What we're looking at
An all-star team of Canadian bond funds, which have been a popular choice for investors during the recent financial market ups and downs.
The goal here was to find names in the various major bond fund categories that have performed consistently well. Specifically, we've gone fishing for funds that ranked in the top quartile for the three- and 10-year periods to July 31. Quartiles divide funds in a category in four groupings - first quartile is the elite. Funds on this list are ranked by assets.
What we found
A nice mix of funds for all kinds of investors. Got a small portfolio? You can get into TD Canadian Bond with an upfront investment as small as $100. If you can muster $5,000, then PH&N Bond D (that's for do-it-yourself investors) is worth a look because of its low fee and strong returns. Beutel Goodman Income should be on your list of candidates if you have $10,000 to invest in a bond fund.
Common to all these funds are management expense ratios that rank miles below the astronomically high Canadian fixed income fund average of 1.72 per cent. The sole exception is Mandate National Mortgage Corp., which is a vehicle for investing in mortgages and thus riskier than a fund that holds bonds issued by governments, their agencies and major corporations.
If you're buying bond funds to provide stability and income for your portfolio, note that Canadian fixed income funds are designed as a sort of all-in-one product to cover off your bond needs. Short-term bond funds mainly stick to bonds maturing in five years or less, which means you get lower returns but also a somewhat higher margin of safety when interest rates rise.
|Consistent Performers Among Bond Funds|
|As of July, 2010||As of July 31|
|Name||Category||Assets($mil.)||LatestMER||1-yr (%)||3-yr (%)||5-yr (%)||10-yr (%)|
|TD Canadian Bond||Cdn. Fixed Income||9386.62||1.05||7.71||6.67||4.48||6.20|
|TD Short-Term Bond||Cdn. Short Term Fixed Income||2881.98||1.05||4.05||5.58||3.86||4.75|
|SEI Canadian Fixed Income-O||Cdn. Fixed Income||1897.65||0.07||8.68||6.70||5.09||6.47|
|CIBC Cdn Short-Term Bond Index||Cdn. Short Term Fixed Income||1275.41||1.03||3.20||5.25||3.69||4.59|
|Beutel Goodman Income||Cdn. Fixed Income||1268.13||0.73||6.05||8.01||5.51||6.66|
|Dynamic Canadian Bond Fund||Cdn. Fixed Income||1155.86||1.57||5.95||6.56||4.15||5.65|
|PH&N Total Return Bond-D||Cdn. Fixed Income||854.32||0.57||7.26||6.65||4.88||6.46|
|PH&N Bond-D||Cdn. Fixed Income||813.09||0.58||7.55||7.06||5.05||6.45|
|United Cdn Fixed Income Pool-W||Cdn. Fixed Income||565.77||0.18||9.19||6.65||4.97||6.36|
|PH&N Short Term Bond & Mtg-D||Cdn. Short Term Fixed Income||278.61||0.58||4.62||5.81||4.30||5.16|
|RBC Advisor Canadian Bond||Cdn. Fixed Income||151.06||0.89||5.68||6.36||4.39||5.77|
|McLean Budden Fixed Income D||Cdn. Fixed Income||144.13||0.65||6.29||6.58||4.47||6.01|
|Beutel Goodman Corp/Pro Active Bond||Cdn. Fixed Income||132.51||0.74||7.23||7.96||5.59||7.20|
|Integra Bond||Cdn. Fixed Income||115.18||1.12||5.22||7.05||5.00||6.33|
|Harmony Cdn Fixed Income Pool-W||Cdn. Fixed Income||72.81||0.16||7.50||7.07||5.26||6.20|
|Mandate National Mortgage Corp||Cdn. Short Term Fixed Income||8.84||2.00||7.95||9.31||9.22||8.18|
|Ridgewood Canadian Bond||Cdn. Fixed Income||N/A||N/A||12.51||9.70||7.22||7.06|
© 2007 The Globe and Mail. All rights reserved.
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