On January 31, 2008, Claymore Investments (Canada) launched the Claymore 1- 5 Year Laddered Government Bond ETF. From Claymore’s site:
Claymore 1-5 Yr Laddered Government Bond ETF seeks to provide a return based on the price and performance, before fees and expenses, of the DEX 1-5 yr Government Bond Index (“the Index”). The investment strategy of the fund is to invest in and hold the constituent securities of the index.
The ETF provides suitable investors of different sizes with the opportunity to gain exposure to a well diversified government bond portfolio, designed with staggered (“laddered”) maturity levels from one year to five year.
I like the fact that the Claymore ETF has a very low 0.16% MER. By comparison, iShares Canadian Short Bond Index Fund (XSB) has a MER of 0.25%.
From the iShares.ca site:
The iShares™ CDN Short Bond Index Fund seeks to provide income by replicating, to the extent possible, the performance of the DEX Short Term Bond Index™, net of expenses. The DEX Short Term Bond Index is a market capitalization weighted index consisting of a broadly diversified range of investment grade federal, provincial, municipal and corporate bonds with a term to maturity between one and five years.
So both bond ETF’s invest in 1 to 5 year Canadian bonds but the difference is that the Claymore ETF buys only government bonds. The iShares bond ETF includes corporate bonds in its holdings.
In terms of performance, from February 02, 2008 to October 03, 2008 the Claymore ETF (CLF) is up by 3.10% whereas the iShares ETF (XSB) is up by 2.75%. There is one catch that may be of interest – the average volume for XSB is 95,000 but it is only 19,000 for CLF.
My Canadian model performance table will no longer include a HXU / Cash model since this model is based on putting cash into a non-interest bearing account which doesn’t make sense now that we have a money market ETF model (i.e. HXU / CMR). Starting with the next ETF model update, the Canadian table will include a HXU / CLF model.
