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best way to have bond's in portfolio?

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  • Jun 23rd, 2016 1:18 am
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[OP]
Member
Jan 24, 2007
318 posts
7 upvotes

best way to have bond's in portfolio?

looking to add some fixed income to my investments (15%) and wondering what the best way is.
I'm holding 85% of equity ETF's so looking at holding a bond etf if possible, but i'm not sure if this is wise...

so far, i'm debating between RQI - RBC's 5 year corporate bond etf that targets 2021 maturity (at 2021 fund will be 100% cash) or
CBO (no, not chicken bacon onion from McDonalds!), it's iShares rolling 5 year corp bond etf.
This is for my RRSP so long term focus with a "set it and forget it" mind set.

Any thoughts on which way to go?
10 replies
Deal Addict
Mar 8, 2013
2706 posts
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For fixed income in an RRSP with a long term focus, I would invest in government, not corporate, bonds (to avoid company risk). Read up on Canada Real Return Bonds. I bought the individual bonds, but xrb.to is simpler.
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Apr 11, 2008
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tiger_handheld wrote: looking to add some fixed income to my investments (15%) and wondering what the best way is.
I'm holding 85% of equity ETF's so looking at holding a bond etf if possible, but i'm not sure if this is wise...

so far, i'm debating between RQI - RBC's 5 year corporate bond etf that targets 2021 maturity (at 2021 fund will be 100% cash) or
CBO (no, not chicken bacon onion from McDonalds!), it's iShares rolling 5 year corp bond etf.
This is for my RRSP so long term focus with a "set it and forget it" mind set.

Any thoughts on which way to go?
If it's long term, why do you want bonds? Do you expect bonds to outperform the stocks long term or do you want to rebalance every year?
Deal Addict
Sep 6, 2010
1935 posts
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Vancouver
HoTiCE_ wrote: Vab.to
This also, keep it simple and add more than 15%.
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Jun 19, 2009
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TDB is newer and has a lower MER than VAB, but has more government bonds (VAB has more corporate). Realistically, very small differences. I would investigate TDB, but VAB is not a bad option either
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Oct 14, 2001
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GMA
No love for HBB ? It is vastly superior in unregistered accounts (at least from a taxation perspective).
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Sep 6, 2010
1935 posts
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Vancouver
SkimGuy wrote: TDB is newer and has a lower MER than VAB, but has more government bonds (VAB has more corporate). Realistically, very small differences. I would investigate TDB, but VAB is not a bad option either
The volume of trading on TDB is minuscule.
[OP]
Member
Jan 24, 2007
318 posts
7 upvotes
Archanfel wrote: If it's long term, why do you want bonds? Do you expect bonds to outperform the stocks long term or do you want to rebalance every year?
I want bonds so I can sleep a little better at night. No other reason than personal "feeling" of comfort.
gwplant wrote: This also, keep it simple and add more than 15%.
Why more than 15%? Its for long term, so I have 85% equity.


Why is VAB.To better than RQI or CBO?
Average time to maturity in VAB is 10 years , while CBO and RQI is 5 years. With lower rates, why be "stuck" with 10 year terms?

I want to get to close as buying individual bonds without having to buy then. Hence why I'm looking for a etf that will give me that. The crap part about bond etf's is there is no maturity date, unlike the real ones.
I have no problem re-balancing once a year. Just don't want to spend more than a few hours once a year "managing".
Deal Addict
Sep 6, 2010
1935 posts
699 upvotes
Vancouver
tiger_handheld wrote: I want bonds so I can sleep a little better at night. No other reason than personal "feeling" of comfort.


Why more than 15%? Its for long term, so I have 85% equity.


Why is VAB.To better than RQI or CBO?
Average time to maturity in VAB is 10 years , while CBO and RQI is 5 years. With lower rates, why be "stuck" with 10 year terms?

I want to get to close as buying individual bonds without having to buy then. Hence why I'm looking for a etf that will give me that. The crap part about bond etf's is there is no maturity date, unlike the real ones.
I have no problem re-balancing once a year. Just don't want to spend more than a few hours once a year "managing".
CBO is all corporate bonds, more volatility, if that is what you want out of your fixed income component then have at er.

There is a reason why you have bond exposure in your portfolio, if that reason is because you want safety from stock fluctuations, which is a big reason for holding fixed income, then 15% is simply too small exposure to accomplish this.

Might point is if it were me I would either raise my exposure or just go 100% equities, at my age it is an obvious choice why I am over 30% in fixed.

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