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Global X Active Canadian Bond ETF (HAD)
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iShares Core Canadian Short Term Bond Index ETF (XSB)
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Materials Select Sector SPDR (XLB)
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CIBC Active Investment Grade Corporate Bond ETF (CACB)
Q: Hello
I have been accumulating short term bonds ETFs and ladder ETFs. Now in a new cycle should one focus on accumulating long binds such as XLB. Also do you have a active bond
ETF name you recommend?
Thank you
Thank you
I have been accumulating short term bonds ETFs and ladder ETFs. Now in a new cycle should one focus on accumulating long binds such as XLB. Also do you have a active bond
ETF name you recommend?
Thank you
Thank you
5i Research Answer:
HAD is a small Canadian active bond ETF. CACB is much larger and focuses on corporates.
Longer bonds have more sensitivity to rates, and, in theory at least, should do better as rates decline. But they also trade on sentiment as well, and an uptick in inflation expectations can result in losses even when rates are declining. In a recession though long bond funds can do very well, and thus can be a form of insurance at times. We would be OK with adding some XLB exposure, but we would not do a wholesale swap and would prefer some duration diversification.