Product news: TD enters the bank ETF game

TD Asset Management Inc. has a new Canadian bank ETF with a focus on dividend growth.

The TD Canadian Bank Dividend Index ETF (TSX: TBNK) tracks the Solactive Canadian Bank Dividend Index, which puts more weight on issuers’ dividend growth. Its holdings consist of the Big Six banks, with heavy weightings currently toward Bank of Montreal (27.5%) and National Bank of Canada (25.7%), while CIBC makes up less than 5% of the fund.

The ETF’s management fee is 0.25% and its risk rating is medium.

Bank ETFs have been popular in the past year amid volatile markets and last year’s plunge in growth stocks. ETFs focused on the financial sector brought in $839 million last year, the most of any sector-based product, according to National Bank Financial. Flows have been even stronger this year, topping $1.1 billion in the first quarter.

Last month, Hamilton Capital Partners Inc. launched an equal-weight Canadian banks index ETF.

TD also introduced currency-hedged versions of two existing ETFs. The TD Global Technology Leaders CAD Hedged Index ETF (TSX: TCEX) and the TD Active U.S. Enhanced Dividend CAD Hedged ETF (TSX: TUEX) also began trading on April 27.

Here’s other Canadian investment product news.

Purpose Investments Inc.

Purpose released a U.S.-dollar version of one of its cash funds. The Purpose USD Cash Management Fund (TSX: MNU.U) offers an annualized net yield of 4.7% by investing in high-quality, short-term money market instruments denominated in U.S. dollars.

The actively managed fund invests primarily in debt securities maturing in under 60 days, with a weighted-average maturity of 58 days on April 28. The fund has a low risk rating and a management fee of 0.25% for the ETF and class F of the mutual fund, and 0.5% for class A.

The asset manager has offered the $606-million Purpose U.S. Cash Fund, which invests primarily in U.S. dollar-denominated high-interest deposit accounts with Canadian banks, since 2016.

The Canadian version of the cash management fund (TSX: MNY), which launched in September, had $266 million in assets under management as of March 31. Cash alternative products have received large inflows over the past year as high interest rates have increased yields and more investors have been content to sit on the sidelines in a volatile market.

The Purpose High Interest Savings ETF placed second in ETF inflows last year at almost $2 billion, according to National Bank Financial, behind only the CI High Interest Savings ETF.

AGF Investments Inc.

AGF has proposed a change to the investment objectives of the $498-million AGF Strategic Income Fund. The fund currently invests in a mix of common and preferred shares of Canadian companies, Canadian federal and provincial bonds, high-quality corporate bonds and money market instruments.

Under the proposed change, AGF will shift its focus to “a diversified mix of funds and ETFs that provide exposure to global equity and fixed-income securities.”

If you have investment product news, email Mark Burgess at markb@newcom.ca.