Bond Portfolio vs ETF

Asset allocation, risk, diversification and rebalancing. Pros/cons of hiring a financial advisor. Seeking advice on your portfolio?
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Bronze Ring
Bronze Ring
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Joined: 17 Oct 2016 18:36

Bond Portfolio vs ETF

Post by soldToSoon » 26 Jan 2017 12:48

If you have about 1 million to deploy in bonds (about 25% of overall portfolio), does it make sense to build your own bond portfolio?
Comprising say 10 to 12 year provincials and corporates of the same duration?
The obvious noted shortcomings of going your own way are:
-Interest rate risk...will remain with ETFs as well.
-Credit risk...still prevalent with even 20 to 30 issues in the portfolio
-Liquidity issue...selling these individual issues is a pain and wide spreads are an issue.

The pluses are:
-Predicted YTM of anywhere between 3 to 4%
-Credit risk can be managed by sticking above BBB plus

Also, how should these funds be deployed. Dollar cost averaging? wait for the yields to rise further?
I used to think my business was unpredictable . Investment world is much harder!

For corporates, e.g. BCE 10 year bond yields about 4%, not much different from the dividend yield. Does it make sense to equities rather than bonds then?

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