Opinions
Richard Croft
iShares Short Term Strategic Fixed Income ETF
XSI-T
COMMENT
Dec 09, 2016
$19.170
Stock price when the opinion was issued
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COMMENT
For a 2-3 year hold in an RRSP? This was launched 4-6 months ago and has been fairly well received, but the performance, as you might imagine, has been middling. All income investing in Canada is a reverse beauty contest. You are just trying to be the least ugly. In this environment where rates are very, very low, it is difficult to make money in any given sub-segment of the market. This way you at least get the diversification of having some dividends, some REITs, some corporates, some domestics, some foreign. You get a little bit of everything and it should be a little more stable.
E.T.F.'s
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He doesn’t know this, but assumes it is an actively managed bond fund. If so, the question you are going to have is the duration of the bond fund at any given time. You can usually get that information from the people who market this ETF. If you have a duration of 10, then you can expect roughly at 10% move on that particular fund given a 1% change in interest rates. If rates are going down, you have a nice move up, but vice versa if rates are going up. His inclination is that REITs are probably going higher. If so, he is not enamored with bonds. Reset preferreds might be a better way to go.