The Return to an Era of Income Investing (Lee)

Another area in fixed income that we favour is Canadian investment grade corporate bonds. Although we preferred the shorter-term bonds in this area at the beginning of the year, we began recommending mid-term corporate bonds in August as the Bank of Canada is now looking they are likely to hold interest rates steady until at least the second quarter of 2012 as the economic recovery has lost some steam since last January. Another reason we continue to recommend mid-term corporate bonds is due to their attractive yield to volatility ratio (yield to 30 day volatility) suggesting they may help increase portfolio yield without adding significant volatility.