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Who
should consider Bond Mutual Funds? |
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Bond Mutual Funds
are suitable for investors seeking to earn maximum interest income or
relatively stable long-term growth through reinvestment of income. Bond
Mutual Fund unit values fluctuate but have historically been less volatile
than equity Mutual Funds.
Virtually all bonds funds which invest in Canadian bonds, and some which invest in foreign currency bonds, are RRSP- eligible without limit. Most others may be held in RRSPs as foreign property up to the current 20% limit set by Revenue Canada.
While payment of interest and principal of securities held in bond funds have no such guaranteed obligations of the issuers, bond funds have no such guarantees. The market value of bonds will fluctuate on a daily basis with changes in interest rates. Consequently, investors should recognize that daily fluctuations in the market value of bonds will affect the value of the bond fund units as well.
Investing in bond Mutual Funds is therefore a little riskier than investing
in bonds and debentures directly.
To find out more how an a bond fund would help diversify your portfolio,
please call us at (905)844-7700 for
an independent investment advisor at Fiscal Agents.
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