Buy these bond funds for stable income

Article Excerpt

The Bank of Canada increased interest rates in July 2017 for the first time since 2010. Its key interest rate rose from 0.50% to 0.75%. The bank’s next opportunity to raise rates is in September 2017. Whether it will do so is uncertain. The Canadian economy continues to expand faster than expected—it’s now projected to increase by 2.8% this year, up from the 1.3% growth of 2016. This year’s growth could prompt another rate hike to head off the risk of inflation. At the same time, raising rates too quickly could hurt the many Canadians now spending a high proportion of their income to service mortgage and credit-card debt. We continue to advise against investing in bonds right now. 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 bond funds offer lower fees and high-quality holdings. ISHARES CORE CANADIAN SHORT-TERM BOND INDEX ETF…