There are several types of bonds that Canadian investors can choose from, each with their own unique characteristics and risk-return profiles. Let's explore the main categories:
Government Bonds
These bonds are issued by the federal or provincial governments to fund public projects or manage their debt. They are considered low-risk investments, as they are backed by the credit and stability of the issuing government.
Examples include: Province of Ontario bonds, Province of Alberta bonds, and etc.
Municipal Bonds
Issued by cities, towns, or other local government entities, municipal bonds finance various projects like roads, schools, and hospitals. Municipal bonds are generally considered low-risk investments, though they may have slightly higher risk than federal
or provincial bonds.
Examples include: City of Vancouver bonds, Regional Municipality of Peel bonds, and etc.
Corporate Bonds
Companies issue corporate bonds to raise funds for their operations or specific projects. Corporate bonds generally offer higher returns than government bonds, but they come with increased risk due to the possibility of the issuing company defaulting
on its debt.
Investment-grade bonds have higher credit ratings, while high-yield or junk bonds have lower ratings and higher risk.
Examples of corporate bonds include: Bell Canada bonds, Enbridge bonds, and etc.