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Vanguard Canadian Aggregate Bond Index ETF (VAB)
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Vanguard Intermediate-Term Corporate Bond ETF (VCIT)
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iShares 7-10 Year Treasury Bond ETF (IEF)
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iShares 20+ Year Treasury Bond ETF (TLT)
Q: Hello 5i,
Our portfolios initiated positions of TLT, VCLT, IEF, VCIT, and VAB ~2 months ago. TLT and VCLT are each at 2% of the portfolio. VAB, IEF, VCIT combined are 3%.
We will add additional funding to the ETF's. Would you recommend an increase across the board or should we focus our increase on TLT, VCLT, and VAB based on the latest talk about lowering rates?
Note: We are treating the ETF's as a stock as we have GIC's through to 2028 as our fixed income (15%). What are the triggers to indicate that the ETF's are reaching the end of the runway and a switch to individual stocks is recommended?
Thank you for your great service and Merry Christmas.
D&J
Our portfolios initiated positions of TLT, VCLT, IEF, VCIT, and VAB ~2 months ago. TLT and VCLT are each at 2% of the portfolio. VAB, IEF, VCIT combined are 3%.
We will add additional funding to the ETF's. Would you recommend an increase across the board or should we focus our increase on TLT, VCLT, and VAB based on the latest talk about lowering rates?
Note: We are treating the ETF's as a stock as we have GIC's through to 2028 as our fixed income (15%). What are the triggers to indicate that the ETF's are reaching the end of the runway and a switch to individual stocks is recommended?
Thank you for your great service and Merry Christmas.
D&J
5i Research Answer:
We might simply go with 'across the board' here. If rates go down, most/all bonds should see a benefit and some of this has already been seen in the last three months.
On the stock comment, we understand this as you are viewing them as a 'trade' on rates coming down. We are not big fans of trying to time markets but one marker to use on the trade/strategy will probably be if/when the FED formally announces its first rate cut. At this point there will be more clarity on what their cadence of cuts will be and what level they are targetting, which should get quickly priced in (if not already priced in prior to that event).