Two Low-fee Bond Fund Investments

Article Excerpt

We generally advise against investing in bond funds because we doubt that bond fund managers can add enough value to offset their fees. However, if you need steady income and want to hold bond funds, here are two funds that have low fees and top-quality holdings, and that stay out of speculative trading. ISHARES CANADIAN SHORT BOND INDEX FUND $28.73 (CWA Rating: Income) (Toronto symbol XSB; buy or sell through a broker) mirrors the performance of the Scotia Capital Short Term Bond Index. This index consists of a diversified range of investment grade federal, provincial, municipal and corporate bonds, with terms to maturity of between one and five years. Top issuers include Canada Mortgage and Housing, RBC Capital Trust, Province of Ontario, Province of Quebec and Royal Bank of Canada. The average term to maturity of the 94 bonds held by the iShares Canadian Short Bond Index Fund is currently 3.1 years. Expenses for the iShares Canadian Short Bond Index Fund are 0.25% of assets per…