Canadian Bonds

[notTwain]

I was watching WSJ report this sunday morning and heard a recommendation to consider buying Canadian Bonds - in that they currently have good rates and the exchange rate should favor a US investor in the next few years. Sounds pretty good - has anyone had this allocated in their assett allocations? Can US citizens buy Canadian bonds as easily as US bonds? Is there tax laws that affect this?

Just curious - thought someone might shed some light on this before I delve into deeper research.

It just seems the exchange rate is really good against the US ( $0.76) - (and I do like Vancouver area a lot.)

notTwain

 

[Hyperborea]

You can't buy Canada Savings Bonds just like non-US residents can't buy US Savings Bonds. There are Canadian governemnt bonds similiar to US treasury bonds. I don't think that there is any reason that you shouldn't be able to buy them just like US treasury bonds can and are held by non-residents.

You could start by looking here http://www.bankofcanada.ca/en/financial_markets/index.htm

Note that the exchange rate was lower (i.e. $0.65) not too long ago.

 

[ShokWaveRider]

IMHO Canadian bonds do not offer any significant value in the short term. May as well go with ING CD or savings.

SWR

 

[DANCER]

Hi, I'm a new member to this website with an interest in learning about Canadian Treasury Bonds. Saw your 2004 enquiry and wondered if you had ever taken it to the next step and bought the Canadian Bonds. My interest was centered around the safety of the Canadian Bonds versus the American Treasuries. Canada has had budget surpluses in last 8 years as opposed to our everygrowing twin deficits. My thoughts were that bonds from a fiscally sound country might be a better safeguard to protecting your principle. Any resources that you uncovered on this subject would be appreciated . thanks, DANCER

 

[brewer12345]

Hi, I'm a new member to this website with an interest in learning about Canadian Treasury Bonds. Saw your 2004 enquiry and wondered if you had ever taken it to the next step and bought the Canadian Bonds.  My interest was centered around the safety of the Canadian Bonds versus the American Treasuries. Canada has had budget surpluses in last 8 years as opposed to our everygrowing twin deficits. My thoughts were that bonds from a fiscally sound country might be a better safeguard to protecting your principle. Any resources that you uncovered on this subject would be appreciated . thanks,  DANCER

I incorporate foreign sovereign debt (including Canadian) in my portfolio via a position in GIM. This is a closed end fund that is unleveraged and has a long track record of good performance. Non-US bonds are a useful asset class given their solid returns and low correlation with US bonds and equities.

 

[Brat]

Brewer, are there any mutual funds that you think we should consider?

I am 'twixt minded between foreign equities vs bonds because of the (usually) greater impact of transaction costs in the bond market.

In recent years investors purchased REITs and viewed them as a bond play, is the same thing true with foreign REITs?

 

[brewer12345]

Brewer, are there any mutual funds that you think we should consider? 

I am 'twixt minded between foreign equities vs bonds because of the (usually) greater impact of transaction costs in the bond market. 

In recent years investors purchased REITs and viewed them as a bond play, is the same thing true with foreign REITs?

I like GIM best for foreign bonds. The fact that you can usually buy it at a modest discount to NAV makes it all that much sweeter. If you want an open-ended fund, I believe PIMCO has one (PFUIX?), but they hold a more rstrictive list of stuff and hold things I think are questionable (bunds, etc.).

I hold foreign equities and bonds. Haven't made a leap to foreign REITs in part because you pay up so much for the exposure. If they ever re-open the fund, TAREX (whic I own a bit of) holds an increasing amount of foreign real estate plays/REITs.