Topic: How To Invest

Would you please give me your opinion on the Dynamic Strategic Yield Fund? Thank you.

Article Excerpt

The Dynamic Strategic Yield Fund is a mutual fund that mostly holds high-quality Canadian and U.S. stocks. But it also holds 20.4% of its portfolio in bonds. We don’t generally recommend bonds right now, because they’re unlikely to perform as well in the next few years as they have in the last few. That’s mainly because interest rates will likely hold steady or rise, which means the fund would only earn interest income on its bonds; instead of capital gains, its bond holdings could produce capital losses. As a general rule, the safest bonds are issued or guaranteed by the federal government. Next are provincial issues or bonds with provincial guarantees. After that come corporate bonds. The Dynamic Strategic Yield Fund mostly holds corporate bonds. The risk on corporate bonds varies widely. Some corporates are almost as safe as government bonds and offer only slightly higher yields. Some corporates are far riskier but may not offer enough extra interest to offset the risk…