# CLF vs ZAG (vs CBO) - which would you choose?



## obriast (Jul 22, 2013)

If you were looking to add short-term bonds to your portfolio, which ETF would you choose and why?

If none of these, which product(s) and why?


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## james4beach (Nov 15, 2012)

I would not choose any of them at current levels. By the way ZAG isn't short term bonds anyway.

CLF holds an average 3 year bond and yields 1.69% - 0.17% MER = 1.52% yield after fees
CBO holds an average 3.5 year bond and yields 2.28% - 0.28% MER = 2.00% yield after fees
ZAG holds an average 10 year bond and yields 2.52% - 0.28% MER = 2.24% yield after fees

The first thing I observe is that there are high interest savings accounts in Canada that yield more than CLF. For instance credit unions at 1.8%. GICs yield more too, even at big banks, with CDIC (government) insurance.

What I would hold instead:

High interest savings accounts with deposit insurance
2 yr, 3 yr, and 4 yr GICs from a big bank, with CDIC insurance

Why? Because they're higher yield with less risk. That's a no-brainer. No risk of bond price declines, AND they pay a higher yield!

I have yet to see a bond fund or bond ETF that is attractive, versus savings accounts & GICs. Of course this can change depending on interest rates but the situation has been like this for around 2 years.


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## obriast (Jul 22, 2013)

james4beach said:


> By the way ZAG isn't short term bonds anyway.


True...was looking at it in comparison to some others and accidentally included it here.



james4beach said:


> I would not choose any of them at current levels.


What levels would you hold them?


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## LongLiveTheMonarchy (Mar 20, 2014)

Is there any reason that you did not look at Vanguard's Canadian Short-Term Corporate Bond Index ETF? (ticker: VSC) It has a lower MER of 0.17%



obriast said:


> If you were looking to add short-term bonds to your portfolio, which ETF would you choose and why?
> 
> If none of these, which product(s) and why?


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