Rollercoaster markets are making bonds more attractive than ever to your clients. Unfortunately, bond funds can tie clients to a long DSC schedule which may last well beyond their appetite for bonds. Fixed income exchange traded funds can provide the same diversification as a mutual fund but can be sold at any time for the cost of a stock trade. And because fixed income ETFs are fabulously efficient, their low MERs will likely end up putting more money in your clients’ pockets.

Want a portfolio of high quality U.S. corporate bonds? There’s an ETF for you. Or how about a collection of U.S. treasuries? ETFs track a treasury index of short, mid and long-term maturities, all for 15 basis points. In Canada you can buy an ETF that holds a Government of Canada 5-year bond or one that holds a 10-year bond. These home grown fixed income ETFs charge only 0.25% and are unique in that they hold an actual bond and are not based on an index. Chances are the ETF is getting a better yield on its Government of Canada’s than you could negotiate for your client simply because of the size of the ETF’s purchase.

The assortment of fixed income ETFs is expected to grow quite rapidly as investors and advisors come to appreciate the flexibility, low cost and price transparency ETFs provide.

Being able to build a well diversified bond portfolio with only a few trades allows you better control over your client’s asset allocation and the possibility of being more responsive to market changes. When your clients are ready to lighten up on their bonds for the rewards of equities, their choices and yours won’t be restricted.

For more information on fixed income ETFs please visit the links below.

Sponsored by Barclays Global Investors Canada Limited
Contact Howard Atkinson at howard.atkinson@barclaysglobal.com

Commissions, management fees and expenses all may be associated with Exchange Traded Funds. Please read the relevant prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. BGI’s ETFs, other than iUnits, are not qualified for distribution to the public in Canada as no prospectus has been filed for such funds with Canadian securities regulators.