iShares Advantage High Yield Bond ETF…

iShares Advantage High Yield Bond ETF (CHB.TO)

0.00

+0.02 (-100.00%)

23 watching

DON'T BUY

High Yield Bond ETF. High Yield Bonds are the least correlated of all interest rate products to the actual interest rate market. They are with the less liquid and more volatile companies. Historically, the spreads with these have really come in. High yield bonds are more expensive than they were in pre-prices in 2007.

WEAK BUY

Not a bad sector. A good place to be instead of cash or GICs

BUY

High Yield Bond ETF. Likes this one. Owns it in taxable accounts because it’s tax advantaged.

TOP PICK

High Yield Bond ETF. Unique structured product in that it returns because it is a total return swap in an underlying portfolio. Returns are either return of capital or capital gain, which is more tax efficient.

BUY

High Yield Bond ETF. Diversification reduces risk of holding low-investment-grade bonds. Gives full exposure to high yields as an asset class. Higher asset class has performed very well over the last decade. Prefers Canadian hedged versions over US ones because of currency changes, especially in RRSPs.

DON'T BUY

Junk bonds, lower credit rating. Never been strongly in favour of these because of the credit risk involved, but it’s a question of degree of risk.

BUY

US high yield bonds traded in Canadian dollars. Hybrid between bonds and equities. You have to be prepared to ride with the volatility. There is credit risk. Structured to pay dividends as capital or return of capital, unlike XHY.

BUY

High Yield Bond ETF. Uses a forward so that payments you get, instead of being taxed as interest, are taxed as capital gains. Gets you around the US withholding tax. Good for a taxable account. (Pays out a little bit more than the underlying yield, meaning the payouts could go down a little in the future.)

COMMENT

High Yield Bond ETF. When dealing with high yield bonds, they are lower quality bonds. Also duration on this portfolio is more mid-term rather than short-term. If there is an increase in rates it will be negatively affected. Returns are in the form of capital rather than interest, which makes it more attractive.

COMMENT

High-yield bond ETF. Have to be careful how much high yield is in your portfolio. Did very well last year and into this year and probably more to come. Below investment grade giving riskier holdings. This ETF is linked to an index and the duration is not long, about 5 years.

DON'T BUY

Problem with it is that anything that says high yield means junk. Prefers not to have that for long term retirement planning. It’s a structured financial product. Risks of default, counter party risk and a taxation risk.

N/A

High yield bond fund. He has not looked at it yet in detail. Currency hedge is important. Prefers the iShares product.

TOP PICK

This is down the risk spectrum so you get paid for taking on the risk (8-9%). This has a shorter term to maturity. They do not withhold tax. It’s an attractive asset space.

BUY

High yield bonds. Yield spreads have tightened compared to a year ago. We are at a point where all bonds have risk. By going into high yield, you take on extra risk. You are diversified in case a company in the fund defaults on payments.

COMMENT

When talking high yield bonds, you're really talking junk bonds so it’s high yield combined with high risk. Wouldn't go into this with his own clients but if you want this he would recommend this one as it is hedged for the Cdn$ but duration is about 5 years so will be vulnerable to any upward movement in interest rates.

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iShares Advantage High Yield Bond ETF (CHB.TO)