The laddering structure of PFL and the short duration of its underlying securities may also help reduce portfolio’s interest-rate sensitivity in the current climate. That means as a fixed income ETF, PFL acts as a potential low-risk investment for investors while interest rates continue on their upward path.
PFL is designed to track the performance of the FTSE Canada 1-3 Year Laddered Floating Rate Note Index, as closely as is reasonable and before fees and expenses.
The index is made to track the performance of a laddered basket of investment-grade floating-rate notes issued by Canadian provinces, governments, and agencies over a period of one to three years.
In recent months, there has been a notable surge in buying of USD- and AUD-denominated floating-rate bonds.
Investors are drawn to this asset class because floating rate bonds provide them with the intrinsic benefits of bonds, such as consistent income and portfolio protection during market stress, as well as the upside potential of higher rates.
