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  5. XLB: Since long duration bonds have more sensitivity to interest rate movements and interest rates are expected to decline next year does it make more sense to invest in a long term bond ETF? [iShares Core Canadian Long Term Bond Index ETF]
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Q: Since long duration bonds have more sensitivity to interest rate movements and interest rates are expected to decline next year does it make more sense to invest in a long term bond ETF? And since I expect interest rates to fall further in Canada does it make more sense to go with a Canadian ETF? Which ones would you recommend?
Asked by Gary on December 18, 2023
5i Research Answer:

Certainly the thesis makes sense, but keep in mind if one is wrong then interest rate leverage will work the opposite way. In Canada we would suggest XLB.