Laddered ETF Bond funds

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soloman
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Laddered ETF Bond funds

Post by soloman » 11 Sep 2017 14:59

I was thinking of using one of the Blackrock iShares ETFs for a 5 year ladder Bond fund, but I see the unit price has been sinking over the last few weeks. Anyone know why this would be ? I thought laddered funds were one of the safest things you could buy !

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AltaRed
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Re: Laddered ETF Bond funds

Post by AltaRed » 11 Sep 2017 15:23

soloman wrote:
11 Sep 2017 14:59
I was thinking of using one of the Blackrock iShares ETFs for a 5 year ladder Bond fund, but I see the unit price has been sinking over the last few weeks. Anyone know why this would be ? I thought laddered funds were one of the safest things you could buy !
Doesn't change the fact that yield curve changes will result in re-pricing of all bonds regardless of maturity. Take a look at the BoC yield changes over the past few weeks for all durations.....
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soloman
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Re: Laddered ETF Bond funds

Post by soloman » 11 Sep 2017 23:31

So excluding GICs and Cash, what other kind of Fixed Instrument could I use to keep the principal safe ?

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AltaRed
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Re: Laddered ETF Bond funds

Post by AltaRed » 11 Sep 2017 23:40

Individual (discount) bonds and debentures held to maturity. It is hard to find a discount bond these days but it is easy enough to find 5-6-10 year term notes/debentures...albeit such animals are unsecured debt. Unsecured debt is junior/subordinate to secured debt of course and thus carries higher risk by definition, but that doesn't mean it is bad. Some companies prefer to issue term notes/debentures to avoid drawing too heavily on their bank lines. Example: I hold an Enbridge Income fund debenture... I don't consider that too high a risk assuming they are not going bankrupt any time soon.
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