Hartford Funds Debuts Broad Bond ETF

Firm launches a lower-cost actively manged core bond fund.

ETF.com
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Reviewed by: etf.com Staff
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Edited by: etf.com Staff

Today Hartford Funds has rolled out an actively managed core bond strategy in an ETF wrapper. The Hartford Total Return Bond ETF (HTRB) prioritizes delivering “competitive” total return, with income listed as a secondary objective, according to the prospectus.

The fund lists on the NYSE Arca exchange and comes with an expense ratio of 0.39%. It is managed by subadvisor Wellington Management Company.

HTRB can include securities issued by the U.S. government or affiliated agencies, domestic and foreign corporate debt, foreign government debt, supranational debt and asset-backed or mortgage-related debt, the prospectus says.

“We created another fixed-income ETF to offer investors more options to optimize their fixed-income exposure across all market sectors, which may help them to diversify their investments and reach their long-term goals,” said Vernon Meyer, chief investment officer of Hartford Funds.

Few Requirements

The fund will primarily invest in investment-grade debt denominated in U.S. dollars, but up to 20% can be in nondollar securities, and up to 40% of the portfolio can be invested in foreign issuers representing developed or emerging markets. Up to 20% of the portfolio can be invested in high-yield debt.

There are no limits on maturity or duration, but the prospectus notes the holdings will primarily consist of securities with at least one year to maturity. It also says HTRB’s managers can use a wide range of derivatives to manage portfolio risk.

Although the investment team will handle most decisions, the managers may rely on specialists employed by Wellington Management for specific sector and security selection strategies, the document says.

HTRB seems to most resemble the $3.6 billion SPDR DoubleLine Total Return Tactical ETF (TOTL), which has a similarly wide latitude in its investments. However, it comes with a higher expense ratio—0.55%. It also has some similarities to the $2.1 billion PIMCO Active Bond ETF (BOND), which is also focused on offering core bond exposure. BOND comes with an expense ratio of 0.56%.

Hartford offers two other actively managed bond ETFs, both of which are focused on the U.S. investment-grade space. The Hartford Quality Bond ETF (HQBD) has $20 million in assets under management, while the Hartford Corporate Bond ETF (HCOR) has $15.5 million. 

Contact Heather Bell at [email protected]
 

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