Not exact matches
Put more tax - efficient investments (low - turnover funds like index funds or
ETFs, and municipal
bonds, where interest is typically free from
federal income tax) in taxable accounts.
The Short term
Federal Bond Index (
ETF) was devised to imitate the...
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For taxable accounts, investors can consider iShares Short Maturity Municipal
Bond ETF (MEAR), whose income is generally exempt from
federal income tax.
The
Federal Reserve Statistical Release shows assets in municipal
bond ETF's have grown from $ 15.1 billion at year end 2014 to $ 24.7 billion at year end 2016.
When the yield on 10 - year
federal bonds spiked earlier this year — from 1.88 % on May 16 all the way to 2.55 % on July 5 — the value of broad - based
bond ETFs plummeted sharply.
As the name suggests, the
ETF holds equal amounts of provincial,
federal and agency
bonds maturing in 1 to 5 years for an attractive MER of 0.15 %, which is 10 basis points cheaper than XSB.
(
ETF.com: Sep 29, 2016)
ETF.com said that while it's impossible to know whether the next
Federal Reserve rate hike will cause «a rally in interest rates (and sell - off in
bonds)... there are many tools available in the
ETF world to minimize the impact of higher rates, or even capitalize on them.»
The Claymore 1 - 10 Year Laddered Government
Bond ETF (TSX: CLG) holds 53
bonds with maturities ranging from 1 year to 10 years issued by the
Federal and Provincial Goverments.
«But government
bond funds, including FITRs, generate income streams that are subject to
federal income tax (they are exempt from state tax), and the
ETF structure provides no means of limiting this tax.»
The BMO
ETF is entirely composed of
federal government
bonds, whereas the iShares
ETF has a small component of provincial
bonds with a slightly higher yield.
Finally, ZAG, your
bond ETF, includes about 800
federal, provincial and corporate
bonds with terms ranging from one to 30 years.