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iShares Core Canadian Long Term Bond Index ETF (XLB $18.63)
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iShares 20+ Year Treasury Bond ETF (TLT $87.29)
I have been a holder of the TLT ETF for some time; only a very short period was it in the green. While the yield has been decent, I am now down 14% as the Jerome Powell cage gets rattled.
My question is simply, are the Trumpian risks becoming too much to hold this ETF? I believe he is radical enough to remove Powell, but likely won't and will just continue to make noise. Even the noise is having impact.
If yes, do you have a Canadian Bond Fund you might recommend of similar characteristics?
XLB would be a close Canadian equivalent, focusing on long term Canada bonds with a 15-year duration. Yield 4.07% currently. The Powell/Trump saga is quite annoying. We think the FED has done a fabulous job controlling inflation and managing the pandemic. We are not sure Mr. Trump understands that even if the FED lowers rates it does not mean market rates will go down, and in fact this week that was proven when it looked like Powell was on the way out. So, it will still come down to the economy and inflation. We think that there is room for rates to 'tick' down, which will--eventually-help long bonds. There is some economic weakness, but also with higher government debt there is a crowding impact and some pressure on rates to rise in order to sell debt. As usual, competing market forces. But we would not yet give up on long bonds completely even though the past few years have been ugly.