Holding Your Bond Fund for the Duration
Bond index funds have a place in almost all portfolios, even in a low-rate environment. However, it’s important to match the right bond fund to your investment goals. To do that you need to know two...
View ArticleAsk the Spud: RBC’s Target Maturity ETFs
Q: I just read about the launch of RBC’s family of target-maturity corporate bond ETFs. They seem like they would be an attractive option for the fixed-income portion of my RRSP. How do these products...
View ArticleAnother Promise of a Free Lunch
Earlier this month, Mackenzie Investments produced this advertisement for the Mackenzie Sentinel Corporate Bond Fund. The banner headline reads “Think high yield means high risk?” The rest of the ad...
View ArticleAsk the Spud: Should I Hold US Bonds?
Q: One of my coworkers and I recently started our own Couch Potato portfolios and we’re wondering if it would be better to have some American bonds in the mix. Wouldn’t that be another way to...
View ArticleDid Your ETF Just Get Riskier?
One of the problems with actively managed mutual funds is that you can never be sure that the risk level will remain constant. In an income fund with a mix of government bonds, high-yield corporate...
View ArticleA Homemade Principal-Protected Note
Given the widespread fear among investors today, it’s not surprising that financial institutions offer a staggering number of structured products that come with guarantees. Both market-linked GICs and...
View ArticleHow Will Rising Rates Affect Bonds?
Since the 2008–09 financial crisis caused bond yields to plunge to new lows, market forecasters have been predicting a rise in interest rates. And when bond investors think rates will increase, they...
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The Long and Short of Barbell Bond ETFs
Chalk up another one for ETF innovation in Canada. This week, First Asset launched three new bond ETFs that are the first of their kind in North America. And unlike some innovations in the ETF world,...
View ArticleDoes a 60/40 Portfolio Still Make Sense?
For as long as I can remember, the traditional balanced portfolio has been 60% equities and 40% bonds. Indeed, all of my own model portfolios use that overall asset mix as a starting point. But a lot...
View ArticleWhat’s On Your ETF Wish List?
It seems like ETFs are appearing in Canada every month, but it’s been a while since I got genuinely excited about a new product. It was great to see both Vanguard and BMO create S&P 500 funds with...
View ArticleAsk the Spud: The Role of Real Return Bonds
Why has the iShares DEX Real Return Bond (XRB) dropped so dramatically this year? I thought this asset class was protective in times of rising interest rates (which are correlated with inflation), but...
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Why GICs Beat Bond ETFs in Taxable Accounts
Last October, Justin Bender wrote a blog post explaining why GICs are more tax-efficient than bonds. The blog caught the attention of John Heinzl of The Globe and Mail, who wrote his own article on the...
View ArticleUnderstanding Floating-Rate Notes
By now every serious investor understands the consequences rising interest rates will have on bond portfolios. For more than four years we’ve been reminded that when rates go up, bond prices fall—and...
View ArticleBond Options for the Socially Responsible
Most discussions about socially responsible investing (SRI) seem to revolve around stocks. If you’re an index investor with an interest in SRI, there are a number of ETFs that screen companies...
View ArticleA New ETF of Strip Bonds
Back in February I asked readers to share their ideas for new ETFs that might fill gaps in the current marketplace. The idea for that blog post came from a contest run by First Asset, who invited...
View ArticleWhy Use a Strip Bond ETF?
Barry Gordon admits he was surprised when he first read Justin Bender’s entry in First Asset’s Search for Canada’s Next Top ETF contest, which I introduced in my previous post. “It runs against the...
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What’s Happening to My Bond ETF?
If your portfolio includes a broad-based bond index fund, you’ve probably noticed its value has fallen significantly over the past several weeks. Judging from recent e-mails I’ve received, the reasons...
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Why a Diversification is a Piece of Cake
After almost four years of false alarms, the bond bears are finally able to act smug. Broad-based Canadian bond index funds have fallen in price about 4% or so in since the beginning of May. Meanwhile,...
View ArticleIs Your Bond Fund Really Losing Money?
When the yield on 10-year federal bonds spiked earlier this year—from 1.88% on May 16 all the way to 2.55% on July 5—the value of broad-based bond ETFs plummeted sharply. But I’ll wager that many...
View ArticleAsk the Spud: Should I Fear Rising Interest Rates?
Q: Recently the bond market—and 40% of my Global Couch Potato portfolio—has dipped significantly. I understand swings like this occur from time to time, but with interest rates moving higher would it...
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