Here’s a low-fee way to invest in bonds

Article Excerpt

The Bank of Canada cut its benchmark interest rate to 0.25% from 1.25% in March 2020. The move was meant to spur the economy after COVID-19 hit. Whether the bank holds that rate steady, or cuts it even further, depends on the country’s economic growth and unemployment levels. Meanwhile, even for our conservative investors, we caution against investing in bonds. Today’s low interest rates make bonds unattractive. While another drop in rates would do little to enhance the return for bondholders, a rise would push down their returns. However, if you need stable income and want to hold bonds, these two funds offer lower fees and high-quality holdings. Each is a buy. ISHARES CORE CANADIAN SHORT-TERM BOND INDEX ETF $28.24 (Toronto symbol XSB; buy or sell through brokers) mirrors the FTSE TMX Canada Short-Term Bond Index. You pay a low MER of just 0.10%. That FTSE index tracks investment-grade government and corporate bonds with one- to five-year terms. The ETF holds 469 bonds; the average term…