Archive | Under the Hood

Under the Hood: iShares Core Portfolio Builders

This post is part of a series called Under the Hood, where l take a detailed look at specific Canadian ETFs or index funds.

The funds: iShares Conservative Core Portfolio Builder Fund (XCR) and iShares Growth Core Portfolio Builder Fund (XGR)

The indexes: Both XCR and XGR are actively managed funds that do not track an index.

The cost: The MER of each fund is 0.63%. This is the all-in cost, as the MERs of the underlying funds are waived so investors are not charged twice.

The details: The iShares Core Portfolio Builders are ETF wraps: all-in-one portfolios made up of iShares ETFs in various asset classes: bonds, equities, and commodities. They appear to be designed for investors who like the idea of investing with ETFs, but aren’t comfortable building their own portfolios from scratch.

Although their names suggest quite opposite strategies, both ETFs are extremely bond-heavy: the Conservative version (XCR) currently holds 76% in bonds, 19% in equities, and 5% in commodities. The Growth fund (XGR) is 63% bonds, 26% equities, 9% REITs and 2% commodities.

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Under the Hood: Claymore Corporate Bond

This post is the first in a planned series called Under the Hood, where I’ll take a detailed look at a specific ETF or index fund.

The fund: Claymore 1–5 Year Laddered Corporate Bond ETF (CBO)

The index: CBO tracks the DEX 1-5 Year Corporate Bond Index, which appears to have been custom-made for this fund. The index lays out a set of rules for building a laddered portfolio of short-term, investment-grade corporate bonds. It includes 25 bonds divided into five equal “buckets”: five of the bonds have a term to maturity of 1–2 years, five others have terms of 2–3 years, and so on up to 5–6 years.

The cost: The MER is 0.28% as of June 2009, including a management fee of 0.25%.

The details: Claymore launched this ETF just over a year ago and it has been very popular, with an average daily trading volume of about 115,000 shares. It’s a well-designed index: the laddering technique is an excellent way to achieve a balance between good yield and a minimum of interest-rate risk. (In most cases,

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