Buy these bond ETFs for steady income

Article Excerpt

The Bank of Canada is unlikely to raise interest rates any time soon. That’s because low prices for oil and other commodities will likely continue to offset higher exports due to a low Canadian dollar, as well as increased government spending. Even so, the long-term outlook is for higher interest rates. That’s because heavy deficit spending and the expansion of the money supply in the past few years make higher inflation more likely. We continue to advise against investing in bonds right now. That’s because today’s low interest rates make bonds unattractive, and rising rates would push down their future value. However, if you need stable income and want to hold bonds, these two bond funds offer relatively low fees and high-quality holdings. ISHARES CANADIAN SHORT-TERM BOND INDEX ETF $28.47 (Toronto symbol XSB; buy or sell through brokers) mirrors the performance of the DEX Short-Term Bond Index. This index consists of a range of investment-grade federal, provincial, municipal and corporate bonds…