate swaps. The Fund’s short positions in U.S. Treasury futures are not intended to mitigate credit spread risk or other factors influencing the price of non-government bonds, which may have a greater impact than interest rates. The Fund may also invest in other interest rate futures contracts, including, but not limited to, Eurodollar and Federal Funds futures. The Fund may invest in short-term paper, cash and cash equivalents, including shares of affiliated and unaffiliated money market funds, in order to achieve its investment objective.
Fund Hodlings (11/21/16):
|FlexShares Disciplined Duration MB ETF (MBSD)||34.4%|
|FlexShares Credit Scored US Corpor ETF (SKOR)||27.9%|
|IShares 3-7 Year Treasury Bond ETF (IEI)||15.2%|
|FlexShares Credit Scored-Long ETF (LKOR)||14.1%|
|IShares 7-10 Year Treasury Bond ETF (IEF)||4.3%|
|IShares 20+ Year Treasury Bond ETF (TLT)||1.3%|
|FlexShares IBOXX 3-Year Target Dur ETF (TDTT)||1.3%|
|FlexShares IBOXX 5-Year Target Dur ETF (TDTF)||1.3%|
BNDC Home Page
Here is a comment from Shundrawn Thomas, head of Northern Trust’s Funds and Managed Accounts Group:
“Demand for fixed income ETFs is growing rapidly as evidenced by the growing share of fixed income ETFs in the past several years. Investors are particularly interested in ETFs that can serve as core portfolio holdings. Our Core Select Bond fund allows investor to achieve efficient diversification through liquid investments in underlying fixed income ETFs and individual securities. We believe our deep experience in actively managed fixed income strategies and our distinctive approach to ETF product development provides investors with the opportunity to outperform traditional fixed income funds.”