– XBB is the trading symbol for the
iShares Core Canadian Universe Bond ETF. It covers the entire domestic bond market, including corporate and
government issues and bonds of varying maturities. If you only want
exposure to Canada, it’s a good fund to hold (I own it myself).
But Canada represents only a fraction of the world bond market. You may
want to diversify by adding ETFs that give you some exposure to
fixed-income securities from the U.S. and overseas. Here are three you
might want to discuss with your advisor.
iShares Core Total USD Bond Market ETF (NASDAQ: IUSB). This fund invests in a portfolio of U.S. dollar-denominated bonds that
can be both investment grade and high yield. It did quite well in 2017 with
an annual gain of 4.05% to the end of December. The expense ratio is only
iShares Core International Aggregate Bond ETF (BATS: IAGG). The mandate here is to invest in a portfolio of investment-grade bonds
that are not denominated in U.S. dollars. The main holdings are issues from
Japan, France, Germany, Italy, and the U.K. The expense ratio is 0.09%. The
fund returned 2.51% in 2017.
iShares J.P. Morgan Emerging Markets Bond ETF (NASDAQ: EEM). As the name suggests, it invests in debt from Emerging Markets countries
but only in bonds denominated in U.S. dollars. It had a strong run in 2017,
with a gain of 36.41% for the year. The expense ratio is 0.40%.
Any mix of these and XBB would provide a lot more diversity and profit
potential for your portfolio. – G.P.
Gordon Pape is one of Canada’s best-known personal finance commentators and
investment experts. He is the publisher of
The Internet Wealth Builder and The Income Investornewsletters, which are available through the Building Wealth website.
For more information on subscriptions to Gordon Pape’s newsletters,
check the Building Wealth website.
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Notes and Disclaimer
© 2018 by The Fund Library. All rights reserved.
The foregoing is for general information purposes only and is the opinion
of the writer. Securities mentioned carry risk of loss, and no guarantee of
performance is made or implied. This information is not intended to provide
specific personalized advice including, without limitation, investment,
financial, legal, accounting, or tax advice. Always seek advice from your
own financial advisor before making investment decisions.
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