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Discussion Starter #1
I currently hold the following bond investments:

iShares Corporate Bond Index ETF
iShares Real Return Bond ETF
iShares IBoxx High Yield Corporate Bond ETF
iShares U.S. Corporate Bond ETF
Morgan Stanley Emerging Markets Domestic Debt Fund
SPDR Series Trust Barclay's High Yield Bond Fund
PH&N Bond Fund D

High Yield bonds have had a good run over the past few months and the tide seems to be turning at least in the past few weeks.

My dilemna is whether to continue to hold the above fixed income portfolio or whether to sell the HY funds, and possibly the Corporate funds as well and, for simplicity's sake, put everything into the PH&N Bond Fund D and let the professional managers there look after things in a rising interest rate environment.

Any thoughts? How are you investing your fixed income allocation as interest rates start to rise?
 

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Why the heck would anyone need 7! bond funds? And why would you keep the one with the highest MER? Rule #1 buy the bond fund with the lowest fees.

High yield and corporate means the same thing so you may actually want to learn about bonds before you decide what to do this time. ;)
The interest rate just went up so you've got a window of time to ponder this... and to discover that bond prices are not mainly driven by interest rate movements.

Good luck.

BTW, all my personal account bond holdings are in high yield bonds.
 

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Why not just 1 bond fund? Each fund really does offer alot of diversification.

How many funds do you own in total?
 

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Discussion Starter #5
I currently have 19 mainly etf's in my portfolio while I recommend to others that they have just four or five broad-based etf's.

Am I in the danger range for 'diworsification'?

In the equity portion, I have ETF's for the following categories:

Canadian Value
Canadian Smallcap
Canadian Energy
Canadian Materials
Canadian REIT's
U.S. Largecap
U.S. Smallcap
U.S. Dividend Income
Nasdaq
Europe/Pacific
BRIC
Latin America
Emerging Markets
Global Precious Metals

Plus the bond funds listed above.

Any advice on where to start pruning? Where have I gone wrong?

I started out with just four investments: XBB, XIU, XIN, and XBB and it gradually evolved into the lengthier list that I have now.
 

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I currently have 19 mainly etf's in my portfolio while I recommend to others that they have just four or five broad-based etf's.

Any advice on where to start pruning? Where have I gone wrong?

I started out with just four investments: XBB, XIU, XIN, and XBB and it gradually evolved into the lengthier list that I have now.
Why is your advice not applicable to yourself? I think you can answer your own question. If you need a huge hint a simple get back to basics will be it. ;)
 

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Yeah...that is alot...you could reduce all of your CDN etfs by simply holding an index fund...that is basically what you have now.

I agree with your own advice of 4-5 broad based funds/etfs.
 

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Yeah...that is alot...you could reduce all of your CDN etfs by simply holding an index fund...that is basically what you have now.

I agree with your own advice of 4-5 broad based funds/etfs.
While I think that 19 is way too many, I personally believe the 4-5 is too few. A broad-based CDN index tracking ETF will not have any exposure to small-cap companies.

A broad-based EAFE index fund also has little to no exposure to mid- and small-cap holdings.

REITS are another asset class shown to provide good diversification.

4-5 just doesn't cut it IMHO.

However, what I see as superfluous are things like the CDN Energy, and CDN Materials, global precious metals (all 3 of these sectors are already heavily weighted in the broad CDN market). There are already many tech and dividend paying co.'s in the broad-based US indexes so those can be cut also. BRIC, latin america & EEM? Stick with one.
 

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To get back to your original question, one large CDN bond fund is all you need, and PH&N's record in this field is pretty hard to beat.
 

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To get back to your original question, one large CDN bond fund is all you need, and PH&N's record in this field is pretty hard to beat.
I don't know about the holdings of some of these funds, but some of them are clearly mutually exclusive, so the OP'er would be losing some diversification by getting rid of all of the holdings. Interest rates worldwide do not move in lockstep, so there is a case to be made for getting international diversification (whether it's worthwhile in light of management fees is another matter).
 

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Why the heck would anyone need 7! bond funds? And why would you keep the one with the highest MER? Rule #1 buy the bond fund with the lowest fees.

High yield and corporate means the same thing so you may actually want to learn about bonds before you decide what to do this time. ;)
The interest rate just went up so you've got a window of time to ponder this... and to discover that bond prices are not mainly driven by interest rate movements.

Good luck.

BTW, all my personal account bond holdings are in high yield bonds.
This is not correct. High Yield is corporate debt, but usually corporate means 'investment grade' corporate debt, with lower yields and risk.
 

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To get back to your original question, one large CDN bond fund is all you need, and PH&N's record in this field is pretty hard to beat.
I agree, I have that fund in my portfolio and that fund has been doing lately better than many equity funds. Recently, one of the PHN associates took offence when I jokingly referred to their High Yield Bond Fund as containing "junk bonds"....
 

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I don't know about the holdings of some of these funds, but some of them are clearly mutually exclusive, so the OP'er would be losing some diversification by getting rid of all of the holdings. Interest rates worldwide do not move in lockstep, so there is a case to be made for getting international diversification (whether it's worthwhile in light of management fees is another matter).
Any large CDN long-term bond fund will be pretty d****d diversified already.
 

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Owning just one bond fund is not enough in my opinion. I believe that PH&N bond fund last year had GMAC bonds as it's number one holding - something around 10%. If they had defaulted (which they came close to judging by the yields to maturity of these things at the end) that would have been a pretty big blow to the fund. Most of us don't look at what these funds/ETF's actually hold due ot their perceived safeness. By having 4-5 funds you will be just that much more diversified.
 

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Owning just one bond fund is not enough in my opinion. I believe that PH&N bond fund last year had GMAC bonds as it's number one holding - something around 10%. If they had defaulted (which they came close to judging by the yields to maturity of these things at the end) that would have been a pretty big blow to the fund. Most of us don't look at what these funds/ETF's actually hold due ot their perceived safeness. By having 4-5 funds you will be just that much more diversified.
I can't speak to what they held last year, but currently GMAC does not appear in the top 10 holdings of the PH&N Bond Fund D. This fund has an MER of 0.58%, is top ranked by most financial sites, and has had a sterling record for decades. If you think you can outguess the bond traders at PH&N you should be running your own bond fund.
 

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Discussion Starter #17
As a rule, I invest in ETF's ahead of managed funds but today's bond environment makes me nervous and I just feel better leaving it to professional bond managers realizing that is no guarantee of negative returns during a rising interest rate environment.

That said, I still hold ETF's for Canadian and U.S. investment grade and high yield bonds for diversification purposes.

I have never liked the 'all eggs in one basket' approach.
 

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I can't speak to what they held last year, but currently GMAC does not appear in the top 10 holdings of the PH&N Bond Fund D. This fund has an MER of 0.58%, is top ranked by most financial sites, and has had a sterling record for decades. If you think you can outguess the bond traders at PH&N you should be running your own bond fund.
I never said I could do better than their bond traders and simply stated you should have more than just one bond fund. Also the GMAC bonds they had expired last summer so of course they are no longer on the top 10 - if GMAC would have defaulted on their bonds you would have taken a beating on this fund.
 

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In the world of mutual funds these terms are used interchangeably. :rolleyes:
Roll your eyes all you like. Many providers offer 'high yield' funds that consist of below-investment grade securities as well as 'corporate' bond funds that typically consist of investment grade corporate debt. Please go ahead and list all these 'corporate bond funds' that consist of sub-investment grade debt.
 

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Roll your eyes all you like. Many providers offer 'high yield' funds that consist of below-investment grade securities as well as 'corporate' bond funds that typically consist of investment grade corporate debt. Please go ahead and list all these 'corporate bond funds' that consist of sub-investment grade debt.
Why would I waste my time on such a pointless exercise. You can if you like. My point was very simple, nothing more needs to be said. Perhaps you struggle to comprehend simple things?? :rolleyes: ;)
 
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