iShares has announced the launch of two fixed-income ETFs to help generate income for investors while addressing sensitivity to interest rate volatility: iShares Conservative Short Term Strategic Fixed Income ETF (XSC) and iShares Conservative Strategic Fixed Income ETF (XSE).
XSC and XSE will invest primarily in securities or ETFs that provide exposure to Canadian and international fixed income securities. Both funds will seek to hedge any resulting U.S. dollar or other foreign currency exposure, as applicable, back to Canadian dollars. XSC will also, upon rebalancing, generally limit its exposure to interest rate risk by maintaining a portfolio duration of less than five years. The management fees will be 0.40% for XSC and 0.50% for XSE.
Structured as funds of funds, XSC and XSE will directly hold funds that provide exposure to both domestic and international fixed-income securities that Canadian investors might otherwise have difficulty accessing.