So I am thinking about putting some money in this bond fund - http://www.claymoreinvestments.ca/en/etf/fund/chb ( yields 7%, MER .5, 100+ companies, currency hedged, Ba1/BB+/BB+ bonds )
For the investors out there-
Do you buy any junk bonds? What is your allocation?
What kind of credit risk is involved here(this fund)? To me it seems quite small as you're diversified across 100+ companies.
What is your opinion on where interests rates are going? Bond bubble?
I'm a college student who has managed to get $2,500 together and have put it in a TFSA(registered account where interest and capital gains are not taxed). I need to decided what to do with this money. Capital preservation is key but I still would like to earn a decent rate of return. I have also been looking at a Canadian dividend ETF(yields 3.5%, MER .6, AVG P/E 19.5), and a Corp 1-5y bond ETF(yields 5.14%, MER .27).