-
iShares Core Canadian Long Term Bond Index ETF (XLB)
-
Mackenzie Floating Rate Income ETF (MFT)
-
iShares 20+ Year Treasury Bond ETF (TLT)
Q: Could you give me some examples of the "Fat Coupon Bonds" that David Roseberg" referred to on BNN yesterday?
Could MTF be included? Thanks, JAMES
Could MTF be included? Thanks, JAMES
5i Research Answer:
Mr. R has moved into the 'deflation' camp. In such a scenario, rates fall, and any bonds/bond funds with long maturities and higher coupons can rise in price. MFT is a floating rate fund, so while it can participate in a bond rally, over time its floating rate focus may limit its gains in a declining rate environment. Funds such as XLB and TLT with longer terms and non-floating rate will likely do better. Note, though these are very different approaches to a floating rate strategy. A more balanced approach with a fund such as XBB might be a good compromise.