Canadian bank lists Canadian bank ETF

Canada

Royal Bank of Canada lists three funds

Canada’s largest company, the Royal Bank of Canada, is listing three new ETFs in Toronto. They are:

·      RBC Canadian Bank Yield Index ETF (RBNK)

·      RBC 6-10 Year Laddered Canadian Corporate Bond ETF (RMBO)

·      RBC Short Term US Corporate Bond ETF (RUSB)

One of the enjoyable ironies of banks listing bank ETFs is that the banks usually end up tracking themselves. And in this regard, RBNK doesn’t disappoint. RBNK will track an index of the biggest banks in Canada weighted by dividend yields. The National Bank of Canada and Canadian Imperial Bank take up half the index’s weight between them. RBC weighs in at fifth. 

Listing a banking ETF in Canada is an interesting proposition because the Canadian stock market, much like its close cousin, Australia, tends to be dominated by the biggest banks anyway. In the MSCI Canada Index, Canadian banks take seven of the top 10 spots by market cap. This means that the country’s stock exchange, as a whole, tends to correlate with the performance of its banks.

RMBO and RUSB are very different. They are both actively managed and hoover up debts issued in Canada and the US. RMBO will have the additional feature of being divided (“laddered”) into five groupings with successive maturities from six to ten years. I could not find any information on which corporates or what the ratings of the bonds would be.

Taiwan

Fubon lists preferred US ETF

Fubon Securities, one of Taiwan’s biggest ETF issuers by assets, is listing the Fubon S&P US Preferred Stock ETF (00717) in Taipei. 00717 will track the S&P US Preferred Stock Index, which puts together an index of US preferred stocks. Preferred stocks are different from regular shares in that they are more secure. They come higher in the capital structure and have a higher claim on income security.