# Need to replace PH&N bond fund



## robfordlives (Sep 18, 2014)

I am looking for suggestions to replace PH&N Bond fund which makes up the majority of my fixed income holdings

Performance last three years including distributions has been 1.9, 2.0 and 0.9% with 2nd quartile rank in each of those. MER is 0.49%. I do not feel this MER is warranted for the performance relative to something like VSB, VAB. In the past this was always ranked in the first quartile so clearly it is time to move on.

Does anyone have suggestions for a better bond fund, or should I just go with the ETF’s noted?


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## james4beach (Nov 15, 2012)

This is a good bond fund even with the higher MER. I don't see a huge urgency to switch from the mutual fund to an ETF... but you probably will get a little bit extra performance with an index ETF.

Is this in a registered or non registered account? If there's going to be a tax consequence to making this move, you might want to delay, since PH&N Bond Fund is really not that bad and only performs a bit worse than the ETFs.

I like XBB the best due its long track record and low MER at around 0.10%, after their recent fee reduction. However I only hold it inside a tax shelter. VAB is also good, very similar. Not much separates XBB from VAB.

You should also consider your time horizon. You mentioned VSB (short term bonds), which is appropriate for time horizons less than 10 years. However if your time horizon is longer, for example if this is part of an ongoing retirement portfolio then you will get higher returns in regular bond funds like XBB or VAB, as opposed to short term bonds. You can also combine the bond fund + GICs, which is what I do.


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