
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 considered a viable option for those nearing retirement and looking to reduce risk in their portfolios. Experts recommend utilizing this fixed-income ETF as a means to provide steady monthly cash flows while mitigating exposure to equities, especially important for individuals with a high percentage of equities in their RRSP. The laddered approach to fixed income offered by this ETF can be beneficial for retirees planning withdrawals in the near term, as it provides a structured way to invest in high-quality bonds. Additionally, during periods of market downturns, the ETF can act as a counterbalance to falling stock prices, capitalizing on the inverse relationship between stocks and bonds. The yield is attractive, hovering around 3%, making it a potential choice for those seeking relative safety without the burden of managing individual bonds.
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.