ISHARES CANADIAN BOND BROAD INDEX FUND $28.97 (CWA Rating: Income) (Toronto symbol XBB; buy or sell through a broker) (formerly the iUnits Government of Canada 10 Year Bond Fund) mirrors the performance of the Scotia Capital Universe Bond Index.
This index consists of a diversified range of investment grade Canadian government and corporate bonds, with a term to maturity of more than one year.
At last report, the bonds in the index were 45.3% Government of Canada bonds, 26.1% Provincial Government bonds, 1.2% Municipal bonds and 24.7% Corporate bonds.
The fund sticks with high-quality corporate bonds from issuers such as Canada Mortgage and Housing, Bank of Montreal, the Government of Canada, Enbridge and Hydro Quebec.
The average term to maturity of the 128 bonds in the portfolio is 10.1 years. Expenses for this fund are 0.30% per year.
The Broad Index Fund yields 4.3%, just above the yield on the Canadian Short Bond Index Fund. The only reason to hold this fund for the extra 0.1% yield is if you think that interest rates are going to move down. Otherwise, buy the Short Bond Index Fund.
Canadian Broad Index Fund is a hold.