
TSE:XSB
This summary was created by AI, based on 2 opinions in the last 12 months.
The iShares DEX Short Term Bond ETF (XSB-T) is viewed as an effective option for investors approaching retirement who are looking to reduce risk and secure monthly cash flows. Experts highlight its potential to provide a laddered approach to fixed income, making it a suitable choice for conservative portfolio adjustments. Notably, it's mentioned that despite the simplicity of investing in such ETFs, individuals can still opt to purchase individual corporate bonds directly for specific cash needs, thereby avoiding management fees. The ETF serves as a safety measure in a diversified portfolio, especially during market downturns when stocks may falter. Its yield is currently around 3%, which presents an appealing option for those prioritizing capital preservation in uncertain economic conditions.
In his institutional mandates, he has to have a minimum of 30% in fixed income, and he is not particularly positive on bond returns over the next 12-18 months, as he expects longer-term interest rates to start rising. In his case, he has 7.5%, and 30% is in the short-term bond index XSB-T. He is using that to reduce the duration of that bond portfolio. In this case, about half the bond portfolio is in the US in the fixed income market, with the other half being in Canada split evenly between the bond index XBB and XSB on the short term.