You get stable income with these bond ETFs

Article Excerpt

Spurred by the dramatic impact of COVID-19 on the economy, the Bank of Canada has now cut its benchmark interest rate to 0.25% from 1.25%. Whether it continues to hold that rate steady, or cut it 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, and an interest rate rise would push down their future value. But, 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 $27.73 (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 478 bonds; the average term to maturity is 2.85 years. The bonds are 67.6% government and 32.4% corporate…

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