I'm a Canadian in my early 30s and I have 100% of my portfolio invested in equities. I've been doing some reading and most sources say that a percentage of your portfolio should be in bonds. I was thinking about redistributing about 20% of my portfolio into a bond index ETF, but I've never been familiar with bonds until now. I'm having trouble figuring out which bond index ETFs are better than others. I've been looking at XBB iShares Universe Bond Index Fund and VSB Canadian Short-Term Bond Index ETF as potential choices. I was wondering if anyone had any thoughts on either of these or if you might suggest a different bond index fund? thanks
In your early 30's with income you have no business loaning money to others, that comes later. People like bonds because it adds stability and income during the big drop down in the stock market, exactly the time you should be buying more equities. Check back at age 50. I have used BND.
Two quick thoughts: 1) Volume -- favor the one(s) with higher volume. 2) Optionability -- favor the one(s) with higher volume. No doubt, you were thinking this already. I just wanted to echo your thoughts. (Sometimes that's helpful. {The voices in my head tell me that, all the time....})
and average maturity or duration. Not to mention quality. Volume and optionablility are not necessarily a plus for a multi year long term bond investor.
Check out the marketing section of the educational section of the Vanguard Group. I hope they they have an educational branch. Or any large Canadian mutual fund provider.
Sorry for the gibberish. My poor attempt at multitasking. I think you got my drift. Vanguard is a leader in low cost fixed income and the educational material is superb.