Opinions
Stan Wong
iShares Aggregate Bond ETF
AGG-N
BUY
Oct 10, 2024
Stock price when the opinion was issued
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(A Top Pick Aug 15/18, Up 8%) A Canadian version of this would be ZAG. The fees are relatively low. A massive institutional favourite with a mix including longer term bonds.
Billy Kawasaki’s Insights - Picks from 5i Research. With the Fed stating that low interest rates are here for a while, this stock should perform fine. It has 20% exposure to long maturities which could pose some risk. One of the best in its category. Unlock Premium - Try 5i Free
Bonds and fixed income had a tough time the last couple of years. Now that we see interest rates falling (despite a bit of an uptick last 2 weeks), he does like bonds. Investment-grade government and corporate bonds.
At 3 bps, AGG is significantly cheaper than the Canadian version, XAGH, at 20 bps. So consider buying this one, if you don't mind the USD exposure.
Seeing improvement in the bond space, as interest rates are forecast to move a bit lower. Bonds have definitely improved. This ETF is up 9.1% over the last 12 months. It's been a long time since we've seen high single-digit returns, given that rates were moving higher.
XAGH owns the entire US bond market, including corporates and governments, with a Canadian hedge. Do you need that hedge? In other words, do you think the CAD will move up toward the USD? If you think the USD will move higher or remain steady, then might as well own the US version, which is AGG -- it's probably cheaper, and you'll get the lift of the USD moving higher.