These bond funds offer steady income

Article Excerpt

The Bank of Canada increased interest rates in July 2017 for the first time since 2010. It then raised its key interest rate again in September 2017, from 0.75% to 1.00%. But it appears unlikely that it will raise it again this year. That’s because the Canadian economy shrank unexpectedly in August, by 0.1%. The decline was largely due to maintenance shutdowns in the resources sector. But at the same time, the slowdown has made the Bank of Canada cautious. It also feels that raising rates too quickly could hurt the many Canadians who now spend a high proportion of their income servicing mortgage and credit-card debt. We continue to caution against investing in bonds. Today’s still-low interest rates make them unattractive, and rising rates will push down their future value. However, if you need stable income and want to hold bonds, these two funds offer lower fees and high-quality holdings. ISHARES CORE CANADIAN SHORT-TERM BOND INDEX ETF $27.61 (Toronto symbol XSB; buy…

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