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For almost a decade and a half of near-zero interest rates, advisors and investors saw fixed income losing its utility as a retirement solution or a component of a balanced portfolio. The 60/40 fell out of favour as other solutions hit the market to deliver the yields investors couldn't get from fixed income. These assets were, primarily, a tool for capital preservation.
That dynamic has changed dramatically over the past two years. Inflation and steep interest rate hikes introduced volatility and opportunity to the fixed income market. As interest rates appear to be peaking, and speculation rages around central bank interest rate cuts, now may be time to take money that has accumulated on the sidelines in guaranteed investment certificates (GICs) and money market funds to assets with better long-term potential.
Today's fixed income opportunity is very compelling for two key reasons. This first is with rates where they currently are, bonds are currently providing investors with income not seen in more than a decade. Investors have a rare opportunity to lock in historically high yields as central banks reach the end of their hiking cycle. This, along with the potential for capital appreciation if rates fall, can provide a very attractive total return opportunity, or a "perfect storm for fixed income returns". This is because bond prices have an inverse relationship with interest rates. This means that, typically, when interest rates go up, bond prices go down and when interest rates go down, bond prices go up.
"Targeting" the current investing environment
To take advantage of the opportunities present in today's fixed income market, TD Asset Management Inc. (TDAM) has launched a suite of TD Target Maturity Bond Exchange-Traded Funds (ETFs). These ETFs (offered in both Canadian and U.S. dollar versions) invest in a portfolio of investment-grade corporate bonds which are hand-picked by TDAM's Fixed Income Investment Team, offering increased diversification and the chance to help generate higher yields when compared to other fixed income products.
As the name suggests, the TD Target Maturity Bond ETFs purchase bonds that have a common maturity date (successive years from 2025 to 2027) so when the ETF's maturity date arrives, the fund closes, and investors receive their principal just as they do with individual bonds. The income received is relatively stable because the ETF typically doesn't need to replace holdings along the way. Additional benefits and considerations include:
- Ease of execution - TD Target Maturity Bond ETFs trade can be easily purchased on the stock exchange with no minimum purchase amounts at a low-cost giving you the desired bond exposure.
- Improved liquidity - Unlike holding a basket of individual bonds that may be less liquid in the secondary market, the ETF structure allows investors to easily trade and adjust their bond exposure in response to changing market conditions or evolving investment objectives.
- Enhanced flexibility relative to GICs - The current environment has led many individuals to ‘lock in’ with fixed term GICs, which can’t be cashed in before maturity. TD Target Maturity Bond ETFs are a more flexible investment alternative as they provide daily liquidity through the exchange.
- Potential for tax-efficiency - With many corporate bonds trading at a discount, a portion of the total return can be treated as capital gains as opposed to interest income which is taxed at higher rate.
- Aligning investment time horizons – The TD Target Maturity Bond ETFs provide the ability to match the time horizon of the investor with the maturity date of the ETF, which allows investors to save for specific financial goals or needs.
- Build better laddered portfolios – TD Target Maturity Bond ETFs are an efficient way to help build a laddered portfolio to manage interest rate and/or reinvestment risk.
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专业人士管理 |
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For more information on the suite of TD Target Maturity Bond ETFs, please visit our website.
本文所含信息由道明资产管理有限公司提供，仅供参考。信息出自我们认为可靠的来源。图表仅供解说之用，并不反映任何投资的未来价值或未来表现。本信息并未提供财务、法律、税务或投资建议。具体的投资、税款或交易策略应根据每位投资者的目标和风险承受能力加以评估。
进行交易所买卖基金投资可能需要负担相关佣金、管理费以及支出。投资前请参阅招股章程和ETF情况概要。 ETFs are not guaranteed, their values change frequently, and past performance may not be repeated.交易所买卖基金单位在证券交易所按市场价格进行买卖，因此收益会因经纪人佣金的支付而减少。
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道明交易所买卖基金由道明银行（Toronto-Dominion Bank）全资子公司道明资产管理有限公司（TD Asset Management Inc.）管理。
道明资产管理有限公司 (TD Asset Management Inc.) 是道明银行 (The Toronto-Dominion Bank) 的全资拥有附属机构。
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