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HBB vs. GICs

By Justin Bender · January 30, 2015 - 3 comments

The recent rate cut by the Bank of Canada has continued to push bond yields lower. The yield-to-maturity on the iShares Canadian Universe Bond Index ETF (XBB) has dropped from 2.22% to 1.70% since the beginning of 2015 (this figure is as of January 28, 2015, and before fees and taxes). Due to the tax-inefficient nature of most bond ETFs, the after-tax returns for these products are expected ...

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Active Funds Exposed

By Justin Bender · January 15, 2015 - 0 comments

Rob Carrick wrote an article late last year that suggested four actively managed mutual funds which may be worth a look by open-minded DIY investors. All four funds had beaten the S&P/TSX Composite Index’s 8% return over the last 10 years (as of October 31, 2014).  Three out of four of the funds had even crushed the index return since their inception.   Without more inf...

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After-Tax Returns of Strip Bond ETFs

By Justin Bender · December 22, 2014 - 2 comments

On June 11, 2013, First Asset released a new short-term bond ETF comprised entirely of strip bonds. It seemed like an odd choice at the time, seeing as there were already many short-term bond ETFs available to Canadian investors. Relative to the existing products, the First Asset 1-5 Year Laddered Strip Bond Index ETF (BXF) was expected to give investors a leg up when they held the ETF in th...

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The DRIP Myth

By Justin Bender · December 5, 2014 - 8 comments

Dividend reinvestment plans (or DRIPs for short), allow investors to use their dividends to automatically purchase additional shares in the same ETF. The arguments in favour of using DRIPs usually go something like this: Get more of your money working for you! Maximize the benefits of compounding! Cut your investing expenses! Now I doubt anyone will argue with the benefit...

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How to Calculate your Average Annual Rate of Return

By Justin Bender · November 20, 2014 - 2 comments

With Phase II of the Client Relationship Model (CRM II) fast approaching, Canadian investors will likely be on their own when trying to make sense of their reported rates of return (which will generally be meaningless for benchmarking purposes). The Modified Dietz rate of return calculator (available in the Calculators section of the blog) continues to be my recommended choice for DIY invest...

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