in a bid to stifle inflation. The benchmark iShares Core Canadian Universe Bond Index ETF . The three-year average annual compound rate of return to Feb. 29 was negative 2.26 per cent.
Long-term bonds, which carry the most risk, showed a similar but more exaggerated pattern. The iShares Core Canadian Long Term Bond Index ETF was down 21.9 per cent in 2022, up 9.34 per cent in 2023, and down 4.88 per cent so far in 2024. Its three-year average annual compound rate of return is negative 5.59 per cent and the five-year number is negative 0.84 per cent.
Short term bonds are supposed to be a safe haven in times like these. But the returns have been choppy. The iShares Core Canadian Short Term Bond Index ETF was down 4.13 per cent in 2022, gained 4.94 per cent in 2023, and is down 0.08 per cent so far this year. The three-year average annual compound rate of return to the end of February was 0.03 per cent, slightly ahead of break-even.
So, if you want to hold some bonds in your portfolio, where should you look? The iShares Floating Rate Index ETF for a forward yield of 3.9 per cent annually.Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter.
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