Low-fee bond funds for steady income

Article Excerpt

Canada’s inflation rate is just 1.1%, well below the Bank of Canada’s 2% target. That lets the bank keep interest rates low, which holds down our dollar, making our exports cheaper in world markets. That’s good for Canada’s economic growth. 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 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 $28.63 (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,…

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