Two Low-Fee Bond Funds: 1 Buy, 1 Hold

Article Excerpt

We generally advise against investing in bond funds because we don’t believe 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 don’t engage in speculative trading. ISHARES CANADIAN SHORT BOND INDEX FUND $28.12 (CWA Rating: Income) (Toronto symbol XSB; buy or sell through a broker) mirrors the performance of the Scotia Capital Short 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, TD Capital Trust, Province of Quebec, GreatWest Lifeco, Bell Canada and Bank of Nova Scotia. The average term to maturity of the 62 bonds held by the iShares Canadian Short Bond Index Fund is currently 3.0 years. Expenses for the iShares Canadian Short Bond Index Fund are 0.25% of assets per year. The fund…

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