HCOR, HQBD Closed 09/14/2018
Hartford Funds, begun trading two new Actively Managed Fixed Income ETFs, the Hartford Corporate Bond ETF (NyseArca: HCOR) and the Hartford Quality Bond ETF (NyseArca: HQBD) on Wednesday, March 22, 2017. Here is a synopsis of the new ETFs:
1.
FUND INFORMATION:
| Symbol: HCOR | Exchange: NYSE ARCA |
| Name: Hartford Corporate Bond ETF | Net Expense Ratio: 0.44% |
FUND OBJECTIVE:
The Hartford Corporate Bond ETF is an actively managed fund which seeks to provide total return with income as a secondary objective.
The Fund seeks to achieve its investment objective by investing in U.S. dollar denominated, investment grade rated fixed income securities. The Fund normally invests at least 80% of its net assets (including any borrowings for investment purposes) in investment grade, fixed-income securities issued by corporate entities. Investment grade securities are securities that are rated investment grade by a nationally recognized statistical rating organization (NRSRO), or are considered by Wellington Management Company LLP (sub-adviser), to be of equivalent credit quality. Wellington Management employs a bottom up approach to portfolio management, by identifying issuers with favorable credit fundamentals and attractive total return profiles. The Fund normally expects to invest in securities issued by one hundred or fewer different issuers at any one time.
The Fund may invest in fixed income securities of any maturity. The Fund normally maintains a dollar weighted average duration equivalent to that of the Bloomberg Barclays U.S. Corporate Bond Index, plus or minus a year. As of December 31, 2016, the duration of the Bloomberg Barclays U.S. Corporate Bond Index was 7.19 years. Duration is a measure of the sensitivity of a fixed income security’s price to changes in interest rates.
The Fund’s average duration measure incorporates a bond’s yield, coupon, final maturity, and the effect of derivatives. The Fund’s industry positioning will typically be driven by Wellington Management’s bottom-up fundamental research and comprehensive risk management approach to portfolio construction and may cause the Fund’s sector weightings to meaningfully differ from benchmark weightings. Although the Fund may invest across different sectors,
it has no limit on the amount it may invest in any single sector. The Fund may invest up to 20% of its assets in U.S. Treasury obligations and obligations of U.S. Government agencies or instrumentalities.
Fund Top Holdings (04/02/17):
| US 5YR NOTE (CBT) JUN17 XCBT 20170630 | 8.02% |
| US LONG BOND(CBT) JUN17 XCBT 20170621 | 7.19% |
| TIME WARNER CABLE LLC SR SECURED 04/19 8.25 | 2.51% |
| PENSKE TRUCK LEASING/PTL SR UNSECURED 144A 02/22 3.375 | 2.07% |
| PENTAIR FINANCE SA COMPANY GUAR 09/20 3.625 | 2.03% |
| RIO TINTO FIN USA LTD COMPANY GUAR 05/19 9 | 2.02% |
| HUMANA INC SR UNSECURED 10/24 3.85 | 2.02% |
| GENERAL MOTORS FINL CO COMPANY GUAR 01/19 3.1 | 2.01% |
| UBS AG SUBORDINATED REGS 05/23 VAR | 1.88% |
| PPL CAPITAL FUNDING INC COMPANY GUAR 05/26 3.1 | 1.83% |
Useful Links:
HCOR Home Page
2.
FUND INFORMATION:
| Symbol: HQBD | Exchange: NYSE ARCA |
| Name: Hartford Quality Bond ETF | Net Expense Ratio: 0.39% |
FUND OBJECTIVE:
The Hartford Quality Bond ETF is an actively managed fund which seeks to maximize total return while providing a high level of current income consistent with prudent investment risk.
The Fund seeks to achieve its investment objective by investing in securities that the sub-adviser, Wellington Management Company LLP, considers to be attractive from a total return perspective while providing current income. The Fund normally invests at least 80% of its net assets (including any borrowings for investment purposes) in investment grade, fixed-income securities.
Investment grade securities are securities that are rated investment grade by a nationally recognized statistical rating organization (NRSRO), or are considered by Wellington Management to be of equivalent credit quality. The Fund generally invests a significant portion of its assets in mortgage-related securities such as agency and non-agency mortgage-backed securities and related securities such as collateralized mortgage obligations, and other obligations that are secured by mortgages or mortgage-backed securities although the amount the Fund invests in such securities may change significantly from time to time based on current market conditions. The Fund is permitted to invest without limitation in mortgage-backed securities issued by U.S. Government agencies, including the Government National Mortgage Association (Ginnie Mae), the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). The Fund may invest up to 20% of its assets in credit sectors, including but not limited to non-agency residential and commercial mortgage-backed securities, asset backed securities, corporate bonds and covered bonds. The Fund may invest in both U.S. Treasury obligations and in obligations of U.S. Government agencies or instrumentalities. The Fund may use reverse repurchase transactions, repurchase agreements and dollar rolls. The Fund may use derivative instruments, including futures contracts, options, and swaps, to enhance returns, manage portfolio risk or for other investment purposes. The Fund may trade securities actively and may invest in debt securities of any maturity. The Fund normally maintains a dollar weighted average duration of between 1 and 8 years. Duration is a measure of the sensitivity of a fixed income security’s price to changes in interest rates. The Fund’s average duration measure incorporates a bond’s yield, coupon, final maturity, and the effect of derivatives, such as interest rate swaps and futures that may be used to manage the Fund’s interest rate risk. The use of derivatives, such as interest rate swaps and futures, may have the effect of shortening or lengthening the duration of a fixed income portfolio. The Fund may invest in “to-be-announced” investments, including when-issued and delayed delivery securities and forward commitment transactions. The Fund may invest in “Rule 144A” securities, which are privately placed, restricted securities that may only be resold under certain circumstances to other qualified institutional buyers.
Fund Top Holdings (04/02/17):
| FHLMC TBA 30 YR 4.5 GOLD SINGLE FAMILY | 5.23% |
| FNMA TBA 15 YR 2.5 SINGLE FAMILY MORTGAGE | 4.81% |
| FHLMC TBA 30 YR 3 GOLD SINGLE FAMILY | 3.70% |
| FHLMC TBA 30 YR 3.5 GOLD SINGLE FAMILY | 3.67% |
| FNMA TBA 15 YR 3 SINGLE FAMILY MORTGAGE | 3.60% |
| GNMA II TBA 30 YR 4.5 JUMBOS | 3.09% |
| FNMA TBA 30 YR 3.5 SINGLE FAMILY MORTGAGE | 3.08% |
| GNMA II TBA 30 YR 3 JUMBOS | 2.89% |
| US ULTRA BOND CBT JUN17 XCBT 20170621 | 2.77% |
| US 5YR NOTE (CBT) JUN17 XCBT 20170630 | 2.03% |
Useful Links:
HQBD Home Page