Q: I've got 5 years left before retirement, and I want to slowly roll my RRSP from equities to etf's over the 5 years. This year I'd like to buy a few that will have growth over the coming 5 years, thinking of beaten-up sectors like telco's and banks - do you think they have a runway for a 5-year plus hold (also thinking they have a good dividend, jumping in now), and what which etf's would you suggest if you agree with these sectors, or in other sectors. Thanks!
5i Research Answer:
Valuations are indeed low in financials and communications. We might prefer a bit of a longer time frame to be afer, but we think when interest rates shift lower sentiment may change. Expectations are low so it won't take much to move the sectors. We think investors who accumulate now will see solid income and some gains over the next five years. For financials, we would look at XFN. For communications, there is not really a good Canadian ETF to suggest. But owning BCE and T we think would equate to the same thing. We might also suggest utilities, with ZUT as a suggested ETF.