CAGG ETF Analysis: Dividends, Returns TSX:CAGG

Analysis

Holdings Discussions Technicals Seasonals

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The fund provides exposure to an index of investment-grade bonds issued by the government, agencies, and corporations in Canada that have a remaining term to maturity of at least one year. In seeking to achieve a higher yield than the Bloomberg Canadian Aggregate Bond Index, the index uses a rules-based approach consisting of four steps in determining the weighting and allocation, as well as the returns and statistics of the constituents. The first step includes reweighting the major subcomponents of the parent index using 12 buckets which are chosen based on sector, duration, and credit quality. The second and third step involves using an optimizer to set the weight of each of the 12 buckets while determining and applying constraints. Finally, after deriving the individual buckets weights, the total return and average statistics are calculated in the fourth and last step and are rebalanced on a monthly basis. The fund is designed for investors with a high risk appetite.