BMO Discount Bond Index ETF. (ZDB.TO)

(A Top Pick Dec 01/22, Down 1%)

Owns Canadian bonds - removes highest premium positions (high par value).
Very cheap and liquid asset.
Trading at a discount to par value.
Good time to buy.

Discount bonds that don't trade at a premium price. Not a good buy right now. Too complex. Capital gains tough to figure out.

Gives you exposure to bonds that have lower coupons and lower prices. Over time it delivers the same type of aggregate bond exposure in a slightly more tax-efficient way. One of the cheapest bond ETFs in Canada at 10 bps. Can use it as core allocation for fixed income. If you're not happy with the long duration, BMO has a short-term version as well.

These are discount bonds. They trade at a coupon price less than the current yield. They are much more tax efficient but you get less coupon. It makes sense in a taxable account. This is the most tax–efficient way to play the Canadian bond market although the government is looking at it and there may be changes coming.