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  5. HBND: Is it possible to choose a favourite for a 1-1/2 to 2 year hold with the expectation of a reasonable yield while rates remain near current levels, and a capital gain as (if) they begin to fall? [Hamilton U.S. Bond YIELD MAXIMIZER TM ETF]
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Q: Is it possible to choose a favourite for a 1-1/2 to 2 year hold with the expectation of a reasonable yield while rates remain near current levels, and a capital gain as (if) they begin to fall?

HBND vs XBB or something preferable?

I'm assuming they all provide yield that will be treated as interest and not eligible divs. If so, preferred account type?

Thanks,
Asked by Peter on December 08, 2023
5i Research Answer:

HBND will be taxed as a mix, as call option premiums are treated as capital gains for taxes. XBB would likely do a bit better if rates fall. But in a stable rate environment we would side with HBND.

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