Q: I bought this ETF sometime ago in my RRIF for its delicious yield ( at the time 15%, now unfortunately 18% ) , thinking that Trump will get his way and rates will decrease . This does not seem to be happening but in the end nobody really knows what rates are going to do. Silly me for putting my hat in the ring with Trump.
I am down 20 % on this ETF but the large distribution has mitigated my loss. It is 4 % of my RRIF and 2 % of total portfolios . What would you do with this ETF ? Thanks. Derek.
I am down 20 % on this ETF but the large distribution has mitigated my loss. It is 4 % of my RRIF and 2 % of total portfolios . What would you do with this ETF ? Thanks. Derek.
5i Research Answer:
One year return is 3.35%. Long dated treasuries are of course more sensitive to rates. With higher inflation and rate fears, the bond market has seen some weakness on the long end of the curve. It is important to note the ETF hasn't done anything "wrong", it is just the yield curve has not performed as expected. IF the war ends, conditions should improve. Risks are higher, though, and we generally prefer our fixed income holdings to be lower risk. But there is a chance of recession, and HPYT could perform better under that scenario. We would be OK holding this in a small weighting. Conditions do change, and sentiment right now is pretty bad. Any positive spin could see improvement here.