Low-fee bond ETFs for income seekers

Article Excerpt

The Bank of Canada is holding interest rates steady, especially with the current inflation rate of 1.2% well below the bank’s 2% target. The bank doesn’t want to slow Canada’s economic growth with higher rates or push the dollar any higher. Even so, the long-term outlook is for higher interest rates. The heavy deficit spending and the expansion of the money supply over the past few years increase the potential for higher inflation. We continue to advise against investing in bonds right now. That’s because today’s low interest rates make them unattractive, and rising interest rates would push down their future value. However, if you need stable income and want to hold bonds, here are two bond funds that have low fees and high-quality holdings. ISHARES DEX SHORT-TERM BOND INDEX FUND $28.91 (CWA Rating: Income) (Toronto symbol XSB; buy or sell through brokers) mirrors the performance of the DEX Short-Term Bond Index. This index consists of a wide range of investmentgrade federal, provincial, municipal and…