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BMO Aggregate Bond Index ETF (ZAG)
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iShares Core Canadian Short Term Bond Index ETF (XSB)
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iShares Convertible Bond Index ETF (CVD)
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iShares Core Canadian Long Term Bond Index ETF (XLB)
Q: What bond funds are the best to invest in right now for the long term? Currently I hold ZAG.TO and CVD.TO. Should I continue buying them? I would prefer a higher dividend than what the ZAG gives.
Thank you!
Thank you!
5i Research Answer:
We like ZAG as a broad bond fund, with exposure to varying bond types and maturities, however, if an investor is seeking a higher yield, we would prefer a long-dated bond ETF such as XLB (~4% distribution yield). Its price will be more volatile than an aggregate bond fund such as ZAG or a short term bond fund like XSB, however, if rates peak or decline, XLB will see strong capital appreciation.