With the U.S. Federal Reserve widely expected to finally begin moving interest rates higher in September, volatility in rates is likely to emerge. In a volatile environment, a more tactical approach can help mitigate some of that volatility and outperform. Based on that premise, I believe this rules based, tactically managed ETF should outpace its more traditionally constructed, index focused peers. At the end of April, slightly more than half was invested in investment grade corporate bonds, 31% in long term government bonds, and 11% in high yield. Credit quality is strong, with less than 2% invested in non-investment grade issues. Duration sits at 6.77 years, which is slightly below the FTSE/TMX Canadian Universe Bond Index. This exposure to long-term bonds helped in the earlier part of the year, but has dragged performance of late. While I do expect this to outperform XBB, I don’t believe it will do so until we start to see a marked increase in bond market volatility.