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BMO Aggregate Bond Index ETF (ZAG)
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BMO Long Federal Bond Index ETF (ZFL)
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iShares Core Canadian Short Term Corporate Bond Index ETF (XSH)
Since it appears interest rates appear to be stabilizing should one hold on for a recovery or try a different strategy or different holdings. Perhaps maybe moving to GIC or HISA EFT or other holdings you may suggest. Or do you think the same recovery may be seen by continuing to hold?
This loss seems to be an issue with those that have to go managed funds and mutuals with a balanced EFT portfolio.
I am going to transfer from so called managed to my own managed EFT's to avoid the fees. Think I can do just as well (or poorly depending on how you look at it) but wondering if I should switch holdings when moving funds to self directed EFT's.
I do have a separate portfolio with individual stocks, so this is basically a portfolio to minimize management and time requirements.
While the Bank of Canada may not begin cutting rates until sometime in 2024, bond yields (which determine bond prices) move in anticipation of interest rate decisions by the BoC. This means that, interest rates do not necessarily have to come down in order for bond yields to decline, and therefore bond prices to increase. In an environment where interest rate cuts are expected next year, and thus bond yields are moving lower, bond prices can do well, and thus bonds can outperform money in a GIC or HISA ETF.
We believe the move lower in bond yields is just beginning to accelerate, and historically these breakdowns in bond yields can last several months to a few years, benefitting bond prices. We would prefer to hold onto these bond ETFs given the recent developments by the Federal Reserve and the BoC, and the reaction from the bond market.