Investors are betting that they can get better returns for their money by investing in the bonds of investment grade or investment grade debt, or “EUR/CAD” bonds.
The two terms refer to a type of bond with a fixed rate of return and a maturity of at least six years.
The “Eur” is a unit of currency used in many European countries.
Australia has a fixed-rate bond index that is often referred to as a bond fund.
While some investors may think that a bond ETF would be the perfect way to get better yields, it’s more likely to bring the return to their money from the underlying bond.
This is because an ETF doesn’t need to be traded in a market, which is why it is usually less risky than a bond.
For more information on bond investing, visit Investopedia’s guide to bond funds.
It is a riskier investment to buy a bond in the real world, but this risk can be mitigated by investing the bond in an index fund.
Investopix Australia is a national investment service provider for bonds and bond ETFs.