What is a short-term bond fund?
A short-term bond fund is a mutual fund or exchange traded fund (ETF) holding bonds with maturities between one and three years. Short-term bond funds can invest their assets in government or corporate bonds. As a general rule, the safest bonds are issued by or guaranteed by the federal government. Next come provincial issues or bonds with provincial guarantees.
If you need steady income and want to hold bond funds, we advise you to focus on those with short-term maturity dates. That’s because short-term bond funds face a lower risk from interest-rate increases (changing interest rates influence the value of existing bonds inversely. When interest rates fall, bond prices rise, and vice versa. The longer the term to maturity on the bond, the bigger the effect of a change in interest rates).You should also avoid funds that take part in any kind of speculative trading.
Interest rates are near historic lows, so bond funds that hold long-term bonds simply can’t go a lot higher than they already are. Right now, it seems more likely that interest rates will continue to hold steady or rise slightly in the short term, and move higher in the long run. This means the funds would only earn interest income on their bonds; instead of capital gains, their bond holdings could produce capital losses.
In general, short-term bond fund ETFs charge considerably lower MERs than bond mutual funds. That’s why, if you want to find and hold the best bond funds, we recommend taking the low-MER approach offered by a bond ETF.
At TSI Network, we recommend using our three-part Successful Investor philosophy:
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The Bank of Canada increased interest rates in July 2017 for the first time since 2010. Its key interest rate rose from 0.50% to 0.75%. The bank’s next opportunity to raise rates is in September 2017. Whether it will do so is uncertain.
The Canadian economy… Read More
The Bank of Canada increased interest rates in July 2017 for the first time since 2010. Its key interest rate rose from 0.50% to 0.75%. The bank’s next opportunity to raise rates is in September 2017. Whether it will do so is uncertain.
The Canadian economy… Read More
These two bond ETFs offer exposure to quality holdings with low-fees, but they’re best left to investors who need stable income and really want to hold bonds.
The Bank of Canada will likely hold interest rates steady for all of 2017. That’s because low prices for… Read More
The Bank of Canada will likely hold interest rates steady for all of 2017. That’s because low prices for oil should continue to offset government stimulus spending as well as stronger exports due to the weak Canadian dollar. The federal government’s tighter mortgage rules should… Read More
For investors who need stable income and want to hold bonds, these two bond funds offer exposure to quality holdings with low-fees.
The Bank of Canada is unlikely to raise interest rates any time soon. That’s because low prices for oil should continue to offset government… Read More
The Bank of Canada is unlikely to raise interest rates any time soon. That’s because low prices for oil should continue to offset government stimulus spending as well as increased exports due to the weak Canadian dollar. The federal government’s tighter mortgage rules should also… Read More
For investors who need stable income and want to hold bonds, these two bond funds offer relatively low fees and high-quality holdings.
The Bank of Canada is unlikely to raise interest rates any time soon. That’s because low prices for oil and… Read More
The Bank of Canada is unlikely to raise interest rates any time soon. That’s because low prices for oil and other commodities will likely continue to offset increased government spending and higher exports due to a low Canadian dollar.
Even so, the long-term outlook is… Read More
ISHARES CANADIAN UNIVERSE BOND INDEX ETF $32.43 (Toronto symbol XBB; buy or sell through brokers) mirrors the performance of the Canadian Universe Bond Index. The 1,119 bonds in the portfolio have an average term to maturity of 10.54 years. The fund’s MER is 0.33%.
The… Read More
ISHARES CANADIAN UNIVERSE BOND INDEX ETF $31.87 (Toronto symbol XBB; buy or sell through brokers) mirrors the performance of the Canadian Universe Bond Index. The 957 bonds in the portfolio have an average term to maturity of 10.26 years. The fund’s MER is 0.33%.
The… Read More
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We do not collect or disclose personal information, except when it is provided to us voluntarily by the site/store visitor with their consent.
We store subscriber and password files containing personal information securely. These files are stored in secure areas that are not accessible to the general public. We are always working to ensure the security of your personal information.
We are continuously in the process of improving our sites and services. If any new features or policies require a change to this current policy, we will post a clear notice of this change on pages of our site where the privacy policy appears. The principle behind this privacy policy is to collect information with your knowledge and consent.
What personal information do we collect?
The information we receive from customers helps us personalize and continually improve your online experience at TSI Network. TSI Network may collect personal information online for all legal purposes, which include, but are not limited to:
Information You Give Us: We receive and store any information you enter on our website or give us in any other way through sign-up forms or ordering forms for publications and services. You can choose not to provide certain information, but then you might not be able to take advantage of many of our services and features. We use the information that you provide for such purposes as responding to your requests, customizing your web browsing experience for you, improving our website, and communicating with you.
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We do reserve the right, however, to collect and perform statistical analyses of the internet traffic to our website for our internal use. However, information collected does not allow us to identify any individual, and will not collect any personal information of the visitor. Furthermore, we do not sell, rent or loan to any outside parties the information collected and analyzed.
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Does TSI Network Use the Information It Receives?
"Contact Us" and Comment Features: TSI Network encourages visitors to its websites to contact us with questions and comments. Email addresses and other information of persons using these features may be collected in order to facilitate our responses to those inquiries.
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Except as provided herein, TSI Network will not sell or rent personal information about you to unaffiliated third parties.
We may disclose personal information you have provided through our websites, for the above purposes, to persons or companies that we retain to carry out and other activities for which you have registered or in which you have otherwise asked to participate. In particular, we may for these purposes transfer information to any country (including the USA and other countries which may not offer the same level of data protection as Canada). We also will disclose personal information if required by law, including compliance with warrants, subpoenas or other legal processes.
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TSI Network does everything possible to prevent unauthorized intrusion to its websites and the alteration, acquisition or misuse of personal information by unauthorized persons. Notably passwords submitted by users of our websites are encrypted using encryption mechanisms. However, TSI Network cautions visitors to its websites that no network, including the Internet, is entirely secure. Accordingly, we cannot be responsible for loss, corruption or unauthorized acquisition of personal information provided to our websites, or for any damages resulting from such loss, corruption or unauthorized acquisition.
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TSI Network has procedures in place to keep your personal information accurate, complete and current for the purposes for which it is collected and used. You may review the information that you have provided to us and where appropriate you may request that it be corrected. If you wish to review your personal information please send a request to: service@tsinetwork.ca.
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What Choices Do I Have?
Changes to this Policy
This Policy is the sole authorized statement of TSI Network's practices with respect to the collection of personal information through TSI Network's websites and the subsequent use and disclosure of such information. Any summaries of this Policy generated by third party software or otherwise (for example, in connection with the "Platform for Privacy Preferences" or "P3P") shall have no legal effect, are in no way binding upon TSI Network, shall not be relied upon in substitute for this Policy, and neither supersede nor modify this Policy.
TSI Network may revise this Policy from time to time.
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