Mike PhilbrickHorizons CDN Select Universe Bond ETFHBB.TOBUYOct 15, 2024

Wants tax efficiency, but not looking for income.

You have to do a breakeven analysis. The cost of this ETF and getting that tax efficiency is around 40 bps a year. If your total return in the ETF is (on an after-tax basis) better than 40 bps a year, then it makes more sense to use it (compared to one that doesn't give you that tax efficiency). It also depends on the tax bracket you're in.

Because this ETF is within Horizons corporate class, there are no distributions. This gives you better compounding, and your total return is by way of capital gains when you sell. Great for fixed income.

(A Top Pick Jan 09/23, Up 2%)

Safe vehicle that reduces risk in markets. Paired with ownership in equities - is a good option for portfolio diversification. 

It covers the total Canadian bond market with low priced government, municipal and corporate bonds. It yields 3% but doesn't distribute it.

Bonds are the first thing you'd put in a registered account, as bond income is taxed at the highest levels. For a non-registered account, HBB delivers the bond index return in a total return format, so you're not receiving income. It does have its own set of risks.