Opinions

Lorne Steinberg iShares Core Canadian Universe Bond Index ETF XBB-T DON'T BUY Jan 31, 2019

Canada is lagging the US in interest increases. He expect the Bank of Canada to raise over the next couple of years at least 4 more times. In that scenario a regular bond ETF wont perform well. The only are where they see value in FI is in the High yield space.

Lorne Steinberg

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BUY

HED-T Active managers don't beat bond indexes, net of fees. But he likes XBB which offers the a straight, simple Canadian bond universe and is cheap; it'll perform just as well as an actively managed bond index.

BUY

A universal bond ETF for Canada? If you want an ETF that gives you a cross-section of Canadian bonds, then buy XBB-T. If you want something more global, then Google "global bond ETF" which you can buy and hold long-term.

PAST TOP PICK

(A Top Pick Jun 07/19, Up 6%) We have resistance below $110 where we are today. He believes in a long term secular thesis for healthcare. If you can get it when it tanks a bit and then hold it for a long time that is better. You want to hold this sector.

DON'T BUY

Not yet. Investors can re-balance their portfolios. If you aimed for one percentage of equities and another for bonds, you can move money to maintain that balance. That is one of the most prudent things people can do. The bottoms are not in yet.

DON'T BUY

It holds a wide variety of bonds with different maturities. In a period of rising interest rates, he does not expect this asset class to perform well. The only place for fixed income will be high yield bonds, albeit with more volatility.

COMMENT

Bond returns have been terrible. It won't give investors what you hoped for. Need to look elsewhere. A big challenge. Could trade here.

BUY

Gives you a broad, diversified basket of bonds (federal, provincial, corporate) and charges an MER of 10 basis points. Period of 7.5 years with a yield at maturity of nearly 4%.

Unspecified

About 75% is government bonds and 25% corporate Canadian bonds. It has a 3.3% yield. Although down over the past three years, there should be upside if bond prices appreciate. In general, for fixed income you can hold some cash but should also have bonds.

BUY

Has a duration of 7 years, typical of these kinds of bond ETFs in Canada. Includes federal, corporate, and provincial bonds. Is the grandaddy of this kind of ETF.

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Lorne Steinberg iShares Core Canadian Universe Bond Index ETF XBB-T DON'T BUY Jan 31, 2019

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