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iShares 1-5 Year Laddered Corporate Bond Index ETF (CBO)
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iShares Core Canadian Long Term Bond Index ETF (XLB)
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iShares 20+ Year Treasury Bond ETF (TLT)
Q: I am looking to increase my fixed income percentage but this current market has me bamboozled. Major markets are basically even YTD despite Trump's tariffs still being on the books. There was a significant rally the other day because the US is “only” going to levy 30% tariffs and China will drop theirs to “only”20%! But while the markets go up, long term bonds continue to drop which I thought was a negative market indicator. So are things as mixed up and incoherent as I think? And with this background is now a good time to buy long bonds, short bonds or equal amounts of both?
Appreciate your insight.
Paul F.
Appreciate your insight.
Paul F.
5i Research Answer:
It is an unusual time; the tariff issue is a wildcard, but Trump has shown the ability to back down, and the fear of massive tariffs is diminishing. Meanwhile, corporate earnings have been good and inflation remains under control, contrary to fears. So, interest rates might still decline this year. For bonds, considering uncertainty, we would prefer a balanced diversified approach rather than all long or all short duration.