Q: Dear Pat: Can you please explain how real return bonds work? Also, are they worth investing in, especially the iShares Canadian Real Return Bond Index ETF and the iShares Floating Rate Index ETF? Thanks.

A: Real-return bonds pay you a rate of return that’s adjusted for inflation.

Here’s how they work:

When a real-return bond is issued, the level of the consumer price index (CPI) on that date is applied to the bond. After that, both the principal and interest payments… Read More