Opinions
Daniel Straus
BMO Short Term Corp Bond E.T.F.
ZCS-T
BUY
Dec 01, 2022
In a rising rate environment, you might want to stick to a shorter term. ZCS is a short-term, corporate, investment-grade ETF. Had drawdowns, but not as bad as a typical aggregate bond or high-yield ETF.
$13.100
Stock price when the opinion was issued
E.T.F.'s
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COMMENT
Short-term corporate bonds, ZCS-T or CBO-T? They both have very similar holdings. This one weights the bonds in the portfolio related to the size they have in the market, whereas CBO weights them with a traditional laddering strategy, each ladder getting an equal weight. It is really hard to say which is better, because all bond ETF’s are ladders of a sort.
E.T.F.'s
BUY
We are likely bottoming in the interest rate cycle. He sees interest rates staying much lower for much longer, but thinks they are probably bottoming. If there is a very glacial rise in interest rates as he expects, that is very good for short term interest bonds. This is a good ETF if you want to hold it for that.
E.T.F.'s
BUY
Short-duration of 3-4 years corporate bond index. Has held up better than aggregate bonds, but still not great. Short bonds or inflation-protected ones are the right strategy, as they don't carry the same rising interest rate risk. Much of the damage is done for downward movement in bonds, though there might be more to come. Yield is 3-3.2%.
E.T.F.'s
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