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Global X Active Canadian Bond ETF (HAD)
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CIBC Active Investment Grade Corporate Bond ETF (CACB)
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Dynamic Active Canadian Bond ETF (DXBC)
One of the most important reasons that I am a subscriber is not only to ask questions about my own portfolio and stocks on my watch list but also to learn from you folks PLUS fellow subscribers and their questions!
Today (20th May) Peter asked a question about Bond ETFs VS Actively managed Bond funds. Having read so many Q&A s about bond ETFs by you, I thought Bond ETFs like VAB,VSB etc would have been your top picks! I didn't realize that actively managed Bond funds beat the ETFs. A new lesson for me!
Given that is your answer, can you suggest your top picks in actively managed Bond funds, for Canada, for the US and perhaps for the international exposure. Of course lower fees would be preferable!
Thanks for your answer in advance.
We don't want to disbarrage passive funds, and in our prior answer there was somewhat of a disclaimer. Studies focus on 'surviving funds'. In other words, funds that did poorly disappear and do not carry through to average performance numbers. But, generally active funds can outperform because they can respond more quickly to interest rate movements than passive funds. Most passive funds follow an index, and indices are often only updated every three months, or even less often. Thus, active managers can get a 3-month head start on portfolio adjustments and this can improve returns. They still need to be 'right', though, and there are good managers and bad managers. Fees are also generally higher for active funds. Finally, investors tend to trade in and out of active funds more often, and this can impair individual returns (though still keeping average returns OK). So, we would remain very comfortable with passive ETFs. Some active suggestions: US: MINT, BINC Canada: HAD*, CACB, DXBC*. Note the two markeed * are still fairly small but OK for small unit purchases.