Opinions
John DeGoey
Franklin Liberty Canadian Investment Grade Corporate E
FLCI-T
BUY
Apr 08, 2019
An actively managed bond ETF? It makes sense to have some of your bonds actively managed. He just spoke to the manager of this ETF and he's looking at the shape of the yield curve and managing expectations.
$19.430
Stock price when the opinion was issued
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BUY
A stock ETF to add more diversification to a portfolio It charges only 35 basis points and is actively managed. The average duration is 8-9 years. This holds only corporate bonds. Yes, he expects one rate cut this month, but we need it at all. This cut is a desperate move. Rates are way too low and we need to normalize rates so that we have some ammo when the economy hits the skids.
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PAST TOP PICK
(A Top Pick Jul 23/19, Down 0.1%) He's bullish emerging markets where there's an emerging middle class to grow the economy. An actively managed fund and costs only 35 basis points. Rate hikes have made bond products like this negative. FLCI has done fine and he still likes it. He predicts a tough 2020, so he's moving to a conservative portfolio starting in January.
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COMMENT
A defensive ETF? If your concern is safety you may want to look elsewhere. This ETF holds investment grade Canadian corporate bonds. It is actively managed, which makes sense for this unique space. It has a lower MER as well (0.4%). Be careful looking at yield. It the yield is listed higher than the bond portfolios Yield to Maturity, it will likely decline in share price over time. This makes it more challenging to understand total valuation. Yield 3.6%
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