Opinions
Hank Cunningham
BMO 2013 Corporate Bond Maturity
ZXA-T
BUY
Aug 02, 2012
$14.870
Stock price when the opinion was issued
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It's the ideal tool to help you make quicker, more informed decisions for
managing and tracking your investments.
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BUY
This is a Bank of Montreal solution to fixed income funds with no maturity date so you don’t know what your money is going to be worth when it matures. You start out with 3 yr corporate bonds in it and as each bond matures, they buy a money market security. By the time 2013 is up you get 100% of your money back. Likes these.
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COMMENT
For RESP or short-term investor? This is relatively new in the market. These target date ETF bonds decline in maturity as time progresses and eventually turn into money market instruments. The good thing is, you eliminate duration risk. However, if there is a large outflow or inflow into the ETF, then the ETF manager has to go and buy increasingly scarce bonds.
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He is overall in favour of the target maturity bond ETF's. These are specific maturities and you can buy 5 consecutive years and you will get your money back in that year specifically. A better way of putting your own ladder together in an ETF. Prefers Royal Bank’s which are little more specific while this one is more complex.