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Use global bonds in a large portfolio

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  • Nov 8th, 2015 3:04 pm
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Nov 8th, 2015 12:38 am
van800 [OP]
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May 20, 2012
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VANCOUVER

Nov 8th, 2015 12:38 am

Use global bonds in a large portfolio

Here's my dilemma. I have a large-ish portfolio, 1m+, and I'm allocating 25-30% to bonds. Almost all the portfolio has to go in taxable accounts, so I'm using HBB for bond exposure.

Should I include HTB as well to diversify my bond exposure between the US and Canada? There is already plenty of international exposure in the equity portion, but bonds are 100% Canada right now. What does everyone think?
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Nov 8th, 2015 2:38 am
atomiton
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Dec 14, 2007
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Nov 8th, 2015 2:38 am

This thread probably belongs in the investing subforum
Nov 8th, 2015 10:54 am
van800 [OP]
Jr. Member
May 20, 2012
104 posts
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VANCOUVER

Nov 8th, 2015 10:54 am

Thanks hyacinthe. I already looked at that article actually. It speaks about bond diversification in very large bond allocations ($1.4m) but I'm wondering if the same would apply to a smaller portfolio size like mine.
Nov 8th, 2015 1:29 pm
wm009
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Nov 8th, 2015 1:29 pm

I don't think it is as important. You have to remember bonds are mainly to reduce the standard deviation of the portfolio and Canadian bonds do provide that. I like the idea of adding in a bit of diversification (maybe 10-30%) of international, but I'm not going to worry about it now. Maybe when my portfolio is larger I'll do it, but at the end of the day it probably won't make a lick of difference.
Indexer, non-yield chasing, low cost, broad based, as simple as possible investor.
Nov 8th, 2015 3:04 pm
hyacinthe
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Oct 16, 2014
222 posts
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Moncton, NB

Nov 8th, 2015 3:04 pm

In a smaller portfolio, you'll get the best results by keeping it simple. Stick to 3-5 ETFs and focus and reducing costs (management or trading) instead of trying to tweak it to the 'perfect' portfolio. Once your portfolio grows to reach a considerable value, you may want to look into optimizing it.
There was an interesting article last month at Boomer and Echo: http://www.boomerandecho.com/is-my-two- ... oo-simple/

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