Global X Active Ultra-Short Term Investment Grade Bond ETF (HFR.TO)

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The Global X Active Ultra-Short Term Investment Grade Bond ETF (HFR) is designed to invest in high-quality corporate debt. Its primary objective is to offer an increased yield when interest rates are on the rise, thereby cushioning its market value against the volatility often associated with interest rate fluctuations. The fund actively manages its interest rate exposure to ensure its portfolio duration consistently remains below one year. This makes HFR a valuable tool for investors aiming to reduce the overall interest rate sensitivity of their existing bond portfolios. HFR utilizes interest rate swap agreements to effectively hedge against rising interest rates. By converting fixed-rate payments into floating ones, the ETF seeks to provide capital protection during periods of increasing rates while simultaneously allowing investors to benefit from higher yields. The fund's investment strategy focuses on generating income that aligns with current Canadian short-term corporate bond yields, all while minimizing the impact of Canadian interest rate changes on the ETF. It primarily invests directly in Canadian debt and debt-like securities, with the aforementioned duration management strategy. HFR may also allocate capital directly to U.S. company debt or indirectly through investments in other listed funds. The deployment of derivatives, specifically interest rate swaps, is fundamental to its mechanism for delivering a variable income stream.