Investing

Low risk government bonds

  • Last Updated:
  • Apr 19th, 2020 9:37 pm
Deal Addict
Oct 4, 2006
3638 posts
3019 upvotes
Toronto

Low risk government bonds

Looking for low risk given I’m about 10 years from retirement.
I already have some ETFs and just a few equity funds.

Looking at some Government bonds that granted are pretty low rates of about 4%.
Is there something similar in terms of risk but say 7-8% return?
7 replies
Deal Guru
User avatar
Sep 8, 2007
10978 posts
14473 upvotes
Way Out of GTA
Good luck with those return parameters. Right now 10 yr Cdn govts are about 2%.

CDN Corp debentures are between 5-6% depending on the issuer. But you are exposed to issuer risk.

Long term equity returns tend to be about the 8% range. And obviously inherently volatile.
Member
Sep 23, 2010
474 posts
242 upvotes
TORONTO
Government bonds are all mis-priced because of fake demand. Unless you will have problems keeping under the $100k CDIC insured threshold, qualifying GICs are going to be way better, but still only 1/2 your desired return. Government bonds are for investors who have to find somewhere to place billions of dollars, not for someone looking to invest a few hundred thousand.
Newbie
Sep 17, 2018
76 posts
24 upvotes
I'm interested to know if government bonds are covered bonds.....what happens if the bank you bought them from goes bankrupt?
Jr. Member
Jun 17, 2018
123 posts
100 upvotes
Hamilton, Bermuda
Government bonds are very safe... The government owes you money, and that doesn't change if ever the bank goes bankrupt.
Deal Fanatic
User avatar
May 11, 2014
6582 posts
9090 upvotes
Rankin Inlet, NU
Carymay wrote: I'm interested to know if government bonds are covered bonds.....what happens if the bank you bought them from goes bankrupt?
Little to zero risk. Almost all brokerages and investment institutions are insured under CIPF. If the place you buy them from goes under, you are generally covered upto $1 million. The risk is low considering it is a lot harder to leverage with instruments under management vs cash deposits at a bank.
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RFD Saskatchewan Pension Plan
Newbie
Sep 17, 2018
76 posts
24 upvotes
xgbsSS wrote: Little to zero risk. Almost all brokerages and investment institutions are insured under CIPF. If the place you buy them from goes under, you are generally covered upto $1 million. The risk is low considering it is a lot harder to leverage with instruments under management vs cash deposits at a bank.
Would big banks be allowed legally to convert the government bonds I purchased through them to offset their losses in tlac should they need to recapitalize.

Thanks

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