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iShares 1-5 Year Laddered Corporate Bond Index ETF (CBO $18.57)
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iShares Core Canadian Short Term Bond Index ETF (XSB $27.04)
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iShares Core Canadian Universe Bond Index ETF (XBB $28.25)
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iShares Core Canadian Long Term Bond Index ETF (XLB $18.66)
Q: I am presently fully invested and want to raise 30% cash by selling some of my holdings…..My question is, where to invest the cash?? I used to invest in Short term bonds/tbills to preserve cash which roll over monthly but think that this is not the time for that as everything is pointing to lower interest rates! In your opinion would it be wiser to invest in longer term government bond etfs and if so which ones do you prefer? Thank you?
5i Research Answer:
It really depends on an investor's goals. If an investor is just 'parking' cash, we would suggest T Bills or a high interest ETF such as CASH or PSA. We would accept lower rates for more security. Bonds can see gains when rates go down, and long bonds such as XLB can do very well at times. BUT...if rates do not move as expected then bond funds can see losses. So if it is 'cash' that is desired we would shy away from bond risk. We would be comfortable with XLB, XBB, CBO and XHY as general bond funds. XLB is long term. XSB could be used for shorter term bonds.