BMO Discount Bond Index ETF
ZDB.TO (TSX)
The BMO Discount Bond Index ETF (ZDB) provides a cost-effective way to gain bond exposure, utilizing discount bonds that trade below face value. With an expense ratio of just 0.10%, it stands out for investors looking for tax-efficient options in non-registered accounts. Although it currently has a 1-year return of -1.32% and a 5-year return of -8.75%, its dividend yield of 2.14% offers some income potential amid market fluctuations.
Pros:
- Tax-efficient bond exposure
- Cost-effective for non-registered accounts
Cons:
- Negative 1-year and 5-year returns
- Market volatility risk
The BMO Discount Bond Index ETF (ZDB.TO) may be suitable for conservative investors seeking low-cost bond exposure and tax efficiency, particularly in non-registered accounts. However, potential investors should weigh its recent performance, including negative returns over both the 1-year and 5-year periods, against its modest dividend yield of 2.14%.