Opinions
Paul Gardner, CFA
iShares Canadian Real Return Bond Index ETF
XRB-T
PAST TOP PICK
May 31, 2022
(A Top Pick Apr 08/21, Down 7%) Underlying bonds are illiquid and tied to a high duration. Should do better this year, as long rates will stay stable or drop, but inflation will be sticky.
$23.390
Stock price when the opinion was issued
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COMMENT
Real return bonds are all about anticipating what future inflation is going to be. The additional payment you get is relative to actual inflation expectation. How much is priced in matters. Unloaded in December since he though inflation expectations were priced in. There is a short term buying opportunity now that it has come off a little. Need alternatives for fixed income.
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DON'T BUY
PAST TOP PICK
(A Top Pick Jul 16/21, Down 15%) You get a real-return bond that will perform linked to the inflation rate. As inflation rises, this will yield more. However, this holds very long-duration bonds (over 15 years), rising rates overwhelmed the inflation coupon on the bonds, so that created a serious decline. See top picks for an alternative.
E.T.F.'s